Thursday, January 11, 2007
Following Katrina's money trail

Louisiana Gov. Kathleen Blanco recently set aside $500 million for New Orleans.

Where is the money? That seems to be the most-asked question around New Orleans.

Nearly everyone here has heard the federal government allocated around $12 billion to Louisiana. Major charities donated about $2.5 billion. Even foreign countries sent about $1 billion, including $126 million in cash earmarked for Katrina victims.

So where is it? We went to find out, and were told much of it is still in the hands of the federal government.

I met Louisiana Gov. Kathleen Blanco at the governor's mansion to talk about the money trail. She says the state has received and paid out about $2 billion dollars of the $12 billion or so that's been promised by the federal government.

But New Orleans Mayor Ray Nagin says that's not enough. He says the city is broke and wonders why it's only received about $100 million of the nearly $1 billion it has been promised.

Here's one thing that's holding up the money: The federal government's reconstruction fund works as a reimbursement program. The city needs to spend money to get money back. Problem is, the city says it doesn't have the money to spend on the construction projects, so it can't get reimbursed for work it can't get started.

Gov. Blanco says she recently put aside about $500 million to help the city make down payments and get projects started, but will construction companies be willing to do work for a city that's broke and has to get reimbursed to pay them? People here aren't so sure.

In the meantime, many people here will continue to live without a working sewer system, without power in many areas, and without much hope of a speedy recovery fed by a vast infusion of funds.
Posted By Randi Kaye, CNN Correspondent: 4:24 PM ET
  22 Comments
Randi and all of you at Anderson Cooper/CNN ... Keep up the good work... That seems to be the biggest question, where is all the money?? Thanks for being there, continuing to cover this story and helping the folks out in NOLA...
Posted By Anonymous Sherry Sarasota Fl : 4:42 PM ET
In a city filled with so much death, doom, and destruction, not to mention a failed sewer system, why would people ever want to stay in the city before it is rebuilt? Once the city gets back on it's feet, THEN people can go back.

I don't see Denver crying for billions of dollars because they're under 4 feet of snow and are in a State of Emergency...
Posted By Anonymous Daniel Grape, Pittsburgh PA : 4:46 PM ET
Come on folks; any halfway decent public administrator knows that you borrow the funds for building infrastructure (bonds) and then get reimbursed (via the federal government, state government, and/or local taxes) and pay off the bonds. What kind of administrators does the city of New Orleans have? Can't they do anything? The process is the exact same as it would have been before the hurricane. But if their infrastructure is in the sad state that some are indicating, it may be that they really don't know how to replace and rebuild the infrastructure because they weren't doing their jobs properly even before the hurricane.
Posted By Anonymous Cassie Dallas, PA : 4:53 PM ET
I have to address the comment from Colorado:
If a category 3 hurricane isn't big enough for some of you, how about the federal, state and city government leaving your ass on your rooftop to ROT for days before ANY real help arrives. Meanwhile, there's at least 10 feet of water all around you and you have NO FOOD, NO WATER and NO IDEA about if or when anyone is coming to help. Dead bodies are floating below you and dogs are eating some of the bodies. Meanwhile, the people who did not have the means to leave the city are stranded at the Superdome while rapes and murders are happening around them. Oh, and if you've never been to Louisiana, the summers can be brutally hot and oppressively humid, so it's hard to breathe sometimes, especially when you've been rotting on your scorching rooftop holding a HELP sign for days.
Just a little recap.
AND IT'S OVER ONE YEAR LATER...where's the money???
Posted By Anonymous Debbie Darby, Denham Springs, LA : 5:01 PM ET
Yet another example of the incompetence of our government. Unbelievable! It is unacceptable that our fellow Americans in NO and Mississippi have been abandoned by their government. The federal government needs to change their process; give NO/MS the money they need to rebuild upfront, and hold local governments responsible for a full account of how they are spending that money. Oh, wait....local government in NO??? Oh, well...
Posted By Anonymous Kim Dayton, OH : 5:02 PM ET
Huum, I wonder why Mississippi is not having the same financial problems? Republican governor, republican president. It's very clear that the administration has been partisan about this. When I hear how much money is being spent to rebuild Iraq and how much has been obscenely spent on this war, it's sickening. They can find money for a war but not for Americans who were ruined by natural disasters.

As a new Orleanian who has had to restart my life elsewhere, it hurts that so many people still don't understand what happened, the scope and magnitude and that New Orleans was home to people. I will always believe that the lack of understanding of some is due to racism. Period.
Posted By Anonymous Paige B., DC : 5:06 PM ET
The citizens of San Francisco rebuilt the city after the worst earthquake in it's history, 101 years ago. The citizens of Galveston, Texas, rebuilt their gulf community over 100 years ago after the worst hurricane in history (worse than Katrina)with NO FEDERAL ASSISTANCE or INTERNATIONAL ASSISTANCE.

A blogger from DENVER COLO. wrote about his expericence with the blizzard and their ability to NOT LOOT, NOT KILL, etc. Strangers are helping strangers. WOW...and this is WITHOUT the federal government stepping in. WHAT A CONCEPT.

If Louisiana and New Orleans weren't wrought with political corruption, perhaps the city wouldn't be broke.

Also, the federal goverment's job is to protect and defend our country from foreign and domestic enemies.

However, FEMA was present to aide the city. Along with many charities such as The Baptist Men and Best Friends (animal rescue).

Yes, the city must be rebuilt. However, it appears that no amount of money will ever be enough, because corruption runs top to bottom in that state.
Posted By Anonymous Laverne, Dallas, Texas : 5:11 PM ET
Hi Randi~
New Orleans has turned into a cluster nightmare!!! How could it be so difficult to get the money to NOLA? Can this situation get any worse? Maybe if our government could pretend this was a disaster in another country, the money would appear. How bizarre, how bizarre. Thanks Randi.~
Posted By Anonymous Betty Ann, Nacogdoches TX : 5:15 PM ET
To Debbie who has responded to my Denver comment:

It is true enough that being under 4 feet of snow with power, water, and alot food isn't as bad at 6 feet water with no power, water, and very little food. However, I can understand that all these thousands of people lost their entire lives in New Orleans, but is their ignorance of the desctruction so powerfull that they MUST go back? Is it really the rich heritage of New Orleans these people want back, or is it the money?

The horrors of the city are unimagineable... so bad I can't see any reason for anyone to go back. They should move on, out of the city, to a new area and start a new life. All they're doing by trying to go back now is spread death and disease and make matters worse.

They need to move on to a new area. Maybe in a few years the city will dry out and be able to be rebuilt. People are going to have a hard time, no doubt, but things could be worse...

...They could all be dead.
Posted By Anonymous Daniel Grape, Pittsburgh PA : 5:22 PM ET
The city could have zillions and it still wouldn't be enough. It's a black hole. I will never go there again.

Q:How do you spell LOUISIANA???

A:CORRUPTION
Posted By Anonymous Samantha, NYC, New York : 5:24 PM ET
"will construction companies be willing to do work for a city that's broke and has to get reimbursed to pay them?"

This is a good question. Along with that - When the rebuilding does finally begin, where is the insurance going to come from? Many insurance companies have practically pulled out of the gulf coast area. If the government had been more responsive in the immediate aftermath of Katrina, maybe insurance companies would not have felt the need to desert the region also. Major businesses need assurance that the federal government is taking an active interest in an area before they will take any risks.
Posted By Anonymous Deb, Richmond VA : 5:32 PM ET
Randi,

What a conundrum. Advance funds to local government agencies in NO, when who knows how much will be siphoned off for indirect costs and/or graft? Keep the status quo of nothing getting done because NO has no money? Yikes. We need someone America trusts to stay in NO, hold on to the money and dole it out as needed, making sure it is spent as it is supposed to be. Can we find out if Walter Cronkite would be interested in coming out of retirement? Glad you are on the job Randi. I know you will follow the money and not let anyone off the hook. You are good at that. Go get them!
Posted By Anonymous Charlotte D, Stockton CA : 5:38 PM ET
What's the purpose of money if it can't be used? It becomes a digit typed onto a piece of paper - just another statistic. Katrina and its victims are not statistics. They deserve better. But where is all the money ...
Posted By Anonymous Shruti Bala, Glendale, AZ : 5:46 PM ET
Sorry about my earlier posting directed at the comment from Colorado-I meant it for an earlier posting comparing Katrina to the snowstorms in Colorado. I was angry and momentarily confused.

But for everyone out there suffering from "Katrina Fatigue"--what should scare the hell out of you about New Orleans and Gulf Coast is that it could happen anywhere in this country. The implications of this go way beyond a hurricane. This exemplifies major governmental failure that has left people with little hope. The disaster of a hurricane is a force of nature and I understand that but what should bother us all is that it's over a year later and things are not much better. Why do I pay taxes? Why should I vote? Is this incompetency what we as Americans should expect in return for fulfilling our obligations????? We aren't prepared for anything disasterous and we don't have systems in place to correct anything. THAT is what should keep us all up at night. We're the most advanced country in the world and what do we have to show for it???
Posted By Anonymous Debbie Darby, Denham Springs, LA : 6:04 PM ET
Why not interview the people of New Orleans to see whether or not they agree with how the $100 million was spent by Mr. Nagin and his City Council?... or do they even know how the money was spent?
Posted By Anonymous xtina - chicago IL : 6:10 PM ET
Hi Randi,
Obviously, New Orleans is still hurting. So what are the answers, or at least some of the answers. Keeping them honest is great, it's needed, but the time has long passed to solve some of the nightmare these people have had to endure. If Lou Dobbs and Paula Zahn can have town hall meetings, why not AC360. Have a series of town hall meetings and go at it. From top to bottom. Expose everything and everyone who is causing New Orleans and the whole Gulf a migraine. Sooner the better..Please. I hope the people of the region realize that there are many of us out here who have not forgotten them. Take Care
Posted By Anonymous Lorie Ann, Buellton, Calif : 6:14 PM ET
Come on, people...some of you comparing the situation in New Orleans with the situation in Denver is ridiculous in the extreme. The entire infrastructure of New Orleans has been totally destroyed, the devastation leaving behind hundreds of bodies in the flood waters.

While the situation in Denver is serious, it in no way can even compare to the devastation found in New Orleans. The entire infrastructure of Denver is intact, although temporarily greatly strained because of the snow fall.

One would think some of you people are believing the hoax email circulating on the internet which attempts to equate the devastation of New Orleans with the situation in Denver.

The destruction of New Orleans is so great, only something on the order of a Marshall Plan is needed to help rebuild the infrastructure of the entire Gulf coast area devastated by Katrina.

From the beginning, there should have been strict oversight as to where the aid money is going. And the federal government isn't the one who should be controlling the oversight of funds considering how they botched the oversight of the funds going to Iraq.

Federal, state and local politicians must come together and create a plan for the re-building of New Orleans. They must leave behind their petty jealousies and partisan bickering and do what they were elected to do, represent the people.

And a special thanks to Anderson Cooper and everyone at 360 who keep shining light on this situation and keeping New Orleans in the media glare.
Posted By Anonymous Joseph Kowalski, North Huntingdon, PA : 6:33 PM ET
Where did the money go? This is the oldest question in Louisiana. Take it from someone who has lived there, it goes into the pockets of those who control the state from the shadows--as it always has. Giving money to help New Orleans, or any other part of Louisiana, rebuild itself is tantamount to flushing it down the toilet. The former FEMA director said it best: "Louisiana is dysfunctional."
Posted By Anonymous Gary Penley, Divide, Colorado : 7:55 PM ET
I'm in New Orleans right now at a Conference for the Marine Corps... I was a member of JTF Katrina, MARFOR Katrina and arrived just after the storm. I saw first hand the destruction of New Orleans... I have to tell you that I am shocked and appalled at the lack of significant progress the federal government has made to enable the city to prosper and re-establish itself. It appears that America has an attitude of "it's not my problem" Well in fact it is our problem our fellow Americans are suffering in this city struggling to survive. I was shocked when I heard one lady mention that she was waiting on her check from FEMA... Simply depressing.
Posted By Anonymous Martin The Marine, St.Louis, MO : 8:00 PM ET
People want to rebuild New Orleans, but for what purpose, especially considering its location? We cannot predict whether or not annother massive hurricane will hit the area again and again sink New Orleans. Rather than waste the money and risk the destruction of the city again, it should be left as Lake Orleans and be done with it. No sense in this happening again in the next 5 years. The weather is getting worse year by year. How many more people have to die before they realize that New Orleans is really just placed in a bad location?

And granted, Denver is no where near as devestating as New Orleans. Mostly, it is the corruption, and people will find any reason they can do blame the government. Granted, it's not exactly up to par... but can the critics to better? Can they take the high seat the Governers, Mayors, and other Politicians take? What would they say if they were to buckle under the pressures of the nation coming down on them asking what to do next?

New Orleans people cannot sit around and wait forever for the government to help them if they cannot help themselves. No homes, no jobs, no insurance... you start from scratch. If someone hands you $1,000, you don't just sit there and hope the govenment will give you the rest. You put it to use, work as hard as you can, and start over.

Maybe I'm saying all this only because I'm not from New Orleans. But it doesn't take a rocket scientist to realize that New Orleans is no longer and should never be the best place (geographically speaking) to live.
Posted By Anonymous Daniel Grape, Pittsburgh PA : 8:01 PM ET
I left my beloved home of 23 years after Katrina and have been back twice since. In that time I had seen generations of political corruption come and go, one "good ole boy" network to another and from what friends there now tell me, it hasn't changed just because New Orleans is down. Does the local and federal government realize that THE WORLD IS WATCHING. If we cannot rebuild one of the world's most beautiful and beloved cities, why should we be trusted taking over Iraq or any other part of the world for that matter. I see my city, famous for the kindness and unique spirit of its people turning into a new Wild Wild West, and God help us, that's what it will become if someone doesn't organize a committee to organize a committee to organize another committe to accomplish something with the monies available. We are broken hearted from one coast to the other, waiting to go home. I say put the Humane Society in charge of everything. They were in there first with food, water and compassion, without any politics or anything but the resolve and determination to save our pets. Too bad we can't seem to get that kind of unconditional love and compassion for the people of New Orleans.
Posted By Anonymous Marie, Chicago, IL : 8:12 PM ET
To Daniel from Pittsburg Pa.

You don't think New Orleans should be rebuilt? One industry we have in New Orleans is a major oil refrinery that was damaged but back on line. People all over the country, including you in PA benefit from the oil to heat your homes.
Every state in this country depend on other states from products that are made and manufactered in their states.
Thank You
Posted By Anonymous Mike St.Amant LA : 1:24 PM ET
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