10.22.15

SCHUMER URGES FEMA TO DO A THOROUGH JOB BEFORE REFERRING ANY SANDY VICTIM’S CASE TO TREASURY FOR COLLECTION; BILLS WITH SKY-HIGH INTEREST RATE CHARGES SHOULD NOT LAND IN LI MAILBOXES AS PART OF ANY STANDARD PROCEDURE; FEMA MUST DO ITS HOMEWORK BEFORE CLAWING-BACK GRANT ASSISTANCE; LI RESIDENTS WHO RECEIVED CRITICAL AID & DID NOTHING WRONG SHOULD NOT BE FORCED TO REPAY A DIME

In Personal Letter To FEMA, Schumer Says Agency Must Be Sure That Prior To Any Case Referral To Treasury FEMA Must Conduct A Review Of The Matter And Ensure That Recoupment of Funds Is Necessary; Says Anything Less Is Disservice To Sandy Victims, Confuses Residents & Is Plain Unfair; Urges Establishment Of Review Process Before Collection Attempts 

Schumer: Great Majority Of LI Residents Rightfully Depended On FEMA Funds To Make Critical Repairs That Got Them Back On Their Feet; Any Efforts to Claw-back These Funds Must Be Preceded By a Thorough Review and Engagement With Victims Prior to Referral to The Department of Treasury

As the third anniversary of Superstorm Sandy approaches, today, U.S. Senator Charles E. Schumer urged the Federal Emergency Management Agency (FEMA) to establish a Superstorm Sandy Recoupment Review Process that would properly vet and review cases in which federal disaster grant funds are sought to be recouped by FEMA. Schumer said that FEMA should carefully review cases in which the agency believes that Sandy victims may have been overpaid or improperly paid before referring cases to Treasury for collection of these excessive payments. After Superstorm Sandy, FEMA provided federal disaster grants to victims throughout the hard-hit areas in New York, like Long Island. As part of its obligation to reduce fraud and waste, FEMA conducts audits of individual assistance (IA) payments to identify improper payments made to disaster victims. When FEMA believes it has uncovered improper payment the agency can attempt to recoup the grant, regardless of the basis for the improper payment being made in the first place. Schumer explained that a review process would require that FEMA fully evaluate the facts and circumstances surrounding a Sandy-victim’s IA payment and require outreach to the recipient to obtain any additional information that may better inform the facts surrounding the recoupment effort. Schumer’s call comes in the wake of reports that FEMA continues to attempt to claw-back funds from hard-hit Sandy victims without evidence of fraud or purposeful manipulation and without awareness of additional details that may justify the initial grant amount. Schumer said that a Superstorm Sandy Recoupment Review Process would help make sure that homeowners are treated fairly and prevent others from having to deal with an unnecessary bureaucratic burden.  

Schumer is a co-sponsor of legislation, the Disaster Assistance Recoupment Fairness Act of 2015, that would direct FEMA to waive its recoupment policy. Schumer has said that, until this legislation becomes law, FEMA should ensure that its efforts to recoup IA funds are based on accurate and complete information. Schumer said that that while it is important to reduce waste, fraud and abuse by cutting down on improper disaster assistance payments, such efforts must be made on the front end of this process, and that doing it on the back end goes against equity and punishes honest Americans.

“Requiring Superstorm Sandy victims to repay thousands of dollars in aid, nearly three years after the storm, is just plain wrong and counterproductive, since these funds have already been spent on crucial repairs necessary for getting storm victims back on their feet. FEMA should waive all debt among Superstorm Sandy victims, except where there is clear evidence of fraud. That is why I’ve introduced legislation that will make sure that these victims can keep this much-needed money and am also asking FEMA to establish a formal review process prior to any recoupment attempts. This would prevent people who have done nothing wrong from getting stuck with both a bill and a total that is through the roof because of an unfair interest rate.” said Senator Schumer

Schumer’s letter to FEMA Administrator Craig Fugate appears below.

Administrator W. Craig Fugate

Federal Emergency Management Agency

U.S. Department of Homeland Security

500 C Street SW

Washington, DC 20472

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,

 

Charles E. Schumer

United States Senate

 



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