Sworn affidavits point to deliberate scheme to cheat storm victims
State and federal officials are calling for a full-on investigation of the Federal Emergency Management Agency after it was alleged last week that the system it set up to ensure Sandy-affected homeowners weren’t cheated out of money was itself designed to withhold funds rightfully due to them.
“The long and painful road to recovery for Sandy victims, as perilous and lengthy as it has been, continues to be marred by FEMA related failures and abuses,” U.S. Rep. Gregory Meeks (D-Queens, Nassau) said in a statement sent to the Queens Chronicle. “An external and independent review of FEMA’s claims processes is long overdue, and I call upon the Government Accountability Office to undertake such a study with great urgency.”
Last year, FEMA set up a review process that allowed homeowners to appeal payouts on flood insurance claims after it was reported that workers on those cases were allegedly instructed to doctor damage reports, allowing companies to get out of paying millions of dollars to restore people’s storm-ravaged homes.
Last Thursday, U.S. Rep. Tom MacArthur (R-New Jersey) revealed a whistleblower who, in a sworn affidavit, said the review process was also set up to “systematically underpay homeowners.”
The whistleblower was identified as Jeff Coolidge, flood manager with FEMA contractor OST, who worked in the review process from September 2015 to January 2016 and looked over 1,000 flood insurance claims during that time.
In his affidavit, provided to the Chronicle, Coolidge alleges that he was given clear instructions from his “superiors at OST and from FEMA managers to exclude from the payment recommendations items that are covered under FEMA’s Standard Flood Insurance Policies” and was told to use software developed specifically for the process to determine how much a homeowner would be given for an appeal.
If he suggested an amount owed to a homeowner that went outside the range designed by the software, “FEMA would not approve it and directed me to have the desk auditor revise the findings to fit within the threshold” generated by it.
Two other affidavits by anonymous whistleblowers allege similar wrongdoing.
“FEMA has failed to provide the appropriate oversight and controls necessary to assist the most vulnerable victims,” MacArthur said in a statement. “The federal government cannot and should not be immune to the consequences of their actions.”
FEMA spokesman Rafael Lemaitre said the agency has “no reason or incentive to underpay any claim.
“We take any allegation of fraud very seriously and will direct any evidence of that to the proper authorities,” he continued. “Already, FEMA has paid out over $50 million in underpayments to policyholders and we won’t stop reviewing this claim until we pay every penny out that is due.”
Critics of the agency, however, will not be satisfied until a thorough probe of it is conducted by an outside entity.
“The only solution is for there to be a full-on investigation of FEMA,” Assemblyman Phil Goldfeder (D-Rockaway Park) said.
A vocal critic of the agency, Goldfeder has proposed a state alternative to the National Flood Insurance Program, saying the federal model simply cannot be trusted anymore.
He said he wasn’t so much surprised to hear the allegations of the claims review process being rigged as he was “disappointed.”
“Nothing surprises me with FEMA anymore,” he said, adding he has not heard if anyone in his district was cheated out of money during the review process.
“I’ve heard general concerns.”
The assemblyman’s political mentor is also calling for an investigation.
“We have worked too long and too hard to get FEMA to review the many flood insurance claims that were wrongfully denied or shortchanged, and we can’t allow the new system to go off the rails,” U.S. Sen. Chuck Schumer (D-NY) said in an emailed statement. “I’ve demanded answers from FEMA — and more importantly demanded results so that long-suffering Sandy victims can finally receive the flood insurance compensation they deserved in the first place.”
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