December 06, 2018

Senators Seek Expanded Investigation of Waste and Abuse in FEMA Contracts for Puerto Rico Hurricane Recovery

Report Finds that Over 60% of Funds for Home Repair Program Spent on "Overhead, Profit and Steep Markups"

Washington, DC - United States Senator Elizabeth Warren (D-Mass.), along with three Senate colleagues, today sent a letter to the Department of Homeland Security (DHS) Inspector General (IG) to request that the IG expand its ongoing investigation into the Federal Emergency Management Agency's (FEMA) contracting in Puerto Rico Hurricane Maria relief efforts to include new reports of waste and abuse associated with the contractors hired to execute and manage the $1.2 billion Tu Hogar Renace program.

The letter was also signed by Senators Richard Blumenthal (D-Conn.), Bernie Sanders (I-Vt.), and Richard Durbin (D-Ill.).

In October 2017, FEMA announced the creation of the Tu Hogar Renace (Your Home Reborn) program in Puerto Rico, which provides temporary repairs to damaged roofs, windows, doors, walls, and water heaters to "return the home to safe, habitable and functional conditions." Seven major contractors were hired by the Department of Housing and Urban Development (HUD) to conduct the repair work and two firms to manage the program.

In their letter to the DHS IG, the senators expressed concern about a recent New York Times report that "more than 60 percent of what FEMA is spending in the program" to repair up to 120,000 homes is not paying for these repairs but is instead "going toward overhead, profit and steep markups." The report also found that that while homeowners were approved for "up to $20,000 each in aid," a review of hundreds of invoices and contracts indicates that-in nearly every case-they received less than half of that.

"It is a significant concern that only a small percentage of taxpayer funding went to actual home improvements for impacted Puerto Rican residents," the senators wrote.

The senators also expressed concern with FEMA's decision to award Tu Hogar Renace contracts to two companies with connections to the Trump Administration, Adjusters International and Excel Construction.  In their letter, the senators noted that Daniel Craig, the owner of Adjusters International, was the Trump Administration's nominee to be deputy director of FEMA last year, and that Excel Construction, after donating $100,000 in 2016 to the Trump Victory Committee, was one of the seven companies awarded a contract for conducting repairs.

"This pattern of parties with significant connections with either the Trump campaign or Administration being awarded contracts warrants scrutiny," the senators continued. 

The senators requested that the DHS IG expand the scope of its current investigation on FEMA's award of contracts to include a determination of the procurement, payment, and oversight of contractors and firms in the Tu Hogar Renace program, and asked a series of questions about the timeline, procurement and payment processes associated with the program. 

The letter is the senators' latest inquiry into FEMA's contracting process for the relief and recovery efforts following Hurricane Maria.  Last year, the Senators called for an investigation of FEMA's decision to award over $30 million in contracts to Bronze Star LLC for temporary roofing materials in Puerto Rico that were never delivered.  In February 2018, the senators sent a second letter regarding the botched $156 million contract awarded to Tribute Contracting LLC for emergency meals provided after the hurricane, and in October 2018, Senators Blumenthal and Warren sent the DHS IG another letter regarding FEMA's awarding of contracts to companies with little or no experience in conducting the work assigned to them. 

For more information about Senator Warren's work for Puerto Rico and the U.S. Virgin Islands since Hurricanes Irma and Maria, visit