Disaster Relief Programs Tend to Suffer From Corruption, But Why?

• Author: Chris Remington
• Posted: 2024-07-21

The past several years have seen a considerable amount of turmoil, with wildfires, flooding, and the COVID-19 pandemic all causing problems for millions of people that became impossible to ignore.

As to be expected, the United States Government has numerous departments and relief programs tasked with providing residents and citizens with the necessary resources to get through hard times.

However, although these resources are quite effective at getting people they need, they're also prone to abuse from unscrupulous individuals.

What Exactly Is Disaster Relief?

When people think of "disaster relief," they're probably imaging massive floods, raging wildfires, or destructive earthquakes, but in reality, disasters are simply instances where large numbers of people are unable to live their lives or otherwise function as they normally would, due to a breakdown in infrastructure or economic hardship.

Disasters often include natural disasters, where a large area effectively becomes uninhabitable due to some highly destructive weather event, but it can also include extreme financial downturn.

For instance, a drought might not make an area impossible to live in, but if everyone there is dependent on agriculture or something related to it, then it could classify as a disaster if enough basic infrastructure starts to buckle as a result.

How Does Corruption Occur?

When it comes to disaster relief, there are countless ways in which people can manipulate programs to their personal benefit; however, some ways are much more common than others.

Insurance Fraud

Insurance programs are really the primary way in which governments can guard against the effects of disasters. These programs can either involve supplementing private insurance policies or just providing insurance directly from federal, state, or local agencies.

Insurance fraud frequently takes the form of purposefully overestimating the value of property or pretending certain properties are relevant to the functioning of a business or municipality. It can also involve individuals pretending they have more employees than they actually have in the case of business insurance or even outright taking insurance money that rightfully belongs to employees covered by a policy.

It's also possible for insurance brokers themselves to commit fraud, which can be much easier to do during disasters as they can simply take money reserved for policy claimants without anyone noticing.

Embezzlement

Embezzlement is probably the simplest form of disaster relief corruption and (usually) involves people in positions of authority taking money or supplies designated for disaster victims and keeping it for themselves.

If they perceive a disaster is hectic enough, embezzlers might just take resources without a second thought, but when it's more likely for discrepancies to get noticed, they might "cook the books" to cover their tracks.

Also, while not necessarily embezzlement, it's possible for unscrupulous officials to launder relief money through third-party entities.

As an example, the government frequently takes bids for reconstruction projects, with the lowest bidder getting a contract. Sometimes, the people responsible for giving out contracts will make deals with contractors to offer them contracts instead of others, regardless of whether they actually should, in exchange for money later down the line.

Emergency Loans

In certain situations government entities provide emergency loans to people, usually businesses.

The greatest example of this was the Paycheck Protection Program (PPP) seen during the Covid-19 Pandemic, which offered businesses substantial (often forgivable) loans in exchange for keeping employees on payroll.

In these situations, businesses often falsely claim they meet eligibility requirements or misuse funds, resulting in billions of dollars going to waste when people really need them.

How Does This Relate to You?

Although disaster relief might seem like a far off thing that's probably not going to impact your life, the reality is that very few people expect their homes or communities will get destroyed by a hurricane or tornado, but it ultimately happens all the time.

When people misappropriate funds, the effects aren't inconsequential and, in fact, can dramatically increase suffering and rebuilding time. There's a limited amount of resources in any given instance and only so much can be used for disaster relief, which can be a serious issue if you ever find yourself in a bad situation.

Understanding how corruption works is also an important component of keeping government officials accountable. If you know where to look, you can easily determine whether relief money is going exactly where it should and who to go to in order to correct any discrepancies.

Being Aware

Staying vigilant is something everyone should do in general, but it's especially important when it comes to things like disaster relief. A little bit of corruption here or there is tolerable, but when it comes to massive disastrous events it's effects can be monumental.