It is taking center stage in Gov. Bobby Jindal's fight to police house-lifting contractors run amok
A once-obscure state board is taking center stage in Gov. Bobby Jindal's fight to police house-lifting contractors run amok in the state's Hazard Mitigation Grant Program.
View full sizeHome-elevation work in New Orleans was photographed in June 2006. For the second time since Jindal issued an executive order in August to protect homeowners, the Louisiana State Licensing Board for Contractors last week addressed charges of shoddy work or improperly licensed contractors participating in the state's $750 million elevation grant program.
Twelve contractors were fined anywhere from $500 to more than $15,000, some were placed on probation -- requiring them to file monthly reports to the board -- and another had his license revoked.
The licensing board has been overseeing construction contractors since 1956, but its executive director, Michael McDuff, acknowledged that the board's role has become far more critical since Jindal's executive order charged it with monitoring the hundreds of contractors taking advantage of federally financed grants. Jindal's order followed a series of Times-Picayune stories exposing unlicensed and inexperienced companies doing the dangerous jobs.
"The problem with the program was it let people with home-improvement licenses do this work," he said. "But they've got new policies that will make it much safer."
Since Sept. 1, the state has adopted new, tougher policies, including ones requiring contractors to get expensive rigger's or general liability insurance, warranties on their work and, most recently, performance bonds to reassure homeowners that they won't be stuck with bad or partially finished lift jobs. Some smaller contractors complained they would be priced out of the program and that big companies were getting an unfair advantage.
McDuff said the exclusion of smaller, less experienced firms is actually long overdue.
"It will definitely keep these small, inexperienced subcontractors out," he said of the new bonding and insurance requirements.
Some have questioned whether the licensing board really has the teeth to keep hundreds of new elevation companies in check. While it has imposed significant fines and has yanked licenses in extreme cases, its most common practice of placing firms on probation does nothing to limit their access to the lucrative state grant money. And when Rocks Shoring, which is not registered with the Secretary of State and has falsely purported to have proper licenses, failed to show up for its hearing last week, the board said it hadn't issued a summons and, therefore, could not hear the matter.
McDuff said the board is limited in that it can't seek restitution for wronged homeowners, and it can't actively monitor all of the elevation work going on these days. That's why the board has put more focus on putting out literature to educate homeowners about licensing requirements, he said.
"We want people to know that they should not do business with a contractor until they verify they are licensed," he said. "A lot of elderly people don't know how to deal with contractors. But at some point, people have to understand that they should verify contractors' licenses and get three competing bids."
There are also serious questions about the board's independence. In 2008, the board reported that about 300 contractors took licensing examinations each month, but 22 contractor representatives each month also sought waivers from having to take those tests, and they were regularly granted.
McDuff said examination exemptions are often granted under reciprocity agreements with other states, so experienced contractors who move into Louisiana don't have to study and take the challenging tests. But he also said that no exemptions have been granted for elevation firms since the governor's executive order.
State Inspector General Stephen Street reported on improper actions by board member Donald Lambert Sr., a Kenner contractor who Street said would sponsor an average of four waivers each month. Street's investigation found that Lambert improperly blocked a waiver request by the Dalrymple Corp. for months in 2007, then suddenly reversed course and pushed through the exemption at the July 19, 2007 board meeting, when they were not scheduled to consider it.
Just before that board meeting, Lambert left a message for the board director stating that Dalrymple's owner had just paid Lambert's son a "sizeable amount" of money, the inspector general reported. Lambert then made an unscheduled motion to give Dalrymple a test-free license, vouched for the company and did not recuse himself when the motion passed unanimously.
The state Ethics Board charged him with violating the Ethics Code by voting on a matter in which his son had a significant financial interest, but a panel of administrative law judges found there was no proof that Lambert knew about his son's interest before the vote.
The judges considered the Ethics Board's evidence against Lambert "circumstantial" and accepted an affidavit from his son as evidence in his favor. The administrative law judges ruled that Lambert didn't know about his son's involvement before the July 20, 2006, board meeting, though that was a year before the improper action allegedly took place.
"All I can say is I was cleared by them and that's not easy to get done, and I didn't do anything wrong and I don't have any other defense about it other than to tell you to look at the record," Lambert said.
Shortly after he was cleared in September 2010, Lambert did recuse himself from a similar vote to grant a test waiver for a residential contractor's license to Adam Kershenstine, owner of Coastal Shoring LLC, a Metairie company that's been a key player in the elevation grant program. Lambert was working at the time as a consultant for Coastal, making $3,000 a month.
"I didn't participate in that at all," Lambert said. "I had already had that experience of being careful after being investigated by the ethics board, so I recused myself."
According a review of board minutes, Kershenstine was also granted a test waiver in 2007 when his company first received a commercial license.
David Hammer can be reached at dhammer@timespicayune.com or 504.826.3322.