Kudos to the NY Daily News for its investigative series, launched Sunday, on how billions in 9/11 funds have been misspent (hat tip: BizzyBlog):

…a four-month Daily News investigation of the $21.4 billion disaster recovery package reveals that major elements of the aid process were procedurally flawed — from the determination of how much money was supposedly needed, to how it was distributed, to how it was actually spent and ultimately, to how little oversight there was over the spending. In effect, no one was watching.

As a result, 9/11 recovery aid was used to finance a plethora of projects that taxpayers elsewhere could be forgiven for characterizing as old-fashioned pork-barrel spending…

Some specifics:

# Hundreds of millions of dollars were spent on projects that seemingly had nothing to do with 9/11 and lower Manhattan.

# Programs were plagued with so many loopholes that millions more ended up being given to recipients who did not fit the full intent of the particular program.

# Still more millions went to help projects already in the works before 9/11 or on the drawing board with no prior funding source.

# Huge contracts were given to companies and organizations linked to the very officials tasked with deciding how to spend the money — creating, at a minimum, the potential for multiple conflicts of interest.

# Substantial sums were given to companies to stay in lower Manhattan even though they had no intention of leaving.

# In many cases, original eligibility rules were expanded, and deadlines extended, so that virtually no one was ineligible. Vast numbers of applications were filed during the final weeks of signup periods.

# Rules for some aid programs were so loose and broadly drawn that otherwise honest people grabbed their little piece of the 9/11 money pot — like the thousands of New Yorkers who took advantage of FEMA by obtaining free air conditioners, air purifiers, air filters and/or high-efficiency vacuum cleaners.

# The gold rush also attracted businesses and organizations that followed all the rules for obtaining relief but didn’t necessarily need free money to survive.

Then there’s the city Department of Education. It did such a poor job of keeping track of how it spent its $32 million share of Project Liberty grief counseling funds, that four years later, the feds are still withholding $26.8 million. Finally, The News found that program after program was designed, then redesigned, with a singular goal: spend every dime.

For example, in August 2002, the Empire State Development Corp. revised the formula for its Business Recovery Grant program to make the maximum awards available to more companies. Based on the old rules and the spending rate at that point, the recovery grant program never would have spent its full allotment.

The genesis of the $21.4 billion figure for New York? Sen. Chuck Schumer pulled it out of…the air:

The magic number of “$20 billion” that President Bush first said he would give New York was actually pulled from thin air, a figure born of politics and compassion rather than actuarial calculation and meaningful analysis.

Sen. Chuck Schumer (D-N.Y.) came up with the number in an effort to match the amount of emergency money being planned for anti-terrorism security across the country — legislation that made no specific mention of New York.

“To ask for more than $20 billion — more for New York than for all the military and the rest of the country — would seem excessive,” Schumer told the Daily News. “But to ask for less than $20 billion would be derelict in my duties as a New York senator. So I figured, ‘Let’s match it, $20 billion for the rest and $20 billion for New York.’”

Schumer remembers Bush asking, “New York really needs $20 billion?”

“At least that, Mr. President,” Schumer replied.

“You got it,” said Bush.

As Schumer later recalled, “I got up out of my chair, and I almost went over to hug him, but I realized he was the President, so I patted him on the back.”

Read how the 9/11 funding became a corporate welfare slush fund here and here.

The latest development: Pols urge probe of 9/11 billions.

Hint: Look in the mirror.

On a related note, I wrote on how charity vultures were exploiting 9/11 funds back in December 2001:

Left-leaning Asian-American activists are in on the act — collecting dubious race-based relief funds and spouting bureaucratic mumbo-jumbo to justify themselves.

Consider: The United Way gave more money to an Asian-American social services group than it did to the New York Fire Department for family grief counseling. The non-profit Asian American Federation of New York snagged $250,900 “to coordinate supportive services and relief efforts for Chinatown residents.” By comparison, the September 11th Fund distributed $225,000 to the NYC Fire Department for grief counseling to firefighters and families.

There’s something wrong with this picture.

The AAFNY is made up of 36 Asian-American health and human service agencies. Charlie Lai, the federation’s policy and planning director, told me that $200,000 of the United Way grant will go this week to four of its members to “connect affected individuals to appropriate services” and help them “fill out a slew of government forms.” Will “affected individuals” get any of the money? Not a dime.

In fact, Lai says, direct cash relief for victims is “really the least important component for us.” Instead, the money will go to human resource experts who will create “a more focused pathway to social services;” assist displaced workers “in evaluating their employability skills;” and “broaden the spectrum of human potential.” The rest of the federation’s United Way grant - $50,000 - will be used to “implement and coordinate advocacy.” In other words, Lai says, “It’s for me. For my salary…”

And here’s how Democrats in New Jersey turned federal 9/11 homeland security money into their own party slush fund.

“Everything changed after 9/11,” they said.

Not quite.

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9/11 Families For a Safe and Strong America react to the news.

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The 9/11 Commission bloviators are back in the news. Read Richard Posner instead. (Hat tip: Freedom to Belarus)

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