Hoping to speed aid to Louisiana homeowners who suffered losses in last year's storms, the state's Road Home rebuilding program will take a fresh approach to appraising properties.
Gov. Kathleen Blanco today announced that the program will scrap its controversial computer-model system for calculating home values and instead use post-storm appraisals to determine pre-storm worth. Some citizens charged that the computer model underestimated pre-storm values, especially in Orleans Parish.
The Road Home program -- along with the private company that administers it -- have faced blistering criticism in recent days from federal and state officials. ICF International of Fairfax, Va. administers the program under a 3-year deal worth $756 million, one of the largest non-construction contracts in state history.
Founded in 1969 as the Inner City Fund, a venture capital firm financing urban businesses, ICF has evolved into a global consulting company focused on defense, energy, environment, homeland security, social programs, and transportation. Just this week, the company won a $10 million contract from the U.S. Environmental Protection Agency to run a program promoting clean energy investment. It probably doesn't hurt that the company has ties to the Bush administration, having earlier this year hired as the head of its homeland and national security divisions someone who previously served as an advisor to former Homeland Security Secretary Tom Ridge.
But even while it's winning new government contracts, ICF's work in Louisiana has come under growing fire. This week, federal Gulf Coast Rebuilding Coordinator Donald Powell wrote a letter urging the company to pick up the pace of payments, noting that it has delivered aid to only 92 homeowners out of 80,000 applicants, the New Orleans Times-Picayune reports. Also this week, state Rep. Charmaine Marchand (D-99th) camped outside the State Capitol for several days to drawn attention to Road Home's problems; Marchand's district includes New Orleans' especially hard-hit Upper and Lower 9th Wards. One of the state's U.S. senators also weighed in on the program:
All I can say is 'Road Home' ... is a debacle, it needs to be fixed. And I have started to look, in detail, at that ICF contract and I'm startled at what's in it. The dollar amounts - $19 million travel budget ... and I don't get it," said Sen. David Vitter (R-Louisiana).
Meanwhile, the Louisiana House and Senate passed resolutions last week calling on Gov. Kathleen Blanco to fire ICF. State lawmakers also created a panel to investigate ICF's handling of the contract, and they called on the federal Securities and Exchange Commission to look into possible conflicts of interest involving the company's initial public offering of stock. ICF filed official paperwork for the IPO in May, at the same time it was pursuing the Road Home deal; it went ahead with the offering in October, shortly after winning the contract.
This is not the first time questions have been raised about ICF's ethics. As the Baton Rouge Advocate reported in June, ICF first got involved in the Louisiana rebuilding effort when its Emergency Management Services subsidiary won a $900,000 contract to help the state decide how to spend federal grant money, in the process developing what eventually became Road Home. While carrying out that work, ICF decided to seek the lucrative program administration contract. But the Louisiana Board of Ethics raised concerns that the earlier contract might create the appearance of giving ICF an unfair advantage in vying for the bigger deal, so CEO Sudhakar Kesavan ended the earlier one.
The Board of Ethics also expressed concerns about ICF's plan to subcontract work to Liberty Bank, since bank chair Norman Francis also chairs the Louisiana Recovery Authority, which helped devise the Road Home program. In response, Liberty bowed out of the deal. (The other two companies invited to bid on the Road Home contract also proposed using subcontractors with LRA connections, the ethics panel noted: ACS State and Local Solutions wanted to work with Dryades Bank, whose president is LRA member Virgil Robinson, while BearingPoint planned to hire Whitney Bank, whose stockholders include LRA member John Smith.)
But ICF is putting a positive spin on recent developments. On Monday, just days after the Louisiana legislature called for the company to be fired and investigated, ICF put out a press release headlined, "ICF International Receives Expression of Support from the State of Louisiana":
ICF International received a strong expression of support today from the Louisiana Division of Administration (DOA), the agency that oversees ICF's contract for the implementation of The Road Home program. Jerry Luke LeBlanc, Commissioner of Administration, stated, "We all realize that this contract to assist in recovery from the nation's largest disaster is a monumental task. ICF has responded to the challenge of getting the program up and running. We will continue to work with ICF to address implementation issues and to streamline the program for the benefit of our citizens. Our most important focus is our homeowners and getting our communities back." LeBlanc's comments were made in the context of a nonbinding resolution passed by the State legislature last Friday calling for Louisiana Governor Kathleen Babineaux Blanco to terminate ICF's role in The Road Home program.
Governor Blanco also stated, "I share the frustration of our people and the legislature, but common sense must prevail. This is the most massive long-term recovery program ever undertaken by any state, at any time in American history. The remedy for our people, who have endured so much through Hurricanes Katrina and Rita, is to move faster, not to start over from scratch."
"We appreciate all the expressions of support," said Sudhakar Kesavan, Chief Executive Officer of ICF. "Our focus now, as it has been all along, is on helping the people of Louisiana and delivering a successful program."