FEMA Wants Payback from Ineligible Aid Recipients

Thousands of people who received money from the Federal Emergency Management Agency after Hurricane Katrina are now being asked to pay the money back. FEMA fraud has been highly publicized, but many people who are facing collection say they gave FEMA correct information and followed its rules, and they should not have to pay.

FEMA's deputy director of recovery, David Garratt, says all applicants were made aware of the agency's repayment policy.

"That's a standard flag warning online and in our call center operations that an individual may have to pay that money back if there's a subsequent determination that the money was given to them in error," Garratt says.

Under federal law, FEMA is required to try to recover the money. Garratt says it's FEMA's policy to help disaster victims first, and ask questions later.

"Getting them assistance fast is more important than delaying getting them assistance to go through those checks and balances," Garratt says. "And then later we're going to go back as part of our normal process and see if they should have received it."

Ranie Thompson, a legal aid attorney in New Orleans, says it will cost more to try to collect the money from her clients than what they owe.

"Most people at this point do not have the money to pay back in full," she says, adding, "It's highly unlikely that you're going to collect $20,000 from somebody who only gets $600 a month."

FEMA is trying to get back more than $175 million from Katrina-related claims in Orleans parish alone.

More than 50,000 letters asking for repayment have already been mailed, and more than 100,000 may be on the way. A provision in the law that allows FEMA to compromise or suspend claims when it seems unlikely that they will collect the money.