Lawmakers criticize post-Katrina funding appeals process

Senators at a Tuesday Homeland Security and Governmental Affairs subcommittee hearing cited a need for third-party reviews of contested post-Hurricane Katrina reconstruction funding allotments.

Sen. Ted Stevens, R-Alaska, who serves as ranking member on the Ad Hoc Subcommittee on Disaster Recovery, asked whether it would be "viable to set up an arbitration concept to aid in reconstruction." If appointed, a third party would be able to review and decide funding appeals made by cities to the Federal Emergency Management Agency. FEMA would be bound by the third party's decision.

Under current procedure, FEMA allots a certain amount of funding for a public reconstruction undertaking. Should local officials feel the allotment is insufficient, they can either sue the government or file an appeal with FEMA. Stevens said the system lacks independence, since the people who handle the appeals are the same ones who make the original funding decisions.

Sen. Mary Landrieu, D-La., expressed concern that the appeals dialogue between FEMA and local officials could drag on for more than a year. "There is no open objective independent arbitration," said Landrieu, chairwoman of the subcommittee. "So it's a never-ending appeals process."

Henry Rodriguez, the president of Louisiana's St. Bernard Parish outside New Orleans, said inadequate funding and money tussles are the main reasons for delays in rebuilding. "If we had the money, we wouldn't be asking FEMA for anything," he said. "We'd be taking care of business."

Localities that cannot complete a project within the funding allotment must either file an appeal and wait for the results or start the project and risk defaulting on payments to subcontractors.

The lack of independent arbitration might deter small towns from filing an appeal at all, Landrieu said. "A small town like Waveland might have been glad to take what they could get," she said, referring to a Mississippi town that was destroyed by the hurricane. "They don't have the attorneys to sue the government."

Landrieu said she wanted to review the appeals filed, as well as the project allotments that had gone uncontested. "We need to see how well [FEMA] is working with small towns," she said, "and giving them what they need."