In October, Hurricane Matthew struck the Caribbean and moved up to the southeast coast of the United States. The storm claimed in excess of 1,600 lives, and caused more than 10 billion dollars of damage. The Hurricane is not unique as a natural disaster. Earthquakes in Italy and flooding in China are only some of the other recent natural disasters that have struck people around the world. The process of providing relief to storm-damaged areas is a grueling and difficult one, involving government assistance as well as the help of the public.
Ronald K. Noble and RKN Global warn that relief efforts can also bring with them the danger of corruption and fraud that not only diverts important resources away from the public good, but also endangers people’s safety.
The problem is the large amount of money that flows in the direction of the affected areas and communities. This money is sent under highly stressful and pressured conditions, as services must be provided immediately. This often leads to a failure of oversight that leaves the door open for corruption.
Following Hurricane Katrina, which devastated New Orleans in 2005, for example, the mayor of the city took bribes in exchange for quick approval of contracts to rebuild the city. The U.S. government established the Disaster Fraud Task Force in 2005 in the wake of Katrina to combat such corrupt practices. It estimates that the aftermath of Hurricane Katrina and the 2006 Hurricane Rita saw the U.S. government defrauded of between $600 million and $1.4 billion of support that was supposed to rebuild the damaged areas and help people.
Ronald K. Noble and RKN Global draw attention to the fact that these corrupt deals can lead to lower quality work, which creates even more devastation. For example, a supposedly earthquake-proof elementary school building collapsed from the earthquake that struck Italy this summer, as did a bell tower which had been reinforced with special funds that were distributed following a 2009 earthquake there. The bell tower fell and killed a family of four.
Vast amounts of money combined with poor oversight because of the emergency makes it easy for corruption to grow. Politicians see an opportunity to enrich themselves with kickbacks while improperly granting government contracts. This encourages corrupt contractors, who in turn cut corners, often on safety controls. It is therefore imperative that governments take a close look at the use of funds that are earmarked for disaster relief in order to deter this insidious type of corruption.