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Who's making money off FEMA trailers

3 years 3 months 2 weeks ago February 11, 2014 Feb 11, 2014 Tuesday, February 11 2014 February 11, 2014 10:13 AM in The Investigative Unit
Source: WBRZ
By: Michael Marsh

BATON ROUGE - Thousands of FEMA trailers bought by the government for Hurricane Katrina continue to be auctioned off nine years after the storm, and each sale shows how much taxpayers have lost.

Mike Dupree and his friend were looking for a trailer to put on their hunting lease. They found one they liked among a hundred in Carnecro being auctioned off by Henderson Auctions of Livingston Parish. The prices can range from $3,000 to $5,000 depending on the size and condition.

"I bought one three years ago, one like this... and I paid $2,600 so, it's in real good shape," Dupree told the News 2 Investigative Unit.

Following the money trail that put those trailers in Carencro is like following the history of the hurricane itself. After the storm FEMA bought 145,000 trailers to house evacuees, paying more than $2.5 billion. Most were occupied for two years, after which FEMA turned the trailers over to the General Services Administration to sell as surplus. The government wanted them gone as quickly as possible to reduce the exorbitant cost of storage.

That gave RV dealers the upper hand, because they had the money to buy in large numbers. Through 11 auctions the GSA sold 120,000 trailers, getting back just $300 million of the government's initial $2.5 billion cost.

Now RV dealers have lots filled with the aging trailers, and are making money on the other end selling them to individuals. Formaldehyde fumes from the glue used to make the trailers have dissipated in the years since Katrina evacuees sued the government over them, an issue that helped drive down the trailers' price at auction. A 40-foot trailer bought from the GSA for $1,200 to $1,500 sold for $4,500 in the recent Henderson auction.

Even though Dupree got a good deal for his camp, he agrees that taxpayers lost out.

"You can't recoup on them, it's bottom line. You can't get your money back," he said.

The GSA said it accepted the highest bids for the trailers at its auctions, and contends bulk sales were the best way to save taxpayers money since RV dealers could handle the logistics of taking large numbers of trailers at a time.

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