Program makes victims twice over

By John Maginnis,

A federally financed grant program, beset with delays, disorganization, claims of unfairness and, ultimately, allegations of graft directed at a state official might sound like the bad old days. But the problems and scandal surrounding the Hazard Mitigation Grant Program lie squarely at the feet of the Jindal administration, which is scrambling to contain the damage and to fix what’s gone awry.

If Gov. Bobby Jindal did have a substantial opponent today, he or she would be a big club to whack him with, by calling into question his administration’s image of ethics, competence and empathy for ordinary citizens.

The $756 million federal grant program for hurricane victims to elevate their homes, which was approved toward the end of the Bush and the Blanco administrations, seemed to be treated like the unwanted stepchild of the Jindal administration from the start. It took two and a half years and a $66 million contract with The Shaw Group to get checks flowing to long-waiting homeowners, $302 million of which went out in the last six months.

Along with the acceleration of the program came growing complaints of shoddy work done by the legion of contractors pouring into the state. Some dissatisfied homeowners claim that state and Shaw workers sided with the contractors in pay disputes, even, in one case, after a contractor had been arrested for fraud.

To the simmering situation a fuse was lit with a whistleblower lawsuit filed by two employees of the program, who allege that a state official accepted jewelry and meals in exchange for giving a contractor confidential information, which enabled the firm to pursue eligible homeowners.

Plaintiff Greg Pierson said that, in the big picture, “the victims of the storm are now the victims of the system.”

The reporting by The Times-Picayune led to an editorial scolding the Jindal administration for not doing more to protect citizens, such as setting standards for the hundreds of contractor firms hustling homeowners for work. It also challenged the administration to provide more consumer information on contractors and to undo the restrictions that often make it impossible for customers to get rid of firms doing substandard work.

With the heat rising, Commissioner of Administration Paul Rainwater last week announced a wide investigation into the charges in the lawsuit, in conjunction with the federal Homeland Security inspector general and the state attorney general’s office. The program official named in the suit for accepting gifts, Courage Idusuyi, has been placed on administrative leave.

“I obviously wish we had acted quicker,” said the commissioner. While recognizing there are many good contractors in the program, he said his office would go after the bad ones, beginning with setting up an anti-fraud hotline.

“I take full responsibility,” he said. “If someone is not in their home because of shoddy work, we have to fix that.”

The buck did not stop there, though, for it finally rose to the top two days later when the governor issued an executive order to provide consumers with more information and to crack down on “dilatory, incompetent, unscrupulous or predatory contractors and subcontractors.” The order requires the State Contractors Licensing Board to investigate complaints, to suspend or revoke the licenses of those who do not meet the program’s standards and to post that information on-line.

All good stuff, just three years late. The governor also should be taking a hard look at the performance of The Shaw Group, as this is one of the largest privatization contracts let by the administration. In its headlong drive to privatize government services, the state doesn’t need to repeat these kinds of problems with, say, the $2.2 billion Medicaid program it is turning over to five private insurance companies next year, or with the growing number of charter schools being run by for-profit businesses.

The home elevation program is a complicated undertaking, though not the first such effort the state has organized involving federal recovery grants, contractors and homeowners trying to rebuild. More so than any state, Louisiana should have a better handle on the process by now. The Hazard Mitigation Grant Program is only half done, so the administration can still make it right, if it’s a priority to do so.


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