FEMA Sat On $85 Million in Katrina Relief

"FEMA gave away about $85 million in household goods meant for Hurricane Katrina victims, a CNN investigation has found. The material -- from basic kitchen goods to sleeping necessities -- sat in warehouses for two years before the Federal Emergency Management Agency's giveaway to federal and state agencies this year.

Martha Kegel, the head of a New Orleans nonprofit agency that helps find homes for those still displaced by the storm, said she was shocked to learn about the existence of the goods and the government giveaway.

'These are exactly the items that we are desperately seeking donations of right now -- basic kitchen household supplies,' said Kegel, executive director of Unity of Greater New Orleans. 'These are the very things that we are seeking right now. FEMA, in fact, refers homeless clients to us to house them. How can we house them if we don't have basic supplies?'

Kegel's group works with FEMA and other local organizations to rehouse victims of Katrina, the 2005 hurricane that flooded New Orleans and killed more than 1,800 people along the Gulf Coast. Community groups say thousands of people are still living in abandoned buildings in the city, though fewer than 100 people remain housed in tents.

FEMA confirmed it had kept the merchandise in storage for the past two years -- then gave it away to cities, schools, fire departments and nonprofit agencies such as food banks. In all, General Services Administration records show FEMA gave away 121 truckloads of material."