In recent days, Gov. Jim Justice and his administration temporarily froze a nearly $150 million federal flood recovery effort amid a purchasing snafu on a $17 million consulting contract and repeated concerns from constituents about promised relief that never arrived.
The following are answers to some questions to help better understand the bureaucratic problems that slogged down a massive effort after the deadly June 2016 flood, and how the state plans to revitalize the program.
What is RISE West Virginia?
The origins of the RISE West Virginia group trace back to former Gov. Earl Ray Tomblin’s administration. In its early stages, RISE awarded grants up to $10,000 to small businesses affected by the flood, funded by the state and a private donor.
After the flood, RISE West Virginia got nearly $150 million from the U.S. Department of Housing and Urban Development in early 2017 to repair and reconstruct single-family housing and rental units that sustained damage. That money came from a federal Community Development Block Grant designated for disaster relief.
The funds are available to applicants in Clay, Fayette, Greenbrier, Jackson, Kanawha, Lincoln, Monroe, Nicholas, Pocahontas, Roane, Summers and Webster counties.
According to members of Justice’s administration, some red flags popped up around RISE in early 2018, prompting an investigation.
Brian Abraham, Justice’s general counsel, said the state originally negotiated a $900,000 contract dated about March 2017 with Horne LLP, a Mississippi-based firm that helps states with natural disaster response. However, that contract only spans part of several pieces of work to be done.
Abraham said an employee of the Commerce Department went on to sign a final contract beefed up to about $17 million from the original $900,000. Neither the state Purchasing Division nor the state attorney general approved that change; both of them were required to sign off.
Abraham also noted the contract states it is dated and effective Dec. 12, 2016, but no state agent signed it until March 30, 2017. That discrepancy remains unexplained, he said.
To avoid the possibility of the state being put on the hook for any misused HUD funds, the Justice administration froze the program and hired the law firm of Carey, Scott, Douglas & Kessler to look into the matter in late January. The freeze was lifted last month.
In fact, the state did not actually obtain authorization from HUD to begin spending RISE funds until Feb. 20, 2018.
West Virginia Adjutant General James Hoyer, who recently began overseeing RISE, said the environmental review process is a major factor bogging down the process of turning dollars into houses.
On Thursday, Hoyer said HUD rules forced the program to get certain redundant approvals that he’s looking for ways to circumvent. Also, he said some approvals that were obtained weren’t communicated to the people who needed to know. Those issues kept the state from getting funds from HUD to pay contractors to do actual construction and demolition, Hoyer said.
He said administrators are looking for ways to streamline the process and fix staffing issues. He’s also consolidated two separate RISE case management systems into one, in an attempt to avoid any duplication of work and to prevent clients slipping through any cracks.
Emails obtained via public records requests and interviews with RISE clients show several people involved with RISE before Hoyer’s entrance, whether emergency management officials or clients, were getting inconsistent and often inaccurate statements from RISE officials regarding the status of the program and why they were not getting any help.
In a November 2017 news release, state Commerce Secretary Woody Thrasher said 1,100 families had received help from RISE, a claim Justice called entirely inaccurate this week.
Likewise, a report from WV MetroNews based on different emails shows months of bureaucratic issues between Commerce and another state agency, the Division of Purchasing, in the months leading up to Justice’s pause of the program.
Who runs RISE?
When HUD awarded the state the grant, the West Virginia Development Office, part of the Department of Commerce, took over RISE. The program’s action plan submitted to HUD said that’s because the office had already handled non-disaster Community Development Block Grants. The decision to put RISE within the Development Office was first made by the Tomblin administration and furthered by the Justice administration.
According to the action plan, the Development Office had managed more than $148 million in Community Development Block Grants funds since 2007.
However, as former Commerce Secretary Keith Burdette said in a recent interview, the Development Office had never handled such a huge influx of money so it brought on Horne LLP to help manage the grant.
However, given an onslaught of problems with RISE, Justice put Hoyer in charge of the program on Monday after saying the Department of Commerce “dropped the ball.”
Both the Department of Commerce and the National Guard are effectively extensions of the executive branch and under the purview of the Governor’s Office.
Although Hoyer is overseeing the program now, some have questioned why a flood recovery program wound up in the Department of Commerce in the first place.
A law passed in 2017 also created the State Resiliency Office, which handles flood recovery and preparedness, and its board within Commerce.
That board, comprised of several executive branch members, reports to the Joint Legislative Committee on Flooding. However, the board did not meet as often as the law requires, and its quarterly and annual reports did not go through the proper channels. Likewise, most committee members didn’t see the reports for months after their submission.
Thrasher chairs the board, which includes Hoyer and Department of Homeland Security and Emergency Management Director Jimmy Gianato.
Has anyone been fired?
So far, only one person has lost his job as a result of the malaise — and he disputes that.
Josh Jarrell, former Deputy Commerce Secretary and general counsel for the department, was fired. However, he denied that he was fired in an interview last month and pointed out he had already received approval from the state Ethics Commission to seek outside employment at the time of his ouster.
Jarrell acted as the state signatory on the Horne contract, which Abraham, the governor’s general counsel, said he was not authorized to do. Jarrell denied the claim.
Though Justice said Thursday that no one else has been fired, he maintained his earlier statement that terminations are to come.
He has also not sent out any clear signal whether Thrasher will keep his job.
What about Horne?
The state will keep contracting with Horne as recovery efforts continue, per Justice and Hoyer.
Justice said finding a new consultant this late in the game would lead to further delays with HUD. However, he said the contract has been pared down to somewhere between $9 million and $10 million.
As of Friday morning, Horne has received about $704,000 in state money over the last two years, according to data from the state auditor. It received its last payment in January.
What comes next?
As Hoyer looks forward, several politicians have called for investigations for what happened with RISE.
House Speaker Tim Armstead, R-Kanawha, wrote a letter to the chairmen of the Joint Legislative Committee on Flooding last month requesting the body “examine the management of the West Virginia Rise program at the earliest opportunity.”
In a May statement, the chief deputy attorney general declined to comment, citing potential litigation. A spokeswoman held that position Friday.
Kanawha County Commission President Kent Carper has called for a legislative review of the program. Legislative Auditor Aaron Allred confirmed Friday his office is planning to audit RISE as well.
What does the Department of Commerce have to say?
Nothing so far.
For roughly two weeks, communications aides from Commerce did not respond to interview requests with Thrasher. After Justice announced that Hoyer would oversee the program, Commerce staff referred the requests to a National Guard spokeswoman.
Eventually, Butch Antolini, a Justice spokesman, denied the request. “Until the realignment work on the RISE program is completed, no interviews with Secretary Thrasher are being granted,” he said.
I’m having problems with RISE. What can I do?
The National Guard established a hotline through W.Va. Volunteer Organizations Active in Disaster that RISE clients can call for assistance. That number is 304-220-2570.
And the Gazette-Mail wants to hear from those who have been dealing with RISE. Email us about your experience at firstname.lastname@example.org.