Legislators Ask for FEMA Housing Investigation

Senators Elizabeth Warren (D-MA), Richard Blumenthal (D-CN), Bernie Sanders (I-VT), and Richard Durbin (D-IL) have asked U.S. Inspector General John Kelly to find answers to questions about the home rebuilding part of FEMA’s work on recovery following Hurricane Maria.

Far fewer households were awarded any aid for their homes than is usual in disasters. One of the primary reasons is that Puerto Rico has a high proportion of nonstandard home ownership situations. Many people whose homes were destroyed have no documents to prove that they owned the structures. FEMA had denied 79% of all requests for aid to rebuild homes as of July 2018.

For the roughly 120,000 homeowners who were awarded grants, the average amount was just $20,000 — and they received only half of that, on average. The letter from the senators reference a New York Times story that reports “More than 60 percent of what FEMA is spending in the program, the largest emergency housing program in the agency’s history, is not paying for roofs, windows or doors, The New York Times found in a review of its expenditures. Instead, it is going toward overhead, profit and steep markups.”

Some pricing has been based not on the actual cost of materials and labor, but on a process known as “interquartile range” which contractors have complained amounts to “illegal price gouging.”

The letter points out that many contractors had government connections, and expresses concern that the FEMA recovery program for Puerto Rico shows a “pattern” of hiring well-connected but unqualified contractors. They remind Kelly of previous letters sent by legislators asking for explanations of apparent irresponsible spending that has not resulted in the promised rebuilding results.

FEMA’s responses to these letters, say the senators, have all said that FEMA “understands” their “concerns,” but that answers to their questions have not been forthcoming.

The new letter poses more specific questions:

  • Why did it take 5 months for the first repairs to be conducted?
  • What was the process by which the contractors and firms charged with executing and managing the… program [were] awarded the contracts?
  • Why did FEMA use the “interquartile range” process in determining costs?
  • What oversight did FEMA conduct to determine that the federal finds… were effectively managed?
  • What factors did FEMA consider…?  were those companies’ connections to the Trump Administration a factor?
  • How has FEMA responded to contractor complaints about the markups amounting to “illegal price gouging”?
  • What steps has FEMA taken in the wake of… questionable contracts to analyze and improve its contracting processes?”
  • When does the Department of Homeland Security’s Office of Inspector General expect to release its report of its review of the circumstances surrounding FEMA’s contracts?

Read the full letter.

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