Bombshell report reveals misuse of millions in FEMA funding to casino

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The Omaha Tribe of Nebraska and Iowa is losing its federal funding after an audit by the inspector general found that organizations used disaster relief grants to repair an old casino and pad officials’ pockets.

“The problems we found at the Omaha Tribe were serious and pervasive,” said the Department of Homeland Security’s Office of the Inspector General after finding that they mismanaged roughly $14 million in federal flood-assistance grants. “(The tribe) is not capable of properly managing a federal grant.”

The Omaha tribe was awarded $13.9 in FEMA funding for flood damage sustained in 2011. The audit, released last week, revealed a disorganized mess that borders on corruption.

“The Omaha Tribe’s accounting system and supporting documentation were so unreliable and in such disarray that the only amounts we were able to verify with any degree of confidence were $2.8 million of unneeded funds; $165,000 of unclaimed insurance coverage; and about $74,749 of eligible and supported costs,” the inspector general’s office said in its 32-page report, which was issued on Nov. 30. “We question the remaining $13.9 million as unsupported.”

The report further revealed that the Omaha Tribe spent $168,764 in taxpayer funding for “ineligible expenditures to repair its old casino” and awarded $312,282 to itself as a “bonus,” according to a report in The Washington Free Beacon.

States typically are experienced in managing FEMA grants, but Indian tribes and U.S. territories don’t often know what they’re doing, according to the audit. It was also noted that the tribe’s poor record-keeping has been a long-running problem that resulted in sanctions by the Bureau of Indian Affairs from 2011 to 2013.

FEMA had approved building the new Blackbird Bend Casino, but this meant that they couldn’t use the money to renovate an old casino and turn it into an events center. However, when the Omaha Tribe saw that they had money left over on the new casino project, they used it to pay their own contracting company a massive bonus.

“These problems occurred for many reasons; however, the Tribal Emergency Management Director said that the principle of tribal sovereignty overrides Federal regulation and allowed the tribe to manage its grant through tribal law,” the inspector general said.

“Tribal sovereignty is the inherent authority of indigenous tribes to govern themselves. However, the principle of tribal sovereignty does not allow Native American tribes to poorly manage their finances, profit from Federal grants, pay themselves bonuses, or disregard Federal regulations.”

FEMA will likely designate the tribe as a “high-risk grantee” and disallow any funds that went to unauthorized work.

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