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v The Road
Home Program (RH) is administered by the state of Louisiana as a HUD Community
Development Block Grant (CDBG)
·
ICF Emergency Services
(ICF) and HGI contracts used about 10% of the $10.4 billion program funding
v This program officially ends in June 2010 but will continue to
monitor grantees for compliance with covenants for “compensation” grants that
unfairly shortchanged many thousands of the applicants
v In addition, funds that will be collected for not meeting the
covenants and for planned construction loans will go into state coffers for
undetermined purposes
v ICF, the main RH contractor: its slogan of “Passion, Experience, and
Expertise” is contradicted by reality
1. See
the CHAT newsletter from Sept. 13, 2010
2. More
about the unconcern, inexperience, and lack of knownledge
of ICF in following newsletters
v In the following article,
former RH officials & former Gov. Blanco stated that they did not
know
about underfunded
applicants in the beginning of the program
http://www.nola.com/news/t-p/neworleans/index.ssf?/base/news-15/128522342444460.xml&coll=1
1. CHAT documents show that top RH officials were informed of the
problems in Oct. 2006, 2 months after the program started in a meeting in the
office of Walter Leger, former Chairman of the Louisiana Recovery Authority
(LRA) Housing Task Force
·
Correspondence
to Gov. Blanco’s chief advisor on RH issues; Walter Leger; and Mike Byrne of
ICF
·
Correspondence
to and from Dr. Norman Francis, Chairman of the LRA Board of Directors
2. Four years ago, we documented the problems with underfunding of RH
applicants because of RH using ‘pre-storm value of land and home” instead of
the rebuild estimate
o
The above file uses sample
calculations based upon numbers given to us by the RH officials in the meeting
two days earlier in Oct., 2006
o
The document contains our
conclusion communicated to these officials 4 years ago that ” The people
who need the money the most to be able to come back to their LA home are given
the least help. This is prejudicial.”
o
The early calculations in
this document were based on a sliding scale for rebuild costs that was later
changed by the RH to $130 per sq ft for everyone
o
However, most applicants
had their grant determined by pre-storm valuations, that were often
underestimates and were done by poor methods and often inexperienced ICF staff
o
Applicants whose grants were
determined by rebuild costs often were underfunded, especially due to unfair
rules and practices during the administration of Gov. Jindal and LRA Director Paul Rainwater
o
For example, Paul
Rainwater changed the rule in the summer of 2008 to exclude mold and mildew
damage even for homes that stewed in water for 3 weeks as a result of the Army Corp of Engineers’ mistake-laden
oversight of the levees
“We believe that it is likely that the
state will face claims of economic or racial discrimination arising from the
policies now be carried out by ICF.”
4. The present Gov., Bobby Jindal’s
administration made the program more unfair despite appeals from CHAT and other
organizations of applicants who were given much too little funding to repair
their homes due to faulty rules and faulty implementation
v The Dead-end of Road Home: Waste of Taxpayer Money To Intimidate
Tens of Thousands of Homeowners
1. The Louisiana State Office of Community Development is sending
out letters to tens of thousands of Road Home (RH) Applicants that ask them to
sign statements threatening “fine” and “imprisonment” if they have not provided
true information about filling the covenant for their RH grant.
2. One major problem is that the covenant and Compliance and
Monitoring Forms being send to them are contradictory. The covenant requires
that they live in their repaired house for any time (officials of Road
Home often stated at public meetings that one day would suffice) during the
course of 3 years after receiving their grant funds. The Monitoring Forms
demands a current utility statement despite the fact that the covenant
does not require that they be currently living in their home.
3. Another is that applicants are being asked to give a certificate
of occupancy or other such document. This was never mentioned in the covenant
and, because of technical, bureaucratic, and financial reasons, some applicants
will be living in their home while still awaiting a certificate of occupancy.
4. They are also being asked to get a copy of initial permits from
the city or parish, which should be unnecessary and was never mentioned to
applicants before. If they lost their
copy, these are time-consuming to obtain.
5. They are being asked to produce all these documents within 30
days from the day the letter was sent to the applicants, which is unfair and
unreasonable. RH routinely left applicants incommunicado for many months and
more than a year but demands rapid responses from beleaguered
applicant-hurricane victims, which includes many of those suffering again
because of the catastrophic BP oil spill.
6. The covenant states that the money applicants received is
“compensation for damages. ” What right does the state
have to demand repair of homes from applicants and maintaining maximum flood
insurance in perpetuity? Many of the
low- and middle-income applicants lost all their possessions in the flood, are
in difficult financial straits, were
systematically shortchanged on their grant amounts, and falsely led to believe
that they would have a chance for a fair appeal to correct the state’s and the
contractor’s (ICF Emergency Management Services) shortchanging mistakes after
they signed the covenant papers.
7. The covenant states that “”Nothing in these Covenants shall be
construed to require the Owner to repair, rebuild, relocate or sell the
Property.” Now the state monitoring staff is requiring precisely that repair or
rebuilding despite the acknowledgement that “The Louisiana Recovery Authority estimates that at
least 20,000 Road Home recipients, or 15 percent, will be unable to rebuild
their homes without substantial help.” http://www.nola.com/hurricane/index.ssf/2010/05/nonprofit_assistance_for_road.htm
o
Even if funds from only
5% of these applicants are recovered, that would mean about $60 million, given
the average grant size of about $60,000.
o
What will the state do
with the majority of these 20,000 applicants who needed the grant money to pay down
mortgages suddenly demanded or to pay rent or to pay for partial home repairs
that they could not complete because their grant was inadequate?
o
Will the state try to put leans on thousands
of homes thereby negatively impacting the real estate market, which is already
depressed?
8. All the signs point to this “monitoring” being a waste of
taxpayer money for the purpose of justifying jobs for state staff in Baton
Rouge and filling state coffers with money (see Item 10, below). Not only will
state staff (~120 in the Disaster Recovery Unit that includes OCD) have to
process 128,000 Monitoring and Compliance forms and associated documents sent
by applicants, but also, the letter with the form tells applicants that there
will be a tax money-wasting personal visit to their home to check on the status
of repairs!
9. What is the purpose of these expenditures? The effect will be to
harass over 100,000 victims of the catastrophic hurricane/floods, who often
lost their homes as well as their possession due to the faulty oversight of the
US Army Corp of Engineers. This was federal guilt money that the State of
Louisiana was never given (they got no interest and had to draw down grant
funds from a federal account), but rather was responsible for distributing to
the victims.
10. What will happen to the federal tax dollars “recaptured” from
intimidated RH applicants despite the highly dubious legality of the covenant
and contradictions in it and in the compliance documents? By the admission of
one of the heads of the Housing Dept. of OCD at a public meeting, the
recaptured money from applicants will go into OCD’s coffers.
11. Therefore, federal dollars intended for hurricane victims are
being changed to state dollars to be used at Gov. Jindal’s
discretion. This will include enabling state staff to reinforce the opinion of
very many applicants who have described the 4-year RH program as a terrible
ordeal of no answers or nonsensical ones to why mistakes in their grant
calculations were not corrected. Many thousands of these applicants are still
not able to repair their homes because of the systematic shortchanging of grant
funds to them while almost 10% of the $11 billion went to the contractors ICF
Emergency Management Services and HGI (Hammerman
& Gainer Inc).
Reference Documents
http://chatushome.com/chatusfiles/MonitoringForRecaptureLettersForms_7_2010.pdf
http://chatushome.com/chatusfiles/Covenants_SeePoint9_112607.pdf
Grant
recipient affidavit, note Point 3
Grant
Agreement for homeowners, note Point 4
v
Some recent CHAT newsletters:
· Converting
Federal Disaster Relief Money to State General-Coffer Money: March 25, 2010
· Amnesty
International and Rights of Victims: April 11, 2010
· Unhappy
Endings to the Road Home Program: May 1, 2010
· Louisiana
House of Representatives Speaker Jim Tucker & the Politics of RH Money: May
17, 2010
· Road
Home Numbers and Reality: May 25, 2010
· Road
Home Tries to Stifle Complaints, Part 1: May 29, 2010
· Road
Home Tries to Stifle Complaints, Part 2: June 9, 2010
· LA
Office of Community Development (OCD) and HUD Going After Applicants: June 23,
2010
v This is
the link to our complaint (39 pages and 88 footnotes) to the HUD Office of
the Inspector General (OIG):
http://chatushome.com/chatusfiles/HUD_OIG_Complaint_ForPublicRelease_final__2_2_09.pdf
Below is a description of the
outcome of this complaint from Melanie Ehrlich, the founder of CHAT, and main
author of this complaint
· When I was interviewed by an
inspector from the HUD OIG, I asked if Fred Tombar,
the Special Assistant on Disaster Recovery to the Secretary of HUD, would
have any influence on the outcome of the promised investigation.
· Mr. Tombar is
a former subcontractor and paid TV-apologist for the main Road Home Program
contractor ICF Emergency Management Services (ICF).
· The HUD OIG inspector only
smiled and said no.
· I asked if he would
interview any of the list of representative applicants who had been treated
unfairly or inconsistently and were willing to be interviewed by the HUD OIG.
He had asked for such a list.
· “No,” said the HUD OIG
inspector but he would be sure to interview representatives of the
contractor, ICF, and HUD staff (whom our complaint implicates
in covering up the mismangement of the
state-administered program) and state officials from the Louisiana Recovery
Authority (LRA) and the Louisiana Office of Community Development (OCD).
Ø
Our complaint, which dealt with violation of HUD
rules, concerned the following substantive issues: