WASHINGTON — When the White River overflowed its banks in March 2008, Carolyn Guglielmana of Mountain View “lost nearly everything” to the mud and water that flooded her home of 20 years, but a federal disaster payment helped with the repair cost.
Three years later - in a move that Democratic Sen. Mark Pryor decried as “absolutely unconscionable” - the Federal Emergency Management Agency has reconsidered its generosity, telling Guglielmana that she must repay the entire $27,251.83 because the agency now says she wasn’t eligible for the funds it approved.
And she’s not alone. Another 34 Arkansans who were provided FEMA payments also have received similar letters saying they, too, must repay the money, including five others in Stone County.
“I was just amazed” at the letter, Guglielmana, 73, said Tuesday, speaking from the home she shares with her husband, Gary, which sits next door to Jack’s Fishing Resort in a row of houses on the Stone County bank of the White River.
The FEMA letter, dated March 25, explained that as part of routine FEMA audits that follow every federally declared disaster, the agency discovered that Guglielmana was not eligible for the assistance because her home is in a “special flood hazard area,” a situation further complicated by the fact that Stone County officials have opted not to participate in the National Flood Insurance Program.
According to federal law, FEMA officials said, that means Guglielmana wasn’t eligible for the federal disaster payment she received.
But Guglielmana was already aware of that situation - and she says the FEMA officials who approved her assistance payment were, too.
The “bill for collection” letter gives Guglielmana 30 days to repay FEMA or face substantial interest and penalties and be ineligible for any future federal disaster assistance.
Guglielmana didn’t know how to respond to the threat.
So, with pen in hand, she sat down at the kitchen table and wrote a letter to Pryor, whom she has never met.
“We would never have taken the help, had we known they would want the money back,” she said in a two-page letter. “Our home is still not the way it was, we lost almost everything we had worked for.”
She explained that not only did FEMA officials know her home was in the flood zone, but they also attended county meetings where the lack of flood insurance was discussed. FEMA officials visited her home, taking pictures and assessing damage.
Those officials, she wrote to the senator, “knew our situation” and even “patted me on the back and said don’t worry.”
By Monday, FEMA’s top official - Administrator Craig Fugate - was in Pryor’s office to discuss the situation ina meeting that both sides portrayed as cordial and helpful.
As far as the agency is concerned, its hands are tied by federal law that requires that it audit the payments and recoup taxpayer money that shouldn’t have been paid in the first place. The process has bogged down in recent years in the wake of hurricanes Katrina and Rita and the large volume of claims that resulted.
A class-action lawsuit caused further delays. That lawsuit has been settled, and new officials, appointed by President Barack Obama, have taken over the agency. As part of restarting the process of recouping improper disaster payments, the Senate Homeland Security Subcommittee on Disaster Recovery and Intergovernmental Affairs held a hearing on the topic last month - headed by Pryor.
While agency officials contend they made it clear at that hearing that repayment letters would be going out, the testimony primarily focused on the cases that stemmed from Katrina and Rita. Pryor says FEMA has mishandled the matter.
“While I believe we must do everything we can to prevent erroneous disaster assistance payments and to recover funding in the event of fraud, it is absolutely unconscionable that FEMA would attempt to collect disaster assistance funds in a case where the funds were paid out after all FEMA procedures were followed and a FEMA inspection was conducted to determine an applicant eligible for the maximum allowable grant,” Pryor wrote to Fugate.
FEMA officials said Tuesday that they have “worked closely” with Pryor and other lawmakers to explain the revamped process. Because they are required to recoup improper payments, they must balance meeting the needs of disaster victims quickly with ensuring taxpayer dollars are spent appropriately, they said.
The letters sent out by FEMA explain payment options as well as the right to appeal in language agency officials repeatedly describe as clear and plain. But the format, tone and focus on penalties might lead a recipient to think otherwise.
“While we are legally required to conduct these recoupments, disaster survivors have been through a lot and they deserve a process that is fair and transparent,” said Rachel Racusen, FEMA’s public affairs director. “Our priority, when developing this new process, was to make sure disaster survivors had complete and clear information about the reasons for their debt described in their notice, and what options are available for appealing or resolving this debt.”
In his letter, Pryor asked Fugate to “immediately halt” FEMA’s efforts to get repayments from those who “played no role in the problem that led to the erroneous disbursement.” But FEMA officials said that since their role is required by law, it would take action by Congress to change the law todo that.
If that’s what it takes, Pryor said, that’s what he’ll do: “Hopefully, they can find some flexibility in the statute to deal with this. If not, we’ll work on legislative language with them to address this as soon as possible.”
That would be welcome relief for Guglielmana, who worried in her letter that Pryor wouldn’t be able to read her shaky handwriting “because I am very nervous.”
“I’m not going to let FEMA do me in,” she said Tuesday. “I know what I am, and I know they are wrong. I don’t know how people can get by and do this to other people.”
Front Section, Pages 1 on 04/06/2011