Content provided in partnership with

Most relief funding has yet to reach Katrina victims

New Orleans CityBusiness, Aug 28, 2006 by Deon Roberts

After Hurricane Betsy in 1965 flooded Judy Hoffmeister's parents' Ninth Ward home, the family didn't receive the $2,000 checks the Federal Emergency Management Agency doled out to many Hurricane Katrina victims.

The Hoffmeisters also didn't receive FEMA rental assistance or a $150,000 federal grant to rebuild their home, which Betsy filled with 3 feet of water.

The Hoffmeisters and other Betsy survivors did receive vouchers from the Red Cross for sheets, pillows and mattresses and a loan from the U.S. Small Business Administration, Hoffmeister said.

Compared with Betsy, Katrina survivors have been given much more aid.

Most Popular Articles in Business: Research and Markets : Tesco Plc - SWOT Framework Analysis; Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors; eBay made easy: ready to start an eBay business? These 5 simple steps will ...; Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...; Wal-Mart's newest distribution center opened last month near the southwest ...; More »

As of Aug. 18, the SBA approved 123,291 business and home loans totaling $8.7 billion for people affected by Katrina. It's a mammoth amount compared with the 490 loans totaling $3.2 million issued after Betsy.

Katrina was far more destructive than Betsy, which caused $6.5 billion in damages in 1990 dollars, according to FEMA. Katrina's damage is estimated at $81.2 billion.

Betsy survivors like Hoffmeister often use the phrase "neighbor helping neighbor" to describe how people rebuilt their homes and lives after Betsy flooded parts of St. Bernard, eastern New Orleans and the Ninth Ward.

Gerald Spohrer, who lived in Chalmette when Betsy hit, said aid was "limited."

"We didn't even see the federal government," Spohrer said. "We all worked by ourselves, on our own. Everybody helped everybody.

"We did expect it (help from the government). We didn't miss it. We didn't get FEMA money."

Unprecedented assistance

Craig Colten, professor in Louisiana State University's Department of Geography and Anthropology, said people in 1965 did not expect the federal response they do now.

Samuel Hyde Jr., a professor at Southeastern Louisiana University in Hammond, agreed.

"People have begun to look at government as something that is directly responsible for them and their situation ... unlike at the time of Betsy," Hyde said.

After Betsy pushed a foot of water in Spohrer's home, he took out a $3,500 SBA loan to rebuild. No ne had flood insurance, he said.

Hoffmeister, a St. Bernard Parish councilwoman and director of the parish's Red Cross chapter, was 19 at the time of Betsy. She remembers her father cursing every time he mailed monthly payments on a $2,500 SBA loan. "Sons of bitches of America," Hoffmeister recalled her father muttering.

She said her father relied on his brothers and neighbors to help rebuild with their own hands.

"They didn't wait on the government," she said. "Everybody pitched in."

The SBA loans were eventually forgiven. Hoffmeister said the SBA forgave her family's loan two years later even though they still owed $600.

Eva Lynn Rockvoan lived in the Ninth Ward at the time of Betsy. Rockvoan, who works for St. Bernard Parish government, was in high school in 1965 and living in a rental house that flooded with water up to the light switches.

After Betsy, Rockvoan said her mother applied for a SBA loan and the Red Cross likely gave her mother money for groceries. But there was no federal money to pay for hotel rooms like Katrina victims received, she said.

"This was like in the '60s so it didn't take much to help them survive," she said.

Misspent money

Handing out so much money in the wake of Katrina has led to reports of misspending.

The Government Accountability Office said in a June 16 report that hurricane victims wasted at least $1.4 billion in individual assistance payments. In some cases, people used the money to buy champagne or go to strip clubs. Others received multiple $2,000 payments or should not have qualified for the money in the first place.

The GAO said flaws in the FEMA registration process and lack of verification for people who applied for aid over the telephone led to the abuse.

Even though the federal government has given more money to Katrina victims than to victims of Betsy, federal officials said most relief funding has yet to reach Katrina victims.

Last week, Don Powell, the federal government's Gulf Coast rebuilding czar, said the federal government has designated roughly $110 billion to rebuild the coast but states have spent a total of only $44 billion.

Most relief funding has yet to reach Katrina victims

New Orleans CityBusiness, Aug 28, 2006 by Deon Roberts

Find Research Guides for:

Find Featured Titles for: Sports

Most Popular Articles in Business

Most Popular Publications in Business