Biloxi's recovery shows post-Katrina divide

Shirley Salik, 72, stands in front of her camper, which she has parked in her son's yard.

While casinos prosper, hurricane's mark lingers in working-class areas

By Peter Whoriskey
Sun., Nov. 25, 2007

BILOXI, Miss. - Nowhere has the rebound from Hurricane Katrina been gaudier than along Mississippi's casino-studded coast.

Even as the storm's debris was being cleared, this city's night sky was lighted up with the high-wattage brilliance of the Imperial Palace, then the Isle of Capri, then the Grand Casino. More followed, and so did vacation-condo developers.

Yet in the wrecked and darkened working-class neighborhoods just blocks from the waterfront glitter, those lights cast their colorful glare over an apocalyptic vision of empty lots and scattered trailers that is as forlorn as anywhere in Katrina's strike zone.

"At night, you can see the casino lights up in the sky," Shirley Salik, 72, a former housekeeper at one of the casinos, said this month while standing outside her FEMA camper with her two dogs. "But that's another world."

More than two years after the storm, the highly touted recovery of the Mississippi coast remains a starkly divided phenomenon.


While Gov. Haley Barbour (R) has hailed the casino openings as a harbinger of Mississippi's resurgence and developers have proposed more than $1 billion in beachfront condos and hotels for tourists, fewer than one in 10 of the thousands of single-family houses destroyed in Biloxi are being rebuilt, according to city permit records. More than 10,000 displaced families still live in trailers provided by the Federal Emergency Management Agency.

Long-standing resentment
Now, long-standing resentment over the way the state has treated displaced residents has deepened over a proposal by the Barbour administration to divert $600 million in federal housing aid to fund an expansion plan at the Port of Gulfport. The port's recently approved master plan calls for increasing maritime capacity and creating an "upscale tourist village" with hotel rooms, condos, restaurants and gambling.

"We fear that this recent decision . . . is part of a disturbing trend by the Governor's office to overlook the needs of lower and moderate income people in favor of economic development," 24 ministers on the Mississippi coast wrote in September in a letter to state leaders. "Sadly we must now bear witness to the reality that our Recovery Effort has failed to include a place at the table . . . for our poor and vulnerable."

State leaders rejected the complaints. Gray Swoope, executive director of the Mississippi Development Authority, which is leading the state's recovery efforts, called the port expansion a "key piece" of the state's economic recovery and said that already-funded programs will be enough to address the state's housing needs.

"The people at this table are very compassionate about the people on the coast," he said. "We feel housing has been addressed, and it's in our plans."

Swoope said that because storm-displaced Mississippians are being accommodated by the state's housing programs, the state is comfortable asking the Department of Housing and Urban Development for permission to redirect the housing aid to the port project.

Exactly how much help residents should receive for rebuilding has been a flashpoint from the beginning of the recovery, when Louisiana and Mississippi adopted starkly divergent approaches to dispensing federal housing aid.

Louisiana leaders designed a homeowner grant program that is far broader. Essentially, any homeowner with significant hurricane damage is eligible to receive as much as $150,000 for rebuilding, less any insurance payouts received. A special provision for low-income homeowners added as much as $50,000 to the award if the damage claim was not enough to rebuild.

Mississippi's primary homeowner grant program, by contrast, was much narrower.

The program, known as Phase 1, focused only on the relatively narrow group of homeowners who lived outside the designated flood-prone areas -- and as a result did not have flood insurance -- but were flooded by Katrina.

It excluded thousands who lived in the flood zone and lacked adequate flood insurance, as well as anyone who experienced only wind damage.

Bailing them out, the argument went, would encourage homeowners to forgo insurance coverage in the future. But because low-income households were more likely to lack insurance or to be underinsured, Mississippi's exclusions fell most heavily on the poor, advocates said.

"Mississippi had to be pushed every step of the way to a compassionate position, and it's only partway to the finish line -- that's why losing this money to the port would be so wrong," said Reilly Morse, a lawyer for the Mississippi Center for Justice, a legal aid organization that has lobbied for the housing money. "It's just not compassionate to stop here when so many people still aren't cared for."

Mississippi did eventually begin compensating low-income homeowners who lacked insurance. But that program, Phase 2, limited awards to $100,000, and about 20 percent of the 11,000 applicants for that money have received checks so far.

Mississippi's program for rebuilding affordable rental properties has lagged even more. A proposed $262 million program for the owners of small rental complexes or houses, the primary type of rental on the coast, has yet to dole out any money. Another program, for low-income housing tax credits, is supposed to generate about 5,730 affordable rental units, but fewer than 1,100 have been built.

More than 20,000 rental units in Mississippi sustained major or severe damage in Katrina. The post-storm scarcity of rentals has driven prices up as much as 30 percent, making it more difficult for families in FEMA trailers to find new homes.

"Renters -- well, a lot of us sort of fell through the cracks," said Salik, the former casino housekeeper.

A widow, she quit her job after having a knee replacement years ago but still works three days a week at a mini-storage facility.

For a month after the storm, Salik lived in a tent. After a few more temporary living arrangements, she landed a FEMA camper that she has parked in her son's yard. Her son's camper flanks his house on the other side. He is still repairing the house, and though Salik had rented a house before Katrina, she expects to move in with her son when he finishes.

Like many of the residents struggling to rebuild in eastern Biloxi, Salik said she opposes spending housing aid for the port.

'Lot of people around here who need help'
"Whatever turns their crank," she said when asked about the proposal. "You know, really, there's still a lot of people around here who need help."

All along the road Salik lives on, Hoxie Street, people are struggling to get back into their homes. And while city officials have blamed the slow recovery on new FEMA guidelines that call for elevating houses by as much as 12 feet off the ground -- an expensive and sometimes impractical requirement -- those rules do not affect everyone, and most said their primary challenge is financial.

Daniel Beavers, 52, a surveyor, is rebuilding his house himself because his insurance payout and a state grant fell well short of what he has needed.

Emily Sponsler, a bartender, and her 11-year-old son are living in a FEMA trailer while they wait for their landlord to gather enough money to rebuild the house they once rented for $625 a month.

Earl Parrish, 72, a retired pipe fitter, and his wife, Betty, are still living in their grandson's home in Ocean Springs, the next town over, trying to put their Hoxie Street house back together on a limited budget.

They received about $50,000 from the housing grant program, but it was not nearly enough to complete the job. Katrina flooded their house with about six feet of water.

They have put in their own savings, and a Lutheran church group handled a lot of the labor. But their home is not quite ready for them to move in -- it has no furniture.

Like his neighbors, Earl Parrish opposes redirecting the housing aid to the port. But he seemed to regret making a complaint.

"We're grateful for what we got -- don't misunderstand," he said. "But the people around here were just working folks who didn't have much. You see all these empty lots around here? These are people who just can't afford to come back."

© 2007 The Washington Post Company

Return to A.M. in the Morning! Home

Read More......

Presidential contenders should take a stand in favor of insurance reform

AN EDITORIAL OPINION OF THE ORLANDO SENTINEL
Posted November 17, 2007

The odds of the federal government bringing fairness and stability to states' property insurance markets used to run about the same as an umbrella withstanding a hurricane.

Those odds finally are changing, however, thanks to a perfect, well, storm of:

• Insurers relentlessly abusing their policyholders.

• Some federal policymakers responding to that abuse with creative legislation.

• And some major contenders for the White House embracing the cause of reform.

The abuse is legion and growing. Hundreds of thousands of Floridians have seen their policies dropped or their premiums skyrocket in the wake of eight hurricanes from 2004 to 2005, even though Florida lawmakers reduced insurers' risk by providing them with backup insurance that protects them after catastrophic storms. Thousands more loyal policyholders from Georgia to California had their claims denied after Hurricane Katrina and calamitous fires destroyed their properties.

That hasn't been enough for President George Bush to say Washington should carry a big stick to the insurance industry. On the contrary, he favors a hands-off approach and says he'd veto legislation designed to make the industry more responsible.

The next White House occupant, though, could bring relief to millions of policy-owners by agreeing to sign two bills.

Taylor's legislation is critical

The bill from Rep. Gene Taylor of Mississippi would allow folks who get flood insurance through the federal government to also purchase wind policies from Washington. That's a critical fix for a system which, after Katrina, saw companies hurriedly determine that flooding, not wind, damaged homes. That finding allowed them to pocket premiums and make Washington disproportionately pay claims.

The bill from Florida Reps. Ron Klein and Tim Mahoney would allow a state like Florida with a government-sponsored insurance fund to pool, if it wished, its risk with those of other states. The risk would then be shared by private markets by the selling of long-term catastrophe bonds. Reducing the insurance industry's risk, it should allow more competition and with it, more reasonably-priced policies for homeowners.

Any savings that insurers gain, which the Treasury secretary would determine, would be passed on to consumers.

Sen. Hillary Clinton is sponsoring the Klein-Mahoney bill in the Senate, which hasn't voted on it or Mr. Taylor's bill. The House has passed both bills. Fellow White House candidate John Edwards supports Klein-Mahoney, while Rudolph Giuliani generally supports the principles in both bills. Mitt Romney says he's open to supporting the needs of homeowners. Other major candidates are saying little.

Voters wanting a say in whether Washington reforms the property insurance landscape would do well to remember that come the next election.

Return to A.M. in the Morning! Home

Read More......

Many Coast children are frustrated, traumatized

In Pascagoula schools, grant money is being used to fund program helping students live with hurricane's aftermath.

Pat Sullivan/Special to The Clarion-Ledger
Martha Smelley works with a student at Eastlawn Elementary School in Pascagoula.

By Rebecca Helmes
November 25, 2007

One little boy in the Pascagoula School District keeps his suitcase packed, ready to go if another hurricane approaches.

A little girl cries when she talks about watching water pour into her house from Hurricane Katrina's storm surge more than two years ago.

An 8-year-old student describes her life in a FEMA trailer as "pathetic."

They are among many children along the Mississippi Gulf Coast who still feel helpless or hopeless, are easily frustrated, or have nightmares - all symptoms of post-traumatic stress disorder.

In the Pascagoula school district, these children get help from the district's five part-time, grant-funded Katrina counselors.

BY THE NUMBERS

More than 600 families are living in MEMA Katrina cottages.

More than 13,600 families are living in FEMA trailers and mobile homes on the Mississippi Gulf Coast.

Students will move back into Gautier Elementary on Monday for the first time since the Aug. 29, 2005, storm.

Last year's enrollment in the Pascagoula district - the most recent available - was 6,965 students. That's more than the 6,748 students it had the year after the storm, but it still doesn't match the pre-Katrina enrollment of 7,559. Other districts on the Coast have seen similar enrollment fluctuations.

"The kids are hearing everything and being exposed to everything ... with child coping skills," said counselor Linda Holder of Pascagoula.

That's why the district saw fit to pursue a $100,000 federal grant for the counseling soon after the Aug. 29, 2005, storm. When that money was exhausted, Chevron stepped in with a $250,000 grant to continue it.

The counselors extol the value of talking about what's wrong - dealing with changes in friends, being sad or moody or working out anger or aggression. They each spend about 20 hours per week listening to students - and sometimes district staff members.

Theirs is a community that, like others along the Coast, is a patchwork of recovery.

Along Pascagoula's Beach Boulevard, where one swanky house after another once faced the Gulf of Mexico, some homes are manicured and pristine, as if a hurricane never came through.

Pat Sullivan/Special to The Clarion-Ledger
C.P. Winters, a Pascagoula school district counselor, talks with a Central Elementary teacher about Katrina issues.

But down the street, the only sign of life on a former home's cement slab are two patio chairs facing the ocean.

Other homes in the neighborhood in varying states of repair have yards scattered with trailers.

This month, 13,624 Federal Emergency Management Agency travel trailers and mobile homes were occupied on the Coast. More than 600 families were living in Mississippi Emergency Management Agency cottages.

In most places along the Coast, the storm cut into enrollment. The Pascagoula district lost about 800 students between 2004-05 and 2005-06.

Many districts along the Coast are seeing enrollment gains but haven't returned to their pre-Katrina enrollment.

However, academic achievement in coastal districts mostly has held steady with many schools maintaining their Level 4 and 5 ratings. Level 5 is the state's highest achievement rating.

Pascagoula's Katrina counselors said it's difficult sometimes to separate the issues caused by Katrina and the pre-existing conditions exacerbated by the storm.

"We've tried to see anybody and everybody (who seeks help)," Holder said.

Katrina counselor Martha Smelley said she likes that she can take some of the workload off guidance counselors.

"I have the freedom to just focus on that one child for an hour if I need to," Smelley said.

Jackson County mom Michelle Wilson, who is leading the Rebuild Jackson County Longterm Recovery Committee, said sometimes parents don't know how to help their children cope.

"We're not all psychology majors," Wilson said.

Her stepdaughter, 9 years old when Katrina hit, was at her biological mother's home when the storm surge brought the bayou inside. She climbed up on furniture to avoid the water.

"It did cause her some problems," Wilson said. "We found she was acting out a little bit.

Because her stepdaughter attends Jackson County Schools, she set up a few sessions with a counselor outside school who allowed her to talk about what happened.

Wilson said the girl is not acting out anymore and that more counseling such as Pascagoula offers should be available along the Coast.

"There are not many programs that are out there that don't cost a lot of money," Wilson said.

Holder said the issues have changed as people have moved through phases of recovery.

The year of the storm, she said, people were in survival mode. Last year, she said, they were angry for several reasons - insurance companies weren't paying, families were cramped in FEMA trailers or they just wanted life to be what it was before the storm.

"It was a new normal, and we didn't like the new normal," Holder said.

This year, she said, she has been dealing more with moodiness and depression than anger or aggression.

The counseling is expected to continue at least through this school year.

Donna Thomas, a counselor in the Gulfport School District, said the guidance counselors in her district pick up the slack with Katrina counseling.

"If they're (children) still in a FEMA trailer, they're tired of it," Thomas said. "The girls, especially, want privacy. They just can't get any."

Glen East, Gulfport's superintendent, said his district recognizes families are still coping as best they can.

"You're still really dealing with 'Why are my mommy and daddy not getting to move back into our house?'" East said. "Folks are moving back, and folks are still living in trailers."

He said schools in the district probably have taken more field trips in the past few years to give students a breather from Katrina life and talk.

"It's always going to be a little bit different," East said. "I think you probably still have a lot of people fighting for the old normal. That's probably exactly part of the mental health issue."

Michelle Eleuterius, a social worker in the Long Beach School District, said more signs of the old normal are cropping up - such as the Burger King that opened in her community.

Eleuterius said she tries to help students and families see how far they've come.

"I just help the kids see that life gets better," she said.

Return to A.M. in the Morning! Home

Read More......

N.J. church meets Katrina goal 6 months early

Fountain Baptist raises $1 million ahead of self-imposed 2-year deadline

Nov. 22, 2007

SUMMIT, N.J. - Parishioners at Fountain Baptist Church set a goal of raising $1 million in two years for communities hit by then beat their deadline by six months.

A group that tracks philanthropy says it is one of the largest amounts ever raised by a single U.S. church.

The church in this suburb made the promise in May 2006, with a self-imposed two-year deadline to raise the $1 million. The goal was reached this month.

"Anytime you help someone and know they're going to be blessed by your effort, there's no better feeling," said Michael Williams, a trustee of the church.


The Rev. J. Michael Sanders said that among other things, the money went for job training, housing and aid to churches impacted by the storm.

"After a while, people often forget certain things and people lose their commitment, their excitement or concern," Sanders said.

The Center on Philanthropy at says it's aware of only one other donation from a single church that was larger: the Los Angeles Oriental Mission Church's $3 million donation to earthquake victims in El Salvador in 2001.

Fountain Baptist Church officials said about 1,200 of the church's 1,900 members gave an average of $833. A donor who wished to remain anonymous gave $33,000, and another gave $15,000.

The Lott Carey Foreign Mission Convention, an African-American Baptist organization based in Washington, administered the donation. Fountain Baptist Church was started in 1897 by a group of black workers who gathered to pray together.

Some members don't think the giving is about to stop.

"There's still a lot of work that has to be done in that area," said Patrice Edwards, a church member for 17 years. "It's not like we met a goal and that's it."

© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Return to A.M. in the Morning! Home

Read More......

Insurers Shift Cost Burdens to Homeowners

Barbara P. Fernandez for The New York Times
Charles R. Williams’s home was damaged during Hurricane Andrew in 1992.

By JOSEPH B. TREASTER
November 23, 2007

PALMETTO BAY, Fla. — Charles R. Williams stood near the glass sliding doors in his home south of Miami and pointed out parts of the ceiling and walls that had crumpled after Hurricane Andrew ripped open the roof 15 years ago.

The visible damage from that storm, one of the worst of the century, has largely disappeared. But Mr. Williams and homeowners nationwide are still feeling its effect in their pocketbooks.

The storm stunned insurance companies and, after paying out more than $22 billion in claims in inflation-adjusted dollars, they began rewriting policies to protect themselves as much as homeowners. They also developed computer programs intended to limit payouts on claims.

As a result, American homeowners are having to make do with much less coverage at steadily rising prices. In Miami and other places along the coast, insurance prices have skyrocketed, deepening the national slowdown in home sales.

The insurers say they have had to take defensive measures to stay in business and pay claims as operating costs have climbed. “If you’re being overly generous in covering risks and you’re not taking in sufficient premium, it doesn’t make business sense,” said Richard Ward, the chief executive of Lloyd’s of London, a large insurer of homes and businesses in the United States.

Yet some industry experts and consumer advocates say that efforts by the insurers to increase profits, after years of taking losses on home insurance, are shifting more of the burden of repairs and reconstruction to homeowners. The cutbacks in coverage, consumer advocates say, have contributed to the slow recovery of the Gulf Coast from Hurricane Katrina and will most likely hamper recovery from the recent wildfires in California.

“You have a different mentality at the insurance companies,” said Andrew Barile, a consultant who has spent his life in the industry. “They no longer worry about the public service aspect. They’re concentrating on the bottom line.”

The bottom line has been good recently. The property insurance industry, including home, auto and commercial coverages, reported a record profit of $44 billion in 2005, even after paying $41 billion in damages from Katrina. The industry set another record for profit in 2006 at $64 billion. And as a second hurricane season is coming to an end without a hurricane hitting the coasts, 2007 is shaping up to be another lucrative year.

The changes in insurance coverage have been gradual. They are spelled out in the revised policies. But few homeowners read their policies, and they are often unaware that coverage has been reduced until they are faced with making repairs or rebuilding their homes. In most of the country, reduced coverage is much more of a burden than rising premiums.

Ten years ago, for example, the average cost of home insurance in America was $455 a year.

Today, it is an estimated $886 for much less insurance. Along the coastlines, annual premiums on houses routinely run into the thousands of dollars. Contending that even those premiums are not high enough for the risk they face, the insurers have canceled or declined to renew several million policies.

Two years ago, the annual cost of coverage for Mr. Williams, a retired airline pilot, and his wife, a former flight attendant, rose more than 50 percent to $2,599, for about $250,000 in coverage.

The insurers say they have tried to strike a balance that works for them and their customers. “What insurers have tried to do,” said Robert P. Hartwig, the president and chief economist of the Insurance Information Institute, a trade group in New York, “is to sell policies that provide people with coverage for the vast majority of losses they are likely to suffer at an affordable price.”

“A policy that covered every peril would be unaffordable for many if not most people,” Mr. Hartwig said.

Before Andrew, the insurers sold home insurance as a loss leader and loaded the policies with lavish benefits to attract customers for their car insurance and to build up capital in their investment portfolios.

“It was a kind of avuncular, sleepy line of business,” said William R. Berkley, the chief executive of W. R. Berkley, a commercial insurer in Greenwich, Conn. “Then losses started to outstrip even what investment income might have been able to make up.”

In those days, the standard home policy promised to pay for the replacement of a destroyed home, regardless of the cost. Now most policies pay the insured value of a house and up to about an additional 25 percent — which is often not enough to rebuild, as many victims of the recent wildfires in California are discovering.

As an example, a typical policy for a home valued at $300,000 usually pays up to $375,000.

One home destroyed by the California fires, for example, was insured for $4 million. The insurer, Chubb Insurance, estimated that rebuilding would cost $6 million, or 50 percent more than it was insured for. But Chubb is one of the few insurers still offering full replacement coverage.

By issuing full replacement policies, the risks of higher reconstruction costs and underestimates on home values fell on the insurance company. Now most companies put the risk on the homeowner.

In much of Miami and along the coast, the insurance companies no longer provide coverage for the most costly threat to homes: damage from hurricanes and other high winds. Now, Florida and several other states have created state-run insurance companies to provide the coverage.

Insurers that still sell policies against wind damage impose deductibles of at least 2 percent and as much as 5 percent, which is another way of reducing coverage. On a $300,000 home with a 5 percent deductible, the homeowner pays for the first $15,000 in damage, compared with the once standard deductible of $500.

After Katrina, the reductions in coverage and the insurers’ reluctance to pay claims contributed to thousands of lawsuits and out-of-court disputes and made it difficult for many to rebuild.

Flooding was extensive along the Gulf Coast. The insurers do not cover flood damage, and their policies say so. But most policies also contain clauses that rule out payment for wind damage that occurs in combination with flooding.

Many homeowners could not accept that flooding caused by hurricane winds could cancel out the battering by high winds that their homes suffered for hours before the water arrived. And they took their insurers to court. But a federal appeals court recently ruled that the insurers were within their rights to deny payments in those circumstances.

Besides many angry customers, the insurers are facing federal and state investigations and a lawsuit by the attorney general in Louisiana into their coverage and claims-paying practices.

In a lawsuit filed this month, Charles C. Foti Jr., the attorney general in Louisiana, accused State Farm, Allstate and other insurers of using computer programs to gain “an unjust advantage over policyholders” in calculating premiums and paying claims. Private lawyers in Louisiana have filed similar lawsuits based on the testimony of former claims adjusters.

“The idea that insurers conspired to limit claims is completely without merit and unsubstantiated,” Mr. Hartwig said.

The insurers say they have resolved 99 percent of the 1.2 million claims from Katrina for damage to homes and that most people are satisfied. Most of the complaints, they say, have not been related to reductions in coverage but have resulted from expectations of homeowners that insurance policies would cover flood damage.

Many people, Mr. Hartwig said, are “searching for ways to fill the economic gap” created by Hurricane Katrina. “But,” he said, “the gap principally boils down to two words: flood insurance. If there had been 100 percent penetration of flood insurance, we wouldn’t be having this conversation.”

Tightening coverage and claims payments have produced spectacular results for the insurers, as shown in an economic snapshot of their performance in home insurance in 1992, the year of Andrew, and in 2005, the year of Katrina.

In 1992, the companies collected $20.5 billion in premiums and reported a pretax loss of $11.8 billion on home insurance, not counting earnings from investments, according to A. M. Best, an insurance rating agency. In 2005, the home insurers took in $52.2 billion in premiums and reported a pretax loss of $643.6 million; losses had been cut to a sliver of sales. In 2005, with investment earnings of $1.9 billion, the home insurers had a net gain, before taxes, of $1.3 billion.

One measure of the new efficiency of the home insurance business is its ratio of claims expenses to premiums. In the year of Hurricane Andrew, the industry paid out $1.27 for every dollar of premium it collected. In 2005, the year of the more destructive Hurricane Katrina, the insurers paid out 71.50 cents for every dollar of premium.

“I could understand it if the insurance companies were cutting back on coverage, lowering their costs and passing on some of the savings to homeowners,” said J. Robert Hunter, the director of Insurance at the Consumer Federation of America. “But they’ve hollowed out their policies and they’re keeping the benefits for themselves.”

The insurers say that in a time of more powerful and more frequent hurricanes, they have to tailor their coverage and prices for overwhelming jolts. The huge increase in condo towers and homes along the coasts, they say, have multiplied their potential losses.

“I guarantee you,” Mr. Berkley said, “as we move down the line, the profits you’re seeing in the business today are going to take a significant hit.

“One meteorological wobble,” he said of Hurricane Dean, which tore through the Caribbean and Mexico in August, and the storm “would have hit Miami. And that’s a $100 billion hit.”

Return to A.M. in the Morning! Home

Read More......

FEMA to reimburse Aquarium for replacing fish lost in Katrina

STAFF FILE PHOTO BY MICHAEL DEMOCKER James Arnold, curator of life support, checks on a hogfish (top) and squirrelfish he caught from the reef off Big Pine Key in Florida in 1996. FEMA will reimburse the aquarium for the cost of restocking.

By Mark Schleifstein
Staff writer
Posted by The Times Picayune
November 21, 2007

A senior FEMA official has reversed the denial of a request by the Aquarium of the Americas to be reimbursed $99,766 for replacing fish killed in 2005 during Hurricane Katrina.


Federal Emergency Management Agency regional officials had denied the request after estimating the cost of getting replacements for the 3,000 dead fish from commercial sources would be $616,849. FEMA officials determined the fish were "one of a kind" items similar to lost works of art and declared them ineligible for reimbursement.

The aquarium appealed the initial denial, reducing its request for reimbursement to the actual costs involved in its own expeditions to capture fish and of collecting fish donated by other aquariums.

FEMA denied the revised request for the same reasons, a decision affirmed earlier this year by FEMA Regional Administrator William Peterson.

But in a Nov. 20 letter, FEMA Assistant Administrator Carlos Castillo said the fish being replaced were "non-exotic" and should be considered contents eligible for replacement, just like furniture.

"The applicant has demonstrated that it was more cost effective to catch the replacement fish than to purchase the fish commercially," Castillo wrote, and is eligible for regular and overtime labor costs associated with the fish collections.

"We were expecting a good outcome on this because it made so much sense," said Audubon Nature Institute Chief Operating Officer Dale Stastny.

He said the money would plug part of the hole in the aquarium's budget caused by the Katrina-related losses, and the year-long period the attraction stayed closed to the public.

"Actually, right now, we're out chasing stingrays," he said.

John Hewitt, director of husbandry for Audubon, recently visited Landry's Restaurants' Downtown Aquarium in Houston to pick up some donated rays, and this week was at the Virginia Institute for Marine Sciences in Gloucester Point, Va. to collect several more, Stastny said.

FEMA spokesman Bob Josephson said it will still take a few weeks to complete the paperwork involved in transferring the money to the aquarium. FEMA must rewrite the request forms based on Castillo's ruling, then transfer the money to the state Office of Homeland Security and Emergency Preparedness, which will then transfer it to the aquarium.

Josephson said the successful appeal shows FEMA's careful review of damage requests by local agencies is working.

"It's there to ensure that everything is looked at and we provide the maxium funding eligible," he said. "The important thing is that we got it right in the end."

Mark Schleifstein can be reached at mschleifstein@timespicayune.com or (504)¤826-3327.

Return to A.M. in the Morning! Home

Read More......

FEMA Flip-Flops, OKs $100K for La. Fish

FEMA Admits Fishing Expedition Paid Off, Relents on $100K Reimbursement to La. Aquarium

By JOHN MORENO
The Associated Press
November 21, 2007

NEW ORLEANS

Reversing a decision that some found bureaucratically absurd, the Federal Emergency Management Agency granted $99,766 Wednesday to an aquarium that saved taxpayers a bundle by catching replacements for the fish it lost to Hurricane Katrina.

FEMA had said that the Audubon Aquarium of the Americas needed to buy the fish from commercial vendors, a method the agency said would cost $616,849 but would comply with disaster aid laws.

When aquarium staff went out and caught them for $99,766, FEMA denied their petition for reimbursement, though the move had saved half a million dollars.


The aquarium appealed, and the dispute dragged on for 17 months until Carlos Castillo, FEMA's assistant director of disaster assistance, notified the aquarium in a letter Wednesday that the federal agency would pick up the tab after all for the aquarium's catch of 1,681 fish from the Gulf of Mexico, the Florida Keys and Bahamas.

"We felt confident that our appeal would go through. But of course, it's a nice Thanksgiving," said Melissa Lee, a spokeswoman for the aquarium. "We'll be able to use this to make things better at the aquarium."

A linchpin of the city's tourism-based economy, the aquarium is seeing only 70 percent of its pre-storm visitors and has laid off 80 percent of its staff.

FEMA initially denied the aquarium's petition because it believed catching new fish improved the collection. Under federal law, facilities cannot be improved upon with federal money, only restored to their pre-disaster condition.

State officials say the majority of 35,000 Katrina rebuilding projects have been stalled in strict interpretations of the same law, generating mountains of paperwork in which FEMA takes stock of damages as minute as the number of pencils lost at a school.

Bob Josephson, FEMA's director of external affairs in Louisiana, said the reversal is proof that the process works.

"That's why we have a formalized appeal process, to ensure that the applicants are getting a first and second look and we are providing all the disaster assistance available," said Josephson, who was first alerted to the aquarium case by The Associated Press. "I think were always looking for cost-effective measures to save taxpayer's money."

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Copyright © 2007 ABC News Internet Ventures


Return to A.M. in the Morning! Home

Read More......

Future of levee project rests, literally, on clay

By Rick Jervis, USA TODAY
November 20, 2007

Construction work continues on the 17th Street Canal near the levee wall that failed during Katrina and flooded parts of New Orleans. Photo by Chris Graythen, Getty Images

NEW ORLEANS — The project to rebuild this region's critical levee system is in need of some good old Louisiana clay.

But a clay shortage — and a subsequent rise in its price — may slow progress in rebuilding the levees in and around New Orleans.

The Army Corps of Engineers, the U.S. agency in charge of the levee project, will need an estimated 145 million cubic yards of clay to fortify 350 miles of earthen levees around the greater New Orleans area, said Soheila Holley, a senior program manager with the corps charged with finding the clay.

In the two years since Hurricane Katrina, the Army Corps of Engineers has only acquired 20 million cubic yards, she said. An additional 50 million cubic yards are being tested.

"This is one of the most complex issues of the hurricane protection system," Holley said, noting that Orleans, St. Bernard and Plaquemines parishes are nearly out of quality clay, which keeps water from penetrating levees.

Importing clay from neighboring states would add costly hauling fees, she said.

Levee and flood wall breaches were the main causes of the catastrophic flooding of New Orleans following Katrina. The corps has begun work on a $7.5 billion, 100-year hurricane protection system that includes more than 300 projects, such as reinforcing levees, installing new floodgates and closing harmful canals. A 100-year hurricane is a storm with a 1-in-100 chance of occurring in any given year.

Though it's still too early to tell what impact it may have overall, a lack of good clay could potentially impede the project's progress. "There's not enough land in the vicinity," she said. "We need a lot of material, it has to be good, and it has to be at a reasonable cost. Those are our current challenges."

Both the reddish-orange Pleistocene clay and gunmetal blue Holocene clay are found along the Mississippi River in southeastern Louisiana and both could make strong levees if mixed properly, said Robert Bea, an engineering professor at the University of California-Berkley who has led studies of the levees.

The clay is found about 20 feet under backyards and fields near the riverbank, pushed there by the Mississippi over millenniums, Bea said.

The corps acquired as much of the clay as possible immediately after Katrina. But as the need for the clay increased, a new breed of entrepreneurs, known as "clay brokers," began acquiring properties from landowners and selling the clay to the corps, often at increased prices, Bea said.

DRC, a Mobile, Ala.-based construction management firm, has acquired around 10,000 acres in Louisiana containing 20 million cubic yards of clay since Katrina, said Chuck Prieur, a program manager with the firm. DRC has sold the clay for levee construction since winning a contract late last year, he said. There were 20 other firms vying for that contract, Prieur said.

"A lot of people are getting into the business of selling clay," he said. "It's a commodity we're looking to sell. The opportunity is there for potentially a good profit."

Clay prices soared to around $80 a cubic yard immediately after the hurricane, then settled to $20 to $30 a cubic yard this year, Prieur said. The clay sold for around $10 a cubic yard pre-Katrina, Bea said.

For now, the Corps of Engineers is trying to deal directly with landowners and avoid the brokers to keep costs down, Holley said. But as clay becomes scarcer, the agency may have to go to market for the firm earth, she said.

"We'll avoid that to the point we can avoid it," Holley said. "But there may be a point where we'll have to."


Return to A.M. in the Morning! Home

Read More......

Debate commission releases its evaluation of city's application

Posted by NOLA.com November 20, 2007

Three Democratic presidential candidates Tuesday chided the Commission on Presidential Debates for not selecting New Orleans for one of four nationally televised debates next year.

Meanwhile, amid speculation that partisan politics dealt New Orleans out of the mix, the commission's co-chairman denied that the decision was based on anything but the merits of the 16 cities that applied to host the debates.

Frank Fahrenkopf Jr., one-time chairman of the Republican National Committee, brushed aside speculation that Republicans vetoed New Orleans as a presidential debate backdrop for fear that the Bush administration's hapless response to Hurricane Katrina would reflect poorly on them.


"That's stupid," Fahrenkopf said. "This isn't a bunch of fly-by-night politicians making these decisions. We don't play games."

New Orleans, the acknowledged sentimental favorite in the competition to host one of four debates in 2008, lost out to Oxford, Miss.; Nashville, Tenn.; and Hempstead, N.Y. St. Louis was chosen to host a vice presidential debate.

The decision prompted criticism from three Democratic presidential candidates. Five Democrats and two Republicans running for president had urged the commission to schedule one of the debates in New Orleans.

Sen. Hillary Clinton, D-N.Y., said the commission "missed a golden opportunity to show New Orleans that the entire country is committed to its recovery," while Sen. Barack Obama, D-Ill., said the event would have provided "an economic boon to the city" and reminded Americans "about the unmet promise to rebuild and restore the Gulf Coast."

Former Sen. John Edwards, D-N.C., who launched his presidential bid in New Orleans, urged the panel to reconsider.

"As a nation, all of us have a responsibility to do everything we can to help rebuild this great city, and holding national events in this city, like a presidential debate, will help New Orleans move forward," Edwards said.

Private group, private files

A day after the decision was announced, questions continued to swirl about why post-Katrina New Orleans -- which successfully played host to the 2007 Sugar Bowl, has staged numerous conventions and was chosen as the locale for the 2008 NBA All-Star Game -- didn't make the cut.

Contributing to the confusion is the secretive way the commission operates. It provides no formal explanation about why certain cities are chosen and others are not, leaving the losing bidders to speculate about how their applications were deficient.

Asked whether the commission would be willing to make public its evaluation of New Orleans' bid, Fahrenkopf declined.

"We're a private group. We're not going to produce our files," he said.

The only document made available Tuesday was released by Anne Milling, founder of the hurricane recovery group Women of the Storm, which spearheaded the debate application. It was a Sept. 24 e-mail from Janet Brown, executive director of the commission, which indicated that the panel was concerned that promises made by the city would be kept.

"Important questions have arisen concerning the bid from New Orleans," Brown wrote. The e-mail went on to say that given the "unique configuration" of the New Orleans bid, the commission wanted to know which organizations would "accept legal responsibility for performing which tasks."

Norman Francis, president of Xavier University, said Fahrenkopf gave him a specific reason for the denial Monday before the decision was announced. Francis said he was told that New Orleans' primary arena for the debate, the Ernest N. Morial Convention Center, lacked the necessary technological capabilities. Francis, whose school would have been one of four colleges hosting the event, dismissed the suggestion as nonsense.

Milling said she was told by the other commission co-chairman, Paul Kirk Jr., that the city had not recovered sufficiently from Hurricane Katrina to stage the event.

Kirk, former head of the Democratic National Committee, didn't return phone calls, but denied that account in an interview in The New York Times. Milling on Tuesday stood by her version of the conversation.

The paucity of details led to speculation about the reasons for the snub. Francis suggested that the city was too dramatic a setting for members of the commission who may have been nervous that scenes of destruction and despair more than two years after Hurricane Katrina would be embarrassing.

"There is no rational earthly reason that we weren't ready to host a presidential debate," Francis said. "If the word was that New Orleans wasn't ready, that's not the issue. They weren't ready for us."

No disrespect intended

Fahrenkopf said the decision not to pick New Orleans "should not be interpreted as an attack" on the city or its "ability to handle an event."

He could point to no specific criterion -- facilities, transportation, hotels, communications -- that the city would be unable to provide.

Like Fahrenkopf, Mike McCurry, another commissioner and the former spokesman for President Clinton, brushed aside suggestions that politics played a role in the decision.

McCurry, who has rebuilt houses in Gentilly and the Lower 9th Ward since the 2005 storm, said "so many of us had sympathy for New Orleans. We really wanted to make it work."

He said there was "no stronger advocate at the beginning than Frank" Fahrenkopf, who organized the 1988 Republican presidential nominating convention in the city.

"At the end of the day it's not about giving community a boost, but letting every American voter see the debate," McCurry said. "Fundamental things have to come together and they weren't coming together in New Orleans."

He added, "Everyone (on the commission) said we will actively solicit New Orleans four years from now."

-----

Bill Walsh can be reached at bill.walsh@newhouse.com or (202) 383-7817.

Return to A.M. in the Morning! Home

Read More......

Letter to WSJ: Retract False Statement Regarding Scruggs

VIA EMAIL AND FACSIMILE
E-mail: wsj.itrs@wsj.com
Editor
The Wall Street Journal
200 Liberty Street
New York, NY 10281

Re: Your Editorial of November 15,2007, "Mississippi Hoods"

To the Editor:

The Wall Street Journal should immediately retract a false statement regarding my client attorney Richard F. Scruggs contained in its November 15,2007 editorial entitled "Mississippi Hoods. "

The editorial purports to recount events leading up to a lawsuit brought by E.A. Renfroe & Co., Inc. against their former employees Cori Rigsby and Kerri Rigsby. Renfroe sued the Rigsbys after they went public with evidence they believe shows that State Far (one of Renfroe's largest clients) wrongfully denied insurance coverage to victims of Huricane Katrina.



The Journal asserts that "Mr. Scruggs convinced two Renfroe employees-sisters Cori Rigsby Moran and Kerri Rigsby-to steal documents to aid his civil litigation against State Far."

This statement is false. First, it is not true that Mr. Scruggs "convinced" the Rigsbys to copy State Farm's documents. Many months before they first met Mr. Scruggs, the Rigsbys independently concluded that State Farm was treating its policyholders unfairly, and they began collecting evidence of what they observed. Indeed, Cori Rigsby has testified that she and Kerri Rigsby decided "on our own" to copy a batch of documents in June 2006. Mr. Scruggs commends the Rigsbys for their courage and determination.

Second, neither of the Rigsbys ever "stole" any documents. As they have testified repeatedly, they copied documents evidencing what they saw as State Farm's unfair practices, but they did not take original State Farm documents. The Rigsbys had the right to make such copies to provide them to law enforcement and others with an interest in investigating and correcting the fraud they believe has occurred.

The Journal's November 15, 2007 editorial concludes with the line "You can't make this stuff up." Yet, with the respect to the above statement, it appears that the Journal did just that. Accordingly, I insist that the Journal issue an immediate retraction.

Very truly yours,

John W. Keker

Return to A.M. in the Morning! Home

Read More......