Katrina: Gov't Failure, Private Fraud

Secretary of Homeland Security Michael Chertoff pauses during remarks to the National Emergency Management Association on Monday, Feb. 13, 2006 in Alexandria, Va.
As a congressional report blamed government-wide ineptitude for mishandling the Hurricane Katrina relief effort, a government accounting report called out misspending on hurricane efforts and the Justice Department announced widespread hurricane-related fraud.

The 600-page report by a special Republican-dominated House inquiry into one of the worst natural disasters in U.S. history concluded that "Katrina was a national failure, an abdication of the most solemn obligation to provide for the common welfare. At every level – individual, corporate, philanthropic, and governmental – we failed to meet the challenge that was Katrina."

Excerpts from a draft of the report, which is due for release Wednesday, obtained by CBS News said "a blinding lack of situational awareness and disjointed decision making needlessly compounded and prolonged Katrina's horror."

CBS News correspondent Bob Fuss reports that the draft report said President Bush's Homeland Security team didn't analyze or act effectively on the information it had after Katrina hit, that Homeland Security Secretary Michael Chertoff failed to do what he was supposed to and that the federal government "stumbled" into its response for the first several days after Katrina came ashore.

The report is being released as Chertoff announced wide-ranging changes to the nation's embattled Federal Emergency Management Agency.

The former FEMA chief likely will get a grilling from the Senate Homeland Security and Governmental Affairs Committee, which was going to hold a hearing on the subject on Tuesday. Late Monday, that hearing was postponed; a new date for the hearing has yet to be announced.

Sen. Susan Collins, R-Maine, will be leading the questioning of Chertoff. Does she see Chertoff keeping his job?

"That's not my call," Collins said. "That's the president's call."

One question Senators are hoping to get answered, reports CBS News correspondent Sharyl Attkisson, is why Chertoff was a full day late in knowing about New Orleans' levee breaks.

The changes against FEMA in the report range from creation of a full-time response force of 1,500 new employees to establishing a more reliable system to report on disasters as they unfold.

They are the first steps to overhauling FEMA, which was overwhelmed by the Aug. 29 Gulf Coast storm.

Monday, federal prosecutors have filed fraud, theft and other charges against 212 people accused of scams related to Gulf Coast hurricanes. Forty people have pleaded guilty so far, according to the latest report by the Hurricane Katrina Fraud Task Force. Many defendants were accused of trying to obtain emergency aid, typically a $2,000 debit card, issued to hurricane victims by FEMA and the American Red Cross.

Chertoff – who has been the target of much of the criticism of the federal response to the hurricane – rejected criticism that his agency is preoccupied with terror threats, at the expense of preparing for natural disasters like Katrina.

"I want to tell you I unequivocally and strongly reject this attempt to drive a wedge between our concerns about terrorism and our concerns about natural disasters," Chertoff said.

His strong defense of his agency came in response to criticism by ex-FEMA chief Michael Brown and others.

Chertoff spoke at a gathering (RAW video) of state emergency management directors meeting in suburban Alexandria, Va. He responded to what he said were "people taking the position that DHS sees itself as a terrorism-focused agency" and that there's a "huge difference" between man-made and natural disasters.

Brown, who resigned under pressure as FEMA head, told a Senate committee last week he told the White House and Homeland Security officials on Aug. 29, the day Katrina hit, that major flooding was under way and a levee had been breached.

But both President Bush and Chertoff said previously that they were unaware of the levee breach until the next day, Aug. 30.

The failure of the levee system led to the catastrophic flooding of the city of 500,000 people.