Road Home and Hazard Mitigation Funding Fraud - 2012
- July 5, 2012
CHATNews: Inexperience is no longer an excuse
Dear CHAT members,
Two articles recently appeared in the newspaper about Hazard Mitigation Grant Program (HMGP) funding of Road Home (RH) applicants.
The take-home message from the standpoint of the overwhelming majority of the RH applicants is that for the Louisiana State government and the federal government, accountability is a one-way street.
· Six years of careful and detailed observation of the RH and the associated HMGP clearly indicate that for the state and federal officials handling the RH and HMGP programs, accountability is not mostly about helping the disaster victims.
· Instead, these officials are overwhelmingly concerned about the very small percentage of applicants who try to take unfair advantage of the system. The officials' misbalanced priorities are to the detriment of the vast majority of applicants.
· According to these government officials, accountability is not about the government trying to protect its citizens from mistreatment by the program or by contractors running the program.
· Accountability, in the government's frequently expressed view, is rarely about protecting taxpayers from having their money land in the hands of contractors who are often taking unfair advantage of access to government funds, contractors who often overcharge, underperform, cover-up mistakes and self-aggrandizing manipulation.
· Quite often the press reflects the government officials' concerns with the program and gives far less attention to:
§ the very much larger numbers of applicants who have been misled by those running the programs (for example, continual changing of rules for applicants that make grants smaller and more difficult to get and that are so unnecessarily, extraordinarily complicated and thereby harder to track);
§ the diversion of HMGP funds from RH applicants;
§ untold numbers of RH applicants still struggling to get their homes repaired under the burden of unfair short-changed grants or denial of payment of their RH grant;
§ ICF Internationals' mistakes that shortchanged applicants when ICF was in charge of managing the RH and are still haunting some applicants as the state arranges unjustified liens on applicants' homes due to ICF miscalculations of "overpayment" to applicants.
· In an accountable system of government, applicants with proof of calculation or documentation mistakes made by ICF should be able to have someone from the program fix the mistake and stop the lien and wrong demands for applicant paybacks.
§ However, just as applicants struggled for a fair hearing of their proof that obvious mistakes were made in grant calculation by ICF, so applicants struggle now that the state Office of Community Development (OCD) is in applicant-payback mode.
§ And where will that payback money go? From a public statement made in the past by an OCD official, it will go into the OCD coffers.
· Paul Rainwater, former Exec. Director of the Louisiana Recovery Authority and current Commissioner of Administration, stated that in a letter to FEMA that I previously posted that all of the allotted FEMA funds that were supposed to be used to help RH applicants, were unnecessary for that purpose.
§ Instead, Mr. Rainwater and Patrick Forbes, the present Executive Director OCD, have cut the funds available to RH applicants.
§ The result of these manipulations is that very many thousands of HMGP applicants have been denied funds solely because of inadequate money allotted to the program after the redirecting of funds to other programs and the overly generous contracts to the companies managing the program for OCD.
· Detailed advising of applicants to help protect them from unscrupulous house-building contractors was a requirement of the RH contract to ICF International. ICF benefited enormously from being the main contractor to the state for the RH.
§ This contractual requirement was made into a mockery by ICF, who merely had posted very belatedly some advice at hiring housing contractors at the RH website, which was not even publicized to the applicants. Moreover, the government allowed ICF to add language to the grant closing papers that applicants sign stating in effect that the applicants were aware of the existence of fraudulent housing contractors. Meanwhile ICF provided no real help in that regard but it had "cover" for its contractual mandate.
§ The result, as could have been easily predicted, is that huge numbers of applicants were cheated by housing contractors. For the HMGP grants, the elevation contractors were often companies who swooped in to take advantage of Mr. Rainwater greatly increasing the ceiling for HMGP house elevation grants and directed HMGP money for RH applicants mostly to the house elevations. Thereby, he did not keep his promise that HMGP funds could also be used for reconstruction of a house that was being elevated if there was no duplication of benefits.
So the flow of the RH and HMGP money has been overly generous to contractors in what looks, sounds, and smells like a plan that intentionally did not include adequate accountability to applicants.
This has been going on for 6 years in two separate RH-related programs.
In the beginning, government officials and ICF spokespersons said over and over, "This is an unprecedented program. It is difficult to get it working smoothly from the start."
Well, now it is six years later and despite the important help that RH and HMGP gave to thousands of fortunate applicants, thousands of others have suffered mightily under the lack of accountability of these programs to put the legitimate needs of applicants (not contractors) first and foremost and treat applicants fairly and consistently.
I have excerpted statements from the two news articles mentioned above.
Homes were raised after Katrina with taxpayer money, then abandoned
Published: Sunday, June 24, 2012, 6:01 AM; By David Hammer, The Times-PicayuneThe Times-Picayune
A top FEMA official, Franki Coons, says the federal agency is deeply concerned that an untold number of homeowners in the New Orleans area lifted their houses at taxpayer expense -- some even receiving beautiful, ornate foundations and staircases -- and haven't done another thing to fix their storm-ravaged structures.
"There are pictures of properties that now have a certificate of occupancy (even though) the entire back wall is gone," Coons said. "I pulled some individual files while I was down there recently, and I saw one where we paid $90,000 and ... it didn't look like anything had been reconnected, yet it got a certificate of occupancy. Those are the kinds of things that are the subject of numerous investigations and exactly what prompted us to say we're not certain there's good project management going on there."
The elevation grant program paid another $32,000 so the [a] house could be elevated in April 2010. Three months later, the city granted a certificate of occupancy, something that shoring companies ask for when they're done because they need it to collect the second half or final third of the grant. Charles Heisser said he didn't ask for the certificate and can't understand why it was issued, given that his house has no finished floors, no interior walls, no electricity and no plumbing.
Accountability rules are an afterthought in Gov. Jindal's Louisiana: Jarvis DeBerry
Tuesday, June 26, 2012, 8:45 AM
., Carriere said his house is incomplete because the state told him after work began that his contractor is unlicensed.
By then, Carriere said, he'd already given the Birmingham contractor half of the $80,000 estimated to do the job.
Carriere wonders why the state didn't do that from the beginning. "I had three quotes," he said, "and I could have picked one of the other guys ... to get it done."
State officials initially refused to serve as any type of go between or conduct any type of vetting. That allowed unscrupulous and unlicensed contractors to get hold of taxpayer's money.
Founder, Citizens' Road Home Action Team (CHAT)