<DOC> [109 Senate Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:24439.wais] S. Hrg. 109-467 HURRICANE KATRINA: HOW IS FEMA PERFORMING ITS MISSION AT THIS STAGE OF RECOVERY? ======================================================================= HEARING before the COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED NINTH CONGRESS FIRST SESSION __________ OCTOBER 6, 2005 __________ Printed for the use of the Committee on Homeland Security and Governmental Affairs U.S. GOVERNMENT PRINTING OFFICE 24-439 WASHINGTON : 2006 _____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512ÿ091800 Fax: (202) 512ÿ092250 Mail: Stop SSOP, Washington, DC 20402ÿ090001 COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS SUSAN M. COLLINS, Maine, Chairman TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware LINCOLN D. CHAFEE, Rhode Island MARK DAYTON, Minnesota ROBERT F. BENNETT, Utah FRANK LAUTENBERG, New Jersey PETE V. DOMENICI, New Mexico MARK PRYOR, Arkansas JOHN W. WARNER, Virginia Michael D. Bopp, Staff Director and Chief Counsel Jonathan T. Nass, Counsel Joyce A. Rechtschaffen, Minority Staff Director and Counsel Michael L. Alexander, Minority Professional Staff Member Trina Driessnack Tyrer, Chief Clerk C O N T E N T S ------ Opening statements: Page Senator Collins.............................................. 1 Senator Lieberman............................................ 3 WITNESS Thursday, October 6, 2005 R. David Paulison, Acting Under Secretary for Emergency Preparedness and Response, and Acting Director of the Federal Emergency Management Agency, U.S. Department of Homeland Security: Testimony.................................................... 7 Prepared statement........................................... 41 Post-hearing Questions and Responses......................... 53 Appendix Senator Coburn's Findings RE: Charity Hospital in New Orleans.... 32 Coburn Calculations RE: the cost of the FEMA contract with Carnival Corp.................................................. 33 HURRICANE KATRINA: HOW IS FEMA PERFORMING ITS MISSION AT THIS STAGE OF RECOVERY? ---------- THURSDAY, OCTOBER 6, 2005 U.S. Senate, Committee on Homeland Security and Governmental Affairs, Washington, DC. The Committee met, pursuant to notice, at 9 a.m., in room SD-342, Dirksen Senate Office Building, Hon. Susan M. Collins, Chairman of the Committee, presiding. Present: Senators Collins, Coleman, Coburn, Warner, Lieberman, Levin, Akaka, Carper, Dayton, and Lautenberg. OPENING STATEMENT OF CHAIRMAN COLLINS Chairman Collins. The Committee will come to order. Good morning. This morning the Committee holds its third hearing into the government's response to Hurricane Katrina. Our focus today will be on the recovery efforts being directed by the Federal Emergency Management Agency (FEMA). Our purpose is to identify the bureaucratic roadblocks, inflexible policies, outdated laws, and wasteful practices that impede the prompt and compassionate delivery of needed assistance. I appreciate the acting FEMA Director Paulison testifying before us today. Throughout our investigation, the Committee has taken care not to interfere with the critical work being done in the Gulf States by distracting key officials from their urgent, immediate duties. At the same time, however, this Committee has an obligation to conduct vigorous oversight. More than a month after Katrina's landfall, frustration, concerns, and questions about FEMA's responsiveness and planning persist as Gulf Coast residents work to put their lives and their communities back together. At our hearing last week, we heard testimony from four officials representing communities that have become major relocation and relief centers for hundreds of thousands of people displaced by the storm. A common theme of that testimony was the incredible ingenuity and generosity demonstrated by individuals, businesses, charities, churches, and other community organizations in providing relief, not just in the immediate aftermath of the storm, but for the days and weeks following. Another common theme was that in many cases this humanitarian mission is being carried out, not in conjunction with a coordinated Federal effort, but despite the lack of one. As an example of this disconnect, the Mayor of Baton Rouge told our Committee that it was not until September 27, not coincidentally the day before our hearing, that his city was assigned a single point of contact at FEMA. The population of Baton Rouge doubled in the first days after the storm, from 400,000 to 800,000. The pressures on the city's resources-- schools, housing, and health care facilities--are staggering. For the city that is at the very heart of the recovery effort to be left so long without a dedicated Federal contact is simply astonishing. The Mayor of Fayetteville told us that the FEMA teams in his city seemed to be completely unaware of each other's presence, evidence of a lack of coordination and communication that we have heard about time and again. Minor oversights and inevitable glitches are to be expected. But the more glaring failures appear to be the result of insufficient planning, faulty decisions, ineffective implementation, or perhaps simply an overwhelmed bureaucracy. FEMA officials have stated that housing for those displaced by the storm is the Agency's highest priority. Yet more than 430,000 victims remain in hotel rooms and thousands more are still in emergency shelters. Since Katrina hit, FEMA has signed contracts for more than $2 billion in temporary housing, including more than 120,000 trailers and mobile homes. According to press reports, however, as of last week just 109 Louisiana families have been placed in those homes while tens of thousands of Louisiana residents remain in emergency shelters. The entire concept of creating sprawling centers of temporary housing far from homes, schools, and other necessities has been questioned. Would an expanded voucher system be more effective? Are displaced families asked their preferences? Is the system matching families and housing easily accessible? The Committee has also heard countless stories of wasted resources and refused offers of skilled assistance. Several hundred firefighters from throughout the country who answered an emergency call from FEMA to serve on the front lines of the Katrina recovery found themselves instead in Atlanta undergoing days of training on cultural sensitivity and sexual harassment. Many then found themselves not dispatched to the scene of the disaster where their skills would have been put to very good use but instead serving as community relations officers for FEMA. One of those firefighters was from Jay, Maine. He and four other Maine firefighters had traveled south at FEMA's request. They were asked to bring flood and hazmat gear with them and were advised that they must be physically capable of performing manual tasks under severe conditions. They were told to expect austere, harsh living conditions with minimal or no creature comforts for a period of at least 30 days. Instead, once they arrived in Atlanta they had to go through 2 days of sensitivity training before getting their assignments. Then they learned that they were being deployed to Texas and that their jobs would be handing out pamphlets and helping evacuees fill out paperwork. These five Maine firefighters feel that their valuable skills were wasted. They answered the call for help, volunteering to serve in harsh conditions. So they wonder why they were put up in hotels and asked to do jobs that could have easily been performed by local people. They are frustrated by spending two critical days in sensitivity training at a time when they could have been helping people in desperate need. Too often vital supplies have not been positioned where they are needed. Perhaps one of the best known examples is the odyssey of the ice. Nearly 200 million pounds of ice were purchased by the Federal Government at a cost exceeding $100 million. Much of it traveled thousands of miles on circuitous routes throughout the country, including to Maine, but was never delivered to the victims. In addition, a recent report by the Inspector General finds that millions of dollars were wasted on unused ice during the Florida hurricanes last year. No one questions the necessity of ice during natural disasters, but clearly the system by which commodities are ordered, tracked, and delivered appears to be deeply flawed. Since September 11, enormous investments of time, effort, and taxpayer money have been made to craft a system in which all levels of government were to communicate and coordinate for the most effective response possible whether to a natural disaster or a terrorist attack. That did not occur with Katrina. Certainly there are many people at all levels of government, including people at FEMA, who are working tirelessly to help rebuild the lives and communities that this powerful storm so severely damaged. But the progress has been halting, a trail of missteps that calls into question what has been done during the past 4 years and that continues to plague the recovery efforts to this very day. Senator Lieberman. OPENING STATEMENT OF SENATOR LIEBERMAN Senator Lieberman. Thank you very much, Madam Chairman. Thanks for calling this hearing. Mr. Paulison, thanks very much for being here. As the Chairman's opening statement has indicated, you are going to hear an accumulation of frustrations, anger, concerns, and questions about FEMA's performance. I understand that you're the Acting Director of FEMA. You were brought in on an urgent emergency basis when Michael Brown stepped down. But you're the man in the chair now, and therefore you're the person that we have to ask these questions of. I thank you for being here, and I will proceed in that spirit. The spirit is one of determination to work together with FEMA and the Department of Homeland Security to get this right, which is to say the process of preparing for and responding to disasters, whether they be natural disasters or terrorist attacks, because neither nature nor history will give us a vacation, or a break. So we've got to do the work that we know we need to do and do it quickly. Last week at a hearing that we held, as the Chairman has indicated, the stories we heard from officials whose communities have opened their arms to hundreds of thousands of evacuees were very troubling. The ongoing investigation of our staff has found critical gaps in the recovery effort. First, and most importantly, FEMA has had trouble, it seems to us, just getting services to many of the storm victims. In too many hard-hit communities in the Gulf Coast, disaster recovery centers, so-called DRCs, still have not been established. According to your testimony submitted to the Committee, Mr. Paulison, FEMA has established 84 DRCs, but Hurricane Katrina alone affected some 90,000 square miles of the Gulf Coast consisting of hundreds of local jurisdictions. How many communities out of the national spotlight that Senator Collins and I saw when we visited the region a couple of weeks ago totally in Hurricane Katrina's and then later Hurricane Rita's path are there, and how many still do not have a convenient FEMA center where citizens without access to phones or Internet can go for help? I will tell you that our staff asked, I believe it was the congressional relations office of FEMA, for some numbers on this. How many communities are currently unserved that should be served, and we were told to look at the FEMA Web site. And that's just not enough. That's not an adequate response. We have heard complaints also that FEMA has not communicated effectively with many of the local officials in the affected area. We've been told that many of these officials, in Louisiana particularly, are having a hard time finding out from FEMA who is in charge of urgent matters like housing for evacuees. Others complain that when decisions are made that they, the local officials, have not been put in the loop to participate in the decisions or even to learn about them in a timely way. I would say that the most significant need that FEMA must address now is housing for the tens of thousands, hundreds of thousands of evacuees who need it. I'm glad, of course, that FEMA and the Red Cross have decided to extend for now the program which is paying for a reported 438,000 evacuees to stay temporarily in hotels and motels. As you know, the program was originally scheduled to end on October 15, but with longer-term solutions still not available for many evacuees, I do not think FEMA had any other choice but to extend the program, and I thank you for doing that. More broadly on the housing question, FEMA has apparently spent well over $1 billion up until this time for travel trailers and mobile homes, although the exact number our staff has not been able to determine. I am going to ask you today how much, to the best of your knowledge, FEMA has spent on housing and what's happened for now to those trailers and mobile homes that have been contracted for? Again, many local officials have told the Committee and our staff that they fear a proliferation of dysfunctional FEMA cities across the Gulf Coast region where evacuees will have little access to jobs, schools, health care, public transportation, or other services. Helping hundreds of thousands of evacuees who cannot return home to find suitable housing is clearly an extremely difficult problem. I don't minimize it as I repeat these concerns and criticisms, but we need to hear today how FEMA and the Administration plan to solve this problem. Like all other Members of the Committee, I would imagine, I am also concerned that FEMA's handling of no-bid contracts for the response and the recovery effort has created opportunities for waste, fraud, and abuse. Some companies with questionable contracting histories have been awarded multibillion-dollar no- bid contracts. Others are reportedly receiving payments far in excess of market rates. FEMA does not appear to have sufficient contract officers to prevent these abuses. Congress has already appropriated, as you well know, over $60 billion for the relief effort. We absolutely need to assure that those funds are being spent effectively or it will, as it is beginning now, constrict the willingness of Congress to appropriate more money for relief recovery and rebuilding. In that regard I'm pleased to see that the Administration has, in fact, decided to limit the government's use of a statutory provision that it originally asked to be changed. That provision had increased to $250,000 the amount that Federal employees could charge to government credit cards for Katrina-related purchases. Similar use of much smaller authority was criticized in previous auditing reports. To raise it to $250,000 was inviting abuse at a time when we really need to take steps to guard against it. Congress now, I hope, will follow through by repealing the original provision, which was enacted in the initial supplemental appropriation without opportunity for debate. Finally, I do want to talk with you, if time allows today, about the oversight of not just the immediate response and relief but of the recovery and rebuilding process. I know that Secretary Chertoff has asked Coast Guard Admiral Allen to be in charge of the immediate relief and response to Hurricane Katrina, but on the recovery and rebuilding under existing statute and regulation FEMA's role is also pivotal. Under the national response plan, FEMA is charged not only with delivering its own programs of recovery and response and rebuilding, it also is the Federal coordinator for long-term recovery that includes other primary agencies such as HUD, Small Business Administration, Department of Agriculture, and the Treasury Department. This is a recovery and rebuilding of the Gulf Coast that is without precedent in our history. A successful recovery from this disaster, compounded by the additional responsibilities that have been placed on FEMA by Hurricane Rita, it seems to me, is beyond FEMA's capacity to manage, which is to say the recovery and reconstruction of the Gulf Coast region. Many of us here are looking for an answer to how to best provide for the reconstruction of the Gulf Coast and are concerned or have concluded that it is too much to ask of FEMA to do this, and I would like very much to hear your advice at this point, as Congress is thinking about these matters, on this important question. Madam Chairman, I thank Chief Paulison for taking the helm in a time of crisis. He's got a distinguished and very proud record in firefighting and as Administrator for the U.S. Fire Administration over the years. He is no stranger to stepping into a tough situation. This is a real tough one that will demand your best. I thank you for coming today to answer our questions. Thank you. Chairman Collins. Thank you. I'm pleased to welcome---- Senator Lautenberg. Madam Chairman, forgive the interruption, but I understand that for a peculiar reason that I do not fully comprehend that we're prohibited from giving opening statements. I thought that we, as Members of the Committee, would have the same privileges as the Chairman and the Ranking Member, and I am going to suggest to my colleagues that they prepare opening statements and give them to the press. If there is not time to hear a protocol that perhaps one of us want to lay out, I think that we ought to make sure that we are not stymied from giving our views. Chairman Collins. Senator Lautenberg, it was made very clear to all Members that at the start of this series of hearings every Member would be given an opportunity for an opening statement, but that on subsequent hearings, as is the case in virtually every other committee, the Chairman and Ranking Member alone would give opening statements. However, every Member is welcome to have an opening statement prepared, put on the press table, and included in the record. And to make that very clear, I would say that, without objection, opening statements will be included in the record for all Members. Senator Lieberman. Madam Chairman, I do want to say with respect to Senator Lautenberg's question that this procedure has been agreed to by both of us and is patterned--I am happy to say this in the presence of the distinguished chairman and the ranking member on the Armed Services Committee--on the other committees, not all of them but most of them that I am on, that follow this rule, that part of it is because we want to get to the witness and then leave, hopefully, a little longer time for individual questions. So I understand why you said this and I respect it, but I just wanted you to know it is a decision we have made together. Senator Lautenberg. I understood that, Senator Lieberman. The fact that you made it together, in my view, doesn't make it right. Thank you very much. Senator Lieberman. But it raises the probability that it's right. [Laughter.] Chairman Collins. I am very pleased to now turn to our first witness, David Paulison. Just 3 weeks ago, on September 12, Chief Paulison took over as the Acting Undersecretary of Emergency Preparedness and Response and as the Acting Director of FEMA. As Senator Lieberman indicated, previously he served as the Administrator of the U.S. Fire Administration, as well as the Director of Preparedness Division. He also began his career as a firefighter and rose through the ranks to be Chief of the Miami-Dade Fire Department. He has had a great deal of experience, and I very much appreciate his joining us this morning. I also want to make clear to those watching this hearing and to our colleagues that I recognize that Mr. Paulison has only been in the job as FEMA Director for 3 weeks. Thus, many of the problems and the criticisms that we're going to bring up today were not on his watch. The decisions were not made by him. Nevertheless, you're the one in charge right now, Mr. Paulison, so we hope that you will work with us to address what remain very serious problems. Please proceed with your statement. TESTIMONY OF R. DAVID PAULISON,\1\ ACTING UNDER SECRETARY FOR EMERGENCY PREPAREDNESS AND RESPONSE, AND ACTING DIRECTOR OF THE FEDERAL EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF HOMELAND SECURITY Mr. Paulison. Madam Chairman, thank you very much for those comments, and Senator Lieberman and the rest of the Committee. Quite frankly, I appreciate the opportunity to come before you. I understand very clearly the charge that we have. I have only been here for 3 weeks, but we will work with this Committee, I can promise you that, to make sure that we look at all avenues of how we're going to make this a better system. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Paulison appears in the Appendix on page 41. --------------------------------------------------------------------------- I was asked by President Bush and Secretary Chertoff, as you know, 3 weeks ago to take over as Acting Director of FEMA. Quite frankly, I did not hesitate to lead the dedicated men and women of FEMA. Senator Collins, I appreciate your comments earlier. It's astounding the effort that I've seen by the employees of FEMA to do a good job, and quite frankly I'm humbled to be working with what I feel are some of the finest people in the Federal Government. Over time, I look forward to working with Congress, this Committee particularly, to evaluate and address what we have learned and continue to learn from this catastrophic event. I do appreciate the attention and focus Congress is giving to these important issues, and I look forward to working with you in the coming months. However, that is not why I am here today. Today, I'm here to report on the ongoing relief effort, which you rightly imagine has been, quite frankly, occupying all of our time and particularly mine. So I'd like to provide the Committee with a brief report on ongoing operations. Our response efforts involving immediate lifesaving and sustaining efforts are coming to an end, and a long and immensely challenging recovery effort is already well underway. Families have been separated, lives have been turned upside down, and many people, as you have seen personally, have lost everything they have. FEMA, our Federal partners, the governors, the mayors, parish presidents, county officials, emergency workers and planners, private industry, as well as our partners in charitable and faith-based organizations, have a great deal of work ahead of us. This will require, quite frankly, a team effort from all of us. We will work side-by- side with all of our partners, and we're going to be united, not divided, in this effort. It's going to take hard work, but together I firmly believe, I do believe that we can get the job done. To date, FEMA has registered over 2 million victims for disaster assistance, and we've provided housing assistance in the form of money or direct housing to almost 400,000 displaced individuals and families. As Senator Lieberman pointed out, we have 84 disaster recovery centers open in Texas, Louisiana, Mississippi, and Alabama to provide support to these evacuees. At one point we had over 300,000 evacuees from Hurricane Katrina sheltered in congregate shelters spread throughout more than 40 States. Hurricane Rita added to this shelter population, and although today we have fewer than 60,000 people in the shelters, we still have a lot of work to do because our goal is to get these people out of these shelters by the middle of the month. Our first and foremost priorities are efforts to address the housing needs of those displaced while also respecting individual autonomy as well as the impact on the affected communities and States. State and local leaders will play a central role in determining the nature and shape of the long- term and arduous planning and rebuilding process that we're going to have to go through. We will support and supplement these State and local efforts throughout the process while continuing to assist the individual victims of these disasters. That is a commitment from me personally. Our goal is to move all Katrina evacuees out of congregate shelters by the middle of October. In Louisiana and Mississippi, Texas, and Alabama, hundreds of thousands of homes have been damaged or destroyed in one of America's largest natural disasters. The housing stock lost in most of the impacted parishes and counties in Louisiana and Mississippi alone has created a need for short-term and mid-term housing for an estimated between 400,000 and 600,000 households. Some of these people are still in congregate shelters. Many of the displaced found their own temporary accommodations such as hotels and motels or with friends and family. They, too, will require assistance to get back on their feet. These families will also need to find long-term housing. The Federal Government is committed to helping the citizens of the Gulf Coast overcome this disaster and rebuild their devastated communities. Our recovery strategy is based on a single premise, assist the victims of Hurricane Katrina and re-establish a normal living environment as quickly as possible in the towns and communities where they want to live as long as that local infrastructure can support them in the long term. In reaching these goals, we'll apply three basic assistance methods. The first method is to provide assistance directly to individuals and families, allowing them to take ownership of their lives, to choose for themselves the best housing option, where they can best fit into the job market, and how best to move forward. Each eligible family can receive assistance for temporary housing for up to 18 months. An individual whose unemployment or loss of self-employment is caused by a major disaster, like Hurricane Katrina, and who is not eligible for regular unemployment compensation, may be eligible for the disaster unemployment assistance program that FEMA operates. To date we've provided almost $50 million to the U.S. Department of Labor for unemployment benefits and State administrative expenses under the disaster unemployment assistance program. The second way is to provide assistance to State and local governments that are now encumbered by the increased demands on their limited resources. While many host States have welcomed thousands and thousands of displaced evacuees into their communities, into their churches and schools, they nevertheless face a difficult challenge supporting the new population of evacuees as you so correctly pointed out. Their infrastructure, their community services, and housing stocks have been strained to the limit, and the Federal Government recognizes the urgent situation that they're in. Accordingly, we are committed to reimbursing the States for many of these increased shelter-related costs through our public assistance program. In areas directly impacted by Hurricane Katrina, we will provide funding to repair damaged schools and rebuild those that were destroyed, including funding for equipment, furniture, and supplies. In those host States that have received large numbers of displaced students, we will fund temporary classrooms in those schools where additional funding capacity is needed to accommodate the increase in the number of enrolled students. In addition, if new buses are needed to transport students to school, we will fund those additional costs along with any additional security costs they may incur. The third way is to help rebuild the Gulf Coast in ways that make the community stronger, safer, and less vulnerable for future loss of life and property. FEMA's public assistance program and direct contracting authority will pay for much of this work. The States will pay a portion of these efforts as well. Some of the remaining costs will be paid through our flood insurance settlements administered by the National Flood Insurance Program and through mitigation grants, private insurance, Small Business Administration loans, Federal tax incentives, and the private sector. Also during the recovery process, FEMA awards grants under the hazard mitigation grant program as authorized in the Stafford Act, so we can assist State, local, and tribal governments to rebuild communities in a way that will reduce vulnerability and reduce future hazards. The recovery process for Hurricane Katrina will be neither fast nor easy, and I'm sure you're well aware of that. But I'm confident that we will get there, but only if we continue to work together with all of the partners that I mentioned earlier. On September 23, 2005, the Federal Government announced a comprehensive housing assistance program to meet the immediate needs of individuals and families displaced by Hurricane Katrina. The Department of Homeland Security and the Department of Housing and Urban Development announced measures to provide transitional housing assistance to evacuees that cut through red tape to provide the evacuees with flexibility, a choice, and portability that they need to move into temporary shelters and more stable housing than those congregate shelters that they've been in. We are also expediting aid to evacuees with immediate housing needs. Because of Hurricane Katrina's unprecedented scope and the widespread dispersion of evacuees, FEMA is accelerating the assistance to individuals and households program, which provides housing assistance to homeowners and renters. To reduce upfront paperwork and provide immediate aid, households will receive an initial lump sum or rental assistance payment of $2,358 to cover 3 months of housing needs. This payment represents a national average of fair market rent for a two-bedroom unit. The Department of Housing and Urban Development will also provide specialized housing to assist these evacuees. While the majority of evacuees will receive assistance through FEMA, others will be eligible for comparable benefits under HUD's Katrina disaster housing assistance program. Through these programs, displaced families will have the opportunity to relocate to areas where housing availability and job markets will meet their immediate needs. Let me do contracting first, and then I'll get into the conclusion. I think that's an interest for everyone here. As we focus on the long-term rebuilding of the Gulf Coast region, many are asking how the Federal contracting process works and rightfully are concerned about the cost, as we all are. Members of Congress have also inquired on behalf of their constituent business owners about how they can match the resources with the extraordinary demand on the impacted regions. There are three basic ways by which we will arrange and pay for the Federal recovery efforts. In some cases, FEMA will directly contract for goods and services in accordance with our Federal procurement regulations. I can assure you that we are enforcing those Federal procurement regulations. FEMA can also issue mission assignments to other Federal departments and agencies to perform necessary work and reimburse them for their costs. In many cases, however, FEMA will reimburse directly the State and local governments in declared emergency areas for eligible activities through grants. For example, FEMA issued a mission assignment to the U.S. Army Corps of Engineers to conduct large-scale debris removal efforts in some of the most decimated areas of Mississippi and Louisiana. The Corps acquires services or supplies for these efforts through contracting processes. Companies interested in assisting in the debris removal efforts should contact local officials or go to the U.S. Army Corps of Engineers web site for guidance, and they can become part of that system. Similarly, last week the Department of Homeland Security placed on its web site a list of companies with whom FEMA has contracted and posted a link that should be helpful for businesses interested in directly contracting with FEMA or in examining subcontracting opportunities. Businesses in your constituent States that wish to pursue contracting opportunities can go to the Department of Homeland Security web site and simply click on the icon, Working with the Department of Homeland Security, and it gives them opportunities to get into that system. As I said, much of FEMA's spending will be to State governments in the form of grants. FEMA awards grants to assist State, local, and tribal governments and certain private non- profit entities with their respective responses to and recovery from disasters. Specifically, FEMA provides assistance for debris removal, implementation of emergency protective measures, and permanent restoration of infrastructure. While FEMA is not a party to contracts awarded by the State or their county sub-applicants, we will nevertheless not tolerate discriminatory contracting practices. Under the Stafford Act and its implementing regulations, local businesses or workers are to be given preference where practicable, and under various Federal laws and FEMA regulations, minority and women-owned businesses should be given a fair opportunity to compete for contracts. In conclusion, governments, whether local, State, or Federal, cannot compel any citizen to move back into the disaster-affected region, nor should they. However, we must work with our State and local partners to develop opportunities that will facilitate the return and provide help to those who chose to do so. Over time and with encouragement, the good people of the Gulf Coast will return and make the region better, safer, and less vulnerable to disaster if disaster strikes again. These States are suffering tremendously. Speaking from experience, it will take years to really recover, and there will be countless hurdles to overcome along the way. But the spirit and essence of this region, even among such a tragedy, remains vibrant and strong, and all of us remain committed to the restoration of this important part of this great Nation. I believe that working together we will help the victims in this terrible disaster rebuild their lives and get back to some normal type of living conditions. Madam Chairman, thank you for the opportunity to speak in front of you, and I would be absolutely happy to answer any questions that I possibly can. Chairman Collins. Thank you very much. Senator Warner needs to leave to chair the Armed Services Committee hearing, so I'm going to yield part of my initial time to him. Senator Warner. Senator Warner. I thank the Chairman, and I will submit other questions for the record. Drawing your attention to something that you've, I'm sure, been focusing on, the Mayor of New Orleans has laid off a goodly number of his city workers who could presumably be productive in this crisis. The sheriff now has inadequate funds to pay his individuals. Is that within your jurisdiction, or where might I or others go to try to help that situation, which on its face seems to me to fall within what Congress intended by way of its appropriations to meet these types of crises? Mr. Paulison. Yes, sir, that's a significant issue for probably not only New Orleans but several of the other communities that I met with the mayors on also. Under the Stafford Act we do have the ability to loan up to 25 percent of the taxable revenue in a particular community. However, that has been capped at $5 million, and I'm not sure that $5 million would have a big impact on a city the size of New Orleans, or Baton Rouge, or some of the others. Senator Warner. There's no other means by which Congress can expeditiously act to help in that situation, if it's necessary? Mr. Paulison. There is no other means for FEMA to assist in that matter. Senator Warner. Is there another agency of government--I assume you're coordinating with other Federal departments and agencies? Mr. Paulison. We are, sir. I'm not aware of any that allows us to give direct benefits as far as paying for employees' salaries. We do pay for overtime. If the overtime is created by dealing with a disaster, we will assist a city in that matter. But we are not allowed to pay for---- Senator Warner. Perhaps our staff and others can direct their attention to this because I think this is a situation that patently on its face--the American citizens want to help in a situation like this. Senator Lieberman. Madam Chairman, I wonder if I could just clarify because I believe I just heard you say that under the Stafford Act FEMA can only compensate for overtime work of municipal employees. In this case, because they've had their tax base decimated, they need compensation for just regular pay, not overtime; is that right? Mr. Paulison. That's correct. Several of the cities in the area have lost most of their tax base, so therefore they don't have the revenues to necessarily operate their normal day-to- day operations, such as New Orleans, as Senator Warner pointed out. That is an issue. Except for the $5 million that we're allowed to give statutorily to loan to the cities, the rest of that is outside of our purview. Senator Lieberman. Can that be used for regular pay and not overtime as---- Mr. Paulison. Yes, the $5 million under the Stafford Act is a loan, and again it's up to 25 percent. Previously, in my understanding, there was not a cap. Congress put a cap on it, I'm not sure how many years ago, to cap it at $5 million. It does help some of the smaller cities, but it probably wouldn't have a big impact on the City of New Orleans. Senator Warner. Madam Chairman, we have a bill on the floor moving through now, and we could possibly put together a brief amendment to correct these technical problems. Senator Lieberman. That's a very good idea. Senator Warner. I'd be happy to join with the Chairman in that matter. I thank you for the courtesy. Chairman Collins. Thank you. Mr. Paulison, one of the complaints that we've heard from the very beginning, and it continues to this day, is that it's been difficult for the victims of Hurricane Katrina to register for benefits. Initially, we were told that they would call the 1-800 number, it would be busy. They would try in the middle of the night, they still couldn't get through. We were at that point, told by FEMA that they should go to the web site, and now we're hearing from our colleagues in the Gulf States that hurricane victims have been turned away when they tried to register for benefits at FEMA's disaster recovery centers, which would seem to be a very logical place to go to register for benefits. So we looked on FEMA's web site, and sure enough, it said that hurricane victims could not go to the disaster recovery centers to register for assistance, and we've highlighted the relevant section. We printed that screen out on Monday. We talked with FEMA officials, and we said, it makes no sense to set up one-stop centers and yet not allow victims to register for assistance. Now it's to FEMA's credit that after we talked to FEMA about this that the web site was corrected, that the policy was changed, and now hurricane victims can go to the logical place, the disaster recovery centers, in order to register. But I am perplexed why FEMA would not have allowed individuals to register in the first place when you've touted these recovery centers as being a one-stop center. Mr. Paulison. Senator, I don't know that I can answer the question of what has happened prior to me being here, although I understand the position I am in, and I do accept responsibility for those issues. They can go to the centers. They can use our telephones to register, or they can use our computers to register online. The amount of people we registered in Hurricane Katrina far exceeds anything that FEMA has ever done. We ramped up, we had well over 12,000 people answering telephones during the height of the Katrina response and ramped up as quickly as we could. We normally keep about 1,000 operators around the clock to answer FEMA questions, and we had to ramp up very quickly from 1,000 to over 12,000. And we can thank the IRS, their call center, they loaned that to us to ramp up. We got about 5,000 people immediately. But you are correct, the Disaster Recovery Center should be a place where people can go to register, and we have done that and will continue to do that in the future. Chairman Collins. Thank you. I used up the remainder of my time. Senator Levin needs to go also. Senator Levin. Thank you, Madam Chairman and Senator Lieberman. So that I can join Senator Warner over at the Armed Services Committee, I appreciate your allowing me to go out of order. Senator Lieberman. Senator Collins and I hope that Senator Warner and you will, therefore, support all of our requests for funding for our respective States. [Laughter.] Senator Levin. In addition to that, we will also explain your absence to the Armed Services Committee, even more important. At the last hearing, I asked our witnesses about missing children. We still have children that are unaccounted for, a couple thousand. We also have children that are located in shelters or in homes that are still separated from a family member. Do you know how many children there are? Mr. Paulison. Senator, I do not know exactly how many children. I do know that we are working diligently to get families back together. We know very well that families were separated during this disaster and are working to make sure that we get those families back together where they belong together. Right now we are going into the shelters--we have about 57,000 left in congregate shelters--to get those into some decent housing. And we will also start our case work, and I think that case work will very quickly help us resolve some of the issues you talked about. Senator Levin. What we need is just simply a common intake form in a national database. There is no reason not to have one. We have been trying to get this from the Red Cross, these numbers. We have been trying to get these facts from the National Center for Missing and Exploited Children. It is incredible to me that there is not a single database where people who have control of missing children who are separated from their parents or their guardians are not identifying those children and those children are not being linked to the guardians and the parents who are looking for children. I find that utterly incredible that there is no one database for those children to be registered and those parents who are still seeking children to be registered. I would hope FEMA would just take charge of this issue. We cannot get this data. Of all the human horror stories that exist, it seems to me that probably at the moment, with all of the other problems--and there are huge problems; they have been identified by our Chairman, our Ranking Member, Senator Warner, and others--this has got to be No. 1. Mr. Paulison. Yes, sir. Senator Levin. Now, we also have a law, as you said, that local people are supposed to be used in the reconstruction under the Stafford Act, where that is practicable, I guess, are the words of the statute, and yet we have story after story about local workers being displaced by workers who are coming in from other States who work for less wages. For instance, 75 skilled electricians at Alvin Callendar Naval Air Station in Louisiana, a military base hit hard by Katrina, 75 electricians from Louisiana, devastated by the hurricane, but they had a job, employed by Knight Electrical under a 20-month contract to repair electrical problems on the base after Katrina. Then we were told that recently the operation was shifted to Kellogg, Brown & Root, a subsidiary of Halliburton. They then subcontracted immediately to an engineering and construction firm with out-of-state offices. They bring out-of-state electricians to the base. Are you familiar with that particular issue? Mr. Paulison. Yes, sir, and---- Senator Levin. Is my statement accurate or is that---- Mr. Paulison. Well, 72 percent of the dollars--not necessarily 72 percent of the contractors, but 72 percent of the dollars in the first 3 weeks after Hurricane Katrina when we started contracting went to small businesses. And any contracts over $500,000, our current business plan says at least 40 percent of those subcontractors have to be awarded to small business. Senator Levin. Are you familiar with the one contract that I mentioned that was shifted to Kellogg, Brown & Root? Mr. Paulison. We can definitely research that--I have people sitting behind me--and get back to you on that particular contract. We are working very hard, believe me. Senator Levin. I know you are working hard, but this is a subject that we read constantly about, hear constantly about. Another example: Maintenance workers at the Superdome and the Convention Center, these are maintenance workers at that center who had a job. They were being paid $15 an hour plus benefits. That was their pay. Instead, suddenly the cleanup is being handled by out-of-state workers who agreed to work for $12 an hour with no benefits. Now, is that what is going on here? Do you know about that problem? Mr. Paulison. I can tell you that we are working diligently to get most of those contracts down to the local workers, if possible. We know that in order to rebuild that community, the people need jobs, they need housing, and we are working to do that. I can look at these individual instances. In fact, if you want to give us that whole list, we can do the research. Senator Levin. I will give you the third one. You can report on these and then tell us if they are typical or not. This has to do with portable classrooms. A company that had supplied portable classrooms to schools in Mississippi for two decades offered to supply 200 portable classrooms immediately, another on short notice. They offered to sell these for $20 million. Instead of accepting that offer, there was a no-bid contract to a company called Akima that had out-of-state offices, no prior experience in supplying portable classrooms. Twice as much was paid to that company as was offered in a contract by the Mississippi company that had previously supplied those classrooms. And if you will read the Clarion Ledger, a paper in Jackson, Mississippi, a no-bid contract issued to a crony, a company that had those kinds of crony contacts before with the contractor, allegedly. Now, I know with all the things that you need to do, we have to get local people working. We have to have contracts bid for, and we need a system, as our Chairman and Ranking Member have said. If this contracting process is not used properly, if dubious contractors are used or cronies are used or sole-source contracts are used, we are going to find that there is a loss of support for congressional efforts to see if we can't help these folks recover from the disaster. It is going to sour the public, basically, on congressional efforts to help the public if these stories continue. And I would hope that on those three cases you look into it, but also go back to those missing kids, if you would, and give us some assurance that is the No. 1 priority to bring those families and their children back together. Mr. Paulison. Absolutely. Particularly the classrooms, that is one of those issues that we mission-assigned to the Army Corps of Engineers to provide those classrooms. But we can go back also through them and see how they awarded those contracts. Senator Levin. I appreciate that, and thank you for your efforts. Mr. Paulison. Thank you for your questions. Chairman Collins. Senator Coburn. Senator Coburn. Thank you, Madam Chairman. Welcome. First of all, let me tell you how proud I am of the courage that you are displaying in the position that you are holding. You are in the hot seat, and it is difficult. Our job is to make sure that the response is appropriate to the individual need, and some of what we do is a little Monday morning armchair quarterbacking to you, but I think it is still very important. One of the concerns--we had several people from Oklahoma down working, and I want to raise an issue with you. Several of them were National Guardsmen that were told to leave Charity Hospital, and the assessment by the National Guardsmen that I talked to down there was that the only damage that Charity Hospital had inflicted on it was flooding of the basement. I hear last night on the news that they are going to condemn the hospital, and I don't know if that is accurate or not. But what I do know is they had plans to replace it prior to this, and they had not found a funding mechanism. And the question in my mind, in your job as administrator, and we look at that if, in fact, structurally it has been damaged, is it part and parcel of what we should do to replace that whole hospital? Should that be American taxpayers that do that? Or should we replace the portion of it that was actually damaged by the storm since it was up for replacement anyway? And so I would love to hear your comments on the philosophy under which FEMA works and the guidelines under which FEMA works to do that. I will put a couple more out there on the table for you so that you can answer. We also had several Oklahomans that went down, EMTs that went down for dispatching, and they were paid as dispatchers. One spent 1 weekend down there, and you all paid him $5,400 to work 48 hours to dispatch care from Texas into the area. And he called me because his question was: ``This is ridiculous that I am getting paid this much money.'' The third area is that some of the contracts that have been let down there are now affecting the rigs that we are trying to get back up in the Gulf Coast because the pay that they are receiving from some of the contractors is higher than what the pay is when working on the rigs. So when we are overpaying for things, we tend to have things not competition allocating the resources where they might best be needed. So I just would like for you to outline the process that you all go through to make the decisions that you make. Mr. Paulison. I think there are a couple issues. One, I appreciate the information about Charity Hospital. We will look at that very carefully. Senator Coburn. Let me just give you a little additional thing on that. They were told to leave their positions and instructed by the mayor and the management of Charity Hospital, and several of the doctors that I have talked to down there say there is nothing wrong with the hospital. They can be up and running if they would just decide to do it. So I am a little worried that we may be building a new hospital, or at least paying for a complete hospital, when, in fact, it may not be our obligation. Mr. Paulison. We want to move quickly to restore the cities, especially the critical infrastructure, back to the way they were. And that is the key, restoring them back to their original condition, not necessarily tear down and rebuild a new one. So that is what the public assistance program does. If a sewage station pumped 100,000 gallons of fluid, we will restore it back to do that again, not to do 200,000. But we will look very carefully at some of these big projects like you just mentioned. We have put IG staff out there. We put our senior procurement officials out there. I even have some of our general counsel people that I have put in place after I took over to make sure that the contracts that we are putting out don't have some of the same things that we did early on. Again, I don't know if the contracts earlier on were right or wrong. That is something we are going to go back and look over carefully, so I am not giving a judgment call here. I just want to make sure that the ones we do from now on under my tenure are as fair and equitable and legal as they can possibly be. The weekend thing, quite frankly, Senator, I am going to have to look into that. Those are some of the issues--when we go back and do our after-action report and the lessons learned--and this Committee is going to be heavily involved in that, and we are going to do some of the stuff on our own also to look at some of our practices. And I suspect there is probably going to be a hundred other people out there doing studies on this, and the lessons that we learn from this, what we are telling staff is we are not going to get defensive about anything out there. We are going to do the same thing that we did after Hurricane Andrew where we took our State, the local, and Federal Government and made a very conscious decision that this was not going to happen again, that we are not going to allow what happened in Hurricane Andrew happen again. And if we had had a Hurricane Andrew, it would not have happened again. But Hurricane Andrew pales to what happened in this particular storm. So we need to do the same thing and take that same attitude, and the distinction you are bringing up is that those are the types of things we need to look at very carefully and make sure if there was wrongdoing that we fix it; if there is something wrong with our procedures, that we fix it; and if there is something wrong with our policies, we fit it. And it may require legislative changes. Senator Coburn. Let me go to another question, if I may, because I am going to run out of time here. Mr. Paulison. Sorry. I didn't mean to take up your time. Senator Coburn. No, it is your time. It is important that we have the answer. I have been critical of the contracts that you have let with Carnival Cruise Line. That was a decision you obviously didn't make but somebody made. And the problem isn't that you have made a contract. I think there are two problems here. The net revenue for Carnival under that contract is greater than what the published net revenue per passenger would have been had they been sailing full board, according to their own reports. And I am not critical of Carnival. They came and offered ships. It is not about Carnival. It is about, first of all, making a contract for 6 months at a quarter of a billion dollars; and, second, doing it at a price above what they would have earned had they been running a commercial sailing operation. I just would like for you to talk about that. Mr. Paulison. Well, you are right, I was not part of the contract. But I have to tell you, the cruise ships are a very essential piece in this whole public policy issue, how we are going to house people. In Florida last year, we had four hurricanes, and we housed more people than ever in the history of FEMA, which is between 5,000 and 20,000 people. We have to house now between 400,000 and maybe 600,000 people. So it is just incomprehensible what we have to deal with. The cruise ships are a big piece of that, and with the cruise ships, the apartments, the hotels, the motels, trailers, mobile homes--all of those are going to be pieces of this big housing project. And right now they are serving a very significant need for us. Senator Coburn. They are half-full. Mr. Paulison. Today they are almost completely full. They were half-full a few days ago, that is correct. We are moving our Federal workers that are going in there. Some of the corridors are very tight, but we are rotating people out on floating 60-day time frames so they can live in those quarters for that short period of time. And, quite frankly, they are almost completely full, and the cost per day per person is, I think, $168 a day, and the Federal per diem in New Orleans is close to $200 a day. Now I am hearing it is much more. So right now it is becoming very cost-effective to do that. But, again, those are types of things that we need to go back and look at, how we did no-bid contracts. We have to weigh the ability to do it quicker, but at the same time be fiscally responsible. But the cruise ships is one of those issues that will definitely be part of our after-action report and review. Senator Coburn. I would just put in for the record, Madam Chairman, that the cost of one cabin for 6 months comes to about $85,000, and you could come close to buying a very nice home in Tulsa, Oklahoma, that would meet that for that same cost. So we have got to look at costs a little better. Chairman Collins. Thank you. Senator Lieberman. Senator Lieberman. Thanks, Madam Chairman. Mr. Paulison, thanks for your answers so far. This Committee, as you know, is involved in an investigation of the preparation for and response to Hurricane Katrina, in some ways separate from what we are talking about today. We are focused today on the relief and recovery part of it. We want very much--I know I speak for Senator Collins and the entire Committee--to work with FEMA on this. We have heard some initial reports that the Department of Homeland Security and FEMA may have instructed at least some personnel not to speak with our Committee investigators without permission from people above or without the presence of people from above, and also that work on some after-action reports may have been halted because of our document request for fear that they would come into the possession of the Committee. Obviously, I don't know whether that is accurate or not. I do know and I am sure you know that the Lloyd-La Follette Act and annual appropriations statutes generally prohibit Federal agencies from trying to prevent personnel from providing information to Congress, and the Whistle-blower Protection Act particularly forbids agencies from taking action against employees for disclosing waste, fraud, and abuse. So I want to ask you, since you are here today, will you as the Acting Director of FEMA commit to fully cooperating with all aspects of this Committee's investigation, including producing documents and witnesses in a timely manner, and that you will not prohibit FEMA employees or contractors from speaking with congressional investigators? Mr. Paulison. Absolutely, Senator. I am actually looking forward to working with this Committee. We are going to cooperate 100 percent. We need to find out what worked and what did not work, and we need to find out before we have the next disaster. So I am fully supportive of what this Committee is doing. You will have 100 percent of my cooperation, and I have not heard any of the issues that you have said. No one has passed any information down to me that we are not to cooperate with this Committee. So you are going to have our cooperation. You are going to have my personal commitment to do that. Senator Lieberman. I appreciate that immensely, and I take it from the last thing you said that as far as you know, neither you nor anyone at DHS has issued any instructions to staff regarding cooperation with our investigation. Mr. Paulison. No, sir, I have done nothing like that, and I am not aware of anybody else doing anything like that. Senator Lieberman. I guess I would ask, although maybe in some sense you have done it by stating what you have just said, that you urge people working in FEMA under you at this point to cooperate with the investigation. Would you do that? Mr. Paulison. Yes, sir. This has to be as open as it can be. If we are going to learn from the lessons, we have to do a full and complete investigation from all angles. Senator Lieberman. Absolutely. We are not into the so- called blame game. Obviously, we want to see who performed and who didn't, and we want to say so, but our focus will be on how to work together to make it better. Mr. Paulison. Yes, sir. I agree with that. Senator Lieberman. My colleagues have asked different questions about contracting problems, and I share that concern greatly about the various particular matters asked. I have heard, as others, that contractors are receiving payments in excess of market rates and that FEMA doesn't appear to have sufficient contract officers to prevent overcharging. In fact, if I am right, the agency is relying on a contractor, on a consulting firm to help with its contracts. And, this is troubling, and it forces us to look more generally at FEMA, and in some ways this disaster will highlight what FEMA is. I think a lot of people felt FEMA was and, in fact, is more than it actually is. It is a couple thousand people, right? Mr. Paulison. Twenty-three hundred people across 50 States. Senator Lieberman. Yes, on stand-by. Now, you have a disaster like this, this one is unprecedented, and immediately you have enormous responsibilities thrust on you through this number of people. I think one of the things we are going to want to ask, as we go on with our investigation, do we want to reform, transform FEMA? Do we want to create a new agency to do what it is doing? Let me ask you some general questions that I think may highlight this. For instance, when will FEMA reduce its reliance on no-bid contracts and return to normal contracting procedures in its response to Hurricanes Katrina and Rita? Mr. Paulison. I have been in public service a long time, and I have never been a fan of no-bid contracts. Senator Lieberman. Right. Mr. Paulison. Sometimes you have to do them because of the expediency of getting things done. I can assure you that we are going to look at all of those contracts very carefully, and hopefully we can put things in place for the future where we will not have to depend on no-bid contracts for future use. Senator Lieberman. One of the problems that I would guess-- and I have heard others say this--that led to the no-bid contracts is that FEMA did not have contracts in place before the storm to provide the emergency needs that could have been anticipated, perhaps not to the same degree, but the kinds of needs, which nobody anticipated, in a hurricane like Katrina. In fact, somewhere I remember reading that the Department of Homeland Security chief procurement officer admitted that FEMA should have had in place more of those contracts so it could have been ready to more quickly respond. I understand, again, you are Acting Director. You have been there 3 weeks. But do you have an answer to why FEMA didn't have in place more of the so-called indefinite delivery, indefinite quantity contracts before the storm which might have been--or would have been bid contracts and would have been presumably at more competitive prices? Mr. Paulison. I cannot completely answer that. I do know that they were in the process of bidding these particular contracts when the storm hit and were not finished with that process. And, also, all of those no-bid contracts we are going to go back and rebid. We are in the process of rebidding them already. Senator Lieberman. So you have started that already. Mr. Paulison. Yes, sir. We are going to rebid all of those no-bid contracts, and they were in the process of starting to do that. Now, maybe it should have been done sooner. That is one of those things that your Committee will obviously research, and we will do also, internally, for our lessons learned and our after-action reports. Senator Lieberman. OK. I appreciate that. My time is up, but I want to say we are all looking at this very intensely in a way that we would not have before, but it sure looks with hindsight that FEMA would have been in a much better position if it had had a lot of contracts in place that had been bid that were stand-by contracts to provide exactly the kind of services that FEMA rushed in to provide on a no-bid basis and which we fear the taxpayers may have ended up paying more money for than they should have. Thanks, Mr. Paulison. Mr. Paulison. Thank you, sir. Chairman Collins. Senator Coleman. Senator Coleman. Thank you, Madam Chairman. First, I want to thank you for your service. You have taken on a responsibility of enormous magnitude at a time where there is a lot of criticism. And we are sitting here doing what we have to do. We have oversight responsibility, and we want to make sure the system works the way it should. What you have heard again and again from all my colleagues is concerns about not overcharging in contracting. We know the people need to be housed, but do you spend a quarter of a billion dollars on cruise ships? Are they operating at fully capacity, etc.? So I want to thank you, Mr. Paulison, for your willingness to step forward into the line of fire here, and hopefully we will all learn from this and do better. Let me just follow up on a couple of points. One, in terms of the ability to deal with payroll, you have a $5 million cap. That $5 million cap could go, as I understand your testimony, to pay for salaries--it is a loan, but if that is what local governments want to use it for. Is that correct? Mr. Paulison. That is correct. Senator Coleman. So if we could simply fix that statutory cap under these circumstances, a technical correction, if, in fact, we wanted to do something about payroll for sheriff's employees, it would be possible to do that by simply changing that cap. Is that correct? Mr. Paulison. That is correct. Senator Coleman. In terms of the concern that my colleague from Connecticut raised about no-bid contracts and the concern--and this has been reported in a number of areas, stuff like blue tarps for covering damaged roofs, there weren't enough of those in stock. Again, we are looking back here, but do you recognize, do you agree that FEMA did not have on hand, in stock the number of goods that would have been needed for this kind of emergency? Mr. Paulison. Well, I don't know if--I am not sure exactly what the point of your question is. Senator Coleman. One of the points was, for instance, it was reported that you did not have enough blue tarps to cover damaged roofs. Mr. Paulison. There has been a nationwide shortage of those blue tarps based on the number that we used in Florida. But as I flew over--and I am sure Senator Collins and Senator Lieberman flew over the damaged area. There is a sea of blue roofs out there, and we do have tarps coming in, quite frankly, as fast as we can use them. So, supplies are--the two areas where there was a significant issue were blue tarps and generators, that there was a nationwide issue with those, but we were able to get the numbers that we needed to do our job. Senator Coleman. In terms of dealing with no-bid contracts, clearly you have to move fast, and certainly the traditional bidding process wouldn't work. But is it possible if you look at how we could modify the contract process to allow for competitive bidding but still allow FEMA to move quickly? Mr. Paulison. Yes, sir, absolutely. That is what we were just talking about, the fact that we are going to rebid those no-bid contracts, and we should have contracts in place ahead of time for those stand-by items that we need, like blue tarps. Senator Coleman. And if there are statutory changes that need to be done to allow you to move quicker but still provide some sort of competitive mix in there to ensure that we are getting the best price, I would appreciate it if you would submit those to the Committee so that we could take a look at that. Mr. Paulison. Yes, sir. Senator Coleman. Could we just talk a little bit about housing going beyond cruise lines? Who has responsibility for the long-term housing needs in the Gulf Coast? What agency? Mr. Paulison. FEMA is responsible for the long-term housing. I shouldn't say that--we are responsible for the interim housing. What we want to do is to do a phased process, a step process. We want to get people out of these congregate shelters, first of all. That is our number one goal. We need to get them into some decent living quarters, apartments, condominiums, single-family homes. Mobile homes plays a piece of it. The cruise ship plays a piece. All of that plays a piece in getting people into some decent housing where they have some privacy. We want them near where they can have jobs. We want them near where schools are available for their children. And that is what our focus is right now. Senator Coleman. Is there a percentage maximum that FEMA then provides to rebuild a house that has been totally destroyed? Mr. Paulison. Yes. The maximum a person can receive with all the benefits is $26,200. The actual price for a damaged home is $10,200--for a destroyed home is $10,200 for that particular piece of it. But when you add the rental assistance, damage to the inside of the house, medical bills, the whole series of things, it all adds up to $26,200 maximum that we can give an individual. Senator Coleman. There is a big gap there, isn't there, in terms of what it takes to rebuild a home versus what FEMA provides? Mr. Paulison. Yes, sir. And if a person does not have any insurance at all, there is going to be a significant gap. Senator Coleman. I do not have a lot of time, but I ultimately want to get back to housing. One of the areas of concern to me, on the one hand, there have been questions raised about the number of mobile homes. Then, on the other hand, I am looking long term, and I don't think we want to create mobile home cities. How are you dealing with that issue? Mr. Paulison. That is a big issue. What we don't want to do is what we did in Florida, create this huge mobile home park. So we have limited the size of mobile home parks to 200. If there is a need to do more than that, the Federal Coordinating Officer would have to come back to me and Under Secretary Jackson for approval to build anything over 200 mobile homes in a particular park. What our real focus is going to be is to put travel trailers in people's driveways or on their lot while they rebuild their homes. That is the quickest, that is the easiest for us to do, and that is going to be our focus. The next move would be to put those mobile homes in existing parks or existing places, like parks and things like that, that already have pads and sewer and water hook-up and electric hook-up. Then the last one would be to actually create a mobile home park where there is nothing there. Senator Coleman. I appreciate your sensitivity to that issue. In Grand Forks and East Grand Forks, I saw a lot of the travel trailers in the driveways, and they weren't very spacious, but they at least allowed people to be close to their homes as they began the process of rebuilding. Mr. Paulison. You don't want to live there forever, but for short term, it is perfect for a family. Senator Coleman. Thank you. Thank you, Madam Chairman. Chairman Collins. Thank you. Senator Dayton. Senator Dayton. Thank you, Madam Chairman. I want to thank you for being here, Mr. Paulison. In the month now or more since Hurricane Katrina, you are the first Administration official with direct responsibility for managing this disaster who has had the fortitude to come before us. I notice that you are pretty much alone here at the table. Echoing what President Kennedy once said, success has a thousand fathers, but failure is an orphan. And if your counterparts in other agencies and your peers would spend as much time before this Committee as they do on the Sunday talk shows, we would be much better informed, and we would have answers and the American people would have answers. And I thank you for providing some of those answers today. I recognize you are new to the position. I commend you for taking on the responsibility, especially in the midst of what you are facing now. As I have thought about this, it seems to me that the term ``emergency management'' is really an oxymoron. I mean that not pejoratively regarding the agency that you head, but just the very nature of what we are looking for here, and I hear that contradiction even in our questions today, and they are all legitimate questions. But, on the one hand, we want and the situation demands a swift response, an immediate response. On the other hand, we want a response carried out according to literally thousands of pages of laws and regulations, all of which have justification, but in a way we are going to have to decide which of the two we want, because my experience up in Roseau, Minnesota, in 2002, when there was a flood that had the same effect on that city, but a much larger scale occurred in New Orleans, but the people who came from, I believe, Washington State, FEMA agency staff, were very dedicated, hard- working, right on the spot, wanting to help. But they were shackled. They couldn't give in most cases immediate responses. They weren't authorized--we talk about--I am on Armed Services--the commanders on the battlefield able to dispense funds--to provide assistance for schools, to provide soccer balls, I mean, to do things that are just immediately necessary. They couldn't say yes to any of that. Individual citizens who were in the state of shock and despair needed answers about what kind of assistance they could get, not just for temporary housing but to rebuild their homes. They couldn't get an answer--I commend the Chairman for pointing out the 800 number of the disaster. They didn't know where to go. They had a form to fill out or a number to call. They got answers almost always no, no. If they could decipher where to go for this and then where to go for that, and this is the reason, I think, we need to have these hearings now on an ongoing basis because, as Senator Warner offered today, to try to amend something--if we are going to just sit on the sidelines and wait until all this is over and then second-guess what has happened, I mean, that is a legitimate function. But if we are going to roll up our sleeves and try to improve the response that is ongoing now for the next weeks and months down in New Orleans, in that region, then we have got to be engaged and involved. And we have to figure out with you what we need to do to take off these shackles and allow people to say yes, and, yes, hold them accountable and, yes, audit their decisions and assure that the taxpayers' money is as well spent as possible. But, on the other hand, if we just send people down there who can't do anything other than to go back to normal contracting procedures, which take weeks or months, then we can't then rightfully expect them to deliver any of the results that we are all looking for. So I don't know if you can address that in the time I have that is limited, but it seems to me that should be the thrust of what we are doing here. Mr. Paulison. Again, I am not familiar with what happened in your State, but I can tell you what my philosophy is, and that is to push the authority for decisionmaking down to the lowest level possible. The people out in the field should have the authority to make decisions, and they should have the information to make those decisions, and that is how I operate. That is how we are going to run FEMA as long as I am here. Senator Dayton. I appreciate that. If somebody is a small business owner whose business has been destroyed now, can they go to somebody at that level and get a response? Mr. Paulison. Yes, sir. We should be able to have enough knowledge on the scene for anybody to come to a FEMA person. We have a Federal Coordinating Officer down there. We have the Principal Federal Officer down there. I have senior procurement people down there. We have the IG's office. We have our General Counsel, everyone that we can think of in those areas that can make decisions and tell them what the right answers are. Senator Dayton. What are the right answers to someone whose business has been destroyed and wants to know can he get a small business loan for $100,000, the cost of rebuilding the business? Mr. Paulison. There are people from the Small Business Administration on the scene down there in those cities now. I have a FEMA person in pretty much every municipality. We have our Joint Field Offices located in the capital of both of those States. So we are doing right now everything we possibly can to get that information out there, where people should be able to get the right answer. There shouldn't be any question about what we are capable of doing and what we are not capable of doing. Senator Dayton. The homeowner whose home has been destroyed, they can go in the same way and find out how much money, if any, is available as a grant for, beginning to refurbish, what kind of a loan is possible, if it is or not, just to help rebuild their home? Mr. Paulison. That is why we have the Joint Field Offices, that is why we have the Disaster Recovery Centers, to put people out there who can answer questions. And we are making it much easier for people to do that. Based on Senator Collins' comment to us about what we were not doing, we made changes to make sure that could happen. So, yes, we are making every effort to have those answers down in the field where they should be. They shouldn't have to come to Washington for answers. Senator Dayton. My time has expired, Madam Chairman. The other issue I would like to explore and I hope this Committee will explore is the centralized locus of one person or one entity in charge in a situation like this. I think the multi- jurisdiction nature of government in the Federal agencies that are interlocking and overlapping, again, we can't have a swift emergency response if we are going to do it by committee and consensus. That may be more than a tangled web than we can resolve immediately, but I have seen it now with the private airplanes flying into the airspace here and the whole Capitol complex evacuated. You have six different agencies, Federal, local, all of whom claim jurisdiction and authority. And, believe me, by the time they have agreed on what the response is going to be, the pilot has lost his license and is deceased. Mr. Paulison. Understood. Senator Dayton. Thank you, Madam Chairman. Chairman Collins. Thank you. Chief, many of us have expressed concerns to you today about FEMA's contracting procedures. The Stafford Act, as I understand it, requires FEMA to give a preference, to the extent feasible and practicable, to local firms doing business primarily in the area affected by a major disaster. Obviously, that makes a lot of sense because it helps the recovery effort if local businesses receive some of these contracts. Our staff took a look at a contract that FEMA issued for manufactured housing that required potential bidders to respond within 24 hours. And what we found is that FEMA issued a no-bid contract to a company outside the Gulf Coast region. We were told by the Mississippi Manufactured Housing Association, which represents three manufacturers and 171 retailers, that it never received any kind of communication from FEMA during this process. And that troubles me because it seems inconsistent with both the letter and the spirit of the Stafford Act, but also the failure to tap local resources can breed resentment towards FEMA. I know that you didn't make this decision. It was made in early September. But what will you do to ensure that local resources, local small businesses, are able to bid on FEMA contracts that affect their region? Mr. Paulison. First of all, we have heard pretty much every Member of this Committee very clearly, and also we believe that we should be giving as many of these contracts as we can to the local people in the community and also in the State. We have also worked with the Governor of Mississippi to allow them to purchase locally mobile homes and travel trailers, and we reimbursed them for those. So we are moving along in that direction. It is a Band-aid fix, no question about it. But, again, my philosophy is to make sure that as much as possible we can do that. We do have requirements, when we bid national contracts, for those big contracts, that they have to use a certain amount of small business or local vendors. We just have to enforce that to make sure that happens. Also, I just got a note from my people that we have told them, for those big contracts, they have to use local vendors exclusively, if that is possible. Now, they may not have the capacity, but at least we can use whatever can be used. So we are putting stuff in place to make sure that we can do this. It is obvious, going through as many disasters as I have, that the more jobs that you can create at the local level, the quicker the community is going to recover. And that is what we want to do, and that is what we are going to focus on doing. Chairman Collins. I am really glad to hear that because that is what has been so troubling in this case. It seems that there were local vendors who were available, able to meet the need, and yet the contract was awarded without competition to a supplier from outside the region, and that just doesn't seem to make sense. I also want to talk with you further about the ice example that I brought up several times and that we have had discussions with your office about, and the reason is that while our first goal is to make sure that we are serving the basic needs of the victims of Katrina, we also have a very serious responsibility to the taxpayers of this country to ensure that as we open the Federal purse, we are doing so prudently and that we are not wasting taxpayer dollars. I wrote to you on September 20 asking you why the Federal Government was paying drivers to haul truckloads full of ice all over the country, including to my home State of Maine. Approximately one week ago, we were told by your office that 30 trucks of ice had been routed to Maine and that of those, 20 had been dispatched to assist the Hurricane Rita victims. Well, this seemed odd to me because I was in my home State, and one of my constituents took me and showed me where trucks were lined up in a parking lot, just sitting there, running 24 hours a day because they had to keep the refrigeration on, and it seemed to me that there were many more than 30 trucks. So we asked your office again whether you were sure that was correct, and just this morning we were told that actually there were not 30 trucks, there were 250 trucks that were routed to the State of Maine, and of those, about 100 have been dispatched. Now, if those latest figures are correct--and they sound much more like what I observed and what my constituents have told me about--that means that we still have 150 truckloads of ice purchased to assist the Hurricane Katrina victims sitting in cold storage in Portland, Maine. And I am also told that it costs $800 a day to haul this ice around the country. None of this ice started in the State of Maine. It was just routed there, 1,600 miles away from the victims. This is just really hard to understand, and, again, it erodes public confidence in the Federal Government's management. And I also think it erodes public support for additional appropriations to help the victims when the public sees this kind of waste in their own backyard. Again, I realize a lot of these initial decisions were not made on your watch, but they are very disturbing to those of us who want to both help the victims and guard the taxpayers' dollars. Mr. Paulison. And, believe me, I understand your concerns. I have done a little bit of looking into this. Again, most of it has focused on what we are going to do in the future. But a lot of the ice was prepositioned for Katrina. With the massive evacuations out of Louisiana, a lot of that was not needed. We did also preposition again for Hurricane Rita, which I was responsible for, and we did move a lot of ice and water and MREs into Texas and into southwest Louisiana for that event. Part of the issue also is one reason you may see a lot of trucks of ice is we don't have time to replenish it if there is another hurricane. So we made the decision to continue to store it. We cannot get new ice again. If we dumped it out on the street and just let it melt and sent the trucks home, we couldn't replace it fast enough, and there are two more storms out there. So until we get through hurricane season, we are not going to get rid of the ice. We are going to keep it. I guess the bigger issue for down the road is what is going to be our public policy on ice. Is it an essential commodity or is it not? We know that water and food definitely is. And should we be in the ice business? Now, I firmly think we probably should be, but, again, I don't want to make that judgment without really looking at it. So there are a whole bunch of issues that are coming out of what you're asking that we need to look at very carefully. How much do we store? How much can we get when we actually need it? What is the ramp-up of the industry out there to give us ice? Those all are the types of things we have to look at and fit into this mix of how we are going to supply commodities. Another issue is tracking. FEMA does not have a good tracking system. Maybe we need to bring in a Wal-Mart or something. We don't have a good tracking system of where the commodities go and where they are at any given time. So those are the issues that we have to go back and look at very carefully and how we are going to manage this organization in the future. Chairman Collins. Thank you. Senator Lieberman. Senator Lieberman. Thanks, Madam Chairman. On that last point, you are absolutely right, and incidentally, I have grown so tired of using the metaphor, ``This makes as much sense as carrying coals to Newcastle,'' because it is not an American metaphor, and it is tired. And now I am going to say, ``This makes as much sense as carrying ice to Maine.'' I will think of Senator Collins whenever I do that, and many other times, of course. Mr. Paulison. I am sure that will be on the front page of some paper. [Laughter.] Senator Lieberman. Probably in Maine. I just want to say--and you probably have seen this, although I know you have had a busy 3 weeks, but really on the question of the ice, last month the Department of Homeland Security IG issued what I thought was a startling report about information technology systems that the Emergency Preparedness and Response Directorate, in which FEMA is located, uses to support incidents, response, and recovery operations. They particularly went over the four Florida hurricanes in 2004 and found a number of deficiencies, including that the systems cannot effectively handle increased workloads and don't talk to each other. So that may be a big part of the reason, as you suggested, why the ice ended up in Maine. It makes no sense. And, it is not such a bad idea to talk to Wal-Mart or somebody like that because they manage to move enormous quantities of stuff around effectively. I want to just pick up a few pieces that we have talked about along the way. First, on housing, am I correct, in your priorities for the trailers, the first priority, as we have heard testified to by local officials last week, is to put the trailer basically on the homeowner's property, so from the trailer the homeowner can rebuild the house? Mr. Paulison. That is correct. Senator Lieberman. Do I also understand that the next priority, if you have to build a trailer community, in addition to putting it near existing infrastructure that will support it, you want to put people as close to their homes as possible, their previous homes? Mr. Paulison. The second priority would be putting those mobile homes or travel trailers in existing either travel trailer parks or campgrounds that are close to work. Senator Lieberman. Right. Mr. Paulison. Because the sewer hook-up is already there, there is water, there is electric, the house pad is already there, so it is much easier to put them in and---- Senator Lieberman. But the key there is close to work. Mr. Paulison. It has to be. We can't put people out in the middle of nowhere. That is what slows things down, particularly around New Orleans. There is nothing there locally where we can put places right now. It is still pretty wet. But we don't want to put them out in the middle of nowhere. Senator Lieberman. That is what is important. Mr. Paulison. It does not serve a purpose. There are no jobs, there is no transportation, there are no schools. Senator Lieberman. Right. It is just going to make a bad situation worse. Mr. Paulison. Exactly. Yes, sir. Senator Lieberman. Thank you for that answer and that policy. I referred to the relatively small number of Disaster Recovery Centers, and my impression is that this is particularly true in the rural parts, often poor parts, or parts that have a lot of poor people, of Mississippi and Louisiana. So let me ask you what FEMA is currently doing to reach those individuals in the rural areas of the Gulf Coast who still do not have a FEMA representative or Disaster Recovery Center in their community? And, parenthetically, I will say what we talked about briefly before the hearing. When Senator Collins and I and other Senators went to the region a couple of weeks ago, in some sense we were--it was awful to see New Orleans, but we had seen so much of it on TV that what really stunned us was the absolute devastation caused in rural parts, coastal rural parts of Mississippi, where they didn't have the flooding so they were better off than New Orleans, but everything was knocked down by the hurricanes. And a lot of poor people there are really hurting. So I will go back to my question. What are you doing to try to get more direct FEMA representation or Disaster Recovery Centers in those communities? Mr. Paulison. A couple things. One, the Disaster Recovery Centers, we put them where the States want them. We don't just go out and arbitrarily pick a place to put them because they know where the population is and they would know where they are needed much better than we do. So we do that. We are still in the process of adding more of those. Second, we have what we call community relations people, and this goes back to Senator Collins' comments earlier in her opening statement about using firefighters to do that. We had issues in Florida with some of our community relations people, and we made the decision that we were going to ask firefighters to do this. We made it very clear that that is what they were going to be doing because we have plenty of people to respond. But we had over 4,000 firefighters respond to do that, and so they are out in these communities, and there is nobody that I know that is more sympathetic to somebody in a terrible situation than our firefighters and police officers because they know what they are going through, they have seen it before. They have seen people with fatalities. They have seen people that have had their homes destroyed. So that is why we use firefighters, and we have these people out in the communities, out in the rural areas, and they have the information. They are not just handing out pamphlets. And, yes, we did give them some specific training in sexual harassment because we are required to do that. But that is what we are trying to do, Senator, is get the people out to where--into the rural areas, and it may be just two or three people in a car driving from home to home, making sure people have the information of how to get connected into the FEMA system. Senator Lieberman. OK. I urge you to really give that your attention. Mr. Paulison. Yes, sir. Senator Lieberman. Because we keep hearing from folks and communities like East Biloxi and Waveland that they have been devastated and they have no help. Incidentally, we ought to work together on that sensitivity training because a lot of that probably happened because of Federal legislation or litigation. But this is the classic case, when the house is burning or people are drowning, you don't want to send them for 2 or 3 days of sensitivity training. You want to send in first responders to help and run the risk in the pursuit of saving life. I want to ask you a last question, and I apologize, I am a little over my time. Just give us your counsel on this question of FEMA's capacity to oversee the rebuilding and reconstruction, which it now has the responsibility to do under the National Response Plan. I just don't know how FEMA, with everything else it is doing in terms of the immediate relief and response, how you can oversee the recovery and reconstruction. Do you have a thought on that? Mr. Paulison. Well, we have set up a new Emergency Support Function, ESF-14, that is responsible for some of those long- term recovery efforts. But it is a concern, and we have already had discussion with the Secretary about how we are going to do this long-term recovery because of the planning needed and the amount of devastation, particularly in the areas of Mississippi and New Orleans, of how that is going to happen. Our long-term recovery is primarily based on public assistance, rebuilding the infrastructures that are torn down. We still have people in Northridge, so that takes a long time, and we are still there. I can tell you that I have a commitment from the Secretary and personally from the President that we will stay there until it is done. But there is an issue or there may be some issues beyond the capability of FEMA for this long-term thing, and already we are trying to come up with a solution for that. Senator Lieberman. OK. Well, again, I look forward to working with you on that. I just don't see how you can continue the immediate response relief to the hurricanes, be ready to respond to other natural disasters that may occur, and oversee the reconstruction of a major section of our country. So I think Congress--and we should try to do it together. Congress is moving toward a czar or a Gulf Coast Reconstruction Corporation, but some entity to get that job done. Thanks very much, Chief. Mr. Paulison. Yes, sir, understood. Chairman Collins. Senator Coburn. Senator Coburn. Thank you. You gave me a number a minute ago on occupancy of the cruise ships, and you gave me a percentage. How many people are on board those ships right now? Mr. Paulison. Give me one second, and I have that in front of me somewhere. I don't have that. I know that--here we go. OK. In Louisiana, we have the capability of housing 2,350 people on cruise ships, and there are 2,155 on that cruise ship. In Mississippi, it is able to house--this is as of yesterday, so I know there are already more people on there. In Mississippi, we have 726 capable of housing, and there are 486 on there. So total out of 3,000 cabins, we have 2,641 full. Senator Coburn. Well, OK. You are talking cabins. Mr. Paulison. Yes, sir. Senator Coburn. The capacity of the cruise ships is 7,000 people that you have contracted, 7,170-some people. It is important that the language we get here is correct. If you are talking about cabins, you are not talking about beds. And the capacity is over 7,000. So how many total people are on board the ships? Mr. Paulison. I am going to have my staff find that. I will have to find that for you. I know yesterday they told me that even with the number of bodies, they were over 90 percent full. Senator Coburn. The numbers aren't adding up, and that is why I would like for you to clarify. Mr. Paulison. I will absolutely get that for you, sir. Senator Coburn. When we started talking about numbers earlier, you all were giving us numbers, and now you are giving us cabins, but it doesn't say how many people. Sometimes there are two, three, four berths in a cabin, and so I think it is important---- Mr. Paulison. It will never be 100 percent full. Senator Coburn. I understand that, and I am not---- Mr. Paulison. Those three-berth cabins or four-berth cabins may have a family of three in there. Senator Coburn. Sure. I understand that. Mr. Paulison. Now, we are doubling up with all of our Federal workers and all of our police and firefighters that are in there. We are making them double-bunk, not in the same bed, but both in the same cabin, to make sure we can get as maximum capacity out of it as possible. Senator Coburn. I have one other question that I would like to ask. LSU health system is requesting $600 to $700 million to build a new hospital in Baton Rouge. Did Baton Rouge sustain damage from the hurricane? Mr. Paulison. Yes, sir, they did. I was there, and there was a significant amount of damage. Senator Coburn. The hospital? Mr. Paulison. I did not visit the hospital, but I can find that out for you. Senator Coburn. But they didn't have significant damage like New Orleans? Mr. Paulison. Oh, no, sir. Mississippi had a significant amount of damage, probably more so than Louisiana. If it had not been for the levees breaking around New Orleans, we would be talking about Mississippi here, not Louisiana. Senator Coburn. OK. But is it the responsibility of FEMA to bring on board greater than to repair that which was lost? Mr. Paulison. No, sir. Our job is to put it back where it was before the storm. Senator Coburn. So we can pretty well count on not spending $2 billion on two new hospitals in Louisiana based on restoring what was there in the past. Mr. Paulison. Yes, sir. I cannot imagine that happening. Senator Coburn. Well, that is what the request is for. Mr. Paulison. We get a lot of requests. Senator Coburn. All right. Mr. Paulison. We will look at those very carefully. Senator Coburn. Madam Chairman, I will end with that. I would like to have permission to add for the record an analysis done by my staff on the contract done on Carnival Cruise Lines and also the information done on Charity Hospital and what is actually going on down there. Chairman Collins. Without objection. [The information follows:] [GRAPHIC] [TIFF OMITTED] T4439.001 [GRAPHIC] [TIFF OMITTED] T4439.002 Senator Coburn. And also the possibility to have questions for the record to be answered. Chairman Collins. The record will---- Mr. Paulison. Senator, I would like to have copies of those also, if we can, because that would help us make a better decision. Thank you. Chairman Collins. Thank you. Senator Dayton. Senator Dayton. Thank you, Madam Chairman. What is the state of basic water, sewer, sanitation in New Orleans now? And who is responsible for reestablishing those essentials? Mr. Paulison. It is our responsibility to reimburse the city for those expenses to put that back together and to help them with some contracting issues. Parts of the city do have water. I am not sure that it is all totally potable. The sewer systems are coming back online, and some of the electric is coming back online. Obviously, it is not very widespread. There are just pockets of that. I know the Algiers area, the mayor is allowing people to move back in. It pretty much has all the essential services. The downtown district seems to be able to function fairly well, but there are a lot of other areas in the city that are not able to have occupants back in there yet. Senator Dayton. Who is responsible for law enforcement? And is that being effectively provided? Mr. Paulison. That responsibility is a local issue as to the decision to either move back in or not move back into the city. That doesn't fall in FEMA's purview. Senator Dayton. The people who are now coming back in finding their homes in whatever condition if they still exist, what procedurally are they doing? You testified on this before, but where do they go? Who do they talk to? What are their options? Mr. Paulison. Well, the city is in control of that. I know they are letting some people go back into the cities. I talked to a friend of mine who is a former fire chief of New Orleans, and he got to see his house yesterday, and he said there was about 6 feet of water. They did not go inside. They were supposed to do that today. So I know they are letting people back into the city to look at their houses, to recognize what kind of damage they have, but the mayor has been very careful about what areas of the city he is allowing to be occupied. Senator Dayton. So who is in charge? Is the mayor making these decisions and FEMA provides reimbursement? Mr. Paulison. That is correct. The mayor and the State. All of our funds go through the State, so when the city submits the bill to the State, the State submits it to us, and we reimburse them. Senator Dayton. So when Senator Lieberman asked about how FEMA is going to be responsible for reconstruction, it sounds to me then, from what you have just said, that FEMA's role is really to reimburse for the reconstruction, and others are going to drive those decisions? Mr. Paulison. That is correct. Part of it, we do help with some of those decisions. We also help with some of the planning. But the primary responsibility for that lies with the local and State, and our position is mainly to help them reimburse those projects. We look at those project work sheets, either approve them or disapprove them, and then help them---- Senator Dayton. Given the scope of this disaster and the work that lies ahead, do you have the organizational decisionmaking capacity and authority then to approve $2 billion, $200 billion, whatever this price tag is going to be for whatever those individual decisions add up to be? Mr. Paulison. Yes, sir. If it falls under what is legally permissible under the Stafford Act, the answer would be yes. Senator Dayton. Is the reconstruction of New Orleans covered under the Stafford Act? Mr. Paulison. The reconstruction of individual buildings, the answer is no. The reconstruction of critical infrastructure, the answer is yes. Senator Dayton. So the entire critical infrastructure would be what? Again, sewer, water, sanitation, schools? Mr. Paulison. Sewer, water, sanitation, schools, public works buildings, city hall, things like that. We would help with that reconstruction. Again, to put it back the way it was prior to the storm, not to make it better. Senator Dayton. When you say ``help,'' does that mean someone else makes the decision, local or State, and then FEMA reimburses? Mr. Paulison. That is correct. And the State picks up a percentage of those costs also; it's a 75-25 mix. We pick up 75 percent of the costs; the State picks up 25 percent of the costs. Senator Dayton. So local government and the State will make these decisions, and then FEMA will reimburse? Mr. Paulison. They will submit project work sheets on what they feel is eligible, and we will make that determination whether it is or not. Senator Dayton. And the eligibility, though, is dependent upon the replacement kind of decision? It is not based on whether this is the right strategy or the right configuration or anything else? This is just to replace what pre-existed? Mr. Paulison. That is correct. If a building has to be replaced, let's say--I will make one up. Let's say a school was totally destroyed, they are going to have to meet all the new building codes and new floodplain codes. So that will play into making the--the President is committed we are going to rebuild it better and stronger. That will play into that. Now, individual assistance is totally different. That money goes right to the individual. It does not go through the State. It does not go through the city. It is just the public works projects, the long-term piece of it that goes through the States. Senator Dayton. Next time one of these hurricanes approaches some part of the United States, who will make the decision whether to evacuate or not? Who will carry that out and who will deal with people who choose to stay behind? Mr. Paulison. That is a local and State issue. We do not do evacuations. Senator Dayton. You just come in after the fact and deal with what has occurred? Mr. Paulison. Yes, sir. We can do a pre-disaster declaration and help pay for those evacuations and help pay for the city to do some of those things. But it is their decision whether to evacuate or not, not ours. Senator Dayton. Is that the right protocol, in your judgment? Mr. Paulison. Yes, sir. I don't want to make decisions from Washington. I mean, I have a lot of experience in doing this, and I could make some recommendations to them. My daughter was in New Orleans, and Sunday morning I told her to get out, and she left. It took her 12\1/2\ hours to get to Memphis, but she got out. But that is definitely a local issue. When I ran emergency management for Miami-Dade County, the mayor and I decided in consultation with the State and the Hurricane Center when to evacuate, and that is what the locals--that is what they are supposed to do. Senator Dayton. My time is up, but is the protocol now in terms of the decisionmaking, locus of responsibility, local, State, Federal, is that aligned properly, in your judgment, in New Orleans and that region? Mr. Paulison. As far as when to---- Senator Dayton. For where we are today, moving forward, the reconstruction, the rehabilitation, you talk about the local responsibilities, FEMA's role. Is that the proper protocol? Mr. Paulison. Yes, sir. I believe it is, yes, sir. Senator Dayton. OK. Thank you, Madam Chairman. Chairman Collins. Thank you. Senator Carper. Senator Carper. Thanks, Madam Chairman. Mr. Paulison, welcome. It is good to see you, and we thank you for being with us today. We thank you even more for your willingness to step into the breach and to fulfill the responsibilities and provide the leadership that you are providing today. Mr. Paulison. My wife said I need my head examined, but that is OK. [Laughter.] Senator Carper. My wife has said that a time or two as well. We have all had times when I am sure we felt like we were drinking out of fire hydrants, and I suspect that is exactly how you felt in recent weeks. We have an oversight responsibility in this Committee with respect to the Homeland Security Department and the agencies therein, and really a broader oversight responsibility for the operation of the Federal Government. Among the things that come before us are nominations for people to serve in a variety of leadership capacities. OMB is one, Homeland Security is another. And I don't know that--and as we apportion blame or credit, I don't know that we covered ourselves with glory with respect to our oversight in the way we scrub some of the nominees who may have come before us for some of the Homeland Security positions. And as we look to replace Mr. Brown as he has left, and perhaps others who may depart, take a moment just to talk to us about some of the leadership qualities that we ought to be looking for in order to better fulfill our oversight responsibilities to make sure we are getting the kind of leaders in these critical positions. Mr. Paulison. Are you talking about particularly FEMA? Senator Carper. FEMA. Mr. Paulison. I fully support the fact that those types of positions should be political appointees. They have to carry out the President's policies and guidelines. However, I do feel that the person has to have the capability of doing the job. Senator Carper. How might they get that capability? Mr. Paulison. Well, I can only speak for me. Senator Carper. Go ahead. Mr. Paulison. I can't speak for anybody else. My experience that I have, 30 years in fire service and emergency management, allows me to make the decisions that I think I need to make for a particular job like this, even in an acting level. I can't speak for anybody else, what their experience or education or anything else gave them to move into there. I can just say that I make better decisions when I have good people around me, and I make better decisions based on my experiences that I have had over the past 35 years. Senator Carper. All right. Thank you. I want to ask you--and I know some others have already asked questions with respect to the folks we had in hotels, the folks we still have in hotels around the country, and I know that we started off with a whole lot of people, and I think we have a great many fewer today than we did several weeks ago. I think the Washington Post reported yesterday that there are more than 400,000 folks who are still living--who lost their homes by virtue of Katrina who are still living at FEMA's expense in hotels around the country, 400,000. Does that sound like it is in the ballpark? Mr. Paulison. That is pretty accurate. That is in the ballpark, yes, sir. Senator Carper. All right. Mr. Paulison. Those are not in congregate shelters. Senator Carper. Say that again? Mr. Paulison. Those are not in congregate shelters. Those are either in mobile homes or motels or hotels or living with friends. The ones we have in the actual shelters themselves are less than 60,000, and we are looking to get those out by mid- October. Senator Carper. All right. This is October 6, so---- Mr. Paulison. I understand. We have a task in front of us. When the President gave us the task of getting everybody out by October 15, that was prior to Hurricane Rita. And Hurricane Rita's evacuation obviously set us back significantly. However, we are still focusing on meeting that mid-October deadline to get as many people out of the shelters as we possibly can. Senator Carper. All right. Now, of the 400,000 individuals, these aren't people that are just in hotels. These are people in a variety of places. Go ahead and just give us some rough idea of---- Mr. Paulison. Well, they can be in a motel, they can be in a condominium, they can be in a single-family home. There are several places they can be that we are housing. We want to move those people out of there. We are giving them rental assistance. We are putting them in our housing program. We are working with HUD to as quickly as possible get these people settled somewhere. It very well may not be back in their State where they came from. There is simply not enough housing stock in Louisiana to take all Louisianans back in there. That is not going to happen. I know the governor wants them back in there. We would like to have them back in there. But that is not going to happen. The mobile home and the trailer park issue is not going to house 400,000 people. We have to find alternative housing. So they may very well be in a hotel or a motel or a condominium or duplex for a period of time until we can get them back into homes. A lot of these homes can be reoccupied. A lot of them just had some wind damage, and we can either put a travel trailer there, or they can move back in their home just because we put a blue tarp on the roof. So I think we are going to see things starting to move very quickly now as we get this ball rolling and get it moving along the way. This is a massive undertaking for any organization. Like I said earlier, we housed 20,000 people in Florida, and that was the biggest event we had ever done. Now we are talking about 400,000. It is just a massive effort. It is going to be slow, but we are going to do it methodically. We are going to make sure people are treated with respect and treated with dignity and put in a place that is decent for them to live. Senator Carper. OK. One other question, if I could. Senator Coburn may have raised this. I am not sure if he did or not. But he and I and Senator Obama and others, I think with the support of our Republicans Leader, Senator Frist, and Democratic Leader, Harry Reid, have called for the creation of something like a chief financial officer to work with Inspectors General and others who have oversight over spending in our departments. We passed that legislation from this Committee that would create such a person to serve as a watchdog. I understand that the Department of Homeland Security has created what I believe is called the Katrina Internal Control and Procurement Oversight Board. Mr. Paulison. That is correct. Senator Carper. And my notes here say it consists of the Department's Under Secretary for Management, your Chief Procurement Officer, your Chief Financial Officer, your General Counsel, your Inspector General, and your Chief of Operations. I have two questions. Where does this board, which I presume you are familiar with, fall in the chain of command on the ground in the Gulf? And, second, is it involved in making day-to-day decisions about purchases and expenditures? Mr. Paulison. It is located here in Washington. It is not out in the field. All these people work here, and they are overseeing all of our procurements to make sure they are being done properly. On top of that, we have put senior procurement people out in the field. We put people from the Inspector General's office out in the field. We put people from our Office of General Counsel out in the field. I am going to do everything humanly possible to make sure that we follow government procurement guidelines from here out for the rest of the expenditures we are going to do. This amasses a lot of money. You have given us $60 billion to manage this disaster, and we have to spend it in a fiscally sound manner, and that is what we want to do. I am going to do everything I can do to make that happen. Senator Carper. Of that $60 billion, do you have any idea how much is left? Mr. Paulison. There is about $38 to $40 billion left. Senator Carper. And of that $30 or $40 billion that is left, any idea how much has not been obligated, that is, unobligated funds? Mr. Paulison. No, sir. Off the top of my head, I don't have those figures. We can get those for you. Senator Carper. Again, thank you for your service. Great to see you and welcome. Mr. Paulison. Thank you for your questions. Senator Carper. Thank you. Chairman Collins. Thank you. Director Paulison, I want to thank you for stepping up to the plate, answering the call of your country under extremely difficult circumstances. I have a great deal of admiration for you personally. Your commitment to emergency preparedness and response has been evident throughout your entire career. And I think we are very fortunate that you have stepped in to lead a troubled agency at a critical time. So I want to end this hearing today by thanking you for your service. We are concerned about a host of issues--and they are legitimate issues--as we go forward with the recovery effort. We are also undertaking and have begun an in-depth investigation of what went wrong, and how can we improve our preparedness and response to future disasters. And I appreciate your assurances to Senator Lieberman that you will fully cooperate with the Committee as we go forward with our investigation. There are many more questions that we have for you today, but I am going to submit them for the record. We also have some questions that have been submitted by Senators from the affected regions. For example, during the course of this hearing, Senator Lott, who must have been watching on television, asked me to bring up with you a question concerning aid to the fisheries which have been devastated in his State. We will submit that for the record as well. For that reason, the hearing record will remain open for 15 days for the submission of questions and other materials. I also want to thank our staff for their hard work in putting together this very important hearing as we assess the status of the recovery effort. But, again, you have an awfully big job, and I hope you won't hesitate to come to the Committee and tell us what you need and share your experience. We would welcome that kind of insight and input from you as you attempt this very challenging task. Senator Lieberman. Senator Lieberman. Madam Chairman, I just accept and embrace everything you have said. Mr. Paulison, you have stepped into an emergency. That is your training. This is a different kind of emergency you are stepping into, but in a way, the house is on fire, and you have been called in to not only to put out the fire, but to help us make sure that we are ready the next time. So we have to work together to make that happen, and I look forward to doing it with you. You are a professional. You have answered the questions today. You have given us some pledges, which are important to us. And overall, I thank you and look forward to more of the same. Mr. Paulison. Thank you, and I am looking forward to working with the Committee. So I thank all of you. Chairman Collins. Thank you. This hearing is now adjourned. 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