Tag: superstorm sandy
FEMA Will Look At Superstorm Sandy Claims Payouts

FEMA Will Look At Superstorm Sandy Claims Payouts

By Herb Jackson, The Record (Hackensack, N.J.)

WASHINGTON — Under pressure from Northeast senators, the head of the Federal Emergency Management Agency said on Wednesday that an independent government watchdog will examine whether anti-fraud efforts are shortchanging victims of Superstorm Sandy.

FEMA Administrator Craig Fugate also indicated at a Senate subcommittee hearing that the government may have gone too far in response to complaints of waste and fraud in payments to victims of 2005’s Hurricane Katrina.

Fugate said that he has asked the agency’s inspector general “to ensure that we have the accurate and adequate controls” and “that we provide rapid payments, appropriate to the losses, without making fraud prevention our only goal.”

He also said the inspector would look into whether insurance industry lawyers defending the claims estimates were making claims appeals last longer than necessary to increase their fees.

Fugate faced brusque questioning from senators from New York and New Jersey, who said they had heard hundreds of complaints from constituents who bought flood insurance and were “low-balled” on Sandy-related claims. Some still have not been able to return to their homes because they cannot afford to rebuild.

“Structurally, the system is stacked against policyholders,” said Sen. Bob Menendez (D-NJ), who called the hearing as chairman of the Senate’s housing subcommittee. Examples Menendez cited were in Ocean County, but his office said the problems are systemwide and a legal services lawyer who appeared at the hearing said in an interview the problem is also affecting Sandy victims in North Jersey.

“Some people are being told there was preexisting damage from Hurricane Irene that was paid for already,” said Maryann Flanigan, supervising attorney for the Hurricane Sandy Legal Assistance Project, referring to the tropical storm that hit New Jersey in August 2011.

After Superstorm Sandy hit on Oct. 29, 2012, a third of the 236,000 flood insurance policies in effect in New Jersey at the time had a claim, according to data provided in written testimony by Fugate.

Of 74,000 claims, 1,300 appeals were filed, so Fugate said 98 percent of customers were satisfied. But he said FEMA knows of or expects only 453 lawsuits, and a federal judge told The Record earlier this year that there were about 1,000 cases pending in court and there could be as many as 2,000 by the end of the year.

Fugate’s office did not respond to follow-up questions after the hearing.

The flood-insurance program pays fees to private insurers who sell and service government-backed insurance coverage, and Menendez said the system includes “perverse incentives” because companies face financial penalties if they pay too much — not if they pay too little.

Fugate said the potential penalty is that a company could be thrown out of the program, but he also said he was not aware of that ever happening. He said FEMA does not track how often specific companies’ claims payments are overturned on appeal but does do audits to check for overpayment and underpayment.

An insurance industry lobbyist, Donald Griffin of the Property Casualty Insurers Association of America, said at the hearing that companies have an incentive to pay a fair amount because they also sell other kinds of coverage to the same customers, including homeowners and auto policies.

“Wouldn’t it be accurate to say that the disincentives that the National Flood Insurance program imposes on overpayments outweigh those that are imposed on underpayments?” Menendez asked Griffin.

“It could, sir,” Griffin replied. “It could, but, you know, as I say, we don’t have the data to know.”

Menendez said it was the “ultimate hypocrisy and double standard” that while FEMA was rejecting appeals for late paperwork, at the same time it was failing to meet a congressionally mandated deadline for responding to appeals.

Fugate responded: “I understand, senator. Direction would be appreciated.”

Flanigan, the legal services lawyer, said claims adjusters from around the country were brought in after the storm and probably were not aware of the region’s cost of living.

In one case, an adjuster from the Midwest offered $40,000 for repairs, and details in the offer showed “materials could not be purchased in New Jersey for the unit prices listed,” Flanigan said.

“The flood insurance department denied the claim, stating the damage was caused by wind-driven rain, and the homeowner insurance department denied the claim stating that the damage was caused by flood water,” she said.

“This low-balling of flood insurance claims happens all too often, and results in the insured suffering an unreasonable delay in making needed repairs,” Flanigan said.

Sen. Chuck Schumer (D-NY), asked about reports that some lawyers representing insurers in his state were trying to “draw out legal battles with homeowners in (an) effort to drive up billable hours” charged to FEMA.

Fugate said he was also concerned about the reports and asked the inspector general to look at the issue and refer the case to the Justice Department for criminal charges if fraud is taking place.

Photo: acccarrino via Flickr

Interested in national news? Sign up for our daily email newsletter!

As New Superstorm Sandy Aid Arrives, New Jersey Faces Same Worries

As New Superstorm Sandy Aid Arrives, New Jersey Faces Same Worries

By Karen Sudol and Melissa Hayes, The Record (Hackensack, N.J.)

HACKENSACK, N.J. — Just as a second round of federal disaster aid is reaching New Jersey, Governor Chris Christie’s administration faces a critical juncture in the Superstorm Sandy recovery: Can it fix a litany of grant funding problems identified by storm victims, advocacy groups and lawmakers who are doubtful that much will change?

As New Jersey began to dole out $1.8 billion in relief aid last spring, legislative and state offices were flooded with complaints about lost paperwork and unknowledgeable representatives. A disproportionate number of African-American and Latino applicants were denied aid, a housing advocacy group said. And a company charged with overseeing programs that provide grants for the repair or rebuilding of homes was quietly fired by the state because of “performance-related concerns.”

Christie has placed most of the blame on Congress for delaying approval of the aid and has pointed to stringent federal requirements that have caused further delays. But he has acknowledged that New Jersey made mistakes and can do better. And while the state appears to be taking steps to avoid similar problems when overseeing the distribution of an additional $1.46 billion, critics still have concerns.

“I wish I could say that the state would do things better and differently than what they did with the first pot of money, but it doesn’t appear that they’ve heard any of the complaints, criticism or suggestions for the last six months,” said Staci Berger, the president and chief executive officer of the Housing and Community Development Network of New Jersey, a statewide association of 150 community development organizations. “People would have more respect for the process if the governor and administration said we did a bad job in this and we’re going to fix it. That’s the part that doesn’t ring true.”

Sandy victims have taken issue primarily with the slow pace at which the money — intended to help homeowners and businesses recover from the damage incurred during the storm that hit on Oct. 29, 2012 — has been distributed.

On the commercial end, the state Economic Development Authority has issued only about $13 million of $100 million in grants to 270 of 1,540 businesses that have applied, a spokeswoman said.

The New Jersey Main Street Alliance, a small-business advocacy group, said many businesses had been forced to resubmit paperwork multiple times and had seen a high turnover rate among grant administrators. Corrine Horowitz, the group’s business representative, said the alliance wanted the state to expedite its awarding of grants and hold a hearing for business owners with concerns.

An Economic Development Authority spokeswoman said the agency had made changes to speed up the process, such as reducing the number of documents required by applicants.

But the bulk of the complaints have been made about the state’s residential housing assistance programs.

The Fair Share Housing Center, an organization that defends the housing rights of the state’s poor, received a slew of complaints about the way Louisiana-based Hammerman and Gainer Inc. administered the state’s largest housing aid programs for storm victims. One particular focus was the Reconstruction, Rehabilitation, Elevation and Mitigation program, known as RREM, that offers up to $150,000 for the repair, rebuilding and raising of homes.

The housing center says it found that African-Americans and Latinos were rejected at much higher rates than Caucasians applying for the same relief. It also discovered that there were problems with the data being used to award grants, resulting in erroneous denials. Of those who appealed denials, 80 percent were awarded money.

At just about the time the housing center’s findings were released in December, it was learned that Hammerman and Gainer Inc. had been fired — something state officials disclosed only in response to media inquiries. The state agreed to pay the company a $10.5 million settlement to sever the contract. But the firm filed a request for arbitration last month, arguing that the state still owed HGI $18.43 million.

Another outstanding question is how the company billed the state for $51.2 million for seven months of work even though the three-year contract was capped at $67.7 million. HGI appears to offer as an explanation that it performed work outside the scope of its contract and at an accelerated rate. The company says state officials agreed to pay the firm for this additional work and manpower.

Adam Gordon, the housing center’s attorney, said that without the state’s specifying why HGI was fired, it was hard to ensure that similar problems would not occur with the new round of financing.

“I think this is really a cautionary tale about what happens in an absolutely critical disaster recovery situation when there’s an outside contractor hired and there’s really no oversight from the state,” Gordon said Thursday. “The state ends up spending tens of millions of dollars and does not get the results that it needs to help people return to their homes.”

Carol Davis, a resident of the Silverton section of Toms River, is one of thousands of storm victims who remain on a waiting list for money to elevate her home. She said it was hard to navigate the various grant programs, and she’s constantly trying to keep neighbors — many who have been unable to return to their homes — informed of new programs and deadlines.

She recently asked the governor at a town hall-style event in Toms River if the state could better train program staff and mail residents information about new grants and deadlines.

Christie told her that the state had improved the way it disseminated information after receiving complaints.

After the event, Davis said she still thinks the state could do a better job.

“The grants should be knowledge to everybody, it shouldn’t be a secret,” she said.

Christie has noted that New Jersey has earmarked more money for recovery than both New York City and New York state — New Jersey has set aside $1 billion, with New York and New York City putting aside $240 million and $370 million, respectively. But he admitted at that event that the state needed to improve its programs going forward.

“We’re working on ways to become better at it,” he said. “I never promised you, nor would I, that this was going to be mistake-free. We’re setting up a whole separate government in essence to run these programs, and it’s hard.”

The state’s past experience could provide vital lessons in distributing the next round of money, which is expected to begin in late spring or early summer.

Officials from the state Department of Community Affairs, which contracted with HGI and is now administering the housing programs, said they had taken steps to improve the housing rehabilitation program, including better training of staff and the overhauling of its information technology systems.

“Given these meaningful improvements, the challenging experience that some RREM applicants have had in the past will not likely continue, moving forward,” said Lisa Ryan, a department spokeswoman. “Every day we strive to enhance, streamline and improve the program so that we get all eligible RREM awardees the help they need to get their homes and lives back to normal.”

Photo: acccarrino via Flickr

WATCH: New Jersey Lieutenant Governor Denies Holding Sandy Aid Hostage

WATCH: New Jersey Lieutenant Governor Denies Holding Sandy Aid Hostage

New Jersey lieutenant governor Kim Guadagno (R) unequivocally denied allegations that she threatened to withhold Superstorm Sandy relief aid from the city of Hoboken unless its mayor approved a real estate project, in a Monday morning statement to the press.

Dawn Zimmer (D), the mayor of Hoboken, alleged over the weekend that embattled governor Chris Christie’s administration warned her that Hoboken would not receive disaster relief funds unless Zimmer approved a redevelopment plan favored by the governor.

“The lieutenant governor pulled me aside and said essentially, ‘you got to move forward with the Rockefeller project,’” Zimmer told CNN.

She added that Guadagno told her that ‘this project is really important to the governor,” and “if you tell anyone about it, I’ll deny it.”

Zimmer requested $127 million in funds for Hoboken after the storm, but received only about $350,000 in recovery grants.

On Monday, Guadagno flatly denied Zimmer’s allegations.

“Mayor Zimmer’s version of our conversation in May of 2013 is not only false but is illogical and does not withstand scrutiny when all of the facts are examined,” Guadagno told reporters in Union Beach, NJ. “Any suggestion that Sandy funds were tied to the approval of any project in New Jersey is completely false.”

“Being a Sandy victim myself makes the mayor’s allegation particularly offensive to me,” Guadagno added.

Guadagno’s strong denial will not stop the story from moving forward. Mayor Zimmer says she met with the U.S. Attorney’s office in New Jersey on Sunday to discuss her allegations; if the inquiry continues to expand, it would likely force some key players in Christie’s administration to go under oath.

Superstorm Sandy’s introduction into the scandal surrounding the Christie administration’s political score settling could prove particularly damaging to the governor, who has built much of his political brand around his active, non-partisan response to the disaster. Hoboken was hit especially hard by the storm, which left up to 80 percent of the city underwater.

Photo: acccarrino via Flickr

Chris Christie Delivers State Of The State Address Amid Scandals

Chris Christie Delivers State Of The State Address Amid Scandals

All eyes were on New Jersey governor Chris Christie (R) on Tuesday afternoon, as he delivered his fifth State of the State address.

This year’s address was notably different from those he delivered in past years – and not in a good way.

The Republican governor once again had to confront the two scandals plaguing his second term: the politically motivated lane closures on the George Washington Bridge in September, and the federal investigation into his handling of relief funds in the aftermath of Superstorm Sandy.

In his opening remarks, Christie assured the audience – and listeners nationwide – that his administration “will cooperate with all appropriate inquiries to ensure this breach of trust does not happen again.”

“But I also want to assure the people of New Jersey today that what has occurred does not define us or our state. This administration and this legislature will not allow the work that needs to be done to improve the people’s lives in New Jersey to be delayed,” he continued. “I am the leader of this state and its people and I stand here today proud to be both and always determined to do better.”

The governor also admitted that “mistakes were clearly made” and conceded that he and his administration “let down the people we are entrusted to serve.”

Recent polls, however, show that although a majority of New Jersey adults do not believe Christie has been “completely honest” about his knowledge of the George Washington Bridge incident, an overwhelming 60 percent of Americans nationwide say their opinion of the goevrnor remains the same even after the two scandals.

But just because the public seems uninterested in the ongoing Christie saga does not make it any less of a threat to the potential Republican presidential nominee’s political ambitions. If either of the two separate inquiries find that Christie misused Sandy relief funds to promote his gubernatorial campaign or that he lied about his involvement in or knowledge of the lane closure plans as an act of retaliation against Fort Lee mayor Mark Sokolich (D) – who did not endorse Christie when he ran for re-election — the governor’s reputation is sure to be tarnished, and his political aspirations will most likely never become a reality.

Though Christie continuously denies that he participated in or was aware of the lane closures, he did state, “I am the governor and I am ultimately responsible for all that happens on my watch.”

He then quickly moved on from the scandals and focused the rest of his address on his policy agenda, which involved education reform, crime reduction, and property-tax relief.

Watch Chris Christie’s entire State of the State address below:

Video: NJTV via YouTube
Photo: Gage Skidmore via Flickr