Federal investigators to review Hurricane Irma invoices for three cities
There’s more bad news for three Miami-Dade County municipalities that are still waiting to be reimbursed for debris cleanup from Hurricane Irma: Their invoices are now in the hands of the Department of Homeland Security’s Office of Inspector General.
In September, the Federal Emergency Management Agency sent letters to officials in El Portal, Miami Shores and Florida City saying the agency was probing “questionable invoices” and other documents submitted by consultants who helped the municipalities manage Irma cleanup in 2017.
Now, FEMA has completed its review and referred the matter to the inspector general for further investigation into whether fraudulent invoices were submitted, an agency spokesman confirmed Thursday.
The referral is a problem for the municipalities on multiple fronts. At the very least, it means they will likely have to wait at least a few more months before receiving any more Irma-related funds.
As of last month, El Portal — a tiny, cash-strapped village that has yet to pay off a $1.25 million line of credit it took out in August 2018 to pay bills from a debris removal contractor — had received just over $145,000 of the nearly $2.1 million it sought from FEMA for Irma cleanup.
Florida City had gotten just $343,000 of the $5.2 million it asked for, while Miami Shores hadn’t received any of the $3.2 million it requested.
FEMA spokesman David Mace said FEMA has suspended its reimbursement efforts for all three while the inspector general conducts a review. FEMA releases reimbursement money to the state of Florida that the state can then turn over to local governments.
El Portal Village Manager Christia Alou told the Herald the village is “cooperating fully with authorities and providing all necessary information as requested.”
“We sincerely hope this matter is resolved quickly so the Village can receive its refund soon,” Alou said.
Officials in Miami Shores and Florida City did not immediately return messages seeking comment.
Although FEMA has released some funds to the state for the three municipalities, including all $2.1 million requested by El Portal, state officials have been holding onto those funds ever since they learned this summer that FEMA had identified potentially fraudulent invoices.
Jared Moskowitz, the director of the Florida Division of Emergency Management, told the Miami Herald on Thursday that his agency won’t be turning over any Irma-related funds to the three municipalities while the federal government is investigating.
“I don’t think anybody thinks money should be sent out while there’s an ongoing investigation by Homeland Security,” Moskowitz said. “Obviously, the Division of Emergency Management is not going to send out any funds during this investigation, or any investigation that may be going on, because that could put the state at risk for a pending de-obligation.”
The “de-obligation,” or rejection, of reimbursement funds could be the next problem for the municipalities: Given FEMA’s initial concerns and decision to send the matter to investigators, it’s likely that at least some of the money will be denied by the inspector general.
Representatives for the inspector general could not be reached Thursday for comment on whether a formal investigation or audit has begun. Mace declined to say when FEMA made the referral, but Moskowitz said he only learned of it in the past few days.
Beyond rejecting reimbursement requests, the inspector general could also recommend criminal charges if investigators determine that invoices were fudged. The letter that FEMA sent the three municipalities in September suggested its concerns were related to submissions by third-party consultants, rather than actions by local officials.
One consulting firm, Disaster Program & Operations, helped El Portal, Miami Shores and Florida City keep track of their Hurricane Irma cleanup efforts and submit photographic evidence and invoices to FEMA. Another company, Looks Great Services, did debris removal work for all three cities.
At a village council meeting last Tuesday, El Portal Mayor Claudia Cubillos blasted state officials for not turning over the reimbursement money. She urged her constituents to demand it.
“Why aren’t you all calling [state officials]?” Cubillos said. “Why are we being looked at as if something was done wrong? Nothing was done wrong.”
Cubillos said the village was a victim of “bullying” by the state.
“Maybe it’s because we’re a small city, it’s easy to pick on us,” she said. “The village of El Portal has a right to be paid back. If it’s the last thing that I do as mayor here, we will get our money back.”
Moskowitz said he believed Cubillos wasn’t aware when she made those comments that FEMA had referred the matter to its inspector general. He said he told the mayor about the referral on a conference call a couple days later.
A DP&O representative, Gabrielle Benigni, told the Herald that neither she nor the three municipalities had received any notification about an inspector general audit or investigation.
After a reporter told her El Portal officials seemed to be aware of the referral, Benigni said she “misspoke” and that Cubillos and Crystal Wagar, the mayor of Miami Shores, were both on the conference call with Moskowitz.
“I was the one not notified of any [inspector general] audit,” Benigni said.
Moskowitz said he hopes the inspector general will complete its review within the next six months, and that he sympathizes with the local officials waiting to get reimbursed.
“I’m hoping that, if anything is found, it’s minor and they get the majority of their money,” he said. “I completely understand how much this reimbursement means to these small cities.”
Moskowitz said he knows “exactly” what the inspector general is looking into but declined to say what it is, citing the pending investigation. But he said the concerns relate to work by companies that the municipalities hired during the storm.
“That’s why it’s always extremely important to do a good procurement, to vet your contractors, to use people who have been around in the business for a long time so you can see their record,” Moskowitz said.
FEMA officials have also declined to comment on the exact nature of their concerns. Mace said last month that FEMA officials first became aware of the problems while reviewing documents in late July or early August.
A July 11 email from a FEMA employee to officials in El Portal, which Cubillos shared with the Herald, suggests the agency was initially satisfied with the documents it reviewed, prompting it to release the $2.1 million to the state before problems were flagged.
“DP&O did a wonderful job for you,” Paul “Cory” Ryden, a FEMA employee, said in the email. “I am honored to work for FEMA and it’s days like this that make it worthwhile.”
Ryden added: “The State will handle things from here.”
Cubillos cited that email during the council meeting last week and said she was “confused” and “angry” that the state has not turned over the funds.
The reimbursement process
As Hurricane Irma barreled toward South Florida in September 2017, El Portal and Miami Shores were scrambling to find consultants and ended up piggybacking on Florida City’s contracts with DP&O and Looks Great Services.
DP&O hired monitors who were responsible for independently checking the hazardous limbs and trees that were removed from the streets, and for filling out logs to indicate what was being removed from which locations and corroborating the information with photos.
Looks Great Services, the debris removal company, also tracked what was removed so the two logs could be compared and reconciled. The documentation was submitted to FEMA with a request for reimbursement.
The Herald obtained and reviewed hundreds of photographs and other documents that the municipalities submitted and identified several potential problems in El Portal and Miami Shores.
On Oct. 2, 2017, for example, one monitor logged 504 hazardous limbs removed from Miami Shores, ten times the daily average for monitors in El Portal and Miami Shores in the days after the storm. But the monitor submitted only seven photographs for that day — most of which appear to show low-lying brush.
FEMA rules mandate that a photograph be submitted for each hazardous limb, and that municipalities only be reimbursed for limbs greater than two inches in diameter that “pose an immediate threat” to public safety.
Benigni has maintained that everything was done by the book.
“For every tree there is a ticket,” she told the Herald last year. “We have to make sure that everything is eligible.”
The Irma cleanup and reimbursement process was controversial in El Portal even before FEMA sent its letter in September. Last December, former village Police Chief Ronnie Hufnagel was fired from the department after feuding with Cubillos over the police role in overseeing debris removal.
Hufnagel said the police never oversaw debris removal despite the mayor’s public statements to the contrary.
This story was originally published December 27, 2019 at 6:00 AM.