More Red Tape for Katrina Victims
Katrina Relief Program Manager ICF Intl. Under Investigation
After 30 months of red tape, Katrina Victims are facing new problems with the Road Home program. Katrina Relief program manager ICF International is under investigation.
There is a new storm brewing over Louisiana, although this time it is a storm that will hit the company that was hired to disperse relief to Katrina victims. Over 30 months after Hurricane Katrina hit Louisiana, relief for Katrina victims remains in a state of chaos and the company hired to disperse the relief is now under investigation.
Where the Problems Began
To say that the U.S. government was ill-prepared to deal with the catastrophe that Hurricane Katrina so harshly dealt to the state of Louisiana is an understatement, but according to government officials they did they best they could given the lack of formal preparation and resources capable of handling such widespread damage.
Families were displaced, jobs were lost and entire communities were left to rot in bacteria infested water. However, the government managed to pull together the Road Home program in June 2006 - ten months following. The program, designed to reimburse citizens for property loss due to the breech of government run levees that collapsed in the wake of the hurricane, was to be state-run and federally funded.
The ICF Contract
Under Gov. Kathleen Blanco's administration, Louisiana state officials hired ICF International of Fairfax, VA to manage the disbursement of financial relief at a whopping $756 million. Under the terms of Road Home, Katrina victims can receive a grant to repair water-damaged homes or receive a buyout amount based on a percentage of the value of the property.
The program was being so poorly managed, that Louisiana State Legislature wanted to fire ICF in 2007. However, in the last days of Blanco's term, ICF was given an increased contract ceiling to an outrageous $915 million. It is not clear why the contract ceiling was raised by over $150 million, nor is it confirmed that Blanco's administration went through the proper legislative channels to approve the contract hike.
After months of red tape, delays and mass confusion, more than ten thousand Katrina victims have yet to receive the financial relief due to them. As if that is not enough to cause dissention, the Katrina victims who have received financial relief may have to pay it back. ICF claims that it inadvertently dispersed overpayments in the range of $35,000 to $150,000 to about 5,000 recipients – and they want the money back.
Dirty Hands or Smart Business
Recently, Louisiana state officials announced they would be launching an official investigation of the ICF managed Road Home program to determine if there has been a misappropriation of funds and to identify what Louisiana state official signed the contract, approving the contract hike.
In the meantime, Katrina victims are trying to rebuild their lives, while ICF International is doing quite well. In 2007, they posted over $180 million in revenue for 4th Quarter 2007, as compared to just under $114 million for 2006. Their stock prices over a 52-week spread have seen a rise from $17.68 to $34.36, although as of March 28, 2008, stock prices stood at $20.08 per share.
ICF has taken its share of criticism since they started managing the Road Home program, but the probability they are solely to blame for the issues at hand is unlikely. It is however very likely that some Louisiana state officials will share the responsibility.
The Future of ICF and Road Home
One thing is clear; ICF international is not leaving their reputation to chance. ICF does not want to be the only one left with dirty hands, and they are quick to point the finger at Louisiana state officials for vital program flaws that contributed to the program's chaos. They posted a special announcement on their website addressing the questions that have brought their apparent lack of prudent management skills to the forefront.
The future of ICF and the Road Home program is unclear. If officials fire ICF, they will slow the relief progress and could face a multitude of lawsuits from Katrina victims. Their best bet may be to keep ICF on the contract, regardless of the outcome of the investigation, and hope that public awareness of the issue will drive them to perform better than they have up until this point.
