Letter to Craig Fugate, Federal Emergency Management Agency Administrator - Disaster Recoupment

Letter

Dear Administrator Fugate:

In February, I, alone with a bipartisan group of my Senate colleagues, introduced the Disaster Recoupment Fairness Act of 2015 (S.406). We introduced this important piece of legislation because we recognized that, absent clear evidence of fraud, homeowners should not be asked to repay disaster relief grants that they received, and desperately needed to recover from Superstorm Sandy, several years later. I respect the Federal Emergency Management Agency's (FEMA) efforts to distribute assistance funds in a manner that avoids making payments improperly or inaccurately, however, those determinations and analysis must be done on the front-end and not years after these disaster assistance funds have already been spent by so many homeowners trying to put their life back together. That is why I still believe that efforts by FEMA to recoup Individual Assistance (IA) grants that were paid to homeowners in the aftermath of the storm are inappropriate and wrongheaded, and I believe that you should reconsider and ultimately reverse this policy.

Given that FEMA continues to operate with this policy in place, however, I am deeply concerned by reports that it is being administered in a manner that is inefficient and unfair to victims that rightfully received disaster assistance grants after Sandy. At the very least, FEMA has a responsibility to ensure that its efforts to recoup IA grants that it believes were improperly or inaccurately paid to Sandy victims are based on accurate and complete information.

Upon further investigation of a case referred by FEMA, the Department of Treasury should not be making the determination that the payment initially paid to a homeowner was not an overpayment or that there was a justifiable basis for the initial amount of disaster assistance that was provided. FEMA must be responsible for conducting a thorough investigation of each matter in which it suspects an overpayment or improper payment was made -- prior to making any referral to Treasury for collection.

For that reason, I am calling on FEMA to establish a Superstorm Sandy Recoupment Review Process and would require that all current and pending cases in which disaster assistance funds are sought to be recouped, be vetted through this process prior to being referred to Treasury for collection. This review process would require FEMA to fully evaluate all of the facts and circumstances of an individual's disaster assistance grant and it would also require outreach by FEMA to the recipient to obtain any additional information that the individual has to offer that may better inform the fact surrounding the recoupment effort.

FEMA's analysis of each case and interaction with homeowners to determine whether there is a legitimate basis to seek to recoup funds because of an overpayment or improper payment must be done on the front-end. The onus should not be placed on homeowners to file an appeal and fight through a lengthy bureaucratic process to justify the assistance funds that they received and likely used to rebuild almost three years ago, and the Department of Treasury should not be the agency responsible for making such determinations either. Therefore, FEMA should refrain from making any further case referrals to Treasury until this process is set up and all currently pending cases are properly reviewed. Further, FEMA should also instruct Treasury to suspend efforts to collect on any cases that have already been referred to Treasury and return those cases to FEMA until they can similarly go through this new Review Process.

FEMA has an obligation to set up a review process that is thorough, receptive to additional information, and fair far before making any referrals to Treasury seek recoupment of these funds. This Review Process is critical to ensuring that homeowners are treated fairly, and I hope that FEMA will act quickly to establish and utilize it because the agency's current practice clearly does not reflect FEMA's stated goal of doing "everything we can before [a case] ever gets…referred to Treasury."

Thank you for your attention to this matter. If you would like to discuss this issue further, please contact Zack Rosenblum on my staff at zack_rosenblum@schumer.senate.gov.

Sincerely,

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