February 27th, 2009 in Breaking News

FEMA s “Toxic Bureaucracy” - CBS News.

(CBS) FEMA’s been under fire from critics who claim the Gulf Coast recovery is moving too slowly. Now FEMA officials said they’re investigating allegations of serious misconduct at the New Orleans office. CBS News has learned workers there accuse their bosses of intentionally holding up Katrina aid.

The day Hurricane Katrina hit Slidell, La., in 2005, more than six feet of tidal surge flooded the city’s downtown. Today Slidell mayor Ben Morris is still running city hall - out of a trailer.

“When the train goes by, it shakes,” Morris said.

All because of endless delays, caused by FEMA, he says, which just last month delayed money for rebuilding yet again, CBS News chief investigative correspondent Armen Keteyian reports exclusively.

“It’s been an indescribable nightmare that most people would not believe,” Morris explained.

Today, nearly $4 billion intended to rebuild the Gulf Coast remain unspent. That’s 68 percent of the $6 billion promised by FEMA.

This is leaving hundreds of projects, like a police station in New Orleans, and the Charity Hospital, waiting.

Now, a CBS News investigation has uncovered what more than a dozen current and former employees say is one key reason help isn’t getting to those in need.

They point to a FEMA office in downtown New Orleans, which is responsible for distributing the money. They say the way the office is managed is itself a disaster.

Three senior level staff people - who still work for FEMA - fear they will lose their jobs for speaking out. CBS News agreed to protect their identities.

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