psssst...do something

Contractor faces new fraud claims

A Slidell contractor is behind bars for the second time in six months on allegations he defrauded and stole from Hurricane Katrina victims, Slidell police said Tuesday.

James J. Moore, 47, 175 Meadowmoss Drive, was arrested Monday while he was working on another house. He was booked on two warrants alleging theft over $500, police spokesman Capt. Kevin Foltz said.

The latest arrest came after an Arrowhead Drive resident whose home was damaged by Katrina told police Moore took two payments totaling $15,000 in October to remove the home and its foundation from the property, Foltz said. The homeowner was unable to contact Moore after he removed the home but left the foundation, Foltz said.

Police arrested Moore, who was out on bond after being booked on three counts of theft over $500 in December, after one of the homeowners noticed him working on another home in Slidell, Foltz said.

Moore first came to the attention of authorities in November, after a homeowner in the Palms Springs neighborhood told police Moore had taken about $1,000 in roofing materials the homeowner had purchased, Foltz said. The homeowner had hired Moore to fix the roof of the house, Foltz said.

A few weeks after the first complaint, Moore contacted the owner of Water Tight Roofing and asked that the company purchase $1,800 worth of materials for the Palm Springs job, Foltz said. Moore reimbursed the company with a check but put a "stop payment" on it after the materials were delivered, he said.

In December, the Palm Springs homeowner told police that although Moore had been paid $15,000 for the repairs, he had only completed about $6,000 of the work, Foltz said.

Moore was booked Dec. 18 on three counts of theft over $500 and released on a $2,500 bond, Foltz said.

Slidell police also are investigating another complaint from a fourth person who alleged Moore defrauded him on $250,000 worth of work, Foltz said.

Subsidy offered to get residents out of trailers

Scores of St. Tammany Parish residents still living in FEMA trailers were told by federal officials this week that a pilot rent subsidy program is available for them to move into homes and apartments.

But those residents, at meetings in Slidell and Folsom, were also told that they may have to move out of the area due to a local shortage of rental housing units.

"You have to make some real hard decisions," said Carl Jurison, a senior adviser for the Department of Housing and Urban Development.
Those hard decisions have to be made as an Aug. 29 parish deadline approaches that will require the more than 1,200 parish residents in FEMA trailers to find another place to live.

Parish President Kevin Davis has announced that on Aug. 30, the parish will resume enforcing zoning and other codes that prohibit travel trailers as homes on private property. Those still in trailers on private property will face citations for code violations and fines up to $500 per day, parish officials have warned.

At Aldersgate United Methodist Church in Slidell Wednesday night, about 150 visibly distraught and nervous residents listened to FEMA and HUD officials explain the pilot program.

"Where is Kevin Davis?" asked Winnie Ordone of Lacombe. "How come he's not here to see what's going on? . . . Come Aug. 29, what am I supposed to do? Start paying fines or move to New York? I don't know."

Ordone, who works for the School Board's Head Start program in Lacombe, said she and her 12-year-old son have lived in a FEMA trailer since Hurricane Katrina destroyed her home in Lacombe in 2005. Ordone said the trailer is on "higher ground" property she bought after the storm. She said she has been trying to save money to buy a mobile home that meets parish codes to put on her property.

"It's not like I've been sitting around for three years doing nothing," Ordone said.

A neighbor on Pontchartrain Drive in Lacombe, Larrisa Young, said the prospect of having to move out of the area is disturbing. "My kids ask me every day, 'Where are we going to go?' " said Young, a custodian at Fontainebleau High School

Young said her rental home was destroyed by Katrina. She now lives in a small FEMA trailer with her three children and a 7-month-old grandchild. The trailer is on family property where she hopes to eventually build or put a home, she said.

"We want to stay here," Young said. "I don't want to uproot my kids and family."

Ordone, Young and others at the meetings in Slidell and Folsom filled out paperwork and huddled individually with FEMA and HUD counselors to sign up for the Disaster Housing Assistance Program.

Under the HUD program, FEMA counselors work with residents to find a rental home or apartment and sign a lease with the landlord. HUD then pays the rent for the Katrina victim.

Jurison said a person only has to be qualified for FEMA assistance to qualify for the subsidy program. The program pays up to the fair market value of the rental property through February 2009, Jurison said. Subsidies for people over 62 or who are disabled can continue under the program, he said.

In March 2009, those who are younger than 62, not disabled and meet low-income requirements will be shifted into regular HUD housing or rent voucher programs, Jurison said. The subsidies will end in March for those who don't qualify for HUD programs.

"So, think beyond March 2009," FEMA adviser Gail Tate told the residents. "Get something you can afford" for when the subsidies are no longer available.

The parish deadline to move out of FEMA trailers does not apply to trailers in mobile home parks. But Tate said by March 2009, FEMA will require all trailer residents to move

Woman accused of Road Home fraud

In the first federal case alleging Road Home fraud, a New Orleans woman was charged Friday with stealing $132,000 in homeowner aid for an Uptown home she did not rightfully own.


A federal grand jury in New Orleans handed up two felony counts against Barbara Simmons Dowl, 46: a count of theft of government funds and a count of wire fraud. She got an $85,930 check directly from the Road Home, financed by U.S. Housing and Urban Development money, and also caused the program to wire the other $46,000 of her grant to the Small Business Administration to pay off an SBA loan in her name, also for the property in question.

If convicted, Dowl faces as many as 30 years in prison, three years of supervised release, a $250,000 fine and possible forfeiture of her property. Contacted Friday, Dowl declined to comment.

In an elaborate scheme first exposed by The Times-Picayune in December, Dowl collected a Road Home grant for property previously owned by Nathaniel Dowl Jr., a man she identifies in court testimony as her ex-husband. Court records show Nathaniel Dowl lost the property in 2004 because of unpaid taxes.

After Hurricane Katrina, Nathaniel Dowl filed a "quit-claim deed" in New Orleans property records, falsely stating the city had sold the property at 8633 Zimpel St. to Barbara Dowl, even though in truth the city had sold it to local landlord and developer Brad Robinson and his wife, Michelle, two years earlier.

The deed is signed only by the supposed purchaser, Barbara Dowl, and not by a city official or the Robinsons. A judge declared it and other documents filed by the Dowls on the Zimpel Street property null and void.

"This is your money. This is my money. This is everybody's money," Brad Robinson said Friday. "There are people out there who deserve Road Home money who didn't get any while it went to people like the Dowls."

Nathaniel Dowl, a convicted thief and forger, faces separate state charges of filing false public records on multiple properties, including the quit-claim deed on 8633 Zimpel St., the one that allegedly helped Barbara Dowl collect the Road Home money.

U.S. Attorney Jim Letten said the federal case remains under investigation. Federal officials are expected to closely follow the state case against Nathaniel Dowl, which is scheduled to resume in Orleans Parish Criminal Court next month, and federal authorities can file a superseding indictment in federal court if they want to add charges or additional defendants.

There is evidence that Nathaniel Dowl was involved in similar schemes with Barbara Dowl. Barbara Dowl testified in an August 2006 eviction case about her role in filing a nearly identical quit-claim deed on another property, owned by Tracey and Oscar Poydras. Under oath in First City Court, she indicated little understanding of the quit-claim deed she signed, said Nathaniel Dowl prepared all the documents and added that she simply did what her ex-husband told her.

Federal officials heralded Friday's indictment as a sign they are serious about preventing fraud in the Road Home program and said there will be more indictments to come.

"This prosecution, although the first in our district, will not by any means be the last," Letten said.

According to Tom Luke, HUD's special agent in charge of investigations in Mississippi and Louisiana, this is the first federal fraud charges for Road Home theft in Louisiana, while a parallel homeowner aid program in Mississippi has yielded 53 indictments, 41 convictions and about $3.6 million in frozen or recovered grant funds.

This is despite the fact that Louisiana's program has paid out five times as many grants as Mississippi's.

Officials ascribe the relatively low levels of Road Home fraud to the maze-like verification measures in Louisiana's program, the policies that also have been blamed for slowing grant payouts.

Although Friday's indictment alleges Barbara Dowl also collected an SBA loan on the property she did not own, she has not been charged with fraud for that because she was living in Atlanta when she applied for the loan and a fraud investigation continues in that district, said Matthew Issman, SBA's special agent in charge in New Orleans.

FEMA gives away Katrina donations

In March, the Federal Emergency Management Agency gave away $85 million of donated items and household supplies originally intended for Katrina victims.

The Louisiana agency that deals with government surplus was offered the goods but turned them down.


"Somewhere in this big bureaucracy, links weren't made," said Adam Sharp, spokesman for Sen. Mary Landrieu, whose office is scrambling to track FEMA's discards and possibly reroute them to UNITY of Greater New Orleans, which desperately needs goods for formerly homeless people it has placed in subsidized apartments. "If the supplies just have been moved from one warehouse to another, we hope to get some of them moved back to FEMA so that they can be re-offered to Louisiana and given to UNITY," he said.

For about two years, the goods were stored in one of FEMA's main emergency-supply warehouses, a 280,000-square-foot building in Fort Worth, Texas, according to FEMA's acting press secretary, James McIntyre. When the owner decided to demolish that warehouse earlier this year, FEMA staff went through and tagged unnecessary items.

The agency kept only items routinely used for disaster response: pallets of water, diapers, and cots. It jettisoned boxes of miscellaneous donated goods that came in droves after Katrina but never found owners: things such as shoes, clothing and coffee makers. Everything deemed unnecessary was transferred by FEMA to the U.S. General Services Administration, which distributes all surplus federal property.

GSA routinely offers property like this to government agencies, nonprofits, and GSA's state branches, including the Louisiana Federal Property Assistance Agency in Baton Rouge, which declined GSA's offer of FEMA's surplus from Fort Worth.

Despite UNITY's high-profile efforts to house 300 people over the past six months, the group was not officially registered with the Louisiana surplus agency. So the agency didn't know about UNITY's needs.

"LRA Director Paul Rainwater is taking the lead on determining where this serious breakdown in communication occurred," said Commissioner of Administration spokesman Michael DiResto. Rainwater has contacted FEMA, DiResto said, and "is working to pursue options for the state to make use of these important supplies."

Landrieu's office will help to expedite UNITY's registration, so the group will be cleared to receive any of FEMA's discards, if the senator's office is able to locate them, Sharp said. The state surplus agency also may have similar items in stock and can donate them when UNITY is properly registered.

UNITY is especially interested in what FEMA called "starter kits," which are not standard issue for domestic disasters but were purchased for the 143,000 Gulf Coast families who moved into FEMA trailers, some directly from emergency shelters. Every trailer household got a kit, which included items such as a broom, mop, pots and pans, plates, utensils, towels, bedding, blankets and household cleaners.

The 121 truckloads hauled from the Fort Worth warehouse included perhaps a few thousand kits, left over after all trailer families had been housed, McIntyre said.

For UNITY, these kits would be a godsend, said Martha Kegel, head of UNITY. "It's exactly the stuff we've had to beg from churches, businesses, sororities, schoolchildren and everyday citizens," she said.

FEMA trailer occupant killed after police standoff

NEW ORLEANS (AP) -- Eric Minshew struggled with mental illness for many years and seemed to get much worse after Hurricane Katrina, according to his brother. Finally, when FEMA workers showed up to inspect his government-issue trailer, he snapped. Police shot and killed Minshew early Wednesday after a nearly 10-hour standoff in one of the neighborhoods hit hardest by the August 2005 hurricane.

Authorities said the 49-year-old Minshew had threatened the FEMA inspectors with a gun, then fired several shots at police after they arrived. He was killed after pointing a gun at officers, police said.

Minshew had been living alone in the FEMA trailer outside his parents' house, which had to be gutted because of damage from Katrina. He felt let down by the government, had grown frustrated over the damage and the wait for rebuilding aid, and feared his hopes of inheriting the house were slipping away, said his brother, Homer M. Minshew III.

"I think that the storm took away his hope, and all of the issues involved in it sort of fed the fire," he said. He added: "A lot of people who didn't struggle before were struggling after the storm."

The Federal Emergency Management Agency inspection was a first step toward taking the trailer away. FEMA has been pushing to get residents out of trailers, in part because of dangerous levels of formaldehyde fumes in many of them.

New Orleans' mental health system was thrown into disarray by Katrina and suffers a severe shortage of psychiatric beds. Earlier this year, a police officer was killed by a homeless man who was said to have been diagnosed a paranoid schizophrenic.

But Homer Minshew suggested the turmoil in the mental health system was not really a factor in his brother's death. He said he and his family had begged his brother to get help, but he wouldn't listen.

James Arey, commander of the police crisis intervention team, said the case "doesn't have anything to do with Katrina."

"I'd love to rant and rave about lack of treatment (facilities) and all of that, but that doesn't relate to this case," he said.

Homer Minshew said his brother had moved in with his parents about eight years ago, with no money and no job. He had worked as a security guard, which is how he came to own a gun, Minshew said.

The house had been put up for sale by the sheriff a year ago, but Homer Minshew had held off foreclosure and was negotiating with the bank. He said the family had been awaiting aid from the state-run hurricane relief program so they could either pay off the mortgage or fix up the house and sell it.

Minshew was shot and killed after retreating to the house and barricading himself there.

He suffered from delusions and often couldn't be reasoned with, according to his brother.

"He had a lot of serious mental issues and would all of a sudden go off on a rant about the government, the local, state government, the feds and everything else," his brother said. "He has some issues. He just snapped. Thank God nobody else got hurt."

Rosemarie Brocato, who lives about a block away from the house, said Minshew seemed lonely, often stopping her to talk for a half-hour at a time when she passed his house. "He just needed someone to talk to, I guess. I felt sorry for him," she said.

The shooting took place in Lakeview, one of the city's more prosperous neighborhoods. It was swamped with as much as 11 feet of water after a levee broke.

The whole block on which the trailer sat appeared abandoned, with an empty, overgrown lot next door and houses unrepaired since the storm, their windows broken. Minshew's trailer was the only one visible for blocks along the street, dotted with derelict properties, for-sale signs and beautifully rebuilt homes.

Taped to the front window of Minshew's house were a newspaper article headlined "Do you have a legal right to own a gun?" and a no-trespassing sign. A car in the driveway had two flat tires.

FEMA spokesman James McIntyre said that he couldn't release specifics about Minshew's case but that the FEMA workers "were operating within prescribed procedures to perform a move-out inspection when the applicant exited his housing unit wearing a firearm."

The officers involved have been reassigned to administrative duties during the investigation, which is standard procedure, police said.

Minshew said he didn't fault FEMA or the police, who he said gave his brother "every opportunity" to end the standoff peacefully. But he said he believes his brother "just kind of fell through the cracks."

Mayor Ray Nagin has set Aug. 29, the storm's three-year anniversary, as his goal for getting rid of the last of the trailers in the city. As of Tuesday, nearly 4,930 remained.

Holdouts Test Aid’s Limitations as FEMA Shuts a Trailer Park

BAKER, La. — Theresa August spent the official closing day of the Renaissance Village trailer park singing, muttering to herself and dancing on a picnic table. Finally, wearing an infant’s flowered onesie on her head like a kerchief, she began to pack up.

Ms. August, 39, giggled on the steps of her overflowing trailer last Saturday as Sister Judith Brun asked when she might be able to leave the trailer park that, at its peak, housed almost 600 families displaced by Hurricane Katrina. Sunday? No response. Monday? A smile.

But by Monday, Sister Judith, a nun who has been an almost constant presence during the park’s waning weeks, had learned that Ms. August’s destination was not, as the situation seemed to demand, a placement supervised by a professional caregiver, but an apartment in New Orleans found by a friend. Because it was clear to Sister Judith that Ms. August was not capable of riding a bus and moving into the apartment on her own, as FEMA had planned, Sister Judith decided to postpone the trip a day until she herself could take Ms. August, who has been known to wander off.

The closing of Renaissance Village, near Baton Rouge, and the other remaining FEMA parks represents the final chapter in one of the largest and most tumultuous efforts by the federal government to provide emergency housing to a displaced population. Over the course of two years and nine months, the Federal Emergency Management Agency put up 9,000 families in trailer parks scattered around the Gulf area, where residents endured cramped, inadequate and often poisonous conditions.

Many Louisiana residents shared a similar reaction to the announcement that the parks would close at the end of May: It’s about time. After all, more than 800 families had passed through Renaissance Village’s gates and managed to move on with their lives in their own homes. Why not the rest?

As residents like Ms. August make clear, that question has no simple answer. Those remaining are the hardest to help, posing the toughest test of the oft-repeated promise that the recovery from Hurricane Katrina would at least offer the opportunity to rectify the social ills the storm exposed.

Reason holds little sway over the residents of this microcosm. Some of those most in need have proved to be, out of pride or paranoia, the least likely to accept help. Those who under normal circumstances have little leverage have become the most demanding holdouts. Those ill-equipped for real-world survival cling with surprising tenacity to the place they have come to think of as home.

As the last day came and went, many of those left in the park (38 trailers full, by FEMA’s count) were exemplars of New Orleans’s most persistent problems before the storm: old, unhealthy, delusional, mentally challenged, addicted, illiterate, senile. They have bad credit, criminal records, exasperated relatives. They are often unreliable narrators of their own stories.

Though the government has failed these residents in many ways and for many years, in the final weeks ample assistance has been available — from gas money and food vouchers to utility deposits and hotel rooms, even for those technically ineligible for FEMA assistance. Catholic Charities has helped with furniture and deposits; the Capitol Area Alliance for the Homeless has offered rent subsidies for those who are ineligible. Sister Judith has delivered groceries and arranged rides, sympathized and scolded, strategically dispensed small wads of cash to plug the gaps in the system.

Yet for all that, to follow the last residents as they are dragged toward self-sufficiency is to witness a clanging, screeching streetcar of human and bureaucratic limitations that seems to lurch backward as often as forward. On Tuesday, Sister Judith and Ms. August arrived in New Orleans in a hired van, only to learn that there was no electricity, no mattress and no one to let them into the apartment.

They returned to Renaissance Village.

“The question I keep coming back to,” Sister Judith said, “is why is there still so much need?”

Facing Life on Their Own

Alton Love, 41, rode his bicycle, back tire sagging, down a hot Baton Rouge street with his 9-year-old daughter on his handlebars, looking for the man to whom he had given his car two months before on a promise it would be fixed. He has not seen the car since.

LaTonya London, 24, was at home with four of her five children but no money, no car and no diapers.

Laura Hilton, 45, was clutching a lease for a four-bedroom home in New Orleans for $1,650 a month. Her income, in the form of government disability payments, is $1,600 a month.

These are scenes from the multiple stages of moving out and moving on. As the deadline loomed, the approximately 450 families still in the parks responded in different ways. Some finally opened the door when the FEMA workers knocked, or boarded a van hired by Sister Judith to hunt for apartments. Others broke down in tears, became entangled in delusional schemes or did nothing, passively waiting for one level of government to hand them off to another. FEMA officials said they would not forcibly remove those who remained.

FEMA, which ultimately is a disaster-response agency, not a social service department, endured years of blistering criticism for its failure to understand that many New Orleans residents needed more than just a roof over their heads after the hurricane. The agency now is quick to admit that other agencies are better equipped to handle persistent social ills. Its job in cases like that of Ms. August, FEMA officials say, is limited to getting her housed.

Still, in its awkward fashion, the agency designed a gradual transition for residents from the parks and government care, offering an intermediate step of a 30-day hotel stay. After residents spend the first month in an apartment, the Disaster Housing Assistance Program, administered by the Department of Housing and Urban Development, would kick in, paying the full rent until March 1, 2009.

But each phase presents an opportunity for failure as well as success. What happens to those in hotels who still have not found housing at the end of 30 days? What happens to those who, come March, are in apartments too expensive to afford on their own? What about those who, for various reasons, are already ineligible for rental assistance?

At least 30 families or individuals living in Renaissance Village in its final weeks fell into the last category: Mr. Love because he could not account for the $800 FEMA gave him for rental assistance right after the storm; Ms. London because she opted to leave after her boyfriend, whose criminal record includes arrests for burglary and drug possession with intent to distribute, was banned from the park; Ms. Hilton, who can barely read, because FEMA was unable to verify her pre-storm address.

Concerns About Future

Ms. London, who eventually moved to a $900-a-month house subsidized by the Homeless Alliance, acknowledged how easy it would have been to stay in the trailer park and remain dependent.

“Being in that trailer, having all that stuff, it was like we became crippled,” she said. “You had free rent; you didn’t have to worry about light bills.”

Before the storm, she said, “I was being independent. Now I feel like I’m leaning — I’m leaning.”

Ms. Hilton wanted to move her sons, George, 17, and Roy, 10, back to New Orleans because her daughter and grandchildren live there. Through the Capital Area Alliance for the Homeless, a rent subsidy could be arranged, but Sister Judith, who has focused her efforts on keeping the ineligibles off the streets, is concerned about what will happen when the subsidies expire.

“O.K., you can’t sign this lease,” she told Ms. Hilton, who stared at the ground, which was littered with beer cans. “You can’t afford this, you’re going to wind up getting evicted, then you’re going to be homeless.”

Ms. Hilton wailed, “I’m already homeless!”

Sister Judith said, “You’re going to move to a place that costs more than you get a month, does that make any sense?”

Ms. Hilton had no good answer. When Sister Judith walked away, Ms. Hilton gave a sigh. “Makes you want to drink,” she said.

Hoping for Kindness

There are some families that have been literally riven in the course of the park’s closing. Right after the storm, Joseph Griffin and his girlfriend, Sherryl Harris, lived in a trailer with Mr. Griffin’s sons, Jamal and Jermaine. The boys worked with the art therapists who came periodically to the park, and Jermaine was selected for a scholarship to Idyllwild Arts summer camp in California.

Now Jermaine, 16, has left home and school, and is staying with another family in Kenner, outside New Orleans, where he has a job at a Dairy Queen. Jamal, 13, is staying with his grandmother in Baton Rouge. Ms. Harris is getting her own place.

Mr. Griffin hopes that his boys will come back. As soon as he finds a home.

Not every case seems as difficult, however. Gloria Martin, 51, was prescribed psychiatric medication after the storm for, she said, “hearing voices.” When the medication was stolen, she began to get arrested — once for standing in the middle of the road at night, another time for getting into a fight at the food stamp office. She lost her FEMA eligibility when she went to prison.

But Sister Judith’s team found her a place at Connections for Life, a yearlong program in Baton Rouge for female ex-offenders. On move-in day, Ms. Martin moved like a person in shock. One week later, she was radiant, cheerfully working at the Connections for Life thrift store, where she helped a one-eyed man find window shades.

“I had never had nothing like this happen to me before,” she said. “A free apartment and a job, free clothes and shoes, and eating good. And sleeping good.”

Family felt like 'lab rats' in FEMA trailer

Medical care runs to 4,000 pages, $10,000

It was when the sight of a bloody child became routine that Lindsay Huckabee broke down and cried. She and her husband, Steve, had spent months dealing with "two, three, four nosebleeds a week," in their FEMA mobile home, she said. When it wasn't a nosebleed, one child or another had burning eyes, coughing, congestion and "colds" that wouldn't go away.

The Huckabee children - Vicki, now 13, Caitlin, 9, Lelah, 6, Steven, 4, and Michael, 2 - were regulars at the emergency room from early 2006 onward. Lelah and Michael had surgeries related to chronic breathing problems. Every week, it seemed, at least one child went to the doctor.

"The receptionist knew me by my first name, and I swear she probably knew my voice, too," Huckabee said.

The Huckabees have become icons for a Sierra Club movement that believes formaldehyde fumes in FEMA trailers have caused widespread poisoning of hurricane victims. The organization tested the formaldehyde levels of 69 FEMA trailers. Based on an industrial standard, most tested high, as did the Huckabees'. The Sierra Club is now campaigning for stringent standards on formaldehyde levels in building products, where it is used in glues, resins, particle board and sometimes insulation.

There is no one standard for an acceptable level of formaldehyde exposure. The Occupational Health and Safety Administration has one set of standards. The Department of Housing and Urban Development has another. The Centers for Disease Control and Prevention, through its Agency for Toxic Substances and Disease Registry, has another set of standards far below the others. The Huckabees' mobile home tested just above one of OSHA's standards, just below HUD's standard and well above ATSDR's standard.

Several agencies list formaldehyde as a likely carcinogen.

Lindsay has become an erstwhile spokeswoman for the movement, having testified before Congress twice about her family's health issues while living in FEMA trailers, once for House Oversight Committee and again for the Committee for Science and Technology.

The Huckabees' Pass Christian apartment was flooded to the ceiling by Katrina. They received a travel trailer in October 2005, then a mobile home in December 2005. Lindsay went into early labor. Michael was born four weeks prematurely, and within a few days he was congested. For the first two years of his life, she said, he stayed that way. Before FEMA housing, the Huckabees said most illnesses were treated with Tylenol; they didn't chase their children around with anti-bacterial gel or call the doctor for every sniffle.

"I asked my doctor what I was doing wrong. Why couldn't I get my kids healthy and keep them that way?" Lindsay said.

The CDC wrote in its March 2008 FEMA trailer and mobile home assessment "there is no specific level of formaldehyde that separates "safe" from "dangerous." It found although levels of formaldehyde varied from unit to unit of a particular brand, nearly all brands of FEMA housing tested had units with high levels of formaldehyde. Though it did not declare high levels of formaldehyde unsafe, CDC "supported the need to move quickly," and get people out of FEMA housing before summer, as heat can increase formaldehyde fumes.

FEMA set a target date of June 1 to close its travel trailer parks. This phase is done, said spokesperson Eugene Brezany. Eight mobile home parks are still open, and they will be closed by the end of the year. Most of the 6,400 families still in FEMA trailers are on private land.

The hearings at which Lindsay testified were convened after internal e-mails suggested FEMA and the CDC knew the trailers could be contaminated, yet delayed testing and tried to quash the results. This is the most damning thing to the Huckabees - spending extra weeks and months in a trailer the government knew was unsafe.

They have 4,000 pages of medical records. They've spent at least $10,000 out of pocket for what health insurance won't cover. Steve is a surveillance technician at Hollywood Casino in Bay St. Louis. They believe if the cause of their health problems was not formaldehyde alone, it certainly made things worse.

"I feel like after it was first known that the formaldehyde was a problem, we were lab rats subjected to the toxin, but no one wanted to record the results," Lindsay said.

Trailers in N.O. must go by July 1

New Orleans officials will begin cracking down on residents still living in travel trailers as of July 1, requiring property owners to request an extension from the city if they need to continue living in temporary quarters.

Starting in July, city zoning ordinances that prohibit people from living in trailers on private property - unless in a designated trailer park - will go back into effect, according to a news release issued Thursday by Mayor Ray Nagin's office. Those ordinances were waived after Hurricane Katrina, when thousands of residents needed to live in the tiny metal boxes because their homes flooded.

Over the weekend, workers with the Federal Emergency Management Agency blanketed the 4,684 FEMA trailers currently occupied in New Orleans with notices about the deadline, said Andrew Thomas, an agency spokesman.

Trailer occupants should first contact FEMA to get the trailer removed. Then they need to file an affidavit with the city, included with the flier posted by FEMA, that certifies they asked the federal agency to remove the trailer. This affidavit also grants the city of New Orleans permission to contact the agency to request trailer removal. Filing the affidavit protects the resident if the trailer has not been taken away by July 1.

While FEMA notified trailer occupants about the return to the old city ordinance, the regulations also will apply to people who bought their own trailers after the storm, said James Ross, a Nagin spokesman.

If residents are not done rebuilding their flooded homes, they can ask the city Department of Safety & Permits for permission to continue living in the trailer. However, residents will have to show that they meet specific criteria to obtain an extension and provide the city with records that show they intend to rebuild a flooded house, according to the application. The request for an extension must be filed by July 1.

These criteria include documentation that there is ongoing litigation between a resident and insurance company or documentation that the resident applied for Road Home grants but has not received the money. Other records that may be required include loan papers or data that show repairs are ongoing and telling the city the anticipated completion date.

"While we understand that we must make exceptions in some cases, the elimination of trailers for housing is a priority as we move toward the full recovery of our community," Recovery Director Ed Blakely is quoted as saying in the city news release.

The 30-day notice to vacate their trailers has left a lot of people wondering what to do, said Davida Finger, an attorney handling housing cases for the Loyola Law Clinic.

"It has left people shellshocked," Finger said, noting that most of the people receiving the notices are those who have struggled the most to rebuild their damaged properties. The 30-day timeframe is simply too short, she said.

Many of the dozens of people who have called the Loyola clinic since the weekend are still wrangling with the Road Home program to receive grants to rebuild and aren't prepared to find new places to live, she said.

Finger said the city needs to give homeowners more specific information about the the extension process, such as when they can expect to hear back from the city and who will be deciding whether to grant the extensions.

City Councilwoman Stacy Head heralded the decision to implement a deadline, saying the city is trying to provide people with information about their options as July 1 approaches.

Many areas of New Orleans, particularly those that were not heavily flooded, are very ready to move past the temporary domiciles, she said.

"Moving more and more FEMA trailers, particularly from these neighborhoods, will give people confidence that we are moving back to a state of normalcy," Head said. "And especially with the beginning of hurricane season, it's good to remind people that FEMA trailers are dangerous places - trailers in general are dangerous places to live - and more permanent housing is a much better long-term solution."

People with no place to go once the trailers are removed can ask for FEMA assistance to obtain new housing, which can include rental assistance, Thomas said.

Zoning officials have received about 200 extension requests so far, Blakely said.


Residents who don't receive approval to remain in the trailer after July 1 can be cited by the safety and permits department, Ross said. This process can include a hearing before an administrative officer and fines, as well as eviction.

The New Orleans process could mirror the one implemented in Jefferson Parish, where officials have filed lawsuits against property owners with trailers on their lots, Head said. In a press release issued Thursday, Jefferson Parish officials indicated that 159 lawsuits have been filed against residents who haven't gotten rid of trailers.

Affidavits and extension requests can be delivered to the Mayor's Office of Public Advocacy at City Hall or mailed to the Department of Safety and Permits, Zoning Administration Division, 1300 Perdido St., Room 7E05, New Orleans LA 70112.

Residents with questions about the requirements can contact the city's information line at 311 or (504) 658-2299.

FEMA trailers in St. Tammany to be outlawed by Katrina's 3rd anniversary

St. Tammany Parish President Kevin Davis will hold an 11 a.m. press conference to announce that FEMA trailers will no longer be allowed on private property as of August 29, the third anniversary of Hurricane Katrina.

Davis said the executive order signed during the parish's state of emergency will be allowed to expire on that date.

The press conference will be held in the St. Tammany Parish Council Chambers in the parish administration building on Koop Drive in Mandeville.

Trailers still on list of FEMA options

WASHINGTON -- The Federal Emergency Management Agency may again use travel trailers to house disaster victims, although only as a last resort and for no longer than six months, according to a draft disaster housing report.

James McIntyre, a FEMA spokesman, said the draft is now being reviewed by Secretary Michael Chertoff of the Department of Homeland Security. He expressed hope that members of Congress, who complain that they were promised a report in time for the June 1 start of the hurricane season, will be briefed about the report in the next few days.

Although FEMA Director David Paulison has said that he didn't want to use trailers again after complaints of health problems linked to high formaldehyde levels in some trailers, the agency says it might not have any choice.

In an interview with The Associated Press, Deputy FEMA Administrator Harvey Johnson said that for a disaster approaching the size of Hurricane Katrina, the agency would probably have to use all options, including trailers.

According to the contents of a draft report, first reported by The Associated Press and confirmed by a FEMA official, the agency has determined:

-- Trailers can be used, but only if authorized by the FEMA director and only after the units have been tested for formaldehyde and are within the low acceptable levels established by the agency.

-- FEMA will consider use of alternatives, such as cottages being tested in Mississippi and Louisiana.

-- Unlike after Hurricane Katrina, occupancy will be limited to no more than six months. More than 120,000 families displaced by Hurricane Katrina used trailers, with more than 80,000 using them nearly two years after the disaster. FEMA says about 500 families remain in trailers today.

-- FEMA will rely more on input from states and local governments on what kind of emergency housing to use.

-- Efforts will be made to coordinate with community groups to find alternative rental units in future disasters. FEMA will provide rent subsidies.

Sen. Mary Landrieu, D-La., expressed disappointment that Congress, which asked for a disaster housing report more than a year ago, still hasn't received one. She said that Paulison had promised her a copy by Sunday's start of the hurricane season.

"The agency has refused repeated inquiries for the plan's status from the Senate Homeland Security Committee's Disaster Recovery Subcommittee, yet it has found time to share draft elements with the media," Landrieu said. "Once again, it appears FEMA has opted to put spin ahead of accountability.

Feds: Outside experts to review seeping La. levee

NEW ORLEANS (AP) -- Outside experts will review work at a canal where one of the New Orleans area's worst levee breaks occurred during Hurricane Katrina, and where water is seeping through the mushy ground despite $22 million in repairs, the Army Corps of Engineers said Thursday.

''I have agreed with southeastern (Louisiana) levee authorities as well as the state to go ahead and do an independent peer review, to put to rest what the issues are with the seepage,'' said Karen Durham-Aguilera, director of the corps task force responsible for restoring levees in the five-parish area.

Who will conduct the review has yet to be determined, she said.

Outside experts have told The Associated Press that the type of seepage spotted at the 17th Street Canal in the Lakeview neighborhood afflicts other New Orleans levees and could cause some to collapse if water in the canals gets within a foot of Katrina's 7-foot levels.

The repairs included driving interlocking sheets of metal 60 feet into the ground, 43 feet deeper than before the storm. However, there is evidence that canal water is seeping through the joints.

The corps has defended its work, but also has been digging a trench to find the precise source of wet spots inside the levees.

''Bringing in what we hope is a truly independent review to look at the leaks at the 17th Street Canal -- that is commendable,'' said Sandy Rosenthal, founder of Levees.org, a group that has lobbied for overhauling the Corps.

Aside from that, Rosenthal said in an interview, ''I'm not aware of anything that was presented that would give the citizens of this area any reason to feel safe.''

Aguilera spoke during a half-hour teleconference with General Douglas O'Dell, the federal coordinator for Gulf Coast rebuilding, and Brig. Gen. Michael J. Walsh, commander of the corps' Mississippi Valley division, as the June 1 start of hurricane season neared.

O'Dell and Walsh said the New Orleans area's hurricane protection is better than it has ever been, but that parish or neighborhood risk estimates are not available.

''This is a very complex system, so to be able to talk in specific terms of neighborhood protection versus parish protection versus the entire system, probably defies the amount of time we have left on this call,'' O'Dell said.

The corps' goal, set by Congress, is protection by 2011 from a 100-year storm -- one with a 1 percent chance of hitting in any given year.

FEMA closing trailer parks on eve of hurricane season

BAKER, La. (AP) -- The federal government has plenty of reasons to move hundreds of families out of trailers they have occupied since Hurricane Katrina: the start of a new hurricane season, concerns about toxic fumes and the need for residents to find permanent homes.

But some worry they'll have nowhere to go once they lose their subsidized housing.

The Federal Emergency Management Agency wants to close its last six trailer parks by Sunday, the first day of hurricane season. Those parks, all in Louisiana, are all that remain of the 111 the agency built and operated in the state after the August 2005 hurricane.

It's not clear, however, whether the agency will meet its goal.

While most storm victims are eager to move out of cramped travel trailers and mobile homes, others worry about where they'll end up because they are only being promised one extra month of government-subsidized shelter. Hurricanes Katrina and Rita depleted the supply of affordable housing in the Gulf Coast, and rents are soaring.

''We have hundreds of people who have the potential for being homeless because they don't have the means for sustainable housing,'' said Sister Judith Brun.

The Roman Catholic nun has been helping to find new homes for residents of the Renaissance Village trailer park in this small town just north of Baton Rouge.

Although FEMA is pushing hard to reach its Sunday deadline, it says it won't evict anyone who isn't out of the parks by then.

A FEMA news release Wednesday said 436 households were still occupying trailers at the six Louisiana group sites, including 85 at Renaissance Village, and estimated that 383 of them will still be in place on Sunday.

Despite that estimate, FEMA spokesman Andrew Thomas in New Orleans insisted Wednesday: ''Our goal remains the same.''

''We're trying to get them out as quickly as we can,'' Thomas said.

The agency said in addition to the families in the six FEMA sites, several thousand other families are still in trailers on private sites. The last FEMA-managed trailer park in Mississippi closed this month, but eight group sites that the agency doesn't run remain open in that state.

Though the new hurricane season looms, much of the urgency for moving the familes stems from worries about toxicity.

Tests by the U.S. Centers for Disease Control and Prevention found potentially hazardous levels of formaldehyde in hundreds of FEMA trailers and mobile homes. The preservative, commonly found in construction materials, can cause breathing problems and is classified as a carcinogen.

Steven and Lindsay Huckabee were grateful when FEMA moved their family into a motel in Diamondhead, Miss., in March. They blamed formaldehyde for a rash of illnesses that their five children developed while living in a FEMA trailer for more than two years.

The children's ailments seemed to ease after the move, but the motel didn't solve the family's housing problems.

Before Katrina struck on Aug. 29, 2005, the Huckabees rented a three-bedroom apartment in Pass Christian for $600 monthly. Since then, rents have doubled or tripled to amounts far greater than they can afford. They're waiting for the state to give them a ''cottage,'' billed as a roomier alternative to trailers.

''I don't like living off of FEMA. I would much rather have my own house,'' said Steve Huckabee, a casino employee.

Alton Love has shared a trailer at Renaissance Village with his 9-year-old daughter since January 2007. He lost his job as a truck driver several months ago, and finding new employment isn't easy because his only means of transportation are a bicycle and a bus that only comes by every few hours.

FEMA found an apartment in Baton Rouge for Love and his daughter, who lived at a New Orleans housing project before Katrina. But after the government pays for the first month, Love has to pay the rent.

Most families moving out are eligible for federally subsidized housing assistance until March 2009. Love is one of those who are eligible for only one more month because they can't prove where they were living when Katrina and Rita slammed into the coast.

''I'm carless, jobless and soon to be homeless,'' he said. ''Things are going to work out, though.''

Jim Stark, FEMA's acting Gulf recovery director, said the agency is trying to place people in apartments they can afford once subsidies end.

''It's a little beyond what FEMA would normally do,'' he said. ''Our mission is for emergency housing. Unfortunately, the emergency housing period for New Orleans and southeast Louisiana stretched a lot longer than anyone expected.''

Closing trailer parks like Renaissance Village ''needs to happen,'' said Mario Sammartino, disaster response supervisor for Catholic Charities in Baton Rouge. He oversees 16 case managers helping trailer occupants find affordable housing.

''People need to move on,'' Sammartino said. ''I also know that not everyone is going to reach that normality, and that's what we're concerned about.''

Resources Scarce, Homelessness Persists in New Orleans

NEW ORLEANS — Mayor C. Ray Nagin recently suggested a way to reduce this city’s post-Katrina homeless population: give them one-way bus tickets out of town.

Mr. Nagin later insisted the off-the-cuff proposal was just a joke. But he has portrayed the dozens of people camped in a tent city under a freeway overpass near Canal Street as recalcitrant drug and alcohol abusers who refuse shelter, give passers-by the finger and, worst of all, hail from somewhere else.

While many of the homeless do have addiction problems or mental illness, a survey by advocacy groups in February showed that 86 percent were from the New Orleans area. Sixty percent said they were homeless because of Hurricane Katrina, and about 30 percent said they had received rental assistance at one time from the Federal Emergency Management Agency.

Not far from the French Quarter, flanking Canal Street on Claiborne Avenue, they are living inside a long corridor formed not of walls and a roof but of the thick stench of human waste and sweat tinged with alcohol, crack and desperation.

The inhabitants are natives like Ronald Gardner, 54, an H.I.V.-positive man who said he had never before slept on the streets until Katrina. Or Ronald Berry, 57, who despite being a paranoid schizophrenic said he had lived on his own, in a rented house in the Lower Ninth Ward, for a dozen years before the storm. Both men receive disability checks of $637 a month, not nearly enough to cover post-hurricane rents.

“If I could just get a warm room,” Mr. Gardner said, sitting on the cot under which all his belongings are stored, “I could take it from there.”

Lurlene Newell, 54, said the Federal Emergency Management Agency had paid her rent in Texas after the storm, but when she moved back to New Orleans, she could not find a place to live.

By one very rough estimate, the number of homeless people in New Orleans has doubled since Katrina struck in 2005. Homelessness has also become a much more visible problem — late last year, Unity of Greater New Orleans, a network of agencies that help the homeless, cleared an encampment of 300 people that had sprung up in Duncan Plaza, in full view of City Hall. About 280 of those people are now in apartments, but others have flocked to fill several blocks of Claiborne Avenue at Canal, near enough to the French Quarter to regularly encounter tourists.

Unity workers are hoping that Congress will include $76 million in the supplemental appropriation for Iraq to pay for vouchers that would give rent subsidies and services to 3,000 disabled homeless people.

On Thursday, the Senate passed a version of the bill that included the vouchers; the current House version, not yet approved, does not include them. Without the vouchers, said Martha J. Kegel, Unity’s executive director, even those people already in apartments will be in jeopardy. Their current vouchers, issued under a “rapid rehousing” program, expire at the end of 2008.

New Orleans had 2,800 beds for the homeless before the storm; now it has 2,000, Ms. Kegel said. Those beds are full, but even if they were not, many of the people living on Canal Street are not the sort who can stay in a group shelter. According to the survey, which was conducted before dawn one morning so that only those who actually sleep in the camp would be counted, 80 percent have at least one physical disability, 58 percent have had some kind of addiction, 40 percent are mentally ill, and 19 percent were “tri-morbid” — they had a disability, an addiction and mental illness.

For these difficult cases, permanent housing with supportive services, like counseling, has become a preferred method. But it takes time, patience, money and one thing New Orleans is short of: apartments. Many apartment developers who applied for tax credits after Hurricane Katrina were required to set aside 5 percent of their units for supportive housing, but because of high construction costs and other factors, far fewer units than expected are in the pipeline. And without the vouchers, even those units will not be affordable.

Unity has already moved 60 of the most vulnerable people from the camp to hotel rooms, paid for with a city health department grant, including a woman who is eight months pregnant and a paranoid schizophrenic who is diabetic and a double amputee. In the filth of the camp, the amputee’s stumps had become infected.

Outreach workers have found clients with cancer and colostomy bags, and one so disabled that he was unable to talk. On average, people have stayed in hotels for six weeks before Unity finds an apartment and cobbles together the necessary funds.

Mike Miller, the director of supportive housing placement at Unity, said the camp had become a public health hazard since the city removed some portable toilets in February.

“Two outreach workers have tested positive for tuberculosis,” Mr. Miller said. “There’s hepatitis C, there’s AIDS, there’s H.I.V. Everyone out there’s had an eye infection of some sort. I got one.”

On Thursday, Herman Moore Jr. was hanging out with a friend in the camp. Mr. Moore had lived in a Federal Emergency Management Agency trailer, then a FEMA-financed hotel room, but had not realized that he was eligible for further assistance after the 30-day hotel stay ended last fall. Tipped off by his brother, Mr. Moore had only recently rented a house under the emergency management agency’s program, but had yet to pay the deposit or turn on the utilities because he had no money.

“If I had a TV and some electricity, you all wouldn’t even see me,” he said.

Clara Gomez, 45, told an outreach worker that she had just discovered she was pregnant. Like about 14 percent of the homeless people under the bridge, Ms. Gomez had come to New Orleans to work as a builder, but acknowledged that she had problems with drug and alcohol abuse.

After getting fired from one job, she wound up under the bridge, where she met Patrick Pugh, 36, a New Orleanian who said he had been in drug rehabilitation, turning his life around, when the storm hit. Their IDs had been stolen, they said, making it difficult to get jobs or food stamps.

Seated on a mattress, Ms. Gomez shifted nervously, changing positions every few seconds, all the while keeping her arms anchored around Mr. Pugh’s neck.

“We’re ready,” she said. “We’re ready to get out of here.”

Did Road Home treat all neighborhoods fairly?

It depends on how you look at it

Mortgage lender Carol Johnson has seen her clients and neighbors, mostly black middle-class folks, struggle to return to New Orleans from their post-Katrina exile, while the city's more affluent areas are buoyed by the sounds and sights of rebuilding.

Johnson believes the disparity has much to do with the way the Road Home relief program works. So she was angered but not surprised recently when she scanned a map produced by demographer Greg Rigamer, one showing how different parts of the city fared in the allocation of Road Home grants.

Reflecting about 40,000 Road Home grants in Orleans Parish through April 15, Rigamer's map shows the highest concentration of grants between $115,000 and the $150,000 limit went to residents of Lakeview, Lakewood and Eastover -- among the most expensive real estate in the city's heavily flooded neighborhoods. Eastern New Orleans, by contrast, has a high concentration of grants between $40,000 and $65,000.

The disparity can be traced, to a large degree, to a decision by the Louisiana Recovery Authority and federal housing officials to calculate grants based on a home's pre-storm value or an estimate of how much it should cost to rebuild it -- but mandating that the grant must be the lower of the two figures. In areas with modest-to-low property values before Katrina hit, the formula typically means a lower grant amount.

"This is discrimination based on the pre-storm value of a house," said Johnson, whose company serves mostly minority customers. "Someone in Pontchartrain Park can't rebuild, but you take the same property in Lakeview and you'd get a lot more money."

But the pattern that caught Johnson's eye doesn't tell the complete story. The assumption that the amount of Road Home grants should guarantee every homeowner the financial resources to rebuild is flawed, based on program rules. The federal government classifies Road Home as a compensation program, intended to combine grants with insurance proceeds to help homeowners recoup the pre-storm value of their home.

Federal officials were guarded about compensating homeowners well beyond that amount. If compensating homeowners for the pre-storm value leaves them in need of additional money to rebuild, the owners could try to cover the gap via a low-interest loan through the Small Business Administration. Road Home also allows an additional grant of up to $50,000 for residents in the lowest income brackets.

Looking solely at the average amount of Road Home grants by neighborhood also overlooks an important factor: The amount of money those homeowners originally paid to purchase homes in the city's more expensive locales. For example, it makes sense that a homeowner in Eastover would receive a larger compensation grant simply because that homeowner spent more money to buy a home in Eastover before the hurricanes. Moreover, the Eastover homeowner may still be in the hole because the grants are capped at $150,000.

Middle-income areas, including much of eastern New Orleans, were likely to receive the smallest Road Home grants because of the mix of modest property values and high rates of insurance coverage. And families in those neighborhoods typically found they made too much money to qualify for the low-income supplementary grants.

To determine how well the Road Home program has compensated homeowners for their losses, Rigamer's analysts at GCR & Associates Inc. analyzed average grants as a percentage of median pre-storm values in each neighborhood.

That data run showed that the program most fully compensated those in lower-income neighborhoods but fell short in covering homeowner losses in more affluent areas where losses typically exceeded the $150,000 grant limit.

The analysis shows:

-- Average Road Home grants were actually higher than the pre-storm values of homes in large swaths of poorer neighborhoods, places that served as the emotional touchstones of Katrina's wrath. The typical grant recipient in the Lower 9th Ward, St. Claude, St. Roch, the 7th Ward, Central City, Hollygrove and parts of Gentilly collected more than 115 percent of the neighborhood's median property value.

-- Residents in Lakewood, West End, Lakeview, Lakeshore and Lake Vista -- fully or partly flooded zones with high grant averages -- each received less than the citywide average of 68 percent of pre-storm value.

"It's the upper-priced homes that had the biggest gaps in protection," said Arthur Sterbcow, president of the Latter & Blum real estate firm and someone who has testified on Capitol Hill about New Orleans market challenges since the 2005 storms. "Lakeview, Eastover: These guys got the shortfall."

In Lakeview, many homes were enormously costly to repair, said GiGi Burke, a real estate agent who focuses on lakefront neighborhoods.

"It affected the very wealthy, too, and you don't hear too much about that," she said. "The bottom line is, they're losing a lot more money."

--- Less value, same costs ---

The Road Home grant figures don't provide a complete picture of who has enough to rebuild and who doesn't.

The unprecedented federally underwritten program was designed to work hand-in-hand with insurance payments and other government disaster aid to make homeowners whole, but the amount of insurance carried by homeowners varied widely. Without knowing insurance payouts, generalizations from grant data can be misleading.

But some trends are emerging as data become available from about 109,000 grants, valued at $6.4 billion. The impact of the program on rebuilding rates dates to Louisiana recovery officials' choice to use pre-storm values of properties as a key reference point.

While a home in Lakeview was worth substantially more before the storm than a home of comparable size in the Lower 9th Ward, owners of either destroyed home face similar costs, on a per-square-foot basis, in paying for materials, labor and other construction costs.

But when the U.S. Department of Housing and Urban Development classified the Road Home as a compensation effort instead of a rebuilding program, that drove how grants would be calculated. In a compromise designed in part to limit costs, federal and state officials agreed use the lower of a property's pre-storm value or a replacement cost of $130 a square foot for homes more than 51 percent damaged.

A 1,500-square-foot house totaled by storm waters in Lakeview, for example, might have been worth $250,000 before Katrina. In the Lower 9th Ward, a home of the same size may have been worth $70,000. But while the Lakeview owner's grant would be calculated on the basis of a $195,000 replacement cost, the 9th Ward owner's would be based on the much lower pre-storm property value.

If both homes had been covered by $40,000 in insurance, the Lakeview home would have qualified for the full $150,000 Road Home grant and the 9th Ward applicant would have been left with $30,000. The 9th Ward homeowner would have been fully compensated for the pre-storm value of the property, while the Lakeview resident would be short $60,000.

Both likely would need more money to rebuild, but the fully compensated 9th Ward homeowner would need more. Lower-income families can apply for loans to close the gap, but they typically face more difficulty qualifying.

The LRA recognized the potential problem and created an additional loan -- the state later made it a simple grant -- of up to $50,000 for those making less than 80 percent of the metro area's median household income. The U.S. Department of Housing and Urban Development sets the 80 percent limit at $36,500 for a family of two and $45,600 for a four-person household.

With the additional grant, it's possible for a low-income homeowner to collect up to $50,000 more, although the total Road Home grant still cannot exceed $150,000.

If the theoretical 9th Ward homeowner qualified as low-income, he or she could have collected a total of $80,000 from Road Home, more than the home's $70,000 pre-storm value.

"It shows the Road Home program was progressive in a way," said John Lovett, a law professor at Loyola University who has criticized the Road Home's design. "Maybe it was more generous than we give it credit for."

--- Grants affect return rate ---

That doesn't mean the program is generous enough to spur rebuilding.
Through April 15, 1,242 Lower 9th Ward families had received Road Home checks. That's more than 40 percent of the 2,975 owner-occupied units identified by the federal government immediately after Katrina flooded virtually every property in the area.

Yet nonprofit groups estimate that only 10 percent to 15 percent of families have returned to the Lower 9th Ward. They believe a key reason is the reliance on pre-storm property values in the Road Home formula.

Residents who gathered for a Lower 9th Ward workshop last weekend were eager to learn how to appeal for more Road Home money. Most left disappointed, realizing they couldn't buck the grant formula.

Robert Richardson inherited his 1,283-square-foot home on Caffin Avenue when his father died. Road Home officials informed him it would cost more than $166,000 to rebuild the home, under the $130-a-square-foot formula, but its pre-storm value was just $71,000. Even with a $50,000 low-income grant, Richardson said the resulting $92,000 Road Home award wouldn't get him close enough to the full cost of rebuilding.

"Three generations of my family owned that house," he said. "The formula makes it seem like it's fair across the board when it isn't."

One way Richardson could rebuild the home is to apply the $92,000 toward the cost and seek a $74,000 mortgage to cover the balance. Although he would be left making payments on a home he owned outright before the flood, he would own a completely rebuilt home presumably meeting stronger building codes than the dwelling that existed before the flood.

The New Orleans Recovery Continues, Feds Welcome to Jump Aboard

This week, I got a tour of the Lower Ninth Ward. It was by no means my first visit to the area; virtually every time I return to New Orleans, I drive myself (and/or my visitors from out of town) around some of the vast flood-devastated real estate of the city, to see for myself how the grass-roots recovery is faring. Ever since last fall, when I drove through the Lower 9 with the producer of my Crescent City Stories series for MyDamnChannel.com, I've been amazed and inspired by the area's signs of life. But it took this week's tour, courtesy of the Preservation Resource Center, for me to realize just how false is the national media's depiction of the Lower 9 as dead, derelict and devastated. There are streets -- like the two blocks of Egania Street I happened onto last fall -- and neighborhoods -- like Holy Cross, where PRC is concentrating much of its restoration and rebuilding effort -- that astonish with rebuilt, re-landscaped and re-occupied little (and not so little) homes, mostly restored in the vernacular styles of the area. The Lower 9 shares with districts as undevastated as the French Quarter the curse of streets badly in need of repair (a major road-repair program in the city was announced just this week, nearly three years after the floodwaters were pumped out). And of course, there's the ever-present threat that the Army Corps of Engineers is still...the Army Corps. See this story on seepage at the 17th St. Canal for a real deja-uh-oh experience.

Yet the recovery by homeowners, assisted by dedicated organizations like the PRC, continues, blessed, as I tell my friends there, by the absence of the illusion of leadership. Speaking of which, Sen. Mary Landrieu has inserted in the new War Money Act (my name for it) some provisions for the Gulf Coast's recovery, including:

$6 billion for 100-year flood protection for the New Orleans area, with Louisiana's share reduced from $1.5 billion to $1.3 billion and the state given 30 years, instead of the usual three years, to make the payments.

-- $75 million to move public facilities from the Port of New Orleans to accelerate the closing of the Mississippi River-Gulf Outlet and language directing the Corps of Engineers to look at more expensive options for permanent pumping of storm water in the New Orleans metropolitan area.

-- $75 million for criminal justice needs along the Gulf Coast.

-- $157 million to help six New Orleans area hospitals deal with post-hurricane health care costs.

-- $70 million for 3,000 supportive housing vouchers to help low-income workers find housing in the New Orleans area.

On that latter point, $70 million won't go very far when the rents in the city have doubled and tripled, due to so many rental units being taken off the market due to flood damage. Yet, there's still no federal effort to help jumpstart the renovation and rebuilding of rental units, the only sure way to "help low-income workers find housing." Rep. Barney Frank is head of the relevant committee in the House. How does he stand on helping the working class of New Orleans come home?

Leaky New Orleans levee alarms experts

NEW ORLEANS (AP) -- Despite more than $22 million in repairs, a levee that broke with catastrophic effect during Hurricane Katrina is leaking again because of the mushy ground on which New Orleans was built, raising serious questions about the reliability of the city's flood defenses.

Outside engineering experts who have studied the project told The Associated Press that the type of seepage spotted at the 17th Street Canal in the Lakeview neighborhood afflicts other New Orleans levees, too, and could cause some of them to collapse during a storm.

The Army Corps of Engineers has spent about $4 billion so far of the $14 billion set aside by Congress to repair and upgrade the metropolitan area's hundreds of miles of levees by 2011. Some outside experts said the leak could mean that billions more will be needed and that some of the work already completed may need to be redone.

"It is all based on a 30-year-old defunct model of thinking, and it means that when they wake up to this one -- really -- our cost is going to increase significantly," said Bob Bea, a civil engineer at the University of California at Berkeley.

The Army Corps of Engineers disputed the experts' dire assessment. The agency said it is taking the risk of seepage into account and rebuilding the levees with an adequate margin of safety.

"It's always a potential, so it is a design component for every feature," said Walter Baumy, the chief corps engineer in New Orleans.

The 17th Street Canal floodwall collapsed on the day Katrina surged over New Orleans in August 2005, and the failure severely damaged Lakeview. It was one of the biggest of about 50 levee breaches that contributed to the deaths of about 1,300 people.

Fixing the 17th Street Canal has been one of the most expensive and laborious repair jobs since the storm and has served as something of a test case for scientists and engineers, who plan to apply the lessons learned there to the city's other levees.

Among other things, they repaired the wall by driving interlocking sheets of steel 60 feet into the ground, compared with about 17 feet before the storm. The sheet metal is supposed to prevent canal water from seeping under the levee through the wet, toothpaste-like soil that lies beneath the city, which was built on reclaimed swamp and filled-in marsh.

Over the past few months, however, the corps found evidence that canal water is seeping through the joints in the sheet metal and then rising to the surface on the other side of the levee, forming puddles and other wet spots.

Engineers said the boggy ground is a more serious problem than the corps realizes. Bea said there is a roughly 40 percent chance of the 17th Street Canal levee collapsing if water rises higher than 6 feet above sea level. During Katrina, the water reached 7 feet in the canal.

John Schmertmann, a retired University of Florida professor and a consultant on foundations, agreed with Bea that the corps "may still be embedding some of these not-properly-considered factors, so the new walls may not do what the corps expects."

Reducing such seepage might require the driving of sheet metal far deeper into the ground than is done now, or some other solution, said Bea, who was part of a team of experts sent by the National Science Foundation to do an independent study of the levee failures during Katrina.

Donald Jolissaint, chief of the corps' technical support branch in New Orleans, denied the problem at the 17th Street Canal is serious.

"I personally do not at all believe that this little wet spot is anything that is going to cause a breach or a failure of any kind," he said. A newly installed floodgate could be used to cut off the flow of water into the canal and reduce pressure on the levee, he said.

Nevertheless, the corps is concerned enough that for weeks, workers have been analyzing the wet spots and digging a 160-foot-long, 10-foot-deep trench to zero in on the source. "We're doing everything we can to chase this down," Jolissaint said.

The corps is also spending about $100 million by taking more than 2,000 soil borings to find out what is under the ground and determine the best design.

Timothy Kusky, a geologist with Saint Louis University and an expert on the Mississippi River, said engineering a safe levee system in New Orleans will be very difficult because of the soil.

"You've got old riverbeds and floodplain deposits all interlayered and distributed laterally in a very complex way, and then you build a levee across them," Kusky said.

As a result, a levee sinks at different rates, and the sinking creates "little cracks in them that promote seepage, and also the old river channels and floodplain deposits have different potentials for underseepage," he said.

He said the corps understands a lot of the problems, but it takes a huge amount of data to map every weakness, and the agency does not have the manpower to see that every contractor is doing the job right.

Seepage was reported at the 17th Street Canal before Katrina. The corps denies that caused the collapse. Instead, the corps contends the floodwall flexed and finally cracked under the force of water piled against it by the storm.

Ex-Army Corps consultant indicted in bribery case

NEW ORLEANS (AP) -- A former Army Corps of Engineers consultant and a dirt subcontractor were indicted Thursday on bribery charges stemming from an investigation into levee work after Hurricane Katrina.

Durwanda Elizabeth Morgan Heinrich, a dirt, sand and gravel subcontractor, was accused of conspiring with two former corps workers to get confidential bid information for a $16.8 million levee project southwest of New Orleans in September 2006.

In exchange, the indictment said, Heinrich promised to give the workers, Kern Carver Bernard Wilson and Raul Miranda, 25 cents for every cubic yard of material used to build levees near Lake Cataouatche.

The arrangement would have funneled $299,375 each to Wilson and Miranda, the Justice Department said.

Heinrich was charged by a federal grand jury in New Orleans with one count of conspiring to commit bribery and two counts of offering a bribe to a public official.

Wilson, who was working for the corps as a consultant on the levee enlargement project, was charged with one count of conspiring to commit bribery and one count of demanding and agreeing to accept a bribe as a public official.

Each faces a maximum of five years in prison and fines if convicted on the conspiracy charge and a maximum of 15 years in prison and fines on each bribery charge.

The Justice Department did not return calls seeking information on lawyers for those indicted, and phone listings could not be found for the accused.

Maj. Timothy Kurgan, a corps spokesman in New Orleans, declined to comment Thursday but said his agency had turned over information about alleged wrongdoing to the Army's criminal investigation division.

Miranda, who pleaded guilty in September to bribery, was a construction manager for Integrated Logistical Support Inc., a New Orleans civil engineering firm hired to help the corps manage some of its projects.

Miranda, 50, of Spring, Texas, faces up to 15 years in prison and heavy fines at sentencing in October.

The investigation surrounding the Lake Cataouatche project has been the only case of criminal wrongdoing in levee work so far prosecuted by the Justice Department.

After Katrina hit the Louisiana and Mississippi coasts, flooded 80 percent of New Orleans and killed more than 1,600 people, Congress gave the corps billions of dollars to repair damaged levees and upgrade others.

The Lake Cataouatche levees protect an area of suburbs and small towns on the western side of the Mississippi River.

Road Home smooths way to appeals

The state Friday will unveil a new way to appeal Road Home grants, promising to lift thousands of disgruntled applicants out of a "black hole" of languishing complaints about lowball grants while putting the brakes on plans to collect overpayments.


The move is part of a larger effort by the newly combined Louisiana Recovery Authority and state Office of Community Development to assume direct control of certain procedures once left to Road Home contractor ICF International.

For example, LRA director Paul Rainwater has stepped in to stop ICF from hiring a collection agency for grant overpayments, which the state is required to recover under federal housing rules. A month ago, ICF moved to hire a subcontractor to retrieve excessive payments ICF believes it made to as many as 5,000 of the estimated 135,000 to 140,000 Road Home grant recipients.

But Rainwater now says he wants ICF to freeze collections work and wait for state officials to review each case. The LRA wants to make sure it's cost-effective to seek a repayment and to collect money only when it seems absolutely necessary under federal rules, using special caution in circumstances where the homeowner has already applied the money to rebuilding costs.

"We realize we can't get blood out of a turnip," Rainwater said.

He went a step further and said he didn't want liens placed on properties where overpayments have been made, promising instead that the state would set up flexible, no-interest repayment plans.

Rainwater also said he would abolish a policy of fining ICF the full amount of any overpayment and find another way to fine the company for mistakes made in bulk, hoping that will take away an incentive for the Virginia-based firm to aggressively pursue homeowners.

Rainwater, Gov. Bobby Jindal's recently empowered point man for recovery, said it was time for the state to "take ownership" of a Road Home process that ICF has driven since it was hired two years ago.

Rainwater said he recently replaced Office of Community Development officials who were too chummy with ICF, a process he called the "de-Baathization of OCD," in reference to bans on members of Saddam Hussein's Baath Party after the U.S. invasion of Iraq.

"It's been like hitting someone with an umbrella; what I need is a bat," he said.

Jindal gave him that figurative bat through an executive order in January, and he has responded by putting state officials in ICF's housing centers and by revamping the much-criticized appeals process.

According to protocols released early to The Times-Picayune, ICF will no longer use informal "dispute resolution," and any complaint not resolved within 60 days automatically gets a formal appeal review by a panel that will include three state officials, in addition to ICF employees. And state legislators will be allowed to sit on the panel, providing more transparency for the lawmakers who have been some of ICF's strongest critics.

Unlike in the past, when rules prevented Road Home from talking to a homeowner once he filed a formal appeal, an appeals adviser will be required to contact the applicant within 15 days to make sure the process is clear and that the applicant understands file details.

Some homeowners have expressed concern that they could lose the right to appeal by signing a new document to collect a $30,000 elevation grant. The Road Home Elevation Incentive Agreement, a document sent in recent weeks to about 115,000 applicants in flooded areas, says the home-raising grants can't be appealed and asks applicants to acknowledge that the elevation money is their "FINAL disbursement of Road Home funds" and "that all resolutions and appeals regarding my Road Home compensation have been concluded."

Rainwater said that language was never intended to quash pending appeals or to keep people from appealing other Road Home grant calculations. He said the section was put in the agreement to show that the elevation grant has to be the last dose of financial help provided, so the state can be sure it doesn't exceed the maximum of $150,000 in total Road Home money to each applicant.

Asked whether the agreement could be used to shut down some appeals, Rainwater said, "Over my dead body." But some homeowners say they still are afraid to sign a legal agreement until the language is changed. State officials said they would look into the possibility of sending an amended agreement or advisory to allay those fears.

FEMA parks closing June 1

BILOXI --Residents living in FEMA trailer parks are panicking about where they will live when the temporary housing program ends June 1.

Some residents have flooded a local mission group with phone calls, asking for help finding and moving into new homes. Roughly 6,800 families in South Mississippi still live in the temporary trailers, as the third anniversary of Katrina nears.

"There's just an outpouring from the community of people desperate to try to scrape together dollars here and there to pay deposits on rentals to move out of their FEMA trailers," said Dena Wittmann of Back Bay Mission. The United Church of Christ group is focusing on emergency housing assistance.

The residents, Wittmann said, have been told by their housing advisers that they will be evicted, and the trailers will be removed, by June 1. They want to know where they can get the money for a deposit on a rental, which usually is the cost of one month's rent.

"These deposits are the largest impediment to people moving into more permanent housing," she said.

FEMA has provided the residents with a list of rental properties available, and other resources, including nonprofit agencies that assist with deposits.

Back Bay Missions was on that list, but Wittmann said the group could not afford to cut families a check for more than $800 each - the average cost of a two-bedroom apartment.

"If we were to pay 10 families (the deposit), that would eat into our entire budget for the month," she said. "It's just gotten really scary for a lot of these families that are coming to us and are just desperate for help."

Road Home slows insurance claim payoffs

Richard Barker reached a $60,000 settlement for wind damage on a home near Six Flags on Dec. 12, but his eastern New Orleans client hasn't seen a dime of the insurance money five months later because the Road Home hasn't signed off on the paperwork.

Hundreds of homeowner insurance settlements are on hold because of a bottleneck at the Road Home program, and more are piling up every day, plaintiffs and defense attorneys say, because of the state's diligent checks to make sure that people aren't being overpaid and insurance companies aren't being subsidized.

"You can leave a voice mail once a day, and you're never going to get a return call. This is just an exercise in futility," said Barker, who plans to approach a judge with the insurance defense attorney on the case to see whether they can route around the grant program so the company can cut a check and close the claim.

As lawyers across the city grow exasperated, Soren Gisleson, head of the insurance section at the Louisiana Association for Justice, said several plaintiffs attorneys will meet with Louisiana Recovery Authority Executive Director Paul Rainwater and Office of Community Development Executive Counsel Dan Rees today to look for a way to break the logjam on insurance settlements.

"The problem is there's no time limit for Road Home to respond to the request," Gisleson said. "It's killing the homeowners. It's delaying all settlement checks."

Careful reviews required

Federal law requires Louisiana to make sure there is no duplication of benefits between Road Home grants and insurance payments. Although only additional insurance payments on structures are deducted from Road Home rebuilding grants, the program requires grant recipients to provide detailed information on any additional payments on structural damage, lost contents and displaced living expenses and send it to the state for a signature. If overpayments are discovered, the grant program must be repaid.

Recovery authority spokeswoman Christina Stephens said the state needs to review all of that information to watch for suspicious classifications of damage, such as putting everything on contents and living expenses to avoid having a grant reduced.

"They want to look at how the settlements are structured and to look at what funds are included in the settlement," Stephens said. "Sometimes we'll have questions for the insurance companies and questions for the homeowner."

The state Office of Community Development has six people working on the issue, two of them full time, and ICF International, the company that runs the Road Home program, has two people on insurance issues, one of them full time, Stephens said.

They have approved about 450 insurance settlements, and another 420 are pending, but the program is getting 10 to 15 new settlement approval requests a day as the pace of litigation settlements increases. "Our goal is to turn them around as quickly as possible," Stephens said.

Homeowners wait

The bottleneck is creating the unusual situation in which the grant program that was supposed to help homeowners is preventing them from collecting insurance coverage they paid for, in some cases even though the insurance settlement is worth more than the Road Home grant.

Barker's colleague, David Bernberg, has another eastern New Orleans case in which the Road Home gave his client a $600 grant, but won't sign off her insurance settlement of $55,000 in contents and $18,000 in additional living expenses.

While that type of case might set off a red flag with the recovery authority, from the plaintiffs attorney perspective, the settlement should just be waved through because there's no new money for structural damage that should affect the Road Home grant. "This poor lady can't get paid," Barker said.

While some note that every delay allows insurance companies to keep settlement money in their bank accounts, companies say they're eager to clear out Katrina claims.

"We've had some significant delays with getting settlements into the hands of our customers," said Phil Supple, a spokesman for State Farm, Louisiana's largest residential insurer. "I understand that they are woefully understaffed. We would be supportive of any efforts by the Road Home to resolve these issues to get settlements into the hands of policyholders."

Seeking a solution

To get around the Road Home inertia, some insurance companies have allowed homeowners to sign affidavits agreeing that they're responsible for repaying the Road Home if they collected too much money on their grants. In other cases, plaintiffs and defense attorneys are filing joint motions in court asking judges to declare that after, say, 30 days, the settlement can proceed without the Road Home's signature and the program will have to pursue any overpayments individually. Another idea has been to haul the Road Home into court for an answer and allow settlements to proceed if the program doesn't send anyone.

When plaintiffs attorneys meet with the recovery authority today, Gisleson said, they will ask the Road Home to allow homeowners to cash checks if the program hasn't flagged a problem in 30 days or accept settlements that have been approved by a third party such as a magistrate judge or a licensed mediator.

"We're talking about thousands and thousands of people" as settlements are reached, Gisleson said.

Army Corps says Condition of many levees a mystery

ST. LOUIS (AP) -- Across America, earthen flood levees protect big cities and small towns, wealthy suburbs and rich farmland. But the Army Corps of Engineers, the federal agency that oversees levees, lacks an inventory of thousands of them and has no idea of their condition, the corps' chief levee expert told The Associated Press.

The uncertainty, amid an unusually wet spring that has already caused significant flooding across many states, is creating worry even within the corps.

''We have to get our arms around this issue and understand how many levees there are in the country, who's watching over them, what populations and properties are behind them,'' Eric Halpin, the corps' special assistant for dam and levee safety, said in an interview last month. ''What is the risk posed to the public?''

Critics are troubled that the government doesn't know the answer.

Robert Bea, a University of California at Berkeley levee expert, said many levees are old, with rusting infrastructure and built to protect against relatively common floods -- not the big ones like the Great Flood of 1993, when 1,100 levees were broken or had water spill over their tops.

''Once they do get an inventory,'' Bea said, ''I think we're not going to like what we find.''

Residents along the Mississippi River have been fighting floods with levees since the 19th century. After a devastating 1927 flood, Congress got involved, approving construction of levees and reservoirs along the Mississippi and Missouri river basins.

Today, about 2,000 levees are either operated by the corps or by local entities in partnership with the corps, generally protecting major population areas such as St. Louis and New Orleans.

Thousands of others -- no one is sure how many -- are privately owned, operated and maintained. The majority of those are ''farm'' levees keeping water out of fields, but some protect populated areas, industries and businesses.

For example, flooding in March breached private levees near the southeastern Missouri towns of Dutchtown and Poplar Bluff.

In 2006, prompted in part by the devastation wrought by Hurricane Katrina in New Orleans the year before, Congress provided funding for the corps to inventory the levees it maintains or helps fund. That initial inventory is complete, Halpin said.

Some of what was found was troubling. For example, corps levees in Missouri and Illinois that are supposed to protect against a 500-year flood fall short of even 100-year protection, said Col. Lewis Setliff III, commander of the corps district in St. Louis. Getting those nine levees up to standard would cost an estimated $200 million.

Last year, Congress passed the National Levee Safety Act, which for the first time directed the corps to inventory all private levees. But so far, Congress hasn't provided funding and won't likely do so until 2009 at the earliest.

Still, the project is long overdue, said Susan Gilson, executive director of the Washington-based National Association of Flood & Stormwater Management Agencies.

''No. 1, we have to identify all the levees,'' Gilson said. ''We need to identify where there are problems with the levees. Then the next stage will be repairs.''

Flooding in March killed nearly two dozen people and damaged or destroyed thousands of homes across a swath of Midwestern states. With the ground saturated and rivers still running high, some worry that more flooding is on the way.

Just across the Mississippi River from St. Louis is the Wood River levee in Illinois, which protects a ConocoPhillips refinery. Flooding there could spell an environmental and economic disaster.

Water seeped through the levee in 1993, but it held. Levee district commissioner Leroy Emerick worries that the next big test might not go as well.

Residents of the tony St. Louis suburb of Chesterfield, Mo., already know what happens if the Monarch Levee breaks.

It happened in 1993, sending the Missouri River surging into the region known as the Chesterfield Valley. Within hours, muddy water reached the rooftop at the popular Annie Gunn's restaurant -- seven miles from the river.

In those days, Annie Gunn's was among a few businesses in the valley. Today, the area is home to dozens of big box stores, shopping centers and high-end restaurants.

The development came after the Monarch levee was rebuilt to protect against a 500-year flood, meaning an area has a 1-in-500 chance of being flooded to a certain level in any given year. But David Human, a lawyer for the Monarch district, said there are still small sections of the levee that fall short.

''By fall, we expect 98 percent of the levee system will be at the 500-year level of protection. But guess what? That's not 100 percent,'' Human said.

Flooding in March nearly wiped out tiny Dutchtown, a community of 99 residents in southeast Missouri. Several waterways -- the Castor and Whitewater rivers and Hubble Creek -- flow into what's known as the diversion channel there. Torrential rain caused a quick rise in water that tore through a small, private levee.

Weeks after the flood, residents are still ripping out water-soaked carpet and ruined furniture, cleaning debris from their yards, and power-washing mud caked from cars and siding.

''It was so much water at one time, and the levee couldn't handle it,'' resident Robert Reed, 72, said.

Halpin knows that another major flood would be more than many levees could handle.

''It's not a question of if it will happen. It's a question of when and where it will happen,'' he said. ''There are a lot of vulnerable spots in this country.''

Texas firm taking over Katrina insurance cases

The Provost-Umphrey Law Firm based in Beaumont, Texas, is now representing about 200 policyholders whose disputes with State Farm were being handled by Dickie Scruggs and associated law firms.

Provost-Umphrey attorneys met with ex-Scruggs clients Thursday in Gulfport, said senior partner Bryan O. Blevins Jr.

"Hopefully, we can get this litigation back on track to benefit the clients and, ultimately, the courts," Blevins said Friday.

Scruggs had to relinquish the cases after he was charged in December with conspiring to bribe a North Mississippi judge. He subsequently pleaded guilty in the case. Once Scruggs was charged, State Farm asked a federal judge to dismiss other attorneys who had worked with him. A federal judge agreed to dismiss those lawyers, known as the Katrina Litigation Group.

Lexington attorney Don Barrett, who headed the Katrina Litigation Group, on April 18 wrote to the firm's 400 clients suggesting they hire Provost-Umphrey and also saying the new firm would be sending them contracts at Barrett's request.

Barrett said Friday he met managing partner Walter Umphrey during tobacco litigation. Umphrey's firm had represented the state of Texas during the 1990s lawsuits over what states spent on health-care costs related to smoking; Barrett had worked with Scruggs on Mississippi's case.

Umphrey's firm also subleases office space in Nashville from Barrett's nephew, who has a law firm there. Barrett is listed as an attorney with his nephew's firm. Barrett said he recommended the firm because it has the resources to handle the cases and Umphrey agreed to take them on, large or small.

Also on April 18, State Farm sent letters to Scruggs clients saying their attorneys had been disqualified and that any new attorney hired should contact one of the insurer's lawyers in Oxford.

The letter also said: "We would like to see if we can resolve any remaining issues without the need for further litigation" and gave policyholders a telephone number to call.

About 15 cases have since been settled out of the 178 the Katrina Litigation Group had pending in federal court. Barrett said the group had a total of 400 clients, not all of whom had filed lawsuits yet.

One couple who has settled with State Farm, Thomas and Ann Arnold, were plaintiffs in a racketeering lawsuit filed against the company by multiple policyholders. The lead plaintiff, Glenda Shows, has signed up with Provost-Umphrey, as have some other parties to that lawsuit.

Other policyholders have found their way to Coast law firms that handle insurance cases, some of whose members were miffed by the Katrina Litigation Group's decision to recommend a personal-injury law firm based in Texas.