Sen. Bill Nelson on Tuesday demanded that the Federal Emergency Management Agency ensure that all of its hurricane claims are being handled in an “open, transparent and independent process,” after a new report said 90 percent of flood claims were being denied in Florida.
Nelson, D-Fla., also cited a Washington Examiner report that said a top FEMA official was accused of claims fraud while he was in the private insurance sector. That official, David Maurstad, is FEMA’s assistant administrator for federal insurance, but some whistleblowers accused the company of pushing for minimal payouts for insurance claims in response to Hurricane Sandy while he was an executive.
Nelson told FEMA Administrator Brock Long that the combination warrants extra scrutiny as the agency looks to help thousands of people struggling in Florida as they try to recover from Hurricane Harvey.
“Unfortunately, this could be seen by some as a case of the fox guarding the hen house,” Nelson wrote. “NFIP policyholders must have confidence in the claims process.”
Nelson demanded that FEMA work to ensure all claims are handled fairly, detail the steps its taken to avoid shortchanging policyholders as claims are processed, and certify that all appeals are handled transparently.
In an affidavit on a court case related to a Hurricane Sandy claim, one whistleblower said that OST’s work “was an elaborate process designed to justify minimal payments to policy holders irrespective of the actual merits of their claims.”
Maurstad was representative of complaints about the “revolving door” nature of Washington politics and lobbying, as he worked for FEMA from 2001 until 2011, at which time he moved over to OST, which won contracts from FEMA. Then, in 2016, he returned back to the agency.
FEMA downplayed the revolving door issue.
“To describe that as a revolving door is a very generalized statement that does not take into account, for example, the limited pool of qualified individuals with relevant experience, the specific skills and qualities that individuals bring to their jobs, the government’s need to hire the best qualified individuals for employment regardless of their background, the competitive process normally required to hire a government employee, and the commitment to public service associated with federal employment,” a FEMA spokesperson said in September.
During his tenure at OST, the Department of Homeland Security inspector general issued a scathing report that singled the company out as an example of how revolving door issues were having a corrosive influence within FEMA, although those issues were related to a computing contract, and did not involve flood insurance.
The Washington Examiner has a pending Freedom of Information Act request with FEMA to learn the total of payments to OST for work on the Sandy Claims Review process.
Nelson’s letter also referenced a new report from the Palm Beach Post which said federal records showed, “[n]ine out of 10 flood claims resolved by the National Flood Insurance Program in the early going after Hurricane Irma have been closed without payment.”
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