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$99M raise for Road Home contractor quietly paid

09:31 PM CDT on Tuesday, September 23, 2008

John Moreno Gonzales / Associated Press

NEW ORLEANS -- Gov. Bobby Jindal once expressed outrage at a raise his predecessor gave to the company running the Road Home program for Hurricane Katrina victims, but that has not stopped his administration from paying a $99 million chunk of the increase, the Associated Press learned Tuesday.

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In March, officials with the Louisiana Recovery Authority, and Jindal himself, said they were appalled by a $156 million contract increase granted to ICF International of Fairfax, Va., in the waning days of former Gov. Kathleen Blanco's administration. Blanco's actions increased the company's maximum take from $756 million to $912 million for running the $10.3 billion federally funded Road Home program that has been plagued by grant miscalculations and delays.

But according to an internal financial summary obtained through a community group's Freedom of Information Act request, $59.6 million of the increase had been paid as of Aug. 4, even as the Jindal administration vowed toughness on ICF in the media.

When the Citizen's Road Home Action Team provided the document to The AP, state officials acknowledged that ICF had also received an additional $39.4 million since then.

"The implementation of this program has not changed with this administration," said attorney Davida Finger, who submitted the records request. "The program continues to operate with rules that are shrouded in secrecy and disastrous customer service."

Melanie Ehrlich, co-chair of the Citizen's Road Home Action Team, which asked Finger to submit the request, added: "It's shocking, given what we hear from so many applicants about the inferior level of performance by ICF."

Jindal spokeswoman Melissa Sellers said the governor could not comment because he was in transit from Washington, D.C., where he sought increased federal aid related to hurricanes Gustav and Ike.

LRA Executive Director Paul Rainwater said he told lawmakers during May budget sessions that the state was beginning to pay the raise under contractual obligations. But he acknowledged Tuesday that only the internal financial summary obtained through the FOIA showed the dollar amounts. It took six weeks for the state to answer the freedom of information request.

"What should have happened is an incremental increase, so you measure it as you go along," said Rainwater, who is ICF's chief overseer. "And what should have happened is there should have been a public discussion."

Rainwater vowed that ICF would not receive the full $912 million it stands to earn for running the program. He said he is working to withhold $20 million to $30 million from ICF through labor rate negotiations, but still had to adhere to the Blanco contract.

"We're going stay on the contractor and we're going to continue to manage them very aggressively and we've done that from Day One," said Rainwater. "But I think there are some things people don't recognize: The rules don't change."

The Road Home began in July 2006 and gives victims of hurricanes Katrina and Rita up to $150,000 to rebuild or sell their storm damaged homes. It has doled out $7 billion to 117,606 hurricane victims. However, with as many as 37,000 eligible applicants still in the pipeline more than two years later, and state audits that found grant miscalculation rates as high as 27 percent, the program has been vilified as a leading factor in the lagging Katrina recovery.

The LRA fined ICF more than $1 million in May for failing to meet performance benchmarks, the largest penalty leveled against the company. However, ICF saw much larger Wall Street gains when it went public a few months after securing the Road Home job, the largest single housing contract in U.S. history. Some 38 subcontractors that include politically connected Louisiana construction iant The Shaw Group, will share the fees.

"It's worth noting that the original budget was based on closing 100,000 applications," ICF spokeswoman Gentry Brann, said in an e-mail Tuesday. "We remain firmly focused on ensuring every eligible applicant receives his or her award."

Still, state Rep. Sam Jones, D-Franklin, who sponsored legislation that would give Road Home applicants broader rights to appeal grant amounts, said ICF has been overpaid all along. He said he had not heard in committee sessions or correspondence with the LRA that any portion of the raise had been honored.

"I wouldn't mind seeing it spent if the job was done effectively," Jones said. "What's frustrating is how many people got snookered."

(Copyright 2008 by The Associated Press. All Rights Reserved.)