HMGP Money-Flow Secrets; Homeowner Return To NOLA Dec. 30, 2011
Dear CHAT Members,
This letter is being sent late because we were having some problems with our electronic distribution system, which were kindly fixed by my scientist colleague Dr. Xueqing Xu.
Here are three items for our end-of-the-year newsletter.
1. . Where did the federal money go for HMGP? The public has the right to know and the right to timely information.
Among the important documents that I requested under the Louisiana public records request law were documents showing how much money was spent from Hurricane Katrina/Rita Mitigation Grant Program (HMGP) funds for Louisiana and where in the state they were spent.
This money came automatically to the State of Louisiana automatically as a percentage (7%) of the money spent by FEMA on clean-up after Hurricanes Katrina and Rita in 2005, in accord with federal law. This funding is intended to mitigate (reduce) the damage in future disasters by better building or other measures.
My request for these documents was made to Paul Rainwater, then head of the Office of Community Development (OCD) and the Louisiana Recovery Authority (LRA), and currently Commissioner of Administration under Gov. Jindal.
My formal request for these documents was sent to him on July 1, 2008
Below is the text of the request about federal (FEMA) HMGP expenditures by the state government:
Provide an explanation and documentation regarding the spending and appropriations to date of the $1.4 billion from FEMA Hazard Mitigation Funds that came to Louisiana State government as a result of Hurricanes Katrina and Rita. Include the location within the state where the money was allocated to be spent or has been spent and the projected expenses for HMGP elevation grants for Road Home applicants from these funds.
According to the Louisiana Public Records Request law, a citizen can only request documents that are already available.
Here is some of the background about these HMGP expenditures documents that I was requesting.
In the minutes of the Oct. 11, 2007 Louisiana Recovery Authority (LRA) Board Meeting:
Executive Director's Report [the LRA director was then Andy Kopplin].
Dr. Francis [Dr. Norman Francis, who was Chairman of the LRA Board] asked if the $1.2 billion funding will cover those who have already elevated as well as those who are just starting the process.
Mr. Kopplin replied that we would like to use FEMA funding to pay for the elevations;
however, FEMA said they would only pay for those who have not started the process. We
have asked that they waive this requirement. Mr. Kopplin thanked the Times Picayune for its article, which pointed out the absurdity of the policy.
Dr. Francis asked if the $1.2 billion in HMGP funding is still on the table.
Later on, I was s told by a Road Home official that the amount of HMGP funds increased from $1.2 billion to $1.4 billion as a result of recalculation of the cost of post-Katrina cleanup by FEMA.
In early 2008, Mr. Rainwater, who became Executive Director of the LRA in Jan. 2008, told me during a conference between him and me in New Orleans that this money was unequivocally going to be spent only in South Louisiana.
He said this in answer to my question as to why LRA was not spending it predominantly on Road Home applicants, as Mr. Kopplin had said it would (see above LRA minutes).
I told him that I had heard that much of this money was going to Northern Louisiana for electric generators.
In Northern Louisiana there was no hurricane or flooding in 2005 but Gov. Jindal, who appointed Mr. Rainwater to succeed Andy Kopplin, has his political base there.
Therefore, I included in my request for documents about how much money was spent on the HMGP documents describing the locations in the state of Louisiana in which this HMGP money was spent.
In addition, when I made that public records request, it was common knowledge that the HMGP fund distribution for RH applicants was going extremely slowly even though it made obvious sense for people to elevate their houses before finishing repairs or rebuilding.
It was already 3 years after Hurricane Katrina when I made this request for public documents (summer of 2008).
Moreover, there had to be regular, detailed accounting statements and reports from the state officials to FEMA officials on the spending of these federal funds.
So it should have been an easy matter to let me see those documents.
But it was not made easy for me at all.
Moreover, no document with this information was ever given to me in response to my request.
In the process of the state dodging its responsibility to provide documents about this spending of federal funds and other documents I requested, state tax dollars were wasted, as I will describe in later newsletters.
2. Some recent news articles about the Hazard Mitigation Program
· Many Road Home grant recipients haven't rebuilt
Published: Tuesday, December 27, 2011, 8:00 AM Updated: Tuesday, December 27, 2011, 1:24 PM
"State has no plans to recoup the money" subtitle of article
By David Hammer, The Times-Picayune NOLA.com
Most homeowners who got Road Home grants in 2006, 2007 and 2008 have now passed a three-year deadline to rebuild their homes, but even though many of them admit they haven't complied with the legal promises they signed, the state has no plans to take any of the federal taxpayer money back
The successful rebuilding of the remaining Road Home Option 1 properties represents the single greatest possibility to further reduce blight in New Orleans in the short term," said Jeff Hebert, the city's director of blight policy and neighborhood revitalization. "The failure of grant recipients to fulfill their obligations will significantly contribute to blight in our neighborhoods." ..
1. This statement reveals a lack of understanding of the pervasive underfunding of RH applicants which has prevented very many low-to-middle income applicants from rebuilding their homes who very much wanted to do so.
2. For example, it is highly unlikely that the 78% decrease in occupied homeowner-owned homes in the Lower Ninth Ward (L9) from 2000 to 2010 (despite much help from non-governmental sources) is mostly due to a lack of desire to return to homes that were often mortgage-free.
3. In comparison to L9, there was a 41% decrease in occupied homeowner-owned homes in Lakeview during the same period although those in Lakeview received far less non-governmental help from non-profits.
4. The difference between these neighborhoods is likely due to the lower appraisal values of the L9 land decreasing grants for low-income RH applicants and fewer financial resources for the L9 occupants than those in Lakeview to compensate from inadequate and often unfairly calculated RH grants.
5. Our CHAT surveys and contacts from applicants of all income groups showed that low-income applicants were no less desirous of returning and rebuilding than high-income applicants but the difference in their return rate was largely due to inadequate funds for rebuilding.
6. The state often touts its compensatory programs for low-income applicants were devised by the state and administered in a way that missed many financially needy applicants, as CHAT and other organizations advocating for hurricane victims repeatedly advised RH officials.
7. In fact, CHAT had to advise low-income applicants to protest being excluded from eligibility for Additional Compensation Grants by the contractor ICF International sometimes taking one high paycheck in a year to calculate annual income instead of taking at least three paychecks, and thereby violating RH's own rules.
· Consultant indicted in home elevation case
By The Associated Press
December 16, 2011
A consultant to several shoring contractors has been indicted by a state grand jury in Baton Rouge in connection with the state's troubled home elevation grant program
· Elevation consultant indicted on charge of paying off grant program officials
Published: Thursday, December 15, 2011, 8:05 PM
By David Hammer, The Times-picayune
Prosecutors from the state attorney general's office allege that from 2009 to October 2011, Davis paid thousands of dollars to Courage Idusuyi, one of the state's top managers in the Hazard Mitigation Grant Program, in exchange for private homeowner information that Davis could then sell to contractors to help them solicit house-raising work from homeowners who were assured of getting state grants of up to $100,000.
The state responded by firing Idusuyi on Thursday afternoon.
The indictment also charges Davis with paying three program employees who worked for Shaw Group, which has a $66 million state contract to provide staff to the program. Assistant Attorney General David Caldwell said Davis paid former program employees Michael Tucker, Tanya Kenner and Wanda Acker so they would help Davis' clients. There was also an understanding that they would in turn use some of the money to pay Idusuyi, the state's production team leader, for more of the protected homeowner information, Caldwell said.
"For months, our office has been cooperating with investigators on this and other inquiries," said state spokeswoman Christina Stephens. "We take any allegation of wrongdoing very seriously and, in fact, had alerted the authorities to allegations that one of those mentioned in today's indictment, Tanya Kenner, was reportedly involved in fraudulent activities."
There will be a related discussion of privacy breeches & ICF in a subsequent newsletter
3. Too late but of some use in helping to protect applicants against contractor fraud.
I would like to share with you a recent letter that I obtained from the internet.
This letter states applicants' rights and contractors' responsibilities under the Hazard Mitigation Grant Program (HMGP) for RH applicants.
The above linked letter which was dated Nov. 1, 2011 is clearly in response to the recent whistle-blower lawsuits alleging state and house-contractor fraud in administration of the HMGP in Louisiana.
Applicants' complaints and entreaties did not suffice but a lawsuit from whistleblowers did manage to turn the state officials' gaze to contractor fraud in the HMGP.
The letter appears to have some useful features to help applicants but is, unfortunately, years late for protecting countless numbers of RH applicants from housing-contractor fraud when applicants were trying to rebuild, renovate, or raise their hurricane/flood-damaged homes.
In a future newsletter, I will discuss CHAT's unsuccessful attempts early in the RH program to convince RH officials to protect applicants from contractor fraud.
Best wishes for a very Happy New Year,
Co-Chairman, Citizens' Road Home Action Team (CHAT)