[StBernard] Katrina victims complain about red tape
westley at da-parish.com
Thu Mar 13 18:34:46 EDT 2008
Katrina victims complain about red tape By JOHN MORENO GONZALES, Associated
2 hours, 1 minute ago
Two and a half years after Hurricane Katrina, tens of thousands of miserable
homeowners are still waiting for their government rebuilding checks, and
many complain they can't even get their calls returned. But the company that
holds the big contract to distribute the aid is doing quite well for itself.
ICF International of Fairfax, Va., has posted strong profits, gone public,
landed additional multimillion-dollar government contracts, and, it was
learned this week, secured a potentially big raise recently from the state
In the waning days of Gov. Kathleen Blanco's administration, state officials
increased the management contract ceiling from $756 million to $914 million
- this, after the Legislature wanted to fire ICF over its handling of the
homeowner recovery program, called Road Home.
"I'm flabbergasted that this company could be so inefficient and could mess
up so consistently and for so long," said Bill Yurt, 57, who has been living
in a FEMA trailer for 2 1/2 years.
He said ICF hasn't sent an appraiser to determine the grant amount that will
resurrect his gutted house in Gentilly. And his calls to an ICF caseworker
have gone unreturned for a month.
Road Home was created in June 2006 as a state-run, federally funded plan to
compensate homeowners for the breach of New Orleans' government-run levees.
Homeowners can apply for grants to repair their homes, or obtain buyouts if
they don't want to fix things up.
Yet, 56,000 applicants - nearly 40 percent of the qualified total - had yet
to receive a cent as of last month. Plagued by cost overruns and delays,
Road Home is expected to cost the taxpayers $10 billion in federal money and
has become another glaring symbol of frustration and red tape in
post-Katrina New Orleans.
"Supposedly they had the expertise, but what we've learned ever since is
it's been on-the-job training," said Frank Silvestri, co-chairman of the
Citizens Road Home Action Team, or CHAT, a community group that was formed
in anger over ICF.
ICF spokeswoman Gentry Brann blamed the state's ever-changing rules and
political meddling by officials and community groups for many of Road Home's
She complained that Road Home has come to be regarded as an entitlement
program, and said the company must carefully evaluate 157,000 applications
to guard against fraud.
"The state essentially redefined the goal of the program from rebuilding to
relief in midstream," Brann said.
She said the $914 million that the company could earn is to cover the costs
of the program and was approved by public officials.
"It's very important to note this is not a `pay increase.' It's not actually
even `pay' to ICF. Rather it is an increase in the contract ceiling to cover
the additional unit price costs incurred by our subcontractors," Brann said.
The state got tough with ICF last year, threatening to terminate its
contract, and but ultimately set benchmarks to force it to "close," or
decide, cases more quickly.
However, ICF now stands accused of inflating its closing figures by
deliberately using red tape, confusion and delays to get applicants to
settle for low grant amounts.
"They have been pressured into signing closing documents," said Melanie
Ehrlich, the other chair of CHAT, who has documented nearly 1,000 such
disputes. "We know that this includes applicants who had obvious mistakes in
the calculation of the grant."
Ehrlich said more than half of the Road Home applicants who have contacted
CHAT say they are appealing their awards. Some report getting letters from
ICF telling them they were not eligible for a grant, followed by letters
congratulating them for receiving one.
Dorcil Albair, a resident of Cameron Parish, said she got $9,800 from Road
Home for damage estimated by her insurer at $49,000. She said she signed
Road Home papers with hundreds of others at a local hotel.
"They just shoved the paper in front of us," said Albair, 65. "It was like
an assembly line."
The company had the inside track from the start, critics say. It won the
Road Home contract from a committee of housing experts and a state agency
pressed by Blanco to jump-start the rebuilding. A few companies submitted
bids. But ICF, which counted a $23.6 million Department of Housing and Urban
Development contract as its previous experience, had already designed the
Road Home template.
The relationship alarmed a state ethics board. But ICF was not dropped as
ICF timed the Road Home contract with the launch of its initial public stock
offering, triggering millions in bonuses and options for its top executives,
and has bought out four other companies to tap the deep well of government
It counts among its recent deals a $15 million Homeland Security agreement
to protect chemical installations from terrorists, and a $10 million
contract to help the Environmental Protection Agency preserve the ozone.
ICF reported a profit of $40.6 million in 2007, up from $11.9 million a year
earlier. The company's stock price has at times doubled since the Wall
Street offering, reaching a 52-week high of $34.36.
Securities and Exchange Commission records show no public officials among
ICF's leading shareholders. Its lobbyists include former Rep. Robert
Livingston, R-La., who has offices in Washington and the state Capitol, and
local insider Randy Haynie, whose clients include Philip Morris and
pharmaceutical company Pfizer.
Louisiana officials have publicly said dumping ICF could further slow the
recovery and generate more political fallout. Privately, they say pulling
the ICF contract would be an admission of mismanagement that could give
Katrina victims grounds to sue.
"A deal is a deal, whether it's a good deal or not," said Walter Leger, a
housing official with the Louisiana Recovery Authority, which oversees Road
Home and has been critical of ICF.
Adam Knapp, deputy director of the LRA, said bad publicity ultimately will
spur ICF to better perform. "Their stock will rise and fall on their
delivery here," Knapp said.
A state audit in September looked at a sampling of 80 Road Home grants and
found that the incorrect amounts had been awarded 37 percent of the time.
One-fifth of eligible applicants who applied in the program's first six
months - more than 13,000 - hadn't received grants as of January, according
to company data obtained by CHAT.
ICF responded to such backlogs by reassigning 500 staffers as caseworkers.
But no new employees were hired to meet the demand.
Brann said that is because the company stands to make only a 3 to 5 percent
profit on the contract after it pays taxes, its 2,000 employees and 35
subcontractors. "While the revenue from the Road Home contract is large, so
are the costs," she said.
The deadline for new applications for Road Home assistance has passed, and
Brann said the company expects to resolve its last case this summer.
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