[Congressional Record Volume 141, Number 109 (Friday, June 30, 1995)]
[Senate]
[Pages S9574-S9575]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


           THE DISASTER VICTIMS CRIME PREVENTION ACT OF 1995

 Mr. AKAKA. Mr. President, shortly after the Senate returns 
from the Fourth of July recess, I plan to introduce the Federal 
Disaster Preparedness and Response Act of 1995. This bill will be very 
similar to the measure I offered in the 103d Congress with Senator 
Glenn and Graham of Florida.
  It is very appropriate to announce my intention to reintroduce this 
legislation as we debate the conference report on the supplemental 
disaster bill. We are all aware of the tremendous costs incurred during 
a natural disaster. What many of us are unaware of is the need to 
combat fraud against victims of Federal disasters. The legislation I 
plan to introduce would make it a Federal crime to defraud persons 
through the sale of materials or services for cleanup, repair, and 
recovery following a federally declared disaster.
  Because of instant media coverage of the destruction caused by these 
catastrophic events, we are able to see first-hand the concern of 
others, such as Red Cross volunteers passing out blankets and food and 
citizens travelling hundreds of miles to help rebuild strangers' homes.
  Despite the outpouring of public support that follows these 
catastrophes, there are unscrupulous individuals who prey on trusting 
and unsuspecting victims. This measure would criminalize some of the 
activities undertaken by these unprincipled people whose sole intent is 
to defraud hard-working men and women.
  Every disaster has examples of individuals who are victimized twice--
first by the disaster and later by unconscionable price hikes and 
fraudulent contractors. In the wake of the 1993 Midwest flooding, Iowa 
officials found that some vendors raised the price of portable toilets 
from $60 a month to $60 a day! In other flood-hit areas, carpet 
cleaners hiked their prices to $350 per hour, while telemarketers set 
up telephone banks to solicit funds for phony flood-rated charities.
  Nor will television viewers forget the scenes of beleaguered South 
Floridians buying generators, plastic sheeting, and bottled water at 
outrageous prices in the aftermath of Hurricane Andrew.
  After Hurricane Iniki devastated the Island of Kauai, a contractor 
promising quick home repair took disaster benefits from numerous 
homeowners and fled the area without completing promised construction.
  While the Stafford Natural Disaster Act currently provides for civil 
and criminal penalties for the misuse of disaster funds, it fails to 
address contractor fraud. To fill this gap, my legislation would make 
it a Federal crime to fraudulently take money from a disaster victim 
and fail to provide the agreed upon material or service for the 
cleanup, repair, and recovery.
  The Stafford Act also fails to address price gouging. Although it is 
the responsibility of the States to impose restrictions on price 
increases prior to a Federal disaster declaration, Federal penalties 
for price gouging should be imposed once a disaster has been declared. 
I am pleased to incorporate in this measure an initiative Senator Glenn 
began following Hurricane Andrew to combat price gouging and excessive 
pricing of goods and services.
  There already is tremendous cooperation among the various State and 
local offices that deal with fraud and consumer protection issues and 
it is quite common for these fine men and women to lend their expertise 
to their colleagues from out-of-State during a natural disaster. This 
exchange of experiences and practical solutions has created a strong 
support network.
  However, a Federal remedy is needed to assist States when a disaster 
occurs. There should be a broader enforcement system to help 
overburdened State and local governments during a time of disaster. The 
Federal Government is in a position to ensure that residents within a 
federally declared disaster area do not fall victim to fraud. Federal 
agencies should assist localities to provide such a support system.
  In addition to making disaster-related fraud a Federal crime, this 
bill would also require the Director of the Federal Emergency 
Management Agency to develop public information materials to advise 
disaster victims about ways to detect and avoid fraud. I have seen a 
number of anti-fraud material prepared by State consumer protection 

[[Page S9575]]
offices and believe this section would assist States to disseminate 
anti-fraud related material following the declaration of a disaster by 
the President.
  I look forward to working with my colleagues in enacting this 
legislation.


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