The news organizations’ investigation sparked anger and calls from housing advocates and politicians to end the lawsuits. The New Orleans City Council passed a resolution calling on the state to drop the lawsuits.
Retired U.S. Army Gen. Russel Honoré, who led federal troops into New Orleans after Katrina and is now an environmental advocate, called the state’s legal actions against its own residents a “travesty.”
“The house-raising issue after Katrina was a mess from the day it started,” he said.
State “Anxiously Awaiting” HUD Response
The state and HUD have been talking for years about what to do about people who didn’t elevate their homes. Documents provided by the state to the news outlets show the solution hinges on the resolution of the state’s lawsuit against ICF.
In its lawsuit, the state alleges ICF committed “numerous breaches” of its contract, citing errors in handling files, deciding who was eligible, calculating grants and handing out the money. At one point, the state estimated ICF handed out more than $137 million in grants that were either miscalculated or paid to ineligible homeowners, though Dardenne said that figure has decreased.
ICF has denied those allegations in court. Spokesperson Lauren Dyke has said the firm “worked within the policies put in place by the state.”
Shortly after the state sued ICF, the two sides entered settlement talks and eventually came to an agreement, documents show. The amount of the settlement was redacted in documents provided by the state.
Pat Forbes, executive director of the Louisiana Office of Community Development, which oversaw the Road Home program, wrote HUD in May 2021, asking if the proposed settlement would end the state’s liability for ineligible grants. A HUD official responded with steps the state must take to close out the program. Four months later, Forbes asked for an update. HUD said it should have an answer by March.
When that deadline passed, Dardenne wrote Fudge and Carter, saying the state and ICF were “anxiously awaiting” HUD’s answer.
In an April letter to Dardenne, a HUD official said issues with the state’s recordkeeping system had delayed the agency’s response. However, the official said the agency was analyzing the data and its analysis would be provided to HUD’s Office of Inspector General. After that, the letter said, HUD would be able to provide “sound guidance” on the proposed settlement.
HUD’s decision will determine what happens with the suits, Dardenne said.
When the ICF case is settled and HUD closes out the Road Home program, “all the pending cases are going to be dismissed,” he said. “The judgments are not going to be pursued. I mean, this would end everything.”
Homeowners Say They Were Pressured to Agree to Payment Plans
Two homeowners and an attorney representing two others said lawyers representing the state tried to strong-arm them into agreeing to payment plans. None of their accounts stem from efforts to collect this year.
Alice Sanders, who lives on Social Security, said Mary Cali, a senior partner at Shows, Cali & Walsh, “badgered” her into signing a $200 monthly payment plan last May and said Sanders would lose her home if she didn’t. Sanders did not have an attorney.
“It leaves me with no money. I can’t even buy my own groceries or medicine,” said Sanders, an associate minister who lives in Baton Rouge. “It’s a sin, what they’ve done against their own residents.”
Cali said that claims she pressured homeowners are “patently false. I have never threatened a homeowner with the loss of their home, and I find such allegations offensive.”
Forbes said he has “no reason to believe” the state’s attorneys threatened anyone or insinuated the state would take their home. The state will not foreclose on homeowners to collect these debts, he said.
Attorney Jennifer Jones said two families being sued by the state told her John Walsh, another senior partner in the firm, pressured them to sign agreements, called consent judgments, to repay the money. Jones, who only took on the families as clients later, said neither had a lawyer at the time.
“That’s a disgrace, for a plaintiff’s lawyer to be doing that to someone who is unrepresented,” Jones said. “They don’t know what the lawyer is telling them.”
Walsh did not respond to a request for comment.
Donna Hilliard, who contacted the news organizations after the investigation was published, said she, too, was a victim of the law firm’s aggressive tactics.
A tree pierced her roof during Hurricane Katrina, but the home never flooded. The house was already a couple feet off the ground, so when she and her husband, Honoray, were offered Road Home money in 2007, they checked a box saying they didn’t want an elevation grant.
And yet, two years later, the Road Home program awarded them the elevation money. Hilliard said she never planned to raise her house, but a Road Home representative told her not to fret.
The state sued the Hilliards in 2021 because they had not raised their home.
Hilliard said she was “bullied” last year by three attorneys, including Cali, who told her she should agree to a payment plan.
A longtime hospice nurse, Hilliard was having her own health problems at the time. She was undergoing chemotherapy, and she and her husband couldn’t afford a lawyer.
So they signed an agreement in February to pay the state $250 a month for five years, with a $15,000 balloon payment due at the end. Now 56 and using a cane, she doesn’t know how she’ll afford it.
“I just want them to stop it now, so that I could be able to live whatever time I have left without that hanging over my head,” Hilliard said. “I don’t look for nobody to do nothing for me. When you do me wrong, just fix it.”
Read the original story in ProPublica here.
