Pascrell, Pallone Call for Federal Investigation into Handling of Sandy Recovery Funds

Jan 29, 2014 Issues: New Jersey

Lawmakers cite lack of transparency and mismanagement of funds in request for monitor of federal funds

WASHINGTON, DC - Today, U.S. Reps. Bill Pascrell, Jr. (NJ-09) and Frank Pallone (NJ-06) called upon U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan to investigate the State of New Jersey's dealing with Hammerman & Gainer Inc. (HGI) following last week's sudden cancelation of the State's contract with the Louisiana firm hired to manage New Jersey's nearly $1 billion Hurricane Sandy housing recovery programs.  The lawmakers are also requesting that a HUD official be appointed to independently monitor New Jersey's usage of federal Sandy recovery funds.

"We ask that you investigate the State of New Jersey’s dealings with HGI and appoint an official at HUD to oversee the usage of CDBG-DR funds in New Jersey," the lawmakers wrote in a letter to HUD Secretary Donovan.  "We fought too hard for these federal disaster recovery dollars to stand by while they are recklessly mismanaged. New Jerseyans who are still struggling to put their lives back together over a year after Hurricane Sandy deserve better."

The State of New Jersey ended the nearly $68 million contract with HGI on December 6, 2013 but only announced it publicly last week.  HGI was hired in May to manage New Jersey's Sandy recovery housing programs funded with federal money, including the Reconstruction, Rehabilitation, Elevation and Mitigation (RREM) program.  The cancelation of HGI's contract comes amid months of delays in the distribution of Sandy rebuilding funds.

The full text of the letter follows: 

  January 29, 2014

The Honorable Shaun Donovan
U.S. Department of Housing and Urban Development
451 7th Street S.W.
Washington, DC 20410

Dear Secretary Donovan:

We write today to express our concerns regarding accountability and transparency with certain Community Development Block Grant - Disaster Recovery (CDBG-DR) funded Hurricane Sandy recovery programs in New Jersey.

It has recently come to light that in December, 2013, the State of New Jersey canceled its contract with Hammerman & Gainer Inc. (HGI), a Louisiana firm hired to administer hundreds of millions of dollars in New Jersey’s Hurricane Sandy housing recovery programs. As you know, these programs are funded with federal CDBG-DR dollars provided through the Disaster Relief Supplemental Appropriations Act approved by Congress in January, 2013.  We respectfully request that your Department investigate the circumstances surrounding the termination of this contract and appoint an official within the Department of Housing and Urban Development to independently monitor New Jersey’s usage of these CDBG-DR funds.

Throughout the Sandy recovery process, there have been complaints of a lack of transparency with the selection criteria and distribution process of certain CDBG-DR funded programs in New Jersey administered by HGI. The State of New Jersey was well aware of similar criticism surrounding HGI’s management of Hurricane Katrina recovery programs prior to awarding the contract. We are particularly concerned that the State of New Jersey did not disclose the news of the contract termination for seven weeks following its initial settlement with HGI. To date, neither HGI nor the State of New Jersey have provided any details as to the reason for termination or the plans for administering the impacted recovery programs moving forward. The termination of this contract also raises questions regarding the allegations of mismanagement surrounding these programs, as well as the millions of federal dollars paid to HGI during the course of this contract - which could have gone a long way toward making Sandy impacted residents whole. The people of New Jersey deserve answers to these questions.

Again, we ask that you investigate the State of New Jersey’s dealings with HGI and appoint an official at HUD to oversee the usage of CDBG-DR funds in New Jersey.  We fought too hard for these federal disaster recovery dollars to stand by while they are recklessly mismanaged. New Jerseyans who are still struggling to put their lives back together over a year after Hurricane Sandy deserve better. Thank you for your attention to this request.

                                                                                              Sincerely,

                                                          Bill Pascrell, Jr.                                 Frank Pallone

                                                          Member of Congress                      Member of Congress