Study Claims FEMA Ignored Toxic Findings

By EILEEN SULLIVAN
January 28, 2008

WASHINGTON (AP) — The Federal Emergency Management Agency manipulated scientific research in order to play down the danger posed by formaldehyde in trailers issued to hurricane victims, according to an investigation by congressional Democrats released Monday.

FEMA "ignored, hid and manipulated government research on the potential impact of long-term exposure to formaldehyde" on Katrina and Rita victims now living in FEMA trailers, Democrats on a House Science and Technology subcommittee wrote in a letter to Homeland Security Secretary Michael Chertoff. FEMA is part of the Homeland Security Department.

In a separate letter, lawmakers said the federal health agency that provided guidance to FEMA was "complicit in giving FEMA precisely what they wanted."

Victims living in FEMA trailers have complained of health problems related to formaldehyde, but initial FEMA tests revealed the air quality in the trailers was safe if those trailers were properly ventilated. Formaldehyde is a common preservative found in building materials used in manufactured homes. It can cause respiratory problems and has been classified as a carcinogen by the International Agency for Research on Cancer and as a probable carcinogen by the U.S. Environmental Protection Agency.

FEMA said the health agency's Feb. 1, 2007 advice didn't address long-term health effects, but rather concerned ways to avoid toxic exposure to formaldehyde. "FEMA did not suppress or inappropriately influence any report," said agency spokesman James McIntyre.

The lawmakers are questioning the integrity of research done by the Agency for Toxic Substances and Disease Registry, and said they don't trust FEMA to conduct an independent investigation into the toxicity of the formaldehyde in trailers.

The investigation, led by Rep. Brad Miller, D-N.C., found the health agency ignored research from one of its own experts, Christopher De Rosa.

Because the health opinion was completed without appropriate oversight, the results could be misleading, De Rosa wrote in a February 27, 2007 letter to a FEMA attorney that was obtained by the subcommittee.

"Any level of exposure to formaldehyde may pose a cancer risk, regardless of duration," De Rosa wrote. "Failure to communicate this issue is possibly misleading and a threat to public health."

In its initial round of testing, FEMA took samples from unoccupied trailers that had been aired out for days and compared them with federal standards for short-term exposure, according to the lawmakers. FEMA officials instructed scientists at the health agency to leave out details about long-term exposure in its consultation.

"Honest scientific studies don't start with the conclusion, and then work backwards from there," Miller said in statement.

FEMA is currently testing 500 of the 40,000 trailers, but the lawmakers said they have no confidence in the new testing and sampling procedures.

The test results are due to come out in February and FEMA plans to issue a final report in May.

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Officials: FEMA maps may wipe Bay off map

Much of city now in hazard zone



By J.R. WELSH
jrwelsh@sunherald.com

BAY ST. LOUIS -- A David and Goliath contest is emerging between this small bayfront city and the federal government, with local officials vowing to fight imposition of new FEMA flood-advisory standards they say will hamper future growth and perhaps slay it altogether.

City officials say FEMA flood maps that were unveiled recently place large parts of Bay St. Louis in zones whose designations will require impossible heights for new construction, and will make the cost of flood insurance beyond the reach of many homeowners.

The city already had flood maps that had been revised in the 1980s. But the new maps slated to replace them are more stringent and could impose far different circumstances. The new flood elevations were crafted by federal officials following Hurricane Katrina.

"We have to fight this at all costs. I personally think it will alter the history of Bay St. Louis," said City Councilman Doug Seal.

The maps place large portions of the city in zones designated as "special flood hazard areas" that have an annual 1 percent chance of experiencing a 100-year flood.

Along the bay front, FEMA maps show advisory base flood elevations ranging from 20 to 30 feet. In many areas off the open coast, they run as high as 27 feet. Flood elevations indicate the height above mean high tide at which construction can begin.

Mayor Eddie Favre illustrated the extent of the problem recently when local officials had a get-acquainted meeting with new U.S. Sen. Roger Wicker, appointed to replace retired Sen. Trent Lott.

"The fourth block of Main Street - the middle of Bay St. Louis - is a hazard flood zone now," Favre told Wicker. Under FEMA's new advisory base flood elevations, homes will have to be constructed so high in the air that "instead of worrying about flood, we're worried about wind now," he said.

Councilman Bobby Compretta, who is also a Realtor, said he considers the flood elevations excessive, and fears they will squelch growth in the foreseeable future. "In my opinion, people are not going to rebuild," he said.

Bay St. Louis intends to appeal FEMA's flood maps, and has agreed to hire an engineering firm to assist in the effort. The city also got outside support this week when the Mississippi Municipal League held a conference in Jackson.

That group's executive committee passed a resolution asking that FEMA extend the time from three to six months for the city to review the flood-elevation maps. The resolution will now go to the Mississippi Legislature for support.

City Councilman Jim Thriffiley lobbied at the conference for support from other cities, and said state District 46 Sen. David Baria has agreed to enter the resolution into the record in the Senate.

"Hopefully, we can take the endorsement from the Legislature and use it in our fight," said Thriffiley, who called the new flood elevations "mega-bad. That's the only way I can describe it."

Seal said the FEMA elevations would essentially sink hopes for the city's newly incorporated area, which runs west to Highway 603 and north to Interstate 10. City officials had hoped to develop a sweeping retail and business corridor there to accommodate growth, generate new tax revenues and lessen dependence on income from casinos.

As things now stand, the new flood maps are throwing a long shadow over those plans.

"If we can't develop 603 and the corners of I-10 as a business corridor, it would have a devastating effect on Bay St. Louis," Seal said.


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Tell the networks to make Gulf Coast rebuilding the top topic in the presidential debates

Returning, recovering and rebuilding after the nation’s worst disaster has been left to poor – mostly Black – residents and volunteers, abandoned by their government. Here, Latonja Tucker paints her church in New Orleans. In November, Americans must elect a president who will implement the Gulf Coast Civic Works Project, which will create 100,000 jobs for residents and evacuees to rebuild their communities. Photo: Mike DuBose, UMNS

By Jeffrey Buchanan - San Franscisco Bay View, January 25, 2008

CNN, MSNBC and Fox News and the other networks that have hosted this primary season's 30 presidential debates have yet to ask each candidate how they plan to help rebuild communities in New Orleans and along the Gulf Coast. Though media attention for their struggles has faded more than two years after the 2005 hurricanes and levee failures, many of these communities have not been able to rebuild their schools, police stations, roads and other critical infrastructure as hundreds of thousands of residents remain displaced. The result is an American human rights crisis certainly worthy of being addressed as Americans choose their next president.

Through 14 Republican debates, no moderator has asked any Republican presidential candidates a single question about rebuilding New Orleans and the Gulf Coast. Moderators of the 16 Democratic events have not done much better, directing only a fraction of their debates, less than 1 percent, to Gulf Coast recovery.

In an interview with the Sun News before the Jan. 21 South Carolina debate, Rep. James Clyburn, the state's most senior member of the Congressional Black Caucus, which sponsored the debate, even named rebuilding infrastructure, specifically in the Gulf Coast, as a top issue he hoped to hear addressed in the debate. Still the topic was never touched on.

Top candidates from both parties have characterized the government's response to Hurricane Katrina as a failure during their respective debates. Still only once this primary season, at PBS's Democratic debate at Howard University, did the debate questioners ask each candidate a question related to Gulf Coast recovery. NPR's Michele Norris asked whether each candidate would support a federal law guaranteeing a human right to return home after Hurricane Katrina, based on international law. Though candidates hinted at their rebuilding plans, they were not pressed to explain the steps they would take to create the economic and social conditions necessary for residents to realize their rights.

Gulf Coast residents fear that important questions about the future of their communities and the hundreds of thousands of their friends and families who are still displaced will continue to go unasked and unanswered this primary season.

Things are not looking much better for the general election debates.

Despite letters of support from a bi-partisan list of seven presidential candidates and supportive editorials from USA Today, the New York Times, Time Magazine and the Washington Post, New Orleans' application to host one of four scheduled general election Presidential debates was recently denied. With New Orleans successfully hosting such large-scale events in 2008 as the Sugar Bowl and the NCAA Championship Game and set to host the NBA All-Star Game, city leaders found the snub shocking. Anne Milling, founder of Women of the Storm, the group which led the application effort with a consortium of local universities including Dillard, Loyola, Tulane and Xavier, called it, "a case of politics trumping the clear moral choice."

‘A defining moment in American history'

Debates are a time to make candidates take a stand on the most important issues facing American voters. National polling data indicates that Gulf Coast rebuilding is still important to Americans nationwide, not just those living in the region.

John Zogby, one of the top minds in the polling industry, wrote recently in Campaigns and Elections Magazine that polling data on domestic issues facing candidates in the 2008 elections indicates, "Katrina, over the long haul, will prove to be more of a defining moment in American history than the terrorist attacks of Sept. 11, 2001." He went on to note that after witnessing the failed federal response to Gulf Coast recovery, American voters "hunger nationwide for a new model for the federal government."

Zogby found that Americans wanted a leader who would could unite the nation and marshal the necessary resources to rebuild after a disaster. He wrote that Americans wanted federal leadership with the flexibility to work with local leaders, including local governments, faith and community groups, and solve problems.

Still recovering - more than two years later

In terms of physical devastation, Hurricanes Katrina and Rita and the levee breakdown far surpasses any disaster in America's history. They caused more damage than our three largest disasters combined: the Sept. 11 attacks, Hurricane Andrew and the Northridge earthquake. The human face of the disaster can be seen in the hundreds of thousands of Gulf Coast residents who remain unable to return home.

Housing shortages threaten communities across the Gulf Coast. Thousands of families are about to be kicked out of FEMA trailers, which the federal government recently determined contain levels of toxins so strong that they have advised their employees not to enter the structures.

Federal programs like FEMA public assistance have proven slow and inflexible for rebuilding vital community infrastructure. USA Today recently reported FEMA had spent less than one fourth of the $4.5 billion federal dollars available for rebuilding critical community infrastructure across the region.

Critics claim current federal policy often leaves construction projects addressing long-term needs ineligible for federal aid. In New Orleans, this policy has resulted in infrastructure deficiencies with severe social and economic consequences.

With schools closed, students must travel long distances and some 300 students in New Orleans during the 2006-07 academic year were unable to even enroll.

Restricted public transit and battered roads limit access to work and services. Scarce childcare facilities limit options for working parents. Crime rates have risen while police headquarters operate out of FEMA trailers. Death rates rise as hospitals operate at diminished capacity.

Louisiana alone - not including damage in Alabama, Florida, Mississippi and Texas - has reported over $20 billion in public infrastructure damage due to the hurricanes and levee breaks, leaving significant unfunded needs.

Levee construction remains under-funded, and preventable erosion continues to destroy nature's flood protection, the wetlands, threatening returning residents. These issues impact the pace of recovery and ultimately the rights of residents to return to their communities to live with safety and dignity.

A handful of candidates this campaign season have traveled to the Gulf Coast. A few have even posted portions of their rebuilding plans on their websites but not all voters and Gulf Coast residents have access to this information. For residents who are still waiting on the federal government to fulfill its promises, questions remain about the presidential candidates' commitment to the region.

A new model for Gulf recovery

Recently, Reps. Zoe Lofgren, D-Calif., Charlie Melancon, D-La., and Gene Taylor, D-Miss., introduced a new model for Gulf Coast recovery in the U.S. House of Representatives, H.R. 4048, the Gulf Coast Civic Works Act. The policy was developed with the help of Gulf Coast residents, human rights groups and the Gulf Coast Civic Works Project, a college campus-based advocacy group. Utilizing a human rights-based framework, the legislation hopes to empower the region's greatest assets, the disaster's survivors, with the resources they need to lead.

Through funding infrastructure projects employing local and displaced workers to rebuild schools, police and fire stations, transportation, hospitals and flood protection and restoring the wetlands, the legislation aims to help heal the wounds left since Hurricanes Katrina and Rita and the levee breaks and allow residents to return to their neighborhood with safety and dignity. The bill gives resident and community leaders a greater voice in how their neighborhoods are rebuilt and works directly with community organizations to reach the goal of creating 100,000 living wage jobs and training opportunities for residents and displaced people primarily in the building trades.

The plan would create more opportunities for small and minority businesses while pumping more funds into the local economy and building the infrastructure and the trained workforce necessary for sustainable economic development. The legislation aims to address the region's human rights crisis through helping the displaced realize their right to return and participate in rebuilding their communities and providing economic opportunity to working families.

Stephen Bradberry, state head organizer with the Association of Community Organizations for Reform Now (ACORN) in Louisiana, believes this bold plan will require the support of the next president to become a reality.

"The current president made a whole list of promises to residents about rebuilding the Gulf Coast, but the job is not done. The moderators of the presidential debates need to ask the next president whether they plan to right the situation," says Bradberry. "We need to put the candidates on record, "Do you support the Gulf Coast Civic Works Act to rebuild stronger communities across the region hit by Hurricanes Katrina and Rita?"

Bring the Gulf Coast to the debate

Gulf Coast residents, ACORN members, students and supporters - like the online organizing group Color of Change and the RFK Center for Human Rights - launched an effort to bring Gulf Coast rebuilding back into national focus by first urging hosts of the presidential debates to get a straight answer from the candidates on Gulf Coast rebuilding. Together they hope to give the region a voice to influence the discussion, utilizing online advocacy tools.

"If the debate is not coming to the Gulf Coast, then we need to bring the Gulf to the debate," said Bradberry, winner of the prestigious RFK Human Rights Award in 2005.
The effort, aptly named Bring the Gulf Coast to the Debate, began by targeting Facebook, ABC and WMUR, co-hosts of the Jan. 5 Republican and Democratic New Hampshire primary debates. Supporters urged ABC and WMUR reporters and producers to ask the candidates about the Gulf Coast Civic Works Act. Many contacted ABC's World News Tonight host and debate moderator, Charles Gibson, through his recently opened account on the social networking site Facebook.com.

You can join the efforts' Facebook campaign.

Now supporters are gearing up for the Republican and Democratic California debates on Jan. 30 and 31 hosted by CNN, Politico and the Los Angeles Times. They will be the last debates before the Feb. 5 Super Tuesday primaries.

Supporters can visit ColorofChange.com to learn how to urge the moderators of the Republican and Democratic California debates to stand in solidarity with Gulf Coast residents and ask the candidates about the Gulf Coast Civic Works Act using tools on Politico.com. The website also shows supporters how to send a letter to CNN and Los Angeles Times reporters and editorial staff urging them to ask the candidates about this important Gulf Coast rebuilding policy.

Dr. Scott Myers-Lipton, a San Jose State University professor who founded the 50-campus strong Gulf Coast Civic Works Project, noted that the bill is sponsored by a Californian in Congress, Rep. Lofgren, and additionally is supported by resolutions in both the California State Assembly and California Democratic Party.

"With so many Californians behind the Gulf Coast Civic Works Act, there is no better time than these debates to ask the candidates if as president they will enact this critical plan to rebuild the Gulf Coast," says Dr. Lipton.

Though the Gulf Coast will not host a presidential debate, residents and their national supporters still have hope that the region's crisis can be brought back into the national debate this election season.

Currently questions on the Gulf Coast Civic Works Act for the Democratic and Republican candidates rank No. 1 and No. 2 most popular respectively on Politico.com.

"This is a unique opportunity to move these media organizations to finally ask the questions the people of the Gulf Coast and California and really all Americans need to hear answered," said Chris Hauck, a San Jose State University student and Gulf Coast Civic Works Project organizer.

Visit Color of Change to learn how to vote for the Gulf Coast questions and visit Solving Poverty to find out more about supporting the Gulf Coast Civic Works Act.

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Progressive Values in Action: MS Gulf Coast Volunteer Slideshow

by Ana Maria

From my New York progressive friends who came down to the Mississippi Gulf Coast to volunteer their winter holiday time to help building four homes for Katrina families here in Bay St. Louis and Waveland, Mississippi, located in Hancock County--the county that Hurricane Katrina hit the worst comes this slide show of their time here in the rain and muck, cold and humidity. This slide show has FABULOUS music playing, so turn up your speakers and be ready to dance around!!

Sure, we have our troubles down here. Great music and dancing is always a great salve on our souls. I believe it will be yours as well. These are photos of my many new friends who remain in my heart for their extreme generosity and true compassion for our plight.

May each of them be blessed many times over throughout their lives. They came here to help because they saw the need and put their faith, their beliefs, their values in action. This is so much more than we've seen out of a White House that talks about faith and whose acts betray their words.


© 2008 Ana Maria Rosato. All rights reserved.
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Editorial: Presidential candidates should help solve Florida property-insurance crisis

EDITORIAL
January 25, 2008

If the candidates for president are smart, they'll keep promising relief to homeowners who've taken a beating on property insurance.

If the voters are smarter, they won't settle for amorphous pledges but demand specific action from candidates that can lower premiums and keep companies from ruthlessly dropping them.

The surest way for the candidates to show they'll take that action is to say they'll sign two bills that actually have passed the House, and that could make it to the next president's desk if the Senate also signs off on them.

The Klein-Mahoney bill would allow states like Florida with a government-sponsored insurance fund to voluntarily bundle their catastrophe risk. Backed by private markets, the fund could issue loans to states, reduce the insurance industry's risk and usher in more reasonably-priced policies for homeowners. State reforms largely have failed to do that.

The Gene Taylor bill would allow homeowners who get flood insurance through the federal government to also purchase wind policies from Washington. That's needed because companies too often after hurricanes have determined that flooding, not wind, damaged homes. That finding allows them to pocket premiums and make Washington disproportionately pay claims.

Together, the bills would bring fairness and stability to states' property-insurance markets. Together, they're the furthest Washington has come in years toward making insurers act more responsibly.

Any candidate serious about providing relief should get behind them. Hillary Clinton is co-sponsoring Klein-Mahoney in the Senate. Rudolph Giuliani says he'd sign Klein-Mahoney. John Edwards likes Klein-Mahoney. John McCain, Mitt Romney and Mike Huckabee offer qualified support for either a regional or national catastrophe fund. But none, Barack Obama included, has told us he or she would sign both bills. Homeowners should demand nothing less of them.

Copyright © 2008, Orlando Sentinel

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Mississippi plans Katrina grant diversion

State wants $600 million from housing program for huge port expansion


By Mike Stuckey, Senior news editor
MSNBC Jan. 25, 2008

While thousands of Mississippians who lost their homes to Hurricane Katrina remain in FEMA trailers, the state intends to spend $600 million in federal grants originally earmarked for housing on a major expansion of the state-owned port — a project that could eventually include casino and resort facilities.

Despite strong objections from housing activists and the threat of hearings from two powerful congressional Democrats, the U.S. Department of Housing and Urban Development is expected to approve the diversion of the funds on Friday. A HUD spokesman says the agency has little discretion at this point to block the switch.

Opponents of the move see it as a prime example of Mississippi’s Republican lobbyist-turned-governor, Haley Barbour, favoring rich and powerful interests over the region’s less fortunate.

“It’s just insanity, true insanity,” said Sister Martha Milner, a Catholic nun and board member of the Steps Coalition, the loudest voice on the Gulf Coast against the diversion of the funds.

Supporters see the money switch as sound economic policy that will help the port capture additional business and provide a bonanza of high-paying jobs.

“In order to remain a viable port, we have to do a good job with this repair and redevelopment,” said Gulfport Mayor Brent Warr.

The money in question is part of $5.5 billion in HUD Community Development Block Grants (CDBG) that Congress authorized for Mississippi after Hurricane Katrina struck on Aug. 29, 2005. Administered by the Mississippi Development Authority, about $3.4 billion was allocated to replace and repair some of the nearly 170,000 owner-occupied homes destroyed or damaged by the storm. Another $600 million was set aside for programs to replace public housing, help small landlords fix their units and foster construction of new low- and moderate-income housing.

Waiver request
When it became clear that homeowners, who had to meet specific criteria on damage and insurance, would not tap all of the grant money, Barbour instructed the state development agency to seek a waiver from HUD to redirect $600 million for work on the port.

Mississippi, with the highest poverty rate of any state by several measures, already had won HUD waivers of rules that require the funds to benefit low- and moderate-income residents. Critics see the waivers as a product of the unparalleled influence with the Bush administration enjoyed by Barbour, a former Reagan White House political director, Republican National Committee chairman and legendary fixer who continues to receive checks from the Washington lobbying shop that still bears his name.

‘Absolutely no oversight’
Barbour “basically has free wheel,” said Milner of the Steps Coalition. “Unless we have a different administration (in the White House) he’ll do whatever he wants to do. There’s absolutely no oversight over any of this. Whatever he sends up there, they say OK to.”

The third busiest port on the Gulf of Mexico, Gulfport was planning expansion long before Katrina struck, hoping to grow as a result of new shipping traffic through the Panama Canal, which is being widened. In a 2003 master plan, the port also envisioned expanding casino operations, which have historically accounted for half of the port’s revenue.

After the storm, an update to the master plan found that Katrina had “accelerated redevelopment of port areas and opened new opportunities for the growth of the maritime and gaming markets.” The plan raises the prospect of new casino-resort development on port land as part of a public-private partnership, financed separately from the CDBG money.

It wasn't until early December, six months after the update was adopted by the port authority, that the state development authority sought a waiver from HUD to divert $600 million of the housing grant money to the port — more than double the net dollar damage reportedly sustained by the port from Katrina.

Barbour maintains that some of the federal grant money always was intended for port expansion. But the state development authority did not provide any documentation to support that. And despite repeated requests, agency spokeswoman Melissa Medley did not respond to other msnbc.com questions about the fund diversion and housing programs.

Conflicting versions
Barbour’s current position that part of the housing grant pool was always intended for the port is at odds with his March 2006 testimony before a Senate committee, in which he emphasized that the CDBG money was mostly committed to housing and sought new funds for the port. A year later, Gray Swoope, executive director of the Mississippi Development Authority, did not mention port funding in testimony before Congress about the use of grant funds a few months before the new port master plan was adopted.

"The governor has stated since the earliest days after Katrina that the port is crucial to the overall recovery of the Mississippi Gulf Coast because of its huge economic impact in terms of jobs and commerce," Barbour Press Secretary Pete Smith told msnbc.com in an e-mail.

Port Executive Director Don Allee agreed to an interview with msnbc.com, then canceled it and did not schedule another despite repeated requests.

Cindy Singletary of Living Independence For Everyone, one of 50 nonprofit, religious and social advocacy groups that make up the Steps Coalition, sees the move to divert the housing funds as a bait-and-switch maneuver. “I have nothing against the port itself,” she said. “The main thing I’m against is the priority of it. … We have jobs on the coast. There’s ‘help wanted’ signs everywhere. But we don’t have homes, we don’t have apartments. … That, to me, should be the No. 1 priority for Mississippi.”

Democratic Reps. Barney Frank and Maxine Waters agree. In two letters to HUD Secretary Alphonso Jackson, the veteran House members urged him to deny Mississippi’s request to use the money for the port. Using CDBG funds for the port expansion, “when so many families have yet to be able to return home, is misguided and disregards the continued need for available housing in Mississippi,” Frank, D-Mass., chairman of the House Financial Services Committee, and Waters, D-Calif., chairwoman of the Subcommittee on Housing and Community Opportunity, said in October, shortly after the state’s plans to divert the funds came to light. The two upped the ante in a second letter this week, threatening to hold hearings on “any waivers approved by the secretary.”

35,129 still in FEMA housing
In its “Mississippi CDBG Recovery Fund Report Card,” the Steps Coalition reported that as of mid-January more than 13,000 Mississippi families — or a total of 35,129 people — remained in FEMA housing, nearly 90 percent of them in small travel trailers and most of them ineligible for the CDBG-funded grants.

Another 15,500 households — more than 40,000 people — have open case files with long-term recovery organizations and need assistance to repair their homes and replace belongings, according to the report. Replacement of low-income rental housing also is moving very slowly, and government programs and incentives will restore fewer than half of the 28,514 units damaged and destroyed by Katrina, according to the coalition.

But Warr, the Gulfport mayor, said housing activists’ figures are inflated. “We do have a severe need for affordable housing, but that need is being addressed,” he said. “We will have, I would expect, 1,000 units more on the books just in Gulfport than we had before the storm.”

Warr said the port expansion is not nearly as divisive a local issue as it may appear to outsiders. “I think it’s being used as political fodder by individuals with perspectives other than what’s necessarily best for the coast,” he said. “Most of them are not down here, they are outside the coast, typically from other states.”

Smith, the Barbour spokesman, said the state's estimates of how much low-income or "workforce" housing will be built are higher than the coalition's at 17,000 to 21,000 units. Also, he emphasized, "none of the more than $1.2 billion in grants awarded to nearly 20,000 homeowners are in jeopardy."

That misses the point that plenty of homeowners who didn't qualify for that program and many non-homeowners still need help, say Steps Coalition members. “There’s no other explanation except that the state doesn’t think the lower income storm victims are as important a priority as the port," said Reilly Morse, an attorney with the Mississippi Center for Justice, part of the coalition.

The arguing and pressure on HUD to deny the waiver may be for naught, said Brian Sullivan, a spokesman with the federal agency. Once Congress votes to send the money, “We only have the ability to say yes or no purely on the eligibility of the project,” said Sullivan, adding that CDBG funds are often used for economic development. “HUD doesn’t really have a dog in this fight. They do try and suck us into that vortex. But by statute we really have no discretion.”

Crossing the T's
Sullivan said HUD’s job now is to make sure that Mississippi gathered community input before deciding how to spend the funds and that other criteria for the program also are being met. Friday is the deadline for HUD to act, Sullivan said, adding that “the people making the decision are not best friends of Haley Barbour, but career professionals.”

Steve Adamske, a spokesman for Rep. Frank, questioned Sullivan’s characterization of HUD’s authority. “I don't believe we would be that wrong in the letter that we sent" in October imploring HUD Secretary Jackson to intervene, Adamske said. As to Barbour’s assertion that the money was always intended for the port, "We would dispute that pretty strongly."

© 2008 MSNBC Interactive

URL: http://www.msnbc.msn.com/id/22805282/

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Florida Asks Appeals Court To Reinstate Allstate Ban

By JEROME R. STOCKFISCH, The Tampa Tribune
Published: January 24, 2008

TALLAHASSEE - Accusing Allstate Corp. of engaging in an "ongoing crime," state regulators asked a state appeals court Wednesday to reinstate an order prohibiting the insurer from conducting new business in Florida.

The Office of Insurance Regulation is pressing Allstate over state subpoenas calling for documents relating to the way the company sets its homeowners insurance rates.

Insurance Commissioner Kevin McCarty said in a statement released Wednesday that Allstate "has continued to do everything it can to keep from providing the documents requested" and that now McCarty is "doing everything within my power to ensure that the documents are produced."

Regulators are trying to establish why, after the state took on more financial exposure in the event of a catastrophic hurricane in an effort to drive down homeowners' rates, many insurers failed to lower their rates or even sought rate increases.

Frustrated by Allstate's response to subpoenas issued Oct. 16, McCarty issued an order on Jan. 17 barring 10 Allstate companies from doing future business in the state. The companies wrote everything from lucrative auto policies to workers' compensation, motorcycle and marine lines.

The order was lifted the next day by the 1st District Court of Appeal in Tallahassee, where state regulators on Wednesday filed their argument to reinstate the suspension.

"This doesn't change the fact that our agencies and agents across the state are open for business," said Allstate spokesman Adam Shores. "We are going to continue to provide the documents requested by the Office of Insurance Regulation as outlined in their subpoenas."

In its petition that resulted in the court lifting McCarty's order, Allstate argued that the regulation office was abusing its power to issue emergency orders that are supposed to be limited to specific immediate dangers to the public health, safety or welfare.

In Wednesday's response, regulators argued that Allstate's failure to produce documents did indeed indicate that "the Appellants are engaged in an ongoing violation of the Florida Insurance Code and thus an ongoing crime that in and of itself threatens safety and welfare of Florida citizens that is sufficient grounds" to issue the order pulling Allstate's licenses to do business. The regulators cited Chapter 624.15 of Florida statutes, which states that willful violations of the insurance code is a second-degree misdemeanor and could result in denial, suspension or revocation of business licenses.

"Appellants state that the 'Allstate companies have attempted and are continuing in good faith to respond to the subpoenas and produce as best they can and as quickly as is practicable the huge volumes of documents requested by the Office of Insurance Regulation.' Nothing could be further from the truth," states the petition filed Wednesday.

Regulators say Allstate produced 16 boxes of documents that include prior rate filings already held by their office, documents with missing pages and documents "falsely marked as 'Trade Secret'" that included prior rate filings already in their office's possession and available online.

The office said Allstate claimed it spent 2,000 personnel hours producing the documents. "The Office finds it remarkable that it has taken Allstate the equivalent of 285 days to produce 16 boxes of documents to the Office," the petition states.

Allstate spokesman Shores said the insurer is providing documents on a weekly basis. He said on Wednesday that the company turned over the controversial McKinsey documents, which are internal recommendations on how the company should settle claims, chiefly in the auto business. Regulators confirmed late Wednesday that it had received what were thought to be those documents, which have also been sought by regulators in other states.

The Tallahassee court did not indicate when it would rule.

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Hood seeks to continue State Farm probe

Asks judge to remove prohibition
By ANITA LEE
January 24, 2008



Mississippi's current and former attorneys general are back on the offensive against State Farm insurance companies.

Attorney General Jim Hood is asking a federal judge to dissolve a court order that prevents him from continuing a criminal investigation involving State Farm. Hood said the investigation is not related to a 2006 criminal probe by his office into State Farm's handling of policyholders' Hurricane Katrina claims. Former Attorney General Mike Moore, a mentor to Hood, filed a sworn statement to back Hood's assertion that the 2006 investigation was not intended to coerce State Farm into a settlement of policyholder claims.

Court records indicate State Farm and Hood disagree over a subpoena for State Farm records Hood wants for his current criminal investigation. The investigation involves State Farm's handling of National Flood Insurance Program claims, also the subject of federal inquiries, according to a December letter State Farm wrote Hood objecting to the subpoena.

State Farm said the subpoena violates a January 2007 agreement with Hood to end a criminal investigation into the company's Katrina claims-handling practices in exchange for a global settlement with Coast policyholders.

Hood said the agreement applied to his 2006 investigation, but the company has no right to "blanket immunity from any criminal acts related to Hurricane Katrina."

U.S. District Judge David C. Bramlette III is expected to reconvene a hearing in Jackson to consider whether he should lift suspension of Hood's investigation.

State Farm has accused Hood of using the threat of criminal prosecution to coerce settlement of claims for policyholders represented by his political allies, including attorney Richard "Dickie" Scruggs and Moore.

Moore said in a sworn statement he and Hood did not use the threat of criminal prosecution to coerce State Farm into the proposed global settlement with policyholders in January 2007. Instead, Moore said, State Farm introduced the criminal investigation into settlement talks, not Hood. Moore said State Farm would agree to resolve policyholder claims only if the investigation ended.

Moore also has filed a separate document in a policyholders' lawsuit, describing his role as "facilitator and negotiator" between parties to the proposed global settlement. He said State Farm encouraged him to explain the settlement in a federal court hearing, after which U.S. District Judge L.T. Senter Jr. rejected the agreement. The Scruggs Katrina Group of attorneys already had reached a settlement with State Farm in November 2006 on behalf of 640 clients, which Moore says led to negotiations for a global settlement applying to all Coast policyholders.

Moore and Scruggs also worked together in the 1990s, while Moore was attorney general, to reach landmark settlement of a lawsuit they filed against tobacco companies on the state's behalf.

Scruggs and two other members of his Oxford law firm were indicted in late November on charges they conspired to bribe a state court judge in a dispute over legal fees earned from the 2006 settlement with State Farm. Jackson attorney John G. Jones filed the lawsuit in March, after his firm withdrew from SKG.

As a result of the federal indictment, the Scruggs attorneys also withdrew from SKG, which then changed its name to the Katrina Litigation Group.

State Farm has asked that Scruggs Katrina Group, and now the Katrina Litigation Group, be removed from policyholder cases, alleging ethical and legal improprieties. KLG also has denied any improprieties.

Senter, who is presiding over policyholder lawsuits filed in Gulfport, is expected to decide whether the KLG should be disqualified.

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Mississippi to Use Some Hurricane Aid for Housing Program

By LESLIE EATON
January 24, 2008

As Mississippi awaits a decision on whether it can spend $600 million of federal hurricane relief on a controversial plan to rebuild and expand a shipping port, the state has added $100 million of federal aid to a program to develop housing for low- and moderate-income workers.

The addition, which brings the housing program to $250 million, will produce more than 2,500 housing units, said Gov. Haley Barbour, who announced the increase on Tuesday.

Though it has been widely praised for the speed of its hurricane recovery effort, Mississippi has been criticized by religious and civic groups for slighting the needs of the poor. Congress gave the state $5.5 billion in hurricane recovery grants, with the proviso that half of it should be used to help low-income families, but critics say that less than a quarter of the money is being used that way.

The new allocation may not dampen that criticism because the money is being transferred from another program that was supposed to help the poor by giving grants to low-income homeowners whose houses flooded in Hurricane Katrina’s storm surge. That program received fewer applications than expected, the governor’s spokesman, Pete Smith, wrote in an e-mail message.

The state has distributed about $217 million in grants to more than 3,000 applicants to that program, according to data from the Mississippi Development Authority. A larger program, which primarily serves wealthier homeowners, has distributed more than $1 billion to more than 15,000 homeowners.

Advocates for the poor said that they were concerned that not everyone who qualified for a rebuilding grant had received one, and that in any event the state was still not committing enough money to programs to replace low-income housing, to help renters or to assist people whose houses were damaged by wind rather than flooding.

“Washington is really examining how successful Mississippi’s recovery is for all of its citizens,” said Kimberly Miller, state policy specialist for Oxfam America in Biloxi.

Her group has urged the Department of Housing and Urban Development to reject the state’s bid to use hurricane recovery money to expand the port, in Gulfport, which was damaged by the hurricane.

The state has asked the agency to waive a rule that limits economic development spending to about $50,000 per job created.

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Former Miss. insurance commissioner joins Adams & Reese

January 22, 2008
By Rebecca Mowbray

Former Mississippi Insurance Commissioner George Dale has joined former Louisiana Insurance Commissioner Robert Wooley on the lobbying staff of the law firm of Adams & Reese LLP, further developing the firm's insurance regulation specialty.

Dale, the nation's longest serving insurance commissioner, was ousted in the Mississippi Democratic primary in August after eight terms and 32 years on the job amid public frustration over Hurricane Katrina. He is working in the firm's Jackson office as a non-lawyer senior governmental affairs adviser and a member of the governmental relations team.

In February 2006, Wooley, an attorney, joined Adams & Reese in Baton Rouge after he left his post as insurance commissioner six months after Hurricane Katrina and mid-way through his term. He works of counsel on the governmental relations team of the special business services group.

The New Orleans-based Adams & Reese is one of the largest law firms in the South with offices in Baton Rouge; Birmingham and Mobile, Ala.; Jackson, Miss.; Houston; Memphis and Nashville, Tenn.; as well as Washington, D.C.

In Louisiana, it has an impressive roster of insurance clients, including State Farm, Allstate, USAA, Audubon Insurance Co., Balboa Insurance Group, Louisiana Citizens Property Insurance Corp., the Property Insurance Association of Louisiana, Progressive Insurance Co., Louisiana Land Title Association, Humana Inc. and Oschner Health Plan.

In press release on his hire, Adams & Reese touted Dale's knowledge of the insurance industry and the governmental process. "George adds strength to our capabilities as specialists in insurance regulatory matters, in Mississippi and beyond .Â¥.Â¥. His presence will further develop and compliment our regional and national specialized governmental relations practice."

Dale said that he has always tried to work in the best interests of the people of Mississippi, and joining Adams & Reese gives him the opportunity to serve in a different capacity. "I will continue to look after the best interests of clients from Mississippi to Louisiana and Washington, D.C. due to the firm's regional footprint and strength of their governmental relations practice," he said in the release.

Bob Hunter, a former Texas insurance commissioner who is director of insurance at the Consumer Federation of America, said that Dale's new job at a law firm that represents so many insurance interests is another unfortunate tale of regulators caring more about the industry than the people who elected them.

"Nothing surprises me any more. The insurance industry and the regulators are so intertwined. We've had now two presidents of the NAIC (National Association of Insurance Commissioners) go directly to lobbying jobs with the insurance industry, and we've had so many former insurance commissioners head off in that direction, it's disgusting. How can the public trust state regulation with all this going on?" Hunter asked.

In its release, Adams & Reese boasts about its tradition of hiring former elected officials and cites examples of former Congressmen, state representatives, judges and even a parish leader in its ranks. It does not mention Wooley.

Last year, audit problems at Louisiana Citizens Property Insurance Corp., which was created under Wooley's tenure as insurance commissioner, sparked probes by the Louisiana Legislative Auditor and then a federal grand jury.

In a legislative audit advisory council hearing this fall on Citizens, Wooley testified that his "No. 1 priority was not to go to jail" as his three predecessors had. In December, when Wooley was again asked to appear before the committee, criminal defense attorney Edward Castaing Jr. appeared in his place and said that he had instructed Wooley not to testify until the state provided the documents on which questions would be based.

Hunter found the omission of Wooley's name from the release puzzling, given that Adams & Reese says it is trying to build its insurance practice.


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