THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

FEMA trailer sale called risk for buyers

By Spencer S. Hsu
Washington Post / March 14, 2010

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WASHINGTON — 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.

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

Besides formaldehyde, units may be plagued by mold, mildew, and propane gas leaks, the Federal Emergency Management Agency 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.

Earlier this year, for example, local building inspectors in Missouri discovered damaged FEMA units sold as scrap in earlier auctions in a Fenton, Mo., mobile home park, 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 also has drawn criticism from some lawmakers upset about the loss of taxpayer dollars and industry groups that say the fire sale is hurting their business.

FEMA officials defended the sale, noting that Congress has complained that the government has spent $220 million over three years to store vacant units. Wholesale buyers from the auction must sign contracts attesting that trailers will not be used, sold, or advertised as housing, they said, and that trailers will carry a sticker saying, “Not to be used for housing.’’