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Saturday, May 20, 2006

Bureaucracy at it's finest


Senators get an earful on FEMA, SBA
Horror tales feature ineptitude, delays

Saturday, May 20, 2006
By Bruce Alpert
Washington bureau

WASHINGTON -- A Senate Democratic task force Friday heard from two New Orleans business owners who described their long ordeal trying to get FEMA and the Small Business Administration to respond to what one senator described as routine, uncomplicated requests.

Errolyn Villarrubia Letellier, co-owner of the Rockery Ace Hardware Store in Lakeview, told the Senate Democratic Policy Committee about her frustrating seven-month effort to get even a partial Small Business Administration disaster loan.

Arnold Baker, president of Baker Ready Mix and Building Materials in New Orleans, told the panel he had been trying for nearly eight months to get the Federal Emergency Management Agency to reimburse him for stockpiles of limestone and other materials intended for a runway project at Louis Armstrong International Airport that had been commandeered by the military and FEMA for use after Hurricane Katrina.

Stuck in a hole

Baker says his business has detailed inventory reports of the material left at the airport, which the company values at between $500,000 and $600,000. Baker said that he's happy if the material was put to good use, but the failure to win reimbursement has forced him to eat almost totally into his credit line and made the company's recovery from Katrina much more difficult.

He repeated a complaint made by many homeowners, business operations and public officials that constant turnover of personnel at FEMA forced them to start over multiple times in their efforts for reimbursement or help.

"Every official or representative who has been assigned to us has asked for back-up information, thanked us for it, and said that he or she will get back to us," Baker said. "When we try to call to follow up, someone new contacts us and says he or she has been assigned to the case, and the process starts all over again."

Sen. Byron Dorgan, D-N.D., who presided over the hearing along with Sen. Mary Landrieu, D-La., said it's unfair to put people through so many obstacles for a routine request for reimbursement. He said he and Landrieu would try to get FEMA to work out a settlement with Baker.

Bizarro World

Letellier followed Baker's testimony with an account of her effort, beginning in October, to get an SBA loan so she and her husband could reopen their heavily damaged hardware store.

She recalled that in December, 2005, two months after filing the loan application, she heard from an SBA official suggesting a faster response if the couple lowered the loan request to $150,000, "less than half of what we needed." They reluctantly followed the advice, she said.

It would be another three months before their loan closing would be scheduled. It was March 5, the day Letellier said her father-in-law collapsed while cutting the grass. He would die later in the hospital, about an hour before the closing was scheduled.

"We knew that if we missed the closing it would take weeks to reschedule, so we left the hospital and went directly to the SBA closing appointment," she said. Surprisingly, Letellier said, the agent seemed blasé about their ordeal, and then refused to accept a copy of their flood insurance policy with their packet of documents, even though they had been told it was required.

Later, she said, they were told their failure to provide the flood insurance had delayed the processing of their loan. As of May 8, she said, the SBA has only provided one third of the $150,000 request.

Store reopens

"My first question to you is: Should it take the government seven months to process a loan for a fraction of what we need to get back in business?" Letellier asked the Democratic senators. "Should taxpayers who have never asked anything of the government be made to run a gauntlet of bureaucracy simply to receive a helping hand? It's a helping hand that will provide a much-needed service to a devastated community trying to rebuild."

The news wasn't all bad. Letellier said her husband couldn't attend Friday's hearing because they had finally managed to reopen their hardware store two weeks ago.

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