New allegations of forgery, wrongdoing in elevation program

Published: Aug. 17, 2011 at 9:49 PM CDT|Updated: Aug. 24, 2011 at 9:12 AM CDT
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BATON ROUGE, LA (WAFB) - The State of Louisiana has launched an investigation into possible wrongdoing tied to a program that pays for the elevation of homes in flood-prone areas. And, a federal judge has issued a restraining order in the matter.

The allegations were brought to light by two former state contract workers who spoke with the 9NEWS I-Team last week. The I-TEAM reported new allegations in the case Wednesday night.

In a civil suit filed in May, the two whistle blowers, Christy Weiser and Greg Pierson, allege there were "certain contractors submitting forged bid documents, including charging homeowners for moving "gas lines" when the particular residences had no gas service".

Pierson was a liaison between contractors elevating homes and The Shaw Group.  A Shaw spokesperson said Shaw was "hired to provide staff augmentation to the state who is managing the program.  "We are simply providing additional staff to supplement the state's existing staff on the project," the spokesperson added.  After our I-Team report aired last Thursday, Shaw suspended Pierson until further notice.

Pierson claims that while working for Shaw he was ordered to *only* deal with one specific contractor. "Typically a contract liaison has 30 contractors they manage," Pierson said. "I was given this one specific one so I only had one contractor I dealt with." 

Pierson says he began asking questions about changes being made in quotes for elevation contracts for things like a house with electric heat being charged for costs related to natural gas and discrepancies involving elevating air conditioners. "How can a contract remain the same if you took out $4,000 for a house having gas or for a house having an air conditioning unit to be lifted if it had window units," he asked. Pierson provided several documents to the I-Team. He says they are state documents he took to prove his point.

The documents he provided show that an original quote for elevating a home in Harvey, near New Orleans, calls for $4,500 dollars to disconnect and reconnect gas. Documents show the total cost of the project was $129,000. When the homeowner called asking why she was getting charged the thousands for gas when her home when she does not have gas service, she told the I-TEAM that a representative with J-Con, Inc (the contractor) said they made a mistake and drafted a new quote.   In the new quote, documents provided by Pierson show the $4,500 dollars for gas line removal was taken out. However, according to the documents, the final price for the project remained the same.  However, a closer look at the document shows other figures were inflated. The base price to raise the home went from nearly $38 thousand dollars in the original quote to more than 50 thousand in the new quote. The price for sewer work jumped from $1,500 to $2,700 dollars.  Water line movement jumped from $500 to $1,000 and electrical increased by $238 dollars. 

Pierson says a state official, who he did not name, profited from private information.  According to the lawsuit, he accused the state official of "accessing confidential homeowner information, including from the original road home database, and selling pre approved property listings to private organizations". Pierson claims the information was contained on a disc and copies of the disc were sold to contractors. "For the amount of $10,000," he said.  Pierson said each disc contained information on more than 7,500 homeowners that could benefit contractors. "Rather than going door to door, newspaper ads, billboard ads, they have a list that they can go cherry pick each homeowner they want to knock on the door and solicit their business to lift their house, give their sales pitch," he said.

Christina Stephens, Director of Communications for the State Office of Community Development, said the state first learned of the disc Wednesday. She says they have asked Craft for a copy of the disc. Craft says she will talk with the department Wednesday about possibly providing a copy.  "We'll go to court to get a copy of the disc, if necessary, so that we can determine if any wrongdoing occurred," Stephens said. "If we determine that a current or former program employee sold this information illegally to any third party, we will, of course, turn that person over to the proper authorities for prosecution. We do not take these charges lightly."

Johnny Allen, the President of J-Conn, Inc. also issued a response to our report.  "We have abided by the Hazard Mitigation Grant Program guidelines as well as all applicable state laws and ethics rules," Allen said.

At the request of Louisiana Attorney General Buddy Caldwell, Federal Judge James Brady issued a temporary restraining order Wednesday preventing the whistle blowers from giving any more information to WAFB or any other outlet. Brady has scheduled a hearing for Friday morning to determine whether he will force the workers to return the documents the state says they illegally obtained.