Questions surround former Katrina contractor in line for Houston recovery contract

HOUSTON, Texas (KTRK) -- To help Hurricane Harvey victims get desperately needed housing aid, Houston's Housing and Community Development Department wants to hire a company called ICF international to find victims and get them federal grants.

It's a proposed contract worth $35 million of taxpayer dollars set to be voted on Wednesday by the Houston City Council.

ICF, based in Fairfax, Virginia, is a consulting conglomerate that has worked in previous major disasters like Superstorm Sandy and Hurricane Katrina.

But now 13 years after Katrina, after extensive media coverage and litigation there, some Louisiana politicians have a warning about the company that wants to manage Harvey victim outreach and application intake here in Houston.

"They are the créme de la créme of awful," said Louisiana Senator J.P. Morrell.

Morrell represents the New Orleans area, the epicenter of Katrina's damage. After that storm, ICF was brought in to help victims qualify for housing aid and help manage disaster recovery. But years in, Louisiana allowed ICF's contract to expire.

State audits evaluating ICF's billing show certain costs and fees billed to Louisiana by ICF for its work there led to disputes between the state and ICF. While the state questioned being billed those costs and expenses, ICF largely defended their validity.

According to a report issued by state auditors in 2013, Louisiana's Disaster Recovery Unit had identified that certain Katrina homeowners mistakenly received housing grants. Ultimately, the state sued ICF, looking to recoup more than $200 million for alleged overpayments to some Katrina victims. That lawsuit is still pending. ICF denies the claims.

Senator Morrell also faulted the contract Louisiana had with ICF.

"They're going to make more off you as many ways as possible and it will not be because they are running a stellar, fantastic, recovery program," Morrell said.

When asked about work in Louisiana, ICF told us, "it is no surprise that these projects are often surrounded by a contentious political environment and a level of negativity; particularly in the press. But our focus is always on our job and helping resident get back on their feet and on the path to long-term recovery. And, that's exactly what we did in Louisiana."

In Houston - the housing department defends its pick, telling a city council committee reviewing the proposed contract that ICF got "the highest overall score and was deemed to be the best-qualified consultant."

The housing department told us it checked the company's references and found positive reviews of ICF's work in New Jersey after Superstorm Sandy.

Following that storm, another company, Hammerman & Gainer, Inc. initially got the three-year $68 million management contract and listed its work as an ICF subcontractor on its resume for the New Jersey work. After both sides agreed to end the deal early, ICF took over the work in New Jersey.

ICF was working in the state at the time in an advisory role.

During that Houston housing committee meeting, the housing director told council members he checked the company's public record in Louisiana. Two council members on the committee told ABC13 they were unaware of any pending lawsuit against ICF.

"If we don't get this right on the front end, there will be no trust in how the rest of this project will work. I am deeply concerned about that," said council member Mike Laster.

Besides the choice of ICF, we have questions about the team of subcontractors ICF is pulling together to win Houston's business.

From the outside, it seems like an appropriate team and they well may be qualified. What we do know is that six of the seven people behind those firms have donated money to Mayor Turner's mayoral campaigns - 3 of them gave 5,000 dollars or more - some within weeks of when this bid was due. The only subcontractor who is not a contributor is the man who shared a law firm with Mayor Turner for years. Barry Barnes runs the law firm that is eligible to earn millions under the proposed deal for limited legal services.

Barnes said he has successfully done this type of work in the past and said there's no conflict of interest as he's done work with previous mayors before Turner.

The other subcontractors say there is no connection between their donations and this deal.

A spokesperson for the mayor says he is not involved in picking contractors and neither donations nor the perception of donations played a role. The spokesperson says ICF chooses subcontractors and points out Barnes' firm has done work for the city before Turner became mayor.

When the contract was first presented Barnes' firm was in line for an estimated $2.7 million worth of legal work. But, now, contract documents show an increase to an estimated $6.7 million dollars for Barnes' firm. City staff and ICF decided more legal work would be necessary, the spokesperson said.

"I'm not saying because someone knows somebody, they inherently are a bad contractor, but there's no reason to rush a contract without this of this magnitude, without public scrutiny," Senator Morrell said.

When asked about its Houston team, ICF told us, 'our local partners on this project are well-suited to support this work in Houston.'

The proposed contract and all the people who would be working under it are attracting questions at city hall. This is after all just the early stages of a $1.1 billion rebuilding effort.

"Transparency issues on this are vitally important," Laster said.

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