With Sandy, a History of Mistakes Repeats Itself


When New Jersey officials were ready to start rebuilding after Superstorm Sandy roared up the Atlantic Coast in October 2012, they were determined not to repeat the mistakes of disasters past.

So Richard Constable III, head of the State Department of Community Affairs, flew to New Orleans to meet battle-scarred veterans of Hurricane Katrina. A $10 billion reconstruction program there called Road Home had become notorious for long delays, confusing rules and mishandled applications.

Similar complaints were widespread after Hurricane Ike walloped Texas in September 2008, the costliest storm in the state’s history, three years after Katrina.

Yet New Jersey officials ended up hiring some of the same companies that stumbled in Louisiana and Texas. Today, thousands of frustrated homeowners are still waiting for assistance, and hundreds of millions of dollars in aid are tied up in a system that no one seems able to unravel.

“There’s something very badly wrong with everything about our capability to recover from large-scale disasters,” said Dr. Irwin Redlener, director of the National Center for Disaster Preparedness at Columbia University’s Earth Institute.

“It’s just hair-raising that the same outfits that were in trouble in Louisiana continue to get work in this field,” he said.

Tens of billions of dollars are at stake. Over the last decade, FEMA, the Federal Emergency Management Agency, has provided $120 billion for direct cleanup, aid to battered cities and grants to victims. Congress funneled billions more directly to cities and states for longer-term assistance. The Department of Housing and Urban Development has issued $41.7 billion in disaster-related block grants since Katrina hit in 2005. That compares with $1.7 billion in the previous 13 years, HUD records show.

One result is that local and state governments frequently rely on private cleanup and consultant companies to handle the gushers of cash for them. Critics say those contractors often operate with little government oversight or accountability.

“Nobody does a particularly good job of it, and everybody keeps hiring them,” said Brad Gair, an emergency management consultant who ran Sandy recovery programs in New York City, which has also struggled with contractors and delays in delivering aid.

In New Jersey, disaster consultants were hired to do almost everything after Sandy’s waves and winds left an estimated $37billion in damage.

They applied for the HUD block grants. They opened and staffed nine recovery centers and hired crews to rebuild homes. Consultants monitored how other consultants were performing.

Among the companies that won major contracts were Gulf of Mexico disaster veterans CDM Smith, based in Cambridge, Mass.; ICF Inc. of Fairfax, Va.; and Hammerman & Gainer Inc. of New Orleans.

CDM Smith had won a $23million contract to run a $160 million reconstruction program in Galveston, Texas, after Ike pounded the city.

But rebuilding lagged, public anger grew, and state officials brought in a new firm. Lawsuits followed, and CDM Smith contends it is still owed nearly $15million.

Some Galveston residents were surprised when CDM Smith won a $9.5 million contract to write New Jersey’s recovery plan, said John Henneberger, co-director of the Texas Low-Income Housing Information Service, an advocacy group.

“Everybody here was saying … ‘Didn’t anybody tell them?’” Henneberger said.