Disaster relief funds open floodgates of corruption in US

December 12th, 2008 - 5:09 pm ICT by IANS  

Washington, Dec 12 (IANS) The tonnes of money that flood disaster relief operations open the floodgates of corruption and self-aggrandisement.Federal prosecutors have thus far charged 700 individuals with crimes related to the nearly $33 billion FEMA (Federal Emergency Management Agency) allocated to deal with the disasters, according to the study.

“Our findings suggest that notoriously corrupt regions of the US, such as the Gulf Coast, are in part notoriously corrupt because natural disasters frequently strike them,” write authors Peter Leeson of George Mason University and Russell Sobel of West Virginia University.

“They attract more disaster relief, which makes them more corrupt. We find each $100 of FEMA provided disaster relief increases the average state’s corruption by nearly 102 percent,” they added.

Leeson and Sobel based their conclusions on a statistical model that measured the relationship between FEMA allocations and corruption in each US state, according to a joint release of both the Universities.

The researchers quantified corruption as the number of per capita convictions of public officials for crimes such as embezzlement, accepting bribes or kickbacks, extortion and unlawful dealings with private vendors or contractors.

Hurricane-prone states like Florida, Mississippi and Louisiana, which receive large amounts of FEMA money, tend to have more corruption convictions per capita. States like Nebraska and Colorado, which receive almost no FEMA dollars, have least corruption.

Leeson and Sobel also found notable spikes in corruption convictions in the year following influxes of FEMA money in a given area.

For example, in 1997 Minnesota received around $300 million from FEMA after the Red River Flood. In 1998, corruption convictions in Minnesota spiked to 14 per 100,000 citizens from less than two per 100,000 the year before.

The data used in the study were from 1990 to 1999, so the Katrina and Rita disasters of 2005 are not included. But Leeson and Sobel say the preliminary numbers indicate the aftermath of those disasters appears consistent with their finding.

These findings have been published in the Journal of Law and Economics.

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