Justice administration says it wants long-term relief and also care with contract

CHARLESTON, W.Va. — The Justice administration’s general counsel says officials have spent the past few months ensuring a contract to manage long-term flood relief funds has adequate oversight while also working steadily to provide that financial relief.

The contract, which was halted in January, has come under scrutiny this month when the situation became public. Lawmakers and others have expressed frustration that the internal investigation has affected already-slow relief efforts.

“Nothing’s been just sat on. We’ve been working and trying to figure out a fix,” said Brian Abraham, the general counsel for the Justice administration.

Abraham, speaking on MetroNews’ “Talkline,” described a timeline of action by the Justice administration.

He said the situation began with a meeting in November of cabinet-level representatives with the Federal Emergency Management Agency “to establish whether we could work together as a state.”

“We were having, apparently, some conflict between our various agencies.”

During that meeting, Abraham said, the parties determined some ways to cooperate better.

At that point, no money had been spent by the state on housing, he said.

A few months later, at the start of the year, the administration was assessing its own performance, Abraham said.

“The issue came up: ‘Have you started any work yet?’ And the answer we got was ‘We just did.'”

West Virginia made its request to start using $104 million in federal Community Development Block Grant disaster recovery funds this past Jan. 29.

Those block grants are meant to promote long-term recovery involving housing and businesses. There’s more buildup than for immediate recovery efforts because more planning is involved.

The U.S. Department of Housing and Urban Development gave its OK on Feb. 20.

Abraham confirmed that, even early on, HUD had designated West Virginia as a “slow spender.”

That designation means spending less than 10 percent of monthly pace required to fully use the grant by target closeout date.

Of the $149,875,000 West Virginia has available, the state still has $148,736,333 left on hand.

“It is not uncommon for large-scale disaster relief efforts to get off to a slow start. However, if it strikes us as being slow we’ll say so. And in this case we have,” HUD spokesman Brian Sullivan said in a Thursday interview with MetroNews.

Abraham said the slow spender designation came out during a January meeting with the state Department of Commerce and representatives of the Horne contracting firm that was managing the state’s money.

“They indicated to us it was not a huge deal,” Abraham said. “They were working through it and because now the projects were starting that would all work out.”

About that time, Abraham said, state officials started looking at the contracts having to do with the long-term recovery money.

“What raised some suspicions was that there was a $900,000 initial contract and then we saw during this presentation the new contract was for $17 million,” he said.

The contract was worth up to $17 million over its course, although Horne had been paid only about $700,000 over the past two fiscal years.

The situation gave the administration pause, Abraham said, because of the amount of money and what it saw as a lack of controls in place.

“That immediately raised some red flags, and we started looking into it,” he said.

He said the contract had been run only through the Department of Commerce without going through the purchasing department and a final review by the state Attorney General.

Instead, Abraham said, the Department of Commerce had treated the second contract as a modification of the first one.

Housing and Urban Development sent a letter in late March wondering about West Virginia’s intentions with the contract and with long-term flood relief.

HUD sought assurances that West Virginia intends to move ahead with long-term recovery and housing restoration.

HUD describes potential uncertainty surrounding the state agency, questions regarding HUD’s prior certification of state capacity and whether West Virginia will implement the grant in a manner consistent with the requirements spelled out in federal register notices.

Abraham said the Justice administration needed to err on the side of caution with millions of dollars in federal funding.

“The agencies themselves may not find any fault and may want you to spend the money, but a couple of years later the inspector general comes from those agencies and says ‘Hey, you did this wrong, we want you to repay this,'” Abraham said.

Caution over the contract led to an investigation, he said.

“At the end of the day, Governor Justice has always wanted to be transparent, so we’ve told every authority we could possibly tell,” Abraham said. “And we tried to work with everyone we needed to work with. We are going to put this thing back together.”

The law firm for U.S. Attorney Mike Carey was paid more than $20,000 in April to look into the matter. And the eyes on the contract extended beyond that.

“I personally took five bankers boxes worth of records to the legislative auditor’s, who put three or four people on it. They pointed out things to us,” Abraham said.

“We had to arrange a meeting with Mike Stuart, the U.S. attorney. Mike Carey and I went down and provided that to him. We then had various meetings with members of the Legislature where we told them what we going on. Then we tried to organize a meeting with HUD leadership.”

A meeting that had been set up with leadership from Housing and Urban Development wound up being canceled the prior day, Abraham said.

The contract with Horne may be reconstituted, Abraham indicated.

“We’ve been working with the purchasing division, trying to figure out a legal way we can put this thing back together,” he said.

Contracting for houses has already started up again, he said.

Gov. Jim Justice

Abraham said he wants to make it clear that Governor Justice is very concerned about flood victims, citing Justice’s activities through his businesses and through non-profit organizations to try to provide relief.

Justice lives in Greenbrier County one of the hardest-hit regions during the 2016 flood.

“I’d be remiss if I didn’t mention how important the flood victims are to Governor Justice,” Abraham said.

Among the legislators with concerns about the contract suspension and the rate of progress with flood relief is Senator Stephen Baldwin, D-Greenbrier.

Stephen Baldwin

He credited Justice’s interest in helping people recover.

But Baldwin has wished for greater communication from the administration in recent months.

“We now know the administration was aware of problems with RISE and working to investigate the matter thoroughly,” Baldwin said Friday afternoon.

“Governor Justice even brought in a former federal prosecutor to get to the bottom of it. I would guess that’s why folks at Commerce wouldn’t talk to me or others, because an investigation was ongoing. But we had no way of knowing that at the time until that information was released this week.”

Baldwin said taking a look at Commerce’s oversight was the right move.

“The issue here is not just why Commerce failed to implement the program effectively and responsibly in the past, but how they can do so in the future,” he said.

“We have community needs for housing, infrastructure, and economic development in flood recovery. We have funds to meet those needs. Meeting needs responsibly with available funds should be our goal.”   

 





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