AN INVESTIGATION began yesterday into the Bush Administration’s payment of $236 million (£133 million) to rent three cruise ships to house victims of Hurricane Katrina.

The payment means that every week each evacuee on the three ships, which now sit more than half empty in the Mississippi River, costs taxpayers more than twice the cost of a seven-day Caribbean cruise.

The six-month contract, awarded to Carnival Cruise Lines without a competitive bidding process, is the latest of dozens now under investigation by government auditors amid claims of price hiking and political favouritism.

On Capitol Hill yesterday government auditors from six federal agencies told a congressional committee that hundreds of millions of dollars in contracts were being investigated, particularly those alleged to have been awarded to companies with ties to the White House and Republican Party.

The cruise line contract appears to have been made in the panic that gripped the Federal Emergency Management Agency (Fema) in the chaos after Katrina struck, rather than a case of political payback.

Republicans and Democrats expressed disbelief at the price yesterday. Tom Coburn, a Republican senator from Oklahoma, calculated that if the ships were full, with 7,116 evacuees, for six months, the price per evacuee would be $1,275 a week. A seven-day Caribbean cruise could be bought for $599 a person.

The inspector general of the Homeland Security Department announced this week that he was investigating how several companies were awarded contracts.

The largest contract so far awarded — $568 million for debris removal — went to a Florida company with ties to the Republican Governor of Mississippi.

More than 80 per cent of the $1.5 billion of contracts already signed were awarded without bidding, or under limited competition.

Fluor Corporation of California, and Bechtel National big donors to the Republican Party, have also been awarded contracts to provide temporary housing.

Meanwhile, the finger-pointing over who was responsible for the disaster in New Orleans turned increasingly bitter.

On Tuesday Michael Brown, the former head of Fema who resigned after being heavily criticised for his poor performance, told a congressional panel investigating the catastrophe that Ray Nagin, the New Orleans Mayor, and Kathleen Blanco, the Louisiana Governor, were largely to blame.

Ms Blanco, who appeared before the same panel yesterday, said: “Such falsehoods and misleading statements, made under oath before Congress, are shocking.”

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