March 13, 2010
By Spencer S. Hsu
Washington Post

In a giant auction, the federal government has agreed to sell for pennies on the dollar most of the 120,000 formaldehyde-tainted trailers it bought nearly five years ago for Hurricane Katrina victims. But the sale of the units, perhaps the most visible symbol of the government's bungled response to the hurricane, has triggered a new round of charges that it is endangering future buyers for years to come.

Photo: Workers put the final touches on the FEMA trailer city in Baker, La., on Monday, Oct. 3, 2005, in preparation for the arrival of evacuees from New Orleans and the surrounding areas. The camp has nearly 600 trailers that will each house up to four people. (AP / The Times, Shane Bevel)

Consumer advocates and environmentalists are outraged that the government resold products it deemed unsafe to live in, saying warning stickers attached to the units will not keep people from misusing them.

Besides formaldehyde, units might be plagued by mold, mildew and propane gas leaks, FEMA acknowledged.

"Proceed with caution, extreme caution, if you are tempted to respond to what appears to be an attractive offer for a travel trailer or manufactured home," Arkansas Attorney General Dustin McDaniel wrote in a consumer alert. He and others cautioned that the FEMA units could be resold many times, including over the Internet, and that unscrupulous sellers could remove warning labels or withhold information about the dangers.

This year, for example, building inspectors in Missouri discovered damaged FEMA units sold as scrap in a Fenton, Mo., mobile home park. The units were billed as housing even though their paperwork specified they were not to be occupied.

"What if Toyota ordered a recall, then simply put a sticker on its vehicles saying they were unfit to drive before reselling them?" said Becky Gillette, a spokeswoman for the Sierra Club in Mississippi, which helped uncover the formaldehyde problem. "There's a double standard for the government."

The sale of the units will be completed by April 3, pending an antitrust review by the Justice Department, which has rarely reversed government auctions. In the meantime, the sale has drawn criticism from lawmakers upset about the loss of taxpayer dollars and from industry groups that say the fire sale is hurting their business.

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