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.

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.

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.

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.

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.

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.

As HUD Chief Quits, a Look at Close Ties

HILTON HEAD, S.C. — Most of the time, the prominent men hovered in different orbits and different cities. Yet for years now, their lives have converged here on this resort island of white beaches and rippling sea.

There was William Hairston, a local builder whose wife is active in Republican circles here. There was Michael R. Hollis, an Atlanta lawyer, entrepreneur and presidential history buff who vacations here.

And there was President Bush’s housing secretary, Alphonso R. Jackson, who golfed and socialized here and led the federal agency that gave hundreds of thousands of dollars in business to friends and acquaintances, including Mr. Hairston and Mr. Hollis.

One such friend, an Atlanta developer, received a $127 million contract last year as part of a joint venture to rebuild a New Orleans public housing project. That developer’s company has paid Mr. Jackson more than $250,000 in fees since Mr. Jackson joined the Bush administration in 2001, for work done before Mr. Jackson joined government, the developer’s lawyer said.

Mr. Jackson, who announced his resignation in March, leaves office on Friday as federal authorities continue to investigate whether he enriched himself and friends with lucrative contracts. The inquiry has also laid bare the connections between Mr. Jackson, who was determined to expand opportunities for minority contractors, and the ambitious men who benefited from those opportunities.

It is the story of a small circle of black businessmen linked by their financial interests in the revitalization of troubled public housing and, in most cases, a shared affinity for conservative politics, and how those connections may have helped force the housing secretary from public life.
In 2003, the year before Mr. Jackson was named secretary, 14 percent — or $134 million — of the Department of Housing and Urban Development’s contracts went to black-owned firms, officials say. By 2007, black-owned businesses were receiving 25 percent of the department’s contracts, or $195.6 million.

Mr. Jackson has proudly promoted such statistics, saying that “a good bottom line with small and minority businesses helps to build a stronger America.”

Indeed, some of Mr. Jackson’s supporters deride the scrutiny of his casual friendships as a racist effort to undermine a prominent black official and several respected black businessmen, noting that no one has been charged with a crime.

Representative James E. Clyburn of South Carolina, the No. 3 Democrat in the House, said he believed the investigation was fueled by officials determined to derail Mr. Jackson’s efforts to expand affirmative action.

“Is there something wrong with trying to make sure African-Americans participate in the contracting program with the American government?” asked Mr. Clyburn, who vacations here regularly and knows Mr. Jackson, Mr. Hairston and Mr. Hollis.

But over time, concerns have grown — first among some housing officials and later among federal investigators — as it became clear several men who interacted with and had business deals with Mr. Jackson became beneficiaries of his efforts to further integrate the contracting corps.

Mr. Hairston, who golfed with Mr. Jackson here, received at least $610,000 in contracts from the New Orleans housing authority, which HUD took over in 2002, for reconstruction work on public housing complexes that were battered by Hurricane Katrina, officials say. (Mr. Hairston did not shy from talking up his personal ties to Mr. Jackson, according to housing officials who worked with him. And Mr. Jackson rebuked department employees who challenged Mr. Hairston’s contracts and authority, the officials said.)

Mr. Hollis, an acquaintance of the housing secretary, owns a law firm that was paid at least $1 million by HUD for running the Virgin Islands housing authority, government contracting records show. (Maynard H. Jackson Jr., the former mayor of Atlanta who died in 2003, introduced Mr. Hollis to Alphonso Jackson more than a decade ago.)

The Atlanta developer, Noel Khalil, who occasionally dined with Mr. Jackson in Atlanta and in Washington, runs Columbia Residential, a development company that received the $127 million contract from the New Orleans housing authority last year as part of a joint venture hired to redevelop the St. Bernard housing project.

Mr. Khalil, who does not vacation on Hilton Head, hired Mr. Jackson as a partner in 1998 for development deals in Texas, before Mr. Jackson joined HUD as deputy secretary in 2001. (The two men met in 1994, also via an introduction from former Mayor Jackson, when Mr. Jackson was running the housing authority in Dallas.)

From 2001 to 2007, Columbia Residential paid Mr. Jackson over $250,000 in developer fees on three housing complexes for work that he completed before he entered government, said Mr. Khalil’s lawyer, Buddy Parker.

Mr. Jackson listed only one payment — of $35,000 — from Columbia Residential in the financial disclosure forms he filed for 2001 to 2006. Investigators have been looking into whether Mr. Jackson steered contracts to Mr. Khalil to ensure that Mr. Khalil could make those payments.
Mr. Jackson declined to comment on his ties to the three men, citing the ongoing investigation. Mr. Hairston did not respond to repeated requests for comment.

Pressuring subordinates to award contracts to specific firms could be a crime, according to government officials briefed on the inquiry. The officials said investigators were also trying to determine if Mr. Jackson received payments in exchange for any help he gave friends. But the officials, who spoke on condition of anonymity, said investigators had not found evidence of such an arrangement.

Mr. Hollis and Mr. Khalil denied that they asked for or were offered any special treatment because they were friendly with Mr. Jackson. They say they believe federal investigators know that their contracts were legitimate.

Mr. Parker said he had turned over documents and spoken with investigators. He said a Justice Department official told him that his client was considered a witness in the investigation.

“When you pay money that’s clearly traceable to a sitting secretary of the cabinet,” Mr. Parker said, “it’s not a shocking idea that you’re going to be investigated.”

“But the fact is that he has nothing to hide,” he said. “I feel comfortable in saying that they’ve checked our facts out.”

Mr. Hollis said federal investigators had not contacted him about his contracts to manage the Virgin Islands housing authority, which extended from February 2006 to May 2007. The authorities have subpoenaed records from Smith Real Estate Services, an Atlanta firm that retained him as a special adviser for a Virgin Islands contract with the department in 2004.
Pamela Smith, president of Smith Real Estate Services, declined to comment. Her lawyer, Ralph Caccia, said she cooperated fully with the authorities.

But Mr. Hollis said he had improved the troubled Virgin Islands housing authority, imposing financial accountability, rehabbing 300 public housing units, negotiating for efficient and cost-effective water service and removing hundreds of abandoned cars from the properties, among other steps.

Carmen Valenti, a HUD official who oversaw Mr. Hollis’s work, called him “dedicated, very conscientious and really hard-working.” Mr. Valenti said Mr. Hollis’s contract required several approvals and was extended several times by HUD officials.

“I’m very proud of what we did,” Mr. Hollis said. “We pulled together a team that improved the housing conditions for nearly 15 percent of the people who live in the Virgin Islands, as well as the working conditions of nearly 300 public housing employees.”

“When our engagement started, V.I.H.A. was a highly troubled agency,” he said, referring to the Virgin Islands agency. “When our engagement was over, V.I.H.A. was a much stronger agency and poised for economic recovery.”

Senior Democrats in Congress, who urged Mr. Jackson to resign, say the deals smell of cronyism. Mr. Parker said there was nothing nefarious in the fact that several of the businessmen were acquainted with each other.

“There are a substantial number of successful African-Americans who know each other through business and politics,” Mr. Parker said. “That’s how Noel Khalil knows Michael Hollis and Alphonso Jackson.”

Some African-Americans here bristle at the notion that Mr. Jackson’s casual friendships with the black professionals who flock to this resort town have become part of a federal investigation.

“You get an African-American in a position where he can help black folks, and people just don’t like it,” said Larry Holman, president of the Beaufort County Black Chamber of Commerce, who knows Mr. Jackson and Mr. Hairston.

“It’s unfortunate,” Mr. Holman said. “We have a lot of respect for Secretary Jackson here.”
Property records show that Mr. Jackson bought a house in an exclusive gated community here in 2004. Since then, local residents in this town of 33,000 people have watched his comings and goings with interest.

Mr. Jackson hobnobs with local businessmen, golfs, dines with friends and chats with neighbors who live alongside his vacation home, a cream-colored colonial with columns. He socialized with Mr. Hairston, who had been looking for work beyond South Carolina after his stucco business withered in the face of competition from Hispanic-owned companies here, according to people who know Mr. Hairston.

And he would occasionally bump into Mr. Hollis at parties or gatherings hosted by mutual friends.

Clifford Bush, a local lawyer, said Mr. Jackson made a point of mingling with black businessmen, even stopping by an event organized by the county’s black chamber of commerce.

As a prominent black conservative, Mr. Jackson certainly stood out. Mr. Hairston and Mr. Khalil also share an affinity for the Republican Party. Mr. Hairston’s wife, Starletta, is running for a seat in the South Carolina House, on the Republican ticket.

Mr. Hollis said he still admired Mr. Jackson, despite the housing secretary’s troubles, because he climbed out of poverty to become a lawyer and a member of President Bush’s cabinet. “He pulled himself up by his bootstraps,” he said.

Mr. Khalil said through his lawyer that he “regrets the circumstances that Alphonso Jackson finds himself in.”

As for Mr. Jackson, he is planning on “a few months of rest and relaxation” after stepping down from office, said a HUD spokesman, Stephen C. O’Halloran.

Mr. O’Halloran said Mr. Jackson planned to continue vacationing here in Hilton Head.

Lawsuits surprise some trailer users

42 are sued as parish launches 1st wave of cases

If Thursday was moving day, no one told Craig Furden.

He has been living in a FEMA travel trailer at 713 Causeway Blvd. in the Shrewsbury community since Hurricane Katrina. Despite monthly visits from a federal inspector, he said he had no idea his address appeared in one of 42 fresh lawsuits against owners of property that still harbor the mobile box dwellings.

"Mine's on the list?" Furden said. "They didn't tell me nothing."

Jefferson Parish filed the suits Thursday to start the final push to rid unincorporated areas of what some officials have dubbed persistent eyesores. Though all the properties identified in the initial round of suits are located in East Jefferson, code enforcement officers have targeted as many as 600 trailers parishwide, including 421 in West Jefferson. More suits are planned.

The parish has long banned trailers in many of its zoning districts. But after Katrina-related flooding damaged thousands of houses in August 2005, the Parish Council suspended the law.

In March 2007, the ban was reinstated, and Parish President Aaron Broussard's administration began pressuring residents to leave the trailers and move into houses. The deadline was March 1.

Though some trailers remain, authorities have excised almost 17,000 of them since the summer of 2006. Andrew Thomas, a spokesman for the Federal Emergency Management Agency, said it removes more than 50 trailers each week from Jefferson Parish and its six municipalities.

Eliminating the final trailers could prove a Byzantine process. Code enforcers must find them, some of which are hidden behind high backyard fences. Property owners must be located through title searches. FEMA administrators must be consulted. Then legal action can kick in.

Residents do have options, Deputy Chief Administrative Officer Bert Smith said. With the help of FEMA administrators, parish attorneys will weed out property owners who have applied for home repair money -- but are still waiting for it -- from FEMA or the National Flood Insurance Program, he said. For instance, Assistant Parish Attorney Matthew Friedman cut eight potential lawsuits from Thursday's batch after conferring with federal authorities, Smith said.

Trailer residents with questions are encouraged to contact FEMA or the U.S. Department of Housing and Urban Development.

Smith warned that once a lawsuit is filed, court costs will begin to accrue. It will be a judge's decision whether to charge a defendant with the fees.

The suit filings could become a weekly habit for Friedman, Smith said. "How many he'll file next, and when that will be, depends on how complicated the lawsuits will be."

Complicated could define Furden's situation
His trailer has a cozy look that transcends a temporary shelter. Potted flowers in full bloom hang in baskets from an attached awning. A glass terrarium is on display by the front stairs. Padded chairs invite visitors to sit a while.

When Katrina evicted Furden and his then-wife from a house they rented in Metairie, they moved into the trailer on Causeway. Their landlords, David and Angela Celentano, rented Furden the lot, which houses a large warehouse that once doubled as a flea market.

Furden and his wife divorced a year ago, and he kept the trailer. As a renter, however, he was unsure what effect the new lawsuit would have on him.

"They really shouldn't be bothering me," he said.

A call to a New Orleans address listed for the Celentanos went unanswered Thursday.

Louis Kabel's family also could find themselves immersed in a head-scratcher of a situation. His brother-in-law, John Sternberger, owns the property at 3801 Bauvais St. in Metairie, the target of another parish trailer suit. The Kabels live in the house.

A FEMA inspector examined the abandoned trailer in the front yard Monday, Kabel said, but no one has come to cart it away. Nonetheless, Kabel said he understood the Broussard administration's abhorrence toward the trailers.

"It's been plenty of time," Kabel said. "People should be settled in now."

FEMA to close Renaissance Village trailer site May 31

BAKER -- Margaret Chopin is quick to share her photograph of an East Baton Rouge Parish garden home, highlighting its well-kept lawn, ample garage and generous space for her husband, son and granddaughter.


But the New Orleans native and former Gentilly resident won't call it home any time soon.

Because a possible lease on the property fell through, Chopin shows it off only to illustrate the frustration and longing that come with living in a Federal Emergency Management Agency trailer in Renaissance Village, which opened in October 2005 in the wake of Hurricanes Katrina and Rita.

For Chopin and her neighbors, most of them from the New Orleans area and most having lived in Renaissance Village since it opened, the angst magnifies daily with the approach of FEMA's May 31 deadline to close all its remaining group trailer sites.

At one time the largest concentration of the travel trailers along the Gulf Coast, Renaissance's fences now envelop fewer than 190 trailers. This is down from the 580 that once filled the expansive gravel lot, which is just a short drive from the Louisiana Capitol. Residents have no monthly rent but do pay for propane.

Those who are left essentially have two choices: Find permanent housing or move to a hotel for 30 days on the federal government's dime while continuing their hunt.

Most would qualify for subsidized rent under a program financed by FEMA and run by the U.S. Department of Housing and Urban Development. Residents would have to contribute $50 rent the first month, with their share increasing by $50 each month thereafter. The subsidy would end when the beneficiary covers the full rent amount or in March 2009, whichever comes first.

"I think some people think FEMA is going to come down out of the sky and give a lump sum to the people still here," said resident Bonnie Vernon, originally from Metairie, as she folded clothing in the communal laundry facility before hauling it back to her trailer in a red wagon with only three wheels. "I don't see how anybody who's lived through the last two years could believe that."

Manuel Broussard, spokesman for FEMA's Gulf Coast Recovery Office, described the situation as an opportunity for flood victims to couple self-reliance with the aid of FEMA case workers and the financial boost from the HUD-FEMA Disaster Housing Assistance Program to resume their lives.

'There's no way'

Statewide, group sites account for about 900 of the 20,146 FEMA trailers that were occupied as of April 4. More than 80 percent of those still in group sites were renters before the storms.

All residents are assigned a FEMA case worker to provide rental listings and put them in touch with potential landlords, but residents must secure the leases.

Broussard expressed concerns about meeting the closure deadline for parks in places such as Plaquemines Parish and southwest Louisiana, where he said trailer occupants outnumber viable rental units. But, he said, "we believe we're going to be in pretty good shape" getting the last 185-plus households out of Renaissance.

A more pessimistic view pervades among Renaissance residents, employees and Catholic Charities case managers who work in the park alongside FEMA's case workers. Citing a web of aggravating factors, they said the transition from a trailer is easier to talk about than to accomplish.

Wilbert Ross, displaced from the Lower 9th Ward, said "there's no way" FEMA will meet its deadline at Renaissance. Ross already has left the park once, but could not keep up with his rent.

Sam Sammartino, disaster response director for the Diocese of Baton Rouge, noted that FEMA has failed to meet previous deadlines for other Baton Rouge-area parks -- Mount Olive, Granberry, Sugar Hill -- typically by several months. He said Catholic Charities even attempts to slow down some residents who might be signing a lease they won't be able to afford once the subsidy runs out.

"It's easy to sit there and say, 'These people ought to get a job, get it together and move out,'" said Sammartino, who supervises more than a dozen recovery case workers for more than 900 client households in 12 parishes. "We would want everyone to consider that each case is complex, each case different."

The peak population for Renaissance was estimated in excess of 1,600 -- with more than 3,000 people residing there at some point since its opening. Sammartino said the current number of residents likely is at least double the 188 trailers. Most of the remaining households have children or senior citizens, or both.

Broussard said FEMA does not keep statistics on whether evacuees return to their original home parishes or neighborhoods. He said a majority have settled around Baton Rouge. New Orleanians who want to return mostly can do so, he said, provided they do not insist on returning to their previous neighborhood.

High local rents

The chief complaint about housing for those still looking is the rising rents of post-storm East Baton Rouge Parish, which was growing before the 2005 hurricanes and has absorbed a net gain of at least 25,000 people since.

Chopin, who works three part-time jobs inside the park, said her search for a home in East Baton Rouge Parish had been mostly discouraging. "If you can afford it, you don't want to live there," she said.

The disaster housing assistance will pay as much as 125 percent of the average fair market value for a residence in a given parish. Carol Spruell, spokeswoman for Catholic Charities, estimated that in East Baton Rouge, this is $800 to $900 for a two-bedroom apartment, more for a house. Both figures are considerably higher in Orleans Parish, she said.

Spruell said her organization estimates it would take at least a $17-an-hour, full-time job to make that rent in Baton Rouge with two dependents.

Transportation troubles

Residents say the lack of transportation also hampers their housing search.

Chopin said she and her husband have one car, but he uses it to get to his job on the support staff at a local school. That makes it difficult, she said, to balance her typical 11- to 12-hour work days with trips to find housing. "A case worker might take you or might not," she said.

A bus route, paid for by FEMA, runs about every hour from the park to the local Wal-Mart, Baker Library and central public bus terminal in Baton Rouge. But the last bus typically returns to the park at 9 to 10 p.m., residents said, limiting late-shift employment options.

For Renaissance residents who can find a place, additional barriers come in the form of utility and lease deposits, transporting trailer belongings to an apartment and buying appliances that none of them has now.

FEMA pays some deposits, and Catholic Charities fills some additional needs not covered by FEMA. But help with furniture and appliances falls entirely on private organizations.

One of the most frustrating gaps in service, Sammartino said, is transportation for moving. FEMA has a relocation assistance program, but the Renaissance residents who hail from the New Orleans area but settle around Baton Rouge do not qualify because they are not returning close enough to home.

"I've asked FEMA just to send trucks up here," he said. "I've gotten no response."

Mood of 'despair'

In some respects, FEMA officials said, Renaissance Village represents success stories. Empty trailer spots, marked by water pipes and other infrastructure rising from the gravel, dwarf the number of temporary residences still set up.

In the rear of the park are a playground and classroom buildings housing early childhood learning centers. The project was financed by actress-comic Rosie O'Donnell's foundation. Arcenia Crayton, a resident of the park from its opening until October 2007, staffs another building that serves as a community center in the morning before shifting to an after-school program.

But Chopin said the overriding mood still is "depression, ... despair." Sammartino said he daily fights "fear of the unknown" and "paralysis even among people who know what they need to do." And "FEMA" remains a four-letter word in most conversations.

Sammartino and others, meanwhile, said they worry FEMA will begin urging residents into hotels come June.

"Their job is not necessarily to get people into the right situation," said Crayton, who before the storm lived in Marrero with her husband and three sons. "Their job," she said, "is to get people out of that trailer."

Road Home appeals proving productive

More than half of all Road Home applicants who file formal appeals succeed in persuading the state homeowner aid program to give them more money, according to new statistics.

The Road Home had reviewed a total of 8,770 written appeals from homeowners by March 27, reaching final decisions on 4,834 of them, the program's latest weekly report said.

After reviewing the applicants' contentions, the program agreed its calculations or eligibility determinations were wrong 58 percent of the time: 43 percent deserved more money, 8 percent should have been ruled eligible for awards that they were denied and 7 percent got too much money, the report said.

The Road Home ruled its award was correct 41 percent of the time.

The statistics about appeals were released as the Road Home began an effort to collect overpayments from some applicants, the number of which could range from 1,000 to 5,000, officials have said. The Road Home appeals staff already decided, as of March 27, that 362 of the applicants who appealed formally should have their grants reduced by an average of $14,986. Overpayments to the appealing applicants totaled $5.4 million.

But far more often, the Road Home determined the homeowner did in fact deserve a higher grant. The program reports that as of March 27, it was on the hook to pay a total of $51.4 million in additional disbursements to 2,078 applicants, an average of $23,726.

As of that date, 645 of the homeowners already had received additional disbursements totaling $20.3 million.

The state has set aside $218.4 million in its Road Home budget to handle additional payments to all appealing homeowners.

About 2,000 applicants were still waiting for decisions on their appeals for larger grants, and another 2,000 dispute the Road Home's ruling that they are ineligible, the report said. It also said that 486 applicants who didn't like the Road Home's ruling on their appeal have lodged an appeal with the state Office of Community Development, which oversees the program.

The appeal numbers do not include thousands of applicant complaints that went into the Road Home's dispute resolution process. Paul Rainwater, executive director of the Louisiana Recovery Authority, recently used his newly expanded authority over Road Home to eliminate dispute resolution from the program, mandating instead that all substantive issues go through formal appeals.

A pair of Road Home applicants filed a class-action lawsuit in federal court last week contending that the Office of Community Development violates their constitutional due-process rights when it declares in closing papers that its grant determinations are "final" and "non-appealable."

Some appealing applicants are represented by pro bono attorneys who say the Road Home doesn't comply with its own deadlines for deciding appeals cases. Also, applicants say they can't contact the Road Home appeals team once they file their formal complaint. Rainwater has said that will change, too, so appealing homeowners can answer the appeals team's queries or provide more supporting documentation when needed.

Rainwater's spokeswoman, Christina Stephens, said he has rejected three drafts of changes to the appeals process.

"He's looking for anything to increase responsiveness and cut the wait time," Stephens said.

Road Home subcontractors make hundreds of millions

While ICF International's expanding Road Home contract has led to high-profile inquiries and lots of hand-wringing, there are also three dozen subcontractors that have made hundreds of millions of dollars off the program.


Sixty-two percent of the $592.7 million the state paid ICF as of March 10 was spread among 38 other companies or nonprofits, 22 of them identified as having a base of operations in Louisiana. They do most of the legwork in the state's $10.3 billion Road Home effort and, according to ICF's latest projections, could end up collecting $569 million. That equates to 6 percent of the money Congress sent to Louisiana for homeowner relief.

"We haven't been looking at payments to and performance of the subcontractors," said David Greer, director of performance auditing under Legislative Auditor Steve Theriot. "Now, we'll be looking globally at the Road Home contract to see how services are delivered, and that will get us, partially at least, to the subs issue."

The state Office of Community Development provides monthly updates of subcontractor pay to the Joint Legislative Budget Committee, but the documents were released to The Times-Picayune for the first time last week.

They show that, as of March 10, three of the 33 for-profit subcontractors had made 56 percent of the money, while two of five nonprofits or educational institutions had yet to see a dime for services they provided homeowners.

Shaw top moneymaker

The recipient of the most money is the Shaw Group, whose founder and chairman Jim Bernhard once led the state Democratic Party and who was a leading contributor to former Gov. Kathleen Blanco, architect of the Road Home program. Shaw has collected $84.9 million of a contract projected in February to total $127.6 million, by far the largest of the bunch.

The Baton Rouge company is in charge of equipment and facilities, supporting the Road Home headquarters and 12 housing assistance centers, including one in Texas. The company also runs a call center in Baton Rouge that Shaw bought out when another subcontractor, West Telecommunications, threatened to move it out of state.

Sean Clancy, a spokesman for Shaw, declined to comment about Bernhard's ties to Blanco. He said Shaw is in the third and final phase of its work, has been paid on time and is in the process of closing facilities and scaling back its Road Home work force of 200.

"Shaw is proud of the work it did in the program and believes it helped a considerable number of Louisiana residents through its efforts," Clancy said.

The second-highest paid firm is First American, a financial services company based in Powtay, Calif., that has a Louisiana subsidiary title company. ICF hired it to do $109.3 million worth of title searches, Road Home closings and appraisals, according to a February projection of the contract's value. It has been paid $62.3 million so far but has seen its pay slow during the past year as it has been replaced as the appraisal coordination firm and its allocation of title work has declined.

First American has been largely supplanted by HGI Catastrophe Services, a tiny LaPlace company ICF originally hired for a minor contract but turned into the third-highest earner with no-bid change orders. HGI, a subsidiary of Hammerman & Gainer, was brought on to do about $8 million worth of home damage inspections but has already been paid seven times that much because lucrative appraisal and title work was tacked on to its existing contract last spring. The assignment of additional work came even though the firm has just three years of experience in title work and struggled to pay appraisers in a timely manner.

Hammerman & Gainer's owner, Larry Oney, also contributed to Blanco. A spokesman for Oney declined to comment this week, referring all questions to ICF spokeswoman Gentry Brann.

Subcontractors get bulk

Brann has said decisions about how to distribute closing work between First American, a giant of the industry, and HGI, a relatively unknown firm, change based on the flow of files. A third title company, Bayou Title of Gretna, also was added to the mix, getting a contract estimated in February to be worth $1 million but collecting nearly three times that by March 10.

First American, which early on promoted its ability to handle hundreds of files a day but later had to lay off employees because of a downturn in workload, declined to comment, citing a section of its contract forbidding it to do so.

ICF chose which subcontractors to hire, generally using open bidding processes, although at times -- as with HGI -- the state ordered ICF to sign emergency, no-bid contracts to increase program capacity. Some subcontractors, including Shaw and First American, were part of ICF's original bid package to the state when it sought the full Road Home contract.

Brann said that when ICF's Road Home contract ends in June 2009, the company expects to pay subcontractors about two-thirds of the money ICF gets from the state. The other third of Road Home revenue should stay with ICF, although Brann has said the company expects only 3 to 5 percent will be profit. The rest must pay for ICF's 850 employees, computer systems, office equipment, utilities and insurance, Brann said.

The company's most recent projection that the subcontracts will be worth $569 million indicates that ICF would max out its own $912 million contract.

ICF has said the $912 million is a cap and that it may not have to bill for that much, and Brann said Friday that some subcontractors are not expected to bill for as much as the original projections. State auditors and legislators say they are scouring the contract for ways to reduce costs.

K.C. King, a Road Home applicant who sits on the Louisiana Recovery Authority's housing task force and has 16 years' experience designing computer systems for Boeing, has often criticized ICF for not following best practices, particularly with disclosure to stakeholders. He said the subcontractor pay reports are a step in the right direction, but still do not tell the whole story.

"This ability to outsource tasks reflects well