The Bush administration demoted the Federal Emergency Management Agency (FEMA) from a cabinet-level agency to a component of the Department of Homeland Security (DHS), led by appointees who proved unprepared for the destructive 2005 hurricane season. After Hurricane Andrew hit Florida in 1992, emergency management took on a new importance in the federal government, and James Lee Witt, the director of FEMA during the Clinton administration, was widely credited with reinvigorating the troubled agency. Witt had previous experience in disaster management; Michael D. Brown, President George W. Bush’s pick for the job in 2003, did not, nor did other key members of FEMA’s top management after 2000. Under Brown, the federal agency’s connections with its state and local partners faded, undermining coordination on preparedness and response projects. When Hurricanes Katrina and Rita struck the Gulf Coast in 2005, the response from DHS and FEMA was, by many accounts, slow and disorganized. Victims stranded in their houses drowned as the flood waters rose, and evacuees languished in the Louisiana Superdome. FEMA later drew sharp criticism from both the Government Accountability Office (GAO) and Congress for its muddled chain of command. “A single individual directly responsible and accountable to the president must be designated to act as the central focal point to lead and coordinate the overall federal response in the event of a major catastrophe,” the GAO wrote in 2006. “Neither the DHS secretary nor any of his designees, such as the Principal Federal Official [Brown] filled this leadership role during Hurricane Katrina . . .” By September 2006, Brown had stepped down, but FEMA’s leadership continued to struggle to respond to victims’ needs for food, housing, and aid for reconstruction. Responses to subsequent hurricanes and to flooding this year in the Midwest have gone more smoothly, but some local and state officials are complaining still about the slow pace of FEMA's clean-up efforts.

Follow-up:
R. David Paulison, who has more than 35 years of experience in emergency management, was confirmed as the director of FEMA in 2006. DHS reorganized FEMA based on its interpretation of the 2007 Homeland Security Appropriations law. “This is not the FEMA of two years ago, as our response to recent disasters has demonstrated,” a FEMA spokeswoman told the Center. “As we move forward, we have a plan that lays out steps to continue this transformation.”

Photo: Former FEMA Director Michael D. Brown. Photo credit: Federal Emergency Management Agency

When victims of Hurricane Katrina said goodbye to their homes in 2005, they didn’t realize their health might be next. A 2008 examination by the House Committee on Oversight and Government Reform found that thousands of trailers purchased by the Federal Emergency Management Agency (FEMA) for those displaced by Katrina emitted levels of formaldehyde high enough to cause coughing, chest tightness, nausea, skin rashes, and other adverse effects. The thousands of American families forced into these temporary homes were being exposed to what the Occupational Safety and Health Administration calls “a suspected human carcinogen that is linked to nasal cancer and lung cancer.” And according to the committee chairman, California Democrat Henry Waxman, field staff alerted FEMA to the problem, but the agency refused to conduct tests. A FEMA attorney instructed: “Do not initiate any testing. . . . Once you get results and should they indicate some problem, the clock is running on our duty to respond.” FEMA officials feared that authorizing testing would shift the burden of responsibility to the agency itself, according to the oversight committee. Gulf Stream Coach Inc. won $500 million alone in FEMA contracts within days of the storm and quickly began work on 50,000 trailer homes using low quality engineered-wood products manufactured with formaldehyde, according to published reports. One trailer resident informed Gulf Stream by e-mail in March 2006: “It burns my eyes and I am getting headaches every day. I have tried many things, but nothing seems to work.” In response to a request for comment, a FEMA spokeswoman sent a statement that read, “FEMA neither knowingly, nor willingly, purchased manufactured units from dealerships and manufacturers that contained levels of formaldehyde above existing construction standards, nor did FEMA’s specifications encourage non-compliance with such standards.”

Follow-up:
According to a July 2008 FEMA release, “Everyone who has called FEMA’s formaldehyde call centers with concerns has been offered an immediate move to a hotel or motel until alternate housing is located,” though it makes no mention of those who have not called the hotline. FEMA officials also say that all future temporary housing units the agency purchases will meet stricter standards, including a requirement that “formaldehyde emission levels must be significantly reduced inside the units;” It’s unclear how well the new standards have worked. Some FEMA trailers used in Iowa following floods in 2008 also contain elevated levels of formaldehyde, according to recent reports, and FEMA is retesting trailers for free at a family’s request.

Photo credit: Federal Emergency Management Agency

Next time a disaster sends water flooding into the homes of Americans, the insurance system that protects some of them, the National Flood Insurance Program (NFIP), might not have the money to fill their claims. The NFIP covers areas that private insurers do not want to take the risk of insuring, including the New Orleans floodplain; when Hurricane Katrina hit, the damage was so great that it wiped out NFIP’s funds. The program typically had paid under $2 billion a year to flood victims using the insurance premiums it collects. But claims from Hurricane Katrina alone exceeded $16.3 billion. NFIP could not cover those losses on its own and had to rely on a boost from the Treasury. “The program has been unable to set aside sufficient funds to meet future expected losses,” the Government Accountability Office (GAO) warned in 2008. As of December 2007, the Federal Emergency Management Agency, which oversees NFIP, still owed $17.3 billion against the loans it took from the Treasury to cover losses in the 2005 hurricane season — and that number is growing. For many years, incoming premiums and claims paid tracked fairly closely, but the GAO found that the program’s budgeting method was inadequate to account for the level of risk faced by the NFIP. Congress is working on legislation to forgive the NFIP’s debt and reform the program, but for now the NFIP must bank on updated zoning requirements, like those in New Orleans that require many houses to be elevated on stilts or walls, to keep the program's risk under control. Without reform, the program could lead to another multibillion dollar rescue plan shouldered by American taxpayers.

Follow-up:
Unable to come complete reform legislation in 2008, in September Congress reauthorized the NFIP until March 6, 2009. A FEMA spokesman told the Center that any real change to the NFIP would have to come from Congress, but that it’s unlikely the program will take in enough income from premiums to cover catastrophic losses like those seen in Katrina. “Making the program ‘actuarially sound’ would outprice most policyholders and therefore be counter-productive to Congress’ original intent,” he said. “And this has been debated for years — even before the 2005 catastrophic loss year.”

Photo credit: Federal Emergency Management Agency

The disastrous hurricane season of 2005 caught the Small Business Administration (SBA) napping. The SBA’s disaster loan program is the primary way homeowners and small-business owners receive federal funding to recover after a catastrophe. The SBA, however, never considered how it would react to an event the size of Hurricane Katrina, which was followed within the next 60 days by Hurricanes Rita and Wilma. Collectively the storms wreaked an estimated $118 billion in property damage, only a small portion of which was eligible for SBA action, across the Gulf Coast region. Within four months, SBA had a backlog of more than 204,000 applications for assistance. Each application represented a hurricane victim waiting for the capital to rebuild. “I was amazed at how the delays, affecting the livelihood of my small business, did not seem to be important,” one owner told the House Small Business Committee in March 2006. “Time is critical in these situations. . . . [W]e still have nothing!” In April 2006, the SBA’s administrator, Hector Barreto, announced his resignation. When the SBA’s inspector assessed the situation in May 2006, the SBA was taking about 74 days on average to process an application, far longer than the 21 days the agency had set as its goal. Ultimately, the agency dispersed more than $6 billion in loans.

Follow-up:
In response to a request for comment, an agency spokeswoman noted that, under the SBA’s new administrator, Steven Preston, the application backlog diminished. The agency says it has positioned itself for future disasters by adding an Executive Office of Disaster Strategic Planning and Operations, drawing up a “comprehensive Disaster Recovery Plan, and setting up an online system for loan applications.”

Photo: Former SBA Administrator Hector Barreto

As far back as the 1980s, studies warned that the collection of levees, walls, and floodgates that surrounded New Orleans might not withstand a storm as strong as Hurricane Katrina. Despite this, the U.S. Army Corps of Engineers neglected to update a system that, in retrospect, appears to have been destined to fail. And so when Katrina hit in 2005, storm surges broke down the walls and flooded the city, causing a level of death and destruction that shocked the nation. “This is the first time that the Corps of Engineers has had to stand up and say, ‘We had a catastrophic failure in one of our projects,’” conceded then-corps chief Lieutenant General Carl Strock. As John McQuaid reported in City Adrift, the Center’s investigation into Hurricane Katrina, federal and state panels traced, respectively, 70 percent and 88 percent of the flooding to errors in design of the hurricane protection system. A federal panel, the Interagency Performance Evaluation Task Force (IPET), called the barriers “a system in name only.” Corps scientists knew in the 1980s that the New Orleans levees could not repel category 4 and 5 hurricanes. Robert Bea, who helped lead an investigation of the levee system by University of California at Berkeley engineers, told McQuaid that the Corps’s resistance to change slowed the adoption of new technology. After the storm, the Corps restored flood protection in New Orleans to its pre-Katrina levels, relying in some places on temporary fixes. Although by 2006 plans were in place to enhance hurricane protection in southeastern Louisiana, the Government Accountability Office (GAO) found that the Corps was “following a piecemeal approach, similar to its past practice of building projects without giving sufficient attention to the interrelationships between various elements of those projects or fully considering whether the projects will provide an integrated level of hurricane protection for the area.” As of July 2007, the federal government spent almost $100 million on hurricane recovery in the Gulf Coast. But it was still hard to know what level of protection those funds had actually bought.

Follow-up:
For the moment, New Orleans’s flood protection systems are holding up, but in 2008, Hurricane Ike spooked Louisiana officials enough to evacuate the city. The Corps is integrating recommendations from the IPET into its work on levees in Louisiana and nationwide and has encouraged other flood protection stakeholders to follow the panel’s advice, according to a Corps spokesman.

Photo credit: U.S. Coast Guard