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U.S. senators seek expanded probe into FEMA contracts for Puerto Rico recovery

By on December 6, 2018

SAN JUAN – U.S. Sen. Elizabeth Warren (D-Mass.), along with three other Democratic senators, sent a letter Thursday to the acting inspector general of the Department of Homeland Security (DHS), John Kelly, requesting he expand his agency’s investigation into the Federal Emergency Management Agency’s (FEMA) contracting in Puerto Rico Hurricane Maria relief efforts to include new reports of waste and abuse associated with the contractors hired to execute and manage the $1.2 billion Tu Hogar Renace program.

The letter was also signed by Sens. Richard Blumenthal (D-Conn.), Bernie Sanders (I-Vt.) and Richard Durbin (D-Ill.).

In October 2017, FEMA announced the creation of the Tu Hogar Renace (Your Home Reborn) program in Puerto Rico, which provides temporary repairs to damaged roofs, windows, doors, walls, and water heaters to “return the home to safe, habitable and functional conditions.” Seven major contractors were hired by the Department of Housing and Urban Development (HUD) to conduct the repair work and two firms to manage the program.

In their letter to the DHS IG, the senators expressed concern about a recent New York Times report that “more than 60 percent of what FEMA is spending in the program” to repair up to 120,000 homes is not paying for these repairs but is instead “going toward overhead, profit and steep markups.” The report also found that while homeowners were approved for “up to $20,000 each in aid,” a review of hundreds of invoices and contracts indicates that, in nearly every case, they received less than half of that.

“It is a significant concern that only a small percentage of taxpayer funding went to actual home improvements for impacted Puerto Rican residents,” the senators wrote.

The lawmakers also expressed concern with FEMA’s decision to award Tu Hogar Renace contracts to two companies with connections to the Trump administration, Adjusters International and Excel Construction. In their letter, the senators noted that Daniel Craig, the owner of Adjusters International, was the Trump administration’s nominee to be deputy director of FEMA last year, and that Excel Construction, after donating $100,000 in 2016 to the Trump Victory Committee, was one of the seven companies awarded a contract for conducting repairs.

Blue tarps dot mountainside homes in Utuado, October 2017. (CB file)

“This pattern of parties with significant connections with either the Trump campaign or Administration being awarded contracts warrants scrutiny,” the senators continued.

They requested that the DHS IG expand the scope of its current investigation on FEMA’s award of contracts to include a determination of the “procurement, payment, and oversight of contractors and firms in the Tu Hogar Renace program,” according to a statement, and asked questions about the timeline, procurement and payment processes associated with the program.

The letter is the senators’ latest inquiry into FEMA’s contracting process for the relief and recovery efforts following Maria. Last year, the senators called for an investigation of FEMA’s decision to award more than $30 million in contracts to Bronze Star LLC for temporary roofing materials in Puerto Rico “that were never delivered,” the release says.

In February, the senators sent a second letter regarding the “botched” $156 million contract awarded to Tribute Contracting LLC for emergency meals provided after the hurricane, and in October, Blumenthal and Warren sent the DHS IG another letter regarding FEMA’s awarding of contracts to companies with “little or no experience” in conducting the work assigned to them.

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