Earlier this week federal investigators raided and seized documents from the New Orleans Affordable Homeownership Corporation, the city-chartered and city-financed nonprofit that ran a home-remediation program in 2006 and 2007. The grand jury issued a subpoena last week allowing investigators to collect documents related to NOAH's finances, client files and records of payments to contractors. As the Times-Picayune reported:
The city nonprofit has been under intense scrutiny for the past several weeks, as news reports raised questions about whether its contractors billed taxpayers for work they didn't perform on blighted New Orleans homes.
...some of the homes listed on NOAH work sheets were in fact gutted by volunteer groups, records show. Meanwhile, more than 100 of the 870 properties that the agency's contractors claim to have remediated have since been torn down. Neighbors have said that some of the demolished homes were not cleaned up at all before they were razed, though taxpayers were billed for the service.
National news has credited the work of industrious New Orleans bloggers in breaking open the investigation into NOAH. A story in yesterday's New York Times focuses on how New Orleans activist and blogger Karen Gadbois broke the NOAH story on her site "Squandered Heritage." A few months ago Gadbois discovered that NOAH did not appear to actually be fixing up the houses it was supposed to be working on.
The New York Times explains that Gadbois' work has:
...set off a bomb that has exploded in slow motion [in New Orleans] in the past three weeks, largely thanks to Ms. Gadbois: the federally financed program to gut and repair the storm-damaged homes of the poor and elderly, on which the city spent $1.8 million, has been exposed as - at least partly - a sham.
"Last year at this time we were working feverishly on the issue of the illegal demolition of people's homes," Gadbois wrote on her site on August 1st. "This year we have been working just as feverishly on the nonexistent home-gutting program."
According to the New York Times:
Taking their cues from Ms. Gadbois, WWL and The Times-Picayune have documented business connections between the program's former director, Stacey Jackson, and some of its contractors, one of whom was [New Orleans Mayor Ray Nagin]'s brother-in-law. The reports showed houses that were supposedly fixed up at the taxpayers' expense but in fact were untouched, contractors who billed the city for gutting work that was actually done by church volunteers, "remediated" houses that were then demolished and poor and elderly residents mystified at turning up on the city's list of those supposedly helped. Some of the houses did not belong to the poor and the elderly at all, but were actually owned by businessmen or landlords.
Mayor Ray Nagin tried to deny the legitimacy of Gadbois' investigation. He said the claims that federal money had been misspent on work never done were "completely untrue," and he then complained about "amateur investigations." He even criticized local reporters as "reckless" for following up on Gadbois' discoveries, accusing reporters of "hurting the city's recovery." A few days later, however, he admitted there were "documentation issues" and "discrepancies" in NOAH's remediation program, reports the New York Times.