La. hurricane recovery office under investigation

WASHINGTON -- The Federal Emergency Management Agency is investigating allegations of cronyism and other misconduct at the New Orleans office overseeing efforts to rebuild the hurricane-battered Gulf Coast, officials said Wednesday.

The agency, which has endured criticism over delays in the rebuilding effort, sent a team of Washington investigators to its Louisiana office last week. The agency expects a report on findings in the coming days, two top officials said at a congressional hearing on the Hurricane Katrina recovery.

They acknowledged the investigation under questioning from newly sworn-in Republican Rep. Anh "Joseph" Cao of New Orleans, who said the office is beset with allegations of sexual harassment, cronyism, nepotism and other ethics violations.

"I personally am very concerned," James Stark, FEMA's New Orleans-based assistant administrator for Gulf Coast Recovery, told Cao. "Each one of those allegations you brought up is being investigated fully."

Cao, who met with employees of the recovery office recently, said outside the hearing that his office also is exploring possible corruption, but he declined to elaborate.

FEMA officials said their investigation is focused on personnel issues such as equal employment opportunity complaints and that they have not received allegations of deeper problems.

"The bottom line is, is there a hostile working environment," said David Garratt, FEMA's acting deputy administrator.

Homeland Security Secretary Janet Napolitano, who oversees FEMA, is expected to tour the region in March.

FEMA has been in the crosshairs of local and state officials for years, blamed for much of the slow pace of the recovery. The agency is managing funding for billions of dollars in public infrastructure projects, and its Louisiana offices provide an on-the-ground supervisory presence.

At the hearing, Democrats and Republicans criticized FEMA for taking too long to spend aid money allocated by Congress through the agency. In Louisiana, about $3.4 billion in FEMA assistance remains unspent -- nearly half of what was approved. In Mississippi, the figure is about $1.3 billion, again nearly half of what was allocated.

Stark and Garratt defended the spending, saying the agency has an obligation to ensure that rebuilding projects are appropriate for public money. They said delays result from honest disagreements over how much work should cost or whether it should be eligible.

Paul Rainwater, who heads the Louisiana Recovery Authority, a separate state agency, said FEMA remains overwhelmed by the massive scale of the disaster and its cumbersome bureaucracy simply cannot handle the thousands of projects awaiting decisions.

Katrina struck Aug. 29, 2005, flooding 80 percent of New Orleans and devastating much of the Mississippi Gulf Coast.

FEMA has 400 to 500 employees working at its New Orleans recovery office, with a total of about 950 core employees and 280 contractors working in Louisiana, according to Stark.