NEW ORLEANS, LA (WAFB) - The Hazard Mitigation Grant Program is designed to help elevate homes in flood-prone areas. At a meeting in New Orleans Wednesday Night, tempers flared as questions were raised about why seven contractors have now been suspended from doing work and making money.
"Your processes continue to be flawed and unfair," said Sen. Karen Carter Peterson & Hurricane Recovery Committee Chairwoman.
Pat Forbes, Office of Community Development's Disaster Recovery Unit executive director, took the hot seat blasted by committee members on several issues -- one being how a handful of contractors were recently suspended.
"It is highly suspect that for a company like Orleans Shoring to have been under that kind of scrutiny, for them to conduct this activity and then for the state to rely on that as the basis for seven contractors to be suspended," said Peterson.
Orleans Shoring, a major home elevating company in New Orleans, ran a private undercover sting operation last month. They claim they caught seven contractors violating various rules for the federally-funded Hazard Mitigation Grant Program.
Those secret recordings were then handed over to OCD, which is in charge of the $750 million program. That very same day, Nov. 18th, OCD suspended all seven contractors.
"When you're dealing with a company that obviously has a financial interest in trying to push other companies out of the market, you have to have those tapes verified as being legitimate tapes," said Sen. JP Morrell.
"You felt what you were seeing had not been doctored with? You could determine? You're an expert I guess at looking at video tape that it had not been doctored with?," asked Sen. Ed Murray.
"No, I can't say that. I'm not an expert in that," answered Forbes.
"Well then how can you take the action you did without having someone look at it to make sure it was authentic?" asked Murray.
"To say that we simply turned around and suspended them without a thought to the effect on these contractors is mischaracterizing what we did," said Forbes. "We thought long and hard about what we did about what we needed to do and what was the safe thing. What was the fair thing, and we had to land on the side of suspension."
Forbes said he and a staff member from the Governor's Office of Homeland Security and Emergency Preparedness watched the recordings and then made the decision to suspend the seven contractors.
The tapes have since been handed over to the Louisiana Attorney General's office.
Peterson, who is a lawyer by trade, said the state has opened itself up to lawsuits by failing to notify the seven contractors of the state's action against them.
"Why would you not notify them in email, phone call or writing on the day you suspended them?" asked Peterson.
"My mistake. It was a terrible mistake," replied Forbes.
"None of them are my clients. If they were my clients, I promise you they have a case. I promise you," said Peterson.
The biggest complaint - allowing a private company, with a vested interest, to conduct an unsupervised undercover sting.
"You have one company who has an interest in garnering as much of the market as possible," said Morrell. "When you get information from a company that is obviously a competitor of the companies it's tattling on, that should give everyone a degree of pause. The concern I have going forward now is now that we've shown this kind of behavior is acceptable, I can only imagine what we're going to look at in the future."
The state has stopped any new payments to a Orleans Shoring effective Dec. 1st.
The Louisiana State Licensing Board for Contractors has called Christian Cancienne of Orleans Shoring to a Dec. 15th meeting. They're looking into a violation that could even get the company's license revoked.