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36–609 PDF 2008

S. Hrg. 110–249

THE ROAD HOME? AN EXAMINATION OF THE

GOALS, COSTS, MANAGEMENT, AND

IMPEDIMENTS FACING LOUISIANA’S

ROAD HOME PROGRAM

HEARING

BEFORE THE

AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MAY 24, 2007

Available via http://www.access.gpo.gov/congress/senate

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

BARACK OBAMA, Illinois 

CLAIRE McCASKILL, Missouri 

JON TESTER, Montana 

SUSAN M. COLLINS, Maine 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

PETE V. DOMENICI, New Mexico 

JOHN WARNER, Virginia 

JOHN E. SUNUNU, New Hampshire

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

AD HOC SUBCOMMITTEE ON DISASTER RECOVERY 

MARY L. LANDRIEU, Louisiana, Chairman 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

TED STEVENS, Alaska 

PETE V. DOMENICI, New Mexico

DONNY WILLIAMS, Staff Director 

APRILLE RAABE, Minority Staff Director 

AMANDA FOX, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Landrieu .............................................................................................. 1

Senator Coburn ................................................................................................. 14

Senator Stevens ................................................................................................ 16

Senator Pryor .................................................................................................... 20

WITNESSES 

THURSDAY, MAY 24, 2007

Donald E. Powell, Federal Coordinator for Gulf Coast Rebuilding, U.S. Department of Homeland Security .......................................................................... 5

Andrew D. Kopplin, Executive Director, Louisiana Recovery Authority ............ 8

Walter Thomas, Resident, Lower 9th Ward, New Orleans, Louisiana ............... 22

Connie Uddo, Director, St. Paul’s Homecoming Center/Beacon of Hope Resource Center, New Orleans, Louisiana ............................................................. 23

Debbie Gordon, President, Chimney Wood Homeowners’ Association, New 

Orleans, Louisiana ............................................................................................... 25

Frank A. Silvestri, Co-Chairman, Citizens’ Road Home Action Team (CHAT), 

New Orleans, Louisiana ...................................................................................... 26

Frank A. Trapani, President, New Orleans Metropolitan Association of Realtors, New Orleans, Louisiana .............................................................................. 27

Nelson R. Brego ́n, Assistant Deputy Secretary for Disaster Policy and Response, U.S. Department of Housing and Urban Development ....................... 33

David I. Maurstad, Assistant Administrator, Mitigation Directorate, Federal 

Emergency Management Agency, U.S. Department of Homeland Security ... 34

Susan Elkins, Executive Director, Office of Community Development, State 

of Louisiana .......................................................................................................... 35

Isabel Reiff, Senior Vice President, ICF International, Inc., and Chief Program Executive, Louisiana Road Home Program .............................................. 37

ALPHABETICAL LIST OF WITNESSES

Brego ́n, Nelson R.: 

Testimony .......................................................................................................... 33

Prepared statement .......................................................................................... 113

Elkins, Susan: 

Testimony .......................................................................................................... 35

Prepared statement with an attachment ....................................................... 123

Gordon, Debbie: 

Testimony .......................................................................................................... 25

Prepared statement .......................................................................................... 93

Kopplin, Andrew D.: 

Testimony .......................................................................................................... 8

Prepared statement with attachments ........................................................... 54

Maurstad, David I.: 

Testimony .......................................................................................................... 34

Prepared statement .......................................................................................... 116

Powell, Donald E.: 

Testimony .......................................................................................................... 5

Prepared statement with an attachment ....................................................... 45

Reiff, Isabel: 

Testimony .......................................................................................................... 37

Prepared statement with attachments ........................................................... 135

Silvestri, Frank A.: 

Testimony .......................................................................................................... 26

Prepared statement with an attachment ....................................................... 96

Page

IV

Thomas, Walter: 

Testimony .......................................................................................................... 22

Prepared statement .......................................................................................... 86

Trapani, Frank A.: 

Testimony .......................................................................................................... 27

Prepared statement .......................................................................................... 111

Uddo, Connie: 

Testimony .......................................................................................................... 23

Prepared statement .......................................................................................... 88

APPENDIX 

‘‘Current Housing Unit Damage Estimates, Hurricanes Katrina, Rita, and 

Wilma,’’ February 12, 2006, submitted for the Record from Mr. Powell ......... 151

Dr. Dominique Duval-Diop, Senior Associate, PolicyLink, prepared statement 196

Peg Case, Director, TRAC, letter dated June 8, 2007 .......................................... 201

Questions and responses for the Record from: 

Mr. Powell ......................................................................................................... 204

Mr. Brego ́n ........................................................................................................ 219

Letters dated December 13, 2006 and February 6, 2007, submitted for the 

Record by Mr. Maurstad ...................................................................................... 227

(1)

THE ROAD HOME? AN EXAMINATION OF THE 

GOALS, COSTS, MANAGEMENT, AND IMPEDIMENTS FACING LOUISIANA’S ROAD HOME 

PROGRAM 

THURSDAY, MAY 24, 2007

U.S. SENATE, AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 3 p.m., in Room 

SD–342, Dirksen Senate Office Building, Hon. Mary Landrieu, 

Chairman of the Subcommittee, presiding. 

Present: Senators Landrieu, Pryor, and Stevens. 

Also Present: Senator Coburn. 

OPENING STATEMENT OF CHAIRMAN LANDRIEU 

Chairman LANDRIEU. The hearing of the Subcommittee on Disaster Recovery will now begin. The Subcommittee will come to 

order. 

Let me welcome all of you here this afternoon. There has been 

a great deal of interest in this particular hearing, and I am going 

to begin with my opening statement. It will be a little bit longer 

than usual, but I think the circumstances warrant it. Senator Stevens, my Ranking Member, will be joining me shortly, and Members will be coming in and out throughout the afternoon as we are 

on the floor voting throughout the afternoon. We will take those 

votes as they come. 

Let me begin by saying that this hearing is not an investigation. 

It is an oversight hearing about the Road Home Program. We say 

a lot of things about our homes. We say, ‘‘Home is where the heart 

is.’’ We say, ‘‘You can travel the world to search for what you need, 

but when you return home, you will find it.’’ We say, ‘‘There is no 

place like home.’’

The Road Home Program was designed to help the people of 

South Louisiana build and return to their homes, to rebuild their 

neighborhoods and re-establish a sense of community. Unfortunately, to date, this program has not lived up to its billing. 

Louisianans have moved beyond frustration to cynicism and hopelessness. Headlines appear in the press on a daily basis with tag 

lines like ‘‘Road to Nowhere,’’ ‘‘Potholes in the Road Home,’’ ‘‘Road 

Blocks to the Road Home.’’

2

One might disagree with how the program was developed, designed, and funded, but it is all we have to work with at this point, 

and I intend to see that it begins to work better. We need to look 

into the funding levels to see if they are sufficient and, if not, find 

a way to make it sufficient. 

No single hearing, of course, will remedy this problem. However, 

I do intend to get the answers we need to make much needed improvements. I intend to get answers from the people responsible for 

the program. On the first panel we will have Don Powell representing the Federal Government, primarily responsible for the 

design and development of the Gulf Coast Recovery Plan; and Andy 

Kopplin, who is representing the State. And I will introduce them 

in just a moment. 

But here are some questions that I hope our panels today will 

be responding to: Why is it that almost 21 months after the storm 

and the massive flood, only a little over 13,000 checks have been 

cut? At this rate, which I will generously call a thousand closings 

a month, it will take us another 10 years to get this money to people. Is it the State? Was it the design? Was it the lateness of the 

funding? 

What was the Federal role in determining the level of funding for 

Louisiana’s program? What was the State’s role in determining the 

level of funding for Louisiana’s program? What is the cause of the 

projected program shortfall? What are the most pressing concerns 

facing program participants? Have contractors, like ICF, contributed to the program’s delays? Have they put in procedures to eliminate some of those delays? What steps should be taken, either by 

Louisiana or the Federal Government, to fix the funding shortfall 

if we determine there is one? How has the agreement to use hazard 

mitigation funding affected the process of Road Home grants? How 

can the State and Federal Government collaborate to resolve the 

dispute over the hazard mitigation funding, which is a substantial 

portion—I think $1.2 billion—in question? 

What role, if any, are the local governments playing in the management of the hazard mitigation funds which are traditionally 

used to help mitigate against future disaster and help with local 

funding infrastructure? What is the projected timeline for all Road 

Home grants to be disbursed? How is the duplication of benefits 

preventing people from getting their full promises of funding to get 

their homes and lives underway? 

As this Subcommittee probes for answers to these questions, we 

also need to establish a bit of context, which I hope we can do 

today. The Road Home Program was developed by Governor Blanco’s Administration. The chief architect of the program was Executive Director Andy Kopplin, who is with us here today. It was developed through the LRA. It initially asked for $14.9 billion, according to some records I have seen. However, the Administration 

said this was too costly. In reaction, the Administration reduced 

the amount of the program. 

Congress appropriated $10.4 billion in community development 

block grants to the State through the third and fourth Hurricane 

Katrina supplemental. Then in December 2005, the State received 

the first $6.2 billion, and in June, Louisiana received an additional 

$4.2 billion. 

3

The reason for this funding source, Congress thought this funding source was the most flexible and it would be the most effective 

tool for both Louisiana and Mississippi to engineer its own recovery. That flexibility is in question today. The CDBG funds are administered by the Department of Housing and Urban Development. 

My office has heard time and time again that the use of these 

funds has been anything but flexible. Conversations about the plan 

occur on a daily basis, and change upon change has been required. 

We have the Assistant Secretary of HUD, Nelson Brego ́n with us 

today, along with Susan Elkins, who is responsible for administering these dollars at the State level. They are what I call the 

‘‘fixit people.’’ If it can be fixed, it is going to be HUD, FEMA, and 

the CDBG administration at the Federal level that can fix it, and 

then Congress or the State can fund it if it is short. 

The LRA decided to use $8.8 billion of CDBG money for the Road 

Home Program. The remaining was spent on economic development, infrastructure, and hazard mitigation. The State also hoped 

to use $1.2 billion from FEMA’s Hazard Mitigation Grant Program 

as part of the budget for the Road Home Program, and I continue 

to run into all sorts of explanations as to who mandated that and 

why, and we hope to get to the bottom of it. 

One of the most immediate problems that the program faces 

today is a projected shortfall in funds. This challenge to the future 

of Road Home was first aired publicly recently. The Louisiana congressional delegation has fought very hard to get full funding, but 

I have suspected for a long time that our community development 

awards were not given out in proportion to the damage that Louisiana sustained. We will get some facts in the record on that. 

If this was a program that was receiving high marks from the 

people it serves, maybe these kinds of errors in assumptions could 

be forgiven. But this program is in many measures not living up 

to the promises that were made. I hear stories of unreturned phone 

calls, a labyrinth of bureaucracies that make filing appeals and getting simple explanations an arduous process, and we will hear from 

our citizens today. 

While I understand that the original dollar figures for Road 

Home may have been based on uncertain estimates, the State has 

a number of questions to answer. Why was the program designed 

this way? I hope some of those designs can be justified. Individuals 

who opt to leave Louisiana are penalized. Although there have 

been some changes made for the elderly, there are many citizens 

in the bracket of disabled citizens that are complaining that they 

are not exempt from this penalty and feel like that is unfair. We 

hope to get some answers to that. 

There are enough challenges within Road Home to hold a hearing on this every week. I am obviously not going to be able to do 

that. But I do hope that the panel will present their remarks today, 

beginning with the two people primarily responsible for the design 

and funding levels. Of course, that is not to take away the responsibility of Congress for funding the overall program. But we relied 

in large measure on information given by the Coordinator’s office 

and by your office, Mr. Kopplin, as to how to appropriate at what 

level of funding to help the design of the program. 

4

There has been a slight change to the original outline of today’s 

hearing, and I wanted to say that I took the liberty of Chairman 

earlier this morning to make this change, because one of the things 

that I am hoping to get through today is discussing that moves us 

away from talking points and closer to getting to the bottom of the 

numbers, figures, amounts, and details in question. And so I asked 

Mr. Kopplin and he was willing to join Mr. Powell on the first 

panel to hear about the design. Then we will have our homeowners, 

which I thought was appropriate, to tell about their personal experiences. The last panel, which, unfortunately, Mr. Powell is not 

going to be able to stay for—and I understood that initially because 

he is traveling later today—will be from HUD and FEMA and the 

community development program at the State level as to how it 

could potentially be fixed. Now, perhaps it is working as the designers intended. But I would like to believe that we could get help 

to people sooner. I would like to believe that the program will be 

fully funded and promises fully met. And that is what the hearing 

is about today. 

So, Mr. Powell, if you do not mind, we will start with you. As 

I said, Senator Stevens will be joining us in just a moment. Let me 

briefly introduce our first two panelists. We have received their testimony in good order, and I appreciate it because, unfortunately, 

we did not receive the FEMA testimony until 2 hours ago. There 

is a requirement that testimony be turned in to this Subcommittee 

24 hours in advance, and I want it noted we did not receive the 

testimony from FEMA until about 2 hours ago. 

We did receive both of your testimonies on time. They have been 

thoroughly read and reviewed, and I would like to introduce Mr. 

Powell at this time for his opening remarks. He was named Federal Coordinator for Gulf Coast Rebuilding on November 1, 2005, 

by President Bush. He has been tasked with the job of developing 

of a long-term plan for the region in the aftermath, with development a long-term rebuilding plan for the regions affected by Hurricanes Katrina, Rita, and Wilma. He also works to coordinate the 

Federal efforts and help State and local officials reach consensus 

on their vision for the region. Prior to serving as the Coordinator, 

Mr. Powell served as the 18th Chairman of the Federal Deposit Insurance Corporation, a position he held since August 2001. 

The next witness will be Andy Kopplin, Executive Director, Louisiana Recovery Authority (LRA), an agency which was developed 

a few weeks after Hurricanes Katrina and Rita struck Louisiana, 

Texas, and Mississippi coasts and the massive flood that ensued by 

a collapse of the Federal levee system, which flooded a great deal 

of southeast Louisiana. To act as the leadership on the massive recovery effort has basically been his position. He is represented by 

the State entity, which is the LRA, which was designed to basically 

represent the State in this recovery. Prior to that, he served as 

Chief of Staff to Governor Blanco and before that to Governor Foster. 

So, with that, Mr. Powell, if you will begin, I think we are going 

to provide 5 minutes for opening statements, and then we will have 

a series of questions, and the same to you, Mr. Kopplin. 

5

1The prepared statement of Mr. Powell appears in the Appendix on page 45. 

TESTIMONY OF DONALD E. POWELL,1 FEDERAL COORDINATOR FOR GULF COAST REBUILDING, U.S. DEPARTMENT 

OF HOMELAND SECURITY 

Mr. POWELL. Thank you, Senator. Good afternoon, Subcommittee 

Chairman Landrieu, Ranking Member Stevens, and distinguished 

Members of the Senate Homeland Security and Governmental Affairs Subcommittee on Disaster Recovery. My name is Don Powell, 

and I am pleased to appear here before you today as the Federal 

Coordinator of the Gulf Coast Recovery. I am here today to discuss 

the Blanco Road Home Program, specifically its current financial 

status. 

By way of history, just after I took the post as Federal Coordinator, my staff and representatives from the State of Louisiana 

began exhaustive talks to determine possible additional need beyond the $6.2 billion allocated to Louisiana—the maximum amount 

as allowed by statute in December 2005. My charge was clear: 

Gather the best available data, put all the information on the table 

for review. After many weeks of discussion and by using scientific 

methods like National Oceanic and Atmospheric Administration estimates on flood depth levels, FEMA and U.S. Geological Survey on 

areas of maximum flood and storm surge inundation, FEMA remote sensing data, SBA loss verification information, FEMA inspections, and HUD data, all parties involved in the discussions—

Federal, State, and the State’s own independent demographer—

reached a consensus on the total number of houses destroyed by 

flood damage and an approximate cost per household. 

I would like to emphasize that at no point did I receive guidance 

from the White House, Congress, or other Federal agencies or impart to my staff that we had a ‘‘go’’ amount of funding that we 

should find a way to reach. This truly was a good-faith and fully 

open negotiation with the State, the LRA, and their consultant, 

McKinsey and Company, to meet the needs of the people of Louisiana. 

After intense but open negotiation with all the State representatives, we all agreed that $4.2 billion would be the appropriate 

amount of additional funding to meet the outstanding needs, and 

soon thereafter the President requested $4.2 billion in February 

2006 as part of the fourth supplemental. In fact, at the time of the 

President’s announcement to seek the additional $4.2 billion, Governor Blanco stated, ‘‘Now, I want to say that these numbers didn’t 

just come from the sky. They were carefully crafted legitimate 

numbers, analysis after analysis, evidence after evidence. We took 

it seriously. We didn’t just make up a number. We know that that 

doesn’t fly here in Washington.’’

‘‘Today I know that he’’—the President—‘‘is fully committed to 

helping our people. And so on behalf of the people of Louisiana, I 

have to say a very special thank you.’’

Further questions have been raised as to whether or not the 

State understood or agreed to focus on flood damage. I would like 

to address those questions. 

The focus of the Administration after the 2005 hurricane season 

was and remains flood-damaged homes from either levee failures, 

6

like in New Orleans, or storm surge, as experienced by some in 

southwest Louisiana and Mississippi. We were always very clear 

that the Federal Government would not fund State housing programs to cover wind damage. To that end, if a State’s program 

were to include wind, there would not be Federal funding for that 

purpose. 

In February 2006, we mutually agreed with the State to fund 

106,000 homes that experienced major and severe flood damage at 

an average grant of $72,000, thereby creating a $7.6 billion program. This funding outline was a result of intensive due diligence 

in Baton Rouge for which I deployed staff to work with all the 

State and Federal partners to reach consensus. The flood-damaged 

housing program was a key component of the President’s $4.2 billion supplemental request as described in his submission to the 

Congress and which other White House communications documented as directed specifically to New Orleans because of its 

unique needs related to flood mitigation. 

Shortly thereafter, in March 2006, the LRA itself published their 

own defense of the supplemental request entitled ‘‘Louisiana’s Case 

for an Additional $4.2 Billion in CDBG,’’ which demonstrated a 

program that only compensated for flood damage. Their breakout 

outlines 102,000 flood-damaged homes at $69,000 per house to establish a $7.1 billion program with an extra $400 million left over 

for the State to use for administrative costs. All told, a $7.5 billion 

program. 

This program, which prioritized the most flooded, devastated 

areas, was our consensus, and the way it was described to you, the 

Members of Congress, who approved this funding. The Federal 

Government did not fund State programs to cover all wind damage 

in Texas, Mississippi, Alabama, or Florida, despite numerous requests by many of these States to do so after the 2005 hurricane 

season. In fact, if Texas were to run the same program as Louisiana based upon the same data that the current Louisiana estimates are based, the Federal Government would need to increase 

its allocation to that State by almost 14 times, or another $645 million to Texas alone. 

The truly unique nature of the storms of 2005 and the driver of 

the Federal Government to get involved was the flood damage 

caused by the storm surge and levee breaches. This is damage for 

which there is no private insurance market, damage that in many 

cases was experienced by those who lived outside of the federally 

identified floodplains and/or those who lived inside Federal levees. 

Therefore, despite the original intent and purpose of the CDBG 

funding, the State utilized the autonomy available to them to push 

through their own program design to compensate damaged homes, 

whether by wind or flood, unlike any other Gulf Coast State. 

In the LRA final Road Home plan sent to HUD for its review in 

August 2006, the State had unilaterally, independently, and fundamentally made changes. They projected 114,532 homes destroyed 

by either wind or flood. In a nutshell, the action plan ultimately 

submitted to HUD by the LRA Road Home Program outlined a 

budget that significantly reduced the average payout per home 

from $72,000 to $60,000 while significantly increasing the number 

of eligible applicants from 106,500 to almost 115,000. This was posVerDate 0ct 09 2002 10:48 Jan 22, 2008 Jkt 036609 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 P:\DOCS\36609.TXT SAFFAIRS PsN: PAT
7

sible because, despite Administration attempts to allow the HUD 

Secretary the authority to deny or approve any action plan submitted by the State, Congress instead gave the Secretary only the 

authority to review the plan for CDBG program compliance, not 

opine on the plan being right or wrong. 

Unfortunately, these estimates have proven inaccurate. After 

media reports provided my first indication that the Road Home 

Program was running out of funds, I asked Governor Blanco to 

send me all relevant Road Home data after a meeting on May 9, 

2007. We have worked with HUD to evaluate this data and better 

understand the causes of the perceived shortfall. 

I am here today to tell you our findings. We have verified the 

State’s midpoint estimates that indicate there may be 132,000 eligible applicants and the average grant is approximately $74,000. 

This has caused the program’s potential overall costs to rise to 

nearly $10 billion—far greater than the taxpayer dollars given by 

Congress to compensate flood-damaged homes. From HUD’s midpoint projection using the State’s data, it seems that there are 

88,702 flood-damaged homes and 43,298 applicants that have suffered wind damage. The midpoint projections are that approximately $2.7 billion of the $9.6 billion midpoint estimate will be 

paid to those who did not experience any form of flood damage. In 

fact, midpoint estimates have fewer grantees projected from the 

slower recovering flood-damaged areas. 

As elected officials have said many times, the Federal Government is responsible for this hurricane damage because of the failure of the levee system and now nearly half of the Federal funding 

is going to homeowners that experienced no levee-related damage. 

I am sure this is disheartening news for people like Walter Thomas 

from the 9th Ward, who also will be here to testify today. Postal 

Service data also confirms that while those in levee-protected areas 

only make up 60 percent of the total Road Home estimated applicants, they are overwhelmingly less like to have returned home. 

I need to reiterate that these figures are midpoint estimates. 

Until the State closes the application process, we will not be able 

to definitely determine the total cost of the program. Our evaluation has also uncovered other concerns. For instance, the Elevation 

Grant Program, designed and administered by the State, has cost 

$2 billion. The maximum amount a homeowner can receive is 

$30,000, and the average grant is $24,000. It appears that less 

than a quarter of the people who are receiving the grant are actually legally required to elevate. This is because the State has not 

limited the program to those whose parish-determined damage 

level requires them to rebuild in compliance with elevation standards to receive coverage from the National Flood Insurance Program. 

I am not here to suggest that elevating your home is not a safer 

way to rebuild, but I do not see a mechanism by which the State 

can ensure the elevation grant monies will actually be used for elevation. 

Chairman LANDRIEU. Could you please wrap up in the next 30 

seconds? 

Mr. POWELL. I will. Like you, I am concerned for the people of 

Louisiana. Unfortunately, although our office conducts a weekly 

8

1The prepared statement of Mr. Kopplin appears in the Appendix on page 54. 

call with representatives of the LRA, State ICF, and all the Federal 

partners involved in housing, this issue of perceived shortfall was 

never raised. Given the amount of spending which is targeted for 

administrative cost, I am at a loss as to why this was not made 

clear to either the governor or the LRA earlier. 

I am committed to working with the State in an examination of 

all resources priorities for the people of Louisiana. Through this 

process all resources must be taken into account, and I will not let 

up until we have determined the best path forward for the State’s 

Road Home Program. 

Thank you. 

Chairman LANDRIEU. Thank you. Mr. Kopplin. 

TESTIMONY OF ANDREW D. KOPPLIN,1 EXECUTIVE DIRECTOR, 

LOUISIANA RECOVERY AUTHORITY 

Mr. KOPPLIN. Madam Chairman, Senator Coburn——

Chairman LANDRIEU. Let me please stop you. Let me recognize 

my colleague, Senator Coburn from Oklahoma. He is not a Member 

of this Subcommittee, but he is most certainly welcome, and I look 

forward to turning to him at the appropriate time for questions. 

Thank you, Mr. Kopplin. 

Mr. KOPPLIN. My name is Andy Kopplin, and it has been my 

privilege to serve as the Executive Director of the Louisiana Recovery Authority, representing our Chairman Dr. Norman Francis, our 

Vice Chairman Walter Isaacson, and the other volunteers on our 

bipartisan board of directors. 

Since our appointment by Governor Blanco in October 2005, we 

have focused on developing strategies for recovery, securing resources, and providing transparency and oversight on the expenditure of recovery dollars. We do not run the Road Home or any programs at the LRA. Our job is to make expenditure recommendations of Federal grant funds to the governor and the Louisiana Legislature and to set broad policies for the programs they approve. 

As I address specifics about the Road Home Program, let me put 

them in the context of some major themes that illustrate the challenges we have faced with our recovery. 

First, Federal investments in our recovery have been generous 

and unprecedented, but they have been late in coming, inequitable 

based on damages, and insufficient. 

Second, program implementation responsibilities have been delegated to State-level agencies, largely because the Bush Administration opposed the Baker-Landrieu proposal for a robust Federal 

agency with the mandate and resources commensurate to dealing 

with the first and third most expensive disasters in American history. 

Third, the red tape associated with FEMA- and HUD-funded programs is choking our ability to access Federal dollars appropriated 

by Congress. 

And, fourth, the constant haggling required by State and local officials to secure resources and cut red tape has undermined public 

confidence and slowed the recovery. 

9

On Federal investments after Hurricanes Katrina and Rita, the 

109th Congress waited until Christmas to fund a recovery package, 

then capped Louisiana’s allocation at 54 percent of the total CDBG 

appropriation, even though we had 77 percent of the housing damage. With leadership from Governor Blanco and our delegation, we 

fought for fair and equitable funding. LRA board members personally took the case to Capitol Hill and the White House. Our request 

during these negotiations had been for a total of $14.9 billion in 

CDBG funds, including $9.4 billion for single-family homeowners. 

After vigorous negotiations, Mr. Powell announced the President’s 

support for an additional $4.2 billion in CDBG funds to bring Louisiana’s total to $10.4 billion. This included $7.5 billion for homeowners based on FEMA’s estimate that Louisiana had 123,000 

homeowners who had suffered major or severe damage. Mr. Powell 

also asked us to rely on the $1.7 billion in hazard mitigation funds 

to pay for elevations, buyouts, and smaller home safety investments in meeting the needs we identified in the negotiations. We 

knew the HMGP funding came with considerable administrative 

burdens, but as Governor Blanco often says, when you are negotiating with the folks holding the checkbook, you tend to agree with 

their numbers. Mr. Powell also committed to helping us streamline 

the FEMA process. 

It was not until 10 months after Hurricane Katrina that this bill 

to fund our program with an additional $4.2 billion was signed by 

President Bush. And so for homeowners like the ones behind us, 

waiting for grants 21 months after the storm, it provides little solace for them to hear that half of their wait was on the 109th Congress to fully fund the program. But any fair review of progress 

needs to consider June 2006 as the start date—a date that for most 

homeowners was already too late. 

The program has finally begun hitting its stride. By the end of 

today 20,000 homeowners will have closed on their grants—double 

the number who had closed just 4 weeks ago. Yet just as this news 

of improvement arrives, the program has been covered by a cloud 

of uncertainty again due to anticipated budgetary shortfalls. ICF 

International, the Division of Administration Office of Community 

Development’s contractor for the Road Home Program, has developed a budget projection that estimates the total program costs of 

approximately $10.4 billion—or $2.9 billion beyond what was budgeted. If the $1.2 billion in hazard mitigation funds are not approved 

by FEMA, this shortfall grows to $4.1 billion. 

ICF’s projection shows this deficit results largely from two factors: First, nearly 20,000 more homeowners than FEMA estimated 

are eligible for grants; and second, average awards are higher than 

had been initially projected. ICF’s inspectors are finding many 

homes FEMA labeled with ‘‘major’’ damage should have been categorized as ‘‘severe,’’ warranting a complete demolition and rebuild. 

Governor Blanco has asked the LRA to consider temporarily reallocating other CDBG funds to shore up the Road Home Program. 

As homeownership has been our highest priority, we will do what 

is necessary. But even a temporary reallocation of other funds will 

not be sufficient to cover the projected shortfall. Because the $1.2 

billion of HMGP funds have not been approved either, elevations 

10

and other mitigation measures must be paid for by CDBG funds or 

discontinued. 

Given that this budget shortfall is due to our good-faith reliance 

on FEMA data and that Louisiana’s total CDBG allocation was 

never based proportionally on damages with other States, we believe that additional Federal CDBG funding to support the Road 

Home Program is clearly warranted, and we ask for your thoughtful consideration and support of this request. Remember, Louisiana suffered an estimated $100 billion in physical damages. After Federal investments and insurance are counted, we are still left with an estimated $34 billion in unrecovered 

losses. So, in President Bush’s words, to do what it takes to rebuild 

Louisiana after such devastating losses will require short-term investments to shore up the Road Home Programand long-term investments in our community’s infrastructure. When the President 

said he would do what it takes and stay as long as it takes, he 

didn’t say ‘‘except if you had wind damage.’’ And I will point out 

that in this document, our Road Home application, which was sent 

to FEMA and approved—not sent to FEMA—sent to HUD and approved in June 2006, it very clearly stated it is the State policy 

that participants in the Homeowner Assistance Program deserve a 

fair and independent estimate of projected damages from the 

storm, regardless of the cause of damage. That has been our policy 

since the beginning. We did not want to discriminate between the 

type of damage homeowners who were hit by Hurricanes Katrina 

or Rita suffered after the storm. 

Chairman LANDRIEU. Thirty seconds. 

Mr. KOPPLIN. We have been working to make sure that the Road 

Home Program speeds up. I want to compliment Walter Leger, who 

is behind me, who has been LRA’s volunteer Housing Task Force 

Chairman, who spent hours of volunteer hours working on solutions. I want to compliment the folks running the program who 

have sped up the number of closings, again, doubled the number 

of closings in the last 4 weeks. 

As I have noted, with the Federal match waiver that this Congress is moving forward, that will provide a significant infusion of 

assistance to Louisiana as we move forward in solving the Road 

Home shortfall, and I look forward to working, Madam Chairman, 

with you and the Members of Congress to make sure that every 

single homeowner who is eligible for our approved program gets 

their grant and gets it as quickly as possible. 

Thank you very much. 

Chairman LANDRIEU. Thank you. We will begin, if we can, a 

round of questions, and I will take the first few, and we have been 

joined by Senator Stevens, the Ranking Member, who is no stranger to disaster recoveries and has helped to lead many efforts here 

in Congress over his long and distinguished tenure. 

There were many numbers thrown out about homes with wind 

damage and flood damage, and I checked these numbers just 2 

hours before I came in through CRS, which is our Congressional 

Research Service, and I want to make sure that I have these numbers correct, because I think beginning with the right numbers and 

building back might help us to figure out what the entities were 

thinking as we began to figure out where we need to go. So these 

11

are simple, but they are accurate based on my checking this morning. 

Mr. Powell, this is mostly directed to you, if I could. 

If you take the 63,000 homes severely damaged or destroyed by Hurricane Katrina in Mississippi and multiply it by $150,000 per 

household, that number would come to around $9 billion. Subtracting insurance payments and other Federal assistance, FEMA 

disaster assistance, the $5.5 billion that Mississippi received seems 

close to sort of what they got to begin to put a program of this magnitude together. 

However, if you take the same 205,000 severely damaged or de- stroyed homes in Louisiana, multiply it by $150,000, which is sort 

of the general promise, you come up with a need for $30.7 billion. 

Now, these are big numbers, but in my mind, I am trying to find 

a way to communicate this as simply as I can to get past all the 

mumbo-jumbo about flood or wind or who was in the floodplain or 

who was not. The way this program has been talked about by 

many is a basic grant program to homeowners—not renters but 

homeowners—who experienced severe damage. The testimony this 

morning is, well, now we are talking about flood only, not wind. 

But that has never come directly to my attention until today. 

But set that aside for a moment. Do both of you agree or what 

is the disagreement about these numbers? And if you made these 

calculations initially, as you were designing this program, how 

could you possibly think that the $10 to $12 billion allocated in 

community development block grant initially, even if half of it was 

6 months past the date of the Mississippi final numbers, would 

even be adequate to begin to cover a program that both of you have 

sort of outlined, but in different ways? 

Mr. Powell, will you take that question? 

Mr. POWELL. I am happy to, Senator. 

Chairman LANDRIEU. And then Mr. Kopplin. 

Mr. POWELL. Our office was birthed about the time Congress al- located the $11.5 billion CDBG money to the States along the Gulf 

Coast that were damaged by Hurricanes Katrina and Rita. So 

those negotiations were really done in Congress, and as someone 

pointed out, they were limited where no one State could receive 

more than 54 percent. That was a decision made by Congress. And, 

incidentally, they did not limit that to Louisiana. They gave the 

Secretary of HUD the discretion where he could not exceed more 

than 50 percent. He quickly went and gave Louisiana 54 percent. 

It could have been 30 percent, it could have been 40 percent. 

Chairman LANDRIEU. But let us be clear, and if you do not mind, 

I think this is a very important point of trying to get these numbers. You just testified that you did not come on board until after 

a figure of $11 billion was determined. 

Mr. POWELL. Eleven-and-a-half billion dollars. 

Chairman LANDRIEU. Approximately the same time. 

Mr. POWELL. I am getting to it. 

Chairman LANDRIEU. OK. 

Mr. POWELL. After that, and clearly people in Louisiana contacted our office, as well as other Members of Congress and the Administration, that they felt like they needed more money. That is 

when the discussions started in December in our office with the 

12

people of the LRA: How much more money do you need? So we focused on what we focused on from the very beginning and historically what CDBG money has been used for, a catastrophic event 

like this, and we focused on those homes that had major and severe 

damage by flood—breach of the levee system and the storm surge. 

And, incidentally, Mississippi did not receive any money for wind 

damage. So we focused on what was caused by the breach and 

what was caused by the storm surge. 

With consensus, and with using the best available data, 

science—I am an old banker. I want to see the numbers. I do not 

want to guess. And as Governor Blanco said, these numbers did not 

come from the sky. It was after a lot of deliberation, a lot of investigation, independent and consensus with our friends from Louisiana, we came to the 106,000 number. We then said what is going 

to be the average payout, and we did not use $150,000 because that 

was the cap, as you know, Senator. So we used the best available 

data we had from SBA, from FEMA, from private insurance companies, from other people, and we determined how many folks would 

take the buyout, what would it cost to repair the damage. Came 

up with a consensus number of $72,000, thus the $7.6 billion, and, 

therefore——

Chairman LANDRIEU. But you thought at the time——

Mr. POWELL [continuing]. This President then immediately, after we told him this, asked Congress for an additional $4.2 billion 

based upon a consensus of the data between our office and the people in Louisiana. 

Chairman LANDRIEU. OK. But let me just get clear about one 

thing. When you said a consensus, I can see you are speaking, and 

Mr. Kopplin’s head going this way, so I do not—I think anybody 

observing this, there is no consensus, it seems, which is what we 

are trying to get to here. But when you just outlined those numbers, you are now testifying that—what did you say?—123? What 

was the number you gave? 

Mr. POWELL. I said 106,000. 

Chairman LANDRIEU. The 106,000 was for flood only, not wind. 

Mr. POWELL. Flood only, major and severe. 

Chairman LANDRIEU. Flood only. Was it your understanding that 

it was flood only, Mr. Kopplin? 

Mr. KOPPLIN. In negotiating, we had a lot of things that we requested. They had their reasons for knocking certain things off 

those negotiations. When the money was being negotiated, it was 

based on the FEMA data that Mr. Powell’s office provided to us 

with FEMA and HUD input. That was 123,000 homeowners, 

106,000 flooded and the remainder with wind damage. We chose to 

design a program to cover all 123,000. What we have today is that 

FEMA number was low in terms of the number of major and severe 

damaged households in Louisiana and low in terms of the level of 

damage per household, which has led to the problems. We relied 

on that FEMA 123,000 estimate, which turned out to be low in 

terms of the number and amount of damage Louisiana homeowners 

suffered. 

Chairman LANDRIEU. And what is the real estimate from your 

vantage point now? Or what do you think the accurate updated estimate is? 

13

Mr. KOPPLIN. The estimate provided by ICF in their analysis has 

a midpoint of about 132,000 potentially eligible applicants for the 

Road Home Program, but as Mr. Powell indicated, because we have 

not chosen to tell people who are located all over the country there 

is a deadline by which you have to have applied by last summer 

or something like that, we are still accepting applications, because 

our goal has been to make sure every homeowner who is eligible, 

wherever they may be, gets to apply and gets their accurate grant. 

Mr. POWELL. Senator, I would just——

Chairman LANDRIEU. Go ahead. 

Mr. POWELL [continuing]. Emphasize that these numbers are not 

low for flood damage. In fact, they are lower than what we originally estimated. And I would also add that we did not just use 

FEMA and HUD. We used satellite imaging. We looked at SBA loss 

totals. We did a lot of cross-checking. And their own demographer, 

the State’s, agreed with our consensus that we came up with. 

Chairman LANDRIEU. But getting back to the statement, Mr. 

Powell, that you made about stepping in sort of after the money 

had been allocated, and then we kind of pushed past this 54-percent cap, I understand, because I am an appropriator, that cap was 

placed by the Appropriations Committee. I objected to it then and 

continue to object to it today, but it was something that we could 

not fix at the time. But did that 54-percent cap have anything to 

do with the estimates that we are talking about today? Or do you 

know how that 54 percent——

Mr. POWELL. No. 

Chairman LANDRIEU. Was it based on anything? 

Mr. POWELL. We looked at what were the needs of the people of 

Louisiana as it related to——

Chairman LANDRIEU. Did you recommend that cap, the 54 percent? 

Mr. POWELL. No, ma’am. And after that cap was done, then we 

began to look, what are the needs of the people in Louisiana, with 

a priority toward those that experienced flood damage as a result 

of the levee breach and the storm surge. We did not look at that—

we had a clean sheet of paper and said what additional monies 

does Louisiana need. We knew, because of the 54 percent, what 

Louisiana was going to receive, and so we said—I said, ‘‘Give me 

the facts.’’ As my testimony indicated, give me the facts, and I was 

not governed by anyone telling me what or what not to do. 

Chairman LANDRIEU. And I appreciate that you have tried to be 

an honest broker, and I have said publicly and privately it has 

been good to work with you. And I think the governors of both 

States have been very complimentary of your efforts. But our job 

here is to get to the bottom of how this program seems to be billions of dollars short. Are we covering wind or flood? If not, are we 

doing that for Louisiana and Mississippi on an equal basis? And if 

not, how are we going to find the funding that this program seems 

to be lacking? And there are many other issues, as I said in my 

opening statement, accelerating it, moving through the red tape. 

Now, I want to honor my colleagues that are here. I am going 

to stop my questions. I will have another round and go to Senator 

Coburn, who will have some questions for you, and then Senator 

Stevens. 

14

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. I would be happy to yield to the Ranking Member. 

Chairman LANDRIEU. No, he is——

Senator COBURN. A couple of questions. On the revised 132,000, 

what percentage of that is flood and what percentage of it is wind, 

Mr. Kopplin? 

Mr. KOPPLIN. We have not had the chance to evaluate Mr. Powell’s analysis, which we just received this morning. Our assumption 

is that the distribution of households is consistent with what it was 

when there was 123,000 severe and major damaged households, of 

which 106,000 were flood. 

Senator COBURN. But you think it would be about the same percentage? 

Mr. KOPPLIN. That has been our assumption. Again, this was 

data that was constructed by FEMA, as Mr. Powell said, satellite 

imagery. What we have now is inspections by actual inspectors who 

have gone and looked at every one of these houses. So we have a 

lot greater detail house by house than we even did with that data 

during those negotiations. 

Senator COBURN. Are there any houses outside of what the satellite imagery showed that there was no flood, any of those receiving these funds for flood damage that are not wind damage? 

Mr. KOPPLIN. Our program covers hurricane damage, whether 

from flood or from wind. If you had uninsured damage——

Senator COBURN. I am saying other than wind damage. If there 

are homes that were outside a satellite photo that shows there is 

no flood damage, are there any homes receiving funds for flood 

damage? 

Mr. KOPPLIN. I think the answer to your question is yes, sir, that 

there are homes that got damaged by the hurricane, whether they 

were in a floodplain, out of a floodplain——

Senator COBURN. Yes, but that is not the question I am asking 

you. 

Mr. KOPPLIN. I am not sure I understand. 

Senator COBURN. I am asking you if there is data that says there 

was no flood here by satellite imagery, are there homes outside of 

the flood damage area, which is proven, what you can see on satellite, where the water went, are there homes that are receiving 

money for flood damage, not wind damage? 

Mr. KOPPLIN. I do not know the answer, but I do know that 

homes are being covered whether they had flood or wind damage, 

or both, from the hurricane. And wherever they are in Louisiana, 

it is our commitment to try to help those homeowners cover that 

uninsured gap through this program. 

Mr. POWELL. Senator, I know that there are checks going to Bossier and Caddo, the farthest northwest——

Senator COBURN. Why is it that not just in those counties—in 

Franklin, Washington, Caddo, Concordia—why are funds going to 

those parishes out of this money that were not involved in this at 

all? 

Mr. KOPPLIN. If there are homeowners who suffered major or severe hurricane damage—and my guess is they are in the single digits, if there are, in some of those parishes. If they had hurricane 

15

damage, our policy was, whether you happen to be unlucky in 

Caddo Parish or you happen to be unlucky in Cameron Parish and 

you had hurricane damage, we want to cover your uninsured damages. It is our choice to make that policy decision. It was avidly——

Senator COBURN. I agree. 

Mr. KOPPLIN [continuing]. Sought by the members of our congressional delegation and our legislature to make sure that we 

were equitable between wind and flood, Hurricanes Katrina and 

Rita, which hit our State 31⁄2 weeks apart. 

Senator COBURN. But you do understand Mr. Powell’s point that 

he made is that, in terms of equitable treatment of all the other 

States, we in the past have not covered wind damage. So I have 

two other questions——

Mr. KOPPLIN. But, Senator, if I might, Mississippi, with $5.4 billion of CDBG grants, has enough money to cover wind and flood, 

should they choose to do so. 

Senator COBURN. All right. One of my problems is the real Federal priority here, besides helping Louisiana recover, is—what we 

should really be responsible for is the failure of the levees. There 

were errors. 

Mr. KOPPLIN. Yes, sir. 

Senator COBURN. They caused tremendous heartache, tremendous human loss, and tremendous material cost. Other than that, 

what about private insurance in this thing? Where does it fit in for 

damage, wind damage, etc., off the coast? I am just saying, Where 

is the private insurance money in this program? 

Mr. KOPPLIN. Private insurance is, both by our State policy and 

by Federal requirements, required to be deducted from the level of 

grants that we calculate. So the contractor calculates the level of 

damage, takes the private insurance money or the FEMA payments, deducts that, and so it is a net of what you got in private 

insurance, which is another reason why I would be surprised—I 

was surprised by this number that Mr. Powell has brought forward, that there is $2.6 billion worth of uncovered wind damage in 

terms of that uninsured gap. 

Senator COBURN. OK. Just to clarify things, in Louisiana’s original calculations, did you all include wind damage? 

Mr. KOPPLIN. Yes, sir. 

Senator COBURN. In your original submissions, wind damage was 

included. 

Mr. KOPPLIN. In our initial submissions to HUD, in our initial 

negotiations with Mr. Powell, we proposed the coverage of wind 

damage. 

Senator COBURN. And I just have one last question. Louisiana 

has a surplus of $2 billion. They also have $400 million that was 

set aside for special industrial development. Why shouldn’t the rest 

of the taxpayers in America say use some of that, especially—or 

maybe even use it on an interim basis while we are disputing this 

here? Why shouldn’t that go on and be used in anticipation that 

maybe something in the future will come from Congress? What is 

happening on that front in the State of Louisiana? 

Mr. KOPPLIN. As part of my testimony—and there is a letter from Governor Blanco—$4.6 billion of Louisiana taxpayer funds have 

been invested in or are proposed during this current budget cycle 

16

for investment in hurricane recovery and a variety of issues, from 

health care to education to insurance coverage, to make homeownership insurance more affordable. So there is a significant 

State investment being placed already. 

Senator COBURN. I agree, but Louisiana has surplus and our grandchildren have a $350 billion deficit this year. So, again, the 

question should be that the average American is going to say is we 

have sent a lot of money to Louisiana and we are going to send 

more. There is no question we are going to help. But Louisiana 

should not be running a surplus and asking Washington to fill in 

the difference. 

Mr. KOPPLIN. I would suggest, because we have been fiscally responsible with our budget in Louisiana and are running a surplus, 

we ought to be complimented for that. We ought to note the $4.6 

billion that has been invested or proposed for investment. It is a 

significant contribution when a State of Louisiana’s size has about 

an $8 billion State general fund budget. So $4.6 billion being invested in hurricane recovery, I think, is a substantial investment. 

I would remind you we are 107,000 jobs down in the New Orleans 

area; $11.5 billion was lost from Louisiana’s economy the year after 

the storm; and we have $34 billion in unrecovered losses against 

that $2 billion surplus. There are——

Senator COBURN. I understand all that. 

Mr. KOPPLIN [continuing]. Significant needs——

Senator COBURN. I still think you are going to have a difficult 

time selling the average taxpayer in this country to say that you 

are running a surplus and you cannot do the things there and we 

need to come do it and we are going to borrow it from everybody’s 

grandkids to do it. I think that is a debatable point. I think it is 

admirable you all run a surplus. I think that is great. But if that 

surplus is there, it ought to be going to help the people in Louisiana now, not sitting in the bank. 

Mr. KOPPLIN. The State surplus came from all over the State, 

and we are investing significantly in our recovery with that money. 

Senator COBURN. All right. I have some questions for Mr. Powell, 

but I think I will just submit them to the record so we can speed 

this up, if we can. 

Chairman LANDRIEU. Thank you very much. Senator Stevens. 

OPENING STATEMENT OF SENATOR STEVENS 

Senator STEVENS. Thank you very much, and I am sorry to be 

late, Madam Chairman. We had a distinguished visitor from China, 

Madam Wu, and I was with the leaders with her. 

I am a little bit confused about one thing. Are these estimates, 

the 132,000, the 123,000, the 106,000, are they estimates of the 

homes that have been damaged? 

Mr. KOPPLIN. The 123,000 homes were estimates based on 

FEMA, based on satellite. Now our projections are based in part on 

96,000 actual home inspections by a trained home inspector for the 

program. So we think that those particular data sets are quite a 

bit better than what was used in the negotiations last February 

with Mr. Powell. 

I would just point out that Mr. Leger behind me had 7-foot on 

satellite——

17

Senator STEVENS. I have only a short period of time. Just please 

answer the question? 

Mr. KOPPLIN. Yes, sir. 

Senator STEVENS. We had terrible disasters up our way, the largest earthquake on the North American continent. We had enormous floods and fires. When we make estimates of the homes that 

have been destroyed and businesses destroyed, but then when we 

come to the program we find that a lot of people have packed up 

and gone and they are not coming back. 

Now, have you found out how many of those homeowners or previous occupants want them rebuilt? 

Mr. KOPPLIN. A significant number, and you will hear from 

some——

Senator STEVENS. Have you found out how many? Do you have 

applicants for these? 

Mr. KOPPLIN. In the program, about 85 percent—and the program staff can get this specifically. But about 85 percent are taking 

Option 1, which is to repair or rebuild their house in Louisiana—

Option 1 or 2. 

Senator STEVENS. Documents have been filed with you? 

Mr. KOPPLIN. Yes, sir. 

Senator STEVENS. Not estimates. 

Mr. KOPPLIN. That is actual documents filed, yes, sir. 

Senator STEVENS. That is pretty high compared to some of our 

disasters, because people, when they have gone through really bad 

disasters, they decide to move somewhere else, and they are not 

coming back. I understand the Governor’s Road Home Program, 

but have you actually contacted people who moved somewhere else 

and said, ‘‘Are you coming back?’’ Do you know how many are actually coming back? 

Mr. KOPPLIN. Well, I think the best data we have are actual 

Road Home applications where they have signed up and said, ‘‘I am 

choosing to repair my house in Louisiana.’’ I think the number is 

80 to 85 percent of the folks have chosen that Option 1. 

Senator STEVENS. Of which number: 132, 123, or 106? 

Mr. KOPPLIN. I think it is—none of the above. It is of actual applicants who have selected their option for us, and I think that 

number is something on the order of 45,000 right now have filed. 

Senator STEVENS. Well, that is what I am getting at. We are not 

at a numbers crunch yet. We are at a numbers crunch because of 

your estimates of how much it is going to cost to do them all, right? 

Mr. KOPPLIN. Right. 

Senator STEVENS. What is your plan right now of how much 

money you need in this fiscal year? 

Mr. KOPPLIN. We believe that about $750 million to $1 billion per 

month will be awarded going forward over the next 6 or 7 months 

to meet the current level of applicants that we have got. 

Senator STEVENS. But you have got that money, right? You do 

not need any help with that. You have got that, right? 

Mr. KOPPLIN. We have got $6.3 billion of CDBG allocated to it. 

We have got $1.2 billion from FEMA that we cannot use yet because they have not approved it. And with those two, that is a $7.5 

billion budget. We have got an estimated projected program cost of 

18

$10.4 billion, so we are short right now $2.9 billion, without reallocating other money in the CDBG——

Senator STEVENS. How can that be? We covered the estimate of 

106,000. 

Mr. KOPPLIN. You covered the estimate for 106,000, and we designed a program to cover—with lower grants than were initially 

decided, to cover the wind damage that Mr. Powell would not agree 

to fund. But the FEMA estimates from back in February are low 

in terms of the number of houses who had major and severe damage and low in terms of the damage per house. 

Senator STEVENS. How many did they estimate back then that 

people would actually seek a replacement or repair? 

Mr. KOPPLIN. I am sorry? 

Senator STEVENS. How many did FEMA actually estimate would 

seek repair? How many homeowners did they——

Mr. KOPPLIN. We estimated that 95 percent of eligible applicants 

would participate in the program, so about a hundred and——

Senator STEVENS. I am not talking about eligible applicants. I 

am talking about people who were in those homes before the incident. How many of them were going to come back? You said 85 percent, right? 

Mr. KOPPLIN. We estimated that 85 percent, approximately, are 

choosing the repair or rebuild option. 

Senator STEVENS. That is of applicants. Now, we are still missing 

each other. I am trying to compare the number of people that are 

making application to those that were there before the incident. All 

right? 

Mr. KOPPLIN. And I believe, Senator, that it is approximately 85 

percent. Whether it is the people who have filed so far or the people who have applied so far, we will still hit about that 85 percent. 

It has been consistent with every measure so far. 

Chairman LANDRIEU. People that were there before. 

Senator STEVENS. If that is the case, why are you short of money 

now? 

Mr. KOPPLIN. Because the program criteria was that you had to 

have major or severe damage as estimated by FEMA, and it turns 

out that the 123,000 major or severe damaged houses that we used 

as the baseline at Mr. Powell’s request, because it was the best 

data we had at the time, is short by about 20,000 houses in Louisiana, and the average level of damage is significantly higher than 

those FEMA estimates projected. We have about 70 percent severe 

damage in reality, whereas FEMA projected 52 percent severe 

damage. 

Senator STEVENS. Well, I said when I went down there right 

after the incident—that I have seen World War II, I have seen a 

lot of damage in my day. I have seen damage from our earthquakes 

and fires. I have never seen anything like this one. 

But, on the other hand, I also saw block after block after block 

totally destroyed, and those people are somewhere else now. Are 

you telling us you believe 85 percent of those people are going to 

come back? 

Mr. KOPPLIN. They are going to come back and repair their 

houses, and you will hear from some of them this afternoon who 

are fighting to do that. 

19

Senator STEVENS. There is nothing to repair. What I saw, there 

was nothing to repair. 

Chairman LANDRIEU. But rebuild. 

Mr. KOPPLIN. Well, they can rebuild them. The grants cover rebuilding as well, and in many cases, that is a better option. 

Senator STEVENS. How many have you actually rebuilt so far? 

Mr. KOPPLIN. Twenty thousand grants at the end of today will 

have been distributed. 

Chairman LANDRIEU. But rebuilt houses, Mr. Kopplin, do we 

know how many——

Senator STEVENS. How many have actually been rebuilt? 

Mr. KOPPLIN. Thousands have been rebuilt, Senator, but I do not 

have a number on that because our program is designed to give the 

resources that the individual needs to repair or rebuild their 

houses. A requirement that they sign and obligate themselves to 

committing to do that repair. But in terms of how much progress 

that they have made, I do not have a specific number on that at 

this time. 

Senator STEVENS. I am running over. I am sorry. 

Chairman LANDRIEU. No. Go right ahead. 

Senator STEVENS. Is it possible for a person to go and get the 

money to rebuild and rebuild it and then get repaid from your program? 

Mr. KOPPLIN. Yes. That is, in fact——

Senator STEVENS. How many have done that? 

Mr. KOPPLIN. Thousands, Senator. I do not know the specific 

number, but you can travel through New Orleans and the surrounding areas. Lots of folks have done those repairs, and we wanted to make sure that pioneers who got it done, got it done. 

Senator STEVENS. Are you holding up anything now waiting for 

more money? 

Mr. KOPPLIN. No, sir. The only thing that is on hold right now 

is elevations, because first we had to resolve a FEMA and a HUD 

elevation issue that Mr. Powell alluded to. And now, because the 

HMGP money has not been approved yet, we are evaluating, given 

this budget shortfall, whether those funds are going to have to be 

transferred to run a local elevation program, which would be very 

time-consuming and difficult for homeowners, which we do not 

want to have happen, which is why it is so important that this 

HMGP money be approved for Louisiana. 

Senator STEVENS. By elevation, you have got to build so far off 

the ground? Is that what you are talking about? 

Mr. KOPPLIN. Yes, sir. 

Senator STEVENS. Thank you very much. 

Mr. POWELL. May I make a couple of comments? 

Chairman LANDRIEU. Mr. Powell. 

Mr. POWELL. Directly to Senator Stevens’ questions. This is according to the U.S. Postal Service. Of all the flood-damaged areas, 

there is a 68-percent vacancy rate. Of the wind-damaged areas, 

there is a 4-percent vacancy rate. Furthermore, in fact, just the 

flood-damaged areas, using the current projections we have now, if 

we just funded that, there would be approximately a $600 million 

surplus. 

Chairman LANDRIEU. A $600 million surplus of what? 

20

Mr. POWELL. Of money. 

Chairman LANDRIEU. In the CDBG for Louisiana? 

Mr. POWELL. Yes, ma’am. 

Chairman LANDRIEU. OK. Let us get back to that. I have been 

joined—Senator, I am sorry. Are you finished? 

Senator STEVENS. Yes. 

Chairman LANDRIEU. Senator Pryor from Arkansas has joined 

us. Thank you, Senator, very much. I do not know if you have any 

questions, but if you do, it would be your time. Or I can come back 

to you later. 

OPENING STATEMENT OF SENATOR PRYOR 

Senator PRYOR. No, I do not have any questions, but I do want 

to thank you for holding this hearing. It is very important. I am 

sorry. I have been in a markup in the Armed Services Committee 

since about 10 o’clock this morning, and it is still going on. But, 

Senator Landrieu, I want to thank you publicly for your work, and 

I want all the folks here to know, especially the people from Louisiana, and really all over the country, that Senator Mary Landrieu 

works every single day on trying to rebuild her State after those 

hurricanes. And she has done a fantastic job, and if I can speak 

candidly, she wears us out every day trying to help her State. We 

appreciate it. 

Chairman LANDRIEU. Well, I thank you, Senator Pryor. If we 

could just get some numbers straight, we might be able to get this 

job moving. But thank you very much. 

I would like to get back to what Senator Stevens said, and then 

we have got to move on to our next panel, because we have two 

other panels. But let me ask you this, Mr. Powell, trying to get 

some of these numbers. You are aware of the total amount of 

money that Mississippi received in community development block 

grants. What is that total? Is it $5.5 billion? 

Mr. POWELL. Five-point-five billion dollars. 

Chairman LANDRIEU. If the State of Mississippi based on their 

accurate numbers today uses the money to fund homeowners, 

owner-occupied, at just flood, how much will that be? And what 

will they have left? And I would like that data right now if somebody on your staff has it. 

Mr. POWELL. They have two——

Chairman LANDRIEU. Hold on. I just want to say if they took 

their $5.5 billion and gave everybody in Mississippi with severe 

damage for flood only up to the $150,000 maximum, reduced by insurance, etc., how much would that cost? Does anybody on your 

staff know that? 

Mr. POWELL. We can get that for you, Senator. They have two 

programs. Their eligibility requirements, they have no wind reimbursement. 

Chairman LANDRIEU. Correct. That is what I am saying. Just 

flood. 

Mr. POWELL. It is homeowners only, and if you did not have insurance——

Chairman LANDRIEU. And there is no rental, no wind, only flood. 

21

Mr. POWELL. That is right. We can get you those numbers. Then 

they have a second program that will address senior citizens and 

also income. 

Chairman LANDRIEU. But the reason that is important to know, 

because we have to——

Mr. POWELL. We can get that for you. 

Chairman LANDRIEU [continuing]. Get down to apples and apples 

and oranges and oranges, is because——

Mr. POWELL. We can get that for you. 

Chairman LANDRIEU. Right. If we gave Mississippi $5.5 billion and they are just going to do flood, and that costs, let’s say, $2 billion, they are going to have a $3.4 billion surplus, and Senator 

Coburn is looking for some surplus money right now. And so we 

have to figure out where there might be some real surpluses that 

we could get to apply to shortfalls elsewhere. 

So I am going to press hard on that number. 

Mr. POWELL. We can get it for you. 

Chairman LANDRIEU. And then we are going to take it to when 

and where was wind decided to be excluded. I have not talked to 

my Mississippi counterparts. They may not be aware that wind is 

not being covered. There is a huge debate in Mississippi right now 

among insurances, whether it is wind or flood. They may be surprised——

Mr. POWELL. Storm surge. 

Chairman LANDRIEU [continuing]. To know that we are not even 

going to attempt to cover some wind damage here. I do not know. 

And then, finally, the question would be if the flood in Mississippi 

only costs $2 billion and they got $5.5 billion, what else are they 

able to use their money for that maybe Louisiana or Texas or Alabama does not seem to have the option? 

Let me end this panel, if I could. I thank you all. Obviously, we 

have just begun, but I urge you to continue to work together to see 

if we can get this program moving and dollars found. Thank you. 

Would the next panel of homeowners come forward? 

[Pause.] 

Chairman LANDRIEU. Thank you all very much. 

Our next panel will consist of five citizens from the State of Louisiana. All of them will share their experiences with the Road 

Home Program that, as you all can imagine, has been difficult and 

caused many anxieties. They are applicants who have received 

their checks and are here prepared to talk about how that process 

worked. 

I would like to begin, if I could, with Tommy Tee Thomas, a resident of the Lower 9th Ward. 

Then we will hear from Connie Uddo, a New Orleans native and 

resident of Lakeview. She has opened her home to neighbors and 

friends as a Beacon of Hope Resource Center for her neighborhood 

that was very hard hit, as was the Lower 9th Ward. She also provides counseling and volunteer coordination for others in her neighborhood, and so not only is she here to tell her own story, but she 

knows many of her neighbors. 

Our next witness is Debbie Gordon, President and Board Member of the Chimney Wood Homeowners’ Association. She serves as 

a claims representative for the U.S. Railroad Retirement Board. In 

22

1The prepared statement of Mr. Thomas appears in the Appendix on page 86. 

May, she became the senior claims representative. She has also 

worked in Houston, Texas, in the wake of Hurricane Katrina. 

Next we will hear from Frank Silvestri, a lifelong resident of 

New Orleans. Mr. Silvestri began working with the Citizens’ Road 

Home Action Team assisting residents to understand the intricacies and ins and outs of this program to help them negotiate the 

best option for themselves and their family. He is a graduate of 

Tulane Law School and has worked for the past 30 years with his 

firm in a general practice. 

And, finally, we have Frank Trapani, President of New Orleans 

Metropolitan Association of Realtors. Frank Trapani, thank you 

very much for joining us. The realtors have played an integral part 

in our rebuilding, and many of your members have given many 

people in the region hope that we can return and rebuild our communities. He has, of course, membership in many organizations. 

We thank you. 

I would like to ask you all to limit your remarks to 3 minutes 

each so that we will have questions and comments. Mr. Thomas, 

you may begin. 

TESTIMONY OF WALTER THOMAS,1 RESIDENT, LOWER 9TH 

WARD, NEW ORLEANS, LOUISIANA 

Mr. THOMAS. First of all, I would like to thank Senator Landrieu 

and the staff for inviting me here today. 

My name is Walter Thomas, a/k/a Tommy Tee. I reside in the 

Lower 9th Ward, New Orleans, Louisiana. I was a victim of Hurricane Katrina. The community was flooded a second time when 

Hurricane Rita landfalled in New Orleans. Residents of the Lower 

9th Ward, and my house was approximately 24 feet under water. 

The estimation from the community said it was 28 feet, so that is 

way over my house. So is that wind or water? 

In the community surrounding us, I was closer to the levee, the 

Industrial Canal where the levee was breached. That is why the 

water was so high in my area. Since then, my house had been demolished. I am currently residing in a FEMA handicapped trailer. 

I have been seriously ill ever since the hurricane. I applied for the 

Road Home Program in August 2006. The community was informed 

everyone had to reapply again because the initial applications were 

lost, and no further explanation was given by the Road Home officials. 

I reapplied in October 2006. I was never contacted to submit my 

application and ownership. And to get to the next phase, I took it 

on myself to walk into a Road Home office that was newly open on 

Willard Street in New Orleans East, and there the lady accepted 

me—I had to wait about an hour, but she took time. I had everything professionally prepared with the assistance of the Lower 9th 

Ward Homeowners’ Association. They was very instrumental in 

helping me put everything together so that it can be professionally 

done. They did research. We took our time, took about 3 weeks to 

do everything that needed to be done. I commend them on doing 

a wonderful job. 

23

1The prepared statement of Ms. Uddo appears in the Appendix on page 88. 

The lady told me that I was the first one to walk into her office 

where everything was perfect, and I felt good about that. I felt like 

I had a check on the way. I do not know when they came out to 

inspect the house, but it was completed. 

During a recent hospital stay, which I was in the hospital recently, I was contacted by Road Home to conclude my application. 

But I was too ill to schedule and discuss the procedure. Two days 

after coming out of surgery for stomach cancer and colon cancer, 

I was taking pain medicine every 15 to 30 minutes. I had my cell 

phone on in the hospital so I could tell my parents—I mean my 

brothers and sisters where I was located. 

I never heard from Road Home again. I called 30 to 40 times. 

Every time I called I get the same answer: ‘‘Someone will get back 

to you.’’ It never happened. I gave up. I put it in God’s hands. I 

know we are a great city and we will survive. And that is part of 

the story. That is it. 

Chairman LANDRIEU. Thank you, Mr. Thomas. I very much appreciate it. Ms. Uddo. 

TESTIMONY OF CONNIE UDDO,1 DIRECTOR, ST. PAUL’S HOMECOMING CENTER/BEACON OF HOPE RESOURCE CENTER, 

NEW ORLEANS, LOUISIANA 

Ms. UDDO. Thank you, Senator Landrieu. First of all, I want to 

thank you so much for putting this together because I feel today 

that we are truly at a tipping point in our recovery. 

Things have changed and evolved for me in my life since opening 

my home up as the Beacon of Hope. I work with the Episcopal Diocese of Disaster Response now, and we have a homecoming response/recovery center in Lakeview. Lakeview is a middle-class 

neighborhood that was flooded by the 17th Street Canal breach. 

I was asked to come here today as a voice of the people. I am 

in gutted homes, trailers, and storm-ravaged yards. Every day I see 

the depression and the hopelessness that has shifted from the 

storm to the despair that our residents are in due to the failures 

and the flaws of the Road Home Program. We have lost thousands 

to this program, and we really need to prevent losing thousands 

more. 

Senator, as Director of the St. Paul’s Homecoming Center, our 

Lakeview Response/Recovery Center, I am the encourager, I am the 

cheerleader that keeps telling people to hang in there, your life will 

come back, it will be better, we will be a community again. But, 

I can no longer tell people that. I cannot look them in the eye and 

say that anymore. Our future is suddenly that bleak. This is a 911 

call from me. 

I brought a stat board and I put a piece of paper up there for 

you to show—and I think this might help Senator Stevens, because 

some of the questions you were asking about that you might draw 

from this. We have highlighted in the second box under household 

summary, you see, we are supposed to be setting the benchmark. 

We are a model for recovery. We are really doing well in Lakeview 

supposedly. So 41 percent were rebuilt and were in the process of 

rebuilding. But if you look in the highlighted yellow box, 59 perVerDate 0ct 09 2002 10:48 Jan 22, 2008 Jkt 036609 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 P:\DOCS\36609.TXT SAFFAIRS PsN: PAT
24

cent, 4,000 approximately, are demolished and trailers for sale are 

inactive. 

If you go down to the next box, the highlighted part, the total 

Lakeview applications for Road Home Program is 4,421. That is 60 

percent right there are locked. Why are we inactive 60 percent? Because we are locked up in this Road Home Program. Your numbers 

speak for themselves. 

When we broke this down, the 531 people that have received 

their money in Lakeview averages out to about 44 closings a 

month. It will take 7 years for the balance of our residents to get 

their money. My point is—and I brought pictures—can we live 

without a post office for 7 years or no grocery store? Can we live 

without a library, no public schools? 

I brought personal testimonies, and anybody in here can grab 

these before they leave. But this is the chronological nightmare 

that our residents are in in this Road Home Program. We are talking about shortfalls, but I am here to talk about the $6 billion that 

is there that we cannot get out. Why cannot our homeowners get 

this money? The hold-ups are just ridiculous. 

Now, I am working with a faith-based group, and I can tell you 

volunteers are coming in by the thousands to help us. And we have 

moved from gutting, and we are going into the rebuilding phase. 

But because people do not have the money to buy their sheetrock 

and their building materials—the Episcopal Diocese is now fronting 

homeowners money to do what this Road Home Program should be 

providing. And to me that is very sad, and I see it in the faithbased. They are getting discouraged because they feel like they are 

carrying the recovery on their backs. They have shouldered this 

with us. And now they are having to front the money. Something 

is just desperately wrong there. 

So I just wanted to share a story where a little girl came to volunteer with her mom from Boston. She was 9 years old. And she 

asked her mother on the third day of working in Lakeview with the 

Beacon of Hope: ‘‘Mom, when are we going back to America?’’ I said 

I was not going to do this, but it hit me between the eyes. And I 

ask you, Subcommittee Members and the Senators and our government: When are we coming back to America? We really want to rejoin the country. We are real American lives. We are a real American neighborhood. We want to be real Americans again. But it is 

just not happening. 

Chairman LANDRIEU. I thank you for that wonderful testimony, 

and that is a magnificent way to end a beautiful, heartfelt testimony, and that is why our Subcommittee is here, to see what we 

can do to get people back in their homes. And as you can see, the 

numbers are scrambled and jumbled. There is a lot of information 

that needs to be cleared up. 

In the next panel will be people that have the ability to expedite 

this program, and most certainly those of us up here can do that 

as well. Ms. Gordon. 

25

1The prepared statement of Ms. Gordon appears in the Appendix on page 93. 

TESTIMONY OF DEBBIE GORDON,1 PRESIDENT, CHIMNEY 

WOOD HOMEOWNERS’ ASSOCIATION, NEW ORLEANS, LOUISIANA 

Ms. GORDON. My name is Debbie Gordon. My home is located in 

New Orleans East. Our community received up to 10 feet of water, 

in which 5 feet sat for 21 days. This was far more catastrophic 

than the hurricane itself. 

The administration of the Road Home is dysfunctional and bureaucratic. Why? Everyone knows what is needed, but incompetency and politics is making it difficult for the victims to be compensated. My personal experience with Road Home has been discouraging, frustrating, and stressful. 

Chairman LANDRIEU. You can take your time if you need to. 

Ms. GORDON. The recent announcement regarding the shortfall of 

money has created additional stress and fear. I applied for my 

grant the same day it became available on the Web. It has been 

9 months since I started this process, and I am still waiting. I attended the required interview. I had all the documentation. I was 

subject to fingerprinting like we are the criminals. 

Again, we had to take it thinking this will all be over in a short 

time and I can get my life back. I was displaced three times and 

was dealing with the situation from afar, but I did my part. My 

home was inspected, and I thought I was on my way to an award 

letter. My application has been in the option letter created status 

since October, and as of this date I have never received my letter, 

nor do I have an appointment for any final closing. 

Being the president of our association, I stay informed of all developments and heavily involved with the constant changing developments. Our community of 74 homeowners is all in the same situation. One out of 74 homeowners has made it to the title company 

but has yet to be scheduled to sign and receive any money. We 

have 74 homes that are sitting there, and we all still have mortgages. 

The responsiveness to inquiries with the Road Home counselors 

is a waste of time because they do not know what is going on themselves. They have been trained to remain customer friendly and 

close with the script—‘‘Remember, Louisiana wants you to come 

home’’—which is a slap in the face when you cannot get answers. 

If I had to grade the responsiveness on this program, it would receive an ‘‘F.’’

Expedite all awards like yesterday. Besides the Road Home 

grants, our community needs major infrastructure repairs, basic 

city services, hospitals, grocery stores, and everything that goes 

with the quality of life we had before Hurricane Katrina. My community had two hospitals before Hurriciane Katrina, and as of this 

date we have none. I mean zero hospitals. 

The State Government has been informed of the health crisis but 

do not seem to care. We still do not have a major grocery store 

chain and none that has committed to come back. I suggest local, 

State, and Federal stop finding ways to delay the process. The 

fraud prevention attachments with the Road Home grants should 

26

1The prepared statement of Mr. Silvestri appears in the Appendix on page 96. 

be added to the administrators instead of the citizens. We did not 

commit a criminal act, so why are you treating us like we did? 

If layers of verification are removed and you streamline the process, you upgrade the computer system, this can happen fairly 

quickly. And as far as Senator Coburn, who is gone, he wants to 

know why Louisiana has a surplus. It is because the people that 

are repairing have put that money back into the surplus. And that 

surplus needs to go for infrastructure. And to compare us to Mississippi—there is no comparison. 

I am sorry for getting emotional, but this has been an emotional 

time. I thank you for letting me come up here, and I hope at least 

I can get my application processed today. Thank you. 

Chairman LANDRIEU. Thank you, Ms. Gordon. You may very 

well, and I really appreciate it. It was tough for some of the homeowners to come up and to have to testify in this way, but I think 

that by getting this on the record, we will all be in a better position 

to be able to meet the needs of this program and to deal with it 

more with some more urgency. And that is what my hope was 

when we called this hearing, and your testimony will be very well 

received. 

Mr. Silvestri. 

TESTIMONY OF FRANK A. SILVESTRI,1 CO-CHAIRMAN, CITIZENS’ ROAD HOME ACTION TEAM (CHAT), NEW ORLEANS, 

LOUISIANA 

Mr. SILVESTRI. Thank you, Senator Landrieu. The stories you 

have just heard from the people on the panel are unfortunately 

representative of a great many residents of the Greater New Orleans area. There are 120,000 people waiting for grant checks, and 

the program is running out of money. If it was not bad enough before, the thought that after all this time of waiting that they may 

not get their grants or their grants are going to be cut is eliminating what little hope people have had left. 

Neither the State of Louisiana nor the Federal Government 

should let this happen. The people that this program was intended 

to help are hard-working, honest homeowners. They are determined to rebuild their lives. But they have been stretched to the 

breaking point, and their greatest enemy right now is time. The 

longer it takes, the fewer of them will come back, Senator Stevens. 

Many have come back. Many more want to return, but they cannot 

do it without the money. 

Our organization has worked with the LRA and the Office of 

Community Development and the Road Home Program to try to 

help make the program better, and we have found that the officials 

involved, despite all the mistakes that have been made and all of 

the wrong turns that have occurred, are good people who want to 

do this job. They want to do it right. They are somewhat hamstrung, however, by the program being stuck in the Stafford Act, 

the Federal regulations they have to comply with under HUD and 

FEMA, and policies that seem to change at the Federal level every 

other week. That makes it really hard to plan and to administer 

those funds. 

27

1The prepared statement of Mr. Trapani appears in the Appendix on page 111. 

There is red tape both at the State and Federal level, and it 

needs to be eliminated. Whatever this Subcommittee could do to 

identify the red tape that could be cut out, it needs to be done. 

The suspicion that Louisiana is treated differently from other 

States, is borne out by the fact that unlike other States, we are 

still not given the waiver of the 10-percent match contribution for 

FEMA that was given to New York after September 11, 2001, and 

Florida after Hurricane Andrew. The damage estimates were 

wrong. FEMA was wrong. You only have to go to New Orleans and 

the area to see that. The damage was substantial, and it was greater than estimated. We just found out this week that FEMA was 

wrong on the damage that was estimated for the city. 

This Subcommittee and Congress should stand squarely behind 

the principle that no victim of this catastrophe should be left behind or told that a grant has to be cut because there is not enough 

money. 

It is widely held that the canal walls failed because there was 

shortsightedness in planning flood protection, that the Federal levees and canals were not strong enough because we cut corners 

there. Do not cut corners on the recovery. You are going to compound one disaster with another. 

There are 16,000 people living in FEMA trailers right now, and 

we have another hurricane season coming. Last year, an elderly 

woman that lives in a neighborhood right down the street from me 

was about to move back into her home, and she died because a tornado struck. And as I say, we are rapidly coming up on hurricane 

season, and we are out of time. 

Your help is urgently needed. The President said whatever it 

takes, however long it takes. The job is not finished. We need your 

help to rebuild New Orleans. 

Chairman LANDRIEU. Thank you. Mr. Trapani. 

TESTIMONY OF FRANK A. TRAPANI,1 PRESIDENT, NEW ORLEANS METROPOLITAN ASSOCIATION OF REALTORS, NEW ORLEANS, LOUISIANA 

Mr. TRAPANI. The Metropolitan New Orleans Association of Realtors thanks you, Senator Landrieu, and the Subcommittee for continuing to focus on the challenges caused by Hurricanes Katrina 

and Rita and the levee failures. There is much to be learned by this 

disaster, and we applaud your effort and leadership. 

The second disaster that we are faced with is the implementation 

of the Road Home Program. We have heard the architects of the 

Road Home Program just this afternoon differ on its building, 

whether or not we are covering wind damage, flood damage, 

106,000 people, 137,000 people, and people like Ms. Uddo and Mr. 

Thomas here are having difficulties relating to the indecision on 

the part of government. The problem is we need money. We either 

have money or we do not have money or we need to appropriate 

money. 

The numbers are anywhere from 3 to 4, 5 times what is appropriated or we have adequate funds. We are not instilling confidence 

in the people who we need to, and the President did say we would 

28

put them back in their homes and help repair New Orleans as it 

was prior to the hurricane. 

We need to repair the damage to people’s properties that the failure, again—and we cannot forget—the failure of the levee system 

created. 

Due to a lack of planning, jurisdictional issues, I think it was 

politics, as someone said, we have approximately 17,000 people 

have received checks and an estimation of anywhere up to another 

120,000 people sitting and waiting for an opportunity to receive the 

monies that they feel are due them to rectify their housing needs. 

We are sitting here with an obvious problem, administrative 

problem. I look at the local SBA business—I look at local banks on 

a daily basis providing SBA business loans on a day-to-day basis 

that take a matter of days and weeks to approve. Is it possible they 

could have been used to provide SBA disaster funds? This would 

have allowed some funds to be distributed throughout the Metropolitan New Orleans area and may have saved some of the businesses that these folks talk about that have gone bankrupt—the 

grocery store, the local cleaners, the drug store, any number of 

local businesses that make a community. They moved back to their 

respective neighborhoods and have to travel miles to be able to go 

to a grocery store. That is not living. That is existing. And the people were living in a community and happy in their community before the levees failed and created this problem 

We are hoping that the Congress can as a result of looking at 

this problem recognize that a comprehensive national disaster plan 

be created. 

Chairman LANDRIEU. If you would wrap up in 30 second. 

Mr. TRAPANI. I thank you all for hearing us today, and I just 

want to share with you that one other problem exists. When these 

folks rebuild their houses, there is a serious insurance problem out 

there. Rebuild the house, try to refinance it, and then have to try 

to get homeowner’s as a result of a flood that they had nothing to 

do with leaves them in a situation where they cannot afford to insure their properties. 

I thank you all very much for taking the time to listen to us. 

Chairman LANDRIEU. Thank you very much. I have just a few 

questions, and then we are going to move to the next panel, but 

let me again thank each of you for your testimony. 

Is it true—and let me just ask you, Ms. Uddo. Is it true that 

homeowners throughout——

Senator STEVENS. Excuse me. May I ask just one question? 

Chairman LANDRIEU. I am sorry. Go right ahead. 

Senator STEVENS. I really do have to go. I am confused about one 

thing, though. You all say you want checks given to the applicants. 

We have never given checks to the applicants. We have given approval to rebuild a home and drawn a check payable to the applicant and the builder. Now, am I hearing this wrong? Do you all 

want checks given to the applicants without the house being under 

construction? 

Mr. THOMAS. No. 

Mr. SILVESTRI. May I say, Senator, the problem is that the State 

cannot administer the program efficiently if they are hamstrung by 

Federal regulations and by inconsistent policy at the Federal level. 

29

Senator STEVENS. It is Federal money, Mr. Silvestri. So I do not 

want to hear that. You are going to have to live up to the same 

regulations we live up to in all of our emergencies and earthquakes 

and what-not, as I told you. But are you saying that the Federal 

Government should draw a check to an applicant before the house 

is even under construction? 

Chairman LANDRIEU. That is the way the program was designed. 

Mr. SILVESTRI. Yes. 

Chairman LANDRIEU. And that was the way the program was designed in Mississippi, I understand. But I could be wrong about 

that. But I believe that the check is a compensation check to homeowners with X amount of damage, and the checks go to the applicants. Now, that was originally done differently in Louisiana, but 

now that has changed, I believe, to reflect——

Senator STEVENS. And there is no obligation to rebuild? 

Ms. UDDO. Oh, no, there——

Chairman LANDRIEU. Initially there was an obligation to rebuild. 

Ms. Uddo, why don’t you respond to that, if you could. 

Ms. UDDO. You have options with Road Home. You can either rebuild—take your money, rebuild, or you can relocate. You can sell. 

You can turn over your right to your money to a new buyer if a 

new buyer will live there for 3 years. There are stipulations to that. 

So my question to you, Senator, is: How can one start construction if they do not have any money to start with? 

Senator STEVENS. Well, you get approval for construction, and 

once you have the approval, the contractor starts building your 

house. 

Ms. UDDO. But a lot of contractors want money up front, and you 

need money—electricians want to be paid right away. I mean, it 

just does not work that way there. 

Senator STEVENS. Well, I have got to tell you, the California 

earthquake, our earthquake, the enormous floods of the West, they 

have not had the delays that you have had in Louisiana. And I do 

not understand. We have all complied with the same Federal regulations that you have got. 

Now, I am sorry I have to go, but I do not understand the concept that you can draw a check to someone to rebuild a house or 

to replace a house and say they can walk off—could they go to 

Texas with the money, buy a house there? 

Ms. UDDO. No. 

Senator STEVENS. How do you know? 

Chairman LANDRIEU. Well, not under our program initially designed, but under the Mississippi program, there was no requirement for rebuilding. And I keep bringing that up only because in 

both situations we have done some different things than we have 

done in the past, and not saying which one is better or worse, but 

that it does exist. The compensation program which was approved 

by HUD that does the CDBG allocation——

Senator STEVENS. Well, we had a fire that destroyed a lot of 

homes, and James Lee Witt of FEMA went up with me, and we 

reached an agreement on a policy that he put into effect that they 

could rent trailers, bring them to the place, and they started a selfhelp process, and they actually started their own homes that same 

30

year. And they got checks payable as they made progress on the 

home. 

But this is a different concept, and I understand that to a certain 

extent some of the problems about delay, if a person just comes in 

and says I want the money to rebuild my house with, there is no 

approval of the concept of rebuilding at all? I mean, I thought the 

money was to rebuild New Orleans. 

Chairman LANDRIEU. Go ahead. 

Mr. SILVESTRI. The program changed, and I think it was an effort—as it has been described to us by the LRA, it was a hybrid 

program between compensation and rebuilding. And as originally 

intended, they built in guarantees and incentives to encourage rebuilding. And then HUD policy changed about 2 months ago, and 

they were told, it is our understanding, they had to issue the payments in a lump sum. 

Now, one other quick thing. What is holding up—for example, the $1.4 or the $1.7 billion that FEMA will not release, that is elevation grant money. That is money that you have to have to elevate before you can rebuild, and now the program is in a stall mode 

because if that money does not get turned loose and people cannot 

know whether they are going to get money to elevate, they cannot 

know whether or not they are going to be able to rebuild, because 

you have to elevate first. Right now the program is paralyzed or 

stalled because FEMA will not release this additional money. 

Senator STEVENS. I understood elevation to be building so far off 

the ground. 

Mr. TRAPANI. Correct. 

Senator STEVENS. Right? Is that your elevation? Go over to Rehoboth. They had a terrible disaster over there when the ocean came 

in and destroyed so many houses. They built the area below the 

homes, and then they built the homes above it. But they did not 

have to build one before they built the other. 

Mr. SILVESTRI. No, but you have to elevate before you rebuild. If 

your house is damaged, you are going to want to pick it up first 

and get the foundation under it before you start working on it. You 

do not want to fix it up and then pick it up and then damage it 

in the process of elevating it. 

Ms. GORDON. Can I say something? Senator Stevens, most of the 

people have put their roofs on, their windows, their siding. All the 

Road Home really is is a gap from what the insurance has not paid, 

and every grant that is given, we are required to sign agreements 

stating that we are going to either rebuild or comply with the laws 

that have been driven. 

Senator STEVENS. I understand that now. Thank you very much. 

Chairman LANDRIEU. Thank you, Senator, for coming. 

Go ahead, Mr. Thomas. 

Mr. THOMAS. They have Option 1, 2, and 3. It is so confusing. 

I understand Option 2. I own the property. Once they agree—once 

the guy called me when I was in the hospital in severe pain and 

could not even talk, he said, ‘‘Hey, live or die, we are ready to settle it right now.’’ I said, ‘‘Well, my life is worth more than the 

money. I am going to live. Talk to you later.’’

But what happened is I selected Option 2. Option 2 states that 

after the insurance money come out, whatever is left, they cut a 

31

check and I give them the deeds to the property. And then I can 

go anywhere I want to go and relocate, which I will stay in New 

Orleans because we have family property. But to the end, I would 

say I could not understand the rest of it. I could not be where I 

was no way because I am right by the levee, would never get a permit to build there again. That is my understanding. You cannot 

meet the regulation, cannot get high enough, cannot get enough 

money, $100,000 is not going to be a $250,000 home. I am on a 

fixed income. I am hungry, broke. 

Chairman LANDRIEU. But you are very good in your testimony, 

Mr. Thomas, and let me——

Mr. THOMAS. And I am healthy and I am blessed. 

Chairman LANDRIEU. Thank you. And let me just add as we 

wrap up this panel, and I have one or two questions. I think as you 

all can sense from even Members who have been very focused on 

the situation—Senator Stevens has been down there himself. He 

has walked through several of the neighborhoods. Senator Coburn 

has come down, I think not once but twice in terms of hearings. 

There is still a difficulty understanding the scope of the disaster 

and the destruction of the neighborhoods, how broad it is. And 

when you ask people are they coming home, they would like to 

come home to a neighborhood. But as you said, if there is no store, 

there is no drug store, there is no library, there is no school, should 

they get their Road Home money and go live somewhere else in the 

city? Or should they take the 40-percent reduction and go move to 

Arkansas or Texas? 

These are very difficult decisions, and I think there is a way—

obviously, there has got to be a way to make this more simple. 

But I want to ask for the record from homeowners, are homeowners—and I understand this is true, but I want you to say it, 

if it is, on the record. Are homeowners paying mortgages since Hurricane Katrina and Rita hit, continuing to pay mortgages? 

Mr. THOMAS. Yes. 

Ms. UDDO. Yes. 

Chairman LANDRIEU. Has there been any relief given? So people 

are paying mortgages on homes that either do not exist and have 

not been livable for 18 months? 

Ms. UDDO. And you will see a lot of foreclosures. There are numerous foreclosures. The mortgage companies are pressing in. 

Mr. THOMAS. The mortgage company waived a lot of those notes 

with no interest, ma’am. They really did. 

Ms. UDDO. Initially. 

Mr. THOMAS. They waived a lot of them. 

Chairman LANDRIEU. You said in your case they did. In your 

case, Ms. Uddo, they did not. In your case, Ms. Gordon? 

Ms. GORDON. No, they——

Ms. UDDO. They worked with you for a short term, most homeowners. They gave us all a few——

Ms. GORDON. Three months. 

Ms. UDDO. Three months, but, now for months, for at least a 

year, people have been having to pay their mortgages. Now, the 

SBA loans that people have taken out, those are coming due now, 

so you have some cases where you have someone paying rent someVerDate 0ct 09 2002 10:48 Jan 22, 2008 Jkt 036609 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 P:\DOCS\36609.TXT SAFFAIRS PsN: PAT
32

where else, mortgage, plus now they are accountable for their SBA 

loan. 

Chairman LANDRIEU. And what is the Federal Government telling you about the SBA loans? Do they have to be paid back with 

your grant or not? 

Mr. SILVESTRI. Yes. 

Chairman LANDRIEU. So once you get your grant, you have to 

pay your small business loan back with the money that you got 

from the grant. 

Mr. THOMAS. And that hurts. 

Ms. GORDON. I cannot answer that because I have not been 

there. 

Chairman LANDRIEU. Well, that is my understanding. 

Mr. SILVESTRI. There is a coordination of the SBA benefits. There 

was some confusion about that initially, but I think that has been 

worked out now with LRA and SBA. But, yes, some of the—if the 

homeowner knows how to do it right and they are getting the—I 

think they are getting good instruction now, they can maximize 

their recovery there Road Home and also get SBA. But they do 

have to pay a portion of the SBA back. 

Ms. UDDO. One thing I wanted you to know—and Senator Stevens—that third option was you can sell your property to the State, 

which is a whole other issue because now we have homeowners 

deeply concerned about what the States is going to do with those 

properties. And so we have homeowners actually holding up on rebuilding because they know that neighbor next door is selling to 

the State. And, that is just a whole other problem that is keeping 

people from rebuilding. So I did not know if you knew that. 

Chairman LANDRIEU. Thank you. Thank you all very much. 

Let’s call the next panel. The last panel this afternoon is made 

up today of Nelson Brego ́n of HUD, David Maurstad of FEMA, 

Susan Elkins from the Office of Community Development, and Isabel Reiff from ICF International, which is the contractor. As you 

all are taking your seats, I will introduce you because of our time 

constraints. 

Nelson Brego ́n is Assistant Deputy Secretary for Disaster Policy 

and Response at the Department of Housing and Urban Development. He is responsible for oversight of the $18 billion in disaster 

grants primarily focused on long-term disaster recovery in the Gulf 

Region. 

Our next panelist is David Maurstad, Director of Mitigation and 

Administrator of FEMA. He is responsible for leading some of 

America’s multihazard risk reduction programs, working to secure 

the homeland from natural hazards. 

Susan Elkins is our next panelist. She is the Executive Director 

of the Office of Community Development. She was born and raised 

in Baton Rouge, has been committed to the State of Louisiana 

throughout her career. She has been working for the State since 

1972, and she now serves as the point person in the Office of Community Development that runs the program. 

And our last witness is Isabel Reiff. She is a Senior Vice President of ICF. She is the Chief Program Executive Officer of the 

Road Home Program. 

33

1The prepared statement of Mr. Brego ́n appears in the Appendix on page 113. 

If we could begin, Mr. Brego ́n, with you, please, and if you would 

limit your testimony to 3 minutes, we are going to have some questions, if we could, about the panel before and the program status. 

TESTIMONY OF NELSON R. BREGO ́ N,1 ASSISTANT DEPUTY SECRETARY FOR DISASTER POLICY AND RESPONSE, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Mr. BREGO ́ N. Thank you, Chairman Landrieu. My name is Nelson Brego ́n. I am a Senior Executive Service career employee with 

the U.S. Department of Housing and Urban Development. I started 

my career with HUD 27 years ago under Secretary Moon Landrieu. 

I think you know who I am talking about. 

Chairman LANDRIEU. I have heard of him before. 

[Laughter.] 

Mr. BREGO ́ N. Yes. I have recently been appointed as the Assistant Deputy Secretary for Disaster Policy and Response by Secretary Alfonso Jackson to coordinate HUD’s disaster response 

across the Department, with other Federal agencies, and to deal 

with any red tape that perhaps shows up as we undertake this 

great task. 

Previously, I was the General Deputy Assistant Secretary in the 

Office of Community Planning and Development, and that is the office responsible for the Community Development Block Grant Program. So I have vast experience in disaster funding. I worked directly with the Empire State Development Corporation and the 

Lower Manhattan Development Corporation dealing with the September 11 supplemental appropriation of about $3.5 billion. 

In the past year, through the tireless efforts of State and local 

government staff in Louisiana, Mississippi, Texas, Alabama, and 

Florida, and with more than $3.1 billion expended, the groundwork 

has been laid for a sustained recovery. Yet many challenges remain, especially in the State of Louisiana. 

In response to the disasters, President Bush signed the first supplemental appropriation providing $11.5 billion on December 30, 

2005. Within 1 month, Madam Chairman, HUD Secretary Jackson 

allocated the funds, and the State of Louisiana received the maximum 54 percent that we have been talking about. 

Last June, after the President signed the second CDBG supplemental providing an additional $5.2 billion, the Secretary once 

again promptly allocated these funds to the affected States—again 

providing the maximum amount allowed by law to the State of 

Louisiana. In total, HUD has allocated a combined $10.4 billion in 

supplemental CDBG funding recovery funds, the maximum amount 

allowed by the law. Today, almost $2 billion has been expended. 

The CDBG supplemental appropriations acts passed by Congress 

were clear in their intent and extraordinary in the flexibility provided to the States, far beyond the traditional nature of such supplemental block grant funding. Congress directed that HUD shall, 

the Secretary shall waive any statute, any regulation with his control. There were only four exceptions that he could not waive. That 

was civil rights, fair housing, environmental laws, and DavisBacon. 

34

1The prepared statement of Mr. Maurstad appears in the Appendix on page 116. 

Chairman LANDRIEU. You have 10 seconds, please. 

Mr. BREGO ́ N. In the case of Louisiana’s Road Home Program for homeowners, the State’s action plan set aside about $6.3 billion 

based on local estimates. Two factors largely determined the program’s delivery cost. These were the estimated number of households and the amount per grant. 

I tell you what, Madam Chairman. I have a lot more to say, so 

why don’t I stop and we will open it for questions and then perhaps 

I would be able to answer all your questions. 

Chairman LANDRIEU. Thank you. Mr. Maurstad. 

TESTIMONY OF DAVID I. MAURSTAD,1 ASSISTANT ADMINISTRATOR, MITIGATION DIRECTORATE, FEDERAL EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF 

HOMELAND SECURITY 

Mr. MAURSTAD. Good afternoon, Chairman Landrieu and Ranking Member Stevens. I am David Maurstad, Assistant Administrator for FEMA’s Mitigation Directorate. FEMA’s Hazard Mitigation Grant Program provides States and communities with post-disaster funds to help them implement long-term mitigation measures. By funding such activities, the Federal Government helps 

communities rebuild stronger and safer. 

As early as the fall of 2005, Louisiana recognized mitigation’s 

value and set aside $250 million in HMGP funds to encourage local 

governments to plan for and prioritize traditional mitigation activities such as planning, elevation, and acquisition. Since then, the 

State has invested valuable time trying to incorporate the bulk of 

their HMGP funds, over $1 billion, into Road Home, a State-designed program to compensate storm victims with HUD CDBG 

funds. 

Unfortunately, Louisiana did not consult FEMA while developing 

Road Home; consequently, they have encountered difficulties trying 

to combine the two programs. In August 2006, FEMA worked with 

HUD and Louisiana in a flexible and accommodating manner, offering creative options to address barriers to progress. Ultimately, 

the State’s decision to exempt senior citizens from a Road Home 

penalty, again, without consulting FEMA, makes their Road Home 

Program unworkable because the exemption conflicts with the Stafford Act’s nondiscrimination in disaster assistance section, which 

states, ‘‘Relief and assistance activities shall be accomplished in an 

equitable and impartial manner, without discrimination on the 

grounds of race, color, religion, nationality, sex, age, disability, 

English proficiency, or economic status.’’

The primary goals and objectives of the two programs are different. The Road Home is a compensation program to individual 

homeowners; whereas, HMGP helps communities reduce their vulnerability to future events with Federal grants. Last October, Louisiana submitted a single HMGP application for over $1 billion to 

acquire properties under Road Home. The proposal did not indicate 

whether the properties met HMGP requirements, nor did it describe how such requirements could be met. Without this information and considerable legal barriers, FEMA denied the application. 

35

1The letters submitted by Mr. Maurstad appears in the Appendix on page 227. 

2The prepared statement of Ms. Elkins appears in the Appendix on page 123. 

Madam Chairman, I would like to provide two copies of letters 

related to these matters for the hearing record.1

Community-wide mitigation educates citizens about hazards, motivates them to incorporate mitigation into their land-use decisions, 

and galvanizes them to reconstruct stronger. I have visited the 

Gulf Coast many times since August 2005, and I know the victims 

are frustrated, and they do not see progress. I have heard firsthand 

similar testimony as was shared by the previous panel. 

As a former Mayor, State Senator, and Lieutenant Governor, I 

am no stranger to the challenges that sometimes accompany Federal funds. My experience also makes me confident that a concerted 

Louisiana-FEMA focus on HMGP will result in effective mitigation 

activities across the State. If the Road Home and the HMGP operate separately, FEMA can provide the State’s communities with the 

resources they need to reduce future property damage and loss of 

life during future events—our collective mission. With Road Home’s 

attention to homeowners and HMGP’s community focus, LouisianaFEMA collaboration can result in a whole that is greater than the 

sum of its parts. 

Thank you, Madam Chairman, and I look forward to your questions. 

Chairman LANDRIEU. Thank you. Ms. Elkins. 

TESTIMONY OF SUSAN ELKINS,2 EXECUTIVE DIRECTOR, OFFICE OF COMMUNITY DEVELOPMENT, STATE OF LOUISIANA 

Ms. ELKINS. My name is Susan Elkins, and I am here today representing the Office of Community Development. The Office of 

Community Development is the fiscal agent responsible for administering the disaster relief funds provided by Congress. We are now 

in our 11th month of the program since the launch of the recovery 

program. 

As of May 23, over 139,000 applications have been received, 

115,000 appointments have been held, 60,000 benefit option letters 

have been sent to homeowners, 41,000 homeowners have selected 

their option, and we have closed 20,000 homeowners as of today. 

We have spent over $1 billion to date that has been paid out to 

homeowners. We will close 10,000 cases this month, and we will 

continue to ensure that those closings increase as the throughput 

allows. 

We have heard a lot about how slow the program is going, and 

I would like to address that. 

To determine how fast or slow the Louisiana program is moving, 

there is no precedent for this type of program. The only possible 

comparison might be how Mississippi did in the same amount of 

time after starting its program. 

Mississippi began their program in January 2006. Louisiana 

began their program in June 2006, approximately 6 months later. 

This was due to the need for the additional disaster recoveries that 

were provided by Congress in June 2006. Mississippi has done a 

fantastic job in their program. 

36

1The chart referred to appears in the Appendix on page 134. 

In the materials that we have provided, you will find a chart that 

compares activities that are common to both Louisiana and Mississippi programs starting from the time that each State selected 

its management contractor and tracking progress on a month-bymonth basis.1 By the ninth contract month, Louisiana sent over 

30,000 more option letters than Mississippi, and we closed more 

than 15 times the number of closing. In the same time frame, Mississippi received approximately 17,000 applications, while Louisiana had 110,000 applications—six times more. 

At this time I would like to offer some observations for you to 

consider in examining how you can aid the process and using Federal funds for future disaster recovery, and first is data. There is 

great incompatibility in the data that is generated and kept by individual Federal agencies, all of which gather information, but 

there are no standard conventions for the most basic entries like 

street addresses, and there is no standing agreements to provide 

that information, and it takes months to get that information. 

Much time has been wasted because the information needed from 

these agencies to make informed decisions was not available or reliable or usable. And an example is the first time we used the 

FEMA data, which we had to have for verification. We could only 

get a 10-percent match right for the verification of duplication of 

benefits. 

The second is redundancy. We have lost count of how many times 

the same work has been done but by different agencies. Here is one 

example: The same properties have been inspected four and five 

times—first by FEMA, then by SBA, then the private insurers, 

then the Road Home, and then the lenders. So homeowners are 

frustrated. 

There is also the duplication of benefits, which is huge. The Stafford Act requires us to find and quantify funds from other 

sources—including private sources—that are presumed to be duplications. The need to do this has slowed down the recovery enormously. Just try getting insurance information from hundreds of 

private insurance companies for tens of thousands of payments 

that are made each day, daily, because they change, from an industry that is already overwhelmed and they have no business incentives to provide this information to the State. Sometimes it would 

take 90 days or longer. It is a nightmare. 

I urge you to revisit the duplication of benefit provisions, particularly as they relate to private as opposed to Federal funds, and how 

they apply to loans such as those from SBA as opposed to grants. 

Last, but not least, the Federal regulations inhibit rapid response to disasters. Given time, I could recite a litany of examples 

of how these well-intended regulations—and they are well intended. Clearly, they are needed in normal times, but they hamper 

and hamstring recovery efforts tremendously. 

Chairman LANDRIEU. Can you wrap up, please? 

Ms. ELKINS. The CDBG rules differ from FEMA rules, SBA rules. 

SBA rules differ from DOT rules. And that is why we are not able 

to leverage these dollars to use them in the recovery process. We 

37

1The prepared statement of Ms. Reiff appears in the Appendix on page 135. 

have worked now for a year with FEMA to be able to use the 

HMGP dollars, and to date, we have not been able to use those. 

So I will wrap it up. 

Chairman LANDRIEU. Thank you, and you can submit the rest for 

the record. Finally, Ms. Reiff. 

TESTIMONY OF ISABEL REIFF,1 SENIOR VICE PRESIDENT, ICF 

INTERNATIONAL, INC., AND CHIEF PROGRAM EXECUTIVE, 

LOUISIANA ROAD HOME PROGRAM 

Ms. REIFF. Good afternoon, Chairman Landrieu. I am Isabel 

Reiff. I am a Senior Vice President of ICF and the Chief Program 

Executive for the Louisiana Road Home Program. 

Before I begin, let me say that it has been a privilege to work 

on this program with the citizens of Louisiana. We take the responsibility very seriously to both deliver the grants to these individuals who have suffered so much and to do it with compassion. The 

resilience of these homeowners has been nothing short of inspiring, 

and I give you my word that we will reach out to each of the individuals here and to everyone else whom we have provided with 

anything less than A-plus service. 

We appreciate the opportunity to discuss the challenges and 

issues that ICF and our team face in delivering the largest recovery program in our Nation’s history. To summarize some of the accomplishments, as of last night we have received, as Susan Elkins 

just said, about 139,000 applications and just under 108,000 homeowners have scheduled or held appointments. By this time next 

week, we will have submitted 70,000 award letters and we will 

have held more than 20,000 closings, which result in a commitment 

of $1.5 billion to homeowners. At this rate and with no further program changes, 90,000 eligible homeowner applicants will receive 

their Road Home funds by the end of this year. 

Madam Chairman, it is important to understand that this program has been delivered over the past 7 months in a very challenging post-disaster environment during which many changes 

have been made to the program, including alterations to the calculation of benefits, the additions of new categories of eligible recipients, and a revised process of establishing pre-storm value. 

I want to be very clear when I say that we recognize that these 

changes were made in a very honest effort to improve the program 

and for the benefit of the homeowner. But the fact is that there has 

been an extraordinary number of midcourse corrections to the underlying delivery model of this program in an environment that 

would not tolerate an interruption in service. We need stability. 

From a delivery perspective, it is difficult to satisfy a homeowner 

if we cannot give them definitive information in a changing environment. We are very concerned about the quality of our customer 

service, and we continuously work to improve it. However, the program is ahead of schedule, and I am afraid that the accelerate pace 

has come with a price. 

Madam Chairman, because there is often confusion in the press 

and elsewhere about when ICF started operations in Louisiana 

under this contract, let me take a moment to provide some context. 

38

We signed our contract in June 2006, a full 10 months after the 

hurricanes. Under the terms of the contract, the production phase, 

the actual processing of claims did not begin until this past October, 14 months after the hurricanes. So we have only been in production for 7 months, and it is in those 7 months that we have 

achieved the accomplishments that we have just recently referred 

to. 

This program has already been audited seven times by State and 

Federal authorities without major concern. We are comfortable 

with that degree of transparency. We have always operated that 

way. We have, of course, faced significant and unprecedented challenges. We are proud of our achievements as we accelerated the 

final stage of getting grants to the homeowners. 

I should point out that originally the Road Home contract required ICF to complete the process of closing on all of these transactions by the end of 2008. We now project that much of this work 

will be done and most grants awarded a full year earlier than the 

original schedule, assuming that there are no additional changes to 

the program and that there is an application deadline. 

We do appreciate that nothing would be fast enough for the thousands of homeowners anxious to return to their homes, and we are 

constantly seeking ways to accelerate our progress and improve our 

performance. 

Finally, as part of our obligation to inform the State of program 

progress and outlook, ICF has been providing weekly reports on 

Road Home progress since November. 

So, in summary, I would like to emphasize the following points: 

The Road Home Program is a recovery challenge unprecedented in 

its scope and complexity. It was designed and approved by the 

State of Louisiana, and ICF has been implementing this program 

at an accelerated pace for the past 7 months, but only for 7 

months. The program constantly evolves, and we have made dozens 

of complex changes in delivery with virtually no interruption in 

service. And despite all of these challenges, working together, with 

all programs stakeholders, I believe that dramatic progress has 

been made and most eligible homeowners will have been compensated by year-end, much earlier than required under our contract. 

I would be pleased to answer any questions that you may have. 

Chairman LANDRIEU. Well, thank you. There are going to be 

many questions. There will be many submitted to the record, and, 

of course, you all will be given a time frame to respond. Our time 

will only allow just a few questions this afternoon. 

I would like to begin with our HUD representative, if I could. 

Since HUD is in the business of providing housing—and this is the 

greatest challenge we have on the Gulf Coast, is getting our people 

back into their homes. This has been focused today on homeowners, 

but, of course, we have renters and we have multifamily homes. 

These are predominantly single detached homes that we are talking about. But if the 54-percent cap on the initial allocation between Mississippi and Louisiana had not been placed, has HUD yet 

done a calculation as to what the actual amount of money would 

be needed to cover the programs that have been described today? 

And if you have done it, give me what the numbers are. If you have 

39

not done it, are you able to do it? Because I am going to ask you 

to do those calculations? 

Mr. BREGO ́ N. Madam, again it is a matter of how do you look at 

damage and what is it that the State wants to accomplish. Right 

now, for instance, the program that has been described by the 

State is an eligible activity, whether they want to do the basic compensation, whether they want to do wind mitigation. Those are all 

eligible activities——

Chairman LANDRIEU. With all due respect, that is very clear 

right now, what the Louisiana program is and what the Mississippi 

program is, and it is getting clearer as this hearing is going on. 

There is still a question as to whether we are trying to cover wind 

and flood. But have you done those calculations? 

Mr. BREGO ́ N. We do have the numbers of how many——

Chairman LANDRIEU. What are they, do you know? 

Mr. BREGO ́ N [continuing]. Units are—well, they fluctuate between 105,000 and 150,000, which was what the chart showed that 

we had before. 

Chairman LANDRIEU. There is a big difference between 105,000 

and 150,000, and so what I would like to do is, without pressing 

today, I am going to submit a letter to HUD to ask the question: 

If there was no arbitrary cap placed by Congress, which I acknowledge was done, just looking at the program that has been described, up to $150,000 grant for flood only, what would that number be? Since you all are in the business of housing, I am going to 

ask the housing officials to give us that number. 

Now, Mr. Maurstad, if I could ask you, you stated in your testimony that the State never consulted you about the use of hazard 

mitigation grants. Could you go over that again? I do not know if, 

Ms. Elkins, you would be the appropriate one from the State to respond, but that is not my understanding. But if you could please 

repeat that? 

Mr. MAURSTAD. Yea, ma’am. When the Road Home Program was 

developed, we were not consulted as to how the Hazard Mitigation 

Grant Program would be involved in the Road Home Program. 

Chairman LANDRIEU. But was Don Powell consulted about that 

issue? 

Mr. MAURSTAD. That I am not sure. 

Chairman LANDRIEU. Was HUD consulted about that issue? 

Mr. BREGO ́ N. No, ma’am. 

Chairman LANDRIEU. OK. So the State arbitrarily on their own 

decided to—the hazard mitigation money, there was not conversation——

Mr. MAURSTAD. No. In all fairness, we began working with the 

State in the fall of 2005 with the first $250 million that they allocated to the various parishes for traditional hazard mitigation 

work. There was a lock-in amount that was provided to the State 

that they would have approximately $1.47 billion available totally 

for hazard mitigation. As they have discussed in testimony today, 

they were looking at incorporating the balance of the Hazard Mitigation Grant Program into Road Home. 

Chairman LANDRIEU. Because they thought they would be short on the Road Home money and needed to use that $1.5 billion to 

reach their target number of homes covered. 

40

Mr. MAURSTAD. That very well may be the case. That is not a 

conversation that I have had with——

Chairman LANDRIEU. But you all did not have that conversation 

with them at the time? 

Mr. MAURSTAD. No. There is—the State——

Chairman LANDRIEU. So after they included that, then several 

months later you all came back and said that really could not be 

done that way. 

Mr. MAURSTAD. In June last year, we began discussions of trying 

to look at how we could incorporate HMGP——

Chairman LANDRIEU. And we are almost in June this year, and 

that has not been resolved yet, has it? 

Mr. MAURSTAD. We began working with them. There was concern. Administrator Paulison created a separate working group 

with HUD, the State, myself. That began working in August. We 

started going through the issues until they then made the decision—again, without consulting with us—about the nondiscrimination issue. 

Chairman LANDRIEU. But the bottom line is that FEMA and Secretary—with Secretary Paulison and FEMA and the State have 

been trying to work this out for 1 year, almost 1 year, and it is not 

working out yet. Is that basically correct? 

Mr. MAURSTAD. We have been working on it with them trying to 

find ways to make it work for 1 year. 

Chairman LANDRIEU. All right. Let me ask you, Ms. Elkins, if I 

could, this chart from the Lakeview Homeowners’ Association—I 

am actually going to ask either the City Planning Commission in 

the region to potentially, if they can, provide charts like this for all 

the neighborhoods, because I think this really kind of gets us to 

where we need to be. You all both testified that you think within 

a year the applications will be out and people will have their 

checks. But according to this one neighborhood projection, it will 

take 7 years for the homeowners that have applied in Lakeview to 

receive their checks. So I am confused as to what this record 

should reflect. Do you disagree with these numbers? 

Ms. ELKINS. I have not had time to look at it, but just glancing 

at it, I think what they did is they looked at the money from the 

20 months, with the storm, and we just received the money. So I 

do not think that this is accurate. We have actually been in production for 7 months. We have only had a contract for 11 months. We 

had the pilot program first. So our goal is to move at least 10,000 

each month. 

Chairman LANDRIEU. OK. Well, I am going to ask you, if you do 

not mind, just for this record to take this document and see if you 

could work with the Lakeview Association and upgrade it, and if 

you all could submit that for the record, because if it can be done 

for this one neighborhood, there are dozens and dozens of neighborhoods throughout, not just the New Orleans region, but St. Bernard and Cameron Parish, etc. And it will give people some hope 

as to when their applications can be finalized. 

One final question to the coordinator. You stated the only missing piece to the original contract were benchmarks for option letters sent to homeowners and for closings completed. You stated you 

spoke with several housing experts to determine what you should 

41

use as appropriate time frames for closings, that you looked at Mississippi’s program because they contained similar tasks as Louisiana’s. You looked at title searches verifications. But even as you 

found it difficult to find a precedent time frame for the completion 

of option letters and closings, why did you fail to consult with advocacy groups who have been working in the field with Hurricane 

Katrina victims such as some of the low-income housing organizations, lawyers’ committees to determine a suitable time frame? Or 

did you consult with these and other groups? Ms. Reiff, this is to 

you. 

Ms. REIFF. The time frames for the program and for the contract 

were provided by the State of Louisiana. We do meet with local 

groups. We have a complete outreach effort. We work with nonprofits. We use and rely on nonprofits to reach out to special needs 

populations, to encourage them to come in and to provide them 

services. And we work often with different organizations to make 

sure that the materials we are providing are usable, are transparent, and are helpful. So, yes, I do believe we speak with a variety of groups all the time. 

Chairman LANDRIEU. OK. Are there any other comments that 

you would like to make for the record? I will give you each 30 seconds before we close, if there is anything you think you have not 

answered or responded to. 

Mr. BREGO ́ N. Yes, Madam Chairman, if I may. Again, I want to 

focus on the fact that the State is the responsible agent here for 

the administration of the CDBG funds. HUD has been very flexible, and we have worked very closely with the State. We feel that 

the State has the capacity to run this program. They have been 

running the CDBG program at the State level for over 20 years. 

The other thing I would like to mention is the issue of the environmental reviews. Our position at HUD was we advised the staffers that perhaps they should give the authority to the Secretary to 

waive the NEPA, the environmental requirements, which is one of 

the stumbling blocks, barriers——

Chairman LANDRIEU. Was that waiver given? 

Mr. BREGO ́ N. It was not, Madam. 

Chairman LANDRIEU. Not given, OK. 

Mr. BREGO ́ N. That is correct. 

Chairman LANDRIEU. Mr. Maurstad, any closing remarks? 

Mr. MAURSTAD. Three very quick points. 

First of all, for the record, we want to make sure that there is 

an understanding that the numbers for the housing were not a 

FEMA estimate. FEMA provided HUD data call information that 

HUD used with a number of other pieces of information to come 

up with the housing numbers. So if we could clear that up——

Chairman LANDRIEU. Let me try to clear that up for the record. 

So FEMA is saying do not use our numbers, use HUD numbers? 

Mr. MAURSTAD. No. They asked us for information. We provided 

that information with a series of caveats on what that information 

was used for and what that information meant. HUD fully understood that and used that in their overall calculations. But they are 

not strictly FEMA numbers. 

Chairman LANDRIEU. Because this Subcommittee is going to find 

the right numbers, who should we go to to get the real numbers 

42

about how many homes were severely damaged in Mississippi and 

in Louisiana? Just tell me, who should we go to? 

Mr. MAURSTAD. Well, since you have asked my opinion, it would 

seem to me that there should be a group from the LRA, from HUD, 

and from Mr. Powell’s office that should sit down and be tasked 

with coming up with a set of numbers that they can all agree with. 

My second point would be that it is important that we emphasize 

that the critical obstacle with HMGP folding into the Road Home 

Program is the nondiscrimination section violation of the Stafford 

Act, and so we would like to be able to provide additional information to you on that. 

And last is to emphasize that I believe in my working with both 

the State—is that the HMGP and Road House programs can run 

parallel and meet the objectives of both. We can run the HMGP 

program outside but parallel to the Road Home Program and 

achieve what I believe the Road Home is trying to accomplish with 

the program inside Road Home. 

Chairman LANDRIEU. And you are testifying based on the current 

funding? You do not think this program will be short so they can 

take out the hazard mitigation and run it parallel? 

Mr. MAURSTAD. I have not looked at that because that is—I 

mean, our money is available to them. 

Chairman LANDRIEU. Correct, but you do not know if you take 

out the one—your testimony is that you do not know that if you 

take out the $1.5 billion hazard mitigation that the program then 

would have enough money to cover all the——

Mr. MAURSTAD. I have not studied the overall needs of the Road 

Home program. 

Chairman LANDRIEU. OK. That is fine. 

All right. Ms. Elkins, any closing comments? 

Ms. ELKINS. I think that there needs to be greater consistency 

in the Federal regulations, and I would like, for the record, to ask 

how long would it take to run this parallel program with HMGP 

dollars for the homeowners? 

Mr. MAURSTAD. Do you want me to respond, ma’am? 

Chairman LANDRIEU. Go ahead. 

Mr. MAURSTAD. We have already been working with the parishes on the first $250 million. We worked initially with the parishes to 

make sure that—only three parishes had local mitigation plans 

that they needed to be able to be eligible for the funds. We worked 

with them. All of the parishes and communities except one now 

have that. They are poised to be able to implement the Hazard 

Mitigation Grant Program in this disaster, just like Louisiana has 

done in previous disasters. This is not a new program. The State 

has administered this program in the past. They understand the 

rules, the regulations. They have done it before, and I believe we 

can work with them and do it again. 

Chairman LANDRIEU. OK. I thank you all very much. The time 

has come for us to conclude the hearing. Let me thank all of our 

panelists. Let me particularly thank the homeowners who gave 

such heartfelt testimony and helped us to focus on the importance 

of getting this program fixed, getting the data right, the numbers 

right, the coverage right. I do not want any homeowner in Louisiana or Mississippi to believe that this government is not going 

43

to fulfill its promises. We do not know at this point how exactly 

that will be done, but this Subcommittee and I believe the full 

Committee of Homeland Security and Governmental Affairs wants 

to make sure that this program works better, more completely, 

more quickly, and more efficiently to help build these communities. 

And we are going to continue to have hearings until we can figure 

out the numbers, figure out the coverage, and accelerate the help 

for the people that are depending on us to do that. 

Thank you so much. 

Mr. BREGO ́ N. Madam Chairman, if I may, I would like to request 

to include my prepared statement. 

Chairman LANDRIEU. Your statements will be recorded to the 

record and additional questions will be submitted by us very shortly. 

Thank you. The meeting is adjourned. 

[Whereupon, at 5:16 p.m., the Subcommittee was adjourned.] 

(45)

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