MacArthur demands FEMA chief step down

House New Jersey
Rep. Tom MacArthur, a Republican whose Third District stretches from Willingboro to the Shore, said Monday that the Federal Emergency Management Agency itself had engaged in "corrupt and fraudulent" practices and called for the resignation of Administrator W. Craig Fugate. (AP Photo/Mel Evans)

A New Jersey congressman is asking for an investigation of the Federal Emergency Management Agency and the resignation of its top official after reports that FEMA was aware that insurance companies fraudulently denied full payouts to Hurricane Sandy victims.

Rep. Tom MacArthur, a Republican whose Third District stretches from Willingboro to the Shore, said Monday that FEMA had engaged in "corrupt and fraudulent" practices and called for the resignation of Administrator W. Craig Fugate.

"My district saw some of the most disastrous effects of Superstorm Sandy. Too many families and individuals suffered great losses, and then they were faced with the exorbitant cost of rebuilding," MacArthur said in a statement. "It's an ongoing struggle and the Jersey Shore will be recovering for years to come."

MacArthur said he is demanding a full investigation by House committees into whether FEMA was aware that private flood-insurance companies might have used falsified engineering reports to shortchange storm victims.

There are ongoing investigations of the matter by the New Jersey attorney general and the inspector general of FEMA.

"Survivors of Superstorm Sandy deserve to know when FEMA first learned of these corrupt practices, why nothing was done to stop them, and what FEMA's direct and indirect role was in carrying them out," MacArthur said.

FEMA officials did not return calls for comment Monday.

Lawmakers, including Sens. Robert Menendez and Cory Booker, both Democrats, have demanded that investigators look into more than 1,000 claims that were not fully reimbursed. Officials said insurers have routinely lowballed payments, with homeowners often being awarded less than a third of the value of policies they had been paying premiums on for years.

Insurance companies have claimed that damage homeowners say happened during Sandy was the result of "earth-shifting" or preexisting structural issues.

Some homeowners have filed lawsuits in attempts to get the companies to pay up. Others haven't been able to afford to make repairs on their homes and have been forced to unload their properties at fire-sale prices.

Brad Kieserman, FEMA deputy associate administrator, who has been on the job for less than a month, said on CBS's 60 Minutes on Sunday that FEMA was aware of the fraud for more than a year.

Kieserman said that he had also uncovered evidence of the use of unlicensed engineers to create flood damage reports, and that misinformation in those reports may have been the reason that thousands of homeowners were denied claims.

Kieserman said there were "signals" that there were issues with the engineering reports in 2013 - about a year after the storm hit on Oct. 29, 2012. Sandy left $68 billion in damage in New Jersey and New York and killed 233 people in its 1,100-mile-wide path.

Had the information "been elevated in the agency," he said, people could have been helped sooner.

MacArthur said he was calling for a "thorough and immediate" investigation of the agency.

"I have long been a champion for restoring accountability to FEMA, and this latest news underscores the need for real change at the agency," MacArthur said. "That is why I am calling upon W. Craig Fugate to resign from his role as FEMA administrator. For too long this agency has mishandled their fundamental role to help disaster survivors."


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