Secret benefactor helping Livingston with costs of FEMA battle

A financial institution is paying lawyers $700 per hour to help Livingston Parish fight the Federal Emergency Management Agency’s denials of $60 million in claims for Hurricane Gustav-related cleanup costs.

But its identity is shrouded in secrecy.

The parish won’t name the bank assisting in its battle against FEMA, and the benefactor is fighting to keep its identity a secret.

FEMA has repeatedly denied the bulk of the parish’s claims for debris removal costs stemming from the 2008 storm. The agency said much of the work ran afoul of federal guidelines and was therefore ineligible for reimbursement. The parish requested arbitration over the issue, but FEMA has asked the Civilian Board of Contract Appeals in Washington, D.C., to dismiss the case.

FEMA contends the U.S. Department of Homeland Security’s Office of Inspector General must first determine whether FEMA wrongly denied payment before the case can go to arbitration. The parish disagrees and is fighting against dismissal.

Parish President Layton Ricks said Friday that the financial institution paying for the parish’s Washington, D.C., attorneys — whom the parish legal adviser described as “top-notch” and charging “upwards of $700 per hour” — does not want its identity revealed to anyone.

Several Parish Council members highlighted the issue Thursday night, asking why an unknown entity would get involved financially in the dispute and why the benefactor’s identity could not be disclosed.

“We have requested to get us permission to be able to do that,” Ricks said. “The last note I got from them is that it’s a sticky situation right now, and that before I release any information to anyone, I have to get permission.”

Parish legal adviser Christopher Moody told the council Thursday, “They obviously represent the lenders of a stakeholder who’s done work for the parish hoping you’ll get the money and then honor the contract and reimburse them.”

The parish’s contract for debris removal was with International Equipment Distributors, a firm that has sued the parish in state court for more than $50 million in unpaid work, plus interest.

That case is on hold, pending the outcome of the arbitration.

Ricks said the benefactor recommended the law firm Baker Hostetler, but said he has exclusive authority to direct the attorneys’ work on the case.

Councilman Marshall Harris asked Ricks on Thursday whether the money that is ultimately awarded, if any, would be forwarded to the benefactor, International Equipment Distributors or the many local subcontractors who did the bulk of the cleanup work.

“Because there’s a false hope out there that if we get the money, these people who actually did the work will finally get paid,” Harris said.

Ricks said the money would go first to the parish and then to the people who did the work.

The benefactor has not been promised any percentage of the award, he said.

Ricks noted that the dispute involves FEMA project worksheets and said any money awarded in arbitration would have to be disbursed according to what is listed on those worksheets.

If the panel of judges ultimately awards the parish only a percentage of its claim, Ricks said he doesn’t know whether the contractors would continue to pursue the full amount from the parish through lawsuits.

“Certainly it depends on the percentages. I don’t know what that number is, where they’d be willing to say thank you and head to the house,” Ricks said. “I’ve asked, and across the board, everyone says let’s just see what we can get.”

Ricks said Thursday and repeated Friday that, while he has no personal reason to hide the identity of the benefactor from the Parish Council or the public, he does not have permission to disclose it.

He said it is an irrelevant detail in any event because the parish would not be able to afford the cost of arbitration on its own. He said he’s focused on making sure the arbitration moves forward.

“If we’re not paying, why make a big deal out of it?” Ricks said. “It’s only a big issue if someone’s looking to make it an issue.”

In an October audit report, the inspector general found that FEMA failed to follow its own deadlines for responding to the parish’s appeals, but the audit did not address whether FEMA’s eligibility determinations were correct.

That finding is enough, parish officials said, to trigger use of “the Gustav statute” — a provision of federal law enacted in 2013 at Sen. Mary Landrieu’s request to provide the parish with a separate and impartial forum for appealing FEMA’s decisions.

However, FEMA officials said the inspector general failed to do its job under the statute when it focused on deadlines rather than determining whether the agency wrongly denied the underlying claims for reimbursement.

Without that determination, FEMA officials said, the case cannot proceed to arbitration.

Ricks said the parish’s attorneys filed a response to FEMA’s dismissal request Monday afternoon.

“We hope within the next week or two to get a response back saying (arbitration) will be scheduled and will move forward,” Ricks said.