Christie administration ends contract with firm distributing Sandy grants

After months of complaints from homeowners about inept management, poor communication and long delays, the state said today it has severed ties with a Louisiana firm hired to handle New Jersey’s nearly $1 billion Hurricane Sandy housing recovery programs.

It remains unclear who is administering the federally funded programs.

The three-year contract the state signed last spring with Hammerman & Gainer Inc., or HGI, ended this week. Both sides agreed last month to terminate the nearly $68 million contract.

"We’ve recently concluded our relationship with HGI as New Jersey transitions to the next phase of disaster recovery," Lisa Ryan, a spokeswoman for the state Department of Community Affairs, said today in a statement.

Ryan did not respond to follow-up questions about why the contract was ended or who was now running the housing programs.

HGI was hired in May to run housing initiatives supported with federal money, including the Reconstruction, Rehabilitation, Elevation and Mitigation, or RREM, program and the Homeowner Resettlement program. The DCA oversees both programs.

The RREM program, which offers as much as $150,000 to homeowners to repair their Sandy-damaged properties, has drawn the ire of many hurricane victims.

Some residents said they had to challenge initial rejection letters which said their properties hadn’t sustained enough damage to qualify for recovery money. Others said case managers lost all of their paperwork, forcing them to submit the same information again and again.

Homeowners say it’s still a struggle to extract information about the status of their applications and when they can expect to see progress with rebuilding.

DCA Commissioner Richard Constable addressed some of those concerns during an Assembly hearing earlier this month, saying training had been increased for housing recovery personnel.

He did not mention that the contract with HGI was ending.

A document dated Dec. 16 and posted to the state Treasury Department’s website says a settlement agreement was executed by the state of New Jersey, the Department of Law and Public Safety, the Office of the Attorney General and HGI on Dec. 6. That document states HGI will receive $9 million for an "unpaid balance" and another $1.5 million for "interim compensation" during the "transition period."

Cherie Pinac, chief operating officer for HGI, said "it was a mutual agreement to terminate."

Pinac said her firm reached an agreement in December to end the contract and that the contract ended on Monday.

Pinac refused to elaborate as to why the contract was terminated.

"I can’t discuss any of that at this point in time," she said. "Under the terms, we are not supposed to make any statements with regards to the contract."

According to the Wall Street Journal, a law firm representing HGI donated $25,000 to the Republican Governors Association the month after the firm submitted its original proposal. The RGA, which Gov. Chris Christie chairs, was an important source of cash for his re-election campaign. The association pumped $1.7 million into Christie’s campaign.

The governor’s office referred all questions to the DCA.

Adam Gordon, a staff attorney at Fair Share Housing Center, said while dismissing HGI was a "good step," the lack of disclosure raised serious questions.

Gordon’s group sued the administration in September for not releasing documents related to the recovery effort sought in an open public records request.

"Of all the crazy things around transparency and how this process has worked, this is the craziest. How do you do this? How do you fire your biggest contractor that is running the biggest program and not tell anyone about it? Is anyone running it now?" he said.

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