FEMA seeks immunity from Katrina toxic trailer suits while failing to come up with disaster housing alternatives

The Federal Emergency Management Agency yesterday asked a federal judge to dismiss it from lawsuits filed over the formaldehyde-contaminated trailers provided to families displaced by Hurricane Katrina. Arguing on FEMA's behalf, the Department of Justice told the judge the agency should be entitled to immunity from claims challenging its response to disasters.

Becky Gillette -- director of the Sierra Club's formaldehyde campaign, which first sounded the alarm publicly about high levels of the cancer-causing chemical in the Katrina trailers -- blasted the agency's request, the Jackson Free Press reports:

"The government should bear responsibility for harming these people. We tried to tell them early on that these trailers were testing positive for formaldehyde and it took them nearly two years before they even acknowledged a problem," Gillette said. "That’s two years that tens of thousands of families were exposed to excess levels of formaldehyde."

Independent tests conducted by the Sierra Club in early 2006 revealed dangerously high levels of formaldehyde in housing provided to Katrina survivors, but FEMA was slow to respond to concerns. In fact, more than a year after the group released its findings, FEMA Administrator R. David Paulison testified before a House committee that he was unaware the trailers posed a health threat. The agency was also accused of suppressing health warnings due to liability concerns and interfering with the Centers for Disease Control and Prevention's study assessing the trailers' risks.

But at the same time it's fighting liability for the Katrina housing disaster, FEMA has failed to come up with an alternative housing plan for future disasters.

This week, the agency finally released its full draft disaster housing plan, which was originally due a year ago. But apparently FEMA has decided to leave it up to the next administration to figure out how to avoid a mess like the one that unfolded after Katrina. Rather than submitting plans for six of nine required improvements to its previous plan, for example, FEMA instead plans to create a task force to figure that out. The agency has also failed to come up with an alternative to problematic travel trailers.

Sen. Mary Landrieu of Louisiana called FEMA's plan "incomplete." An analysis conducted by the staff of the Subcommittee on Disaster Recovery, which Landrieu chairs, said the creation of such a plan should have been a top priority for the agency:

It is not clear from FEMA's strategy if and when the United States will have a catastrophic disaster housing plan and who will develop one. The only thing that is clear today is that the nation does not have a catastrophic disaster housing plan now. This is unacceptable.

Katrina trailer contractor failed to act on known health risks

Gulf Stream Coach -- the politically connected company handed a $500 million federal contract to manufacture trailers for Hurricane Katrina victims -- knew its product was contaminated with dangerous levels of cancer-causing formaldehyde in early 2006.

But it failed to notify residents or take any action to protect them.

That was one of the revelations that emerged from yesterday's hearing on Katrina trailer manufacturers held by the House Committee on Oversight and Government Reform. Led by Rep. Henry Waxman of California, the committee has been investigating health problems related to toxic trailers that the Federal Emergency Management Agency provided to storm survivors at a total cost to taxpayers of more than $2 billion. The hearing came a week after the Centers for Disease Control and Prevention released a report assessing in detail trailers' formaldehyde levels.

"FEMA failed by ignoring the dangers of formaldehyde and resisted testing. Gulf Stream's problem is different," Waxman said in his opening statement. "The company did test trailers after hearing the first reports of high formaldehyde levels. It found pervasive formaldehyde contamination in its trailers. And it did not tell anyone."

The Department of Homeland Security gave the first piece of the limited-competition contract for 50,000 travel trailers to Gulf Stream of Nappanee, Ind. four days after Katrina came ashore in August 2005 -- even before New Orleans' Superdome shelter was evacuated. The second half of the deal, the largest DHS awarded to a private company in 2005, was in place by Sept. 9. In the decade leading up to the disaster, Gulf Stream's founding family and employees contributed at least $81,650 to political candidates and groups, with all but $5,250 of that going to Republicans.

In March 2006, the first media reports appeared documenting FEMA trailer dwellers' health complaints, including headaches, nosebleeds and respiratory problems. After communicating with FEMA officials, the company agreed to send someone to a Louisiana trailer staging area to test the units' air quality. Between March 26 and May 15, Gulf Stream employees tested about 50 trailers, finding dangerously elevated levels in many of them. Some of the units registered formaldehyde at levels above 500 parts per billion -- a level that triggers mandatory medical monitoring under federal workplace safety rules.

However, when the company summarized its findings with FEMA in a May 2006 letter, it downplayed their seriousness, according to a staff analysis prepared for the committee:

Gulf Stream did not inform FEMA that all of the 11 occupied units it tested had levels about 100 ppb. It did not inform FEMA that four of the 11 occupied units had levels about 500 ppb, which is the OSHA action level for mandatory medical monitoring. And it did not inform FEMA that over 20 of the approximately 40 unoccupied trailers it tested had formaldehyde levels about the 750 ppb OSHA standard.

Though Gulf Stream offered to make its test results available to FEMA, the agency apparently did not pursue that offer, the analysis found. Meanwhile, Gulf Stream Chairman Jim Shea blamed FEMA for the company's inaction in his prepared testimony:

On May 17, 2006, FEMA specifically advised us NOT to directly contact occupants. The agency told us it had the means to address occupant concerns and that it would let us know if it wanted our assistance.

Other manufacturers addressed in yesterday's hearing were Forest River of Elkhart, Ind.; Keystone RV of Goshen, Ind.; and Pilgrim International of Middlebury, Ind. The trailers made by those companies and used to house Katrina's displaced were all found by the Centers for Disease Control and Prevention to have significantly higher levels of formaldehyde than other brands. However, the other companies apparently did not have as much detailed knowledge of the potential health risks as Gulf Stream.

Last year, Gulf Stream voluntarily converted to wood products that meet the formaldehyde emission levels proposed by the California Air Resources Board. The Recreational Vehicle Industry Association has also set that standard for all its members. However, there are still no federal formaldehyde standards for travel trailers.

While problems with trailers' air quality have long been known, the federal government has been slow to come up with a disaster housing plan that avoids their use. Last month FEMA unveiled a plan that calls for trailers to be deployed only as a last resort, with the approval of the affected state's governor, and for use only on private property where the owners can repair damaged homes within six months. The agency said it would instead promote permanent construction of new housing units, use of vacant rental units, and alternative housing such as the prefab "Katrina cottages."

But U.S. Sen. Mary Landrieu of Louisiana said FEMA's plan represented a case of too little, too late. As she told the New Orleans Times-Picayune:

"Nearly three years after Katrina and Rita, FEMA submitted to Congress a six-page document that regurgitates FEMA's typical housing strategy. ... The only new strategy in FEMA's 2008 plan is to call upon governors of impacted states to sign off on the use of trailers, which would allow FEMA to give them to disaster survivors responsibility-free."

(In this FEMA photo by Mark Wolfe, Bobby Keyes of Mississippi moves his belongings into a new FEMA travel trailer on Thanksgiving Day 2005)

Lawyer behind Katrina insurance litigation gets five years for bribery

The man who's been called a "pirate in seersucker" is heading to the brig.

Richard "Dickie" Scruggs -- the noted Mississippi trial attorney who sued insurance companies for their actions after Hurricane Katrina -- was sentenced last week to five years in federal prison for attempting to bribe a state judge. Scruggs, who must also pay a $250,000 fine and the cost of his incarceration, is a former Navy fighter pilot who made a fortune suing the asbestos industry on behalf of sick shipyard workers and representing Mississippi in the tobacco litigation of the 1990s.

Upon reporting to prison on Aug. 4, Scruggs reportedly will receive mental health and drug treatment. He was found to have a drug problem after pleading guilty earlier this year.

At the sentencing hearing, Scruggs expressed regret and an inability to understand why he did what he did:

I could not be more ashamed than to be where I am today, mixed up in a judicial bribery scheme that I participated in. I realized that I was getting mixed up in it. And I will go to my grave wondering why.

I have disappointed everyone in my life, my wife, my family, my son, particularly; my friends, many of whom were kind enough to come up today and to write to the Court. I deeply regret my conduct. I ' m sorrowful for it. It is a scar and a stain on my soul that will be there forever.

Scruggs' former law partner, Sidney Backstrom, was already sentenced to 28 months for his role in the scheme. Scruggs' son, Zach, is scheduled to be sentenced Wednesday for charges related to his failure to report the wrongdoing. Also awaiting sentencing are attorneys Tim Balducci and Steve Patterson, a former state auditor.

Scruggs and his co-conspirators were indicted last year for offering to pay Circuit Court Judge Henry Lackey $50,000 to rule in favor of the Scruggs Law Firm in a lawsuit over the allocation of $26.5 million in attorney's fees for the Katrina litigation. Lackey reported the bribery attempt to the FBI, which taped subsequent conversations.

After insurers tried to avoid paying claims filed by homeowners after Katrina by arguing the damage was due to water and not wind, Scruggs sued. He eventually negotiated more than $100 million in settlements, though a federal judge recommended that he face criminal contempt charges for using improper tactics.

A Democrat, Scruggs is the brother-in-law of former U.S. Senate Majority Leader Trent Lott, and he represented the Lott and U.S. Rep. Gene Taylor in their lawsuits against State Farm for refusing to pay claims for the loss of their homes in Katrina. Taylor, a Democrat, and Lott, a Republican, pushed federal legislation to investigate insurers' claims handling after the disaster, a potential conflict of interest.

Lott resigned last year just days before Scrugg's indictment, and it was later reported that the former Senator was being investigated for a possible role in the bribery conspiracy. Lott was not in the courtroom for Scruggs' sentencing. U.S. Attorney James Greenlee, who prosecuted Scruggs, has said his investigation is continuing.

A message at the website of Scruggs' law firm says Katrina insurance cases are now being handled by the Katrina Litigation Group. That firm says the criminal case will not affect its clients.

Formaldehyde presents special problems for Katrina's children

Speaking of housing and health woes in the Gulf, an Associated Press report documents the serious health problems facing children whose families moved into Federal Emergency Management Agency trailers after the disaster. Many of the young trailer dwellers are suffering from respiratory problems that have been linked to formaldehyde, which has been detected in many of the units at dangerous levels.

The AP points out that the federal studies conducted so far into the health problems of children who lived in the contaminated trailers have drawn criticism for their design, limited scope and failure to do anything to actually alleviate suffering. Dr. Shama Shakir, a pediatrician in Bay St. Louis, Miss., said that before the storm she prescribed nebulizers -- devices that turn medicine into mist for inhaling -- about twice weekly. She's now doing so about a dozen times a week:

"You give them the most potent steroids, the most potent antibiotics, and still they have the symptoms," Shakir said. "I worry about what will become of these children long-term."

Rep. Bennie Thompson (D-Miss.) has introduced legislation mandating health exams for trailer residents who believe they were sickened by formaldehyde. That measure is expected to cost the government far more than a similar $108 million bill for those who worked in the rubble of the World Trade Center after 9/11. However, it would be less expensive than class-action lawsuits -- one of which has already been filed.

Nagin to present upbeat "State of the City" amid ongoing social disaster

New Orleans Mayor Ray Nagin will deliver his 2008 "State of the City" address this evening at the Port of New Orleans Cruise Terminal, and it's expected to be a boosterish affair, the Times-Picayune reports:

"I look forward to speaking again with our citizens about the recovery of New Orleans," said Nagin in a written statement this morning. "I said during my budget address to the City Council last year that we are reaching the tipping point, and the evidence bears that out."

Among those things he sees as indicators of the city's recovery: its hosting this year of seven major events, including the NBA All-Star Game; the population reaching 72 percent of pre-Katrina levels; unemployment nearing all-time lows; and the demolition of more than 8,000 storm-damaged properties.

What Nagin probably won't discuss in detail tonight is the ongoing social disaster in the city, where a severe lack of affordable housing has contributed to an estimated doubling of the homeless population since Hurricane Katrina to about 12,000. Asked about homelessness earlier this month at a panel discussion sponsored by the American Association for Public Opinion Research, Nagin first charged that the people living on the city's streets came from elsewhere -- then quipped that the solution was one-way bus tickets out of town.

In fact, a survey [ppt] conducted earlier this year by Unity of Greater New Orleans, a coalition of advocates for the homeless, found that 86 percent of people living in the city's encampments were from the New Orleans area. Sixty percent said they were homeless because of Hurricane Katrina, and about 30 percent said they had received rental assistance at one time from the Federal Emergency Management Agency.

A story in today's New York Times details the conditions suffered by those living in one encampment under a highway overpass not far from the French Quarter. About 80 percent of the camp's residents have at least one physical disability, 58 percent struggle with addiction, and 40 percent are mentally ill. One person who has since been moved to a safer shelter was a paranoid schizophrenic, diabetic, double amputee whose stumps had become infected from the filth.

The horrendous conditions are presenting a health risk to outreach workers -- and to the larger public as well:

Mike Miller, the director of supportive housing placement at Unity, said the camp had become a public health hazard since the city removed some portable toilets in February.

"Two outreach workers have tested positive for tuberculosis," Mr. Miller said. "There’s hepatitis C, there’s AIDS, there’s H.I.V. Everyone out there’s had an eye infection of some sort. I got one."

Before Katrina, New Orleans had 2,800 beds for the homeless; that number is now down almost 30 percent to 2,000, despite the greater need. The situation is also dire for those whose health problems preclude living in group shelters due to the shortage of affordable apartments. That shortage in turn has been worsened by city, state and federal officials' decision to demolish four public housing complexes in New Orleans that had been barely damaged by the storm without first providing replacement units.

Last week, the U.S. Senate passed a spending measure that includes $76 million for vouchers to provide rent subsidies and services to 3,000 disabled homeless people in the city. Unfortunately, the current House version of the legislation does not include that voucher funding. And if Congress does not act soon, even those people already receiving help will be in trouble, as the current vouchers expire at the end of this year.

In the meantime, Unity has put out a call for donations to help those homeless it does manage to settle in apartments. Among the items needed are small dressers, box fans, night stands, microwaves, televisions, mini-refrigerators, small appliances, hangers, new mattresses, cleaning supplies, toiletries, dining room tables and chairs, and bookcases. The group cannot accept clothing, shoes, toys, or used mattresses, but monetary donations are welcome and tax-deductible. For a text document with donation details, click here.

Ex-White House spokesperson drops bombshells about Iraq, Katrina

Scott McClellan, the Texas native who served as White House press secretary from July 2003 to April 2006, has a new book out that's shocked many with its harsh criticism of an administration he loyally served.

What Happened: Inside the Bush White House and Washington's Culture of Deception charges that the president relied on "propaganda" to win support for the war on Iraq. McClellan also has some strong words for the administration's response to Hurricane Katrina, Politico.com reports:

He writes, for example, that after Hurricane Katrina, the White House "spent most of the first week in a state of denial," and he blames Rove for suggesting the photo of the president comfortably observing the disaster during an Air Force One flyover. McClellan says he and counselor to the president Dan Bartlett had opposed the idea and thought it had been scrapped.

But he writes that he later was told that "Karl was convinced we needed to do it -- and the president agreed."

"One of the worst disasters in our nation's history became one of the biggest disasters in Bush's presidency. Katrina and the botched federal response to it would largely come to define Bush's second term," he writes. "And the perception of this catastrophe was made worse by previous decisions President Bush had made, including, first and foremost, the failure to be open and forthright on Iraq and rushing to war with inadequate planning and preparation for its aftermath."

Scion of a prominent Austin political family, McClellan began working as a spokesperson for then-Gov. Bush in 1999 and went on to serve as traveling press secretary for the Bush-Cheney campaign in 2000. He writes that he still does "like and admire" Bush, who he says was "terribly ill-served" by his top advisors. He also offers some criticism of the national press corps, calling it "too deferential to the White House."

Action urged on affordable housing for the Gulf Coast

We wanted to pass along the following message from the folks at the Katrina Information Network:

The House of Representatives passed a domestic supplemental spending bill, but it did not include much needed funds for affordable housing in the Gulf states. On May 22, the Senate voted for a domestic spending amendment that included Gulf States funding by a vote of 75-22.

Advocates in the Gulf Coast have worked long and hard to secure these additional funds for affordable housing. They have succeeded in convincing the Senate Appropriations Committee and full Senate of the immense need that still exists in areas affected by the 2005 hurricanes. Now they need your help to make sure the full House of Representatives follows suit.

Please use this toll free number, 1-877-210-5351, for the congressional switchboard and ask to be connected to the housing staffer for your representatives' offices. Or send them an email: http://salsa.democracyinaction.org/o/2114/t/2612/campaign.jsp?campaign_KEY=24693

Thanks for your continued support,

Katrina Information Network

As we've reported here before, homelessness in New Orleans has doubled since Katrina, and thousands of families across the Gulf Coast still live in temporary housing -- including FEMA trailers containing dangerous levels of toxic formaldehyde. More than two and a half years after the disaster, the region's lack of affordable housing remains one of the most pressing problems facing the recovery effort.