[Senate Hearing 109-467]
[From the U.S. Government Publishing Office]



                                                        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



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        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:]

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    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.
    [Whereupon, at 11:01 a.m., the Committee was adjourned.]


                            A P P E N D I X

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