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Remarks by Secretary Napolitano at Today’s Media Availability to Announce a New Arbitration Process for Gulf Coast Recovery

Release Date: 
August 7, 2009

For Immediate Release
Office of the Press Secretary
Contact 202-282-8010
Washington, D.C.

Secretary Napolitano: Well, and thank you. I am very pleased to be here with [Louisiana] Senator [Mary] Landrieu, and I think the people of Louisiana need to appreciate the work and leadership that she has provided in this effort. She is unrelenting in her request for the recovery of the Gulf Coast, and I am pleased to work with her as is the entire Obama Administration.

Indeed, my first trip to the Gulf Coast was with the HUD [Department of Housing and Urban Development] Secretary, Shaun Donovan. We have been able to do—not only some innovative issues with the resolution which I’ll announce here in just a moment—but also with respect to some of the housing issues that remain after Katrina. Just briefly, to summarize a number of the things that have happened in the last few months to get federal funding to communities that need it—to cut through the red tape that has stalled the progress of rebuilding the Gulf Coast, the process for putting new leadership in place, consolidating our offices to be more efficient, and streamline decision-making—we early on created a decision team to resolve disputes.

We dissolved the Gulf Coast recovery office and realigned it with the existing Louisiana Transitional Recovery Office. Now, anybody who was familiar with Katrina issues, you know that eliminated a lot of delay in the process. We have greatly accelerated the funding for recovery projects in the Gulf Coast. Indeed, since January, FEMA [Federal Emergency Management Agency] has obligated hundreds of millions of dollars for education and public works products, health care infrastructure and debris removal.

As a result, schools are being rebuilt. Fire and police stations are being replaced. Plenty of infrastructure projects are under way, but we are not done yet; and, as [FEMA Administrator] Craig Fugate said on our way in here, we cannot wait for this new arbitration process to be in place. So today, I am pleased to announce an arbitration process that will give us one more tool in our tool box for expediting Gulf Coast recovery efforts. This new arbitration process will provide an independent alternative review, critical to achieving final resolution of remaining disputes. It will be an independent review and it will provide local applicants, state and federal government with final and binding funding decisions.

Under this process, multiple arbitration panels will be convened, each comprised of three judges from a pool of federal resources—not FEMA—independent of FEMA, to look at any disputes that remain between FEMA and the state of Louisiana or other local applicants in the assistance process.

Who will it be? Where will these arbitrators come from?

You’ll hear in a moment—but they will come from the GSA [General Services Administration] Civilian Board of Contract Appeals. This is a great place for them to come from, because this is a group who will handle on a day-in, day-out basis—on contract disputes—building contract disputes. They have construction background and experience. They understand the issues that underlie many of these remaining claims, and they will be provided and have access to the advice of independent, technical and scientific subject matter experts like engineers and architects.

How will we get this process started? At the end of this month, FEMA will issue detailed rules for the arbitration process that will provide applicants with the information they need to begin submitting their request for arbitration. These procedures are fair, but they’re aggressive. We want to move these things along, so we have set targeted deadlines for how the arbitration process will work.

30 days from the applicants or 30 days from the process being started, new applicants can decide to opt into arbitration. So at the end of the month, you publish the procedures. People who have not yet filed their claims can have 30 days to do that. If people are already in FEMA process, they can decide if they want to just stay there, or they have 60 days to decide if they would like to go into an arbitration process and start anew there. So that will move things along.

The three key points that we should take-away from this process are as follows. The arbitrations will be independent. They will be final and binding. So, as Senator Landrieu said, they are a process by which we get to closure on some of these claims that have been pending—and some for years. The arbitration process will be quicker than the FEMA process. Indeed, we think most of these appeals could be resolved in four to five months once they begin; and they will be third-party neutral, which will not be a FEMA panel—which has been a concern of some in the Gulf Coast about having applied to FEMA then having the appeal decided by FEMA.

Instead, they will be independents—the final binding—quicker independent, and I think this procedure will be a help as—like I said, give us another tool in the tool box we are employing in the Gulf Coast area. Let me close again by thanking you, Senator. I’ve got to tell you. We talked about this early in my tenure as Secretary and having some kind of way to get out of the usual process. Not because of the number of remaining claims, but from her and really her continued advocacy with the people of Louisiana, I’m not sure that we would be standing here today. Thank you very much.

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