View this article online: https://www.insurancejournal.com/news/east/2015/03/03/359129.htm
A New Jersey congressman is asking for the resignation of Federal Emergency Management Agency (FEMA) Administrator W. Craig Fugate and an immediate investigation into FEMA after reports that FEMA was aware of allegedly fraudulent engineering reports that may have been used to deny flood claims by Superstorm Sandy victims.
“I am outraged and saddened to hear reports that FEMA may have turned a blind eye to corrupt and fraudulent practices used to deny full assistance to families and individuals recovering from Superstorm Sandy,” U.S. Rep. Tom MacArthur (R-3rd Dist.) said in a statement Monday. “It is simply shocking that the Agency could have known about these private insurers’ wrongdoings as early as August of 2013, yet did nothing about it.”
“My district saw some of the most disastrous effects of Superstorm Sandy. Countless families and individuals suffered great losses, and then were faced with the exorbitant costs of rebuilding. It’s an ongoing struggle, and the Jersey Shore will be recovering for years to come,” said MacArthur. “That’s why I am demanding a full investigation by relevant House Committees into this issue, in addition to ongoing investigations by Governor Christie and the Inspector General. Survivors of Superstorm Sandy deserve to know when FEMA first learned of these corrupt practices, why nothing was done to stop them, and what FEMA’s direct or indirect role was in carrying them out.”
“I have long been a champion for restoring accountability to FEMA, and this latest news underscores the need for real change at the Agency. That is why I am also calling upon W. Craig Fugate to resign from his role as FEMA Administrator,” the New Jersey congressman said. “For too long, this Agency has mishandled their fundamental role to help disaster survivors. Administrator Fugate has failed as a leader and must step down before any further harm is done.”
U.S. senators from New York and New Jersey — U.S. Senators Bob Menendez and Cory Booker (both D-N.J.), and Kirsten Gillibrand and Charles E. Schumer (both D-N.Y.) — also issued a joint statement Monday calling for the U.S. Senate Committee on Banking, Housing & Urban Affairs to hold new oversight hearings of FEMA-run National Flood Insurance Program (NFIP).
The four New York and New Jersey senators said that according to federal court records and recent news reports, including a months-long investigation aired by “60 Minutes” Sunday evening, evidence supports allegations that private insurers denied the flood insurance claims of thousands of homeowners after Sandy because of fraudulently altered engineering reports.
“The Senators have serious concerns about when FEMA learned of the potential fraud, what steps FEMA took to address it, and FEMA’s general oversight of those that run the NFIP program on its behalf,” the senators said in their statement.
The senators sent a letter Monday to the Chairman and Ranking Member of the U.S. Senate Committee on Banking, Housing & Urban Affairs, and asked for an oversight hearing “to further examine FEMA’s handling of the Sandy claims process and its oversight of the private insurance companies that facilitate the program on its behalf.”
The senators said in the letter: “It is shocking to us that FEMA officials received specific allegations of fraudulent activity that served as the basis for claimants being denied the coverage they had paid for, including homeowners who lost their homes, and either did not appropriately investigate these claims or simply looked the other way…[these] serious allegations and the questions that they raise are highly troubling, and we believe that Congress, in its oversight capacity, has responsibility to hold further hearings so that these questions can be fully addressed in an open and transparent manner.”
The senators said in their statement Monday that more than 1,000 property owners have lawsuits pending in U.S. Eastern District of New York against insurers over flood insurance claims that were denied in the wake of Sandy.
The senators also stated that evidence has been presented in federal court that is cause for concern over the current lack of FEMA oversight over the “Write-Your-Own” insurance companies who service NFIP claims, and the subcontractors who they hire to assist them.
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