FEMA changes demanded amid Sandy fraud allegations

 U.S. Sens. Bob Menendez, left, and Cory Booker of New Jersey are among federal legislators calling for changes at FEMA in the wake of fraud allegations. (AP file photo)

U.S. Sens. Bob Menendez, left, and Cory Booker of New Jersey are among federal legislators calling for changes at FEMA in the wake of fraud allegations. (AP file photo)

U.S. Sens. Bob Menendez and Cory Booker, both of New Jersey, are demanding more oversight of the Federal Emergency Management Agency.

And U.S. Rep. Tom MacArthur of New Jersey is calling for FEMA’s top administration to resign. “I am outraged and saddened,” MacArthur said.

The overtures follow hundreds of lawsuits filed by Hurricane Sandy victims claiming that inspectors underreported property damage, something they say resulted in insurance payments that were smaller than they should have been.

In December, New York’s attorney general’s office started a criminal investigation into the matter.

In response, insurance companies have said that the alleged fraud affects just a small percentage of all Sandy-related claims. Furthermore, claims are paid for out of a FEMA fund, so insurance companies say there is little incentive to forge inspector reports.

Brad Kieserman, who heads FEMA’s insurance program, recently said that he’s seen proof of fraudulent reports.

“I’m not going to sit here and conceal the fact that it happened, because in the last three weeks, I’ve seen evidence of it,” Kieserman said on CBS’s “60 Minutes” on Sunday.

Menendez and Booker called the allegations “highly troubling.” Joined by U.S. Sens. Kirsten Gillibrand and Chuck Schumer of New York, they wrote a letter to the member of the Senate’s Committee on Banking, Housing and Urban Affairs.

“It is shocking to us that FEMA officials received specific allegations of fraudulent activity that served as the basis for claimants being denied the coverage they had paid for, including homeowners who lost their homes, and either did not appropriately investigate these claims or simply looked the other way,” they wrote “Congress, in its oversight capacity, has responsibility to hold further hearings so that these questions can be fully addressed in an open and transparent manner.”

MacArthur, meanwhile, said he has long sought better accountability at FEMA.

“For too long, this agency has mishandled their fundamental role to help disaster survivors,” he said.

A FEMA official said the allegations have been forwarded to the office of the inspector general.

“FEMA’s top priority is to help disaster survivors and their communities recover from the devastation of disasters,” said Jeh Johnson, secretary of Homeland Security. “FEMA will continue to work with Congress to ensure policyholders are paid every dollar to which they are entitled and to improve transparency in the flood insurance program going forward.”

 

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