All the Members of the New Jersey Congressional Delegation sent a letter today to Secretary Julián Castro of the U.S. Department of Housing and Urban Development (HUD) urging him to exercise his authority to prevent further delays in the distribution of federal disaster assistance to victims of Superstorm Sandy. Without such action, payouts received from the Federal Emergency Management Agency’s (FEMA) Sandy Claims Review and grants that are awarded with Community Development Block Grant-Disaster Relief (CDBG-DR) funds would be subject to a complex and costly duplication of benefits analysis.

     Signing the bipartisan appeal, spearheaded by dean of the delegation Chris Smith (NJ-04), were Representatives Donald Norcross (NJ-01), Frank LoBiondo (NJ-02), Tom MacArthur (NJ-03), Scott Garrett (NJ-05), Frank Pallone (NJ-06), Leonard Lance (NJ-07), Albio Sires (NJ-08), Bill Pascrell (NJ-09), Donald M. Payne Jr. (NJ-10), Rodney Frelinghuysen (NJ-11), Bonnie Watson Coleman (NJ-12), and Senators Robert Menendez and Cory Booker.

       Thousands of Sandy victims’ flood insurance claims are being reviewed by FEMA for potential underpayments due to fraud and misconduct by certain insurance companies and engineering firms and a lack of oversight from the National Flood Insurance Program (NFIP).

     “Almost three years after enduring the largest natural disaster in our state’s history,” said Smith, “New Jersey homeowners are tired of dealing with the broken and delayed insurance program. Identifying and collecting duplicative assistance benefits would further slow the recovery process, and burden Sandy victims and the federal government for little in return.”

    While additional payouts are subject to the Stafford Act’s duplication of benefits policy, HUD may exercise its statutory authority if it is not in the best interest of the federal government. As the letter states:

      “Nearly three years after the storm struck, thousands of Sandy survivors still find themselves stuck in a battle with FEMA as they try to get the flood insurance proceeds they deserve. They did nothing wrong, nothing to deserve this treatment, but were nonetheless victimized by the unconscionable misconduct by certain insurance companies and engineering firms who defrauded them, all of which was enabled by FEMA’s inadequate control and oversight.”
 
       The State of New Jersey has already made clear that it will not consider the additional flood insurance payouts as a duplication of benefits with any CDBG-DR award—such as grants made through the Reconstruction, Rehabilitation, Elevation, and Mitigation (RREM) Program. FEMA has already exercised its discretionary authority and waived enforcement where flood insurance payouts create a duplication of benefits with FEMA Individual Assistance.

 

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