Panel Calls for Federal Probe of Retrofitting

A Los Angeles City Council panel Tuesday called for a federal grand jury investigation into allegations that contractors were paid to seismically retrofit hundreds of homes that inspectors said already met safety codes.

The council’s Ad Hoc Committee on Earthquake Recovery asked for a federal investigation of contractors who bolted homes to their foundations and assured owners that the Federal Emergency Management Agency would pick up the tab under a special funding program.

However, FEMA rejected about 1,000 applications for reimbursement, mostly because inspectors determined that the homes already met seismic safety codes and the retrofitting work was redundant.

“Somewhere along the line we got involved with people who were doing work that didn’t need to be done,” said Councilman Hal Bernson, who is chairman of the committee and who represents parts of the northwest San Fernando Valley.

Bernson suggested that a federal grand jury investigate because he said it appears that contractors defrauded or tried to defraud FEMA out of federal funds. He also asked for an investigation by the city attorney’s office.

“Unfortunately, there are always unscrupulous people that prey on people after a disaster,” he said, referring to the Northridge earthquake.

According to officials, the city would have to ask the U.S. attorney general to submit the allegations of fraud to a federal grand jury for an investigation to take place. City officials could also ask local members of Congress to bring the allegations to the attorney general.

Homeowners who were rejected said they each paid about $2,000 for the retrofitting work and were assured by the contractor that they qualified for the FEMA reimbursement. Some contractors even used telemarketing to sell their services.

Councilman Mike Feuer, whose office has received about 250 calls from homeowners who were rejected, welcomed the call for an investigation but said he wants city and federal officials to consider providing funding to help out homeowners who have to shoulder the cost of the bolting.

Feuer said he believed the 250 telephone calls he received were merely “the tip of a much larger iceberg.”

Under the program, FEMA paid out about $16 million to bolt down about 11,000 homes. This is in addition to the $92.5 million that FEMA has approved to retrofit homes and businesses under other assistance programs.

To qualify for FEMA’s program, homeowners had to have suffered at least $100 in structural damage and submit an application, with receipts of work already completed, by the July 17 deadline.

But in recent months, the program has been marred by confusion and finger-pointing.

Bernson and Feuer said FEMA is partly to blame for the confusion because the agency, without conducting inspections, approved many applications to retrofit residences that were already bolted to their foundations.

“One of the fundamental problems is equity,” Feuer said.

Leland Wilson, FEMA’s federal coordinating officer, told the committee that the agency may have approved some applications to retrofit homes that already met seismic codes because only about 15% of the homes were inspected at the beginning of the program.

But toward the end of the program, he said FEMA began to inspect all the homes and rejected all of those that already had pre-existing bolts in the foundation.

He said FEMA has already contacted the Contractor’s State Licensing Board and the state attorney general’s office to investigate the contractors for possible fraud.

The Contractor’s State Licensing Board said that it has already begun to investigate 10 complaints about one contractor who allegedly provided retrofitting services on homes that already met seismic codes.

Kim Canevari, a spokeswoman for the board, said she could not reveal any details about the investigation but said that if a contractor is found guilty of fraud, the board can revoke the firm’s license and issue a fine of up to $15,000.

But some contractors and homeowners who were rejected for reimbursement also point the finger of blame at FEMA, saying it ran a slipshod inspection program and failed to warn the owners of older homes to check for pre-existing bolting before hiring a contractor.

Itzcik Weinstein, who owns Weinstein Construction Co. in Sherman Oaks, said his firm installed foundation bolts on hundreds of homes and said that he was upset to learn that FEMA rejected the application of many of his customers because the homes had pre-existing foundation bolts.

Weinstein said that his firm only provided retrofitting on homes that had no previous bolting or had pre-existing bolts that did not meet current codes.

FEMA guidelines require that foundation bolts be no more than six feet apart and within 12 inches from any corner.

“Either the spacing was wrong or the washers were wrong or it didn’t meet FEMA guidelines,” Weinstein said.

In interviews, several homeowners who were rejected by FEMA said they know of neighbors or friends who were approved by the agency for retrofitting work even though their homes had pre-existing bolts.

“I feel that FEMA is the bad guy here,” said Barbara Stevens, who paid $2,330 to have her Sherman Oaks home retrofitted and was rejected for the FEMA program. She said the FEMA inspector never looked at her foundation and yet concluded that the pre-existing bolts met current safety codes.

“I now have literally no money,” Stevens said.

But many homeowners who were left to shoulder the costs of the retrofitting said they don’t know who is to blame, and they are simply trying to figure out what to do next.

Helene Chemel paid a contractor $2,120 to have her Van Nuys home retrofitted and was rejected by the FEMA program. She said her contractor told her that her home had pre-existing foundation bolts that did not meet seismic codes. But after the work was done, FEMA rejected her application, saying the pre-existing bolts did meet code.

“I don’t know who to believe anymore,” she said.