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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 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:
o failure
to provide a common, consistent, fair and independent method of determining
homeowners’ damages, including pre-storm values,
§ thereby, many applicants
received less grant money than they were entitled to, which has caused an
especial hardship for moderate-to-low income applicants consequently unable to repair
or rebuild their homes;
o failure
to provide program rules, information and documents to applicants in derogation
of their rights;
o failure
to meet the contractual obligation to provide an “ombudsman” type program;
o failure to provide a fair and independent
appeals process in violation of due process;
o acts
in derogation of HUD requirements for citizen and local government
representative participation.
Ø Why was there nothing but a one-paragraph
dismissal (“case closed”) of our complaint?
·
after the
HUD OIG sat on it for 7 months
·
after the
inspector from HUD flew down to interview me
·
after the
office of the HUD OIG promised a full, publicly posted report whatever the
outcome
·
despite our
extensive documentation of glaringly inconsistent treatment of applicants
o
inconsistent
treatment is a major violation of HUD rules
Ø The answer is that the evidence that HUD OIG
was so damning their only response could be either a real investigation or no investigation
at all
·
They choose a cover-up with no investigation at
all
·
HUD, like officials of the State of Louisiana,
are complicit in knowingly allowing more than ten thousand applications (see
our complaint to the HUD OIG linked above and more documentation below) were
subject to appeals conducted by the contractor (ICF) who made the mistakes or
state staff who had no rules for conducting those appeals
v If you are a member of the media and want more
information, write to mehrlich8@yahoo.com
· If you are a Road Home applicant or other
individual and want to subscribe to our free weekly newletter or want more
information, write to chatlra@yahoo.com
April 11, 2010
Ø A report that was just released by Amnesty International has much merit but is missing
the main problems for eligible Road Home (RH) applicants, ~ 130,000 –
140,000 hurricane victims. It isn’t the Stafford Act upon which the report
focuses that is responsible for so much heartache and so many RH
applicants being unable to rebuild or repair their homes despite $10 billion of
grant money for the program.