Gov. Bobby Jindal unveils safeguards against 'predatory' contractors
In response to complaints from New Orleans-area homeowners that shady home elevation contractors participating in the state's Hazard Mitigation Grant Program are doing shoddy work while state officials stand idly by, Gov. Bobby Jindal issued an executive order late Friday outlining new consumer protection standards for the program.
View full sizeUnsecured metal plates were used to level this house in Marrero. The order says it's crucial to provide homeowners the tools "to protect themselves against dilatory, incompetent, unscrupulous, or predatory contractors and subcontractors" and their "unsafe construction methods and unscrupulous predatory marketing and contracting methods."
It requires the state licensing board for contractors to investigate complaints and suspend or revoke licenses of contractors or subcontractors who fail to meet state expectations for participating in the hazard mitigation program, fail to meet construction standards, or violate federal, state or local building codes.
The order also requires the state commissioner of administration to:
- Develop a process that will let homeowners change contractors who perform shoddy work, including the transfer of grant money to the new contractor.
- Inspect or investigate complaints of shoddy construction.
- Suspend payments to contractors or suspend contractors from entering into future contracts under the program if the commissioner or his representative finds that complaints are accurate and the contractor fails to correct work in a timely manner.
- Increase the insurance requirements for contractors participating in the program to protect homeowners against poor or incomplete construction and any additional damage caused by deficient construction methods.
The order also requires that the contractor licensing board be notified of any findings that might cause the suspension or revocation of contractor or subcontractor licenses, and to post on the Internet and elsewhere a list of contractors and subcontractors who have been suspended or barred from participating in the program.
Sweeping state probe
On Thursday, Commissioner of Administration Paul Rainwater confirmed that the state has launched a sweeping internal investigation into allegations of graft and data leaks in the $750 million program, focusing on claims in a whistleblower lawsuit that alleges state officials sold private homeowner data and received gratuities from contractors who wanted quicker payments for elevation work.
Officials from the federal Homeland Security inspector general and Louisiana Attorney General Buddy Caldwell's office are assisting that investigation.
Jindal's executive order follows a series of reports in The Times-Picayune and elsewhere outlining complaints about shoddy work, improperly licensed contractors, misleading advertising by contractors and a failure by officials from the company operating the state program to follow up on the complaints.
The grant program is operated for the state by the Baton Rouge-based Shaw Group under a $66 million contract.
In one case, Shaw continued to allow Celebrity Contractors to solicit and receive elevation jobs even after Gregg Huskey, a Celebrity official, was arrested on contractor fraud charges.
Michael Tucker, a Shaw employee, threatened to take back grant money from one Marrero homeowner if she didn't pay Celebrity to finish the job, after she complained that the company did not follow an engineer's plans in raising her home.
Homeowner Darlene Self, whose house is falling apart after the shoddy work, filed suit against Shaw in Jefferson Parish Civil District Court over Tucker's actions. Self said she hired an independent engineer who found Celebrity used the wrong size concrete blocks, didn't use steel rods specified in the plans, and failed to install proper concrete footings and wood sills.
Celebrity submitted a letter from its own engineer saying everything was done according to plans. But that engineer, Eugene Brian, earlier this week said he'd never inspected the house. Brian said the man who drafted the construction plans for Celebrity signed the inspection letter using Brian's certified engineer's stamp.
And that man, Larry Trumbaturi, said he never inspected Self's house, instead taking Celebrity's word that the job was built properly.
Tucker was dismissed by Shaw in May and has declined to comment on his actions. In a response to Self's lawsuit, Shaw argued that it has no contract with homeowners and, therefore, no responsibility to Self.
Celebrity 'on probation'
Earlier this week, a spokesman for the state Licensing Board of Contractors said it has not taken action against Celebrity, but is monitoring the criminal charges against it.
State spokeswoman Christina Stephens said Celebrity was "on probation" for failing to complete a majority of its state-financed jobs in the necessary time and had 60 days to show improvement before being suspended.
In a second case, a Pontchartrain Park resident responded to an advertisement in The Times-Picayune that claimed to be from the "HMGP Home Elevation Call Center." Actually, it was for a company called KGB Properties that did not have the proper licensing for elevation work. A subcontractor working for KGB also was not properly licensed.
Jindal spokesman Kyle Plotkin would not say why the governor issued the sweeping executive order on Friday, replying only that "the governor's executive order puts homeowners in the driver's seat and puts contractors on notice to know that if they perform poorly or take advantage of homeowners, then the state will take aggressive action to penalize them, including suspending them from doing HMGP work, and to protect homeowners."
Mark Schleifstein can be reached at mschleifstein@timespicayune.com or 504.826.3327.