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Red Tape Ties Up Katrina Funds

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Red Tape Ties Up Katrina Funds

Katrina & Beyond

Red Tape Ties Up Katrina Funds

Red Tape Ties Up Katrina Funds

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Where the Money Went
Scott Stroud, NPR

President Bush speaks about Gulf Coast recovery in January 2006. The president confirmed his commitment to help rebuild areas devastated by hurricanes in 2005, calling the U.S. government a "partner" in the reconstruction effort. Jim Watson/AFP / Getty hide caption

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Jim Watson/AFP / Getty

Despite the fact that President Bush and Congress have allocated more than $110 billion for reconstruction efforts in the Gulf Coast, some people say they're still not getting the help they need.

Sydney Roux is one such storm victim. Last summer, she was living in a FEMA trailer where her three-bedroom home had once stood in St. Bernard Parish, just outside of New Orleans. At the time, she dreamed of the new house she hoped to buy through a state-run program called The Road Home.

"I'm thinking about making my bedroom in peach and blue. Tell you the truth, I wouldn't mind building a shotgun house," she said last summer.

But Sydney Roux has yet to procure that shotgun house. She says she's spent the past six months filling out paperwork and making repeated calls to check on the status of her application. She hasn't received any money. Of the 104,000 people who have applied for help from The Road Home program, fewer than 500 have received grants.

"I wish they'd hurry up," Roux says. "I wish somebody would get behind them to hurry up, hurry up, hurry up."

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The Road Home experience is indicative of what's happened with much of the $110 billion that President Bush often talks about. Less than half of that money has been spent. Some of it has been set aside for long-term construction projects, which always take time. Other funds appear to be stuck in a morass of rules and red tape. The federal government has provided $7.5 billion for The Road Home program, but officials say getting the money to homeowners is the state's responsibility.

"We have visited with both the state and the contractor to see if there are any impediments that the federal government is doing that would slow this down," says Don Powell, the federal coordinator for Gulf Coast Recovery. "And that assistance was given in a very fast and orderly way. This is a contract between the state and this contractor."

The state sees it differently. Andy Kopplin, the executive director of the Louisiana Recovery Authority, says providing housing aid to more than 100,000 people is a monumental task that's made even more difficult by federal rules.

"This is money that wasn't a check with the state of Louisiana's name on it, but it's community development block grant program money, which has a series of strings attached to it as well, leading right back to Washington, D.C."

One requirement is that all those who get Road Home money first pay off any outstanding Small Business Administration loans. The state also has to verify how much private insurance each applicant has received so it can deduct that amount from the grant.

"Again," says Kopplin, "it's a federal requirement that we not duplicate benefits."

But some critics say the state has imposed its own excessive requirements, noting that a similar program in Mississippi has gone more smoothly. Some in Louisiana are pointing fingers at ICF International, the contractor that was hired to administer the program.

"We would love to be further along, but there are a number of factors that are outside of our control," says Carol Hector-Harris, the ICF spokeswoman.

She says thousands of applicants have yet to come in for their first interview. Thousands more have been approved for grants but have yet to tell the company whether they plan to rebuild or move. That decision affects the size of their check. Additionally, verification is time-consuming.

"We have to verify that you are indeed the property owner," Hector-Harris says. "And there are homeowners who have succession issues with respect to the title. So there are a number of challenges in the program that have nothing to do with how quickly we work."

But the bottlenecks aren't limited to The Road Home program. Andy Kopplin says other delays are the result of a requirement that the state and parishes put up 10 percent matching funds, and also because of disputes with FEMA over some repair costs.

Don Powell says the federal government has bent over backward to waive requirements but that some requirements are in place to protect taxpayer funds.

But Senate Homeland Security Committee Chairman Joseph Lieberman says that Hurricane Katrina was such a catastrophic disaster that the usual rules should be set aside.