MacArthur: Constituents ‘Cheated’ By FEMA in Wake of Sandy

Flood Insurance ‘Failed to Help the Most Vulnerable’
Mar 15, 2017
File Photo by: Ryan Morrill A house in Holgate days after Superstorm Sandy in 2012.

Congressman Tom MacArthur, the Republican who represents New Jersey’s 3rd Congressional District, drilled Roy Wright, head of the National Flood Insurance Program, at a House Financial Services Committee hearing last Thursday. He accused – strongly – the program of mismanagement failures in the wake of Superstorm Sandy.

“As I work on reforming the National Flood Insurance Program, my critical priorities will be making the program more affordable, strengthening flood mitigation programs, and most importantly improving accountability of FEMA,” MacArthur said of the Federal Emergency Management Agency in a statement issued after the hearing. “Families across South Jersey are still dealing with the devastating effects of Superstorm Sandy because of the incompetence and mismanagement of FEMA. The National Flood Insurance Program has failed to help the most vulnerable victims of Superstorm Sandy, as evidenced by Mr. Wright’s admission that FEMA paid $350 million in claims on reopened and litigated claims – money that would have been denied Sandy victims if not forced to reopen the claims. I’m grateful I could help secure some justice for my constituents, and I’m committed to holding the appropriate parties accountable and reforming the NFIP so that Jersey Shore residents won’t have to face anything like this again.”

MacArthur, whose district includes much of Ocean County including Barnegat Township and the western half of Stafford Township, was pointed in his questioning of Wright.

“All of my questions and comments come out of who I represent,” he told Wright. “I represent southern New Jersey, the epicenter of Superstorm Sandy. October 29 of 2012, my district was devastated. … You mentioned earlier, Mr. Wright, 144,000 flood claims came out of that event and of those, 73,000 – about half – were in the state of New Jersey. And of those, 36,000 were in my home county.

“Do you how many people – I don’t expect you probably do – that are still out of their homes now, nearly five years later?”

“No, sir,” answered Wright.

“Thousands. Thousands of them,” continued MacArthur. “And my chief guess, the leading cause for people to still be out of their homes five years later, it’s a gap, and it works like this. There are resources from a flood policy, maybe resources from a FEMA grant like a RREM (Reconstruction, Rehabilitation, Elevation and Mitigation) grant to lift a home. There are resources from an SBA (Small Business Association) loan. There are private savings that people have put away for retirement. And they keep inching towards completion, and they run out of money – 95 percent there but they can’t get a certificate of occupancy.

“So getting paid, fairly, at every step of that chain, is absolutely essential for my constituents.”

MacArthur had two photos flashed on a screen in the hearing room.

“I’m going to ask you, Mr. Wright, to look at the two photos that are up on the wall. Do they look like the same photograph to you, left and right? I assure you they are; they came out of your files.”

“OK.”

“I would ask you to read what is circled on the photo on the left.”

“Floodwaters damage heater and boiler,” read Wright.

“That was dated Nov. 12. Then on the right side is the photograph that was sent to the insured on 11/26, when their claim was denied. Can I ask you to read what is in the circled box on the insured’s photograph?”

“Floodwaters do not damage heater and boiler.”

“I don’t have time, unfortunately,” said MacArthur, “to put up a series of these very similar photographs, but I assure you, and I trust that you’ll accept that it’s accurate, that they all do the same thing. You reopened thousands of claims, under some pressure from me and others. Can I ask you how much you paid from all of those reopened and litigated claims in the latter part of the process?

“We have paid out an additional $350 million,” said Wright.

MacArthur cut him off. As a committee member, he had been allotted only five minutes of time to question Wright. He had only 30 seconds left and wanted to end with commentary. In a rather unusual move, the committee chairman gave him an additional minute of time.

“I am very grateful for that,” said MacArthur. “You were under pressure in FEMA, and I realize you weren’t in the role then. But FEMA, under pressure, allowed my constituents to reopen claims – 50 percent of the claims in my state, 25 percent of the claims in this entire episode. You reopened them and paid out $350 million, you just testified, $350 million that would not have come to my state had you not been under pressure to reopen these claims.

“Sir, I beg you and I am telling you that when we reauthorize (national flood insurance), me and others will be watching to make sure there is accountability in the process. …

“We had five whistleblowers that I have statements from, affidavits from. I’ll read you the quotes from two of them: ‘We received instructions not to conduct a comprehensive evaluation of claims. We were directed to tailor evaluations to fall within a range, even if we identified additional covered damage.’ That was one of your employees; that was a whistleblower.

“Another said, ‘There was an elaborate process to justify minimum payments to policyholders, irrespective of the actual merits of the claim.’

“Mr. Wright, this is completely unacceptable. … You are charged with helping the very people that have suffered the most, and my constituents got cheated. And so did others across New Jersey and across New York. And you have to fix that. You have to fix that process so that people at least are getting paid what they are owed, and it doesn’t create a gap that keeps them out of their homes for years after these events.”

Expect the National Flood Insurance Program to be in the news quite a bit in the coming months. Reports have circulated that the budget proposed by President Trump, scheduled to be released later this week, would hike the cost of flood insurance in order to help pay for a wall on the border of Mexico.

— Rick Mellerup

rickmellerup@thesandpaper.net

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