California Fires and Financial Recovery

Jerry Quinn, Disaster Badger shared some more information on the battle between FEMA and PG&E and soon to be citizens who already got Individual Assistance awards from the California fires and may have to pay them back. Note the amount of money the attorney's will get out of the deal for their action on the part of claimants. I'll also highlight that "when you have the big one" hire some real experts who have been doing just disaster recovery for many years. It is a complicated process and the money you spend on the consultants will pay big dividends down the road. 

His comments below:

"Yes it is unusual but subrogation has been in the law going way back. I looked at the DR declarations during the James Lee Witt era and do not see there was a responsible party he could target.

The contingent fee lawyers & PG&E ignored FEMA & California costs when they picked a settlement $ figure.  Those two damaged a proper, legal claim of a 3^rd party.  I believe there are laws against that.

Interesting coincidence the contingent fee (@30%) put $3.9 billion in the lawyers pockets and not the damaged property owners.

If FEMA’s & Cal OES’ costs are recognized, to  the taxpayers benefit, the lawyers take in “only” $2.4 billion.  Who is wailing at their own trough?

FEMA’s claim includes administrative and mission assignment costs way above awarded grants to non-federal agencies.

The massive debris removal operations are funded under Public Assistance grants to political subdivisions.  The property owner in their right of entry contract agrees to makes debris (only) insurance proceeds available to the county handling the PA debris program – that makes the County liable for a refund – the Office of the Inspector General might be silly enough to assert duplication but I doubt they would prevail.

It would be impossible for FEMA, if it chases individuals, to collect $200 million.  Awarded IA grant total “only” $133 million.

Individuals DO NOT make claims against FEMA.  Individuals apply for IA grants.  In  the grant application they agree to voluntarily return duplicated benefits.  So can you imagine the optics of the Department of justice filing criminal fraud charges against those that breached the grant application agreement.

The FEMA Region 9 Administrator has been fighting these issues. This is a lawyer issue not a Regional Administrator’s issue."