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New Data Show Administration, HGI Erroneously Rejected Thousands of People Who Deserved Sandy Funds

Posted by Laura Denker on February 5th 2014

Nearly 80% of applicants who appealed rejections found to be eligible for funding; at least 1,900 applicants for Sandy recovery incorrectly rejected, and status of thousands more uncertain

Data obtained by Fair Share Housing Center (FSHC) shows that, with startling frequency, the Christie Administration and its recently fired contractor HGI erroneously rejected people who were eligible for Sandy funding. Nearly 80 percent of people who appealed their denials in the Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM) program and in the Resettlement programs demonstrated that they were wrongly rejected. One out of four applications for funding the Christie Administration and HGI denied in the RREM program were later reversed. The Christie Administration and HGI have both refused to answer questions about why HGI was fired, but there are signs that HGI and the administration massively botched the basic function of deciding who should and who should not receive funding.

The data FSHC obtained through the Open Public Records Act show HGI erroneously rejected applicants for Sandy aid in 79 percent of all appeals decided in both the RREM program and the Resettlement Program. Additionally, over 1,700 people initially rejected in the RREM program and over 2,000 people initially rejected in the Resettlement program gave up without appealing; it is impossible to know from the data provided how many of those applicants were eligible. Especially given that the appeals process has not been clearly explained, including the appeals process being omitted from the Christie Administration’s Spanish-language website for several months after the initial rejection letters, the number of additional people impacted by Sandy unfairly denied money is likely significant.

3,196 applicants to the RREM program, which provides up to $150,000 per home for rebuilding and elevation costs, were initially told by the Christie Administration they were ineligible. 1,033 people who were rejected appealed. 1,003 of those appeals have been decided, and 788, or 79 percent, upon review were found to be eligible.

Even higher numbers of initial determinations in the Resettlement program, which provides $10,000 to homeowners to be used for non-rebuilding costs, were incorrect. Of 3,221 applicants initially rejected by the Christie Administration, 1,391 people who were rejected appealed. 1,379 of those appeals have been decided, and 1,090, or 79 percent, were found to actually be eligible.

“The Christie Administration’s widespread rejection of large numbers of families actually eligible for Sandy aid shows that the Sandy recovery process has been flawed from start to finish,” Fair Share Housing Center Staff Attorney Adam Gordon said. “Who knows how many thousands more have been denied aid because the Christie Administration botched the process. Is this why HGI was fired? The public, especially those still out of their homes, deserve an answer. And people who were denied unfairly should not be barred from getting help with their homes because of the Christie Administration’s and HGI’s mistakes.”

The new data comes at a critical point in New Jersey’s Sandy recovery:

  • Governor Christie has proposed using the next $1.4 billion in federal funds to continue the existing programs and strategy - a strategy that resulted in 75 percent of people impacted by Sandy telling a Monmouth University poll that the State’s recovery efforts have largely forgotten about people like them. The proposal would permanently shut out over 1,700 RREM applicants and over 2,000 Resettlement applicants mentioned above who may have been unfairly denied funds, as well as people who did not have correct information about the process, from receiving Sandy relief funds.

  • Questions have arisen about the distribution of Sandy funds to communities that were not impacted by Sandy, allegedly for political reasons, such as the approval of $6 million in funds for a senior center in Belleville which was barely impacted by Sandy.

  • The Christie Administration has refused to explain why it fired the single largest Sandy contractor, HGI, and why it gave them over $10 million in a “settlement” of litigation that may or may not have existed. HGI administered the programs that the data now reveal to have rejected nearly 2,000 applicants who were in fact eligible for funds.

  • The Christie Administration has failed to comply with the state’s own integrity monitor law on Sandy contracts over $5 million, including apparently having no integrity monitor on either HGI or Belleville.

“What is Governor Christie hiding on HGI?” Gordon added. “Why hasn’t he come clean before with the fact that they apparently couldn’t perform the most basic task of their $68 million contract - determining whether people are eligible for Sandy aid? It’s good that HGI is now gone. But we need a full explanation of why HGI was fired. And then the administration and HUD have to clean up HGI’s mistakes.”

FSHC, concurrently with the release of this information, called today for:

  • A full explanation, with all supporting documentation, of why HGI was fired and the basis of the over $10 million payout to HGI including source of funds;
  • A full and independent audit, which given the Christie Administration’s failure to comply with the state’s own integrity monitor law, must be overseen by the U.S. Department of Housing and Urban Development Office of Inspector General, of all applications rejected from Sandy aid and whether the applicants were actually eligible;
  • Modifying the proposed Action Plan for the next $1.4 billion to allow for people who were unfairly left out of the process to get funding;
  • A complete explanation of how the State plans to operate these programs going forward, and who will operate the programs.