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52–597 PDF 2009

FINAL BREAKTHROUGH 

ON THE BILLION DOLLAR 

KATRINA INFRASTRUCTURE 

LOGJAM: HOW IS IT WORKING? 

(111–63) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 29, 2009 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

JOHN A. BOCCIERI, Ohio 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

PARKER GRIFFITH, Alabama 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

ROBERT E. LATTA, Ohio 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

AARON SCHOCK, Illinois 

PETE OLSON, Texas 

(II) 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

ELEANOR HOLMES NORTON, District of Columbia, Chair 

BETSY MARKEY, Colorado 

MICHAEL H. MICHAUD, Maine 

HEATH SHULER, North Carolina 

PARKER GRIFFITH, Alabama 

RUSS CARNAHAN, Missouri 

TIMOTHY J. WALZ, Minnesota 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania, 

Vice Chair 

DONNA F. EDWARDS, Maryland 

THOMAS S. P. PERRIELLO, Virginia 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

MARIO DIAZ-BALART, Florida 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

MARY FALLIN, Oklahoma 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

PETE OLSON, Texas 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Daniels, Stephen, Chairman, Civilian Board of Contract Appeals ...................... 7 

Garratt, David, Acting Deputy Administrator, Federal Emergency Management Agency, accompanied by Charles R. Axton, FEMA Lead, Unified Public Assistance Project Decision Team, Gulf Coast Recovery Office, Federal 

Emergency Management Agency ........................................................................ 7 

Rainwater, Paul, Executive Director, Louisiana Recovery Authority ................. 7 

Taffaro, Craig, President, St. Bernard Parish, Louisiana .................................... 7 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Carnahan, Hon. Russ, of Missouri ......................................................................... 58 

Norton, Hon. Eleanor Holmes, of the District of Columbia ................................. 59 

Oberstar, Hon. James L., of Minnesota ................................................................. 61 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Daniels, Stephen ...................................................................................................... 65 

Garratt, David .......................................................................................................... 71 

Rainwater, Paul ....................................................................................................... 106 

Taffaro, Craig ........................................................................................................... 114 

SUBMISSIONS FOR THE RECORD 

Daniels, Stephen, Chairman, Civilian Board of Contract Appeals, responses 

to questions from the Subcommittee .................................................................. 70 

Diaz-Balart, Rep. Mario, a Representative in Congress from the State of 

Florida, written testimony from Rep. Steve Scalise, a Representative in 

Congress from the State of Louisiana ................................................................ 4 

Garratt, David, Acting Deputy Administrator, Federal Emergency Management Agency, accompanied by Charles R. Axton, FEMA Lead, Unified Public Assistance Project Decision Team, Gulf Coast Recovery Office, Federal 

Emergency Management Agency, responses to questions and requests for 

information from the Subcommittee ................................................................... 80 

Rainwater, Paul, Executive Director, Louisiana Recovery Authority, responses 

to questions from the Subcommittee .................................................................. 112 

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(1) 

FINAL BREAKTHROUGH ON THE BILLIONDOLLAR KATRINA INFRASTRUCTURE LOGJAM: HOW IS IT WORKING? 

Tuesday, September 29, 2009 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC

BUILDINGS AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 2:00 p.m., in Room 

2167, Rayburn House Office Building, Hon. Eleanor Holmes Norton 

[Chair of the Subcommittee] presiding. 

Ms. NORTON. The Ranking Member is on his way, but has asked 

that I start, so I am pleased to open this hearing and to welcome 

our witnesses to another in a series of hearings our Subcommittee 

is holding to oversee and evaluate the efforts of the Federal Emergency Management Agency, or FEMA, as well as the effect of State 

and local governments to proceed more rapidly with their work on 

the long 4-year recovery from Hurricanes Katrina and Rita. 

Today we will hear specifically how the new arbitration program 

mandated in the American Recovery and Reinvestment Act, as well 

as hear about how that program operates, as well as about other 

steps that the new leadership at FEMA and at the Department of 

Homeland Security are taking to improve the pace and the quality 

of the recovery efforts in the Gulf Coast. 

At a hearing earlier this year, we were astonished to uncover al- most $3.5 billion caught in a stalemate between FEMA and the 

State of Louisiana from which neither could extricate themselves. 

Based on today’s testimony, as well as on numerous meetings and 

discussions that Members and staff have had with officials at all 

levels of government in the Gulf Coast, it appears that progress 

may have begun since President Obama, Secretary Napolitano and 

Administrator Fugate took office. However, it is exasperating to 

this Subcommittee to have to note that many of the improvements 

now being implemented are not new ideas. Some that have been 

proposed by this Subcommittee for 2-1/2 years are just now coming 

on line. 

During the last administration, FEMA resisted efforts to break 

the logjam, preferring its own traditional devices. Seeing little 

progress 2 years ago, this committee reported H.R. 3247, which the 

House passed in October of 2007, encouraging the use of third parties to review and expedite public assistance appeals, as well as to 

simplify procedures under which small projects would be permitted 

2 

to proceed on estimates for projects up to $100,000. We passed this 

bill, which also raised the Federal contribution for certain projects 

from 75 percent to 90 percent, not once but twice, as well as a similar bill in September 2008. It is unfortunate that the Senate was 

never able to pass this legislation or, for that matter, that FEMA 

did not take from this legislation what needed to be done after the 

House had spoken. 

However, even if the H.R. 3247 procedures permitting thirdparty review had been enacted, FEMA appeared unwilling to 

choose an effective third-party process. The past FEMA leadership 

never faced the structural impediments that obstructed agreements 

for the unprecedented Gulf Coast disasters. 

Given the huge funding amounts at stake, each State has builtin impulses, FEMA to resist approving more than it theoretically 

should and, therefore, to parse its analysis to require State responsibility; and the State of Louisiana to insist on more funds and 

urge Federal responsibility in light of the State’s devastation. Neither side has had much incentive or leadership to negotiate with 

any efficiency or goals except for its own caged views. Considering 

the unprecedented challenge of enormous amounts of money and 

complexity, it should have been clear that, without deadlines, the 

State and FEMA would continue to engage in negotiations at will 

for as long as they desired. Now all involved have exhausted the 

available alternatives and are left with a record of unnecessarily 

delayed recovery in Louisiana. 

The residents of that State are suffering through the greatest 

economic crisis most have experienced, an add-on crisis because of 

the so-called ′′Great Recession,′′ while billions of dollars have been 

left on the proverbial table for years, waiting to be spent on the 

construction of the new Charity Hospital and other vital infrastructure. The accumulated hardship on Louisiana residents demands 

immediate attention. It is hard to overestimate the hardship that 

has accumulated. Only mandated third-party intervention or negotiations on a timeline are left as acceptable. 

As a result of the new arbitration program authorized by the 

Congress in the Recovery Act, FEMA has entered into an agreement with the Civilian Board of Contract Appeals, or the CBCA, 

a part of the General Services Administration, which also comes 

under this Subcommittee’s jurisdiction. The CBCA’s expertise in resolving disputes in Federal construction contracts should prove invaluable, if fully used, with determined leadership and without 

delay. 

It is unfortunate, indeed, that new legislative language has been 

necessary to get action, particularly since it has been clear to the 

Subcommittee that FEMA had sufficient existing authority without 

new law to implement this or similar programs using third-party 

dispute resolution even before the Subcommittee put FEMA-specific dispute resolution into law. 

Even today while the arbitration provision of the Recovery Act is 

mandated for projects exceeding $500,000, nothing prohibits FEMA 

from offering arbitration for smaller projects, nor does legislation 

prevent FEMA from using other types of alternative dispute resolution. 

3 

If efficient and timely results are not produced, resistance to 

using time-limited alternative resolution on Gulf Coast recovery 

will not be tolerated by this Subcommittee. For example, should 

simplified procedures permitting small projects from $55,000 to 

$100,000 or a possibly higher figure be permitted to proceed based 

on estimates? During this Great Recession, as it has been called, 

has the usual State match for infrastructure construction been affected by congressional failure to pass the provision of H.R. 3247 

that would have raised the Federal match from 75 percent to 90 

percent? 

Again, we thank our FEMA representatives, our witnesses from 

the Civilian Board of Contract Appeals, and witnesses from Louisiana for preparing testimony today to help the Subcommittee better understand how to ensure that the recovery efforts in the Gulf 

Coast continue to improve. 

I am very pleased to ask our Ranking Member Mr. Diaz-Balart 

if he has any opening statement. 

Mr. DIAZ-BALART. Thank you very much, Madam Chairwoman. I 

want to thank you for holding this hearing today and for the 

progress made on FEMA’s public assistance projects backlog related to Hurricanes Katrina and Rita. 

As the Chairwoman knows, as a Representative from a State 

that has, unfortunately, experienced a number of hurricanes and 

storms, I have experienced working with FEMA, have seen some 

great success and also, obviously, some of the delays that may have 

occurred in receiving assistance. We all know that addressing the 

delays in public assistance funding is critical in the recovery process following a major disaster like a hurricane. Unfortunately, the 

delays have plagued the recovery process in Louisiana and also in 

other States, frankly, that were impacted by Katrina and Rita. 

It has been now 4 years since Hurricane Katrina hit the Gulf 

Coast and devastated parts of Louisiana, Texas, Alabama and Mississippi. Since that time Congress has taken a number of important 

steps to strengthen FEMA and to try to ensure that Louisiana and 

particularly in other States impacted by that storm can recover. 

Some steps have been taken. Now, unfortunately, delays continue 

to persist, and obviously a lot of work is still undone. 

I want to recognize—and he is on his way here. I know that he 

is flying in now. I want to recognize the efforts of Congressman 

Cao of Louisiana, who has worked tirelessly on this important 

issue, as well as others on this committee. 

At his request the Ranking Member, Mr. Mica of Florida, hosted 

two roundtables involving Members of Congress, FEMA, State, and 

local officials to discuss and find ways in which the process, frankly, can hopefully move along much quicker. 

In response to the ongoing delays, FEMA established the Public 

Assistance Project Decision Team to work through many of those 

projects in Louisiana and to work with Louisiana on those projects. 

To date, $7.8 billion has been obligated for public assistance 

projects in Louisiana with over $1.2 billion provided since February 

of this year alone. A new arbitration process has been established 

pursuant to language included in the Recovery Act. It is something 

that the Chairwoman of this Subcommittee has been a great leader 

on and has been pushing for. 

4 

The ability of FEMA and State and local officials to work 

through, frankly, issues like eligibility has clearly improved, and I 

think you are seeing that. I think we are all pleased with that. 

So, while progress has been made, there are still a number of 

outstanding projects that have yet to be resolved. Some of them are 

larger; some of them are smaller. This, obviously, is not an issue 

that is only important to Louisiana, but to all States, particularly 

to those that may see disasters. We are hoping that we never will, 

but we know that they will be coming in the future, disasters like 

Katrina, Florida being one of those, but any State on the coast is 

subject to those. 

The project-by-project process for public assistance funding may 

not provide the needed flexibility to expedite recovery from a disaster that would be to the scale of something like Katrina, so I believe it is important for this Subcommittee to examine this issue 

closely so that we can ensure that FEMA has the proper tools to 

address similar disasters in the future, disasters that we, unfortunately, know one day will come. 

We had a request also from Congressman Scalise to submit testimony for this hearing. If it would be appropriate, Madam Chairwoman, at this time, I ask unanimous consent for his statement to 

be entered into the record. 

Ms. NORTON. So ordered. 

[The information follows:] 

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7 

Mr. DIAZ-BALART. Thank you, Madam Chairwoman. 

Again, I look forward to the hearing. I want to thank all of you 

for being here and for your service. I, once again, want to thank 

the Chairwoman for her leadership on this very important issue. 

Thank you, Madam Chairwoman. 

Ms. NORTON. Thank you, Mr. Diaz-Balart. 

We have put all of the witnesses at the table in order to try to 

get the needed interaction so that we can understand and can learn 

something. 

Mr. Axton is here, I take it, with Mr. Garratt. It is Mr. Garratt 

who is offering the testimony. So I would like to hear from Mr. 

Garratt for the Federal Government; then to hear from Mr. Rainwater for the State of Louisiana; and from Mr. Taffaro from a subdivision of Louisiana; and finally to hear from Mr. Daniels, the 

Chairman of the Board of Contract Appeals at the GSA. 

Would you proceed, Mr. Garratt? 

TESTIMONY OF DAVID GARRATT, ACTING DEPUTY ADMINISTRATOR, FEDERAL EMERGENCY MANAGEMENT AGENCY, ACCOMPANIED BY CHARLES R. AXTON, FEMA LEAD, UNIFIED 

PUBLIC ASSISTANCE PROJECT DECISION TEAM, GULF 

COAST RECOVERY OFFICE, FEDERAL EMERGENCY MANAGEMENT AGENCY; PAUL RAINWATER, EXECUTIVE DIRECTOR, 

LOUISIANA RECOVERY AUTHORITY; CRAIG TAFFARO, PRESIDENT, ST. BERNARD PARISH, LOUISIANA; AND STEPHEN 

DANIELS, CHAIRMAN, CIVILIAN BOARD OF CONTRACT APPEALS 

Mr. GARRATT. Thank you, Chairwoman Norton and Ranking 

Member Diaz-Balart. It is our privilege to appear before you today. 

Joining me at the witness table, as you indicated, is Mr. Charlie 

Axton. Mr. Axton, day to day, is the Director of the Disaster Assistance Division in FEMA Region 10. He is currently detailed to 

FEMA headquarters as the Acting Deputy Assistant Administrator 

for Disaster Assistance. Mr. Axton is one of our brightest and most 

forward-thinking disaster assistance employees. He has a great 

mind for public assistance, and it is one of the reasons that Mr. 

Axton was sent down to the Gulf Coast and to the State of Louisiana to lead the Unified Public Assistance Decision Team that 

Congressman Diaz-Balart just referred to. That is one of the innovations that was announced by Secretary Napolitano a number of 

months ago, along with the Joint Expediting Review Team. These 

are two innovations that FEMA, in conjunction with our partners 

at the State, have jointly initiated to help deal with disputes that 

exist within the public assistance arena. 

We have enjoyed some success in that regard. As Congressman 

Diaz-Balart indicated, since we appeared before you in late February, over 2,117 project worksheets and revisions to project worksheets have been processed and obligated, amounting to over $1.2 

billion. That is quite an uptick in terms of the numbers and pace 

of public assistance approvals, and we are proud of that success. 

That said, we are by no means at the point where we can say, 

′′Mission accomplished.′′ We recognize that there is still much to do, 

and we intend to continue to work with our partners to make that 

happen. 

8 

I am very happy that you have asked the State of Louisiana and 

a parish representative to appear at this table today. Not only do 

we need to hear from them, but it helps reinforce what we believe 

is very important, and that is the teamwork which moves us forward and enables us to make progress. 

Since Tony Russell was appointed the Director of the Transitional Recovery Office, we have seen a remarkable turnaround in 

our partnership with the State and with the local parish representatives. We have made a great deal of progress in restoring and reforging that relationship, and we are very proud of the partnership 

that we now have with our colleagues and partners from the State. 

Again, I would like to personally thank the leadership of Mr. 

Paul Rainwater and the gentleman sitting behind him, Mr. Mark 

Riley. They have been excellent partners with us in helping improve how we do business in the State of Louisiana and, again, in 

helping us improve the pace of obligations. 

At the end of the table is Mr. Craig Taffaro from the St. Bernard 

Parish. He has also been an excellent partner. We are continuing 

to work with Mr. Taffaro, with his parish and with the other parishes to further empower and improve how we do business with 

those parishes and to become more customer-focused. 

Again, while we are not at the point where we can say ′′mission 

accomplished′′ with any of the parishes, we have made a considerable amount of progress, and we respect and appreciate the partnership that we, with the State, have been able to forge with our 

parish leaders. 

So thank you for having us all here. We look forward to discussing the issues that you have been talking about, Madam Chair. 

Ms. NORTON. Thank you very much, Mr. Garratt. 

Mr. Rainwater. Now, Mr. Rainwater, let me just identify you: 

Paul Rainwater, executive director of the Louisiana Recovery Authority. 

Mr. RAINWATER. Thank you, Madam Chairwoman and Ranking 

Member Diaz-Balart. We appreciate the opportunity to come to you 

in this forum, and it has been very helpful and constructive as we 

work through recovering from Hurricanes Katrina and Rita. 

I serve as Governor Jindal’s chief hurricane and recovery adviser. The Governor has given me broad oversight for more than $20 billion worth of Federal recovery funds, including more than $8.5 billion in public assistance funding obligated to the State of Louisiana. Currently we have reimbursed more than $5 billion to recovering communities. It takes our staff somewhere between 5 to 

10 days to pay that request for reimbursement to applicants or to 

have the express pay process that we started back in 2008 to speed 

up the recovery. 

We have made a lot of progress since February. There is no 

doubt about it. We have seen an increase in the amount of funds 

obligated for projects, including several high-profile projects that 

often were used to exemplify the disagreements between FEMA 

and the State of Louisiana, but we were able to work through that. 

I want to give credit where credit is due. Since President Obama 

took office, and under the new FEMA leadership, FEMA has obligated more than $1 billion in additional funding to Louisiana 

projects. That credit goes to Charlie Axton, to Tony Russell and to 

9 

Bill Vogel, who came down as part of the decision teams, which 

was a very creative process to get down and to work with our 

staff—and the gentleman sitting behind me, Mark Riley—who have 

literally just gutted through, you know, thousands of projects worksheets. 

Several of those large projects that come to mind and that we actually used in testimony to you, Madam Chairwoman, included 

about $16 million that recently got obligated to Tulane University. 

We fought for over 3 years over that project, which basically was 

a library that housed Federal documents. Those documents have 

been housed in trailers with temporary HVAC systems, which is 

not a very efficient way to House Federal documents. This is in addition to another $32 million obligated just weeks before to reconcile for Katrina-related repair work across the campus at Tulane. 

In August, Secretary Napolitano and FEMA Administrator Craig 

Fugate visited the campus of the Southern University at New Orleans to announce an additional $32 million of recovery money for 

the campus. In total, it took 4 years to get to $92 million, but I will 

tell you that Chancellor Ukpolo, who was at that ceremony, was 

amazingly happy and pleased about the future of his campus because it had been called into question because of the delays in coming up with the dollars and the arguments between State and 

FEMA and SUNO. But Tony Russell and Charlie Axton sat down 

with us at a table, and we worked it out. That is the way it should 

be. 

There are additional issues, though, as we have stated. We have 

still got about 4,000 project worksheets that are in some process of 

being reversioned. We have been talking to FEMA about how to 

make that process much more efficient, and we are committed to 

being partners with the Federal Emergency Management Agency to 

do that. 

The only complaint that I have about FEMA is that we do not 

have more Tony Russells, Charlie Axtons and Bill Vogels to spread 

around the country. The reality of it is Tony and Charlie are very 

busy because of the lingering disputes that have been out there for 

quite some time. They work many long hours. Obviously, the more 

we can grow the pipe, the better, and the easier it will be to push 

those dollars through that pipe. 

There are two important things that the State of Louisiana needs 

from FEMA to speed up its recovery: more experienced FEMA staff 

and a streamlined versioning process. 

Now, there are things that FEMA needs from the State as well. 

You know, we started our express pay program, and we knew going 

forward we would need to tweak it, and we are committed to doing 

that. We are adding an additional 55 personnel to the Governor’s 

Office of Homeland Security and Emergency Preparedness to work 

that process, to get more efficient with that process, and to send 

more folks out into the field to work those project worksheets and 

to work that reversioning piece. 

We are also providing ideas to FEMA about how we can organize 

jointly in a more efficient manner. As I said in our first hearing, 

we will continue to be partners and will synchronize as efficiently 

as possible between local, State and the Federal Government to 

kind of take that veil down as best we possibly can. Obviously, as 

10 

you have said, Madam Chairwoman, we all have our roles to play 

here, but we want to do it in a way that is productive and constructive. 

Thank you. 

Ms. NORTON. Thank you, Mr. Rainwater. 

Next, Craig Taffaro, the president of St. Bernard Parish, Louisiana. 

Mr. TAFFARO. Thank you, Madam Chairwoman and Ranking 

Member Diaz-Balart. We appreciate the opportunity to be here. 

We believe that we present a unique perspective, having been involved in the aftermath of Hurricane Katrina from day 1 from the 

local level. Oftentimes the day-to-day struggles and challenges and 

obstacles that we face on the local level sometimes get lost in the 

larger system of FEMA bureaucracy or in the coordination between 

the Federal and State levels. 

We have enjoyed, however, the transition from being a council 

member at the local level and beginning an administrative post in 

January of 2008. We are committed to revamping the relationship 

between St. Bernard Parish, the State of Louisiana and the FEMA 

office, both in the local and the Federal offices. 

We believe that that was a major, important step because what 

we saw was that the relationships that existed at the local level 

with the other agencies had fallen aside, and the needs and concerns of those people representing the 68,000 residents who lost 

their livelihoods and their properties as a result of Katrina, Hurricane Katrina, were left basically unrepresented. 

Over the last 20 months, we have made significant progress. St. 

Bernard Parish stands as the first- or second-ranked municipality 

in the Gulf Coast region in virtually every category of recovery, so 

we believe we stand as a unique member of the recovery effort not 

so much because we have done this on our own, but because we 

have basically pushed the model that recovery could no longer wait. 

As you know, we were ground zero, which meant that every business, every church, every school; and single-digit homes were 

spared from the wrath of Hurricane Katrina. 

What we have found over the last 20 months in particular, which 

has worked most effectively—we have to give credit to the express 

pay system that has released dollars to the local municipalities as 

we have pushed forward the recovery. St. Bernard Parish, being as 

devastated as we were, was left without a great deal of our tax revenue, both in terms of sales tax and ad valorem support. So we 

were in a position where either we had to wait and allow the system to catch up with us or to guide us, or we had to take it on as 

a mission of our own to push our recovery. We were fortunate to 

have a bond issue at the local level, and we have used that basically to substantiate and pay for the services of the vendors in our 

recovery. 

Unfortunately, that well has run dry, and we are faced with a 

situation that without changes to expedite the versioning process 

so that the projects that are identified as ′′eligible′′ and 

′′noncontroversial′′ can move through the FEMA approval system 

much more readily, making the State ready to disburse those funds 

to St. Bernard Parish as well as to other local municipalities. 

11 

To put it in perspective, as we speak today, we have 29 project 

worksheets pending. Those 29 project worksheets roughly equate to 

$100 million to $108 million of work. We have 166 versions to 

project worksheets that are also pending, and that number changes 

daily. We changed from 131 on Friday to 166 as of yesterday. 

Those project worksheet version requests amount to another $114 

million. Based on our roll-ups and our anticipated continued work, 

we anticipate another 300 to 500 version requests being submitted 

in the near term, which will account for nearly another $220 million. 

So, by the way, just in St. Bernard, the magnitude of our destruction and devastation would constitute a major disaster in and 

of itself for just the Parish of St. Bernard, so we are looking at 

nearly $440 million of remaining recovery money. Now, keep in 

mind that these figures only refer to permanent work and not to 

debris work. 

So what we are asking for is a continued partnership with FEMA 

and increased manpower to provide the support for the people on 

the ground, who are doing an absolutely wonderful job, so that that 

money can be freed up in an expedited manner. 

Thank you. 

Ms. NORTON. Thank you very much, Mr. Taffaro. 

Now, Mr. Daniels, you have heard all of this. We put you last 

on purpose. 

So we are going to ask Stephen Daniels, who is the Chair of the 

Civilian Board of Contract Appeals, to testify at this time. 

Mr. DANIELS. Thank you very much, Madam Chair and Members 

of the Subcommittee. 

As you have explained, the Civilian Board of Contract Appeals 

is a quasi-judicial tribunal, which is housed within the General 

Services Administration but functions entirely independently of 

that agency. The Board currently consists of 15 administrative 

judges. Our principal mission is to resolve contract disputes between civilian agencies of the government and their contractors. 

The members of the board and I are honored to take on the responsibility of arbitrating disputes regarding FEMA public assistance grants stemming from damage caused by Hurricanes Katrina 

and Rita. The assignment constitutes an extension of our work in 

arbitrating disputes between government agencies and the entities 

with which they do business. We understand the need for resolving 

the disputes fully and promptly so that the people of the Gulf Coast 

region can complete their recovery efforts and can get back to the 

normal routines of their lives. 

We pledge to the Secretary of Homeland Security and we pledge 

to the Congress, to do our utmost to resolve these disputes in the 

same way we approach our contract cases, as fairly and at the 

same time as informally, expeditiously and inexpensively as possible. 

On August 31, FEMA published in the Federal Register regulations which govern our arbitration of these disputes. FEMA consulted with the Board in drafting these regulations, and the rules 

appear fair to us. Applicants seeking grants of $500,000 or more- 

- State or local governments or eligible private nonprofit agenciesVerDate Aug 31 2005 10:10 Mar 15, 2010 Jkt 000000 PO 00000 Frm 00023 Fmt 6602 Sfmt 6602 P:\HEARINGS\ED\9-29-09\52597.TXT JASON
12 

- may now choose arbitrations by three-judge panels of the Board 

as an alternative to the standard FEMA appeals process. 

Under FEMA’s regulations, if an applicant’s appeal was pending 

with FEMA on August 31, or if FEMA had issued a determination 

on or after February 17, 2009, an applicant could elect the arbitration process no later than October 30. Otherwise, an applicant can 

elect this process within 30 calendar days after it receives FEMA’s 

determination. Election is made by sending a request to the 

Board’s clerk along with supporting documentation. 

Let me take just a minute to outline the process under which we 

will hear these cases. When the clerk receives a request for arbitration, she will assign it a docket number. She will select one of our 

judges in rotational order to coordinate activities regarding the 

matter and two other judges at random to work with the coordinating judge on the panel. She will also inform the relevant State 

government that it may within 15 calendar days submit comments 

on the merits of the application. At the same time, she will inform 

FEMA that it shall within 30 calendar days submit its own comments along with supporting documentation. 

Within 10 business days of receiving FEMA’s comments, the coordinating judge will convene a telephone conference with the parties to address preliminary matters such as a clarification of the 

issues and to schedule further proceedings. An applicant can choose 

to have the panel decide the case on the basis of the written record 

or on the basis of that record plus an informal hearing. 

If the applicant chooses a decision on the basis of the written 

record, the panel will make every effort to issue its decision within 

60 calendar days of the date on which we receive FEMA’s comments. If the applicant chooses a hearing, the panel will conduct 

such a proceeding without a court reporter. It will, if at all possible, 

conduct the hearing within 60 calendar days of the date of the conference, and it will make every effort to issue the decision within 

60 calendar days of the end of the hearing. Decisions will be in 

writing, but they will also be short. They will announce a result 

and explain its basis, but it will not contain expositions of legal 

reasoning. 

Madam Chair, the Board has not yet received any requests for 

arbitration of FEMA determinations, but I can assure you that, 

when cases arrive, we will look forward to working with the parties 

to resolve the disputes as quickly and as fairly as we possibly can. 

Ms. NORTON. Thank you, Mr. Daniels. I think the very presence 

of the Board may have already had some effect. We will see. 

I think it is an indication of the importance of this hearing and 

the impatience of the Full Committee as well as of the Subcommittee. The word ′′progress′′ simply cannot be written yet until 

we are through with this hearing and are satisfied of the progress. 

With the 4-year journey, frustrating journey, of little or no process 

until recently, frankly, for the larger projects, nothing could indicate, I think, the importance—that being yesterday and this being 

tomorrow—of the presence of our Full Committee Chairman, who 

has dropped by despite being in one of the busiest periods of the 

life of the committee as I speak. 

I will ask him, Chairman Oberstar, Chairman Jim Oberstar, if 

he has any opening remarks for us. 

13 

Mr. OBERSTAR. Well, thank you, Madam Chair. I greatly appreciate your persistence in following through on the after effects of 

Hurricane Katrina, which are a lesson for all of America—for all 

areas that have been stricken by disaster. The continued followthrough that you are doing, along with Mr. Mario Diaz-Balart, is 

important to the future of our promise. 

There are a great many lessons to be learned and some, I know, 

even in my district that have not yet been fully learned, such as 

the interoperability of communications in the aftermath of a huge 

forest fire on the eastern edge of the boundary waters/canoe area 

of the Superior National Forest. The firefighters could not communicate with the Forest Service. They could not communicate with 

the county sheriff because they had not received the adequate 

funding for the equipment they needed. This was one of the great 

lessons of September 11, a lesson further learned in Katrina—just 

one of many. 

So, as I am sure you have pointed out in your opening remarks, 

Katrina is our costliest natural disaster in history. We want to continue these oversight hearings, and want to make sure that no others approach this cost in whatever way that we can accomplish. So 

I look forward to continuing the testimony of the panel. 

Thank you. 

Ms. NORTON. Thank you very much, Chairman Oberstar. 

Mr. Cao, who represents a district in Louisiana, have you any 

opening remarks, sir? 

Mr. CAO. Thank you, Madam Chair, and thank you very much 

for holding this hearing. I appreciate your continuing effort to be 

focused in the district and that you push the recovery process. 

I would like to thank Chairman Oberstar for his willingness and 

openness to look at all of the issues that we are facing down at the 

district and to somehow revise the Stafford Act to allow the State, 

city as well as other agencies the flexibility to better recover from 

Katrina. I also would like to thank the Chairman for his emphasis 

on the recovery process after a disaster or something similar to 

Katrina. So, again, thank you, Mr. Chairman, for your continuing 

efforts in our recovery process. 

I missed some of the statements from the panelists, but I am 

very familiar with all of the issues that you presented, and I hope 

to question you a little bit later on some of the questions that I still 

have. Thank you very much. 

Mr. OBERSTAR. Will the gentleman yield? 

Mr. CAO. Yes, sir. 

Mr. OBERSTAR. I would like to express my respect for the gentleman’s persistence on this issue. He has brought to me, to the Chair 

and to the Ranking Member numerous issues of concern to the people of his district and of New Orleans, and I do have to confess to 

a particular interest: My wife is from New Orleans. Some of her 

family still lives there, her extended family. Everybody in New Orleans, I think, is related in some way. They are still there. 

I have traveled several times to various points of the stricken 

city, in particular to St. Bernard Parish, which was affected in a 

way no one could imagine. Homes were overtopped with the floodwaters. Whole structures were floated away from their moorings, 

14 

and one in particular stopped only when it ran into another house 

that did not move. 

I remember talking to that homeowner. He had sued for collision 

damage. I said, Why did you bring suit for collision damage? He 

said, Well, no one else was helping. The Corps was not doing anything. FEMA was not doing anything. What else are we supposed 

to do 6 months into this tragedy? So we brought a lawsuit. 

Well, that is the ultimate in despair and should not happen, and 

I will always be haunted by the signs that read: Hold the Corps 

accountable. 

Well, it is not just the Corps; it is FEMA and everyone else that 

is associated with it. So the gentleman is doing his role, and the 

Chair is doing her role. We want to hear what lessons are learned 

and how we can prevent mistakes from happening in the future. 

Thank you. 

Ms. NORTON. The gentleman closes. The gentleman has yielded. 

Now, you will find this Chair impatient with the ABCs of the 

Federal bureaucracy, so maybe, if I get to know what they are and 

what the differences among them are, I can rest assured. 

Now let me go to Mr. Axton since he has been the man on the 

ground. 

Maybe you could help me understand. You know, the last thing 

we are about is creating new ′′theres′′ in the over-layered Federal 

Government, and watch out for Federal officials. Better than anything else, they know how to name what they are doing. If two people are doing it, they have a name for it. If 1,000 people are doing 

it, they have a name for it. Pretty soon they will have a name for 

it if only one person is doing it. So, before I understand all of these 

things which I hope are not layers, the first thing I have got to understand is the difference between something called the Joint Expediting Team and the Unified Public Assistance Project Decision 

Team. 

Why aren’t they all on the same team? How many teams does 

it take to get something done on the Gulf Coast? 

Mr. AXTON. Chairwoman Norton, that is a very good question. I 

think, when I first arrived down there at the end of February or 

at the beginning of March, on the first day, I had a meeting with 

Mark Riley and some of his team. The original vision for the decision team was to review the final field-level disputes and to make 

decisions on them in essentially a binary fashion. 

What I found very quickly is that the efforts of the State and 

that the efforts of FEMA, whether it be an expediting team or a 

project decision team—was that the real need back in those days 

was to just improve our ability to work together and to work efficiently towards a common goal, and so our focus collectively has 

been toward that, and a lot of those efforts—— 

Ms. NORTON. Excuse me. There are different players on these 

teams or the same players? I still don’t understand. The Joint Expediting Team, did it have different players than the Unified Public 

Assistance Project Team? 

Mr. AXTON. Yes. Yes. 

Ms. NORTON. What is the difference in the players? 

15 

Mr. AXTON. The decision team was a small group of people from 

FEMA, which I was the lead of, and a small group from the State, 

the State’s leadership. 

The expediting team was kind of a broader team that existed of 

FEMA officials who were working in the existing Transitional Recovery Office with the existing partnerships they had with their 

State counterparts. The theory was if those teams were not able to 

resolve issues on the ground, then they would have one final fieldlevel review by the decision team. 

Ms. NORTON. How does it work? Does it work that way still? 

Mr. AXTON. In the past 7 or 8 months since we stood this effort 

up, what we have concluded collectively, really between the FEMA 

officials and the State officials, is that overall we have done a lot 

to improve our partnership, to improve our ability to work together, 

to improve the timeliness of our decisions, and a unity of effort— 

setting goals together, setting priorities together. So many of those 

efforts that we are seeing are becoming complementary and have 

merged again towards that common goal that has been set by Mr. 

Russell—the FEMA Director of the Transitional Recovery Office— 

and the senior State officials. So we have seen an evolution of all 

of those efforts in the past 6 to 8 months. 

Ms. NORTON. It is still two teams. Will they work more together? 

It sounds to me like you always have to have some people on the 

ground. Is there a time frame if they do not reach a decision that 

it goes to somebody else—zap? What is the purpose of having two 

teams, one at a higher level? It sounds to me as though, you know, 

if one court does not do it, let us have another court in between. 

So all I am trying to find out is how long does that team have 

to play with the issue before some team which can make a decision 

gets the issue? That is really what we are after, Mr. Axton. 

Mr. AXTON. No. I understand, and it is a great question, Chairwoman Norton. 

It really boils down to the complexity of the issue that is being 

faced. In some of the cases, it was a single situation where a local 

official was proposing a mitigation, which is an investment that 

could be made to avoid future losses that was deemed ineligible. 

That was a very clear case that was made, and we were able to 

rule on whether it, in fact, could be deemed eligible. 

In other cases it was a series of buildings that had a whole series 

of unknowns that were related to what were the damages? What 

were the impacts? What are the future design requirements? So it 

just really depended on the nature of the issue. 

Ms. NORTON. I do not mean at all to simplify what I understand 

to be a complex process. All I know is what we have seen. 

Mr. AXTON. Right. 

Ms. NORTON. Today FEMA and Louisiana would still be at the 

table, fiddling with each other, if the Congress had not forced a 

new strategy on them. I use the word ′′forced′′ because it took statutes, statutory authority, to do what they already could do. 

Mr. Taffaro, do you see the streamlined effect? You are at the 

level of where there would be the felt need. 

Mr. TAFFARO. Madam Chair, when Mr. Axton first arrived on the 

ground, he arrived in a different role, and the role was, if we were 

not able to resolve our issues with our local FEMA department at 

16 

the TRO, that Mr. Axton would step in and basically resolve that 

conflict. That quickly changed, but what you are hearing is the 

crux of the matter. 

The Stafford Act makes projects eligible or ineligible. The problem is getting something from eligible to ineligible sometimes depends on who is looking at it and is not based on some objective 

criteria. 

As you heard, and as Chairman Oberstar—thank you for your 

visit to St. Bernard. I remember when you came. 

The fact of the matter is when you deal with a community in the 

Gulf Coast region where we had nearly 20 feet of water across our 

entire parish and 3 feet of gulf sludge, there are very few things 

that would be ineligible to be repaired. Yet we still, after 4 years, 

on the ground have to prove that there was damage created by 

such an event, because once it is eligible, there should be no more 

obstacles. It is eligible. Make the project worksheet fit the work 

that is required. Release the funds. The State now can disburse 

those funds, and it is a simple process. 

Ma’am, you are not oversimplifying it. You are hitting it on the 

head. 

Ms. NORTON. Mr. Taffaro, we have heard these brain-numbing 

notions that something was already in disrepair. Now, quote, how 

much of the disrepair was the storm responsible for? 

It is mind-numbing because it is clear that neither Mr. Daniels, 

nor any other administrative law judge, unless he has word from 

on high, can make that kind of separation. It would take commonsense notions that you could put on paper when you reach such 

issues, because it is going to be the case with lots of things. Nothing was brand new when the storm hit. So therefore, since it just 

went up, we now know how much it should cost. 

Mr. Axton, you hear Mr. Taffaro not being entirely satisfied that 

there is a decisionmaker in the process. Even given the fact that 

I say and that Mr. Taffaro says, no, I should not factor in the complexity that I know about—and I do know about the complexity— 

I am, among others on this panel, the guardian of Federal funds. 

I also know it is not beyond human intelligence to figure ways 

within certain parameters to help decisionmakers say yea or nay, 

and I do not hear that those ways have yet been transcribed so 

that Mr. Taffaro would know whether he is in or out without several appeals going up—and I call them ′′appeals′′—several decision 

levels. 

If you streamline the process, why not describe to me how you 

have streamlined the process. Then I will ask Mr. Taffaro if he has 

felt it. If you streamline the process, you ought to be able to say— 

I have some evidence that you have. You have moved $1.3 billion 

since January, you say. 

Who said that? 

Mr. GARRATT. Yes, ma’am, since February. 

Ms. NORTON. How much is left in the pipeline, Mr. Garratt? 

Mr. GARRATT. Oh, let us see. 

Ms. NORTON. Because $1.2 billion or $3 billion since January 

does say to me there has been movement. 

Now, if you will just tell the Subcommittee how the movement 

takes place, I will grant you the complexity, because I have been 

17 

sitting with this issue as long as you have been in recovery, but 

if we cannot speak in any definitive terms about how the streamlining has occurred, how one gets to go within that complexity and 

recognizing that complexity, then we are not yet convinced that, 

one, streamlining has occurred and, two, that the timeline which 

has been speeded up will continue. 

What has been streamlined? 

There are still two of these teams. Mr. Taffaro still complains 

that it is not clear, after you are eligible, whether you can still go 

forward. Therefore, the Subcommittee, or at least this Member, 

does not understand. 

You or Mr. Rainwater or anybody may answer who thinks he can 

clarify this issue for us. 

Mr. RAINWATER. Yes, Chairwoman. I think I can a little bit. 

They talked about the expediting team basically as a team that 

works, you know, with the applicants. A project will go to this 

team. We will give them a time period to work through it. 

Ms. NORTON. For example? 

Mr. RAINWATER. Yes, ma’am. 

Ms. NORTON. Give me some successes. 

Mr. RAINWATER. The Southern University at New Orleans,let us 

use that. We were $32 million off. We gave it to the team. We said, 

you know, you have got about—you know, it is just depending on— 

you know, it was building to building. It was a pretty large project, 

so they had about 90 days to work through it. We actually got together as—what happened is once the team submitted its progress 

report, we got together as a leadership team—myself, Charlie 

Axton, Mark Riley, and Tony Russell—a State joint and Federal 

team, and we went through the process. Now, I will tell you—— 

Ms. NORTON. Wait a minute. That is a joint expediting—— 

Mr. RAINWATER. The expediting team is made up of engineers on 

both sides. 

Ms. NORTON. And the unified public, they all got together on this 

one? 

Mr. RAINWATER. Yes, ma’am. 

So the engineers and the architects get together this Joint Expediting Team. They get together and work through the process. They 

go into the buildings,you know. You know, you hit it just right. The 

mind-numbing process of looking at windows, you know, the ceiling 

tiles, the floors, the whole 9 yards. Then they bring to us the report. Literally, we get the expediting team together and the decision team. We have a conversation, and then the expediting team 

leaves, and then the leadership team debates about what the number is. In this particular case, we submitted evidence that we 

thought that one of the buildings was over 51 percent, and they accepted that. So it helped move the process forward. 

Ms. NORTON. Okay. This is good to have this example. 

Was that project above $500,000? 

Mr. RAINWATER. The total was $92 million. When you add up 

what we worked out at the end of the day, the $32 million that 

Secretary Napolitano announced in August, the total was $92 million for the whole campus. So it was a very large project, a very 

complex project that had been, you know, in the conversation. 

18 

Ms. NORTON. Based on the size of the project, it looks like the 

Joint Expediting Team and the Unified Public Assistance Project 

Team—forgive my laughter, but I wish you all would call yourselves something simpler to kind of send the message that it is not 

as complicated as their names. 

It looks like, based on certain kinds of either complicated projects 

or high-cost projects, that the earlier the two teams get together, 

the more likely a final decision will be made. Is that true, sir? 

Mr. RAINWATER. Yes, ma’am, that is what we have seen. 

Ms. NORTON. Is there somebody in charge of picking those 

projects out and saying, look, these projects take a virtual joint decisionmaking, and they are high-cost. Let us go with those first. 

Have you any priorities like that? 

Mr. TAFFARO. Madam Chair, in our experience, they are the 

projects that the local municipality pushes forward. 

In Mr. Axton’s short tenure, in his arrival, again, the system is 

if we cannot resolve it, he will take care of it or find a way to resolve it. He did that on two of our major issues before he moved 

on. To his credit, Mr. Axton was responsible for helping free up 

$110 million worth of work, both of which were 12 months in the 

waiting of resolution in that time frame. 

Ms. NORTON. So that means that you skipped over somebody in 

order to get to Mr. Axton. 

Mr. TAFFARO. Well, no. We could not resolve it within the TRO 

structure. What happened was Mr. Axton—— 

Ms. NORTON. The what structure? 

Mr. TAFFARO. In the local structure at the TRO, the Transitional 

Recovery Office. 

Ms. NORTON. And you went to Mr. Axton? 

Mr. TAFFARO. Mr. Axton was able to—— 

Ms. NORTON. Oh, is that all the teams together? 

Mr. TAFFARO. He was responsible as the Joint Expediting Team 

member that we initially—— 

Ms. NORTON. So why do you need this other team, whatever it 

is called? 

Mr. TAFFARO. The unified. 

Ms. NORTON. Yes. 

Mr. RAINWATER. Yes, ma’am. 

Madam Chairwoman, we meet on Tuesday morning as a unified 

public assistance team, a leadership team, and we go through 

projects and we set priorities on what needs to happen that week 

with the expediting team so that they can get out there and get the 

architects and the engineers. 

I mean, this was not happening before. Although the challenge— 

and I think one of the reasons you don’t see larger numbers and 

greater progress is you need more teams; to be very frank with you, 

you need more architects and engineers. 

Ms. NORTON. That is what Mr. Taffaro, I think, says in his testimony. 

Given the enormous misery—it is the only word for it—on the 

Gulf Coast, what could be of greater priority than to put as many 

folks down there as you can spare? 

Whose testimony said you need three times as many people? Was 

that you, Mr. Taffaro. 

19 

Mr. TAFFARO. Yes, Madam Chair. 

Ms. NORTON. Do you disagree with that, Mr. Garrett, that you 

need three times as many people on the ground if you really are 

going to make progress on getting this money out in the middle of 

the Great Depression when people are looking for work and there 

is money lying on the table, waiting to be spent? 

Why don’t you have more people down there getting the work 

out? 

Mr. GARRATT. Madam Chair, I can’t speak specifically to Mr. 

Taffaro’s contention that he needs three times as many people to 

help him in that—— 

Ms. NORTON. Do you need any more people, sir? 

Mr. GARRATT. I would have to refer that question to Tony Russell, but Mr. Russell knows that he can get as many people as he 

needs to get the job done. 

Ms. NORTON. Well, Mr. Axton, I want to ask you to answer. Do 

you think if you had a few more people you could do a better job? 

Mr. AXTON. I think the first step to answer that question is really about taking the existing resources that we have and making 

sure that we are using them the most effectively. 

Ms. NORTON. So you are not convinced that you are using the resources that are on the ground sufficiently to help Mr. Taffaro? You 

think there is more efficiency and work to be pulled out of the people on the ground before you get more personnel? 

Mr. AXTON. Madam Chairwoman—— 

Ms. NORTON. Mr. Axton, where do you live? Are you from Louisiana? 

Mr. AXTON. I am a resident of the city of Seattle, Washington. 

Ms. NORTON. Well, what I am thinking about is: I am in Louisiana. The presence of this money waiting to be spent has an effect 

upon the stimulus funds. Why should we give any stimulus funds 

to Louisiana if the Federal Government and the State can’t agree 

on money that is on the table, and FEMA testifies it doesn’t need 

any more money to get money on the ground so that people can get 

work and Louisiana can get fixed? 

Why should the Federal Government come up with one more 

cent for the State when you have got money on the table and you 

tell me you don’t need any more people because you are not convinced that you are getting all the work and all the efficiency out 

of the people you have? 

Mr. Rainwater? 

Mr. RAINWATER. Madam Chairwoman, at the State level, we are 

adding an additional 55 personnel to our ranks to help speed up 

that process. 

Ms. NORTON. So the State has added people? 

Mr. RAINWATER. Yes, ma’am. 

There is another factor I think that Mr. Axton is sort of trying 

to get to, and that is, we think that—one of the things we have 

been talking about, for example, is you streamline this process by 

being smart and allowing local governments to submit architectural and engineering documents to FEMA and the State, and we 

accept those documents as—— 

Ms. NORTON. Well, Mr. Taffaro, do you do that? 

20 

Mr. TAFFARO. Every project is confirmed by an architectural and 

engineering firm. 

Ms. NORTON. So they are doing that, Mr. Rainwater, they are 

doing that? Are you doing that? 

Mr. RAINWATER. Yes, ma’am. The challenge is, those aren’t always accepted and sometimes work is done twice. And that is one 

of the things that—— 

Ms. NORTON. And why is work done twice, Mr. Rainwater? 

Mr. RAINWATER. Because a local or State will submit a document 

to FEMA, and FEMA will hire their architects and engineers to 

look at the document to make sure that the document is fair and 

it is the right disbursement. 

One of the things that we have talked about—— 

Ms. NORTON. Wait a minute. Excuse me. 

Mr. Taffaro, look, we are going to get down to what actually happens: people. Mr. Taffaro has his engineers working. You have separate engineers working? 

Mr. RAINWATER. No, ma’am. 

Ms. NORTON. Okay. Mr. Taffaro’s engineers work. Mr. Taffaro 

gives it to Mr. Axton. Mr. Axton’s people look at it. Where does the 

twice come in? 

Mr. RAINWATER. When there is a dispute between what either 

the State—the State and locals, we work out our problems ahead 

of time. 

Ms. NORTON. Truly? 

Mr. RAINWATER. Yes, ma’am. We take it to FEMA. We say, this 

is what the State and local government believes is the money due 

to the project. And then FEMA will, many times, hire their own architects and engineers to review the documents. 

Ms. NORTON. Okay. 

Mr. Axton, I can understand everybody has to check this work 

now—you are dealing with our money—but respond to the notion 

that there is double work going on here. 

Mr. AXTON. Chairwoman Norton, I think when there are engineers who work on behalf of the local governments and then on behalf of FEMA, the goal on having an efficient partnership is to ensure that the engineers that are working for the locals are looking 

at the design, looking at how the parish or the city or the community has to rebuild that structure—what are the various design requirements and the costs, and then putting it out to bid—all the 

things that are required, irrespective of Federal funding; and then 

our team taking that and looking at it for the purposes of determining eligibility. 

Ms. NORTON. Are you looking again at the design, for example? 

Mr. AXTON. We look at the design—— 

Ms. NORTON. So you are looking at the whole project? They look 

at the whole project? 

Mr. AXTON. And when things work as efficiently as they can—— 

Ms. NORTON. So you may decide that the project ought to be 

smaller, ought to be designed differently, and so forth; is that 

right? 

Mr. AXTON. FEMA should not be making those kinds of decisions. We should. 

Ms. NORTON. So why are you hiring your own folks then? 

21 

Mr. AXTON. The purpose of hiring the professional engineers—or 

architects or accountants, but on the engineering side is primarily 

to look at the design work that was performed by the applicant or 

by their hired engineering firm simply for the purposes of determining eligibility—— 

Ms. NORTON. Okay. 

Then, Mr. Taffaro, that might put you back to ground zero, 

wouldn’t it? I mean, they have looked at it, they disagree—′′they,′′ 

FEMA—with the State, which means you— 

Mr. TAFFARO. Correct. 

Ms. NORTON. Does that mean you have to redesign? What does 

that mean you have to do? 

Mr. TAFFARO. Oftentimes what it means is, there is a dispute 

that then a second team will have to come and reexamine the initial project. 

For example, we have had this with our fire stations, we have 

had this with our roadways, we have had this—— 

Ms. NORTON. A second team from where? 

Mr. TAFFARO. From FEMA, FEMA will send out. And oftentimes 

it is different numbers. 

Ms. NORTON. A second team after the first team has found an 

issue with what the State has introduced. And no streamlining has 

occurred in what Mr. Axton has given me. 

You know, I don’t know whether to cry now or after this hearing. 

It seems to me the dispute exists right then, Mr. Daniels—a dispute exists right then for FEMA to respond. The notion that they 

are going to respond other than in their own ′′best interests′′ has 

already been seen through 4 years of nonaction. 

The reason that this Subcommittee said ′′as disputes occur, 

then—then let’s get to it.′′ 

What is about to happen here is that we are going to have more 

or at least as much—unless you intervene all the time, Mr. 

Axton—as much play of expert on expert as we have had before. 

How many experts does it take to know that FEMA has a structural reason not to agree and the State has a structural—I am not 

blaming any of you; I am just blaming you for not streamlining the 

process once a dispute exists. Yes—if you keep negotiating for another year, yes, you will come to a resolution. 

What are the people who can’t get jobs in Louisiana supposed to 

do while you keep negotiating for another year or, for that matter, 

another 3 months? When does somebody declare, Dispute exists; 

let’s go on to the next stop instead of getting to another set of experts who will not—who have a structural reason to say to you, No, 

go back and make them do this, that or the other. And Mr. Rainwater and Mr. Taffaro have this built-in structural reason. 

The impatience of the Subcommittee comes with not understanding that structural, that built-in way in which each party 

must operate. When each party must operate that way, when the 

demonstrated record is that they will operate that way, why do we 

go hire another set of experts to try to go at the experts that have 

just been heard from? Who does that aid and why is that not simply repeating what has exasperated this Subcommittee? 

Why isn’t that streamlined? Why shouldn’t that go right now to 

appeal or to Mr. Daniels and his group? 

22 

Mr. GARRATT. Madam Chair, I need to go back, I think, and explain that the joint expediting team is in fact designed to be a 

streamlining enterprise. It is designed to—— 

Ms. NORTON. But you haven’t told me how it streamlines, because the other experts are still going to—you are going to go out 

and hire another expert to refute what has just been found. We 

have had testimony here that there will be two sets of experts now 

involved on this project. 

Mr. GARRATT. Madam Chair, I think you would agree with us 

that we do, as an organization, have a due diligence requirement, 

and there is a multilevel—— 

Ms. NORTON. You have already hired one set of experts. He has 

come to a different conclusion than the State’s expert. Why isn’t 

that the point that dispute resolution is necessary, either by appeal 

or in some other commonsense way to solve this? Why are you 

spending the government’s money on another set of engineers and 

architects? 

Mr. GARRATT. It may depend entirely on the characteristics and 

complexities of that particular project. But the bottom line is, if in 

fact as part of that review and reversioning process, they reach an 

impasse, it can go to the joint expediting team and that joint expediting team will attempt to push that thing through. And if they 

are unsuccessful, it will go to the unified decision team to make a 

final determination on that. 

At that point, if the decision is unfavorable, it is now up to them, 

it is their opportunity to enter that into the appeal process or, now, 

the arbitration process. 

Ms. NORTON. How many times can you get to do that before declaring a dispute exists? I mean, how successful has this been? Is this how you got the $1.3 million reduction? Is that how you 

did it? 

Mr. RAINWATER. Yes, ma’am, that is how we did it. 

Ms. NORTON. Mr. Taffaro says you still need three times as many 

people on the ground. 

Mr. RAINWATER. Yes, ma’am, there is no doubt we do. 

But as Mr. Axton—one of the things I wanted to get to, one of 

the things we have been talking about and putting on the table is 

that one of the things we could do is just allow—and the State 

would be very supportive of because there is risk involved in this, 

and we are at this point where we think it is time to take some 

more risk—and that is, you allow applicants to provide—the Federal Government is paying for the architect and the engineer at the 

local level—I know you already know that, Madam Chairwoman. 

Ms. NORTON. That is why I said, why are you spending our 

money on multiple—— 

Mr. RAINWATER. So let’s set an amount, let’s say $1 million. We 

have got 3,500 project worksheets that are valued at about $1 million or less, 3,500 that need to be reversioned in some sense. Why 

not go ahead and set an amount and allow the local governments 

to submit the A&E, the architect and engineering, documents, and 

let’s accept those. And then the State has the risk, if for some reason during the closeout the Federal Government could come back 

and say, We are the ones that messed up and we are willing to accept that, and we are willing to accept the responsibility—— 

23 

Ms. NORTON. But why not transfer the risk, Mr. Axton—you 

know, as to this committee, spending the money on multiple experts or spending it on people on the ground—putting up Charity 

Hospital, no contest. 

So we want to know why they are willing to accept the risk, you 

are not willing to give them the risk. 

Mr. AXTON. Chairwoman Norton, I think the best solution on 

this, based on my experience, is to really take the various experts 

and have their efforts become complimentary. 

Clearly, when the parish hires a professional engineer to design 

a facility in its reconstruction and its repair and replacement, we 

need to be working in concert with those professionals so that we 

can determine how the grant is written, the State can be involved 

in how the grant will be administered, and the applicant will be 

focused simply on the reconstruction and not so much on the program. 

And so, if it works the way it can, it is a complimentary effort 

of professionals. 

Ms. NORTON. It is complimentary, and something has happened 

to make it work, probably a new administration and a lot of pressure put on people on the ground, but I want to make sure it continues. 

Mr. Rainwater, as I understand it, it is the local government’s or 

the State government’s—Mr. Taffaro, I don’t know which decision 

it is as to when to stop the process and go to the next step. Why 

don’t you just stop it? 

Mr. RAINWATER. Typically, Madam Chairwoman, we do that in 

conjunction with local government. I mean, I talk to the parish 

presidents and the mayors quite often. When they have issues that 

come up or when a project has been stuck for quite some time, we 

do these Tuesday meetings, and—— 

Ms. NORTON. Look, it is in your court, sir. If it is in your court, 

you from your own folks. 

Mr. Taffaro, would you call the question earlier, if it were your 

question to call, and get to some kind of appeal or arbitration to 

resolve the matter? 

Mr. TAFFARO. Madam Chair, the issue of timing, of when we take 

it to an appeal process, is our call if and when we have a definitive 

decision made. If we do not have a definitive decision—— 

Ms. NORTON. From FEMA? 

Mr. TAFFARO. From FEMA. 

Ms. NORTON. So FEMA can make it impossible for you to go to 

the next step? 

Mr. TAFFARO. By delaying a definitive position on eligibility or 

amount, that puts us in a situation of limbo. 

Now, what Mr. Axton and Mr. Garratt have referred to in terms 

of a complimentary position, the additional personnel that I continue to refer to is not more people on the joint expediting team, 

but the actual people on the ground writing project worksheets, 

writing versions, so that that process can move forward at the very 

start. That is what holds us up. Even after we get an eligibility determination, a project worksheet or a version has to be written in 

order for that money to be obligated. 

24 

Ms. NORTON. Now, I am going to go to Mr. Cao, especially since 

Mr. Cao has indicated to me that far from expanding the number 

of people on the ground—— 

Mr. GARRATT. Chairwoman Norton, I am sorry to interrupt. We 

have just been notified that there has been a major, 7.9, earthquake near American Samoa and they have just been hit with a 

tsunami. 

I need to go make a call. Would you excuse me? 

Ms. NORTON. Well, certainly you are excused to do that, sir; that 

is your job. I am sure Mr. Axton can answer the question. 

But as I give it to Mr. Cao, who has notified me that not only 

is FEMA not increasing, but it is reducing the number of people 

that would be available to Mr. Taffaro and Mr. Rainwater. 

I will leave you to ask that question. 

Mr. CAO. Thank you, Madam Chair. 

And, Madam Chair, I can sense your frustration just sitting up 

here talking to the different agencies. Just imagine what kind of 

frustrations the people who are living in New Orleans have suffered for the past 4 years. 

But with that being said, Madam Chair, I am very glad to hear 

that they have pushed out $1.3 billion since February, because if 

you were to look at their progress the 2 prior years, it was much, 

much, much, much slower. So being on the ground, I must say that 

they have made tremendous, tremendous progress. 

And I applaud the work of Mr. Tony Russell, the director of TRO, 

down there. He has worked extremely hard. He has been very cooperative to push all the recovery processes forward. 

But at the same time, I amalso concerned, if the information I 

have received is correct, that FEMA has started to reduce the number of people down at the district offices. Is that correct, Mr. Axton? 

Mr. AXTON. My understanding of any sort of staff reductions is 

related to other areas outside of the public assistance program specifically. We have a number of functional areas that work inside of 

our field offices, and I believe that each of those, when it relates 

to reductions, is in other areas. 

And I can speak specifically. I know—President Taffaro and I 

spoke just yesterday, and there was actually some programmatic 

staff that are being assigned out there. And I think we are even 

increasing in certain specific areas. 

So let me double-check on that, and we will confirm the staffing 

levels that are in place currently. But I believe any sort of reductions are outside of the program. 

Mr. CAO. My main concern here is with the status of the CDL. 

I know that the period to submit inputs expired since June. We 

were expecting the regulations to be released sometime in September, or it might have been August. 

What we are hearing now is that it might not be available until 

next year. 

This is the problem that we have, Mr. Axton: that you have city 

governments, you have agencies, you have people like the Orleans 

School Board who are waiting for these criteria to see whether or 

not they will be qualified for these CDL waivers because they have 

to work out their budgets. 

25 

I spoke with the Orleans Parish School Board, for instance, a 

couple weeks ago. They are having a problem with respect to their 

700 or so retirees. The retirees—right now, they are receiving approximately—I am not sure the amount of money, but at this point 

they are spending more than half of their income on medical insurance expenses; and the only way for Orleans Parish School Board 

to help these 700 retirees is to use the amount of CDL money that 

they have still in limbo. They don’t know what to do with it because they are fearful that eventually they will have to repay it; 

but at the same time, you have 700 or 800 or so Orleans school 

teachers who have retired, waiting to receive benefits from the Orleans School Board, and that is the only money that it can use. 

So you have the Orleans School Parish, you have other municipalities. I am sure, Mr .Taffaro, you are having the same problem; 

is that correct? 

Mr. TAFFARO. That is correct, Mr. Congressman. 

Mr. CAO. So you have all these city governments, you have the 

Orleans Parish police superintendent, you have the Orleans sheriff, 

who are waiting for these criteria to be released. 

I would like to know, what is the cause of the delay? Why is 

there a 3-, 4-, 5-month delay on the release of these regulations? 

Mr. GARRATT. Congressman Cao, I am sorry for coming back in 

late for this, and I apologize for being a little distracted. 

In terms of the CDLs, the regulations, unfortunately there is a 

rather protracted process that any regulatory effort has to undergo 

before those regulations are finalized. We are proceeding at pace 

with those, and we certainly wish we could tell you it could move 

faster and has moved faster through that process. 

It has not, but it is not through lack of effort. You will see those 

regulations. If you would like, we will get back to you with some 

more specifics on exactly when we think those regulations will be 

promulgated. 

Ms. NORTON. Within 30 days, sir. Within 30 days, submit to this 

committee the timeline for getting those regulations out, so we can 

inform the entire Subcommittee. 

Mr. GARRATT. Ma’am, I think I can commit to you much faster 

than 30 days those timelines. 

Ms. NORTON. Excellent. 

Go ahead, sir. 

Mr. CAO. Thank you, Madam Chair. 

Mr. Garratt, I know that traditionally when you have disasters 

like this, CDLs are generally forgiven, so I don’t know how you 

have a devastation that is the biggest in the history of the United 

States—a natural disaster that devastated 80 percent of the city of 

New Orleans and basically put the city out of commission for almost a year, I don’t see why there is such a difficult decision in forgiving these loans. And I just want to know the reason for these 

different—or at least the discrepancies with respect to some of 

these decisions, where you have a smaller devastation where the 

loan is forgiven, but then you have a devastation like Katrina and 

the loans might not be forgiven. 

So what is the rationale behind this? 

Mr. GARRATT. There are actually two forms of community disaster loans. There is the form that has existed in the Stafford Act 

26 

for some period of time, and then there is the special CDL loan program that was enacted after Hurricane Katrina. 

The CDL loan program that exists in the Stafford Act does have 

a forgiveness provision. That provision does not automatically kick 

in, but is in fact determined at some point following the loan, several years after, and it is based on the recovery of the jurisdiction 

that received that loan. 

The special CDL provision did not authorize forgiveness, the legislation doesn’t authorize forgiveness, and therefore, we were prevented, when that legislation was initially enacted, from forgiving 

those loans. 

Mr. CAO. I just received information from my counsel that the 

law was changed later on to allow forgiveness. 

Mr. GARRATT. Indeed. Initially, though—when that special CDL 

program was initially passed, that was the case; but that new process, or the special CDL program, in those loans is still evaluated, 

using basically the very same process that we use to evaluate the 

regular CDL program. And that is, based on some number of years 

after they have received that loan, if they have recovered to a sufficient point, then they are not eligible for loan forgiveness. 

If they have not recovered to a specific point, then they are eligible for loan forgiveness. But it is going to depend on—the level and 

extent of their recovery will determine their eligibility for forgiveness under that program. 

Mr. CAO. And, Mr. Garrett, if you don’t mind my sharing the 

Chairwoman’s frustration, it has been over 4 years. And if you look 

at the city of New Orleans, which has made great strides under the 

leadership of Mr. Taffaro—St. Bernard Parish has made great 

strides, as well as other areas. 

Mr. Taffaro, can you please provide us with your input with respect to how critical it is for this loan to be forgiven and the pace 

that needs to be addressed in regard to this issue? 

Mr. TAFFARO. Congressman, the obvious nature of our situation 

can be summed up in our current budgetary process where we are 

a small community operating on a $40 million annual operational 

budget, and we are facing a $7.4 million shortfall going into 2010. 

The amount of CDL funds that we received from Hurricane 

Katrina is in the neighborhood of $18 million. To have to begin to 

repay that would basically put us near bankruptcy. 

Mr. CAO. So, basically, city governments like yours, a parish government like yours, they are pretty much in dire straits, and without some of these loans forgiven in a very expedient way, then 

there would be a tremendous burden for the people of your parish; 

is that correct? 

Mr. TAFFARO. It would result in direct services being cut from 

the residents who suffered the most damage, yes. 

Mr. CAO. So, Mr. Garratt, my question to you here is: How long 

does FEMA have to wait in order to decide whether or not a district has fully recovered to allow loans to be forgiven? I really don’t 

understand. Is it 4 years, 5, 6, 7, 8, 9, 10 years? 

Mr. GARRATT. I hesitate to guess. I believe that it is at the 3-year 

point that we start evaluating the return of revenue to the affected 

jurisdiction, or to the jurisdiction in which the applicant for that 

CDL resides. 

27 

But my preference would be, Congressman Cao, to allow us to 

provide a more fulsome and thorough answer to you following this 

hearing. 

Mr. CAO. Now, let me read to you this—— 

Ms. NORTON. Within 30 days, please provide that answer to the 

Chair, and I will share it with the Subcommittee. 

Mr. CAO. Madam Chair, if you will allow me to quickly read this 

provision belief quickly. It says here, under section 417 of 42 U.S.C. 

5184, ′′Cancellation: Repayment of all or any part of such loan, to 

the extent that revenues of the local government during the three 

full fiscal year period following the major disaster are insufficient 

to meet the operating budget of the local government, including additional disaster-related expenses of a municipal operation character shall be canceled.′′ 

Now, this sounds very clear to me; it requires you to look at the 

local government’s 3-full-fiscal-year period following the major disaster. So my assumption is that it would begin immediately after 

the disaster happened and that it would extend for 3 years. 

Well, the question that I have here now is, it has been over 4 

years, so the time period that you have used in order to assess the 

situation has already expired over 1 year. So how much longer do 

you need in order to make this determination? 

Mr. GARRATT. Congressman Cao, based on history, in fact, we 

have been able to make determinations about CDL forgiveness and 

whether jurisdictions that have previously received those have 

reached that revenue stream, that revenue capability to which you 

refer. 

And you are exactly correct; this is a pretty objective determination, but it does require that the applicant of that CDL provide a 

substantial amount of documentation outlining exactly what the 

revenue capabilities are at that point. 

I don’t know the specifics of each the CDL applicants, but for 

each one of the applicants that believes that we have taken an 

undue amount of time to address that particular issue, I am happy 

to tackle that. 

Mr. CAO. Mr. Taffaro, do you have documents to show to FEMA 

that after 3 years you are insufficient to meet the operating budget 

of your government? 

Mr. TAFFARO. Congressman, we have documentation from 2006, 

2007 and 2008 that would clearly indicate our revenue shortfalls 

for those periods. 

Mr. CAO. So based on what the law states, Mr. Garratt, it says 

that the ′′character shall be canceled.′′ There is the word ′′shall′′ in 

there that mandates the cancellation of a loan similar to what St. 

Bernard Parish is basically receiving; is that correct? 

Mr. TAFFARO. That is correct. 

Mr. CAO. It seems to me pretty clear, so I don’t understand this 

process of reviewing the regulations and to release the regulations, 

and then have them to apply for a waiver or forgiveness which 

might—given FEMA and the pace that FEMA is moving, might 

take another 1, 2, 3, 4 years until you all decide whether or not 

to forgive these loans. 

The law, it looks very clear to me; it says after 3 years if they 

can show you that they do not have sufficient money available, that 

28 

the loans shall be canceled. It cannot get any more clear to me 

than that. Can you explain this whole discrepancy? 

Mr. GARRATT. What I can tell you, Congressman Cao, is that if, 

in fact, any jurisdiction meets that criteria, that their loan will be 

forgiven. That will happen. 

Again, there is a process that this has to go through. They have 

to assemble their information; they provide it. And then that criteria is looked at the very same as any jurisdiction that has ever 

applied for one of these loans. Their criteria is looked at; it is a validation process. 

I am not sure where these particular CDL forgiveness requests 

are in the queue, but as I indicated to Madam Chairman, we will 

follow up with you and provide you a status report on every single 

one of those and let you know when we expect them to be resolved. 

Mr. CAO. Thank you very much. 

I was speaking to Chairman Oberstar just last week about recovery, and his statement was that FEMA spends more money in recovery than it does preparation, and there needs to be a plan to 

help an area to recover after a devastation similar to Katrina. 

My question to you here, Mr. Garratt, is this: After—4 years 

after Katrina, after all the lessons that we have learned from 

Katrina, does FEMA have a plan in place to help an area to recover? Or do we still have the agencies come in there, the Federal 

agencies, the different agencies go in there and just haphazardly do 

things without much coordination, without much assistance, or 

without much conversation with State and municipal governments? 

Mr. GARRATT. Congressman Cao, I think it is important to reinforce the fact that the response to any disaster anywhere in the 

United States is in fact—the quality of that response is going to be 

directly proportional to the teamwork of all of the levels of government that are involved in that response. And the way to achieve 

teamwork is to set up and operate from a unified command perspective. 

Mr. CAO. Do you have that plan in place, Mr. Garratt? 

Mr. GARRATT. Absolutely. 

Mr. CAO. Because a disaster can strike any day, and we want to 

know whether or not there is a plan in place to quickly implement, 

to help an area to recover. Because if those areas have to wait like 

the people of New Orleans, of Louisiana, have to wait after 

Katrina, after Texas had to wait after Hurricane Ike, then we have 

a problem. We have a problem that needs to be solved very, very 

quickly. 

Mr. GARRATT. I agree, Congressman Cao. And I would suggest 

that the disasters that we have responded to, whether they are in 

North Dakota or Georgia, since Hurricane Katrina, have demonstrated that the Agency has come a long way in terms of reforging and reunderstanding and reachieving the kind of unified 

Federal, State, and local level approach to disaster response and 

recovery that is necessary to begin that process right from the very 

beginning. 

So, yes, sir, I think we have got a plan, and I think we are ready 

to go. 

Mr. CAO. What is the status of this national recovery strategy? 

Mr. GARRATT. The national disaster recovery—— 

29 

Mr. CAO. You were saying that you, if I were to follow your last 

statement, that you have all these steps ready, you have all this 

great plan together. I need to know the status of it. 

Mr. GARRATT. No. I was referring to the architecture that we 

have in place, by which we operate and respond to disasters whenever they occur, and that is called the National Response Framework. And that National Response Framework is not just limited 

to response—— 

Mr. CAO. Basically, you don’t have one right now; is that correct? 

Mr. GARRATT. No, sir, that is not correct. We do have a plan to 

respond to disasters. 

Mr. CAO. What about a plan to help an area recover after a disaster? I was talking about a plan to help an area recover. 

Mr. GARRATT. If what you are talking about is the National Disaster Recovery Strategy that was mandated by Congress, that effort is under way. 

Mr. CAO. What is the status of that, Mr. Garratt? 

Mr. GARRATT. Status in terms of? 

Mr. CAO. The National Recovery Strategy. 

Mr. GARRATT. The status is that it is under development, sir. 

Mr. CAO. How far into this development is this plan, is this strategy? Would it be ready, if a hurricane were to come down into the 

Gulf in the next week or so, would it be ready to be implemented 

then and there? 

Mr. GARRATT. No, sir. The plan will not be completed within the 

next couple of weeks; in fact, I would not expect the plan to be completed for a number of months. But that does not mean that the 

Federal Emergency Management Agency and our partners do not 

understand what is necessary to respond to and recover from a disaster. 

For example, Emergency Support Function 14, the long-term 

community recovery function, is a key part of the national response 

framework, and that has been extremely successful in helping 

us—— 

Mr. CAO. Mr. Garratt, it has been 4 years for you all to devise 

a National Recovery Strategy. I don’t understand how much longer 

you need in order to come up with a plan. 

Madam Chair, it just baffles me that 4 years after Katrina, after 

that devastation, we still don’t have a plan of recovery. So I don’t 

really know what else we have to do in order to encourage FEMA 

to come up with a strategy. 

Mr. GARRATT. One point I would like to make, Congressman, if 

you don’t mind, is that a national strategy is one thing; but all disasters are unique and all disasters are different, and the real strategy that is going to support a fast and rapid recovery of any particular geographical area is going to be the strategy that is developed between the Federal Government, between the affected State, 

and between those jurisdictions within that State. 

They need to come together. They need to figure out the unique 

characteristics of that disaster and their recovery. And they need 

to forge together a tailored recovery plan for that affected area. 

That is the purpose of the SF-14, the Long-Term Community Recovery Annex. And they have been unusually successful in helping 

30 

forge those sorts of planning activities in States throughout this 

Nation. 

Mr. CAO. If you can provide us with the status of this National 

Recovery Strategy, we would really appreciate it. Within the next 

week or so, or maybe 2 weeks, we just want the status. We just 

want to know where in this planning strategy you all are right at 

this present moment. 

Now, there was a statement that was said a couple of months 

ago by—— 

Ms. NORTON. If the gentleman would yield, the National Disaster 

Strategy, Mr. Garratt, that you refer to for the Nation—which 

would include, of course, the Gulf Coast, is 2 years overdue, so you 

needn’t cite it in response to the gentleman from Louisiana. 

Go ahead, sir. 

Mr. CAO. Thank you very much, Madam Chairman. 

Basically it says that what the storm did not destroy, FEMA 

came later and destroyed it. And I am talking about some of this 

flood mapping that we have. 

I know that in Louisiana people are suffering from high insurance rates. Flood insurance, for example, can run from $2-, up to 

$5-, $6,000 in flood insurance. 

I live in an area where I believe I pay, if I remember the numbers correctly, about $4,000 for flood insurance per year because of 

this velocity zone. I know that we have a firehouse out there that 

was obligated by FEMA and then deobligated by FEMA after the 

flood maps came out. 

Now, you have people that have homes, that have businesses 

that have been there for a number of years. And now, in order for 

them to get to the nearest firehouse, they have to travel 20, 30 

miles to get to the nearest firehouse. 

My question to you here is, sir, what is the rationale to obligate 

the repairs of these fire stations, and then deobligate them, based 

on these flood maps? 

Mr. GARRATT. FEMA’s obligation from a mitigation perspective is 

to identify risk and to reduce risk to citizens throughout this country. It is also to ensure that Federal funding does not go towards 

funding risky ventures. If, in fact, we are going to fund somebody 

building below flood level in an area that we have identified as a 

flood zone, in fact, we think—— 

Mr. CAO. So my question is basically, based on your rationale, 

then if a community were to return and it happens to be in a highvelocity zone, and based on the rationale that you are saying, that, 

Well, we are not going to give you a firehouse so that we can encourage you to move out of your neighborhood; or if you decide to 

live there, we are just going to go ahead and let your house burn 

down? Is that correct? 

Mr. GARRATT. No, sir, that is absolutely not correct. 

If you will allow me to finish, there are a couple of options available to that jurisdiction. One, if they are interested in building that 

firehouse and not elevating that above the flood risk, they are free 

to do so, but they won’t get Federal funding to do that. 

On the other hand, if they want to mitigate that firehouse to 

whatever risk they face, Federal funding may be available to them. 

31 

So the answer is that it is going to depend on what the jurisdiction and the applicant want to do. The Federal Government is interested in reducing risk to American citizens. 

Mr. CAO. Paul, do you mind clarifying that for me? 

Mr. RAINWATER. Yes, Congressman. 

So there is no doubt that—the policy that FEMA sent down to 

the State and to the local governments basically said that we would 

look at it on a case-by-case basis, depending on what the damage 

to the facility was. There is no doubt that—we are in a dispute 

right now in Cameron Parish, for example, about a school, whether 

it will be rebuilt or not or whether the library will be rebuilt or not. 

And as you said earlier, Congressman, it is important that—I 

mean, these are working communities. There is a reason they live 

along the Gulf Coast. There is a reason that myself and the Governor have been advocates for allowing people to live on the Gulf 

Coast. 

Cameron Parish, just as an example, has two of the largest liquefied natural gas facilities in the country fueling the country. Twenty-five percent of fish and shrimp come from the Gulf Coast, as you 

know. So we are in dispute about some fire stations and some sheriff substations and some schools that are on the Gulf Coast, and 

also some roads in Grandolf, for example, and a fire station. So I 

don’t think we have resolved it yet. 

Obviously, we want to be smart about the way we rebuild in Louisiana, but I think that we can figure that out. And again, it goes 

back to the State taking—— 

Mr. CAO. But then by deobligating the project, basically it leaves 

you no recourse whatsoever; is that correct? 

Mr. RAINWATER. Basically you either repair and take the risk 

that if it is damaged again—which I think most of us are willing 

to do that—we would get no Federal assistance, or you move the 

project outside of that area. 

Mr. CAO. Madam Chair, I do have more questions, but I yield the 

floor back to you so you can resume your questions. 

Ms. NORTON. Well, I think you have asked—and we will come 

back to a second round, but you have asked questions that have 

been informed by being on the ground. And you began your questioning by giving FEMA and the State their due by saying on the 

ground you have seen significant process. 

And I do want to be understood to commend the State and 

FEMA for that progress. Any time I see that figure, $1.2 or $1.3 

million in little more than 6 months, I know that something has 

been happening. 

The problem I am having is finding out how it happened. And 

I think the way to avoid circular questioning is to say to you, Mr. 

Axton, because you were given much of the credit, you and your superior, I need within 30 days, inasmuch as Mr. Garratt mentioned 

on page 3 of his testimony that FEMA has eliminated a number 

of bureaucratic impediments, I need to know specifically what were 

those impediments. 

Did the IG or any other oversight Committee concur with their 

elimination? What offices or procedures were consolidated? Were 

any employees affected? 

32 

There is something about having to put something in writing 

that disciplines the mind. To the extent that you see this, it will, 

in fact, begin to be understood and, it seems to me, may even begin 

to happen in a way that it has been hard for this Subcommittee 

to figure out from your testimony—in part, because of the complexity of explaining it. 

For example, if I were to write this out, I would give specific examples. Mr. Garratt, on page 5, mentioned 32 previously—see, that 

is the kind of concreteness that I commend FEMA and the State, 

Mr. Rainwater, for—32 previously stalled projects in regard, Mr. 

Taffaro, they say to eligibility. 

Within 30 days, I want the names of those 32 projects. 

Believe me, I am not engaged in a paperwork project, but I just 

think if one outlines what I am talking about, without a whole, big 

50-page response, that you will do quite enough for this Committee: 

names of the 32 previously stalled projects with regard to eligibility. 

Underneath that, I would put in a paragraph—no less than that; 

it may take only a sentence—how the eligibility issue was resolved. 

If one sees that in black and white, one might then go to those procedures more readily. 

Ms. NORTON. Mr. Daniels, as far as we are concerned, you are 

not a bystander to this project. The fact that FEMA and the State 

knew you were coming on board may have something to do with 

the progress that has already been made, and that is all right with 

us. 

I guess the fact that there is a Supreme Court of the United 

States means that people work a little harder. Although the last 

thing I want to do as a lawyer who has practiced before the Supreme Court is to cite the courts as any example of what we would 

like to see replicated here. 

How different, if at all, from the current practices do you see the 

Katrina arbitration process working? When should it click in in 

order for you to be useful at all? 

Mr. DANIELS. Well, we would like to see it click in as soon as possible. 

Ms. NORTON. So the more the parties can go back over one another, the less effective your process it is going to be. Because they 

see you there, if they can keep you out there, you know, better 

than not being there at all. 

Mr. DANIELS. The process that I am most familiar with as far as 

dispute resolution is the Contract Disputes Act. And the triggering 

process in that act is the contractor submitting a claim to the contracting officer. If he doesn’t get a decision within a certain period 

of time, he can file an appeal with the Board of Contract Appeals. 

So it is incumbent on—— 

Ms. NORTON. Within a certain period of time. I realize that the 

contracts you deal with are not as complicated, but what time—just 

to give us some idea of how such a mechanism works? 

Mr. DANIELS. Sixty days for a claim below $100,000. For a claim 

above $100,000, the contracting officer must respond within 60 

days to give a date by which he will make a decision, and it must 

be a reasonable date. 

33 

Ms. NORTON. That sounds so rational to me. You handle some of 

the biggest appeals. 

Now, do you handle some of these appeals from the Defense Department? 

Mr. DANIELS. We do not do the Defense Department. That is the 

only Department we don’t do. 

Ms. NORTON. What is the biggest appeal you might handle? 

Mr. DANIELS. We have had appeals up to $100 million on construction projects for major buildings. 

Ms. NORTON. That is good enough for me. 

What is wrong with the process that Mr. Daniels has outlined? 

Mr. Rainwater, Mr. Axton, and Mr. Taffaro, what is missing here 

in terms of what you need in order to get to the point where you 

declare there is a dispute? 

You heard him say—it would look like the ball would be in your 

court, Mr. Rainwater; or possibly Mr. Taffaro, although Mr. Taffaro 

seems to be more willing to get to a response than you, Mr. Rainwater, who is in this unified team and seem to be willing to keep 

the government hiring experts. Because that is what they are 

doing; on your dime they are hiring experts to refute you, sir. 

Mr. RAINWATER. The organization I run goes away July 2010, so 

I am not looking for employment. Our job has been from Day One 

to push as quickly as possible—— 

Ms. NORTON. Excuse me, you have got to explain. What happens 

in 2010? 

Mr. RAINWATER. Yes, ma’am. The Louisiana Recovery Authority, 

this consolidated organization that I run, the Community Development Block Grant dollars and the FEMA public assistance dollars 

expire July 2010. 

Ms. NORTON. And then what happens? 

Mr. RAINWATER. Well, hopefully we will be done with disputes, 

Madam Chairwoman. That is one of the things we were very excited about, about getting Tony Russell. 

Ms. NORTON. How much is left on the table now? How much is 

in the pipeline now? 

Mr. RAINWATER. Yes, ma’am. There are $8 billion that have been 

obligated; we paid out about $4 billion. We think we are going to 

get another $3.5 to $4 billion, depending on the versioning process. 

Now, half a billion of that is Charity Hospital which—the State is 

preparing that arbitration case, and we will be sending it either tomorrow—— 

Ms. NORTON. But we have called the question on Charity Hospital. 

Mr. RAINWATER. Yes, ma’am. 

Ms. NORTON. And that is going to go to whom? 

Mr. RAINWATER. The judge. 

Ms. NORTON. Is the time running on that one? 

That would be the biggest news to come out of this hearing. Is 

the time running on Charity Hospital? 

Mr. RAINWATER. We will send it no later than Friday, but possibly tomorrow. We did send our second appeal up just as a 

placeholder, made the decision to go with our arbitration panel. So 

we will send it to the arbitration panel, and hopefully we will get 

a decision within 60 days. That is the goal. 

34 

Ms. NORTON. Are you prepared for that, Mr. Daniels? 

Mr. DANIELS. Yes, ma’am, we are. 

Ms. NORTON. So Charity Hospital may be the biggest and the 

most desperate of the outstanding—— 

Mr. RAINWATER. Yes, ma’am. And then there are about 14 

projects that are over about $50 million, representing about $1.4 

billion. 

Ms. NORTON. So you do feel that you can handle projects well below $500,000 within this process that you have been using? 

Mr. RAINWATER. Yes, ma’am, we believe we can. 

There are going to be some others. There are about 30 projects 

that we have picked that will possibly go to arbitration. 

Ms. NORTON. Before you run out of gas, how are you going to get 

all of that done, given the process of multiple—not appeals, interestingly—multiple steps with architects and engineers before you 

can get to the dispute stage? 

Mr. RAINWATER. Well, ma’am, I think one of the things that we 

are trying to do—again, one of the things that we have created between the State and the Federal Emergency Management Agency 

is sort of this concept team to sit down, and if we can get to a 

point—for example, one of the ideas on the table is that FEMA 

would accept architectural and engineering reports at a certain 

amount. 

Ms. NORTON. Let’s remember, we are trying to make this a dispute resolution session in itself. 

You have heard Mr. Rainwater say that—say it again, Mr. Rainwater, if FEMA were to accept what? 

Mr. RAINWATER. If we could decide on an amount and FEMA 

would accept architectural and engineering local, State project 

worksheets at a certain amount—for example, we have about 3,000 

that are under $1 million—we could work through that process 

very quickly. 

Ms. NORTON. If they were to accept it. 

Does that relate to your earlier testimony about assuming the 

risk? 

Mr. RAINWATER. Yes, ma’am, it does. 

Ms. NORTON. If it costs more than that? 

Mr. RAINWATER. Yes, ma’am. 

Ms. NORTON. I have to ask, in light of the fact that, otherwise, 

the Federal Government would be spending money on more studies 

out of our own pocket and they are willing to assume the risk, why 

the Federal Government wouldn’t just let them assume it, call it 

a day, sign off, and go on to the next project? 

Mr. Garratt or Mr. Axton, whichever one of you wishes to—I 

don’t need ′′depending on,′′ everything depends on. You heard him 

say ′′under a certain amount.′′ Here is our bid. Of course, we can 

continue with the architectural stuff and continue to go through all 

these appeals, all of which we pay for, but he is saying, We will 

assume the risk, that is how desperate we are. 

You can imagine, Mr. Axton and Mr. Garratt, that the cost of 

labor, the cost of everything is much lower than it would have been 

4 years ago. So I am not sure they are assuming so much risk. People are so anxious to work, small business and business in the 

State and throughout the region, so I am not sure that this isn’t 

35 

anything but a win-win unless there is some bureaucratic sense 

that the Federal Government doesn’t operate that way. Although, 

if we had any private parties in the room, I know what the answer 

would be. 

Because I don’t see where we lose. They may lose. Given my understanding of what it is like down there, I don’t think they have 

much of a chance for losing; therefore, I see it as a win-win. 

I want to know, Mr. Axton or Mr. Garratt, why that isn’t a winwin for certain projects. 

Mr. AXTON. I think the most important outcome that we are continually striving for with all the various local officials—and certainly with the State—is to, again, have the various professionals 

that are involved in each—— 

Ms. NORTON. You cannot come before this Committee without 

answering my question. You see, I didn’t ask you about the professionals. See, 4 years I have been sitting here with the professionals. 

I asked you a very specific question and, sir, I want a specific answer. 

Mr. AXTON. Chairwoman Norton—— 

Ms. NORTON. I said, why isn’t their willingness to assume the 

risk, holding the Federal Government liable for nothing further, 

given an estimate following the professionals having given that to 

you, based on their architects, engineers and the like, why isn’t 

that a win for the government and, therefore, a win-win since they 

would agree to that? 

Mr. Garratt? It may be unfair to ask Mr. Axton since he is not 

in charge. 

I want to know why that ought to wind itself up before Mr. Daniels, who, I must tell you, being in touch with court suits, with settling court suits, having clerked for a Federal judge, I want to tell 

you that that is likely to be the outcome in the first place. 

You don’t need to say so, Mr. Daniels, I know the matter is before you, but I know how things work when a dispute resolver gets 

into the act. 

Ms. NORTON. So I have to ask you, with some sense that there 

is nothing to lose here because you are able to sign off and report 

to this Subcommittee one last project due, with Mr. Rainwater saying it has been so long we are willing to accept the risk, why 

should that not be put into operation now with respect to certain 

projects? 

Mr. GARRATT. It may very well be an outstanding idea, Madam 

Chair. I, personally, would like to know a little bit more about exactly what is being proposed here, but, conceptually, I think it 

sounds like a worthwhile idea. 

Ms. NORTON. That is all I need to hear, because we cannot ask 

you to negotiate. I am sure this is not the first time it has ever 

come up. 

Let me ask you this, Mr. Rainwater. I want you to set out what 

you just said you would propose—projects under what amount. I 

want you to get it to him quick enough so, within 30 days, we can 

see whether or not Mr. Garratt accepts that as a possible way to 

respond. 

Mr. RAINWATER. Yes, ma’am. 

36 

Ms. NORTON. Let me say something about Mr. Cao’s question. 

You are not paying back this money that has been borrowed from 

FEMA, but let me tell you what is happening to Mr. Taffaro and 

to the State of Louisiana. If they are holding up to 25 percent of 

their budget in outstanding debts, that means that that has affected their bond rating, their ability to borrow on Wall Street. To 

the extent that it has affected their bond rating, do you know what 

that means? It means, as a result of no decision having been made 

on the borrowings that Mr. Cao indicated, that the people of Louisiana, 4 years after Katrina, are paying more to borrow money in 

the middle of a recession than they were paying 4 years ago in 

what were good times. 

This is an additional outrage. You have got to borrow money, you 

are paying more to borrow money, and the Federal Government, 

because of the tardiness in dealing with these regulations, as Mr. 

Cao has pressed on, is responsible for lowering the bond ratings of 

the parishes and of the State itself. I mean, that is a shame and 

an outrage; and the timelines that we have indicated, particularly 

in light of the borrowings or the effect on borrowing that we are 

going to have to emphasize, we will hold you accountable for. We 

wanted to put on the record the effect it is having on a State that 

was already in worse state, given Katrina, than any other State. 

Now, some of this I am just going to ask to be put in writing. 

I want to deal with this question of applying people within 

FEMA to help the parishes get to the point that Mr. Taffaro indicated is a huge part of the problem. You have got to have a determination of eligibility which affects the pace of recovery in the first 

place. 

Mr. Taffaro, you mentioned—I think it is on page 8—that FEMA 

has agreed to embed staff at St. Bernard Parish. Have they done 

this? Would they have sufficient authority to make the decisions 

necessary to speed recovery? 

Mr. TAFFARO. Madam Chair, the information that we have received, in fact, as we were approaching the hearing today, is that 

there is a shift in personnel. 

Ms. NORTON. You say you were hearing that today? 

Mr. TAFFARO. Yes, Madam Chair. As of this morning, we were 

hearing confirmation that there would be personnel shifted to 

embed with St. Bernard Parish. 

Ms. NORTON. Excellent. How many people do you expect to 

embed, Mr. Axton? 

Mr. TAFFARO. Well, according to Mr. Russell, the director of the 

TRO, he indicated that there would be one lead and four additional 

personnel who would work out of the St. Bernard Parish government’s office. 

Ms. NORTON. So five people—— 

Mr. TAFFARO. Five. 

Ms. NORTON. —embedded there? 

Mr. TAFFARO. Correct. 

Ms. NORTON. Mr. Garratt or Mr. Axton, how many people does 

FEMA have on the ground in Louisiana dedicated to the recovery 

effort right now, as I speak? 

Mr. GARRATT. In the State of Louisiana as opposed to St. Bernard Parish? 

37 

Ms. NORTON. Yes, dedicated to recovery. 

Mr. GARRATT. I do not have specific figures. Between 600 and 

800. 

Ms. NORTON. Within 30 days, the exact number and to what 

functions and where they are doing their work, please. 

In preparing, Mr. Axton, your work, we asked you to do examples. For example, Mr. Rainwater points at the examples of resolution. I was very pleased to hear about the Tulane library and that 

it was not an easy project. You learn things not only by bold language about what we did but by example. Perhaps you could use 

Tulane as an example of how some breakthrough occurred. I need 

to know where these layers are, though. 

How about appeal? Is that still in the process? I mean, the arbitration is pretty quick if we get to the point where you have no dispute, but we had this other appeal process. Whatever happened to 

it? Is it still in the picture? Why is it in the picture if there is an 

arbitration process? 

Mr. GARRATT. Yes, ma’am. The appeal process still does exist. 

For those projects that were in appeal when the legislation implementing the arbitration process was promulgated, we suspended 

any unfavorable action on any of those appeals. We continue to review the appeals. In fact, if we found in favor of any of those, we 

notified and continue to notify—— 

Ms. NORTON. Is that still in use only for those projects that were 

in process then? 

Mr. GARRATT. No, ma’am. The process is also available for new 

issues that arise. It is going to be up to the applicant to make the 

determination. 

Ms. NORTON. All right. That is something you are going to have 

to tell this Subcommittee. We did not mean to impose another 

layer. Please forgive us. The process that we had concern about 

was not so much the appeals; it was getting to the point where a 

dispute was declared. Now I am all mixed up. We still have the appeal. Whereas, I thought, once we got to dispute and got to Mr. 

Daniels, we could solve the matter, and that is it. So what in the 

world is the appeal process there for in the first place, an old-fashioned traditional process for new matters? 

Mr. GARRATT. The appeal process is what it is—these are complementary avenues for an applicant. 

Ms. NORTON. So it is one or the other? 

Mr. GARRATT. That is correct. 

Ms. NORTON. Now, Mr. Rainwater and Mr. Taffaro, why do you 

need two processes that you can go to? Let me ask you this: After 

you go to appeal, can you still go to arbitration? 

Mr. RAINWATER. No, ma’am, not as I understand it. I think you 

have to pick. 

Ms. NORTON. Which process is quicker? 

Mr. RAINWATER. Chairwoman, I think it depends on the complexity of it. I mean, when you look at Charity Hospital, it is just 

so complex—— 

Ms. NORTON. So you would prefer which process? 

Mr. RAINWATER. Arbitration. Yes, ma’am. 

I mean, one of the things that we have sort of been fighting for 

is this whole ideal of—you know, when we just hit heads to a point 

38 

where folks were bleeding in the room, it was time to bring in an 

independent panel. 

Ms. NORTON. How does the appeal process work? Suppose you 

chose appeal, not for Charity but for some lesser project. What 

would that entail? 

Mr. GARRATT. The applicant who is appealing the dispute would 

submit an appeal to the region that oversees that State. In this 

case, for Louisiana, it would be FEMA region 6. The regional administrator would review that appeal and render a decision. If it 

is unfavorable, then the appellant can re-appeal to FEMA headquarters. So they have two levels of appeal within that process. 

Ms. NORTON. Now, Mr. Rainwater, with that process of appeal 

within appeal and then re-appeal, why would anybody choose that 

process, even for someone smaller than Charity Hospital’s processes, if he simply wanted to get something done? 

Mr. RAINWATER. Yes, ma’am. 

Ms. NORTON. What is the difference between an ALJ’s ability to 

solve a complex matter involving multimillions of dollars that they 

do every day and solving smaller projects of the kind you have indicated? Why would you rather go through these cumbersome appeals? Why would you ever choose that one? 

Mr. RAINWATER. Well, why would we choose an appeals process? 

Ms. NORTON. Yes. 

Mr. RAINWATER. Well, simpler projects that either the applicant 

or the State just does not agree with. You know, FEMA’s perspective at the transitional recovery—— 

Ms. NORTON. Wait a minute. 

Mr. Garratt, what are the timelines on those multiple appeals 

and re-appeals? You heard what Mr. Daniels said. That is a pretty 

straightforward process. Even I can understand it in one telling. 

What are the timelines to appeal? Give me something comparable 

to what he said. 

Mr. GARRATT. Both appeal levels have 90 days to render an appeal determination once they receive that appeal. 

Ms. NORTON. Then, of course, there is another appeal. 

Mr. GARRATT. That would be at either level. So, whether it is the 

first appeal or second appeal, they have 90 days to render a determination. 

Ms. NORTON. Has FEMA ever met such a timeline? Is it meeting 

these timelines now? 

Mr. GARRATT. We are not meeting the timelines universally, no, 

ma’am. Yes, we have. We meet a lot of timelines, but we are not 

meeting all of the timelines. 

Ms. NORTON. Of course not, and you are overworked, and you 

have too few people even on the ground. 

Mr. Daniels, are you meeting your timelines? 

Mr. DANIELS. I cannot really say yet because—— 

Ms. NORTON. I am not talking about this project, sir. You have 

not got any for this project. I am talking about the timelines that 

you discussed for other projects. 

Mr. DANIELS. Generally speaking, once a case gets to the board 

and it is ready for decision, we get that decision out within somewhere between 2 and 4 months. 

39 

Ms. NORTON. Having heard that, Mr. Rainwater, do you still prefer appeals up here to Washington? 

Mr. RAINWATER. No, ma’am. I would rather resolve them down 

in the State. 

What occurs, though, is that, eventually, you know, an applicant 

gets frustrated enough or especially early on. There are not any 

now, but there was a lot of distrust in the beginning to some of the 

issues that were occurring down at the Transitional Recovery Office, so applicants wanted the appeals to come to Washington, D.C. 

We actually worked it out with Mr. Garratt. In Mr. Garratt’s work 

with us, we created an opportunity for applicants actually to come 

to Washington, D.C., and to do an oral presentation so that—— 

Ms. NORTON. So, Mr. Garratt, if they would ask for a hearing in 

Louisiana, would FEMA agree? 

Mr. GARRATT. I think we have agreed in the past. I think our 

preference is, if they want a hearing, that we would agree to do 

that via video teleconference with them. 

Ms. NORTON. Mr. Rainwater, I am having a hard time understanding, except that it is the way it has always been, why you 

would not go to arbitration. Do you really think that the bureaucrats in Washington are going to be more friendly to the States 

since you are choosing the forum? 

Mr. RAINWATER. No, ma’am. That is why we fought for arbitration. That is why we supported it. We have 30 appeals right now 

that we are going to make a decision on whether or not—and we 

need to coordinate with the local—— 

Ms. NORTON. How long does an appeal take then, the next appeal? 

Mr. Taffaro, some of these have been from the parish. What has 

been your experience with the appeal process, just the appeal process? You have finally got a decision. Now you have got to come to 

Washington with multiple appeals. You don’t like that process? 

Mr. TAFFARO. Madam Chair, I think it is important to note, from 

our standpoint, when the arbitration legislation was passed, that 

is what has now triggered the appeal to the region. Prior to that, 

the appeal was not heard at the regional level. So we had a direct 

appeal within the TRO and then to Washington. It is important—— 

Ms. NORTON. So you would prefer the appeal to the regional 

level? 

Mr. TAFFARO. Well, let me put it in the context. 

One of the things at the present local level we attempt to do is 

to resolve it. That trigger point of when we get to an appeal or 

move to arbitration is similar to being in a bad relationship. How 

long do you go before you break it up? That is what happens. 

Ms. NORTON. I can understand, if you look at when arbitration 

occurs in labor disputes, that that would be the case. I want you 

to know that that was not the intent of this legislation. The intent 

of this legislation was to get a decision and to put it in the hands 

of somebody who was not caged in his own interest, because we did 

not see any reason here—we did not blame the State or FEMA, and 

that is why, in my opening statement, I said there are structural 

reasons why they cannot be expected to easily come to a decision. 

So we did not see this as patterned on the labor union process. We 

40 

saw it much more patterned on negotiation processes where people 

come together. 

If I could just give you an example from my own experience: 

When I was appointed to Chair the Equal Employment Opportunity Commission back in the day in the Carter administration, 

I came to an agency that had a 100,000-person backlog. I decided 

that I was not going to allow them to continue to go to court or 

to somehow take all of these things through some very formal procedure. 

So we did something that we call ′′rapid charge processing,′′ 

which essentially was a negotiated process. Except the way we did 

it was, instead of using the investigator only to investigate the 

cases and then come back and say late in the process ′′we found 

this reason why you might be found liable′′ and to let us say to the 

complainant ′′this reason why you might not prevail up front,′′ they 

would go into a room with the employer. 

Let’s take a discrimination complaint where a woman says, I was 

late 10 minutes, maybe, four or five times in the last 6 months, and 

I was dismissed, and I think they dismissed me because I was a 

woman. 

We inform her, you know that they are going to put into evidence 

all of the people they have dismissed, and if we find some men 

have been dismissed in that amount of time, you are going to be 

out of luck because then you have not shown discrimination, and 

the burden is on you. 

Now, he is going to say, we dismissed her because she was late— 

the other side does not even hear this—and we believed that it was 

time for her to go. 

We are going to say, you know what? We are going to, as a matter of law, require you to show us what the late records were for 

men and for women during this 6-month time period. 

Then, Mr. Rainwater, each is understanding that they have got 

a chance they are going to take. Are they going to spend their 

money hoping that they will come out on top once these records are 

produced, as a matter of due process, or are they going to cut their 

losses? 

Let me tell you what. The employee who is mad and has alleged 

discrimination is ready to accept a settlement from the employer, 

which may be any kind of settlement. It may mean that she has 

been fired, and she does not come back. It may mean she got a little recovery. It may mean that, if she promises not to be tardy, she 

would be up for rehiring. Whatever it is, we are able then to negotiate the matter, because each feels some jeopardy in just waiting 

it out. 

This is an example to say that I see the present process, especially with the appeals, putting jeopardy on both sides when I am 

interested on a win-win on both sides. Yet, to a certain degree, all 

of you seem locked into, well, we have done a little better in the 

appeals process now, and maybe we do not know what would happen in the arbitration process. You know, maybe the arbitrator 

comes out with a decision we do not like and is willing to accept 

Mr. Rainwater’s notion: Just cut your losses right now and have 

FEMA accept the estimate. 

41 

I just want to get to a decision. That is why I told you that anecdote, to indicate that the appeal process carries that risk. I would 

like to eliminate the risk, which I regard as structural on each 

side, and would like to just get to a decision one way or the other, 

preferably through real shortcuts like Mr. Rainwater’s. 

I take it you endorse that kind of shortcut, the estimate. 

Mr. RAINWATER. I do, Madam Chair. 

Ms. NORTON. If not, I am amazed at anybody wanting to come 

to Washington, re-appeal and all the rest of it until you get the 

right answer, hoping you will get the right answer, rather than 

going to an arbitrator who would have to go through something 

like the process that I am going through. He would have to explain 

to each side what their jeopardy was, and their lawyers and the 

people who would be accompanying them would then, grownups 

that they are, decide if they are going to cut their losses or not, and 

the arbitrator may end up making no decision whatsoever, because 

it would be decided by the parties, in effect. 

Mr. RAINWATER. Madam Chairwoman, if I could, there are some 

constricts with regards to the arbitration panel. As I understand it, 

it only will look at issues of construction and cost estimates, not 

policy. So there is a reason to still have the appeal processes, especially if we conflict on policy. 

Ms. NORTON. Wait a minute. Excuse me. Oh, just a moment. Are 

you suggesting that the arbitrator could not decide the policy issue? 

Mr. RAINWATER. As I understand it, unless I am mistaken, but 

that is as I understood it. 

Ms. NORTON. Excuse me. I did not think we had a policy issue 

by that point. Really, if we can get all the way to the point where 

the architects and the engineers are down to what the amount 

should be and how it should be configured and a question of policy 

is raised, I do not know what this is all about or why the arbitrator, who is a lawyer and who must decide within the bounds of 

the law, the same law that the administrators who may or may not 

be lawyers and who therefore are giving it to people like the arbitrators to decide for them—I do not understand why—and if that 

is the case, then count on us to clarify that matter. 

I want to know, Mr. Garratt, do you believe the arbitrator has 

no ability under the statute we pass to decide the question within 

the law, the full law, as it applies to FEMA and its regulations? 

Do you believe that is an impediment here? 

Mr. GARRATT. I believe some clarification is in order, Madam 

Chair. 

Certainly, the arbitration panel can decide issues affected by policy. In other words, policy says this is not eligible. We do not think 

it is eligible. The applicant does think it is eligible. Under that policy, the arbitration panel can render a decision on that. What the 

arbitration panel cannot do is make policy as part of that process. 

They are not charged with doing that. They are charged with interpreting existing policy. 

Ms. NORTON. That is an important point. 

My understanding is that, by the time we reach a dispute, call 

to question that it is a dispute, that the policy issues writ large— 

that word has to be reserved for matters where the statutory intent 

42 

is involved—should not be involved, and if they are, I need you all 

to tell me that right now. 

Has this been a matter of law? That is what policy is, not discretion, but now a major policy matter is implicated. How much of this 

is due to that? How many projects on the ground, Mr. Taffaro, do 

you think have been because of policy matters that go to the law 

itself, to the ability of FEMA to make the decision? That is what 

a policy matter is. Otherwise, FEMA has enormous discretion, Mr. 

Rainwater. 

Mr. TAFFARO. Madam Chair, our experience is that FEMA has 

had enormous discretion and that it has been a common discussion 

that ineligibility or eligibility determinations are often differentiated between statutory authority versus policy decisions. Oftentimes, it falls on the side that the FEMA policy would make something ineligible versus the statutory regulations allowing it. 

Ms. NORTON. Mr. Rainwater is going to have to computize for 

me, by example, a policy matter that should not go to the arbitrator. Give me an example—or you, Mr. Axton. Somebody give me 

an example of that so I will know what you are talking about. 

Mr. RAINWATER. One example would be the demolition of homes 

for economic recovery. This is a policy. 

Mr. TAFFARO. That is a perfect example, Madam Chair. 

Mr. RAINWATER. That is a policy. We asked the Federal Emergency Management Agency to demolish houses that were actually 

boarded up and that met the local codes. Under FEMA policy, you 

can demolish those homes for health and safety or for economic recovery. The decision was made, if a home were not considered a 

health and safety risk, that we could not demolish homes and get 

FEMA reimbursement under the economic recovery policy. 

Ms. NORTON. Mr. Garratt, that is a matter for you to decide. Who 

decides that, if not FEMA? 

Mr. GARRATT. That is correct, ma’am. 

Ms. NORTON. But you are saying the arbitrator could not decide 

that matter. Are you saying that, Mr. Garratt? Is that a new issue? 

Would that be a new issue, for example? 

Mr. RAINWATER. That has been an issue that we have been fighting—or pushing back on for quite some time. It affects President 

Taffaro’s parish immensely. 

Ms. NORTON. Well, Mr. Garratt, if there is a new issue—now, I 

accept that Mr. Taffaro and Mr. Rainwater will run into new issues 

because of the unique nature of Katrina. If there is a new policy 

issue like that, why isn’t that matter separated out simply to get 

the policy determination so that the matter can go forward without 

being mixed in with the particular amount or with the particular 

parish, et cetera? Can you or can you not demolish homes? Have 

you made that decision? 

Mr. GARRATT. We have made that decision, and we have demolished homes. So the determination has been made that those abandoned or damaged structures present an immediate threat to 

health and safety. 

Ms. NORTON. So what is the policy issue, Mr. Rainwater? 

Mr. RAINWATER. The policy is not to demolish homes under economic recovery. 

Ms. NORTON. You said what? 

43 

Mr. RAINWATER. Not to demolish homes for economic recovery. 

That is blight. That is, we have blighted homes that people—you 

know, the parish government. You know, folks received their insurance and left the parish. So what we asked is that FEMA demolish 

those homes so that we would not have blight. We felt, in the Stafford Act, there is a provision to do this under economic recovery, 

and we asked for that. 

Ms. NORTON. Okay. Let me read to you the law. 

I am sorry. I have general, very broad language, but he is finding 

even the regulatory language. It is section 206-224 under Debris 

Removal and under Public Interest. 

You know what? All it means is that somebody has got to bite 

the bullet. 

Mr. Daniels, were you in the practice of law? 

Mr. DANIELS. I was in the practice of advising Congressmen, just 

like your counsel there, before I became a judge. 

Ms. NORTON. How long have you been an ALJ, please? 

Mr. DANIELS. Twenty-two years. 

Ms. NORTON. You spent part of your career in the Congress of 

the United States, advising the Congress on or doing what, sir? 

Mr. DANIELS. Advising the Congress on laws and investigations. 

Ms. NORTON. And then you became an administrative law judge. 

You have been an administrative law judge for how long, sir? 

Mr. DANIELS. Twenty-two years. 

Ms. NORTON. During that time, you have had to construe the 

laws of which agencies? 

Mr. DANIELS. For most of that period, the General Services Administration and about 20 other agencies and, for the last almost 

3 years, all the agencies of the government other than the Defense 

Department, NASA, and the Postal Service. 

Ms. NORTON. I lay that on the record, because section A of Public 

Interest clearly leaves FEMA extraordinarily broad discretion, all 

of that discretion, ultimately to ensure economic recovery of the affected community, to the benefit of the community at large or to 

mitigate the risks of life, et cetera—you know, broad, broad. 

So I do not know why an administrator or multiple administrators in Washington are better equipped to interpret this language 

than are arbitrators who may have been interpreting even more 

difficult and complicated language for decades. So I do not understand that the fact that there is a policy matter makes who gets 

the appeal any different, given what Congress has mandated and 

this board has been mandated to make that decision. 

ALJs are there to interpret the law of the particular agency, and 

they are equipped to read Federal law way across agency bounds. 

And they are very well-equipped, I submit to you better equipped, 

than any administrative agency, because they will be comparing 

how they have made similar decisions regarding other agencies. 

So, right now, unless somebody at that table can tell me that 

there is a specific reason why—I am not indicating anything except 

that ′′multiple ways to go without any objective reason for knowing 

why′′ is not acceptable. I want to know why there should be multiple ways to go when one way involves multiple appeals and when 

the other way can get me an answer right away. Unless we have 

not disposed of the policy question, the notion that you have said 

44 

that the arbitrator is not empowered to answer that is false. That 

is the only word for it: ′′false.′′ Under mandate of law and under 

his oath, he is required to make a decision in the very same manner and perhaps even more objectively because he is not involved— 

it is not his agency’s money—than multiple appeals up the chain 

of command. That, my friends, is what the Congress had in mind 

when it said, ′′Go do it′′. So the fact that you are playing off one against the other is a 

matter of huge concern to us. It violates the congressional intent. 

It says you cannot reach a decision. Go forward. Go to the arbitrator. Get it reached in the name of the people of Louisiana. 

Mr. RAINWATER. Madam Chairwoman, if that is clear, I will send 

all of the appeals to arbitration. I want a quick process, but I was 

told that policy decisions could not be handled by the arbitrator. 

Ms. NORTON. I want to correct that right now. 

Now, if your counsel has a different interpretation as a lawyer, 

I am very open to hearing a different interpretation. 

Hear me. I am reading from the statute. This is from the Congress of the United States, Public Law 111-5, February 17, 2009: 

′′Notwithstanding′′—when Congress really wants you to do something, it begins with ′′notwithstanding′′. 

′′Notwithstanding any other provision of law′′—that would include multiple appeals to FEMA folks or to DHS folks—— 

′′notwithstanding any other provision of law, the President shall 

establish an arbitration panel under the Federal Emergency Management Agency program. To expedite the recovery efforts from 

Hurricanes Katrina and Rita within the Gulf Coast region, the arbitrator shall′′—′′shall′′—we always use those words when we say 

leaving no doubt—′′shall have sufficient authority regarding the 

award or denial of disputed public assistance applications for covered hurricane damage under section 403 of the Stafford Act,′′ et 

cetera. 

I do not think we wrote the statute in any vague language. ′′Shall′′ have the authority. ′′Notwithstanding′′ whoever else is 

there. This after Congress was fed up with having pressed all kinds 

of discretionary dispute resolutions for which FEMA kept giving us 

the back of their hand. 

This is a mandate, gentlemen. Go to these folks and settle it. So 

why would anyone want to fool with multiple appeals this way? We 

do not know, but I will tell you that is contrary to the statutory 

intent and language as I have just read to you. 

If you disagree, I will hear your response. 

Mr. GARRATT. Madam Chair, just to make this clear, anything 

that someone can appeal, they can submit for arbitration. Again, 

I want to repeat what I said—— 

Ms. NORTON. In other words, they can appeal and go to arbitration. 

Mr. GARRATT. No, anything that they could appeal they can arbitrate or seek arbitration for. 

Ms. NORTON. No, this said notwithstanding, Mr. Garratt. So why 

should they bother with appeals and going through a bureaucracy 

that is self-interested because it is within the agency? 

Mr. GARRATT. They have an option, Madam Chair—— 

Ms. NORTON. I understand. 

45 

Mr. GARRATT. —as opposed to—— 

Ms. NORTON. No, you are right. They have an option, and Mr. 

Rainwater has still not clarified to me why he had you take that 

option except that you have said, if there is a policy matter, then 

it should go through this. I just read you the statute and asked you 

if you would disagree with the language I have just read that said, 

notwithstanding any other mechanism, they can go to an arbitrator. 

Mr. GARRATT. I do not disagree with that. Notwithstanding any 

mechanism, they can go to an arbitrator. They may elect to go an 

arbitration route, rather than the formal appeal route. 

Ms. NORTON. They may elect to do that. I understand that. I 

want to ask why you would want them to go through more of the 

administrative bureaucracy. They have been at the administrative 

bureaucracy at the lowest level. Why would you want them to continue through the administrative bureaucracy if you wanted to get 

something done? Why is that preferable ever than going to somebody who can decide the issue? If it is not policy, then what is it? 

I think I have just eliminated that it is policy. If you disagree 

with that, then tell me: What is the policy? If it is something other 

than policy, then tell me what other than policy would lead one to 

want to go through the appeal process. 

Mr. GARRATT. Well, Madam Chair, for the Gulf Coast, approximately a third of the appeals are being found in favor of the appellant. So I would suggest, for example, that if an appellant has submitted several appeals and has been successful in that process, he 

may very well want to continue to use the appeal process rather 

than trying something—— 

Ms. NORTON. All right. Mr. Rainwater, apparently, a third is 

good enough for him. Do you regard this third as being the 

quickest, best avenue for the State? 

Mr. RAINWATER. No, ma’am. That is why we wanted an arbitration panel. 

Again, Madam Chairwoman, as I understood it, the arbitration 

panel—and if I am wrong, I am wrong. I am fine with that. For 

example, could the demolition for economic recovery be decided by 

the arbitration panel? Is that something that the arbitration panel 

can overturn? 

Ms. NORTON. Absolutely. I just read the language, and I heard 

nobody respond. If you want your lawyer to send me something, he 

has 10 days to get me a response to that, but I can read statutory 

language as well as he can, and there is no legislative history here 

except what we make in this process. I can tell you right now that 

anything in the legislative history, which was all the stuff you have 

tried, especially the appeal process, has been in the way. Get to a 

decision. 

Mr. Taffaro, would you take your chances on arbitration? 

Mr. TAFFARO. With the new, clarified information, it certainly 

would make us much more ready to choose that option, yes. 

Ms. NORTON. We are not eliminating—this is a special circumstance. The statute says Gulf Coast region. So we are not saying that the appeals process, if you all like it that way, forever is 

gone. We say recovery for Hurricane Katrina or Rita. For God’s 

sake, we are only talking about one delayed circumstance in the 

46 

middle of a recession with people unable to build even smaller 

projects and with us just getting to the legendary Charity Hospital. 

So if you cannot get me within 10 days a legal response to why— 

hear me—why—except for matters in the appeal process now—why 

matters should not go to the arbitrator who does have built-in 

timelines that he most of the time meets, unlike the process up 

here—unless you can get me a legal reason why, this Committee 

expects that you will for new matters go to the arbitration process. 

Mr. GARRATT. We will respond to you within the 10 days that 

you requested, Madam Chair. 

I would like to state once again that our preference would be to 

give these applicants an option. 

Ms. NORTON. You do not have a preference to help Mr. Rainwater out. You have a preference for your decision, as is the case 

two-thirds of the time, to be the decision of the administrator who 

actually is, of course, involved and who also has to be presumed to 

have some predisposition. You are not doing this as a favor to Mr. 

Rainwater, because he happens to prevail one-third of the time 

while you prevail two-thirds of the time. I mean, it is hard for me 

to accept that. 

You just heard Mr. Taffaro and Mr. Rainwater say that, if they 

had their druthers, but for this policy obstacle they would go 

straight to the arbitrator. Well, you have got 10 days for a legal 

response, and then you are going to have language. Guess what? 

We know how to read a legal response. We are going to render our 

view within the same 10 days that I am giving FEMA to get me 

their view. 

Mr. Cao. 

Mr. CAO. Thank you, Madam Chair. 

With your emphasis on the arbitration panel, Mr. Daniels, we do 

not want to overburden this arbitration process. It has just been 

established. How many cases will the arbitration panel be able to 

handle at one time? 

Mr. DANIELS. That is a very good question, sir. 

We have been given quite widely varying estimates by the people 

we have talked to at FEMA as to how many cases we would have. 

The initial estimate was somewhere between 50 and 60 cases. I 

think we would clearly have no problem handling that many cases. 

If the numbers start skyrocketing, we will have to look for ways 

of supplementing our numbers. 

Mr. CAO. How many cases do you have right now? 

Mr. DANIELS. We have right now about 500 cases. 

Mr. CAO. And it was first—— 

Ms. NORTON. Will the gentleman yield for a moment? 

Now, you do not have the same people on 500 cases, do you? 

Mr. DANIELS. Well, we have the same 15 judges. 

Ms. NORTON. You have 15 judges with cases divided among 

them? 

Mr. DANIELS. That is correct. 

Ms. NORTON. I yield back. 

Mr. CAO. Thank you. 

Mr. DANIELS. Those are not cases involving FEMA arbitrations. 

The FEMA arbitration cases will be additional. We will have no 

problem handling—— 

47 

Ms. NORTON. Could I just clarify? The FEMA arbitration cases 

will be handled by how many judges? 

Mr. DANIELS. By 15 administrative judges. 

Ms. NORTON. Thank you. 

Mr. CAO. But then you have 500 cases that you are doing which 

are outside of the FEMA arbitration process; is that correct? 

Mr. DANIELS. Correct. 

Mr. CAO. So your main focus is not solely on—— 

Ms. NORTON. Just a moment. Let’s clarify that. Will these 15 

judges be dedicated to FEMA cases? 

Mr. DANIELS. No. No, they will not. 

Ms. NORTON. Well, he is asking specifically how those judges will 

operate, given the caseloads they have. 

Mr. DANIELS. We should have no problem adding some number 

of FEMA cases to the number of cases we have right now, using 

the same number of judges that we have right now. 

Mr. CAO. So the intent of this arbitration process is to expedite 

the resolution of these disputes. It seems to me that you have 15 

judges who are handling 500 cases that are outside of the FEMA 

dispute resolution process, and you have on top of that FEMA 

projects that you have to resolve. It seems to me that it just defeats 

the purpose of the arbitration panel. 

Mr. DANIELS. Well, a difference between the cases we have now 

and the FEMA cases is that there is a considerable sense of urgency to the FEMA cases. Most of the other cases that we have 

right now proceed along at the pace that the lawyers wish to take 

the cases. 

Mr. CAO. So, if the lawyer were to take 3, 4, 5, 6 months to prepare a case, then—— 

Mr. DANIELS. They well might. Most of those cases will settle 

without a need for judicial intervention to the extent of writing a 

decision. With regard to the FEMA cases, we will approach them, 

as I say, with a sense of urgency; so we will give them priority. 

Mr. CAO. How many cases do you anticipate will go to arbitration? 

Mr. RAINWATER. Somewhere possibly between 90 and 100, I suspect. 

Mr. CAO. Between 90 and 100? 

Mr. RAINWATER. Yes, depending on how well our teams do. 

Mr. CAO. Now, you said previously, Paul, that there are about 

3,000 cases that are under $1 million; is that correct? 

Mr. RAINWATER. Yes. There are a little bit over 3,000 project 

worksheets that represent about $1 billion; and they are all less 

than $1 million, actually. 

Mr. CAO. So what is the difference between your figures and the 

figures that FEMA is willing to pay? 

Mr. RAINWATER. Well, sir, we did a survey of applicants to see 

what they thought the dispute was on the estimation process. Now, 

the survey, itself—and remember, you know, that is local government and other State applicants. It is somewhere between $3 billion to $5 billion. We do not think it is $5 billion. We think it is 

lower than that, obviously, because some of it will not reach, you 

know, the level—— 

Mr. CAO. We are just talking about the 3,000—— 

48 

Mr. RAINWATER. I am sorry. $1 billion. I apologize. 

Mr. CAO. $1 billion? 

Mr. RAINWATER. Yes, $1 billion. 

Mr. CAO. What is the figure that FEMA has proposed? 

Mr. RAINWATER. That is just what—I do not know what—I would 

have to take a look at that, Congressman. 

Mr. CAO. If the difference is a few million dollars, why can’t we 

just resolve those 3,000 PWs and get them done and over with instead of having to decide them case by case by case? 

Mr. RAINWATER. Congressman, there are some examples where 

we have moved forward on—you know, with Charlie’s help and 

Tony Russell’s help, there was a dispute over $10,000. Our point 

was, let’s just move forward. I mean, if for some reason during the 

closeout we are $10,000 off on that project, then the State will put 

up $10,000. I mean, that is not a lot money to keep, you know, a 

project moving forward. 

Mr. CAO. Based on my understanding then, the present law does 

not allow for these kinds of lump sum settlements—is that correct—or at least for FEMA’s interpretation of the law. 

Mr. RAINWATER. There is legislation that was passed with the 

help of Senator Landrieu and others, obviously, for the Recovery 

School District in New Orleans. We are actually in the process of 

preparing a lump sum settlement based off of—you know, for example, it costs about—we believe it costs about $56,000 per student 

to build an entire school system. 

Mr. CAO. But, at this point, the law only applies to the RSD? 

Mr. RAINWATER. Yes, sir, that is right. That is correct. 

Mr. CAO. So we need a legislative fix in order to apply the same 

procedure to other categories of—— 

Mr. RAINWATER. Yes, Congressman. You talked about fire and 

police or primary and secondary education or higher education. You 

would need legislation. 

Well, now, I will say this: The rule does apply to the Recovery 

School District and to other primary and secondary education facilities in the impacted areas, but it does not apply to higher education universities, police and fire stations, public works, roads, 

and other things. 

Mr. CAO. Now, Mr. Garratt, I spoke with the Inspector General; 

and he told me that the present recommendation, as interpreted by 

FEMA, is actually too narrow, that you all can basically go back 

and revise your recommendations to allow for this lump sum settlement procedure quite quickly. Do you dispute that? 

Mr. GARRATT. I cannot dispute it, but it would certainly require 

that I go talk to the same individual you talked to, and I would 

like to discuss their basis for that. If that is the case, we are certainly willing to look at that, but I cannot comment on it without 

talking to the very same person you talked to. 

Mr. CAO. Okay. I will get you both together in a room so you can 

talk out your differences. 

Just a couple more questions. 

With respect to H.R. 3247, which is the bill that got passed 

through the House and is now in the Senate, there is a provision 

that will provide alternative projects where the penalty, instead of 

49 

25 percent, is only 10 percent. How helpful do you see that provision is to the State? 

Mr. RAINWATER. Very helpful. 

In the language that was passed to help us with the lump sum 

penalty for the Recovery School District—well, actually, there were 

three provisions. One was with a lump sum, one was waiving the 

alternative penalty, and then the other was waiving the insurance 

penalty. Instead of building by building, it was done by campuses. 

Those provisions in total saved the State about $600 million. The 

alternative project penalty saved about $247 million, as I remember. So it is extremely important to local communities, and I think 

President Taffaro would agree that that would be helpful. 

Mr. TAFFARO. I would, Congressman. In fact, on the NFIP mandatory deduction, we have been seeking the same relief that the 

criminal justice and educational systems were granted for one-time 

relief, which would recover almost $5 million in eligible funding for 

St. Bernard Parish projects. 

Mr. CAO. Now, I know that there was a lack of clarity with respect to outstanding numbers of projects that were still not resolved in our last hearing which was held before Ranking Member 

Mica. Do you have that number? How many project worksheets are 

still outstanding? 

Mr. RAINWATER. As I understand it, we believe there are about 

4,000 project worksheets that are going through some sort of 

reversioning process based off of the Governor’s Office of Homeland 

Security and Emergency Preparedness numbers that they provided 

to us last week. 

Mr. CAO. You said that the combined value would be between $5 

billion and $6 billion. 

Mr. RAINWATER. Between $3 billion and $5 billion, Congressman, 

although we all admit that we still have some work to do on our 

side to narrow that number and to get you a better number as well. 

That was based off of applicant surveys; and applicants were 

asked, are you satisfied with the versioning process? How many 

project worksheets do you have in dispute? 

That is what the local government gave us. 

Mr. CAO. So with these thousands of projects still outstanding, 

my question here is: Does Mr. Tony Russell have the resources to 

expediently resolve these issues? Because I have to say that he has 

done a wonderful job, and I hope that you can keep him there until 

this thing gets resolved, and I hope it will get resolved very, very 

quickly. So can you provide Mr. Russell with additional resources 

for him to do his job? 

Mr. GARRATT. Thank you for the comments regarding Tony Russell. We share your view that he has done an outstanding job out 

there. 

As I indicated earlier, we will provide to Mr. Russell whatever 

resources he needs to be effective in his role; and if he needs more 

personnel, then he knows that those are available to him. 

Mr. CAO. I just have one last question. It concerns the Port of 

New Orleans. 

I know that there is a dispute at the Port of New Orleans in regards to how much money they received from insurance versus how 

much money that FEMA is willing to provide the ports. Can you 

50 

provide me with a status of the Port of New Orleans maybe within 

a week or so? 

Mr. AXTON. Yes. We met a few weeks ago—or probably 6, 7 

weeks ago now—and there were a number of disputes that they 

presented within that—the Port did. 

The two most significant disputes that I recollect were, one, the 

settlement amount that the Port negotiated with the insurance carrier, and I believe it was actually multiple carriers and that there 

was an ongoing disagreement. Really, I would say it was kind of 

a fundamental lack of good communication among the various folks 

about exactly how they came to that settlement and about how that 

related to the policy limits and all that. 

Their position was the settlement amount under the circumstances and per their existing policy was, in fact, reasonable 

and should become the basis for our deductions that are required 

per statute. Since that meeting, that issue has been resolved. 

Mr. CAO. I have two more questions. I am sorry, Madam Chair. 

One concerns the Sewerage and Water Board of Orleans Parish. 

I know that they came to me and said that, based on their estimate, around $800 million of damages was caused by Katrina. I am 

pretty sure that FEMA disputes that. What is the status with respect to the Sewerage and Water Board? 

My second question is: Do you all have a prioritized plan where 

you are looking at some of these disputes and are saying we need 

to address this issue first, and then you go from there, or is it first 

come-first serve? What is the procedure? 

So one is with respect to the Sewerage and Water Board. What 

is the status of that issue? Two, whether or not you have a plan 

of priority to address some of these needs. 

I know that, for example, the Sewerage and Water Board has 

come to me and said that the city of New Orleans might go without 

water any day now. When you have a city that is going to have no 

water and no sewage, you will have chaos on your hands, and that 

is what we do not need at this moment. 

Mr. RAINWATER. Yes, Congressman. I met with the Sewage and 

Water Board. We have provided some emergency funding for them 

to help repair some of the water lines and sewer lines through our 

Disaster Community Development Block Grant program. I have 

met with Marcia St. Martin. What we have said is that we will 

take that straight to the arbitration panel. We won’t wait. We will 

not send it to appeals, we will send it straight to the arbitration 

panel and see if we can get that overturned. 

Mr. CAO. How long will that take? How much longer will that 

issue take? 

Mr. RAINWATER. Well, the first side of the queue is Charity Hospital, then second will be Sewage and Water Board. So if we send 

Charity Hospital this week, we will start working on Sewage and 

Water Board immediately. 

Mr. CAO. And how long will that take? 

Mr. RAINWATER. Fourteen days. 

Mr. CAO. Because I don’t want people, 300,000, 400,000 people, 

to be without water or sewage. 

Mr. RAINWATER. Yes, sir, I understand that. 

51 

And then from the prioritization perspective, we meet on Tuesdays. We had originally set our goals last year around fire and police were a priority, wanted to get those done, public facilities, 

higher education. And I think we have seen—and as we have kind 

of worked through the queue there, I think you can see where we 

have hit some of those priorities. In other cases, like the Sewage 

and Water Board, we haven’t, so—— 

Mr. CAO. That is all the questions I have, Madam Chair. Thank 

you very much. 

Ms. NORTON. Thank you, Mr. Cao. 

Just for the record, Mr. Rainwater and Mr. Taffaro, what is the 

unemployment rate in Louisiana, and what is it in St. Bernard 

Parish, please? 

Mr. RAINWATER. I am sorry, Madam Chairwoman? 

Ms. NORTON. The unemployment rate. 

Mr. RAINWATER. Unemployment rate in Louisiana. You know, I 

will tell you that the southeast region was written up in the Economist magazine as one of the places where you could ride out the 

recession based on we are getting out about $25 million a week in 

FEMA public assistance money and another $7 million a week in 

Community Development Block Grant money. I don’t remember, it 

is just one of those things. And obviously for Louisiana, what has 

happened is our unemployment is regional, but there have been a 

lot of construction jobs created through—I think what we did last 

year, towards the end of last year and then this year, we have been 

able to push dollars off fairly quickly. 

There is some optimism, if we can get Charity settled, the Veterans Administration has committed to building a hospital. There 

is talk about a biomedical center in downtown New Orleans. We 

have been able to build about 12 large mixed-income communities 

in New Orleans, and so those have created jobs and optimism as 

well, although there are still areas that are hurting. 

I think what has happened in Louisiana is that—not to belabor 

that answer, but what we have seen is that we are starting to see 

large chemical complexes that are beginning to lay off construction 

workers. I will have to find out what the exact number is. 

Ms. NORTON. Well, I am going to ask Mr. Taffaro, too. 

I am pleased to hear that the stimulus funds and the need to rebuild and the rebuilding that is going on has had an effect on the 

unemployment rate. By close of business tomorrow, which is, what, 

Wednesday, would you please submit to the Committee what the 

unemployment rate for the State of Louisiana is at the present 

time? 

Mr. Taffaro, do you have that rate with you? 

Mr. TAFFARO. I will confirm, Madam Chair. At the last check, we 

were at around 8 percent in St. Bernard. 

Ms. NORTON. Have the stimulus funds been of use to you, even 

given the holdup of these projects that would have gone forward? 

Mr. TAFFARO. Absolutely. The stimulus funding we continue to 

actually seek and put into action for many of our projects. 

Ms. NORTON. You have an extra balance of stimulus because of 

this outstanding amount, and therefore, we are particularly mindful of it. 

52 

I have another question or so to get on the record. I understand 

you had a workshop on the arbitration process, is that right, in 

Louisiana? 

Mr. RAINWATER. Yes, ma’am. There have been numerous workshops. 

Ms. NORTON. Describe that. Who went to that? Mr. Daniels or 

Mr. Garrett, who knows about that? 

Mr. GARRETT. We did conduct workshops in each of the States 

that had the opportunity to do this. We invited State and local 

leadership to attend those to answer their questions. So, yes, 

ma’am. 

Ms. NORTON. So generally on the ground they understand how 

the arbitration process would operate if you came to that point; is 

that right, Mr. Axton? 

Mr. AXTON. Yes. That was the purpose of the outreach efforts, 

and I believe it was last Thursday in Baton Rouge. 

Mr. RAINWATER. We had about 50 applicants that attended the 

actual meeting. 

Ms. NORTON. Well, I commend the State for proceeding on that. 

Now, let me ask you another legal question. We were so concerned about the larger projects, ones that were a half million dollars and so. We thought that was colossally outrageous to have 

great big projects there that are stimulus-sized projects—beyond 

what most States could do with stimulus—outstanding. So we 

pressed for projects; we used the half-billion-dollar figure. One of 

the reasons we used that figure is because we believed it was already clear that you could have been using alternative dispute resolution all along, but it was in your discretion, and your discretion 

was not to use it. So I am going to look at what we were relying 

on, and I am going to ask you a question based on that, and on 

what it looks like you may already be considering or doing with 

projects under $500,000. 

Now, section—5 U.S.C., section 572 of the ADR Act, the Alternative Dispute Resolution Act of 1996, ′′An agency may use dispute 

resolution proceeding for the resolution of an issue in controversy 

that relates to an administrative program if the parties agree to 

such proceeding.′′ 

Federal Government long ago has encouraged—we encouraged 

and moved to the mandatory process because encouragement didn’t 

seem to work with FEMA. Now, it would appear that FEMA has 

sufficient authority, therefore, today to expand the present program, the arbitration program, to projects under $500,000. 

Do you agree that you have that authority, Mr. Garratt, at least 

that you have that authority under the language I just read? 

Mr. GARRATT. I certainly agree with the legal citation that you 

just noted. 

Ms. NORTON. Where is my statute? The most recent statute is 

not as permissive because it says, shall establish a panel, shall 

have the sufficient authority, and doesn’t say anything about if 

both parties agree; it just says, do it. 

Now, the reason I ask this question is because I want to be plain. 

You had authority under—it would appear under 5 U.S.C. 572 if 

parties agree to do over half-million-dollar projects, and certainly 

under that. Do you agree that the section I just read—I am asking 

53 

Mr. Garratt, Mr. Axton, Mr. Rainwater, Mr. Taffaro. Do you agree 

that you could give matters under $500,000 to the arbitrator for a 

quick decision under the existing ADR Act if all parties agreed? 

Mr. GARRATT. Speaking for FEMA, ma’am, I am not prepared to 

say I do necessarily agree with that. 

Ms. NORTON. Within 10 days, Section 5 U.S.C. 572, I want to 

know whether counsel agrees that ′′if the parties agree to such proceeding,′′ this section of the law authorizes any dispute resolution, 

including arbitration. 

Now, I am not even into this kind of stuff anymore. I am now 

considering—I will put you on notice—language that will put everything under it and would give guidance as to what kinds of 

things would go under it. We don’t see any other way to proceed. 

We think that the fact that the State and the parish was told that 

they could go to either one really was a way of circumventing the 

intent of the statute, which was for quick decision. We don’t have 

a dime in that dollar in terms of how the decision was made. Congress is past the point of deciding how we want the decision to 

come out. 

I want to ask Mr. Rainwater and Mr. Taffaro if they think projects under $500,000, if parties agree, understanding that I see 

problems in that; and then I want to ask Mr. Daniels if we were 

to put more projects, whether or not, in light of Mr. Cao’s questions, that would just put more on their shoulders than they have 

the capacity to bear. 

So, first, Mr. Rainwater, Mr. Taffaro, would that be useful to be 

able to go for projects under $500,000? I mean, aren’t most projects 

under $500,000? 

Mr. RAINWATER. Chairwoman, the way the breakdown works, for 

example, we have about 14 projects over $50 million; about 81 

projects over 10-, but less than 50-; and then about 597 that range 

between $1 million and $10 million. And then, as I stated earlier, 

we have about 3,000 that are below the $1 million mark. So there 

are a number of projects that are below $500,000. 

Ms. NORTON. So there are some that are too small to be worth 

it. 

Mr. RAINWATER. Yes, ma’am. So we would support that. 

Ms. NORTON. Because in your discretion, grown-up people who 

have been in this process for this long could, do you think, draw 

the line as to the kinds of projects we are talking about, given how 

broadly worded this ADR language is? You would agree that you 

wouldn’t want to put every little thing before an arbitrator. 

Mr. RAINWATER. Right. 

Ms. NORTON. Mr. Garratt, you need to go to your counsel again 

to see what the plain language of the statute really means, whether it means what it says? 

Mr. GARRATT. I do need to run that through our legal staff, yes, 

ma’am. 

Ms. NORTON. Are you an attorney, sir? 

Mr. GARRATT. I am not. 

Ms. NORTON. Okay. We will give you a pass, then, on that. Tell 

the attorneys that they are dealing with an attorney as Chair, so 

if they are trying to circumvent, I don’t need staff help. I will get 

it on reading the plain language of the statute. I am not saying 

54 

that you have to do anything, I just want to know what is in your 

authority to do. 

Now, Mr. Daniels, clearly we are not trying to pile everything 

into arbitration. You and Mr. Rainwater indicate that there would 

have to be some—and it was good to hear him range just how small 

to large some of these are. You will understand why the Congress 

decided that over $500,000 we just couldn’t live with anymore. But 

suppose they were to go to those numbers between $50 million 

and—what was that top number? 

Mr. RAINWATER. Between $50 million and—well, the one project we have over $200 million is Charity Hospital, and that is going 

to be going this week. 

Ms. NORTON. But there is only one project like that. 

Mr. RAINWATER. Yes, ma’am, that is right. And then there are 14 

that are right over the $50 million range. 

Ms. NORTON. I am sorry, I said $500 million. Over $500,000. 

Mr. RAINWATER. Yes, ma’am. So we have got about 3,000 that 

would be either—and I don’t have the exact numbers, but there are 

about 3,000 that are less than $1 million; they are between that 

$1 million all the way down to—I think we have one that is $4,000, 

to be very honest with you. So if we took 3,000 of those—— 

Ms. NORTON. Mr. Daniels, you see how broad is the range. What 

do you think are the optimum cases that one would expect? Given 

the huge amounts you often are called upon to handle—and I suppose some smaller amounts as well—and given the range you have 

heard here, what do you think would be an optimum amount? 

Mr. DANIELS. I think Congress was wise to start with the larger 

cases. 

Ms. NORTON. Now, see, the larger ones, though, turn out to be, 

what is it, over $500,000? And how many? Fourteen like that? 

Mr. RAINWATER. We have 14 projects that are over $50 million, and then about 81 projects between 10- and $50 million, and then 

597 that are between $1 million and $10 million, and then about 

3,000 that are below $1 million. 

Ms. NORTON. So you think the larger amounts first? 

Mr. DANIELS. Yes, because the resources we have at the moment 

are finite. As we proceed, we can supplement those resources. We 

will do whatever it takes to make the process work. 

Ms. NORTON. And you would supplement resources. We are not 

going to require the Board to take on more than it should, but you 

are prepared to supplement the resources? 

Mr. DANIELS. We could do that by making arrangements with 

other administrative boards, other administrative judges, to bring 

them into the process. 

One thing I would say, though, about the numbers and the arbitration process is that, as we go along hearing evidence, issuing arbitration decisions, I think that the people in the State of Louisiana and the people at FEMA will be able to see how the cases 

are coming out, figure out which way the wind is blowing, and a 

lot of those disputes that have been brewing for a long time will 

begin to settle as parties take into consideration how the cases are 

being resolved. 

Ms. NORTON. No question that is how it works. People get an 

idea of what it is likely to be. Much harder, I must tell you, in an 

55 

appeal process, because you are dealing with two-thirds are against 

you, one-third are for you, and you didn’t have any alternative but 

to go to that process in the first place. I am sure it results in some 

settlements as well. 

Mr. DANIELS. So it may be that even though we are looking at 

very large numbers of potential cases right now, that as we proceed 

along issuing decisions, that total number will start shrinking. 

Ms. NORTON. Because there is a precedent being set, in effect. 

Mr. DANIELS. Exactly. 

Ms. NORTON. Gentlemen, I didn’t begin these hearings with any 

bias except that the present processes of FEMA had not, in fact, 

served the public well. Congress has made a decision for projects 

over $500,000, made a decision, mandated decision. It is a matter 

of law. So Congress is called to question on those projects, and we 

intend to have frequent hearings and to do whatever it takes to 

make the State and FEMA adhere to the law. That is what that 

is now. 

We also will be monitoring the Contract Appeals Board, which 

also comes under our GSA jurisdiction. We are prepared to have 

more frequent hearings, and we are prepared to add language, 

mandatory language, to existing bills or to the appropriation bills 

if we find matters like we found today, that policy matters were 

making people go to appeals when the mandated language was arbitration for matters over $500,000. I do not read that FEMA had 

the discretion to say, okay, if it is a policy matter, you go right up 

and do the same thing you have been doing for the last 4 years; 

and if not, then maybe you can go to the arbitrator. And by the 

way, we decide—we, who are involved in the appeal, decide if it is 

a policy matter. Outrageous. 

Mr. GARRATT. Madam Chair, just one point of clarification, and 

that is FEMA does not decide who goes into appeal and who goes 

into arbitration. It is the applicant who decides which avenue they 

want to—— 

Ms. NORTON. Who decides if there is a policy matter involved, 

Mr. Garratt, at the moment? 

Mr. GARRATT. Again, Madam Chair, as I have indicated, anything that they can appeal, they can seek arbitration for. 

Ms. NORTON. All right. Just a moment. Right now—Mr. Rainwater, where did you get the idea that the policy matter had to be 

decided through the appeal process? 

Mr. RAINWATER. In our conversations with our legal staff in our 

office that we would not—just in conversations with the Federal 

Emergency Management Agency that the arbitration panel would 

not be able to overturn FEMA policy. 

Ms. NORTON. That was the view of your legal counsel in consultation with FEMA’s legal counsel? 

Mr. RAINWATER. Yes, ma’am. And indications from folks from 

both agencies that the arbitration panel would only look at construction and estimation-type disputes. But you have made it very 

clear, Madam Chairwoman, that that is not the case, and so we 

will send up some balloons. 

Ms. NORTON. ′′Notwithstanding any other provision of law, the 

President shall establish′′—for public assistance program—′′to expedite recovery efforts from hurricanes named′′—Katrina and Rita 

56 

are named—′′place named within the Gulf Coast region. Arbitration panel shall have sufficient authority regarding the award or 

denial of disputed assistance applications for covered hurricane 

damage under section 403,′′ et cetera. 

I do not believe one has to be a lawyer to read the plain language 

there, and I do not see any wiggle room. And I am saying to you 

that whatever policy pronouncements have come from FEMA have 

been in violation of the statute on its face and has been in violation 

of what this Committee long ago had said it wanted, which was 

third-party intervention in order to hasten recovery on the Gulf 

Coast. The only words I haven’t read is for a project the total 

amount of which is more than $500,000. 

I still am a tenured professional of law, which was my full-time 

occupation before being elected to Congress, at Georgetown University Law Center. I retain my tenure by teaching a course called 

Law Making and Statutory Interpretation, inspired by my experience as an administrator when I was in the Carter administration, 

and now as a Member of Congress and seeing how laws can be interpreted very differently from administrative agencies, from the 

courts and from the Congress, much of it based on poor wording 

in the statute. 

This is optimal wording in the statute. Any court getting a matter of this kind—I don’t suggest that this is the kind of matter that 

would go to court—would have no question, in my judgment, in my 

humble judgment, declaring that the plain words of the statute 

speak for themselves, and they don’t even have to look to the legislative history, such as the hearings which produced this language. 

So be on notice, Mr. Garratt, Mr. Axton, Mr. Rainwater, Mr. 

Taffaro. And be prepared, Mr. Daniels. Unless this matter proceeds 

as the statutory language says, and unless counsel is able to convince the Subcommittee and the Committee to the contrary, we expect these matters to go to arbitration based on your good-sense, 

commonsense notion of whatever the level should be. If necessary, 

this Subcommittee is prepared to put into the appropriation language as to the amount and reaffirming mandatory arbitration. We 

leave that to your good offices, recognizing that that has not 

worked in the past, but believing that we have been clear enough 

for you to understand what our intention is today. 

Mr. Taffaro. 

Mr. TAFFARO. Thank you, Madam Chair. 

In light of your clarifications, there are a couple of items. One, 

I am pleased that you have expressed an interest in addressing 

projects under the $500,000 mark since a community such as ours 

who would incur enormous amounts of operational budgetary obligations for those projects that would not be obligated. 

But likewise, in terms of the interpretation and the mandate 

that the arbitration legislation dictates, there are statutory regulations that we are following within the disaster. FEMA releases administrative policies that are nonstatutory regulations. Are those 

also the intent of this Committee to be eligible for arbitration? 

Ms. NORTON. For items $500,000 and above at the moment? Or 

are you talking about—— 

57 

Mr. TAFFARO. Well, obviously for the mandated legislation, but in the discussion under $500,000 as well. In other words, what I am 

asking is—— 

Ms. NORTON. Well, under $500,000, we are going by the ADR 

language where there would be agreement—I don’t have any faith 

in that process whatsoever, so I am putting FEMA on notice right 

now. We said more than $500,000. We understand that would envelop still a large number—I take it a large number in your—— 

Mr. TAFFARO. There are several that would be over the $500,000. 

Many more would be under. 

Ms. NORTON. Well, we are prepared, Mr. Taffaro, to receive advice from you and FEMA as to the application of such language 

for—give us the cutoff point, and to put language in law since we 

do not have confidence that you would get sign-off from FEMA, and 

the ADR language does require both parties to agree. We just don’t 

think so. They were sending you through the appeal process in face 

of law to the contrary. So we have no doubt that if you took those 

under $500,000 and you asked for them to agree to go to the arbitration process—which they could, that would be covered—we have 

no confidence that you would ever get their agreement. They tried 

to keep you from going, with respect to matters of policy already, 

to the arbitration process, even if you were within the amounts. 

So we believe that more clarification is necessary, and we are 

prepared to do that. We are prepared to do it if we don’t get answers that show us that we should not. And if we do, then we are 

going to put language in to clarify the law. We are not going to sit 

here and be outraged to hear—much as we appreciate that $1.2 

million has proceeded, we expected a new administration to take 

a new view and not to have this tied on its back. And we believe 

that is the view of this administration, but if it needs clarification, 

because Mr. Garratt was there before, and Mr. Garratt is there 

now, and he is doing the same thing he was doing before, he is 

going to get clarification. But we are not going to have another 

hearing where it is recited to me that FEMA says that there is a 

policy matter, for example, that keeps it from going to what the 

plain language of the statute says you must do. 

That, it seems to me—and I will just say it to you straight out, 

Mr. Garratt, that is a violation on its face of the statute; not of the 

congressional intent, but of the plain words of the statute. It was 

designed to make sure that for certain projects, whichever you said 

were policy—and only you get to say that—would go up the same 

chain of command as they went up before. We think that is unfair. 

And if it is not unfair, it at least is inefficient, and it is contrary 

to the statute and contrary to our intention. I know I speak for the 

Senate as well when I say that I am sure any language we put in 

would get the cooperation of the two Senators from the State. 

Thank you very much. This hearing is adjourned. 

[Whereupon, at 5:30 p.m., the Subcommittee was adjourned.] 

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