N.J. Democrat Frank Pallone: Republicans Were Right to Worry About Sandy Aid Being Mishandled

In 2012, the House GOP caucus torpedoed federal help for the storm because they said it would be mismanaged. The congressman says Chris Christie proved them right.

Tim Larsen/New Jersey Governor's Office/Reuters

New Jersey Democrat Frank Pallone said Republicans in Washington may have been right to vote against federal aid for Hurricane Sandy relief in late 2012 because they worried the money would be mishandled.

Representative Pallone called the Christie administration’s handling of federal relief “disturbing” outside of a union hall in Wall Township, New Jersey Sunday. Pallone was there with Senator Cory booker to accept his nomination for a fourteenth term in Congress from Monmouth County Democrats.

As he chomped on an apple, Pallone explained to The Daily Beast: “When we were trying to get the money for Sandy, part of the opposition that was coming from the Western and Southern states was that they claimed the money would go down a rat hole and be mismanaged.”

Pallone said it was embarrassing “that it actually happened” like those Republicans said it would. “I have to go back to the very people who said ‘I didn’t want to vote for this because it wasn’t going to be managed properly’ now that they’ve been proven right.” Pallone took a bite of his apple. “It’s very sad.”

The road to recovery after Hurricane Sandy has been bumpy from the beginning.

In late January 2013, Congress finally approved a $50 billion emergency relief package for storm victims of after weeks of Republican opposition. Many Republicans who voted against doling out federal aid—like the 67 in the House who opposed allotting $9.7 billion to help pay flood insurance—represented districts which had received aid after Hurricane Katrina. Others, like Susan Brooks and Steve King, had received campaign support from Governor Christie while on the trail, making the “no” vote something of a personal betrayal in the governor’s eyes.

Last May, the Christie administration entered into an $86 million, three-year contract with Louisiana-based Hammerman and Gainer Inc. to distribute relief funds to New Jersey residents.

Prior to winning the contract, HGI’s New Jersey law firm, Capehart Scatchard, made a $25,000 contribution to the Republican Governors Association, which in turn contributed nearly $2 million to Christie’s reelection campaign and of which Christie now serves as chairman.

HGI faced criticism for their performance, and in December, the Christie administration quietly terminated their contract. The governor did not address the company’s firing until late February, saying “we had fundamental disagreements about how this should be done…we’re moving on to another contractor. This happens all the time.”

“HGI was a disaster,” Palone said, “I asked, several months ago, HUD to investigate HGI and see what happened to make sure it doesn’t happen again…From what I can see [HGI was] not replaced, and the state is simply now handling the second round [of funding] on their own, without a contract…I think they are [trying to settle] with HGI for $10 million. So, if they settle, the state would probably just lose $10 million.”

Pallone explained that he was not sure why HGI was hired in the first place, “they were a disaster from the beginning, HGI! I don’t know the circumstances, whether [hiring them] was political, or what the circumstances were. I didn’t know much about them at first, so I didn’t realize what the problems were, but gradually, they became manifested as more and more people came into our [congressional] office and said they were having problems.”

In January, Pallone and fellow Democratic congressman Bill Pascrell sent a letter to HUD, asking them to investigate both the hiring and firing of HGI. “We fought too hard for these federal disaster recovery dollars to stand by while they are recklessly mismanaged,” the congressmen wrote. They asked for HUD to appoint an official to monitor the distribution of recovery funds in New Jersey.

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“There’s very little transparency, and that’s the problem,” Pallone said. “We met with the DCA [Department of Community Affairs] commissioner [Richard Constable]. He said that they were trying to make improvements in the second round of funding. But I remain skeptical, and that’s why I think HUD has to get involved, to make sure there’s oversight.”

Oversight might help answer questions many New Jersey residents are asking: Like why Christie funneled $6 million in Sandy funds to the development of a senior center in Belleville (not a particularly storm-ravaged place), fulfilling a plan that was in the works for years prior to the hurricane. Coincidentally, the plan to distribute the money to the town was announced just two weeks before Belleville’s Democratic mayor endorsed Christie for reelection.

Pallone himself asked another Sandy question. Why “people were told, when the storm occurred…‘Go ahead and repair your home, do what you have to do. Apply for grants apply for loans'…Now, when they try to get reimbursement for the work they’ve done, they’re told they’re not going to get reimbursed?” Pallone told The Daily Beast: “we want to make sure [HUD] say[s] to the Christie administration ‘we want to make are you know exactly how to do this.’ There are just so many people who come into our [district] office and don’t know where they stand. They were denied [help], and they shouldn’t have been.”

Last week, PEER, a nonprofit environmental watchdog group, concluded that Christie’s proposal for additional recovery aid “conflicts with its own announced projects, ignores known threats, and contains numerous flaws.”