What happened to the foreign cash for Katrina victims?

Ever wonder what happened to all the foreign donations given to the United States in the aftermath of Katrina? It’s not good news. It turns out that, like so much of the federal response to the crisis, the largest influx of foreign assistance to the US in memory was met with foot-dragging and clumsy bureaucracy. ...

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New Orleans, UNITED STATES: A man walks in the rain along a street of destroyed homes in the Eight Ward of New Orleans, 10 July 2006 almost one year after Hurricane Katrina flooded this area of the city. Some people have returned to repair their homes in this flood-ravaged area although the vast majority of homes in this area of the city remain empty and shuttered. AFP PHOTO / Robyn BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)

Ever wonder what happened to all the foreign donations given to the United States in the aftermath of Katrina? It's not good news. It turns out that, like so much of the federal response to the crisis, the largest influx of foreign assistance to the US in memory was met with foot-dragging and clumsy bureaucracy. None of the donated funds has actually made its way to evacuees.

Some of the donated funds were stuck in a non-interest bearing account for nearly six months - so long that they lost value due to inflation. Back in March, the State Department finally agreed to give a portion of the funds to the Department of Education. When I contacted the DoE recently to find out how they'd put the foreign donations to good use, I was shocked to learn that the money hadn't yet been spent.

Today, the DoE announced that it plans to spend $60 million donated by foreign governments - about half the total received by the federal government - to help rebuild schools on the Gulf Coast. To that, I say kudos; it's money much-needed. But why so late? Why did DoE sit on the funds for so long? Shouldn't those schools have been rebuilt in time for this school year?

Ever wonder what happened to all the foreign donations given to the United States in the aftermath of Katrina? It’s not good news. It turns out that, like so much of the federal response to the crisis, the largest influx of foreign assistance to the US in memory was met with foot-dragging and clumsy bureaucracy. None of the donated funds has actually made its way to evacuees.

Some of the donated funds were stuck in a non-interest bearing account for nearly six months – so long that they lost value due to inflation. Back in March, the State Department finally agreed to give a portion of the funds to the Department of Education. When I contacted the DoE recently to find out how they’d put the foreign donations to good use, I was shocked to learn that the money hadn’t yet been spent.

Today, the DoE announced that it plans to spend $60 million donated by foreign governments – about half the total received by the federal government – to help rebuild schools on the Gulf Coast. To that, I say kudos; it’s money much-needed. But why so late? Why did DoE sit on the funds for so long? Shouldn’t those schools have been rebuilt in time for this school year?

All this leads me to my larger point that if there’s one thing that fills me with righteous anger, it’s the inept federal handling of the aftermath of Hurricane Katrina. I, like so many people around the world who love New Orleans, watched last summer in horror and disbelief as Americans perished in their attics and sat outside the Superdome in the sweltering heat with no relief in sight. One of the great American cities and many of its inhabitants were left to largely fend for themselves. I was angry then that the levees weren’t up to standard. I was angry then that the response by the feds (and yes, the state and local governments, too) was so inadequate and bumbling. And I’m sad to say that today, I’m still angry about the current substandard levee system and an inept response by all levels of government to get New Orleans back on its feet.  

When I was in New Orleans visiting family in May, I couldn’t believe the state of the city. So much of the debris hadn’t yet been cleared (and still hasn’t). Many neighborhoods were as deserted as they were when they were 12 feet under water. Sure, there were a few signs of progress. Shops were reopening, and nearly all of them were hiring. Trash, for the first time in months, was actually being picked up by the city – though the unpredictable schedule was classic Big Easy.  

What’s so infuriating about the slow pace of reconstruction is that so many eager people want to return, rebuild, and renew. It’s not for lack of desire, and it’s not for lack of resources. The feds have committed more than $110 billion to Gulf Coast’s recovery, but less than half of it has been spent. According to a recent Bloomberg report, the GAO estimated that “of an initial $6.3 billion spent by FEMA as of mid-February, as much as $1.4 billion was wasted”. I hope that the DoE actually gets those foreign funds down to the Gulf Coast and spends them wisely and appropriately. There are plenty of people who are depending on it.

Carolyn O'Hara is a senior editor at Foreign Policy.

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