Louisiana Record

Tuesday, October 15, 2019

Potentially skewed billing estimates may explain FEMA’s denial for Gustav cleanup funds

By Jenna Spinelle | Aug 6, 2016

LIVINGSTON – Nearly eight years after Hurricane Gustav struck Livingston Parish, questions still remain about who is financially responsible for nearly $60 million in debris cleanup.

Gustav made landfall Sept. 1, 2008, resulting in more than $59 million worth of debris cleanup bills from International Equipment Distributors (IED) and its subcontractors. Parish officials tried to obtain money from the Federal Emergency Management Agency (FEMA) to pay for work completed and have been repeatedly denied.

That has made for some complications.

IED sued the parish in 2011, claiming that the bills needed to be paid regardless of whether the parish received money from FEMA.

“Livingston Parish received the benefit of tens of millions of dollars' worth of debris removal that it hired IED to perform after Hurricane Gustav,” the lawsuit states. “Parish representatives told IED what work to do, supervised IED as IED performed the work, and approved the work – as well as IED’s charges for the work – in writing. However, the Livingston Parish Government has paid IED only a small fraction of the money it owes IED.”

While that lawsuit was pending, the parish worked with U.S. Sen. Mary Landrieu to present a case to the U.S. Civilian Board of Contract Appeals (CBCA) in an effort to receive money from FEMA – spending an estimated $500,000 in the process.

CBCA ruled in 2014 that the parish would not be receiving FEMA money for Gustav-related expenses. Documents from that investigation were unsealed earlier this month.

IED’s lawsuit was put on hold pending the outcome of the CBCA appeal. Though that decision was made nearly two years ago, the suit still appears to be on hold and the money has not been paid. The matter has not been discussed in any public meetings since 2014. Because the suit is still technically pending, parish officials and IED declined to comment further.

Peter Russell, a New Orleans based attorney, told the Louisiana Record that the stalemate between IED and Livingston Parish might not necessarily be a bad thing.

"What you have here is basically a detente between the two parties," Russell said. "Everyone understands that the debt needs to be paid. The lawsuit is in place to preserve and act upon it in the future if needed."

While nearly $60 million is on the line, the ramifications could be far greater if a wrong move is made, Russell said.

"Livingston wants to be able to hire companies to help them in the future, and the companies want to be hired by other parishes so both sides have an interest in making sure things go smoothly," Russell said.

In July, U.S. District Judge Shelly Dick unsealed documents regarding a federal investigation into the work performed as part of Gustav cleanup. A 217-page qui tam – a civil suit filed under the False Claims Act – sheds light into why FEMA might not have wanted to pay for cleanup work.

In one example, IED billed more $100,000 for cleanup work at Lewis Vincent Elementary School and Albany High School, when the school district allegedly already had proof the work had been completed by another contractor for about $3,300.

Additionally, billing estimates may have been skewed. According to the CBCA ruling, Livingston was one of three parishes in the state requesting money for removing waterway debris removal after Gustav.

Livingston applied for $44 million, while the other two requested $5 million and $300,000.

“The relatively high figure claimed by Livingston Parish caused FEMA to review carefully this parish’s request,” according to the CBCA ruling.

IED’s lawsuit against the parish says that interest continues to accrue on the $59 million while the suit is on hold.

The parish ended the hurricane debris removal project in 2009, after learning that its full cost would be more than $92 million.

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Federal Emergency Management Agency (FEMA)