Profiting from terror

I still hear the occasional story of Katrina victims bilking the government out of two thousand dollars here or three thousand dollars there from my Republican friends. On the other hand, they never seem too worked up about the billions of taxpayer dollars that have vanished into the coffers of government contractors since 9/11. Maybe they're just impressed by the free market's skill and efficiency in defrauding the nation.

Hundreds of millions of dollars in federal aid intended to help small downtown businesses that were reeling from the 9/11 attacks often went instead to huge international corporations, companies with little attachment to the stricken area and businesses that were never in jeopardy.

The beneficiaries included a stock brokerage firm that had closed more than a month before the terrorists hit, a giant real estate firm that repeatedly said it wasn't hurt by the attacks, scores of wealthy self-employed floor traders and a Gramercy Park messenger service with a tiny satellite office downtown, a Daily News investigation of 9/11 disaster recovery aid shows.

The fast and furious distribution of nearly $1 billion in small business aid — part of the $21.4 billion promised to New York overall — was done by the Empire State Development Corp., a quasi-governmental agency with no experience in disaster relief.

Within four months of the attacks, the agency had created five grant programs - free money - and two loan programs to distribute the funds to businesses.