No thanks: US muffs millions in Katrina money

29 Apr 2007 // DAN HARRIS (ABC NEWS): There are new questions tonight about the Bush administration's failures in the wake of Hurricane Katrina. A report finds hundreds of millions of dollars in aid offers poured in from all over the world, but none of that aid actually made it to the victims. ABC's Stephanie Sy has the story.

STEPHANIE SY (ABC NEWS): The victims of Hurricane Katrina are still struggling. But now, they are learning that millions of dollars of promised aid never reached them. The State Department acknowledges that foreign countries pledged nearly $1 billion in cash, oil and other goods. But according to government documents obtained by Citizens for Responsibility and Ethics in Washington, only a fraction of that was ever received. And 'The Washington Post" reports that just $40 million so far has been used for victims. Former New Orleans mayor, Marc Morial, says help is still needed.

MARC MORIAL (FORMER MAYOR OF NEW ORLEANS): It's painful because the needs are still real. To go into neighborhoods and see people still living in trailers, to go through the Ninth Ward and still see large stretches, where, obviously, there's been no rebuilding.

STEPHANIE SY (ABC NEWS): According to the documents, countries' offers were turned away by red tape or even negligence.

MELANIE SLOAN (CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON): One of the most disturbing e-mails we saw was this one about some Italian medical supplies, which actually were, were not used properly and they went bad and they could no longer be used.

STEPHANIE SY (ABC NEWS): While the US spent millions to hire carnival cruise ships to house displaced residents, two cruise ships offered by the Greeks were refused. The federal government was not prepared to cope with the unprecedented number of pledges made by more than 100 nations.

CONDOLEEZZA RICE (SECRETARY OF STATE): The United States is frankly not accustomed to receiving large-scale foreign assistance offers. Some of it couldn't be used. Some of (inaudible) in ways the United States could not use it. But a lot of it was used and a lot of it is still being used to help the victims.

STEPHANIE SY (ABC NEWS): The Katrina Task Force at the State Department responsible for collecting these pledges has now been disbanded. So, it's unlikely the residents of the gulf region will ever see that help. Stephanie Sy, ABC News, Washington.