'Discrepancies' found with remediation work at 90 properties, Nagin says

by Michelle Krupa, The Times-Picayune
Thursday August 07, 2008, 3:30 PM

TED JACKSON / THE TIMES-PICAYUNECouncilwoman Shelley Midura questions Mayor Ray Nagin over the NOAH situation on Thursday.

Mayor Ray Nagin told the City Council this morning that the city has found 90 properties where storm remediation work that was supposed to be conducted by taxpayer-financed contractors was not done.

Nagin said his staff visited all 870 properties enrolled in a now-defunct home remediation program run by the nonprofit New Orleans Affordable Homeownership Corp.

Of the 90 properties where "discrepancies" were found, contractors involved with the program billed the city for work on 46.

The city has notified those contractors of the problems and asked for reimbursement or documentation of work, Nagin said.

While Nagin acknowledged that his staff has uncovered problems by comparing what they saw in the field with a billing list provided by NOAH and finance department invoices, he did not elaborate, leaving unclear exactly what parameters his administration is using to vet the billing list.

Announced in November 2006, the program was designed to help low-income and elderly residents gut their own houses. But reviews by The Times-Picayune and others have found that dozens of the properties were actually owned by business entities or landlords.

It also is unclear how investigators inside the Nagin administration are determining whether NOAH contractors actually did the work. About 100 properties on the billing list have been demolished, while others were gutted by grassroots and church-based nonprofits, records obtained by The Times-Picayune show.

Video of Mayor Nagin's appearance before the City Council.

After waffling about whether he would appear, Nagin arrived in City Council chambers at 11:55 a.m. and answered questions, in a mostly defensive posture, for about 50 minutes.
The mayor was summoned after news broke that contractors with ties to NOAH director Stacey Jackson had been paid for work that was never performed.

The FBI and the inspector general of the U.S. Department of Housing and Urban Development have opened a probe into the non-profit agency. Local Inspector General Robert Cerasoli is also investigating.

For now, the federal probe appears to focus on two things: links between Jackson and the contractors who earned the most money under the program; and whether contractors -- particularly those with links to Jackson -- did the work at homes for which they were paid a total of about $1.8 million. One of the contractors is Nagin's brother-in-law, Cedric Smith.

The program, designed to help poor and elderly residents repair dilapidated homes, was touted by Nagin as a centerpiece of his 2007 budget. Slated as a $15 million initiative, he said the effort would help 5,000 homeowners. The agency has been shut down and all employees terminated.

TED JACKSON / THE TIMES-PICAYUNEMayor Ray Nagin addresses the New Orleans City Council about the NOAH scandal.

Nagin's appearance came after a public rebuke by two council members, who reacted strongly to the mayor's early indications that he might not be able to show because of a scheduling conflict.

Last night, council members Arnie Fielkow and Shelley Midura sent a letter to Nagin criticizing his statement that he "probably" wouldn't attend this morning's council meeting.

"The City Council meetings begin at 10 a.m. and generally do not end until at least 3 p.m.," it read. "Given the importance of the entire NOAH matter, it is difficult to believe that somewhere within that five hour or so time block a scheduling modification could not be made enabling you to appear before the City's legislative branch."

Read Nagin's letter and the council members' response.

Nagin lashed back in an e-mail to Councilman Arnie Fielkow sent about a half-hour after the councilmembers released their letter. "Enjoy your day," he wrote. "I hope your letter gets you the media pop you so desperately crave."

In their letter, Fielkow and Midura also criticized Nagin's decision to conduct an internal investigation and hire an independent third-party monitor to look into the matter alongside his staff. Instead, they urged the mayor to turn over all relevant documents to the FBI and Cerasoli.

"Given the relationships that exist between NOAH and the city, I think it is somewhat less than credible for the city to do its own internal investigations, especially when others are willing to take this on right now," Fielkow said.

The mayor, however, said "Nothing that we're doing is impeding any other investigation."

When pressed by City Councilman James Carter on whether city employees conducting the internal probe could be subject to investigation themselves, Nagin said:
"I would not know that. I don't think that's correct. I don't know where this investigation is going."

In a radio interview this morning, Gov. Bobby Jindal said his administration is following the scandal closely.

"The city doesn't need another controversy, another black eye," the governor said. "New Orleans has to show that it's spending federal money responsibly. It's important to restore people's trust not only in New Orleans, and not only across Louisiana, but across the country as well."