A Breath Of Fresh Air In Post-Katrina Mississippi

by Ana Maria

Today’s a big day in Mississippi. While there are plenty of contested local races throughout the state—particularly on the Republican side, the insurance commissioner is the most important statewide race because it impacts every individual, family, community, and every form of government inside the state.

Here on the coast, electing Gary Anderson as the Democratic nominee and booting out George Dale from office would clearly send more than a few ripples of joy throughout the Katrina-ravaged region. You see, the insurance crisis impacts so many things that most of us—myself included—just don’t think about until it is pointed out.

For example, I’m hearing how drug and alcohol abuse among teens and adults has dramatically increased since Katrina. Kids have no where to go—not a movie theater, skating rink, nothing. What is there to do? How are they to channel all the usual that comes with being a teen and all the unusual that resides inside of them because of Katrina’s impact?

Their friends may be scattered to the winds. The kids may have had to deal with death of friends or family members. Their homes may be gone, schools destroyed, social groups evaporated. Their families finances shattered because of jobs no longer available since most businesses were lost in Katrina. On top of that, little to no money for rebuilding the family home.

We know that communities everywhere struggle with this issue of teens and having places for them to go and activities to keep them occupied in healthy ways. Put on top of that having lost everything they’ve ever known including their social network that helps them go through those difficult years that transform kids into young adults. No wonder drugs and alcohol are rampant.

This past weekend, I attended a Democratic Women’s annual picnic in which many candidates or their surrogates spoke. I was honored to speak on behalf of Gary Anderson. The park was stupendously gorgeous with water to the one side of us, beautiful homes on another, and the beautiful green grass and trees everywhere.

My pitch was easy—all Gary Anderson voters, of course. Yes, I gave them a political hell raising activity: get out their address books and call all of their friends and family to ensure that they remembered to get out and vote. (I'm the same me on paper and in person—only a lot more lively in the flesh.)

The lady who spoke with me about the teen issue also talked with me about the level of depression hitting teens as well as adults and how she is losing friends to suicide, those who lose hope that their lives will ever get back to some level of normalcy.

I listened as she told me that another issue facing the Gulf Coast is the lack of affordable housing in the area and how the insurance companies have made it so that apartment complexes cannot afford to rebuild and that those that may be rebuilt will have to substantially raise the rent to cover the insurance rates.

I recall talking with a grade school friend some months back. Before the storm, her elderly mother’s apartment rent was about $500 a month. After Katrina, the rent nearly doubled—$900 a month. I don’t know about you, but if my monthly costs for housing doubled, that would be more than a bit difficult to absorb.

Most of us could not absorb it regardless of whether we are Democrats or Republicans, seniors or not yet seniors, single or married, Caucasian, African American, Vietnamese American, Sikh, Latino, disabled veteran, coach, nurse, lawyer or doctor. Whether we are salaried, self-employed, hourly wage or fixed income households, we all have “X” amount of money coming in—if we’re among the lucky ones, that is. Increasing household expenses in such a dramatic fashion makes life more than difficult to say the least.

By the way, my grade school friend’s family who received this shocking increase on mom’s rent? The family is Republican.

Increased teen drug and alcohol abuse, adult depression so overwhelming that suicide seems the only out of the unnecessary misery, skyrocketing financial burdens unfair under any circumstances. And what does Mississippi Insurance Commissioner George Dale have to say about all of this?

“My mistake after Katrina was saying . . . some claims are not going to be paid because of water damage.”

WHAT?! The financial ruin of an entire region because Dale chose to turn his back on these communities, cities, towns, and every person inside of them. The emotional devastation that came as a result of Dale assisting his insurance industry buddies to create the largest financial disaster to hit the area probably since the Great Depression in the 1930s. And all he can think about is that his mistake was blurting out what was that he shouldn’t have gone public with insider knowledge that he was going to let the insurance companies get away with ripping off Gulf Coast residents?

Dale’s comments seem to have come from a set of talking points that the insurance industry would have supplied him.

I don’t know how a public official can be so completely devoid of taking personal responsibility for the ruin his own public policies have had on an entire region. I don’t know how a public official can be so completely devoid of an ounce of genuine compassion.

Who am I kidding? George Dale publicly campaigned on behalf of George W. Bush.

I pray that tonight will bring everyone on the Gulf Coast great joy at having helped to give George Dale his walking papers through electing Gary Anderson as the next Democratic nominee for the state’s insurance commissioner. While the insurance industry will have the wind knocked out of it, electing Gary Anderson will be a breath of air that surely to goodness we could all use especially here in post-Katrina Mississippi.


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Lawsuit accuses insurers of defrauding government over Katrina flood damage

Posted on Mon, Aug. 06, 2007

By MICHAEL KUNZELMAN
Associated Press Writer

NEW ORLEANS -- A U.S. attorney in Mississippi is weighing whether to intervene in a lawsuit that accuses insurance companies of overbilling the federal government for flood damage from Hurricane Katrina, said a judge who unsealed the case Monday.

A team of lawyers filed the so-called "whistleblower" suit in April 2006 on behalf of two sisters who worked for a company that helped State Farm Insurance Co. adjust policyholder claims on the Mississippi Gulf Coast after the August 2005 storm.

But the suit was legally required to remain under seal so Dunn Lampton, the U.S. attorney for the southern half of Mississippi, could investigate and consider intervening in the case.

U.S. Magistrate Judge Robert Walker in Gulfport, Miss., ordered the case unsealed Monday, even though the federal government had argued that its disclosure would "compromise (its) ability to conduct an adequate civil investigation of this case."

"The government gives no explanation for how the investigation would be compromised by unsealing the case," Walker wrote in a one-page order.

A spokeswoman for Lampton didn't immediately return telephone calls Monday.

A legal team led by high-profile litigator Richard "Dickie" Scruggs filed the lawsuit on behalf of Cori and Kerri Rigsby, sisters from Ocean Springs, Miss., who worked for a company that contracted with State Farm.

State Farm, Nationwide Insurance Co., Allstate Insurance Co., USAA Insurance Co., and several engineering firms that contracted with the companies are named as defendants in the suit.

The suit, which represents only one side of a legal argument, accuses insurance companies of pressuring engineers to falsify reports so storm damage could be blamed on flood water instead of wind, which would shift the financial burden to the National Flood Insurance Program.

The companies say their homeowner policies cover damage from wind but not rising water, including storm surge. Insurers sell separate flood insurance policies that are subsidized by the federal government.

"By employing engineering reports that reallocated losses to 'flood' instead of homeowners, State Farm, Nationwide, and other insurers essentially pushed off their responsibility to pay claims onto the federal government," the 35-page lawsuit alleges.

Zach Scruggs, Richard Scruggs' son and law partner, acknowledged Lampton's intervention could make it a stronger case.

"I think it's going to be a strong case, either way," Zach Scruggs said. "It's their right to (intervene), but we are more than prepared and willing to litigate this on our own, on behalf of the government."

State Farm spokesman Phil Supple said: "Given that the Rigsbys have been self-proclaimed whistleblowers for more than a year, it was not surprising to see the existence of this lawsuit, which gives them a potential monetary incentive for filing it."

E.A. Renfroe & Co., a Birmingham, Ala.-based insurance adjusting firm, assigned the Rigsbys to help State Farm adjust Katrina claims. The sisters quit the firm after they provided Scruggs - and state and federal authorities - with reams of internal State Farm claims records.

The sisters claim the documents show that State Farm manipulated engineering reports so claims could be denied, a charge that the Bloomington, Ill.-based insurer denies.

Renfroe sued the Rigsbys for distributing the documents. Last month, a federal judge presiding over that case in Alabama appointed two veteran attorneys to prosecute Richard Scruggs and his law firm for criminal contempt.

U.S. District Judge William Acker ruled in June that Scruggs "willfully violated" a court order requiring him to return all of the documents that the Rigsby secretly copied.

Meanwhile, the Rigsbys' suit isn't the first of its kind since Katrina hit on Aug. 29, 2005. In Louisiana, U.S. Attorney David Dugas decided against intervening in a whistleblowers' lawsuit that also accuses insurers of overbilling the NFIP for Katrina's flood damage.

An attorney for a group of former insurance adjusters filed that suit last year in federal court. A federal judge in New Orleans unsealed it in May.



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Bloomberg News Reveals Insurance Secrets to Obscene Profits

by Ana Maria

From the Mississippi Gulf Coast to the Mid-West to California, insurance companies routinely low ball claims estimates at a time when policyholders are most vulnerable. Bloomberg News recently published Home Insurers' Secret Tactics Cheat Fire Victims, Hike Profits, a riveting and insightful article that disclosed the industry’s dirty, unknown secrets.

''Fighting an insurance company is like staring down the wrong end of a cannon,'' Dr. Bennett said after fighting his insurance company. The New Hampshire physician lost his five-bedroom home in a 1993 fire filled with antiques and fine art. Replacement costs? $20 million. The insurance company offered $1.7 million. Not quite 20% of the policy’s worth.

Through his 11-year battle, Dr. Bennett’s attorney found out this shocking piece of information. After the fire destroyed Dr. Bennett’s home, his insurance company changed the “replacement cost” of the policy. A retroactive policy change stripped Bennett of coverage he had bought?! Bennett ended up settling with his insurance company for an undisclosed amount. But he shouldn’t have had to fight his insurance company in the first place. Our laws should be strong enough on their own to force the company to do right by us.

On the other side of the country in San Diego, Calif., a 2003 fire swept through a wealthy subdivision of 30,000 where property values were at least $1 million. “The Southern California fires led to 676 formal complaints to the state saying insurers offered payouts that fell far short of actual costs and delayed on paying claims.”

Here in the Katrina-ravaged region, the industry has again used its low ball, starve the policyholder tactic.

Whether we’re in the Northeast, on the West Coast, or the Gulf Coast, the insurance industry routinely implements a set of practices the purpose of which is to rip off policyholders with legitimate claims and to keep our premiums in the insurance companies’ coffers, an industry secret to obscene profits.

The industry refers to this money as profits. But you and I think of profit as the amount of money after bills have been paid. The industry looks at robbing us of our legitimate insurance claims as a way to inflate their profits through failing to pay their bills. And they have been getting away with it for too long.

The Bloomberg News article describes in great detail various tactics the industry uses including rewarding claims adjusters for deliberately scamming customers out of the money they are owed. With examples from New Hampshire, Illinois, Mississippi, and California, the Bloomberg article demonstrates definitively that this is a national problem.

The questions, of course, are what is the solution, and how do we achieve it? The answers involve both state and federal action.

Federal Answers to the National Insurance Crisis
On the national level, we already have two very forward thinking proposals on the table.

The Senate’s Democratic Leaders have put together legislation to strip the insurance companies of its 62-year old exemption from the nation’s anti-trust laws. This legislation will bring the insurance industry into alignment with every other industry in the country and require that it be subject to the same laws that protect residential and commercial consumers from corporate price-fixing behavior and other unsavory industry-wide business practices.

U.S. Senators Mary Landrieu (D-LA) and Senate Minority Leader Trent Lott (R-MS) are among this bill’s co-sponsors. The proposed law will finally make price-fixing behavior in the insurance industry illegal. The companion bill in the House is H.R. 1081. Contact your senators and congressional representatives to let them know you support this legislation.

The second forward thinking piece of legislation is the Multiple Peril Insurance Act, which will expand the federal flood insurance program to include windstorms as well. Big insurance scammed American policyholders in the Gulf Coast region from Alabama through Louisiana by pretending that the 135 miles per hour winds that battered homes and businesses for up to four hours before the water came ashore caused not a penny of damage. This is the basis for the industry-created water/wind scam. For a good explanation on that, read Wind? Water? More Like a Bunch of Hot Air!

Gulf Coast Congressman Gene Taylor (D-MS) drafted the Multiple Peril Insurance Act, which will protect consumers from insurance companies blame wind damage on water. To date, the bill passed out of the subcommittee along party lines—meaning all Democrats voted for it and all Republicans voted against it. The bill passed out of committee with all Democrats voting for it and a few Republicans joining the Democratic leadership in protecting their constituents. Now, the legislation will be voted on by the entire House of Representatives sometime this fall.

These are all very amazing and critical steps taken to protect home and business owners regardless of whether we live in a modest home in Slidell, Louisiana, (which also got hit hard in Katrina) or Oklahoma. Taking the wind out of the insurance industry’s ability to scam American policyholders is important because when they weasel out of paying legitimate property damage claims, it's simply a form of robbery.

We have to have a level playing field for consumers from the national level. That is the reason for national legislation. We can also do things to assist at the state level. At this point, both are required.

Statewide Answers to the Insurance Crisis
On a state level, we can elect insurance commissioners who will actually fight successfully to protect us. Here in Mississippi we have a great example of an insurance commissioner—George Dale-who has merely rolled out the red carpet for the insurance companies to walk all over policyholders. If Dale had been doing his job, Katrina’s survivors wouldn’t have needed to go to lawyers like Dick Scruggs and his Scruggs Katrina Group or to the Merlin Group or to the Mississippi Center for Justice. Because George Dale didn’t do his job to protect residential and commercial insurers, those lawyers are doing his job for him. We are all so very thankful that these lawyers are skilled to take on the insurance industry.

However, had George Dale done his job, Katrina’s survivors would have had their money already. The construction boom would have already begun. The Katrina-ravaged region would already be in the middle of coming back into full swing. If George Dale had done his job, the Scruggs Katrina Group would have been unnecessary to create.

The point here is that on the state level we need to fire people like George Dale and hire officials like Gary Anderson.

Tomorrow, Mississippians have a chance to go to the polls, pick up a Democratic ballot in the primary election, and vote for Gary Anderson who will make a great insurance commissioner who will dedicate his tenure to protecting American residential and commercial consumers.

We have to have public officials who will protect consumers. We need to do this in Mississippi, California, New Hampshire, and throughout all 50 of our states.

Electing Gary Anderson in tomorrow’s primary election will be a major step forward for civil rights as we close another chapter of the good ol’ boy way of doing business. Electing Gary Anderson will be a major wake up call to the insurance industry and a major step forward for residential and commercial consumers. A new way of doing business which will really be what’s good for America.

Today’s Three Political Hell Raising Activities
Today, we’ll contact our elected officials in the U.S. House of Representatives and Senate as well as help elect Gary Anderson as our Democratic nominee for Insurance Commissioner in Mississippi.

Here are our phone scripts and email letters for our two U.S. Senators. We’ll tell them that we want to protect our families and businesses from being victims of price-fixing and other business shenanigans that the insurance industry is currently permitted to do.

Next, we’ll contact our congressional representatives to let them know that we want to protect our families and businesses through supporting the Multiple Peril Insurance Act. Here is a phone script and email letter to use as desired. Of course, contact information is available at the click of a button!

Today’s third hell raising activity will help elect Gary Anderson in tomorrow’s primary. Please call (615) 414-2965 or (601) 973-3834 and ask for Will. If he is not available, talk with whomever answers the phone. Tell her/him that you want to get a list of names and numbers to phone bank to turn out the vote.

This race to put in office Gary Anderson, a real Democrat, comes down to voter turnout. Every contact with voters to remind them of Tuesday's election is critical. One last thing, be sure to tell them that A.M. in the Morning! sent you!!

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Mississippi Insurance Commissioner Just Doesn’t Get It—His Job, That Is . . .

by Ana Maria

Some have said that I may be too cozy with the industry I regulate. Those who make these charges have never offered one fact where I have not held [the] insurance industry accountable to the laws of Mississippi that I am called on to enforce.

–George Dale Speech at the Neshoba County Fair,
video courtesy of John Leek and Cotton Mouth Blog

After 32 years sucking out money at the government teat, after over three decades in the job, George Dale doesn’t know his job. He is supposed to effectively, efficiently and faithfully carryout the duties of insurance commissioner. That is not just following the letter, but also the spirit, of the law. The point of his job isn’t to be the government paid lobbyist for the insurance industry. Voters wouldn’t put up with that nonsense. The industry has plenty of its own money to pay for lobbyists.

The point of the insurance commissioner is to protect consumers from the ravages of a market that would rip us off blindly if we let them. Andddddd, it is to create a level playing field for the businesses who are insuring our homes, offices, and non-profit organizations as well as local, state, and federal government assets. Unfortunately for us here in Mississippi, Insurance Commissioner George Dale is like their good neighbor, his always on their side. That’s right, the insurance industry is in good hands with George Dale.

When it comes to his job, George just doesn’t’ get it. I think to help him understand the errors of his ways will require breaking it down a bit. Let’s try to spark in him a vague memory of the point of his job.

1. “They made me do it!”

George Dale claims that the corporate big wigs in the insurance industry force him to burden Mississippians with massive jumps in the cost of insurance. The usual talking point for an insurance company is that they will take all their toys and go home if George doesn’t give them the obscene rate increases they are demanding. Dutifully, George drinks the kool-aid the industry gives him, and then he spits out this garbage.

“One important aspect of my job is to maintain a marketplace for the sale of insurance.”

Mississippi Insurance Commissioner George Dale, 2003

News Flash, George. It isn’t the only or the primary aspect of your job. The key question is this. To whose benefit do you maintain that marketplace? Your demonstrated bias is to maintain the marketplace for the benefit of the insurance industry itself and its apparent insatiable lust for obscene amounts of profit.

However, you are supposed to maintain a marketplace for the sale of insurance that is fair and equitable to all insurance companies AND that benefits the public. A HUGE difference.

Don’t give me that poppycock that it won’t do any good if an insurance company pulls out of the state. What is this? Government propping up of business? If companies can’t make their obscene profits here, fine. Let ‘em go. Don’t let the door hit ‘em, you know?

2. “Come right on in! We have your office all set up.”

George, you are supposed to protect the hen house from the foxes, not roll out the red carpet and invite them to set up shop inside your govern-ment office. Immediately following hurricane Katrina, the worst natural disaster in our history, you allowed an insurance industry PR flack to set up shop inside your government office.

When you did this, George, you betrayed the very people depending on you to protect them from the foxes in the insurance industry.

3. “Don’t’ be ridiculous. I’m supposed to be good friends with Industry lobbyists and hire one of their big time lawyers to be my own attorney.”

George, you are supposed to be regulating the insurance industry, not becoming good friends with its big time lobbyists or hiring a big industry attorney as your own lawyer. No, there is no law specifically prohibiting this. However, there is something mighty unethical about it. It doesn’t take a college graduate such as yourself to see that this creates a C-O-N-F-L-I-C-T of I-N-T-E-R-E-S-T.

Yet, all you said about hiring Greg Copeland, an attorney who is a longtime lobbyist for the insurance industry, is “I don’t see any conflict.”

George get your eyes checked, honey. You aren’t seeing the smut that is squarely on the end of your nose. In fact, George, you called this big insurance lobbyist "a good friend." You are not paid to be good friends with the industry. You are paid to protect us from the insurance industry’s propensity for not doing right by us.

Since you see no conflict with it, George, why don’t you just go ahead amd campaign specifically citing your chumminess with an industry big wig.

Vote for me! I’m good friends with an insurance industry big wig lobbyist. I will protect the insurance industry from silly fools who think their family and business budgets ought to come first. Remem-ber . . . a vote for George Dale is a vote for big insurance!

Could these be the reasons that Forbes Magazine reported this horrible fact about insurance rates on your watch?

“Mississippi, dead last in [per capita] income, is the sixth most expensive place to insure a house.”

See, your job is to be a referee so that there is a level playing field that does not benefit one company over the other, that makes it fair for all companies to compete, AND that ensures the public is PROTECTED. The main reason your job exists is because if left to its own devices, the insurance industry is unfair to its customers such as home and business owners. These are YOUR constituents. However, you think your job is to protect your favored corporations. You have missed the boat, George.

Your job is to protect all the folks in the state who own homes and businesses as well as educational facilities. And let us remember that every government agency and non-profit needs insurance, too. That is OUR money going into paying the insurance on the courthouses, jails, public schools, etc. When you approve inappropriately massive increases in insurance rates to protect a company or set of companies that you favor, you demonstrate that have lost your way and forgotten the job you had been elected to do.

You are one confused public official, George. Your job is about the public interest, not your personal interest.

You let the insurance industry co-opt you. They didn’t make you. You did this to yourself.

Heck, even the Mississippi State Supreme Court has so much as stated that you’ve abandoned your post, gone AWOL when it comes to regulating insurance companies.

These days, George, you are whining about trial lawyers who represent the very constituents you’ve long abandoned, lawyers who are the champions for the policyholders you’ve long abandoned. Come to think of it, because you haven’t done your job, you’ve become the trial lawyer’s best friend. Way to go, George. Way to go.

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Levees.org Needs Our Help Urgently . . .

Below is an email I received from Levees.org. Please read and click on the button for today's Political Hell-Raising Activity compliments of Levees.org.

-A.M. in the Morning!

_______________

August 3, 2007

Dear Members,

President Bush has promised to veto the Water Resources Development Act (WRDA), which contains flood protection projects critical to this country and to south Louisiana, a region ravaged by faulty federal flood protection.

This is a terrible blow to New Orleans and south Louisiana's recovery because WRDA includes major projects like 100 year hurricane protection and restoration of Louisiana's coast. It also includes billions in crucial projects that protect other areas of the country.

You can do something!

Click here and in just seconds, send an urgent letter to President Bush asking him to please sign WRDA.

Please do this TODAY!

Congress breaks for recess at 4pm Fri Aug 3!

Just click here!


Thank you,
Sandy Rosenthal
Executive Director, Levees.Org
www.levee.org


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Read the comment exchange

A bit of action on the comment section here is quite entertaining. Join in!

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FEMA Trailers Under Investigation

posted August 3, 2007

They were meant to provide temporary housing to victims of major disasters like hurricane Katrina. But some say their FEMA travel trailers are instead providing them with more misery. Now, nearly two years after the storm, FEMA is sending in scientists and has stopped the deployment of the trailers that have become so prevalent along the Gulf Coast. His old home was destroyed by hurricane Katrina and Austin Sicard says the FEMA-provided travel trailer he's lived in for more than a year is literally making him sick.

Original posted here.

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Law eases FEMA grant match rules

by MARIA RECIO
SUN HERALD WASHINGTON BUREAU
Posted on Fri, Aug. 03, 2007

H.R. 3247

WASHINGTON --
With the second anniversary of Katrina approaching, the House Transportation and Infrastructure Committee approved legislation that will significantly ease state matching requirements to federal rebuilding funds.

Rep. Gene Taylor, D-Bay St. Louis, led the effort to allow work already done by local communities to strengthen structures and infrastructure against future catastrophes to count toward the 25 percent state match for federal Hazard Mitigation Grants - a boon that could mean as much as $145 million to Mississippi.

"It's a tremendous cost savings," said David Staehling, Biloxi's director of administration. "We're doing a water and sewer infrastructure project, and a large amount is coming from Hazard Mitigation."

FEMA rules now require that "in kind" work be approved in advance to qualify for the 25 percent match. Taylor's amendment would waive that rule to allow work done by the state and localities to count for the state's match requirement under the Stafford Act to access Mississippi's $434 million in FEMA's Hazard Mitigation funding.

The Hurricanes Katrina and Rita Recovery Facilitation Act of 2007 also increases the federal contribution for so-called "alternate" projects from the current level of 75 percent to 90 percent.

Currently, if a school district or local government wants to build an alternate facility that differs from what was destroyed by Katrina, it is only eligible to receive 75 percent of FEMA Public Assistance funds. The bill would increase the federal share to 90 percent.

"That's wonderful," said Staehling. "That'll help a lot of people down here." Biloxi's former public pavilion, for example, cannot be rebuilt because it is in the flood zone. But the city could use the funds under the bill for an alternative project.

"When Mississippi communities moved forward to repair and recover and restore the local economy and community, they sometimes moved projects faster than the paperwork," said Rep. Chip Pickering, R-Miss., who also worked on the bill. "This reform allows FEMA to recognize and account that work after the fact, rather than financially penalizing the state for doing what it needed to do too quickly."

Original posted here.

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Bush administration defends storm contracts

By HOPE YEN
THE ASSOCIATED PRESS
Posted on Fri, Aug. 03, 2007

Excerpt . . .

the review found the five agencies had claimed falsely that 259 contracts were awarded to small businesses when in fact they went to large companies or ineligible recipients. That created the false impression that more than $95 million in contracts was awarded to small companies, when the money actually went elsewhere.

WASHINGTON --
The Bush administration on Thursday defended its efforts to award lucrative government contracts to small, Gulf Coast businesses for Hurricane Katrina recovery work, and pledged improvement in the coming months.

In a sometimes testy congressional hearing, officials from five government agencies said they were proud of efforts to award work to small companies.

"I fully expect the numbers to improve," said Lurita Doan, administrator of the Government Services Administration, noting that significant federal contract spending often occurs at the end of the fiscal year in September.

Doan joined officials from Homeland Security, Defense, Veterans Affairs and the Small Business Administration who testified Thursday after the committee released an analysis that showed the agencies had made little progress - and in some cases backtracked - on their pledge to do a better job of helping small, local businesses after the 2005 hurricane.

The committee's review found that small businesses in Louisiana had an overall net loss of $8.9 million in contracting dollars since April, when the agencies reaffirmed their commitment to give smaller companies a share of the work. The loss was due in part to a decision at the Homeland Security Department to modify several existing agreements instead of awarding significant new contracts.

In addition, the review found the five agencies had claimed falsely that 259 contracts were awarded to small businesses when in fact they went to large companies or ineligible recipients. That created the false impression that more than $95 million in contracts was awarded to small companies, when the money actually went elsewhere.

Overall, about 7.4 percent of Katrina contracts so far have gone to small businesses in Louisiana, down from 12.5 percent in April, according to the committee.

"At this point, I would expect less lip service and more action," Velazquez said. "The testimony does not focus on specific and measurable ways to include these local small businesses in the rebuilding effort."

Paul Schneider, DHS undersecretary for management, said the department in the coming months planned to award new contracts to small or local businesses for trailer work in Louisiana and Mississippi; forklift and heavy equipment rental in disaster affected areas in Alabama and Mississippi; and public water and sewer infrastructure in New Orleans.

He also contended that small businesses in Louisiana actually did not lose $8.9 million in contracting dollars since April due to contract modifications. He explained the initial contracts were for maximum dollar values, and DHS ended the contracts early once the work was done.

That drew an impatient response from Rep. Charlie Gonzalez, D-Tex., who said DHS tries to have it both ways. Officials often tout they have awarded contracts to small business with figures based on the maximum dollar amount, only to quietly reduce the payments later.

Don't misrepresent, Gonzales warned: "We're putting people on notice."

For many weeks after the 2005 hurricane, small and local companies were shut out of Katrina work in favor of large concerns with extensive government and political ties. Following public criticism, Homeland Security's Federal Emergency Management Agency pledged to rebid four large trailer contracts and give the work to small companies.

FEMA ultimately rebid only portions of the work. Government investigators later found FEMA did not take adequate legal steps to ensure that the new companies were small and locally operated, resulting in a questionable contract award to a large company with ties to the Republican Party.

Since then, Homeland Security has handed out 43 new contracts worth nearly $12 million to large companies or ineligible recipients. In contrast, it modified contracts to small Gulf Coast companies, resulting in a contract loss of $9 million in Louisiana.

In addition, 106 contracts worth $13 million whttp://www.blogger.com/img/gl.link.gifere miscoded by DHS as going to small businesses, when in fact they were not. That's up from 61 contracts found by the committee in April.

The committee findings come amid renewed focus on potential favoritism and abuse in billions of dollars of government contracts - from Katrina to Iraq reconstruction.

Read original article here.

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180,000 apply for Road Home aid

Posted on Fri, Aug. 03, 2007
Number to grow with mail-ins
THE ASSOCIATED PRESS

BATON ROUGE --
The mailed forms aren't all in yet, but nearly 9,000 homeowners filed last-day applications for the state's Road Home hurricane repair and buyout program by phone, online and in person, bringing the total to more than 180,000, a spokeswoman said.

Even without the mailed form, which had to be postmarked Tuesday, the last-day total is far greater than any other single day, Gentry Brann said.

Once all homeowners who have applied attend an initial appointment, officials will have a better handle on the multibillion-dollar shortfall expected for the program, which could run out of money in December. The state is seeking more money from Congress.

About 140,000 homeowners are expected to be eligible for the federally-funded, state-administered grants of up to $150,000 for uninsured losses from hurricanes Katrina or Rita in 2005. Homeowners had to have suffered major or severe damage from the storms. FEMA initially estimated that 123,000 Louisiana homeowners would be eligible for aid.

Brann said more than 39,100 homeowners had received Road Home aid by the close of business Monday. More than 129,000 have had an initial appointment, she said, and benefits have been calculated for nearly 112,000.

The Road Home has $6.4 billion in federal recovery money, but some officials have estimated it would cost another $5 billion to help every eligible applicant. About $2.8 billion has been distributed. More than $7.7 billion in benefits had been calculated as of July 23.

State officials plan to add another $1 billion by reshuffling federal recovery dollars and tapping into a state surplus. That plan still needs legislative and congressional approval.

Midnight Tuesday also was the application deadline for the second round of the Road Home small rental property program. Owners of one- to four-unit buildings, including town homes and condominiums, could apply for up to $100,000.

Some 82,000 rental units in Louisiana suffered major or severe damage during Katrina and Rita. The small rental program only has enough money to fix an estimated 18,000 units.

Under the first round of the program, $202 million in federal funds was conditionally awarded to about 2,700 applicants in 13 storm-affected parishes to help restore more than 5,100 rental units. Some $300 million is up for grabs in the second round. More than 10,000 applications have been filed.

Original posted here.

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