Why Are Natural Disasters Breeding Grounds For Corruption?

In the annals of corruption in America, 2014 is off to an explosive start. Federal officials are investigating whether New Jersey Gov. Chris Christie (R) used Hurricane Sandy relief funds to produce tourism ads starring his family while the Hoboken mayor accused him of threatening to withhold disaster relief money from her city. New Orleans Mayor Ray Nagin has been convicted by a federal jury of accepting bribes to rebuild a city reeling from Hurricane Katrina. While these scandals in cities historically rife with backroom deals might shrink in comparison to the global spectacle of the Olympic games, they all pose a unique 21st century challenge. They are examples of corruption in response to extreme weather, and such instances are piling up.

Natural disasters are breeding grounds for fraud and corruption. The need for services, whether they be snowplows or rapid reconstruction, is high. Those services must be provided quickly: electricity, gas and water must function, schools and businesses must open and public transportation must run. Returning to life as we know it as fast as possible boosts not only the local economy, but morale.

But such urgent demand can lead to the disregard of quality controls. For example, a lengthy review process for bids and proposals to complete reconstruction may delay a disaster torn city’s recovery and open a door to rubber stamping bids in exchange for payoffs. After Hurricane Katrina devastated New Orleans in August 2005, Ray Nagin and his co-conspirators rapidly approved contracts purporting to rebuild the city — but in exchange for bribes and kickbacks, more than half a million dollars of which went directly to Nagin.

Extreme weather triggers an infusion of reconstruction cash from federal, state and local governments, which a corrupt official can embezzle or bestow on the highest briber. As local government’s emergency funds deplete quickly, the state and the Federal Emergency Management Agency (FEMA) may provide supplementary funds for search and rescue, electrical power, food, water, shelter and other basic human needs. In the event of a disaster, FEMA may also provide up to 75 percent of the costs of rebuilding a community’s damaged infrastructure.

Past examples show that those funds are at high risk of being misappropriated. While weather alone does not create corruption and fraud, studies have shown it creates conditions in which those crimes can thrive. A 2008 research study found that each additional $100 per capita in FEMA relief was correlated with a 102 percent increase in corruption in a state. A similar study of international data shows parallel results: India, Indonesia and the Philippines, for example, suffer from both extreme weather and high levels of corruption. A new report found that the Philippine economy lost at least $132.9 billion in illicit outflows over the last forty years, money that could have more than covered the $700 million in damage due to last year’s Typhoon Haiyan Disaster relief doesn’t have to equal graft.

And these numbers only stand to increase: The insurance company Munich Re calculated that the number of loss events per year, including storms, quakes, volcanoes and tsunamis, has more than doubled since 1980.

The Department of Justice has recognized the vulnerabilities that come with destruction, and has responded with the establishment of the Disaster Fraud Task Force, created in 2005 to investigate fraud related to Hurricane Katrina and since has expanded to address all types of disaster fraud. The government estimates FEMA was defrauded to the tune of between $600 million and $1.4 billion in its support for communities damaged by 2005’s Katrina and 2006’s Rita.

In an era of climate change, the relationship between corruption and natural disasters must be acknowledged and addressed at all levels of government. State attorneys general must follow the lead of the Department of Justice by not only preparing for disaster management and relief, but also by enacting policies to prevent fraud and corruption in the event of extreme weather. These should include fast-tracking procedures to evaluate bids for emergency services that meet the same standards of integrity and merit used when the sun is shining and temperatures are mild, as well as training local prosecutors and investigators in examining disaster fraud. Disaster fraud is currently a federal crime, but states could also do more to crack down on local offenders by enacting similar laws.

Increasing instances of extreme weather may be unavoidable, but a corresponding epidemic of fraud and waste is not. State and local executives must include in their disaster preparedness laws and policies to address the increased opportunity for fraud and corruption. Public safety in the modern age demands no less.

Juliet S. Sorensen is a clinical assistant professor at Northwestern Law School, where she teaches Public Corruption and the Law. She is a Public Voices Fellow with the Op-Ed Project.

Lead image: New Jersey Gov. Chris Christie comforts Kerri Berean, 33, a Chapman Street resident, Saturday, Nov. 3, 2012, in Little Ferry, N.J. Christie toured a section of Little Ferry that was flooded when Superstorm Sandy caused a tidal surge on the Hackensack River that overtook a natural berm protecting the town. (AP Photo/The Star-Ledger, David Gard, Pool)

Dear Reader,

When we asked recently what makes TPM different from other outlets, readers cited factors like honesty, curiosity, transparency, and our vibrant community. They also pointed to our ability to report on important stories and trends long before they are picked up by mainstream outlets; our ability to contextualize information within the arc of history; and our focus on the real-world consequences of the news.

Our unique approach to reporting and presenting the news, however, wouldn’t be possible without our readers’ support. That’s not just marketing speak, it’s true: our work would literally not be possible without readers deciding to become members. Not only does member support account for more than 80% of TPM’s revenue, our members have helped us build an engaged and informed community. Many of our best stories were born from reader tips and valuable member feedback.

We do what other news outlets can’t or won’t do because our members’ support gives us real independence.

If you enjoy reading TPM and value what we do, become a member today.

Latest Cafe
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Associate Editor:
Investigations Desk:
Editor at Large:
General Counsel:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: