Algiers homeowner thought solicitor was working for the state
Like so many other Road Home grant recipients who must raise their homes to comply with state rules, Joann Frazier of New Orleans was at her wits' end this summer. Years of battling with her insurance company, Road Home bureaucrats and a slew of contractors had left her with money problems, a stressed marriage and an unraised split-level house in Algiers with cracks in the foundation. Frazier called Gov. Bobby Jindal's office in June, asking why she hadn't gotten aid yet from the state's Hazard Mitigation Grant Program.
View full sizeHome-elevation work in New Orleans was photographed in June 2006. The governor's office referred her case to the Office of Community Development, which promised swift action. Next thing she knew, a man was at her door from Louisiana Grant Management. He had contracts with house-raising firm Benetech to lift her home at no cost to her.
She was so happy she didn't stop to think about how Benetech got her information.
"I broke down and cried because I said, 'Finally, I got someone to help me get out of this nightmare,'" Frazier said, sobbing again at the memory.
It turns out her nightmare was just beginning. Shortly after she signed with Benetech, the state suspended the company. This week, the firm's owner, Aaron Bennett, was charged with federal public corruption. And Frazier finds herself back at square one.
Frazier's experience and others like it raise further questions about whether the state program has been corrupted by contractors who have been able to access inside information. Commissioner of Administration Paul Rainwater said an internal investigation is trying to assess the extent of the problem, and it will look into Frazier's case in particular.
"Those allegations are being investigated," he said. "If a program employee is found to be showing preference to contractors or providing homeowner information to contractors, we are going to prosecute them."
Frazier said she thought the man who appeared at her door was from the state because he had a card that said "Louisiana Grant Management" -- the name of a short-lived private firm that worked to rustle up elevation work for Benetech and another firm.
Benetech has been disqualified from the program while the state investigates the firm's contract-solicitation practices and its association with a consultant charged with fraud.
Frazier can't understand how her call to Jindal's office led Benetech to her door.
"He had to be working with those people at the state," she said.
Allegations of special treatment for certain contractors by state and program officials has already led to a shakeup in the program this summer. Two top state overseers were placed on paid leave pending an investigation by the attorney general, state inspector general and auditors. Federal investigators are also looking into alleged fraud and self-dealing in the program.
Homeowners have reported being threatened by program officials when they tried to switch away from Celebrity Contractors, a company with a history of shoddy work whose owner and chief consultant were recently charged with contractor fraud.
Several contractors and program officials, all speaking on condition of anonymity for fear of retribution, said they heard the state's Hazard Mitigation production team leader, Courage Idusuyi, tell homeowners to stay with certain contractors. Idusuyi is one of two state officials serving suspensions during the investigation, and Rainwater has acknowledged that Idusuyi accepted free meals from contractors.
Jerl Kershenstine, owner of Metairie-based Coastal Shoring, said his general manager informed him in the fall of 2010 that "'Courage could make our files go through faster, if ...,'" He then held his hand up and rubbed his thumb and first two fingers together, suggesting "we would have to give Courage money."
Kershenstine said he refused to "play ball." The state Office of Community Development, which continues to employ Idusuyi, requested that all questions about its employees come to them.
Of Kershenstine's allegation, agency spokeswoman Christina Stephens said: "Courage has already been put on leave pending the outcome of several investigations into potential wrongdoing, and we continue to assist in those investigations wherever possible. We have a zero tolerance for any illegal or unethical behavior in our programs."
Then there is Kurt Wiltshire, a former state employee at the program who formed a grant management company in Florida while still working for the state, then left the program and launched another grant-ushering firm in Louisiana. Greg Pierson, who works for the state program -- and who has filed a suit alleging graft -- claimed that Wiltshire bought lists of homeowners who were already approved for grants from Idusuyi.
Wiltshire denies those allegations, saying he only gathered addresses from publicly available damage-assessment lists and paid a printing company to cross-reference ZIP codes.
"A contractor can't navigate this grant program by himself because if they try to, that's what they're going to be doing all day," Wiltshire said.
"So, the smart contractors hire mitigation analysts who used to work at the state and those files get moved faster because (former program officials) know about grant manager reviews, (funds available) lists, how to read an elevation certificate."
Wiltshire worked for various elevation contractors when the grant program was in its infancy, including Coastal Shoring. Wiltshire acknowledges sending an email to a Coastal employee in September 2009, nearly three months after leaving his government job, advising the company about one of its clients: "Tell her to call the state to get her clearance letter. She is good."
Former Coastal sales manager Jay Warner said the email shows Wiltshire had a special conduit to private homeowner information.
Wiltshire said that's not true. In 2009, he would have only gotten a homeowner's clearance status by making a three-way call with the homeowner on the line to approve the release of the information, he said.
Later, when the state allowed contractors to get limited power of attorney from clients to shepherd their files through the process, he would obtain a homeowner's status only when granted that power of attorney, he said.
Warner also said Wiltshire provided him and other Coastal salesmen with lists of homeowners who were supposedly already approved for elevation grants. The lists included private information such as Road Home application numbers, Warner said.
"We hired him to be our inside source so when we tried to make sales, when we wanted to find out if they were good, we'd go to him and he'd call somebody at HMGP to let us know their status," Warner said.
Wiltshire denied that, too, saying he never provided any sales leads to Coastal. He said he only provided a list of leads to one contractor, RamJack, and he said that was from the publicly available damage-assessment lists.
"I was hired to be the grant manager, to talk to the homeowners and they can give us the power of attorney to find out their status," Wiltshire said. "Once I left the program, I was completely cut off from the program. It's not like I make a phone call and they do what I tell them to do."
Adam Kershenstine of Coastal said Wiltshire's alleged ties to the program never gave his firm any advantage. "He did nothing for us; that's why we got rid of him," Kershenstine said.
Rainwater said Wiltshire is under state investigation and should not have had any special access to homeowner status information once he left the program's employ.
David Hammer can be reached at dhammer@timespicayune.com or 504.826.3322.