Questions Over Firing of Contractor Helping Sandy Victims

New Jersey Senate President Calls for Explanation From Christie Administration

By Heather Haddon
Published January 29, 2014

New Jersey Senate President Stephen Sweeney on Friday called on Gov. Chris Christie's administration to explain why it fired without public notice an important contractor that processed housing grants for superstorm Sandy victims.

Mr. Sweeney, the state's top elected Democrat, said the abrupt termination of the contract of Hammerman & Gainer, also known as HGI, raised questions about how federal funds would get to people affected by the October 2012 storm.

"I'm confused by it," said Mr. Sweeney, who said he received no clarity Friday when he called the GOP administration about the firing. "They've got to tell us what they are going to do next."

HGI, a Louisiana company that also played a role in the recovery from Hurricane Katrina, received in May a $68 million contract to run housing recovery centers and process applications from New Jersey storm victims looking to rebuild their homes. The firm was an important contractor for the state's biggest homeowner-relief initiative—the $600 million Reconstruction, Rehabilitation, Elevation and Mitigation Program, which provides grants of up to $150,000.

The Wall Street Journal reported in September that Sandy victims had trouble getting basic questions answered at the recovery centers. Some complained that their applications were lost, staff members changed frequently and the program requirements weren't set in stone.

HGI has declined to comment on the complaints. The state Department of Community Affairs—one of the lead agencies in the Sandy recovery—had acknowledged the complaints but, until recently, hadn't said the firm could be terminated.

The state and HGI agreed in December to terminate the three-year contract early, with its last day being Monday. No announcement was made, and Richard Constable, commissioner for community affairs, didn't directly mention it during testimony about Sandy recovery funding at a Jan. 8 legislative hearing. Many Sandy victims who testified expressed frustrations about the application process for grants and getting questions answered.

"The state has taken more of a leadership role with regard to our interactions with the public, and not just rely on the consultants," Mr. Constable said at the time.

In a written response to questions on Friday, Mr. Constable said the housing recovery centers, Sandy hotline and website were operating normally. He didn't explain why the change wasn't announced. "The daily work of helping Sandy-impacted New Jersey families get back in their homes and communities as quickly as possible is occurring as normal," he said.

A spokesman for Mr. Christie referred questions to the Department of Community Affairs.

Cherie Pinac, HGI's chief operating officer, said the firm's lawyers were still talking to the state. She wouldn't comment on why HGI was fired or the legal dispute. Ms. Pinac said the company assisted with the transition of the program's operations and records to the state. Roughly 18,000 applicants applied for the housing programs, she said. "Our goal was always to assist, and that what's we did," she said.

HGI's staff, many who had experience in disaster recovery from work pertaining to Hurricane Katrina, have since left New Jersey, she said. "We didn't want the homeowners and applicants to suffer in the process," she said.

The state retained Atrium Staffing, a temporary staffing agency also used by HGI, to operate the housing recovery centers, Ms. Pinac said.

Employees interviewed at the centers Friday said they worked for Atrium, and there appeared to be no immediate disruption in service. One employee at the Monmouth County center said they were "practically done" with their work there.

Advocates for Sandy victims questioned why the firing wasn't publicized. "Every taxpayer deserves to know what is going on. The whole country is paying for our rebuilding," said Staci Berger, executive director of the Housing and Community Development Network of New Jersey, an organization that has criticized the Christie administration's handling of the recovery.

When it submitted its bid last April, HGI retained Glenn Paulsen, an influential Republican leader in New Jersey who is an executive at the Capehart Scatchard law firm. As the state was completing contracts for Sandy, Capehart Scatchard made a $25,000 donation to the Republican Governors Association in May, according to the association's tax form. Mr. Christie now chairs the RGA.

Mr. Paulsen said his firm has regularly donated $25,000 to the RGA since Mr. Christie won election in 2009, and the governor asked them to play a role in raising money. The organization helps Republicans win gubernatorial elections across the country.

The donation had no role in helping HGI win the bid, Mr. Paulsen said.

"I've been involved in the fundraising efforts," Mr. Paulsen said. "I'm proud of it."

—Ricardo Kaulessar contributed to this article.

Write to Heather Haddon at [email protected]