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.

Man who lost homes in Katrina claims $97M Powerball prize

BATON ROUGE, La. (AP) -- A construction company owner who lost two homes in Hurricane Katrina claimed a $97 million Powerball prize, a jackpot won off a ticket he bought at a convenience store where he stopped to buy his wife a gallon of milk.

When he turned in the winning ticket, Carl Hunter became the largest Powerball winner in Louisiana's history. He won the jackpot in January, but the 73-year-old small businessman waited nearly four months to claim the prize.

An avid lottery player, Hunter said he already had bought a Powerball ticket on Jan. 16 at the gas station less than two blocks from his home in the New Orleans suburb of Metairie. But he stopped at the station again that day to buy milk - at the request of his wife, Dianne - and got a second "quick pick" ticket.

"I had some change, and one dollar was used to buy this ticket," Hunter said Thursday at the Louisiana Lottery Corp. headquarters in Baton Rouge, where he claimed his prize.

"It's all about milk," his wife said, smiling.

The couple, surrounded by cameras, was decidedly low-key about the multimillion dollar win, saying they didn't have specific plans for the money - besides retirement and the rebuilding of a camp lost to Katrina.

"I'm retiring, you know, naturally," Carl Hunter said.

Hunter took a lump sum payment that will give him $33.9 million after taxes, according to lottery officials. Asked why he waited so long to turn in the winning ticket, Hunter said he wanted to wrap up some of his construction work and finish his outstanding contracts. In fact, Hunter's wife Dianne said he was still at work this week.

"I don't think about buying elaborate cars or homes," Carl Hunter said.

Hunter said he owned two homes that were destroyed in 2005 by Katrina, and he and his wife moved into a Metairie home she owned after the storm, the home that was near the gas station where he bought his winning ticket.

The multimillion dollar win wasn't Hunter's first winning lottery ticket. He said he won $5,000 off a ticket a few years ago.

West Metairie Shell, the gas station where Hunter bought his ticket, will get $25,000 for selling the winning ticket. The station, tucked among brick ranch homes and raised wooden houses in a middle-class neighborhood, lost its roof during Katrina, and the store was looted.

New Orleans mayor pushing residents to leave FEMA trailers

Lingering fears about formaldehyde fumes inside federally issued trailers and the impending hurricane season have Mayor Ray Nagin pushing to empty thousands of the structures, intended as temporary housing after Katrina.

With the third anniversary of Katrina coming up Aug. 29, the push is the first for the city, where most of the remaining trailers sit on private property as residents continue to rebuild their homes.

"We need to get everybody out," Nagin said. "We need to find out if anybody's health has been harmed and how do we deal with that, and find the housing that's necessary so these people can get their lives together."

Nearly 5,700 trailers remain in New Orleans, most on the private property of residents who lost their homes to Katrina.

"I want to be gone as much as anybody," said KC King, whose home was heavily damaged by Katrina and later demolished. He said he has been dealing with a series of contractor delays in rebuilding.

Federal, state and local efforts are under way to assist families with housing needs. It's probable that some families now in trailers will end up in hotels or apartments, at least temporarily.

But Nagin, in an interview late last week, said he has no choice but to push an end to use of the trailers, given health concerns and the June 1 start of the hurricane season.

The tough stance is a post-Katrina departure for Nagin. Until now, he has refused to pressure residents in trailers because of issues including a lack of affordable housing and problems with them getting timely rebuilding grants or enough money to finish building their homes.

In a letter to President Bush in late February, Nagin wrote that a federal plan to move people from trailers to apartments and hotels over concerns about formaldehyde fumes would lead to a "second great displacement" of New Orleans residents.

The Federal Emergency Management Agency has been criticized for its response to concerns about high levels of formaldehyde fumes in such homes used by victims of the 2005 Gulf Coast hurricanes. About 24,600 travel trailers and mobile homes remained occupied in Louisiana and Mississippi, and the agency has stepped up efforts to move residents.

In New Orleans, the city is working with the state and FEMA on housing options. One proposal being floated would redirect federal aid now paying for hotels or apartments for displaced residents toward fixing up damaged homes. It's not very likely that the proposal could come to fruition by August, when hurricane season ramps up in earnest, raising fears that the trailers could not withstand a hurricane.

Some City Council members have raised concerns about jostling residents from trailers to even more temporary quarters — apartments and hotels, if they have no other place to go.

Andrew Thomas, a FEMA spokesman, said Wednesday that the agency will work with parishes and homeowners to see where families are in their "long-term housing plan" and transitioning from trailers.

"We want people back into permanent housing, because it's safer with hurricane season almost here," he said. But "we're not just going to take the trailer away because of a date on the calendar, if they're making progress in getting back into their home."

Meanwhile Wednesday, President Bush's hurricane recovery chief said the large number of errors in grants given to homeowners through the Road Home program "revictimizes the victims" by making them repay aid they received. The program, funded mainly by federal dollars, gives grants to homeowners with severe damage from hurricanes Katrina and Rita.

Retired Maj. Gen. Douglas O'Dell told The Associated Press he is concerned about the timeliness and accuracy of the grants awarded through the program, run by private contractor ICF International Inc.

State officials estimate 130,000 homeowners will receive grants. As many as 5,000 are expected to have received too much money, and ICF has moved to hire a subcontractor to collect overpayments.

The company didn't immediately respond to a request for comment Wednesday about the number of errors in grants.

House bill would restrict US reconstruction dollars

WASHINGTON (AP) -- A new war spending bill proposed by House Democrats would prohibit using U.S. aid to rebuild towns or equip security forces in Iraq unless Baghdad matches every dollar spent, lawmakers said Tuesday.

The $195 billion measure, to be voted on as early as Thursday, would fulfill President Bush's demands for military and diplomatic operations in Iraq and Afghanistan until the next president can set his or her own policy next spring. Lacking the votes to force troops home as they would like, Democrats are using the bill instead to assert to voters that the war is to blame for the nation's economic woes.

In addition to restricting U.S. aid, the bill would require Bush to negotiate an agreement with Baghdad to subsidize the U.S. military's fuel costs so troops operating in Iraq aren't paying any more than Iraqi citizens are.

A recent Associated Press report revealed that troops are paying the market average of $3.23 a gallon for gasoline, diesel and jet fuel, while Baghdad subsidies put domestic consumption inside the country at about $1.36 a gallon. Meanwhile, Iraq is expected to reap some $70 billion in oil revenues because of record-high fuel prices.

''President Bush insists on war without end in Iraq, but Democrats in Congress stand with Americans who want to bring our troops home responsibly, safely and soon, and with taxpayers who believe that the Iraqi government must begin to pay its fair share for the reconstruction of their country,'' said House Speaker Nancy Pelosi, D-Calif.

Barring any unexpected developments, the bill would bring the amount approved by Congress since Sept. 11, 2001, to fight terrorism and conduct the wars in Iraq and Afghanistan to about $875 billion.

Other economic-related provisions in the bill include legislation that would extend by up to six months unemployment insurance coverage for jobless people whose benefits have run out. House Appropriations Committee Chairman David Obey, D-Wis., said the measure would cost some $11 billion over 10 years.

Veterans of Iraq and Afghanistan also would begin to receive a big boost in college aid costing $720 million through 2009 but expected to cost far more in future years.

Democrats also tacked onto the bill a plan to block new Bush administration regulations that would cut federal spending on Medicaid health care for the poor by $13 billion over the next five years. The House last month passed that measure by a veto-proof 349-62 margin.

Democrats will try -- as they have unsuccessfully in the past -- to force the troops home. The bill would require that troops start leaving Iraq within 30 days of its enactment and set a nonbinding goal of withdrawing combat troops by the end of December 2009. It also would require that any troops deployed into a combat zone exceed the Pentagon's peacetime standards for being fully trained and equipped.

However, both of these provisions are expected to fail in the Senate and be stripped from a final bill the House is to approve this spring.

Overall, the measure provides $96.6 billion of the $100 billion Bush requested to fund the wars in Iraq and Afghanistan through the end of September. The $3.4 billion left over would be used to fund military base and hospital construction, additional food aid and cover shortfalls identified by the Bureau of the Census and the Bureau of Prisons, Obey said.

The legislation also includes another $5.8 billion, as requested by Bush, to build flood protection levees around New Orleans.

On Iraq, the bill contains $66 billion Bush sought to fund the war into the next administration, giving the next president ''a few months to get his or her act together,'' Obey said.

The move also lets Congress avoid a second war vote during the presidential elections.

Pentagon press secretary Geoff Morrell said Tuesday that unless Congress acts on the war funding bill by June 15, the Army will run out of payroll money, and the Defense Department would have to move cash from the Navy and the Air Force to pay Army soldiers. Rep. John Murtha, chairman of the House Appropriations defense subcommittee, said Congress was on track to finish the bill before then and accused the Pentagon of trying to scare soldiers into thinking they wouldn't get paid.

''We know that under no circumstances we wouldn't pay the troops,'' said the Pennsylvania Democrat.

About $3 billion of Bush's request was devoted to reconstruction and relief programs, half of which would go toward the training and equipping mission.

The administration has been open to lawmakers' suggestions that Iraq assume more rebuilding costs, contending Baghdad is already on track to do so with regard to major infrastructure projects. But depending on how the legislation is written, White House officials are likely to be reluctant to restrict U.S. spending on rebuilding Iraq's military and police forces -- the linchpin in Bush's exit strategy in Iraq.

''The bottom line is that we need the necessary flexibility in the funding that will allow our troops to complete their mission, including funding for training Iraqi troops so that we can bring home U.S. troops,'' said White House spokesman Tony Fratto.

Fratto declined to comment on specific provisions in the House bill.

Obey confirmed that the legislation is slated to advance in an unusual process in which it is broken into three separate pieces for votes in the House and Senate: war funding, anti-war policy provisions and domestic funding.

The idea is to allow anti-war Democrats to vote against the war funding -- which Republicans will provide the votes to pass -- while still ensuring the money goes out to support troops overseas. Democrats get to vote for restrictions on the war, but the provisions would never make it through the Senate to face a veto.

Refinancing plan is meant to close repair-cost gaps

Mortgage giant Fannie Mae has developed a program to help stymied hurricane victims who could not cobble together quite enough money from insurance proceeds, Road Home grants or personal savings to rebuild their damaged home.

To prevent such owners from giving up on their houses -- and falling behind on their monthly mortgage payments -- Fannie will help them refinance their loan and borrow additional money to close the gap between the cost of repairs and the money they collected from other sources to pay for them.

"The point is to stabilize families, not sink them," said Anne Segrest McCulloch, a senior vice president at Fannie Mae.

The program is open only to those owners whose mortgage is held by Fannie Mae, a fact that could complicate its transparency. Fannie does not make direct loans to consumers; it buys mortgages that were initiated by other lenders and holds them as investments or sells them as securities.

Consumers are not always aware that Fannie holds their mortgage, and they must contact the company to which they send their monthly payment to verify whether they are eligible for the new program, called the Limited Cash-Out Refinance: Gap Option.

A spokesman for Fannie Mae said the company is working closely with the local firm Standard Mortgage to connect storm victims with the new mortgage product. Fannie estimates that 3,000 households could benefit from the program.

Fannie's executives say they designed the loan for maximum flexibility. Homeowners who refinance through the program do not need to buy mortgage insurance. In some cases, Fannie will let consumers exceed the original life of the loan to pay back the money they borrow to complete storm repairs.

While many rebuilding programs have been designed solely for homeowners, Fannie's gap option is open to landlords who have struggled to fix investment property. Owners can refinance mortgages on single-family homes, multifamily properties with up to four units, condos, co-ops and manufactured housing.

What they cannot do is borrow against the value of their house to bankroll purchases unrelated to storm recovery.

Company executives said they would help property owners calculate how much it would cost to complete repairs above and beyond what insurance or the Road Home had already provided. The new loan amount would include the balance of the original mortgage; closing costs; money sufficient to finish repairs; and a contingency reserve of up to 10 percent of the repair bill.

Consumers, for their part, "need a plan to stay current on their mortgage, and they need a credible contractor," said Tim Carpenter, Fannie Mae's director of community development along the Gulf Coast.

In helping storm victims refinance their mortgages, Fannie Mae has essentially overlooked the damage that Katrina wrought on the home's value. Instead of basing the size of the loan on what the home would fetch on the open market, the company calculates it based on the cost of repairs -- both repairs already completed and repairs yet to be undertaken.

Fannie has imposed no limit on what lenders call the loan-to-value ratio -- how the size of the mortgage stacks up against the "value" of the house, which in this case refers to the total repair cost.

One local mortgage broker said the program could benefit people who received money through the Road Home and their insurance companies but have fallen, say, $30,000 short to complete their renovation.

"If they're going to allow for something like that, it could be a real positive," said Ross Miller, president of Miller Home Mortgage. However, he said homeowners would have to consider how the interest rate they would get from a refinancing stacks up against the rate on their existing loan.

Jon Searles, a spokesman for Fannie Mae, said consumers would not receive the interest rate they had on their original mortgage, but the prevailing market rate.

To obtain a refinanced mortgage through Fannie, consumers must be current on their existing mortgage -- that is, they must have gone without a 30-day delinquency in the past 90 days. The gap option program is scheduled to expire at the end of June.

The All-White Elephant in the Room

BORED by those endless replays of the Rev. Jeremiah Wright? If so, go directly to YouTube, search for “John Hagee Roman Church Hitler,” and be recharged by a fresh jolt of clerical jive. What you’ll find is a white televangelist, the Rev. John Hagee, lecturing in front of an enormous diorama. Wielding a pointer, he pokes at the image of a woman with Pamela Anderson-sized breasts, her hand raising a golden chalice. The woman is “the Great Whore,” Mr. Hagee explains, and she is drinking “the blood of the Jewish people.” That’s because the Great Whore represents “the Roman Church,” which, in his view, has thirsted for Jewish blood throughout history, from the Crusades to the Holocaust.

Mr. Hagee is not a fringe kook but the pastor of a Texas megachurch. On Feb. 27, he stood with John McCain and endorsed him over the religious conservatives’ favorite, Mike Huckabee, who was then still in the race.

Are we really to believe that neither Mr. McCain nor his camp knew anything then about Mr. Hagee’s views? This particular YouTube video — far from the only one — was posted on Jan. 1, nearly two months before the Hagee-McCain press conference. Mr. Hagee appears on multiple religious networks, including twice daily on the largest, Trinity Broadcasting, which reaches 75 million homes. Any 12-year-old with a laptop could have vetted this preacher in 30 seconds, tops.

Since then, Mr. McCain has been shocked to learn that his clerical ally has made many other outrageous statements. Mr. Hagee, it’s true, did not blame the American government for concocting AIDS. But he did say that God created Hurricane Katrina to punish New Orleans for its sins, particularly a scheduled “homosexual parade there on the Monday that Katrina came.”

Mr. Hagee didn’t make that claim in obscure circumstances, either. He broadcast it on one of America’s most widely heard radio programs, “Fresh Air” on NPR, back in September 2006. He reaffirmed it in a radio interview less than two weeks ago. Only after a reporter asked Mr. McCain about this Katrina homily on April 24 did the candidate brand it as “nonsense” and the preacher retract it.

Mr. McCain says he does not endorse any of Mr. Hagee’s calumnies, any more than Barack Obama endorses Mr. Wright’s. But those who try to give Mr. McCain a pass for his embrace of a problematic preacher have a thin case. It boils down to this: Mr. McCain was not a parishioner for 20 years at Mr. Hagee’s church.

That defense implies, incorrectly, that Mr. McCain was a passive recipient of this bigot’s endorsement. In fact, by his own account, Mr. McCain sought out Mr. Hagee, who is perhaps best known for trying to drum up a pre-emptive “holy war” with Iran. (This preacher’s rantings may tell us more about Mr. McCain’s policy views than Mr. Wright’s tell us about Mr. Obama’s.) Even after Mr. Hagee’s Catholic bashing bubbled up in the mainstream media, Mr. McCain still did not reject and denounce him, as Mr. Obama did an unsolicited endorser, Louis Farrakhan, at the urging of Tim Russert and Hillary Clinton. Mr. McCain instead told George Stephanopoulos two Sundays ago that while he condemns any “anti-anything” remarks by Mr. Hagee, he is still “glad to have his endorsement.”

I wonder if Mr. McCain would have given the same answer had Mr. Stephanopoulos confronted him with the graphic video of the pastor in full “Great Whore” glory. But Mr. McCain didn’t have to fear so rude a transgression. Mr. Hagee’s videos have never had the same circulation on television as Mr. Wright’s. A sonorous white preacher spouting venom just doesn’t have the telegenic zing of a theatrical black man.

Perhaps that’s why virtually no one has rebroadcast the highly relevant prototype for Mr. Wright’s fiery claim that 9/11 was America’s chickens “coming home to roost.” That would be the Sept. 13, 2001, televised exchange between Pat Robertson and Jerry Falwell, who blamed the attacks on America’s abortionists, feminists, gays and A.C.L.U. lawyers. (Mr. Wright blamed the attacks on America’s foreign policy.) Had that video re-emerged in the frenzied cable-news rotation, Mr. McCain might have been asked to explain why he no longer calls these preachers “agents of intolerance” and chose to cozy up to Mr. Falwell by speaking at his Liberty University in 2006.

None of this is to say that two wacky white preachers make a Wright right. It is entirely fair for any voter to weigh Mr. Obama’s long relationship with his pastor in assessing his fitness for office. It is also fair to weigh Mr. Obama’s judgment in handling this personal and political crisis as it has repeatedly boiled over. But whatever that verdict, it is disingenuous to pretend that there isn’t a double standard operating here. If we’re to judge black candidates on their most controversial associates — and how quickly, sternly and completely they disown them — we must judge white politicians by the same yardstick.

When Rudy Giuliani, still a viable candidate, successfully courted Pat Robertson for an endorsement last year, few replayed Mr. Robertson’s greatest past insanities. Among them is his best-selling 1991 tome, “The New World Order,” which peddled some of the same old dark conspiracy theories about “European bankers” (who just happened to be named Warburg, Schiff and Rothschild) that Mr. Farrakhan has trafficked in. Nor was Mr. Giuliani ever seriously pressed to explain why his cronies on the payroll at Giuliani Partners included a priest barred from the ministry by his Long Island diocese in 2002 following allegations of sexual abuse. Much as Mr. Wright officiated at the Obamas’ wedding, so this priest officiated at (one of) Mr. Giuliani’s. Did you even hear about it?

There is not just a double standard for black and white politicians at play in too much of the news media and political establishment, but there is also a glaring double standard for our political parties. The Clintons and Mr. Obama are always held accountable for their racial stands, as they should be, but the elephant in the room of our politics is rarely acknowledged: In the 21st century, the so-called party of Lincoln does not have a single African-American among its collective 247 senators and representatives in Washington. Yes, there are appointees like Clarence Thomas and Condi Rice, but, as we learned during the Mark Foley scandal, even gay men may hold more G.O.P. positions of power than blacks.

A near half-century after the civil rights acts of the 1960s, this is quite an achievement. Yet the holier-than-thou politicians and pundits on the right passing shrill moral judgment over every Democratic racial skirmish are almost never asked to confront or even acknowledge the racial dysfunction in their own house. In our mainstream political culture, this de facto apartheid is simply accepted as an intractable given, unworthy of notice, and just too embarrassing to mention aloud in polite Beltway company. Those who dare are instantly accused of “political correctness” or “reverse racism.”

An all-white Congressional delegation doesn’t happen by accident. It’s the legacy of race cards that have been dealt since the birth of the Southern strategy in the Nixon era. No one knows this better than Mr. McCain, whose own adopted daughter of color was the subject of a vicious smear in his party’s South Carolina primary of 2000.

This year Mr. McCain has called for a respectful (i.e., non-race-baiting) campaign and has gone so far as to criticize (ineffectually) North Carolina’s Republican Party for running a Wright-demonizing ad in that state’s current primary. Mr. McCain has been posing (awkwardly) with black people in his tour of “forgotten” America. Speaking of Katrina in New Orleans, he promised that “never again” would a federal recovery effort be botched on so grand a scale.

This is all surely sincere, and a big improvement over Mitt Romney’s dreams of his father marching with the Rev. Dr. Martin Luther King Jr. Up to a point. Here, too, there’s a double standard. Mr. McCain is graded on a curve because the G.O.P. bar is set so low. But at a time when the latest Wall Street Journal-NBC News poll shows that President Bush is an even greater drag on his popularity than Mr. Wright is on Mr. Obama’s, Mr. McCain’s New Orleans visit is more about the self-interested politics of distancing himself from Mr. Bush than the recalibration of policy.

Mr. McCain took his party’s stingier line on Katrina aid and twice opposed an independent commission to investigate the failed government response. Asked on his tour what should happen to the Ninth Ward now, he called for “a conversation” about whether anyone should “rebuild it, tear it down, you know, whatever it is.” Whatever, whenever, never mind.

For all this primary season’s obsession with the single (and declining) demographic of white working-class men in Rust Belt states, America is changing rapidly across all racial, generational and ethnic lines. The Census Bureau announced last week that half the country’s population growth since 2000 is due to Hispanics, another group understandably alienated from the G.O.P.

Anyone who does the math knows that America is on track to become a white-minority nation in three to four decades. Yet if there’s any coherent message to be gleaned from the hypocrisy whipped up by Hurricane Jeremiah, it’s that this nation’s perennially promised candid conversation on race has yet to begin.

Judge: Corps can be sued for flood

A federal court judge cleared the way Friday for the Army Corps of Engineers to face trial on claims that defects in its Mississippi River-Gulf Outlet destroyed wetlands and turned the navigation channel into a funnel for storm surge.

U.S. District Judge Stanwood Duval's 40-page ruling "paves the way for the first and only trial that will likely be held on how the Army Corps of Engineers drowned New Orleans" during Hurricane Katrina, said California attorney Pierce O'Donnell, who leads the legal team that filed the case two years ago on behalf of a group of plaintiffs that includes WDSU-TV anchorman Norman Robinson, who lived in eastern New Orleans.


The suit alleges the controversial shipping channel flooded thousands of homes in eastern New Orleans, the Lower 9th Ward and St. Bernard Parish.

A spokesman for the U.S. Justice Department, which is defending the corps, declined comment, saying department attorneys needed time to review the ruling.

Duval's decision rejected the corps' argument for tossing out the case without a trial: that a federal law makes the agency immune from lawsuits over damage caused by its flood protection projects.

But Duval said that because the MRGO -- a deep draft navigation channel built over a decade starting in 1958 -- is not a part of the Lake Pontchartrain and Vicinity Hurricane Protection plan, the Corps can be held liable for damage caused by the waterway.

Duval cautioned that his ruling does not hold the corps liable, a matter he said he can decide only after "questions of material fact" about what caused the flooding can be examined at trial.

O'Donnell predicted that if the trial ends with the judge ruling for the plaintiffs, then anyone who lives in the affected areas -- eastern New Orleans, the Lower 9th Ward and St. Bernard Parish -- will be entitled to collect compensation from the corps, "subject to proving their damage."

O'Donnell said his team will also go to bat for residents in part of New Orleans that flooded after drainage canal levees broke after Katrina -- damage for which Duval has already said the corps cannot be sued.

"We are going to the new Congress in January, hopefully with a judgment in our hands, and we are going to say we need a 9/11 style Katrina Victim's compensation fund," O'Donnell said.

In the Friday decision, according to O'Donnell, Duval said the plaintiffs had offered "substantial evidence" that the storm water that surged through the MR-GO and into residents' homes overwhelmed hurricane protection levees.

Corps may have to rebuild floodwall sections

The Army Corps of Engineers may have to rebuild sections of hurricane protection walls on the lakefront to meet engineering standards adopted in the aftermath of Hurricane Katrina, according to floodwall studies done by the corps.

The walls stretch from earthen levees on Lake Pontchartrain to floodgates installed after Katrina on the Orleans Avenue and London Avenue canals. Because these sections of floodwalls are outside the new gates, they are the sole defense to block storm surge from the lake from pouring into such neighborhoods as Lakeshore, Lake Vista and Lake Terrace, as well as the University of New Orleans campus.

The cost of those repairs would be about $4.3 million. Geotechnical engineer John Grieshaber, technical support chief for the corps' Hurricane Protection Office, who hadn't seen the reports, said they still must undergo internal review.

If officials conclude the threats to the walls require immediate response, repairs could be ordered immediately. Otherwise, they would be completed after the reports are finalized, and before the June 2011 deadline for completing the first phase of levee improvements, he said.

Evolving standards

The walls were strengthened after Hurricane Katrina but before the new engineering standards for walls were adopted. Both are now about 16 feet high, which is expected to be high enough to meet the requirements of the new 100-year protection system.

In the past, the walls were only required to meet standards for water rising in the canal to a pre-determined "project height," which was below the top of the wall. Now, the walls are required to withstand the pressure of water rising all the way to the wall's top, even when water shoves the wall a bit out of place, forming a crack between its hard surface and the earth into which it is built.

On each wall, one section was identified that does not meet the new engineering standards and may collapse under extreme circumstances during a so-called 100-year hurricane, or a storm with a 1-in-100 chance of occurring in any given year.

--For the Orleans Avenue Canal wall, the report cites an unacceptable reading based on soil-sample results taken close to the wall; additional sampling is likely to indicate the wall does meet the standards.

--At the London Avenue Canal wall, the report recommended that a stability berm -- a layer of clay that would add weight and mass to offset the water pressure -- be added on the protected side of the wall.

The reports also concluded that the "stick-up" of parts of the Orleans wall -- the area of the wall between its top and the earthen levee into which it was built -- was as much as a foot higher than the post-Katrina 4-foot limit for I-walls. Still, that's a foot lower than an earlier interim standard, the report noted, which might be acceptable.

But where masonry boxes containing utilities, such as electrical cables, were built a few feet from the walls, short sections of the walls were uncovered for 7 feet above the earthen embankment, which would be two feet higher than the new standard.

Overlapping demands

Studies of the I-wall segments are among dozens of investigations of features of the 350 miles of hurricane levees, either as part of continuing efforts to improve protection to pre-Katrina standards or as part of the redesign and rebuilding of the system to withstand the forces of 100-year hurricanes by 2011.

The mouths of the two canals are typical of the overlapping construction demands facing corps designers, said Grieshaber, the geotechnical engineer. The designers are scrambling to make sure that remaining immediate repairs meet the pre-Katrina design standards, while also redesigning them to meet the new 100-year standards that must be in place by June 2011.

Grieshaber said he expects these sections of I-wall and others in the system eventually will be replaced with stronger inverted T-walls as part of the 100-year improvements.

An I-wall has a concrete wall sitting atop sheet piling driven deep enough to block water from moving beneath it, while an inverted T-wall also includes a concrete platform at the base of the wall and a series of deeper, square pilings installed at angles to provide better stability.

The reports recommended replacing the concrete pad on the canal side of the Orleans wall with reinforced concrete that would be directly connected to the existing I-wall, making it into a single unit that would prevent the wall from leaning and creating a crack. It also recommended relocating the masonry boxes or building a different kind of wall at the box that would be more stable. The second alternative would cost less, it said.

The reports also recommended building a concrete cap on top of the outer layer of sheet piling on the Orleans canal and atop sheet piling that is uncapped along the London canal, which would reduce wear and make them more attractive.