"Road Home" Program

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Special to CorpWatch

One year after Katrina, in late August 2006, Louisiana Governor Kathleen Blanco triumphantly opened one of the first offices for Road Home, the massive federal assistance program to help residents rebuild their shattered houses. "This is a homeowner's dream," she said proudly. "We don't need another nightmare."(30)

Unfortunately, another nightmare is exactly what homeowners got. Applicants spent the next year mired in bureaucratic red tape, struggling to document their claims, and angrily fighting back when the program threatened to shortchange them. Now, two years after Katrina, only 25 percent of Louisiana's eligible applicants have collected housing grants, compared to 83 percent of applicants in neighboring Mississippi.(31)  

Much of the blame for the slow progress has been laid at the feet of ICF International, the Virginia consulting company that was awarded a $756 million contract to run the $7.5 billion Road Home program, as well as an $869 million rental aid program. Critics have pointed out that the Louisiana contractor is getting nine percent of the total housing aid budget, while the Mississippi contractor, the Resnick Group, got two percent, or $48 million, to manage that state's $3 billion housing program.

ICF's fat contract probably wouldn't have become an issue if the grants had been doled out promptly and without undue hassle, as the governor promised. Instead, most homeowners are still waiting for their checks, and are beginning to worry they will never arrive. This spring, the state realized it is facing the unhappy prospect of a shortfall estimated at $5 billion. Unless the U.S. Congress opens the purse once more, an estimated 50,000 eligible applicants, out of a total of more than 180,000, may not receive their checks.(33)  

The administrators of the Road Home program began to infuriate homeowners a few scant months after it was inaugurated. In autumn 2006, ICF began sending out "preliminary award letters" to defuse criticisms that it was moving too slowly. Filled with disclaimers, they promised neither a definitive amount of money nor a time line for delivery. And even though the letters avoided most specific details, the company still had to admit that about a quarter of them contained errors.(34)  

For weary homeowners, the letters seemed like just another vague promise that federal aid was on its way: "There are so many loopholes and caveats, it really doesn't say anything," one resident told the Times-Picayune.(35)  

The "final award letters" that began going out in late November weren't much better, as Saul and Mildred Rubin learned. The husband and wife, both in their 90s, moved to a retirement community after the storm destroyed their Lakeview house with nine feet of flood water. The couple was determined to move back home, and eagerly awaited the award letter.

What arrived was a rude shock. It started well enough, with a cheerful "Congratulations!" but went on to say that since their 2,000 square-foot home had only suffered $550 in damage, the Rubins did not qualify for a rebuilding grant.(36)  

The Rubins' son, who became a public critic of ICF as he fought on his parents' behalf, said that because they lacked homeowner's insurance, the couple was counting on the Road Home money to restore their house. He said the house actually suffered tens of thousands of dollars worth of damage. "They're terrified," Alan Rubin told the Times-Picayune. "All of their cash in the world was tied up into the value of this house."


What's more, Rubin and other outraged applicants reported that they were discouraged from filing official appeals. They were told that appealing would delay their grants indefinitely because ICF had not devised an appeal system. Months later, when the $5 billion shortfall became apparent, ICF employees warned applicants that those who appealed risked getting nothing.

State and federal lawmakers have repeatedly questioned ICF International's performance. U.S. Senator David Vitter, a Republican from Louisiana, called the Road Home project a "debacle," and suggested that ICF was profiting handsomely while Louisiana homeowners suffered. "I've begun to look at in detail the ICF contract and I'm startled at what's in it," he told the New Orleans television station ABC26. "The dollar amounts, [include a] $19 million travel budget. ... It's just staggering to me, and I don't get it."(38)  

Meanwhile, in Baton Rouge, the Louisiana House of Representatives approved a resolution by 97-1 in December, demanding that Governor Blanco cancel ICF's contract. The bill's sponsor called ICF's sluggish performance "morally reprehensible."(39)  Blanco rejected the idea of firing the firm, saying that would only cause more confusion and delays.

Road Home spokespeople have maintained that there is no systemic pattern of problems with award offers, and say that some kinks are inevitable in a housing aid project of unprecedented scale.

But this summer, the governor's office finally tired of the excuses. On July 31, the state signed a strict new agreement with ICF, demanding that at least 85 percent of all eligible applicants receive their final award letters, and that 90,000 people receive their checks by the end of 2007. The company faces millions in fines if it does not comply.


New Orleans residents worry that the bureaucratic stalling may have already wreaked havoc on the beleaguered population. "My concern is, the people we need in this city are going to say, 'Screw it,' and leave," Alan Rubin said.(41)

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AMP Section Name:War & Disaster Profiteering