Judge: FEMA Can Stop Paying for Katrina Evacuees' Hotels

A judge let the federal government Monday drop some 12,000 families made homeless by last year's hurricanes from a program that has been paying directly for their hotel rooms.

FEMA has promised the evacuees from Hurricanes Katrina and Rita that they will still receive federal assistance that they can use toward hotel stays or fixing their ruined homes, although the agency will no longer pay for the hotels directly.

Attorneys for the evacuees tried to get U.S. District Judge Stanwood Duval to issue a temporary restraining order, saying the forthcoming money from FEMA won't be enough for reasonable living accommodations or for hotel stays.

Duval denied the request a day after the attorneys delivered the motion to his home.

"These folks are out on the streets today because the federal government, President Bush and everyone else made the decision that it's time for these families to go," said attorney Bill Quigley, an assistant dean of the Loyola University Law School, who filed the motion with civil rights attorney Tracie Washington.

Washington said Monday's decision will result in 8,000 to 10,000 families being put out of hotels across the United States.

Mary Smith, 43, headed out before noon Monday to find a bus, which she hoped would take her to one of the lower-income neighborhoods across the Mississippi River to suburban New Orleans, where she was told she might find a rental.

"I only got my rent check last week," she said. "It's not enough time to find a place."

About 10,500 families, or 88 percent of the 12,000 homeless families, have received rent-assistance checks from the Federal Emergency Management Agency, said Libby Turner, the agency's transitional housing director.

The cash can be used to pay for an apartment or to continue their hotel stays. It also can be put toward fixing their ruined homes.

Monday marks the second wave of evacuees losing FEMA financing of their hotel rooms. Last week, the occupants of roughly 4,500 rooms lost FEMA funding for failing to register with the agency.

In Louisiana, officials offered shelters to those leaving the hotels, but according to FEMA, only one family needed sheltering.

At the same time, two government reports were released Monday that found FEMA had wasted millions of dollars and overpaid for hotel rooms, including $438-a-day lodging in New York and beachfront condominiums in Panama City, Fla., at $375 a night.

The reports by the Government Accountability Office and the Homeland Security Department's office of inspector general detail accounting flaws, fraud or mismanagement in how $85 billion in federal aid is being spent. Among the findings was that up to 900,000 of the 2.5 million applicants who received aid under FEMA's emergency cash assistance program were based on duplicate or invalid Social Security numbers, or false addresses and names.

The Justice Department said Monday that federal prosecutors have filed fraud, theft and other charges against 212 people accused of scams related to Gulf Coast hurricanes, many of them involving attempts to obtain emergency aid, typically a $2,000 debit card.

FEMA spokeswoman Nicol Andrews said Monday the audits were still preliminary. Offering the $2,000 emergency aid "was a calculated risk taken in a catastrophic situation."