Road Home answers questions about the money

By David Spunt - bio | email

BATON ROUGE, LA (WAFB) - This coming fall will mark five years since hurricanes Katrina and Rita devastated parts of Louisiana. Following the storms, the state set up a program called Road Home. It was funded by taxpayers and was supposed to put people back in their homes. It happened for many, but not everyone.

"Our first priority is to make sure first that the families that can rebuild, have the tools in hand to rebuild," said Robin Keegan, executive director of the Louisiana Recovery Authority or LRA.

The LRA oversees Road Home, which was established in 2006. Road Home is funded entirely by the Department of Housing and Urban Development (HUD). To be specific, $8.2 billion in taxpayer dollars went directly to the homeowners. Road Home grants covered what FEMA and the insurance companies didn't. Almost 230,000 homeowners applied for the Road Home help. About 126,000 actually received it.

"We really see there are homeowners in great need and we have the real responsibility to develop the tools in our toolkit," Keegan said.

Homeowners had three choices of what to do with the money. They could rebuild their home in the same location, they could relocate elsewhere in Louisiana or they could sell their property to the state and move. Thousands of homes that were supposed to have been rebuilt on the same site were looked into for this report.

"It was very clearly stated up front. The program was built so that people had three years from the date of receiving their grant to rebuild their home. If they are in violation of their covenant and they haven't asked for an extension and they haven't come to us and explained their case, they are in violation and we can take the grant back," Keegan explained.

Keegan said it is still too early to tell how many of the cases may be in breach of contract and how much taxpayer money may be tied up.

Beacon of Hope is a non-profit organization based in Lakewood aimed at helping in the rebuilding process. The organization provided several homes that have not been rebuilt as examples. According to Road Home records, by the end of this month, almost 3,000 Road Home contracts will have expired. By the end of the year, that number jumps to more than nearly 65,000.

"If people had challenges, we understand those challenges, but we need to be in contact with these families and they have to show us they are in the process of rebuilding," Keegan said.

If a deadline has passed and the LRA suspects foul play, it will send the homeowner a letter. If that doesn't work, LRA may need to involve the Attorney General's Office and even sue to get money back. Former Gov. Kathleen Blanco was one of the creators of the Road Home program. She calls it successful, but not bulletproof.

"We were determined to show the country and the nation that Louisiana could handle billions of dollars and do it properly and get it into the hands of people and not allow scam artists from around the country to come in here and get money that our people desperately needed," Blanco said.

Records show 314 fraud cases have been sent to the HUD Office of the Inspector General in Washington D.C. U.S. Attorney Jim Letten has already handed down 24 indictments.

"The Road Home fraud cases are important because they represent the third or most complex tier of fraud cases we've seen," Letten said.

Unlike the homes mentioned above, Letten added fraud includes individuals who knowingly lied about their physical address and collected money while doing it. The HUD Office of the Inspector General has opened 138 formal criminal investigations.

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