BILOXI, Miss. – The first fraud indictments involving Katrina-relief money should be comingwithin a month, the State Auditor’s office said.

“We have 40 cases open,” said Jesse Bingham director of investigations for the office. “We’ve looked at around 300 cases. We’re probably within 30 days of bringing indictments and making arrests. We’re going to be aggressive with these cases.”

Also Friday, Ken Donohue, inspector general for the U.S. Department of Housing and Urban Development, said his office has heard of complaints about HUD-funded Katrina contracts a state agency awarded to state lawmakers and his agency is looking into it.

The comments were made at a one-day forum Donohue organized at Imperial Palace casino in Biloxi for all the federal and state watchdogs of Katrina relief money.

A complaint was recently filed with the state Ethics Commission about state Sen. Tommy Robertson, R-Moss Point, and state Reps. Jim Beckett, R-Bruce, and Jim Simpson, R-Long Beach, making money from legal work on Katrina homeowner grants. The contract for the work was awarded by the Mississippi Development Authority, which is administering the federal homeowner grants.

“I’m aware of the issue, and I think that’s being explored as we speak,” Donohue said.

Gray Swoope, incoming head of MDA, said this week the agency followed all applicable laws in awarding contracts, and the company created by Robertson and Beckett had the lowest and best bid for the legal work.

“The groups that got (contracts) were much lower than the others,” Swoope said. “We have a fiduciary responsibility to save money whenever we can.”

Donohue and State Auditor Phil Bryant said Friday’s summit was an important one. It was attended by dozens of auditors from the state, HUD, Homeland Security, Department of Justice, Government Accounting Office, Department of Health and Human Services and others, as well as officials from Alabama, Florida, Georgia and Texas. Last February, Bryant held a similar get-on-the-same-page meeting.

“A lack of communication between all these agencies could just be disastrous,” Bryant said. “As (Gov. Haley Barbour) said, we want to front-end load this process of auditing these funds. We want to reduce and eliminate de-obligation – that’s the dirty word. That’s when we spend money, and then (the federal government) comes back and says you’re not going to be reimbursed because you didn’t follow the rules. That’s a terrible potential for state and local governments.”

Bryant said so far, the apparent percentage of fraud with the billions of federal dollars that have been flowing into Mississippi “is very low, in the single digits,” compared to a roughly accepted average in similar programs of around 15 percent.

“We want to be able to say that here in Mississippi, we prevented fraud,” Bryant said. “We want these first people indicted to have their pictures on the front page. We want it to be a terrible experience when you try to defraud HUD or Mississippi.



(c) 2006, The Sun Herald (Biloxi, Miss.).

Visit The Sun Herald Online at http://www.sunherald.com/

Distributed by McClatchy-Tribune Information Services.

AP-NY-12-02-06 1633EST


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