[LESSONS LEARNED: ENSURING THE DELIVERY OF DONATED GOODS TO SURVIVORS OF CATASTROPHES
]
[From the U.S. Government Printing Office, www.gpo.gov]

 
                LESSONS LEARNED: ENSURING THE DELIVERY 
                   OF DONATED GOODS TO SURVIVORS OF 
                              CATASTROPHES

=======================================================================


                             JOINT HEARING

                               before the

               SUBCOMMITTEE ON EMERGENCY COMMUNICATIONS,
                       PREPAREDNESS, AND RESPONSE

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                                and the

                AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 31, 2008

                               __________

                           Serial No. 110-134

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html

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                  HOUSE COMMITTEE ON HOMELAND SECURITY

               Bennie G. Thompson, Mississippi, Chairman
Loretta Sanchez, California          Peter T. King, New York
Edward J. Markey, Massachusetts      Lamar Smith, Texas
Norman D. Dicks, Washington          Christopher Shays, Connecticut
Jane Harman, California              Mark E. Souder, Indiana
Peter A. DeFazio, Oregon             Tom Davis, Virginia
Nita M. Lowey, New York              Daniel E. Lungren, California
Eleanor Holmes Norton, District of   Mike Rogers, Alabama
    Columbia                         David G. Reichert, Washington
Zoe Lofgren, California              Michael T. McCaul, Texas
Sheila Jackson Lee, Texas            Charles W. Dent, Pennsylvania
Donna M. Christensen, U.S. Virgin    Ginny Brown-Waite, Florida
    Islands                          Gus M. Bilirakis, Florida
Bob Etheridge, North Carolina        David Davis, Tennessee
James R. Langevin, Rhode Island      Paul C. Broun, Georgia
Henry Cuellar, Texas                 Candice S. Miller, Michigan
Christopher P. Carney, Pennsylvania
Yvette D. Clarke, New York
Al Green, Texas
Ed Perlmutter, Colorado
Bill Pascrell, Jr., New Jersey
                    I. Lanier Lavant, Staff Director
                     Rosaline Cohen, Chief Counsel
                     Michael Twinchek, Chief Clerk
                Robert O'Connor, Minority Staff Director

                                 ------                                

               SUBCOMMITTEE ON EMERGENCY COMMUNICATIONS, 
                       PREPAREDNESS, AND RESPONSE

                     HENRY CUELLAR, Texas, Chairman
Loretta Sanchez, California          Charles W. Dent, Pennsylvania
Norman D. Dicks, Washington          Mark E. Souder, Indiana
Nita M. Lowey, New York              David Davis, Tennessee
Eleanor Holmes Norton, District of   Tom Davis, Virginia
    Columbia                         Candice S. Miller, Michigan
Donna M. Christensen, U.S. Virgin    Peter T. King, New York (Ex 
    Islands                              Officio)
Bob Etheridge, North Carolina
Bennie G. Thompson, Mississippi (Ex 
    Officio)
                  Veronique Pluvoise-Fenton, Director
                        Nichole Francis, Counsel
                         Daniel Wilkins, Clerk
        Heather Hogg, Minority Senior Professional Staff Member
                 SENATE COMMITTEE ON HOMELAND SECURITY 
                        AND GOVERNMENTAL AFFAIRS

               Joseph I. Lieberman, Connecticut, Chairman
Carl Levin, Michigan                 Susan M. Collins, Maine
Daniel K. Akaka, Hawaii              Ted Stevens, Alaska
Thomas R. Carper, Delaware           George V. Voinovich, Ohio
Mark L. Pryor, Arkansas              Norm Coleman, Minnesota
Mary L. Landrieu, Louisiana          Tom Coburn, Oklahoma
Barack Obama, Illinois               Pete V. Domenici, New Mexico
Claire McCaskill, Missouri           John Warner, Virginia
Jon Tester, Montana                  John E. Sununu, New Hampshire
                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk
                                 ------                                

                AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

                 Mary L. Landrieu, Louisiana, Chairman
Thomas R. Carper, Delaware           Ted Stevens, Alaska
Mark L. Pryor, Arkansas              Pete V. Domenici, New Mexico
                 Donny R. Williams, Jr., Staff Director
               Aprille C. Raabe, Minority Staff Director
                       Kelsey Stroud, Chief Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Henry Cuellar, a Representative in Congress From 
  the State of Texas, and Chairman, Subcommittee on Emergency 
  Communications, Preparedness, and Response.....................     1
The Honorable Charles W. Dent, a Representative in Congress From 
  the State of Pennsylvania, and Ranking Member, Subcommittee on 
  Emergency Communications, Preparedness, and Response...........     3

                               Witnesses
                                Panel I

Mr. William Eric Smith, Assistant Administrator, Logistics 
  Management, Federal Emergency Management Agency, Department of 
  Homeland Security:
  Oral Statement.................................................    12
  Prepared Statement.............................................    14
Mr. Carlos J. Castillo, Assistant Administrator, Disaster 
  Assistance, Federal Management Agency, Department of Homeland 
  Security:
  Oral Statement.................................................    21
  Prepared Statement.............................................    14
Mr. Barney L. Brasseux, Deputy Commissioner, Federal Acquisition 
  Service, General Services Administration:
  Oral Statement.................................................    23
  Prepared Statement.............................................    24

                                Panel II

Mr. Paul Rainwater, Executive Director, Louisiana Recovery 
  Authority:
  Oral Statement.................................................    43
  Prepared Statement.............................................    46
Mr. Oliver R. Davidson, Donations Management Committee, National 
  Voluntary Organizations Active in Disaster:
  Oral Statement.................................................    49
  Prepared Statement.............................................    50
Mr. Bill Stallworth, Executive Director, East Biloxi Coordination 
  and Relief Center:
  Oral Statement.................................................    52
  Prepared Statement.............................................    53
Ms. Valerie Keller, Chief Executive Officer, Acadiana Outreach 
  Center:
  Oral Statement.................................................    55
  Prepared Statement.............................................    58

                             For The Record

Governor Scott McCallum, President and Chief Executive Officer, 
  Aidmatrix Foundation:
  Statement......................................................     3
Mr. Paul W. Rainwater, Executive Director, Louisiana Recovery 
  Authority:
  Letter to Mr. Jim Stark, Submitted by Senator Mary L. Landrieu.    31

                                Appendix

Questions From Senator Mary L. Landrieu..........................    69


LESSONS LEARNED: ENSURING THE DELIVERY OF DONATED GOODS TO SURVIVORS OF 
                              CATASTROPHES

                              ----------                              


                        Thursday, July 31, 2008

     U.S. House of Representatives,        
      Committee on Homeland Security,      
Subcommittee on Emergency Communications,   
            Preparedness, and Response, and
                               U.S. Senate,
   Committee on Homeland Security and Governmental 
                                           Affairs,
                  Ad Hoc Subcommittee on Disaster Recovery,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:05 p.m., in 
Room 311, Cannon House Office Building, Hon. Henry Cuellar 
[Chairman of the subcommittee] presiding.
    Present: Representatives Cuellar, Etheridge, Thompson (ex 
officio), Dent, and Senator Landrieu.
    Also present: Representative Jackson Lee.
    Mr. Cuellar. The House Committee on Homeland Security and 
Emergency Communications, Preparedness, and Response, and the 
Senate Committee on Homeland Security and Governmental Affairs 
Ad Hoc Subcommittee on Disaster Recovery will come to order.
    The subcommittee is meeting today to receive testimony 
regarding ``Lessons Learned: Ensuring the Delivery of Donated 
Goods to the Survivors of Catastrophes.'' Again, good afternoon 
to all. On behalf of the Members of the Subcommittee on 
Emergency Communications, let me first of all welcome my 
colleagues from the Senate, the Ad Hoc Subcommittee on Disaster 
Recovery.
    I would like to, of course, single out Senator Landrieu for 
her tireless efforts to expedite the recovery process on behalf 
of her constituents, who felt the full brunt of Hurricane 
Katrina. Senator, again, welcome.
    Today is a rare bicameral joint subcommittee hearing, and I 
want to thank our Chairman for providing this opportunity and 
taking the lead on this issue because, again, it is an 
opportunity for Members to receive testimony from key FEMA and 
General Services Administration, GSA, officials, along with key 
State officials and nonprofit organizations from Louisiana and 
Mississippi regarding the management of donated household goods 
intended for the survivors of Hurricane Katrina.
    FEMA's shortcomings, in response to Hurricane Katrina, have 
been well documented. Today's joint subcommittee hearing will 
be forward-looking in the sense that we want to examine the 
lessons learned to ensure that the intended survivors of this 
catastrophe do, in fact, receive the goods that have been 
donated for such purposes.
    Specifically, I am looking forward to our witnesses' 
discussion. You have, No. 1, FEMA's handling and distribution 
of unsolicited donated goods in response to Hurricane Katrina; 
and, No. 2, the current system FEMA had implemented to receive 
and distribute donated goods.
    This hearing will also be an occasion for the Members to 
examine the steps that FEMA has taken to improve its logistics 
operations, especially since the enactment of the Post-Katrina 
Emergency Management Reform Act that got passed by Congress.
    Many of us were disturbed to see the CNN investigation on 
June 11 entitled ``FEMA Gives Away $85 Million of Supplies for 
Katrina Victims,'' which outlined that the agency was spending 
more than $1 million per year to store donated goods that were 
intended for Hurricane Katrina survivors. Surely, the 16,596 
households that still reside in FEMA temporary housing units 
could have maybe used the pallets of cots, cleansers, first-aid 
kits, coffee makers, camp stoves that were stacked to the 
ceilings in two GSA warehouse facilities in Fort Worth, Texas.
    I would like to note upon learning that the surplus goods 
were intended for Hurricane Katrina survivors, my home State of 
Texas returned the supplies and delivered them to the New 
Orleans nonprofit organization on June 20, 2008.
    So to move on with this hearing, I look forward to hearing 
from Mr. Smith, Mr. Castillo, about the concrete steps that 
FEMA has taken to improve its logistics management when 
receiving and distributing unsolicited donated goods.
    Mr. Brasseux, this joint subcommittee wants assurances that 
the proper procedures regarding the distribution of surplus 
goods were followed even though GSA maintains that FEMA did not 
inform it that the materials in the warehouses were from 
Hurricane Katrina.
    Mr. Rainwater, Mr. Davidson, Mr. Stallworth, Ms. Keller, we 
want to hear about the level of outreach that FEMA did 
regarding the handling and distribution of donated goods.
    Also, we want to better understand your coordination and 
your cooperation efforts with other States and nonprofit 
organizations that have prioritized service to the survivors of 
Hurricane Katrina.
    In addition, this joint subcommittee wants to know if your 
State or nonprofit organization has used the Aidmatrix 
Foundation software to assist you in the availability of 
donated foods.
    Also, we want to understand if FEMA informed your State or 
your nonprofit organization about the Aidmatrix software to 
which FEMA awarded a $3.5 million grant for the development of 
a software program to better streamline donated goods.
    I would note for the record that Aidmatrix chose not to 
testify today, although they did submit a written testimony for 
the record. With that, I want to thank the witnesses for 
coming, and I look forward to a robust discussion about 
improving logistic procedures and processes and capacities.
    I want to thank the witnesses, again, for their testimony.
    The Chair now recognizes the Ranking Member of the 
Subcommittee on Emergency Communications, Preparedness, and 
Response, the gentleman from Pennsylvania, Mr. Dent, for an 
opening statement.
    Mr. Dent. Thank you, Mr. Chairman, I would like to welcome 
our Senate colleagues here today.
    Today's hearing continues the Emergency Communications 
Preparedness and Response Subcommittee's review of the 
Department of Homeland Security implementation of the Post-
Katrina Emergency Management Reform Act of 2006.
    The Committee on Homeland Security was instrumental in the 
enactment of this important legislation, which has helped 
strengthen FEMA and its ability to lead Federal efforts to 
prepare for and respond to recover from a terrorist attack and 
natural disaster.
    As a result of that legislation and the lessons learned 
from Hurricane Katrina, FEMA has greatly improved logistics 
management.
    For instance, prior to Katrina, FEMA did not have 
sufficient asset management and distribution capability. 
Through initiatives such as the total asset visibility program, 
FEMA is applying best practices in the private sector and can 
now track more than 200 commodities crucial to disaster 
response, including meals, water and emergency generators.
    In addition to reforming its logistics management 
practices, FEMA is proactively offering donations management 
assistance to States through a partnership with the Aidmatrix 
Foundation. While States have a primary responsibility to 
manage donations and offers of assistance, Hurricane Katrina 
made clear that States can quickly become overwhelmed with this 
task and may require Federal assistance.
    Therefore, to help States better manage this task, FEMA set 
up a national agreement with the Aidmatrix Foundation, based in 
Texas, that provides States a web-based donations management 
system free of charge.
    By utilizing supply-chain technology, Aidmatrix leverages 
public and private sector resources to match the needs of 
disaster areas to offers of assistance. This system eliminates 
the need for States to use complicated spreadsheets to track 
donations, helps inform donors of the kinds of assistance 
needed, and eliminates the need to establish and maintain 
warehouse operations. The Aidmatrix network has been used 
successfully in California in response to the wildfires and by 
midwestern States like Iowa that received severe flooding this 
summer.
    While the President and CEO of Aidmatrix Foundation could 
not be here today to testify, he has submitted written 
testimony.
    At this point, I would like to ask unanimous consent that 
Governor McCallum's testimony be included in the record.
    Mr. Cuellar. Without objection.
    [The statement of Mr. McCallum follows:]
  Statement of Governor Scott McCallum, President and Chief Executive 
                     Officer, Aidmatrix Foundation
                             July 27, 2008
    To The House Committee on Homeland Security: The Aidmatrix Network 
is a national disaster relief coordination system funded by FEMA, The 
UPS Foundation, Accenture, and the Aidmatrix Foundation, Inc. to better 
manage unsolicited donations and volunteers. It connects State and 
local governments with donors, State Voluntary Organizations Active in 
Disaster (VOAD), National VOAD, and FEMA.
    Aidmatrix is a nonprofit organization that leverages technology and 
partnerships. We believe that by working together we can make a bigger 
impact than anyone of us working alone. Our powerful technology serves 
as a hub that supports donors, nonprofits, and governments working 
together to get the right aid to people when and where they need it 
most. The Aidmatrix Network provides transparency and accountability to 
all constituents in the supply chain of giving.
    Aidmatrix focuses in the areas of hunger, medical, and disaster. We 
partner with over 35,000 nonprofits and world class for-profit 
organizations worldwide to help move over $1.5 billion of aid annually. 
In the United States specifically, our solutions are used to deliver 
aid to every State in the Nation. Those most in need in each of your 
districts are helped each day by food and medical products connected 
more efficiently through Aidmatrix technology.
    Aidmatrix focuses on applying the same principles of efficiency and 
accountability to all aspects of work. For example, we are accredited 
by the Better Business Bureau for meeting the Wise Giving Alliance's 
Standards for Charity Accountability. In addition, every dollar into 
Aidmatrix mobilizes over $1,000 in aid, perhaps one of the best returns 
on investment made by Congress and the Federal Government.
    The initial award (Cooperative Agreement) was given from FEMA to 
Aidmatrix in October 2006, initiating the Public-Private Partnership. 
Leaders from both sides of the aisle, notably Congressman Silvestre 
Reyes, were critical supporters in helping the Agency determine the 
best path to actually embark on a true public-private partnership 
program. Though the Cooperative Agreement part of the partnership, the 
costs of the program that are not donated by other entities are 
reimbursed by FEMA on an actual cost basis only, after those costs are 
incurred. For the year 2006, Aidmatrix received $72,557.28 in 
reimbursement from FEMA for our participation in the program. The 
Cooperative Agreement continues to represent a less than 10 percent of 
the social investment made in Aidmatrix by all of our supporters each 
year. Additional private sector investments continue to fuel the 
program's expansion and bring positive exposure to the Government, 
nonprofit, and private sector entities involved.
    The system was deployed ahead of the initial planned release to 
support disaster response in Alabama--for which the Governor's Office 
commended FEMA and Aidmatrix's efforts. See attached. Other State 
deployments have included emergency activations to support wildfire-
related donations activity in California, and flood recovery efforts in 
the Midwest. In these cases, Aidmatrix Foundation and our volunteers 
and sponsors provided significant support beyond the Cooperative 
Agreement and did so on a donated basis.
    The initial release was in June 2007 and subsequent releases have 
happened and will continue between now and 2010. As of June 1 of this 
year, the full breadth of system functionality was released. Additional 
annual funding is required to maintain and operate the system, as well 
as perform ongoing training, readiness, and State/territory 
recruitment.
    The Aidmatrix Network is designed to facilitate efficient movement 
of donated offers, honoring established best practices in donations 
management. States in turn share the offers with their State VOAD 
membership. The system tracks offers and provides visibility to FEMA 
and State Emergency Management leadership.
    The program's warehouse management components have provided 
Government and voluntary agency professionals oversight capability and 
real-time visibility and tracking of donated materials in relief 
warehouses in responses to disasters including California, Iowa, and 
Indiana.
    Aidmatrix solutions are web-based tools designed to reduce 
paperwork and allow for easy information sharing. No software, hardware 
or additional IT staff is required with this hosted solution, and 
training is minimal.
    As of July 2008, 22 States and one territory have singed onto the 
Aidmatrix Network. The Aidmatrix Network has received positive feedback 
from States, private sector and the media including:
   Business Week featured a story, Public-Private Alliances to 
        the Rescue, http://www.businessweek.com/technology/content/
jul2008/tc2008072--734064.htm;
   Indiana flood relief.--WISH TV 8 CBS Indianapolis Features 
        Aidmatrix Network for Flood Disaster Relief;
   The U.S. Chamber featured the Aidmatrix Network's in 
        response to the California wild fires, http://
www.uschamber.com/bclc/resources/newsletter/2007/
0712--aidmatrixfeature.
    It may be fashionable to find fault with FEMA. At the same time, 
credit should also be given when FEMA adjusts and improves. All of us 
will continue to work together to create the best possible disaster 
response system in the United States. The Aidmatrix Disaster Relief 
Network is one of the positive changes that will address problems we 
have seen in the past. It is a system now proven through several 
disasters to provide a huge support net to emergency responders, 
decisionmakers, and to providing the right relief to those victims in 
need.
    Examples of comments from recent disasters include those from last 
month flooding in the Midwest when [sic]:
   Joyce Flinn, Operations Officer, Public Defense, Iowa 
        Homeland Security and Emergency Management Division, ``I think 
        the Aidmatrix is a wonderful resource tool. I am grateful FEMA 
        provided the funding support for making the system available to 
        states.''
   Greg Smith, of California's Governor's Office of Emergency 
        Services, is quoted as ``These are indeed exciting times in the 
        field of disaster-related donations management, and the 
        Aidmatrix solution is the cornerstone of it.''
   Joe Watts, NVOAD Donations Management Committee Director and 
        National Disaster Director, Adventist Community Services, 
        ``This (warehouse) application makes it possible to control the 
        inventory as it comes into the warehouse and then track it as 
        items are taken to the distribution areas. With pass codes, 
        appropriate persons at the state and FEMA are able to look at 
        the warehouse inventory in real time. This application has 
        tremendous potential [to] . . . be better able to place vital 
        supplies where they are needed and where they are in short 
        supply.''
    Many in Congress are to be commended for pushing for this type of 
solution to logistics issues in a disaster. It is especially noted that 
the vast majority of total costs are born by sources outside of 
Government. Furthermore, Aidmatrix staff have gone beyond the 
commitment of the FEMA grant and have donated many hours toward the 
success of this national program. This makes it not only a truly 
bipartisan reform, but one which belongs to the public, the private 
sector, and nonprofit organizations alike. It is a model of being able 
to help society.
    I would like to add as well, that beyond the scope of this specific 
hearing, Aidmatrix disaster relief systems are becoming a global data 
standard. Due to the overwhelming success proven in U.S. disasters, 
other countries are now building Aidmatrix Networks to connect the 
private sector with those most seriously in need.
                              Attachments





    Mr. Dent. Thank you, Mr. Chairman. I look forward to 
hearing from several of our witnesses about how this system is 
continuing to develop and how it will help ensure that these 
donations are utilized for their intended purpose.
    Again I would like to thank all our witnesses for joining 
us today. I look forward to receiving your testimony.
    At this time I yield back my time, Mr. Chairman.
    Mr. Cuellar. Thank you, Mr. Dent, for your statements. 
Before I recognize the Senator, I would like to first recognize 
a Member of our full committee, Congresswoman Sheila Jackson 
Lee, who is in attendance with us.
    Without objection, we would like to recognize her and have 
her join us here today. Welcome.
    The Chair now recognizes the Chairwoman of the Senate Ad 
hoc Subcommittee on Disaster Recovery, the gentlelady from the 
State of Louisiana, for an opening statement.
    Senator Landrieu. Thank you, Mr. Chairman. I really am 
pleased to join my colleagues here on the House side, Chairman 
Thompson, particularly from the full committee, Ranking Member 
King, who is not here, but I want to recognize his efforts. 
You, Mr. Chairman, have done an outstanding job, and your 
Ranking Member. Thank you for keeping the focus on this 
recovery.
    To my neighbor and wonderful colleague, the Congresswoman 
from Houston, Texas, she has continued to be just a completely 
wonderful ally in this effort. Thank you very much.
    This is a very important hearing because it is important 
for us to examine the delivery of goods that were donated and 
purchased for survivors of Hurricanes Katrina and Rita. 
Unfortunately, Mr. Chairman, many of those goods that were 
donated and purchased on their behalf never arrived. FEMA has 
received a black eye in the press, to say the least, over these 
recent reports of these returned surplus Katrina supplies to 
Federal and State agencies.
    This, however, though, is not the first time that Congress 
has investigated the administration's handling of hurricane 
supplies and donated goods that failed to reach their intended 
purpose.
    Last April, the Washington Post reported that almost $1 
billion in foreign assistance that was offered in the wake of 
Katrina and Rita, out of $1 billion, only $126 million was 
accepted by our Government at FEMA's request. We will remember 
that more than 150 nations offered nearly $1 billion in cash 
and supplies and, of course, you know the number was $126 
million that was accepted.
    The State Department and FEMA were ill-equipped to 
coordinate these donations and distributions. Some were 
accepted, but many of them, including telecommunications 
equipment, medical supplies and blankets were declined.
    As a member of the State Foreign Ops Appropriations 
Committee, I questioned Secretary Rice exactly on this issue a 
little over a year ago, and here we find ourselves over a year 
later again in a committee looking into how offers of 
assistance or items purchased failed to get to the intended 
purpose.
    I do acknowledge that FEMA has made, as the Ranking Member 
pointed out, some notable progress improving its logistical 
capabilities. I will not deny that some progress has been made. 
The agency has established new professionalized logistics in 
management, a directorate that reached out to the private 
sector to incorporate more advanced systems of the supply 
chain.
    It has also shifted its focus from maintaining large 
inventories that are expensive to drafting contingency 
contracts which reduce waste to save taxpayer money. This is 
good, and new Aidmatrix systems allow States to view donated 
goods and volunteer services in real time in a process we hope 
will give them more choices in the way they would like to 
coordinate their assistance.
    But, Mr. Chairman, this agency's mindset has proven tougher 
to change. FEMA needs to move away from its stubborn assistance 
on detailed requests for specific forms of assistance and must 
lean forward to proactively identify problems on the ground and 
jump in and tackle those problems in a much more collaborative 
manner, in my view.
    I understand that FEMA today will try to blame the State of 
Louisiana for not requesting supplies that the State did not 
even know existed. It is like if a house was on fire and the 
fire department operated the same way FEMA does, we would have 
to call the fire department and specifically request the hose, 
the pressurized water, the truck, the firefighters and the 
ladder all before FEMA would acknowledge that they should send 
this equipment to help.
    This is the wrong approach. I have said we deserve a better 
FEMA, and if I have anything to do with it, with your help, we 
will one day have one. We need a FEMA that functions like a 
work horse not a show horse. FEMA's region 6 office did not 
contact Louisiana recovery authority about the supplies that 
were missing. We understand now it was over $18 million.
    In fact, FEMA didn't contact anyone at the State at all. 
The only communication that occurred with our State happened 
after the supplies were designated to surplus and turned over 
to GSA, and then it was GSA and not FEMA that initiated the 
contact.
    I can't understand how FEMA thought it could determine if 
the emergency supplies were needed without even contacting 
anyone, before they even declared them as surplus, but that is 
what happened in Louisiana. I am not sure, exactly, of the 
details in Mississippi.
    The first CNN report aired on June 11. On June 12, the LRA 
adopted oversight of FEMA supply chain, which is Louisiana 
Recovery Authority. On June 20, the State of Texas delivered 
supplies that it had received to an organization in New Orleans 
called Unity. I thank the State of Texas for acting so quickly. 
On July 1, the Postal Service agreed to return all the supplies 
they had gotten as surplus, and they returned it as well to us.
    On July 14, the State of Arkansas delivered its supplies to 
a city in southwest Louisiana, the city of Lafayette, Acadian 
Outreach Center, which outreaches to low-income families in 
that area, and the postal supplies arrived in Baton Rouge last 
week.
    So this is what happened. I am interested to hear more 
detail about it, but looking ahead, in conclusion, while we 
have been successful in redirecting some of these returned 
supplies back to Louisiana and Mississippi, where they are 
needed. It is important to identify where the breakdown in 
communication occurred so they don't happen again.
    I would also like to know if there are other supplies that 
can be returned, and if there are others that were identified 
for victims in the 2005 hurricanes that never got distributed, 
and which supplies are in FEMA's regional warehouse in Ft. 
Worth and Atlanta could still be sent.
    I was able, and finally, to secure $73 million in recently 
enacted supplemental appropriations to help 3,000 families. 
With Chairman Thompson's help, with the Members on the House 
side, we were able to get vouchers for 3,000 families that had 
been without a place to live for 3 years, but these household 
supplies can help to equip those new households, whether its 
blankets or bedding supplies or cooking supplies, with people 
who have lost everything.
    So, in closing, I can only quote something Teddy Roosevelt 
once said. He said, ``I think there is only one quality worse 
than hardness of heart, and it's softness of head.'' So if 
disaster strikes again, we all want FEMA to have the right 
heart and the right head to get the job done.
    We are willing in our States to lean forward and to do our 
part, but these systems have got to improve, as the recent 
floods in Iowa, California, tornadoes in Kansas have suggested.
    I thank this Chairman for taking the time to look into this 
issue.
    Mr. Cuellar. Thank you again, Senator Landrieu, for your 
statement. At this time the Chair now recognizes the Chairman 
of the House Committee on Homeland Security, the gentleman from 
Mississippi, Mr. Thompson, for his opening remarks.
    Mr. Thompson. Thank you very much, Mr. Chairman, Senator 
Landrieu, I thank both of you for holding this hearing today. 
As you know, we postponed it because of an earlier emergency, 
so I think it is really important going forward that we 
understand how logistics and donated goods will be housed.
    However, it was disappointing to me that almost 3 years 
after Hurricane Katrina we are still discovering critical 
governmental flaws which must be corrected. Today we examine 
FEMA's distribution of donated supplies that were originally 
intended for Katrina survivors. It is almost as if 3 years 
after that catastrophic hurricane FEMA does not realize that 
there are still survivors in need of basic necessities.
    In the weeks since the news network began airing the story 
of donated supplies, my office has been contacted by various 
nonprofit organizations in Mississippi, my home State, telling 
me that they still need supplies for Hurricane Katrina 
survivors.
    I have learned that my State of Mississippi chose to accept 
the supplies and has been housing them in a warehouse in Pearl, 
Mississippi. I have further learned that prisoners at the 
Mississippi Department of Corrections, employees at the 
Mississippi Department of Wildlife and Fisheries, none of whom 
I can verify are Katrina victims, have received these donated 
supplies.
    It is clear to me that FEMA did not properly manage and 
distribute these donated supplies after Hurricane Katrina. That 
is why in 2006, Congress passed comprehensive legislation to 
reform FEMA and give it the tools it needs to respond to 
disasters both large and small. Since the enactment of that 
law, we know that FEMA has made an effort to improve the 
process.
    But I find it disturbing that these supplies were 
warehoused for 2 years, designated as surplus, and given away.
    So I want to know from this hearing how FEMA arrived at the 
conclusion that these donated goods were no longer needed by 
Katrina survivors. Specifically, what outreach was done to 
validate the donations? It is this committee's sincere hope 
that we will hear of the logistical capabilities that have been 
dramatically revamped and that States and nonprofits are 
working together to ensure that supplies reach the intended 
people.
    The committee also understands that shortly after Katrina 
FEMA awarded a $3 million grant to Aidmatrix Foundation to 
create a software program to better streamline donated goods, 
and while Aidmatrix chose not to testify here today, I look 
forward to hearing from our State and nonprofit witnesses about 
the effectiveness of this software. Specifically, I want to 
know how FEMA is alerting States and nonprofits about this 
software program so that it can receive donated goods should a 
catastrophe occur again.
    Again, I would like to thank Chairman Cuellar and Chair 
Senator Landrieu for holding this hearing. I look forward to 
learning from our witnesses the status of the logistics process 
and what is being done to ensure that Hurricane Katrina 
survivors received the donated goods promptly.
    Mr. Cuellar. Thank you, Mr. Chairman.
    At this time I would like to remind other Members of the 
subcommittee, I am reminded that under the committee rules 
opening statements may be submitted for the record.
    At this time we will move forward and welcome our panel of 
witnesses that we have here today.
    Our first witness today, Mr. Eric Smith, is the Assistant 
Administrator for the new Logistics Management Directorate of 
FEMA. Mr. Smith orchestrates the multi-functional logistics, 
planning and operation for the directorate. Prior to the 
position at FEMA, Mr. Smith served as the Senior Executive 
Assistant at the Defense Logistics Agency, where he was 
responsible for all facets of executive level support and 
tasked for a $34 billion joint service activity, with a 
worldwide work force of more than 21,000 civilians, active duty 
and reserve joint service personnel.
    Our second witness is Mr. Carlos Castillo. Mr. Castillo is 
the Assistant Administrator for Disaster Assistance Directorate 
at FEMA. He has dedicated over 25 years of--dedication to local 
fire fighting and local emergency management. He served as the 
Assistant Fire Chief for Technical Services and as the Director 
of the Miami-Dade County Office of Emergency Management. There 
Mr. Castillo managed the response during seven hurricane 
activations and oversaw the domestic preparedness and community 
activity outreach and the county's participation in the urban 
area security initiatives programs.
    Our third witness is Mr. Barney Brasseux, who currently 
serves as the Acting Deputy Commissioner for the FAS, Federal 
Acquisition Service. Prior to his appointment, he joined the 
General Services Administration Federal Supply Service, where 
he has held many positions, such as Chief of Staff, Chairman of 
the Management Council and the Assistant Commissioner for 
Vehicle Acquisitions and Leasing of Services. With the 
consolidation of the FSS and the Federal Technology Service to 
create the FAS, Mr. Brasseux served as an Assistant 
Commissioner for Travel, Motor Vehicles, Car Services, until 
his appointment to the current position.
    Again, welcome.
    Our second panel, if you will allow me to go ahead and 
introduce the second panel, we will hear from the following. 
Mr. Paul Rainwater, who is currently the Executive Director of 
the LRA, Louisiana Recovery Authority. At the LRA he serves as 
the Governor's Chief Hurricane Recovery Adviser, providing 
daily oversight and direction for the State's recovery 
initiatives to carry out the mission of rebuilding a safer, 
stronger and smarter Louisiana. Prior to his current 
appointment, Mr. Rainwater was a Legislative Director and Chief 
of Operations for a U.S. Senator, Mary Landrieu, where he 
managed the Disaster Recovery Committee of Homeland Security 
and helped the LRA and Senator Landrieu secure the $3 billion 
necessary to provide full funding for the Road Home Program. 
Mr. Rainwater is also currently serving as a Lieutenant Colonel 
and Joint Director of the Military Support for the Louisiana 
National Guard.
    Again, welcome.
    Our fifth witness is Mr. Ollie Davidson. Mr. Davidson 
currently serves as a senior adviser for the Emergency Services 
for the Humane Society and member of the Donations Management 
Committee of the VOAD, the national Voluntary Organization 
Active in Disaster. At the VOAD, he coordinates planning 
efforts by voluntary organizations, responding to disasters. 
Mr. Davidson has also served 20 years in the Office of the U.S. 
Foreign Disaster Assistance and a disaster adviser to the 
Business Civic Leadership Center of the U.S. Chamber of 
Commerce.
    Again, welcome.
    Our sixth witness is Mr. Bill Stallworth, the Executive 
Director of the East of Biloxi Coordination and Relief Center. 
In addition to serving as Executive Director, Mr. Stallworth 
has contributed to improving his community through numerous 
positions, such as community development planner, community 
development specialist, Vice President for Economic Development 
for the Biloxi Chamber of Commerce Board of Directors.
    Finally, our final witness is Ms. Valerie Keller, who 
serves as the Chief Executive Officer for the Acadiana Outreach 
Center in Louisiana, which provides families with necessary 
services. Ms. Keller currently serves as an advisory council 
member of the Louisiana Trust Fund and is cochair of the 
Louisiana Advocacy Coalition for the Homeless.
    We are pleased to have all of you here with us, and we 
certainly appreciate your time, your efforts, your energies, 
and, of course, your testimony that you are about to provide.
    Without objection, the witnesses' full statements will be 
entered into the record, and I now ask each witness to 
summarize his or her statement for 5 minutes.
    We will begin with Mr. Smith. Again, welcome, Mr. Smith.

   STATEMENT OF WILLIAM ERIC SMITH, ASSISTANT ADMINISTRATOR, 
  LOGISTICS MANAGEMENT, FEDERAL EMERGENCY MANAGEMENT AGENCY, 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Smith. Good afternoon, Chairman Thompson, Chairman 
Cuellar, Congressman Dent, Chairman Landrieu, and Members of 
the subcommittee.
    I am Eric Smith, FEMA's Assistant Administrator for 
Logistics Management Directorate. I am a retired Army officer 
with over 24 years of technical training and experience and as 
a multi-functional logistician specializing in the areas of 
logistics management, planning and operations.
    I joined FEMA in April 2007, leaving the Defense Logistics 
Agency, to head FEMA's newly established Logistics Management 
Directorate, which is responsible for planning, managing, and 
sustaining the national logistics response and recovery 
operations in support of disaster operations and special 
events.
    Thank you for the opportunity to address this committee and 
provide you with a full explanation of FEMA's inventory, its 
disposition, and opportunity to respond to recent media reports 
alleging FEMA improperly excessed surplus goods. I would 
discuss the Logistics Management's role in this process, and my 
colleague, Carlos Castillo, will discuss donations management 
and Aidmatrix.
    FEMA has and continues to incorporate lessons learned from 
Hurricane Katrina and other events to establish better business 
practices and processes that will meet the needs of States in 
assisting disaster survivors quickly and efficiently. As we 
identify past processes and procedures that hinder FEMA and 
provide support to our customers and partners, we correct them.
    Recent incomplete, misleading, and inaccurate media reports 
accuse FEMA of giving away supplies intended for Hurricane 
Katrina survivors, and these reports often did not adhere to 
standards of fairness or accuracy. FEMA staff were afforded 
opportunity to brief your committee staff on July 16 and 
provided facts in support of FEMA's perspective on what 
happened.
    For instance, FEMA continues to this day to distribute 
disaster survivor living kits, which includes household items 
such as kitchen cookware, blankets, towels, mops, brooms and 
other basics as they transition out of FEMA-provided housing. 
We have more than an adequate stock of living kits positioned 
in Louisiana today to address the needs of eligible disaster 
survivors.
    After Hurricane Katrina and Rita, FEMA received certain 
goods through donations and acquired other items through direct 
Government purchase to help support affected individuals and 
families in the Gulf Coast. These goods were stored locally at 
operational sites across the region and were provided to 
affected States which, in turn, worked through local volunteer 
and charitable organizations to quickly and efficiently 
distribute them to disaster survivors.
    As the recovery effort progressed in the Gulf Coast and 
Gulf support sites were closed, remaining supplies were then 
shipped to and stored at FEMA's distribution center in Ft. 
Worth, Texas. In late 2006, the Ft. Worth distribution center 
continued to receive supplies from the Gulf Coast and other 
areas and open additional warehouses to store them.
    These supplies had accumulated in odd lots and came from 
several different FEMA field sites. These supplies were 
actually valued at $18.5 million, not the $85 million as CNN 
reported. The change in value was due to an errant calculation 
that has since been corrected.
    In accordance with the Government-wide Federal management 
regulation, FEMA is not permitted to give away excess or 
surplus property.
    In view of the unprecedented quantity of goods returned to 
our distribution center and manner in which the donations were 
received after Hurricane Katrina and other events, FEMA was 
unable to clearly distinguish between the donated items from 
Government-purchased items that were returned to our 
warehouses. Therefore, we complied with otherwise applicable 
Federal management regulation process and requested GSA 
services to excess them.
    Again, it is important to note that FEMA legally cannot 
give away Government-purchased items to nondisaster survivors 
in the recovery phase of a Presidentially declared disaster. 
Earlier this year all four States were given the opportunity to 
visit the Ft. Worth distribution center and examine these 
supplies. State agencies assisting Hurricane Katrina and other 
disaster survivors, including Louisiana, Texas, Mississippi and 
Alabama, were all notified by GSA to participate in obtaining 
surplus property through the State representatives. There were 
16 States that took advantage of the notification from GSA to 
obtain excess or surplus property.
    Currently, the distributed excess items are beyond the 
control of either FEMA or any other Federal agency and cannot 
be reclaimed or redistributed. We understand that Louisiana has 
taken the opportunity to make the State agency surplus property 
program more accessible to eligible nonprofits, and has 
identified a lead agency and efforts to better understand the 
needs of nonprofits as they work to fulfill unmet needs of 
disaster survivors.
    FEMA will support Louisiana and all affected States in 
meeting the continued needs of disaster survivors within the 
scope of its regulations. During the field operations, FEMA 
logistics sites now understand that if donated items are 
received at logistics staging areas they are to be segregated 
and kept separate from Government-purchased initial response 
resources. If donated goods are received, the staging area 
manager will immediately notify FEMA's designated 
representative for disposition instructions.
    Again, thank you for the opportunity to testify and give 
FEMA's perspective on the unfavorable media reports. I am at 
your pleasure to answer any questions you may have.
    [The statement of Mr. Smith and Mr. Castillo follows:]
    Prepared Statement of William Eric Smith and Carlos J. Castillo
                             July 31, 2008
    Good afternoon Chairman Thompson, Chairman Cuellar, Congressman 
Dent, Chairwoman Landrieu, Senator Stevens and Members of the 
subcommittees.
    We appreciate the opportunity to represent the Department of 
Homeland Security's Federal Emergency Management Agency (FEMA) to 
respond to recent media reports alleging that FEMA improperly disposed 
of surplus goods, provide you with a full explanation of FEMA's 
inventory, its disposition, and discuss improvements that FEMA has made 
to it donations and volunteer management efforts post-Katrina.
    FEMA has and continues to incorporate lessons learned from 
Hurricane Katrina and other disasters to establish better, stronger 
business practices that will best meet the needs of States in assisting 
disaster victims quickly and efficiently. As we identify past systems 
and procedures that plagued FEMA and our partners, we correct them.
    Recent media reports accuse FEMA of ``giving away'' supplies 
intended for Hurricane Katrina victims. These reports often did not 
adhere to a standard of fairness or accuracy. We appreciate the 
opportunity to discuss this issue with you today and report FEMA's side 
of the story.
    Eric Smith, Assistant Administrator for the Logistics Management 
Directorate will discuss the logistic aspects and Carlos Castillo will 
discuss ESF No. 6 efforts to improve our assistance to States in 
managing donations of goods and supplies.
                         historical perspective
    Traditionally, after a disaster, financial donations and donations 
of goods and services are coordinated at the State and local levels 
through voluntary and nonprofit organizations that work together with 
FEMA to identify and address survivors' unmet needs.
    Prior to the 2005 Hurricane Season, and as part of FEMA's standard 
operating procedures for donations and volunteer management, FEMA, 
through our Voluntary Agency Liaisons, worked closely with Federal, 
State and local entities to provide addresses of centers receiving 
donations. As soon as a State's communications were restored, hotline 
numbers were provided to assist volunteers in assessing where their 
services and donations were most critically needed. These phone banks 
were staffed by voluntary agencies, as well as by State and local 
personnel.
    Following Hurricanes Katrina and Rita, the States of Mississippi, 
Alabama and Louisiana established Katrina Hotlines to coordinate public 
contributions of money, goods and services for the purpose of assisting 
victims. These hotlines were staffed by State personnel and supported 
by FEMA-trained State Donations/Volunteer Coordinators and 
participating voluntary agencies. FEMA also established a toll-free 
number to supplement the efforts of the States because their resources 
were severely taxed.
    Offers were channeled down to the affected State Donations 
Coordination Teams for their consideration. FEMA also made use of the 
National Emergency Resource Registry developed by the DHS Private 
Sector Office. While this was an immediate solution to cataloguing 
incoming offers of assistance, the system was not constructed to track 
matches between States and companies offering goods. Its purpose was 
solely to provide an on-line resource list of available goods and 
service.
    In addition to domestic offers of assistance, Gulf Coast States 
received offers of financial and material aid from over 150 nations and 
international organizations. To coordinate and effectively utilize the 
assistance offered, FEMA turned to the agency that has diplomatic 
expertise working with the international community in a disaster 
context, the U.S. Agency for International Development (USAID) and its 
Office of Foreign Disaster Assistance (OFDA). FEMA formally tasked 
USAID/OFDA to manage the logistics and operations of incoming 
international donations. We also quickly developed a system with our 
Federal partners, including the Department of State (DOS), which acted 
as the intermediary for offers of international assistance to the 
United States as was required, at that time, by the National Response 
Plan (NRP).
    FEMA formally tasked USAID/OFDA for multiple reasons. First, as a 
signatory to the NRP, USAID is committed to the principles underlying 
the NRP and committed to support DHS/FEMA in responding to incidents of 
national significance. Second, FEMA has an on-going working 
relationship with USAID/OFDA and recognizes USAID/OFDA's excellent 
logistics capability. Third, FEMA tasked USAID/OFDA because that agency 
knows the international emergency management community. USAID/OFDA has 
a good understanding of the kinds of emergency supplies that may be 
offered by our international partners. USAID/OFDA also works closely 
with major international relief organizations.
    To facilitate operations, some USAID/OFDA staff members were 
physically co-located at FEMA headquarters. FEMA also asked USAID/OFDA 
to deploy staff members to the Joint Field Office (JFO) in the affected 
region. This proved to be invaluable support for the logisticians and 
response providers at headquarters and in the field.
    For all international donations that the U.S. Government received, 
DHS took responsibility to ensure that they could be distributed in the 
Gulf Coast and would not place extra burdens on response operations. 
However, despite our best efforts to quickly put together, with DOS and 
USAID/OFDA, a mechanism to manage material offers, it was difficult to 
rapidly integrate such a large quantity of foreign assistance into the 
on-going disaster response. Some of these challenges included 
incidental goods being shipped along with accepted items; lack of 
specificity in qualifying U.S. Government acceptance; and a lack of 
understanding of the specifics of the offers.
    Nevertheless, the U.S. Government did successfully accept blankets, 
cots, tents, generators, school supplies, and other materials. 
Ultimately, USAID/OFDA distributed 143 truckloads of international 
donations to distribution centers in Louisiana, Alabama, Mississippi, 
Texas, and Arkansas.
    As part of FEMA's after-action review of its disaster-response 
efforts, we initiated meetings with those Departments and agencies that 
had participated in the receipt of international donations following 
Hurricane Katrina. Our aim was to formalize a system to identify 
requirements and accept international offers of assistance, so that 
valuable time would not be spent developing the system in the midst of 
future disaster responses.
    These meetings led to establishment of an interagency work group of 
the Departments and agencies that had participated in Hurricane 
Katrina's international donations effort. This working group has begun 
formalizing an international coordination system. Participants have 
included components of DHS such as FEMA, Customs and Border Protection, 
Immigration and Customs Enforcement (ICE), Citizenship and Immigration 
Services (CIS) and other Departments and agencies such as USAID, DOS, 
Defense, Food and Drug Administration, Agriculture, and the U.S. Army 
Corps of Engineers, as well as the American Red Cross (ARC). 
Significant progress has been made in the development of standardized 
procedures to review and accept or decline international offers of 
assistance and to respond to international inquiries.
   changes to esf no. 6 mass care/donations and volunteer management
    As part of the National Response Framework (NRF) review process, in 
2007, FEMA and ARC agreed that FEMA would assume Primary Agency 
responsibilities for the mass care component of Emergency Support 
Function (ESF) No. 6, including Donations and Volunteer Management.
    As part of the efforts, FEMA has established a donations policy for 
disasters and provides technical assistance to affected State, local, 
and tribal governments on management of spontaneous volunteers and 
unsolicited goods. The procedures, processes and activities are defined 
in the Volunteer and Donations Management Support Annex of the NRF.
    FEMA works in concert with State, local and tribal governments, 
non-governmental organizations, faith-based organizations, and the 
private sector in the facilitation of an inclusive multi-agency, 
community-wide, coordinated response and recovery effort that ensures 
establishment of a long-term recovery strategy to address unmet needs 
of individuals and families.
    To support these efforts, FEMA's Disaster Assistance Directorate 
developed a Volunteer and Donations Coordination Team at FEMA 
Headquarters to provide rapid, coordinated response and provide Federal 
support to State and local governments. These efforts include warehouse 
support for housing unsolicited donated goods, coordination of 
unsolicited private and international donations, and use of Aidmatrix, 
a web-based application that enables us to record offers of donated 
goods, services and financial resources.
            challenges of donation and volunteer management
    Following a disaster event, even those that do not receive a 
Presidential disaster declaration, the general public makes many offers 
of in-kind and financial contributions. Until 2007, there was not a 
coordinated, effective mechanism to capture the offers and bring them 
to the attention of emergency managers for operational use. The 
challenge of those in the field is getting the ``Right Aid to the Right 
People at the Right Time.''
    Uncoordinated shipments of unsolicited donated goods and large 
numbers of unaffiliated volunteers can cause unnecessary disruption and 
confusion in the disaster area. This can lead to offers remaining 
unused or to a waste of valuable resources. State donations management 
coordinators and others whose job is to manage the public response 
often are overwhelmed.
    FEMA and DHS as a whole saw the need for a secure, user-friendly 
system to efficiently connect Federal and State/local governments, the 
private sector, and the voluntary sector to match the volume of 
donation offers of product and volunteers with appropriate nonprofit 
agencies.
    In February 2006, FEMA posted a ``Sources Sought'' notice in 
Federal Business Opportunities (FEDBIZOPPS.GOV) for the development of 
a much-needed web-based application for donation and volunteer 
management. The Agency evaluated all eight responses received in 
response to the ``Sources Sought'' notice against the published 
requirements and determined that the Aidmatrix Foundation's technology 
solution was the only one to meet all the requirements. As mentioned 
above, FEMA further determined that the expansion of an software 
package or solution previously developed by the Aidmatrix Foundation 
with warehouse, call center, and volunteer management capabilities 
would serve the broad public purpose of helping State and local 
government and voluntary agencies to ensure that donated goods and 
services are accepted, acknowledged, and deployed to the areas of 
greatest need during disaster response and recovery activities.
    Moreover, working with the Aidmatrix Foundation enabled the Agency 
to leverage the good work that had already been taking place in the 
donation management community. Several of FEMA's major voluntary agency 
partners, including the American Red Cross, Adventist Community Service 
and America's Second Harvest were using the Aidmatrix Foundation's 
Disaster Relief Matrix to support donation warehouse operations in 
Katrina-impacted States.
    The Agency subsequently decided that a Cooperative Agreement was 
the best vehicle to secure the donation and volunteer management 
software. The Cooperative Agreement was awarded to Aidmatrix on 
November 28, 2006. It was determined that the funding used to support 
the expansion of a software package or solution previously developed by 
the Aidmatrix Foundation would not be used to directly acquire donation 
management services or solutions for the Federal Government. It was 
also determined that the direct benefit would be to the State, local 
and tribal governments, voluntary agencies, and disaster victims in 
need of assistance that may be available through donations. Finally, a 
Cooperative Agreement would allow the voluntary agency community and 
private sector to have greater equity in ensuring the success of the 
donations management process, while providing FEMA the opportunity to 
leverage a public/private partnership.
                   supply distribution to gulf coast
    As a result of Hurricanes Katrina and Rita, as well as several 
other disasters, FEMA received certain goods through donations or made 
direct Government purchases to help support affected individuals and 
families. These goods were stored locally at sites across the Gulf 
Coast, and were provided to affected States which, in turn, worked 
through local volunteer and charitable organizations to quickly and 
efficiently distribute them to disaster victims.
    Throughout the nearly 3 years since Hurricanes Katrina and Rita, 
FEMA has provided a significant level of assistance to States, 
communities, and individual disaster victims, and continues to do so. 
The FEMA Louisiana Transitional Recovery Office (LA TRO), for example, 
has assisted temporary housing unit residents with various resources as 
they relocated to rental units. The LA TRO continues to provide basic 
household items, both those bought by FEMA and those donated by 
voluntary agencies, to disaster victims.
    As an example, FEMA placed a ``living kit'' in approximately 90,000 
temporary housing units before delivery to disaster victims. These kits 
included needed items such as bed sheets, blankets, dishes, pots and 
pans, and cleaning supplies. In addition, during the past several 
months, as families have transitioned from their FEMA-provided 
temporary housing units to more suitable, safer, and functional 
housing, FEMA has provided these families with additional living and 
kitchen kits (which supply basic kitchen utensils). This effort will 
continue as additional households transition into a permanent housing 
solution.
    Approaching the Third-year Anniversaries of Hurricanes Katrina and 
Rita, FEMA has distributed more than $50 billion in the region. This 
includes $7.8 billion to individuals and families through Housing and 
Other Needs Assistance that includes personal property replacement, 
transportation assistance, health care and other expenses related to 
moving and storage. Aid continues to flow to residents needing support.
                     disposition of excess supplies
    As the recovery effort progressed in the Gulf Coast and field 
support sites were closed, remaining supplies were shipped to and 
stored at FEMA's Distribution Center in Fort Worth, Texas.
    These supplies had accumulated in odd lots and came from the FEMA 
Regions operating in the Gulf Coast area and other FEMA sites. The 
materials and supplies held in storage and determined to be excess to 
the agency's needs are valued at $18.5 million, not $85 million as 
reported. This change in value was due to an errant manual calculation 
that has since been corrected.
    Even as recovered supplies were warehoused, the Gulf Coast Recovery 
Office (GCRO) maintained a supply of kits and other commonly requested 
materials to distribute as appropriate in support of the temporary 
housing mission. The GCRO continues to do so today. The household items 
are distributed to eligible temporary housing residents who transition 
to long-term housing. FEMA continues to work with the Gulf Coast States 
in supporting those in need of these items. The residents can request 
the items through their caseworkers. It is important to note that State 
and local governments coordinate donations of goods through voluntary 
and nonprofit organizations that work together with FEMA to address 
disaster victims' needs.
    In late 2006, the Fort Worth Distribution Center continued to 
receive excess supplies from the Gulf Coast, and acquired additional 
storage space to store the items being received. The supplies covered a 
warehouse area of over 873,815 square feet at the Fort Worth 
Distribution Center, which is approximately the size of fifteen 
football fields.
    In accordance with the Government-wide Federal Management 
Regulation, FEMA is not permitted to ``give away'' excess or surplus 
property. Section 701 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C.  5121-5207) gives FEMA the 
authority to receive donations and distribute them as necessary. In 
view of the unprecedented amount and manner in which the donations were 
received after Hurricane Katrina, FEMA was unable to clearly 
distinguish between the donated items from Government-purchased items 
that were returned to our warehouses. Therefore, we utilized the 
otherwise applicable Federal Management Regulation process, whereby GSA 
disposes of surplus property. It is important to note that FEMA legally 
cannot give away Government-purchased items to non-disaster victims in 
the recovery phase of a Presidentially-declared disaster.
    FEMA coordinated disposition of these supplies with GSA, which 
manages the Surplus Property Disposal process and serves as the 
disposition agency for Federal civilian agencies. This is the means by 
which all Federal agencies, including FEMA, screen and transfer excess 
property from one agency to another to ensure that property or 
inventory of the Government is not wasted. The GSA process helps ensure 
that supplies and assets are used or donated to eligible recipients.
    Under the GSA process, the supplies in question were made available 
first to DHS, then to other Federal agencies, and then to State 
agencies and non-profit organizations. The items were first made 
available to the components of DHS for 7 days. Next, the items were 
made available to other Federal agencies through GSA for a period of 21 
days. After Federal agencies had the opportunity to screen and request 
items, GSA followed its prescribed procedures by notifying the 
established State Agencies for Surplus Property (SASPs) in each State 
and territory to advise them of the availability of the property.
    All States, including Louisiana, were afforded the opportunity to 
visit the Fort Worth Distribution Center and examine these supplies on 
February 13-14, 2008. State agencies involved in assisting Hurricane 
Katrina and other disaster victims, including Louisiana, Texas, 
Mississippi, and Alabama were all specifically contacted by GSA to 
participate in the transfer process through the SASP representative. 
Fourteen States took advantage of the call from GSA to obtain excess or 
surplus property. Mississippi, in particular, acquired materials valued 
at several hundred thousand dollars in addition to the materials FEMA 
was directly managing in the region.
    Also, before we started the screening and disposal process through 
GSA in 2008, FEMA Voluntary Agency Liaisons notified the National 
Voluntary Organizations Active in Disaster that excess supplies may 
become available to non-profit organizations through the GSA disposal 
process and encouraged their assistance in aiding non-profits 
application efforts. FEMA Voluntary Agency Liaisons also reached out to 
SASP State representatives in an attempt to encourage them to reach out 
to the non-profits in their State and make them aware of the surplus 
goods that might become available to them through the GSA process.
                   current status of excess materials
    Currently, the distributed excess materials are beyond the control 
of either FEMA or any other Federal agency, and cannot be reclaimed and 
redistributed. Nevertheless, FEMA will coordinate with State and local 
officials to ensure visibility into the distributed supplies as well as 
any supplies remaining in storage. We understand that Louisiana has 
taken this opportunity to make its State agency surplus property 
program more accessible to eligible non-profit organizations and has 
identified a lead agency in an effort to better understand the needs of 
these organizations as they work to fulfill unmet needs of disaster 
victims. FEMA will support Louisiana in this effort to help meet the 
continued needs of disaster victims within the scope of its 
regulations. We will work with Louisiana and the other Gulf Coast 
States to ensure they are notified, have a full understanding of the 
surplus disposal process and are given the opportunity to access the 
property.
    I am also pleased to note the actions taken by the State of Texas 
to make materials available to residents of Louisiana. I believe that 
this level of State-to-State coordination, spurred by your interest and 
energy, is the most appropriate course of action.
                    lessons learned and improvements
    FEMA has incorporated lessons learned from Hurricane Katrina and 
other disasters to establish more effective business practices and 
processes that will best meet the needs of States in assisting disaster 
victims quickly and efficiently. The Logistics Management Directorate 
has strengthened its business practices and processes through enhanced 
relationships with Federal and State governments, non-governmental 
organizations and the private sector. These partnerships have allowed 
FEMA to make considerable progress toward the National Logistics 
Coordinator Concept. This concept allows FEMA to tap into the resources 
of its partners, minimizing the need for FEMA to maintain large 
inventory levels of its own and thus minimizes the need to dispose of 
excess supplies.
    During field operations, FEMA logistics sites will require that all 
donated items received at logistics staging areas be segregated and 
kept separate from Government-purchased initial response resources. 
When donated goods are received, the staging area manager will 
immediately notify FEMA's designated representative for disposition 
instructions for the donated items. Additionally FEMA Logistics is 
working closer with the non-profit organizations through liaisons with 
FEMA ESF-6 Mass Care, Voluntary Agency Liaisons and Donations 
Management.
                     about the aidmatrix foundation
    Leveraging leading-edge technologies from the corporate world, the 
Aidmatrix Foundation created a system which provides a simple but 
effective means of connecting donors with relief organizations. The 
system communicates offers and needs up and down the humanitarian 
relief supply chain, helping to get the right aid where it is needed at 
the appropriate time.
    The basic system was provided grant funding by FEMA/DHS and made 
available to States at no cost. States are encouraged to set up and be 
trained on the system before the need arises. Additional customizations 
can be performed at a reduced cost to the State or their designated 
foundation. Aidmatrix's training and customization services will be 
provided at discounted rates. To further reduce costs, States may seek 
private corporate sponsorships.
    FEMA also is providing each State with the standard FEMA design. 
States also have the option of customizing and branding their Web site. 
Basic program functionality is available at no cost to each State's 
donations management lead agency and its voluntary networks as outlined 
above. Each State will have autonomy over its installation. Recognizing 
that connecting to the nonprofits on the ground is critical, the system 
includes links to the State Voluntary Organizations Active in Disaster 
(VOAD) member organizations. Customization options allow States to add 
additional nonprofit organizations, cities, and governmental agencies. 
Aidmatrix provides on-site user training, documentation, and demo 
environments. Aidmatrix Network provides several modules that cover a 
wide range of humanitarian aid relief donations coordination. These 
features will be phased in over time, and include:
   In-Kind Donations Management.--The System allows States to 
        establish a call center and national in-kind and State portals 
        via the web.
   Unaffiliated Volunteer Management.--The tool helps States 
        manage the volunteer response and connects offers to agencies 
        with needs efficiently and effectively. It enables smaller, 
        often overlooked agencies to take advantage of the supply of 
        volunteers and alleviate the pressure on the larger agencies 
        and governments to provide more opportunities to help. (This 
        feature is funded by FEMA in Phase II.)
   Online Relief Warehouse Management.--Based on nonprofit 
        warehouse management best practices, the tool leverages 
        leading-edge technology in a simple, user-friendly way to 
        provide real-time visibility into relief warehouse activity and 
        status for all stakeholders involved in a relief effort.
   Financial Donations Management.--Allows States to quickly 
        fundraise in response to specific disasters. The tool promotes 
        the offering of financial donations by individuals and educates 
        the general public on the most critical needs. In addition, the 
        tool facilities workplace and group-based giving campaigns and 
        can easily be customized for rapid response. This component is 
        optional and intended to support a State's disaster cash 
        donations plan.
    Each of these aspects of the Aidmatrix system for donations and 
volunteer management offers specific advantages to consumers and end 
users.
                      in-kind donations management
    The system will provide the designated State Donations Management 
Organization with administrator access and privileges to all 
information in the State's system. This will allow visibility to all 
reporting, all in-bound offers, and the ability to offer donations to 
end relief charities. In times of national disaster, the State will be 
connected to and receive national offers via the system. In the case of 
a State-localized disaster, the State can use the solution to respond 
to a regional event. The system also includes a Call Center Module. A 
State can use this module to respond to a local or national disaster. 
The technology is provided by the Federal Government and the State is 
responsible for providing the manpower to staff the Call Center and 
provide up-to-date messaging.
    This functionality is important for both donors and donation 
managers. Aidmatrix provides an on-line portal for the public to donate 
on-line with messaging on good product donation practices. In addition, 
corporate donors can be set up in advance with unique log-ins so they 
have access to their history, status of donations, etc. These features 
enhance customer service due to decreased wait time, as it allows 
donors to can pledge meaningful offers as they have visibility into 
critical needs.
    Donations Management Coordinators now have the capability of 
routing donation offers to one or more agencies in a short time frame, 
and non-profit organizations have the ability to respond real-time and 
to changes in offers/acceptance and generate reports. This allows for 
reduced call volume as more offers are taken on-line instead of via 
phone, the potential for less waste as offers can be given for specific 
needs, and enhanced collaboration and communication.
                   unaffiliated volunteer management
    This aspect of the Aidmatrix system, which will become available in 
Phase II of the Federal Program, provides volunteers with the ability 
to register their profile for the selection of volunteer opportunities 
by local charities, as well as the ability to view charities needs by 
ZIP code, skill set, etc.
    This is effective for States because it gives volunteers the 
ability to receive e-mail notifications of status, allows voluntary 
agencies the ability to review offers of help by ZIP code and skill 
set, post requests for volunteers, and direct unaffiliated volunteers 
to this portal in times of overwhelming response.
           improvements to donation and volunteer management
    FEMA has made vast improvements in its ability to assist States in 
managing cash and in-kind donations. Recognizing that many States may 
not have the resources necessary to implement broad donation management 
activities, FEMA, through a cooperative agreement with the Aidmatrix 
Foundation, has been able to facilitate an option that is useful in 
providing just-in-time support to States during large donations 
operations. The system has been used to effectively address disasters 
in California, Alabama, Oklahoma, Missouri, and Arkansas.
    To date, FEMA has provided the Aidmatrix Foundation with funding of 
$2.3 million to expand its existing web-based donations management 
network for use during times of disaster. These funds have established 
the national framework for an integrated, coordinated approach to 
donations management--by connecting private sector, Government and 
leading nonprofit entities--for relief deployment and also for round-
the-clock use. Through this cooperative agreement vehicle, Aidmatrix 
personnel can rapidly deploy to the State Emergency Operations Center, 
Joint Field Office, warehouse and Volunteer Reception Centers or other 
locations where donations coordination is needed.
    This system streamlines the way unsolicited donations are offered, 
accepted, processed, tracked, distributed and acknowledged. The 
Network's virtual approach allows Government and nonprofit users to see 
in real time the in-kind donations offers available for immediate 
distribution. The system is designed to support donor intent through 
directing and allocating aid at the State level so that during a 
disaster, qualified nonprofit organizations responding to the disaster 
can get offers more efficiently.
    Under the agreement, Aidmatrix also offers State donations 
management coordinators with software tools to rapidly set up a call 
center to meet inquiries of the general public wanting to help in the 
aftermath of a disaster and for corporate constituents positioned to 
offer unsolicited in-kind products. State-designated portals are the 
preferred method of use for donation offers. States are encouraged to 
promote this portal as part of their donations management plan.
    Twenty-four States, including Alabama, Arizona, Arkansas, 
California, Connecticut, Florida, Georgia, Indiana, Iowa, Louisiana, 
Minnesota, Mississippi, Missouri, New Mexico, New York City, North 
Carolina, Ohio, Oklahoma, Oregon, Puerto Rico, Rhode Island, South 
Carolina, Texas, and Virginia; have adopted the free tool from FEMA. 
All States are expected to be on board by the end of calendar year 
2008.
                                summary
    FEMA remains strongly committed to those affected by the disaster 
and the long-term recovery efforts in the Gulf Region. Based on our 
efforts there, FEMA has developed a national web-based donations 
management network for national and State use during times of disaster. 
The network is offered free of charge to States, and is a web-based 
tool designed to manage the offers of undesignated cash, unsolicited 
in-kind goods and unaffiliated volunteers. The system includes a multi-
agency warehouse inventory component that came on-line June 2008.
    Our efforts to date have paid off. During the recent Midwest 
flooding, the National Donations Management Network was made available 
to the States affected to allow them to capture offers of donated goods 
and help them manage their Multi-Agency Warehouses.
    Additionally, FEMA Logistics is working closer with States and 
local governments and internally to ensure visibility within the 
Logistics Directorate. I can assure you that FEMA Logistics has and 
continues to make progress in improving its business practices in 
planning, managing and sustaining the national logistics response and 
recovery operations.
    Thank you for the opportunity to testify. We would be pleased to 
answer any questions you may have.

    Mr. Cuellar. Thank you for your testimony, Mr. Smith. At 
this time I would like to recognize Mr. Castillo to summarize 
his statement for 5 minutes.

   STATEMENT OF CARLOS J. CASTILLO, ASSISTANT ADMINISTRATOR, 
 DISASTER ASSISTANCE, FEDERAL MANAGEMENT AGENCY, DEPARTMENT OF 
                       HOMELAND SECURITY

    Mr. Castillo. Good afternoon, Chairman Thompson, Chairman 
Cuellar, Congressman Dent and Chairwoman Landrieu and Members 
of the subcommittee.
    As the Assistant Administrator for the Disaster Assistance 
Directorate, I oversee FEMA's support for the many recovery 
activities we provide to States, communities and individuals as 
they work to rebuild their homes and their lives following a 
major disaster. I am here today in particular to discuss our 
actions under Emergency Support Function 6, or ESF No. 6. This 
is a section of the Federal response focused on the delivery of 
Federal mass care, emergency assistance, housing and human 
services when local, State and tribal response and recovery 
needs exceed their capabilities.
    I will also address the reforms we have put in place over 
the past 2 years relating to the donation of goods and 
supplies.
    Until 2007, there was not a coordinated, effective 
mechanism to capture offers and bring them to the attention of 
emergency managers for operational use. Uncoordinated shipments 
of unsolicited donated goods and large numbers of unaffiliated 
volunteers can cause unnecessary disruption and confusion in a 
disaster area.
    This can lead to offers remaining unused or to waste of 
valuable resources. State donations management coordinators and 
others whose job it is to manage the public response can be 
overwhelmed.
    As part of our ongoing effort to incorporate the lessons 
learned in last 3 years, FEMA released earlier this year the 
updated National Response Framework, or NRF. This designated us 
as the primary agency responsible are the mass care component 
of ESF No. 6, including donations and volunteer management.
    Subsequently, FEMA established a donations policy for 
disasters and the provision of technical assistance on the 
management of spontaneous volunteers and unsolicited goods. In 
accordance with the Donations and Volunteer Support Annex of 
the NRF, each State manages and oversees a distribution network 
of donated goods, and FEMA works closely, through our voluntary 
liaisons, to assist in the distribution process.
    To support these efforts, my office developed a volunteer 
and donations coordination team that provides rapid, 
coordinated response and provides Federal support to tribal, 
State and local governments.
    Our support activities can include coordination of 
unsolicited private and international donations, and the use of 
the Aidmatrix web-based application that enables us to make 
offers of donated goods, services and financial resources.
    Recognizing that many States may not have the resources 
necessary to implement broad donation management activities, 
FEMA, through a cooperative agreement with the Aidmatrix 
Foundation, has been able to facilitate an option that is 
useful in providing just-in-time support to States during large 
donations operations.
    The system has been used to effectively address disasters 
in California, Alabama, Oklahoma, Missouri, Arkansas, Iowa and 
Indiana. Aidmatrix has created a national framework for an 
integrated, coordinated approach to donations management by 
connecting private sector, Government and leading nonprofit 
entities for relief deployment and also around for around-the-
clock use.
    The system streamlines the way unsolicited donations are 
offered, accepted, processed, tracked, distributed and 
acknowledged. Twenty-three States have adopted this free tool 
from FEMA as of now.
    Today's hearing is focused on how we managed the received 
donations in 2005 to help those in the Gulf Coast. Our written 
testimony today focuses on that in much greater detail, and I 
am sure we will address it in responding to your questions.
    We all agree that FEMA did not have the systems in place to 
handle every aspect of our response to those catastrophic 
storms. But the truth of the matter is, even with this less-
than-perfect system, FEMA has delivered more than $50 billion 
in aid to those in need in the Gulf Coast.
    We did distribute 143 truckloads of donated supplies 
received from around the world to those on the ground. FEMA's 
Gulf Coast recovery office did provide more than 90,000 
households with kits to help them return to their damaged homes 
or move into a new residence, and it continues to disburse 
these kits today, with sufficient supplies on hand to meet the 
demand of those we are still serving nearly 3 years later, and 
perhaps most importantly we have learned to set into place the 
Aidmatrix system, which will help us make sure we do not make 
the same mistake again.
    FEMA remains strongly committed to those affected by the 
disaster and the long-term recovery efforts in the Gulf region. 
We will continue to work with the Gulf Coast States to address 
long-term recovery efforts and the needs of the victims. We 
have put new systems in place to avoid repeating mistakes of 
the past, and our efforts to date have paid off.
    Thank you for your time and your support of our on-going 
reforms. I look forward to answering the questions you may 
have.
    Mr. Cuellar. Thank you, Mr. Castillo. I now recognize Mr. 
Barney Brasseux to summarize his statement for 5 minutes.

 STATEMENT OF BARNEY L. BRASSEUX, DEPUTY COMMISSIONER, FEDERAL 
      ACQUISITION SERVICE, GENERAL SERVICES ADMINISTRATION

    Mr. Brasseux. Thank you, Mr. Chairman. Good afternoon, 
Chairman Cuellar, Chairman Thompson, Senator Landrieu and 
Members of the subcommittee. Thank you for the opportunity to 
participate in today's hearing.
    I am Barney Brasseux, Deputy Commissioner of the Federal 
Acquisition Service of the General Services Administration. The 
Federal Acquisition Service carries out the GSA Administrator's 
role in providing acquisition and logistics services to Federal 
agencies. Included amongst these logistics services is 
management of the Federal program for disposal of personal 
property. This is managed by our Office of Personal Property 
Management, part of our Office of General Supplies and 
Services.
    Generally speaking, personal property is defined as any 
property except buildings, lands, agency records and naval 
vessels. The primary mission of GSA's Office of Personal 
Property Management is to maximize the reuse of Federal 
property.
    As provided in Title 40 of the United States Code and 
implemented by the Federal management regulations, Federal 
agencies are required to report excess personal property to GSA 
for screening, for redistribution to other Federal agencies and 
other eligible recipients.
    Property is generally transferred at no cost to Federal 
agencies, their authorized contractors, cooperatives and 
project grantees. Property is reported to GSAXcess, a web-based 
program that is used by our customers to screen and select 
needed property. Once reported, property is normal offered for 
screening for 21 calendar days.
    For Federal agencies, most Federal property is transferred 
on a first come-first serve basis. Property transfers are also 
processed through GSAXcess. Recipients of property are 
responsible for making all necessary transportation 
arrangements.
    Excess property which is not selected for transfer within 
the Federal Government is declared by GSA to be surplus to the 
Federal Government at the conclusion of the screening period. 
Once GSA declares the property surplus, the property can be 
transferred under the Federal Surplus Personal Property 
Donation Program. This program is operated through the State 
Agency for Surplus Property, SASP, in each State, territory, 
and the District of Columbia.
    The SASPs are established under Title 40 of the U.S. Code 
and are responsible for determining the eligibility of 
activities within the State to receive donated Federal surplus 
property in accordance with the requirements in statute and the 
Federal management regulation.
    The SASPs are also responsible for fair and equitable 
distribution of surplus property within the State and ensuring 
compliant use of property. Each State has a written State plan 
of operations for the SASP, which is approved by GSA. Eligible 
recipients of property under the donation program are specified 
in Title 40. Major categories of eligible recipients are State, 
public agencies, nonprofit and public health activities.
    SASP will pick up and warehouse property for donation 
within the State or may allow the direct donation of property, 
meaning the donee will make arrangements to pick up and 
transport property which is allocated to them. Property that is 
donated is normally placed and used by a donee within 1 year 
for 1 year. Donations are made to the SASPs at no cost to the 
Federal Government. As SASPs are self-sufficient by law, they 
assess service and handling fees to the actual donee recipients 
in order to fund their operations. These fees are specified in 
the State plan of operation for each SASP.
    SASP operations are reviewed by GSA regional offices on a 
regular basis to determine if operations are in compliance with 
the State plan and applicable regulations. GSA has the 
authority under the FMR to shorten screening when necessary or 
appropriate. Based on the concentration of property and its 
characteristics of potential demand, we often do so.
    At times we will conduct an on-site physical screening 
event. In these cases we will most often offer screening for 
Federal agencies for 1 day. Once no Federal agency has 
expressed interest in the property, GSA declares the property 
surplused to the Federal Government.
    On the second day, GSA offers screening for the SASPs. 
These on-site screening events are well advertised in advance 
to allow customers to travel and make transportation plans.
    Regarding the current event under discussion, in mid-
December, 2007, the Federal Emergency Management Agency, FEMA, 
initially advised GSA of its intent to report excess household 
goods to GSA and FEMA's request to conduct an on-site screening 
event. FEMA reported the excess household goods to GSA on 
February 4, 2008.
    GSA and FEMA worked together to conduct an on-site 
screening event. A property management office in Ft. Worth 
advertised this event to our Nation-wide lists of Federal 
agency customers and to all SASPs through direct e-mails and 
through the National Association of State Agencies for Surplus 
Property.
    The first day of on-site screening, February 13, 2008, was 
for Federal agency customers and representatives of 30 
different activities who participated and requested property.
    The second day, February 14, 2008, the remaining property 
was offered for donation to the 16 SASPs that elected to 
participate.
    I would like to thank you again for this opportunity to 
speak to the subcommittees. I am happy to answer any questions 
you may have.
    [The statement of Mr. Brasseux follows:]
                Prepared Statement of Barney L. Brasseux
                             July 31, 2008
    Good morning, Chairman Thompson, Congressman King, Chairwoman 
Landrieu, Senator Stevens and Members of the subcommittees. Thank you 
for the opportunity to participate in today's hearing. I am Barney 
Brasseux, Deputy Commissioner of the Federal Acquisition Service (FAS) 
of the General Services Administration (GSA).
    The Federal Acquisition Service carries out the GSA Administrator's 
role in providing acquisition and logistics services to Federal 
agencies. Included amongst these logistics services is management of 
the Federal program for the disposal of personal property. This is 
managed by our Office of Personal Property Management, part of our 
Office of General Supplies and Services.
    Generally speaking, ``personal property'' is defined as any 
property except buildings, land, agency records, and naval vessels.
    The primary mission of GSA's Office of Personal Property Management 
is to maximize the reuse of Federal property. As provided in Title 40 
of the United States Code and implemented by the Federal Management 
Regulations (FMR), Federal agencies are required to report excess 
personal property to GSA for screening for redistribution to other 
Federal agencies and other eligible recipients. Property is generally 
transferred at no cost to Federal agencies, their authorized 
contractors, cooperatives, and project grantees.
    Property is reported to GSAXcess, a web-based program that is used 
by our customers to screen and select needed property. Once reported, 
property is normally offered for screening for 21 calendar days. For 
Federal agencies, most property is transferred on a first-come, first-
served basis, although for some specialized commodities, we will allow 
time for competition for these high-demand items, such as aircraft and 
construction equipment. Property transfers are also processed through 
GSAXcess. Recipients of property are responsible for making all 
necessary transportation arrangements. The FMR states the property 
should be removed within 15 days, although that can be lengthened on 
agreement between GSA and the holding agency. GSA ensures that property 
recipients are aware of this time deadline and that property recipients 
comply.
    Excess property which is not selected for transfer within the 
Federal Government is declared by GSA to be surplus to the Federal 
Government at the conclusion of the screening period. Once GSA declares 
the property surplus, the property can be transferred under the Federal 
Surplus Personal Property Donation Program. This program is operated 
through the State Agency for Surplus Property (SASP) in each State, 
territory, and the District of Columbia. The SASPs are established 
under Title 40 of the U.S. Code. The SASP is responsible for 
determining the eligibility of activities within the State to receive 
donated Federal surplus property, in accordance with the requirements 
in statute and the FMR. The SASPs are also responsible for fair and 
equitable distribution of surplus property within the State and 
ensuring compliant use of donated property. Each State has a written 
State Plan of Operations for the SASP which is approved by GSA.
    Eligible recipients of property under the donation program are 
specified in Title 40. Major categories of eligible recipients are:
   State and public agencies, which generally include States, 
        their departments, divisions, and political subdivisions of 
        States, including cities, counties, and other local government 
        units and economic development districts.
   Nonprofit educational and public health activities exempt 
        from taxation under Section 501 of the Internal Revenue Code, 
        including, but are not limited to:
     Medical institutions and hospitals;
     Providers of services to the homeless; and
     Providers of services to the impoverished.
    SASPs will pick up and warehouse property for donation within the 
State or may allow the ``direct donation'' of property meaning the 
donee will make arrangements to pick up and transport property which is 
allocated to them. Again, GSA will ensure removals are timely and 
within the established time frame.
    Property that is donated is normally placed in use by a donee 
within 1 year, for 1 year. The usage requirement is lengthened to 18 
months for property with an original acquisition value exceeding 
$5,000. Donations are made to the SASPs at no cost to the Federal 
Government. As the SASPs are self sufficient, by law, they assess 
service and handling fees to the actual donee recipients in order to 
fund their operations. These fees are specified in the State Plan of 
Operation for each SASP.
    SASP operations are reviewed by GSA Regional Offices on a regular 
basis to determine if operations are in compliance with the State Plan 
and applicable regulations.
    GSA has the authority, under the FMR, to shorten screening when 
necessary or appropriate. Based on the concentration of property and 
its characteristics and potential demand, we often do so. At times, we 
will conduct an on-site, physical screening event. In these cases, we 
will most often offer screening for Federal agencies for 1 day. Once no 
Federal agencies express interest in the property, GSA declares the 
property surplus to the Federal Government. On the second day, GSA 
offers screening for the SASPs. These on-site screening events are well 
advertised in advance to allow customers to make travel and 
transportation plans.
    Surplus property not selected for donation is offered for public 
sale. The Office of Personal Property Management's Sales Program is 
approved as a Sales Center under the Federal Asset Sales Program 
(eFAS), one of the initial e-government initiatives. GSA is the only 
Nation-wide activity approved as a Sales Center for all commodity 
groups and for all methods of sale. Surplus property is offered for 
competitive sales to the general public, most commonly through GSA 
Auctions, our internet auction site. All GSA sales, whether on the 
internet, or live auctions or other methods still utilized at times, 
are listed on GovSales.gov, the eFAS central portal for all Government 
sales.
    Regarding the event currently under discussion, in mid-December 
2007, the Federal Emergency Management Agency (FEMA) initially advised 
GSA of its intent to report excess household goods to GSA and FEMA's 
request to conduct an on-site screening event. FEMA reported the excess 
household goods to GSA on February 4, 2008. GSA and FEMA worked 
together to conduct an on-site screening event. Our Property Management 
Office in Fort Worth advertised this event to our Nation-wide list of 
Federal agency customers and to all SASPs through direct emails and 
through the National Association of State Agencies for Surplus 
Property.
    The first day of on-site screening, February 13, 2008, was for 
Federal agency customers and representatives of 30 different activities 
participated and requested property. The second day, February 14, 2008, 
the remaining property was offered for donation to the 16 SASPs that 
elected to participate. Those SASPs were Alabama, Arkansas, Georgia, 
Illinois, Kansas, Minnesota, Mississippi, Missouri, Nebraska, New 
Mexico, North Carolina, North Dakota, Oklahoma, Pennsylvania, South 
Dakota, and Texas.
    Thank you again for this opportunity to speak to the subcommittees. 
I am happy to answer any questions you may have.

    Mr. Cuellar. Again, thank you for your testimony. I want to 
thank all of you for your testimony. At this time I would like 
to remind each Member that he or she will have 5 minutes to 
question the panel.
    Members, as you know, we have been notified probably around 
2:15 or 2:20 we will be called for six votes. We will leave, 
Senator--when they do call us for votes, to continue the 
meeting, we will leave to the Senator here, vote, and then come 
back and join you.
    The only thing I would ask you, just in case if we leave 
before we finish the questioning, with all due respect, 
sometimes, there is a tendency of some of the Federal agencies 
that as soon as they give their testimony, they walk out. Then 
the second panel will come in and point out certain 
shortcomings or certain deficiencies, have a tendency of 
agencies not listening to them.
    So I would ask all three of you all, if you don't mind, 
with all due respect, that when you finish if you can just sit 
here and listen to the second panel, because I think we are all 
here to learn from each other.
    So at this time I am going to recognize myself, the order 
that we have right now, the changes, I am going to go ahead and 
recognize myself for 5 minutes.
    Senator, I will recognize you, Mr. Thompson, Chairman 
Thompson, Mr. Dent, Mr. Etheridge, and then Ms. Jackson Lee if 
she comes back, five Members, 5 minutes.
    I will go ahead and recognize myself. Mr. Smith, let me ask 
you a question. You had mentioned that there were--the media 
was erroneous in the reporting. I am going to ask you, 
specifically, I know you went over that, but I want to know 
specifically how were they erroneous in the reporting? What is 
it that you are saying that you did not do wrong, No. 1?
    No. 2, we are here for a purpose, as you know, there are a 
Senator and some Members here that have certain questions to 
ask, and I want to know where those questions are based on 
certain assumptions, and I want to know from your opinion how 
are we wrong on those assumptions for having this particular 
meeting here.
    So, Mr. Smith, if you could answer the first part or the 
second part.
    Mr. Smith. Thank you, Mr. Chairman.
    First of all, there are a couple of different points. The 
immediate articles reiterate, kept reiterating the fact that we 
gave away supplies. In fact, we, again, as I stated in my 
statement, according to the Federal management regulation, we 
cannot give away anything. We had to use the established 
Federal process to dispose or excess these supplies. So that 
was one statement that they kept saying that we tried to 
correct, to let them know that it wasn't a giveaway, that it 
was actually following the Federal process.
    Then, again, the reporting of the actual amount of $85 
million, the amount was actually $18.5 million, and one of the 
articles reiterated the fact that none of the supplies ever 
reached their destination, that these supplies never reached 
their intended recipients, while in fact the way the that the 
logistics system got these supplies is because they were all 
sent out to the Gulf States. Once the sites closed down, FEMA 
operations--I mean, the support operations closed down, in 
fact, these supplies were sent back to me, to my operations. We 
didn't receive them and did not issue them. They were returned 
from us after they were not used, from different areas, 
Mississippi, Louisiana, all the field sites that we were 
operating, returned to my site.
    Then, in addition to that, we tried to explain that, to 
today, we still have supplies in Louisiana, throughout the Gulf 
States, which we continue to issue to eligible applicants to 
the housing program, as in fact--just as recently we have 
issued about 9,000 living kits. We still have living kits in 
the storage down there today, and whenever the eligible 
applicant has a need for those we issue them those kits.
    The other fact that we have taken corrective action, which 
in fact that is not the case. We learned from that when that 
happened, and my colleague Carlos Castillo will talk a little 
bit later about how we are doing that through the Aidmatrix 
process.
    Mr. Cuellar. Okay, that is the first part. The second part, 
there is an assumption of why you are here and why you are 
going to get a series of questions. How were we wrong on that 
assumption? Where are we missing? What is the basic premise 
here?
    Mr. Smith. I am sorry, Congressman.
    Mr. Cuellar. In other words, you are saying that the media 
reports are wrong. I think you focused on the part of I say, 
you were saying, well, we didn't give it away. We disposed of 
it according to certain rules.
    But the bottom line is, did they get, did all of them get 
to the intended purpose, and that is to help the survivors?
    Mr. Smith. As far as I am aware, that the entities that 
requested support through their, the Louisiana, the long-term 
recovery office or the caseworkers, received the supplies that 
they asked for. I am not aware of any instance where someone 
asked for supplies in any of the Gulf States that was passed 
through one of our organizations that was not filled.
    Mr. Cuellar. What about the 16,000 Katrina survivors that 
are still there? Have you outreached to them and said we have, 
because I think you said you still had some supplies and 
warehouses? Do you feel satisfied that all those folks don't 
need any of those supplies that are still in those warehouses?
    Mr. Smith. I will attempt to answer that because that is a 
little bit out of my area as far as individual assistance. But 
from the way I understand it, the process works, is that if a 
recipient, if there's an eligible recipient that has a need, 
they make their need known through the long-term recovery 
office there, and that need is filled through the assets that 
are there on the ground through that recovery office.
    If the recovery office does not have those assets or can't 
meet that need, they would then pass that requirement back to 
me at the strategic level, and I will supply it for them.
    Mr. Cuellar. Okay. Senator, I am going to go, we alternate, 
I apologize for that. At this time I recognize my Ranking 
Member, Mr. Dent from Pennsylvania, for his 5 minutes.
    Mr. Dent. Thank you, Mr. Chairman. Mr. Castillo, effective 
logistics management can greatly assist in a disaster 
management team, as we have seen with the California wildfires 
and Midwest floods.
    During the floods, I requested that Aidmatrix be installed 
and used to manage unsolicited donations. This is the first 
time that the Aidmatrix network was utilized for a large-scale 
event.
    What is your overall assessment of the effectiveness of the 
Aidmatrix system during those recent disasters?
    Mr. Castillo. Yes, Congressman, we have actually had very 
positive feedback from this. As you know, it is the first time 
it was used there. In Iowa, we have had--I have got actually a 
couple of examples for Iowa itself, 15 of 40 offers of in-kind 
goods were accepted, including one single carpeting offer, for 
example, worth $200,000.
    In addition to that, a transportation offer, or 
transportation need was fulfilled that was worth $10,000 to 
transport the carpeting. I think it is a good example of 
bringing the need and the donors together through that process 
with Aidmatrix in Iowa.
    Overall, we are still using it, we have utilized it since 
last year with the California wildfires and have had a lot of 
positive feedback and will continue to review and revise it as 
necessary as we use it.
    Mr. Dent. So you thought it was effective in moving the 
goods and volunteers to appropriate locations?
    Mr. Dent. Yes, sir, and in tracking them, and this way it 
ensures the proper and effective utilization. I think it has 
been effective, sir.
    Mr. Dent. Have you identified any revisions or upgrades to 
the Aidmatrix system that should be made to improve its 
utilization or effectiveness?
    Mr. Castillo. Well, the system is very robust. It is web-
based and it allows access from different levels. I think part 
of what we are seeing is that, one, the need to get it out and 
increase and continue our outreach to other States that can be 
part of it and sign on to the system as well, as well as we 
have revised some of the training courses that we have provided 
at the State level. We have already conducted some of those 
courses. We also want to expand that to the local level for 
their use.
    Mr. Dent. Mr. Smith, in the aftermath of Hurricane Katrina, 
as you know, FEMA was heavily criticized for its disaster 
management, including its logistic operations.
    What systems, if any, did FEMA have in place prior to 
Hurricane Katrina to record, track, store and transport both 
purchased and donated goods?
    Mr. Smith. Unfortunately, Congressman, FEMA did not have 
any systems in place to track commodities or donated goods. 
That is, in fact, why we created the Logistics Management 
Directorate to look at a wide range of supply chain processes 
and procedures to put those in place to make sure that we 
didn't repeat those--the mistakes that, you know, that were as 
a result of Katrina.
    Mr. Dent. Then I guess my follow-up, I guess what I was 
going to ask you was what the level of coordination was that 
took place between FEMA and the affected States prior and 
during Katrina regarding commodity and donations management. 
Were there many, and how is it different today?
    Mr. Smith. Primarily in the past it was a reactive process, 
where we worked through our region headquarters to work with 
the States. But, today, FEMA headquarters with the Logistics 
Management Directorate, particularly in the logistics area, 
have taken a more proactive role.
    We plan with them on a daily basis, have outreach programs 
where we work with them to try to understand their needs and to 
meet their needs ahead of time. So when the time comes we are, 
in fact, just executing what we have in plan.
    Mr. Dent. Mr. Brasseux, once a Federal agency determines 
that it has surplus property, it notifies the GSA and provides 
an accounting of the surplus items. GSA then notifies other 
Federal agencies of the items available. Through a screening 
process that typically lasts 21 days, Federal agencies may 
select items on a first come-first serve basis.
    How does a Federal agency determine that a surplus property 
is ready for disposal to the GSA?
    Mr. Brasseux. It is up to each and every Federal agency 
based on their needs and their usage of what they have. They 
may make a determination that that property is excess to them. 
They then notify GSA, and then we begin a process of disposal.
    Mr. Dent. Who at the Federal agency determines what 
property is surplus and what is not?
    Mr. Brasseux. Well, it can be a variety of different areas, 
depending. It is the agency head or their designee, and it can 
be a variety of different levels depending on their agency.
    Mr. Dent. I yield back.
    Mr. Cuellar. Thank you, Mr. Dent, for your questions.
    At this time I recognize for 5 minutes Senator Landrieu.
    Senator Landrieu. Thank you very much. I would like to 
direct my question to whoever was responsible for responding to 
the story that broke on June 11 about the misplaced or given 
away--we will determine what that was--supplies. Mr. Castillo, 
was it you, or was it you, Mr. Smith, that was a designated 
person within FEMA to try to ascertain if $85 million worth of 
items was truly given away or misplaced, or was it $18 million 
and how did it happen? Which one of you is designated as the 
point person?
    Mr. Smith. Madam Chairwoman, I am.
    Senator Landrieu. Okay. Let me ask you a few questions 
about what you discovered. Did the FEMA regional office contact 
the FEMA transitional office, recovery office in New Orleans 
about these supplies, to your knowledge, and the answer is yes 
or no, before the items were designated as surplus? Did the 
regional office contact the FEMA transitional office in New 
Orleans about the existence of these supplies before they 
designated them as surplus?
    Mr. Smith. Not that I am aware of.
    Senator Landrieu. Did anyone in FEMA contact, to your 
knowledge, the Louisiana Recovery Authority, the State's 
principal recovery agency, about these supplies?
    Mr. Smith. Not that I am aware of.
    Senator Landrieu. Did anybody at FEMA contact the Louisiana 
Family Recovery Corps, which had been designated by the State 
as the official agency to coordinate assistance to disaster 
systems, with the supply?
    Mr. Smith. Not that I am aware of.
    Senator Landrieu. Did anyone at FEMA contact the Louisiana 
voluntary organizations active in disaster, which is the 
coordinating role that all the nonprofits in Louisiana have 
organized themselves into so that they can be coordinated, did 
anybody from FEMA contact them?
    Mr. Smith. Not that I am aware of.
    Senator Landrieu. Okay. So my question is, then, since no 
one from FEMA contacted anybody, even yourselves, you didn't 
contact your regional office, you didn't contact the State 
office, you didn't contact the nonprofit, how did you determine 
that these items were not needed?
    Mr. Smith. From a logistics standpoint, when we have 
commodities in our inventory, we base the use of them, the 
utilization on demands. If we don't have demands on that, 
nobody asks for them, we have no requisitions for them, we 
determine if there is an ongoing need to keep them. When we 
didn't have demands for these items, we went through the 
process of following the Federal regulation.
    Senator Landrieu. Well, let me ask you something, if I 
could: How can people ask for something they don't know exists?
    Mr. Smith. They have to have a need. If they developed a 
need, that they have a bona fide need, it is their 
responsibility to pass that need on.
    Senator Landrieu. Well, you might reach that conclusion, 
but I am not willing to reach that conclusion. In fact, I 
actually have a letter from our State I would like to submit to 
the record. Interestingly, it was dated February 7, which is 
addressed to Mr. Stark, signed by Mr. Rainwater, who will 
testify today.
    It is very clear in this letter, which is lengthy, so I 
will not read it, but the operative paragraph is that they are 
asking for assistance to the 6,000 households that have been in 
trailers that are now moving from trailers at the order of FEMA 
into other places to live.
    The letter goes on to say that not only will these 
households need to have a physical structure to live in, a 
rental unit, house or something, an apartment, but they are 
also going to need household establishment funds, and they 
actually requested $6 million toward this. This is an 
additional request that came to Mr. Stark in February, I guess 
around the same time that you all were determining that no one 
needed the items.
    So I would like to submit this letter for the record.
    Mr. Cuellar. The letter is admitted into the record, 
without objection.
    [The information referred to follows:]
    
    
    
    
    Senator Landrieu. Again, I would also like to ask to you, 
Mr. Brasseux, with the GSA, Mr. Rainwater's statement submitted 
to this committee says the record indicates that when GSA 
contacted the State of Louisiana Surplus Property Agency, as 
being at Ft. Worth for property screening, as you testified on 
the 13th and 14th, but it did not indicate that the surplus 
goods that were invited for people to screen were originally 
intended for Gulf Coast hurricane recovery victims.
    Did anyone at GSA, to your knowledge, indicate to the State 
that these supplies that were now at Ft. Worth were previously 
identified as hurricane relief items?
    Mr. Brasseux. No, not to my knowledge. They were 
identified----
    Senator Landrieu. Hold on. So your agency called the State 
and said there were some items, unidentified items, and if they 
had time on their schedule they could come to Ft. Worth and 
look. At no time, do you know, was the State of Louisiana told 
that these were previously designated for hurricane survivors?
    Mr. Brasseux. They were told that they were household items 
that would include towels--dish, hand, bath--sheets, pillows, 
coffee makers, sandals, dinnerware, et cetera.
    Senator Landrieu. So the items were described.
    Mr. Brasseux. They were described to some extent, but it 
was not indicated that they were for hurricane.
    Senator Landrieu. Well, I would suggest that the system 
that FEMA is currently using--which is, unless somebody is 
knocking down your door screaming for supplies, you don't have 
any obligation to reach out to the States that you are created 
to serve, or to at least partner with in an emergency--is 
wholly insufficient, Mr. Smith.
    In addition, I can claim that they did request at least $6 
million of the $18 million that you all gave away. So I am 
going find out where this letter went, who responded and who 
hasn't.
    The final question I want to get in for the record, because 
my time is up, I wrote a letter to Secretary Paulson--let's 
see--on June 12. I asked him--in an attempt to get to the 
bottom of this, I requested his assistance in returning any of 
the supplies back to the States of Louisiana and Mississippi: 
``Would you provide my office with an inventory of anything 
that you currently had so maybe we could help you?''
    The response I got was: We will work with you and your 
staff to ensure visibility into the distributed supplies, as 
well as any remaining in storage. But I have yet to receive any 
kind of inventory list.
    Do you have something available now to submit to this 
committee, any kind of list that we could look at, to see what 
you have in storage that was originally purchased on behalf of 
victims or survivors of these storms that we could look at and 
see if we can help you place them in appropriate places?
    Mr. Smith. Madam Chairwoman, I mentioned in my earlier 
statement that we learn from our mistakes, and we will fix it.
    What I described to you earlier is what happened during 
this current incident when we excessed supplies. We have since 
learned from that. We will now notify the LTROs, Mississippi 
and Louisiana, any of the offices out there that still have 
case workers for eligible applicants to let them know whenever 
we have additional supplies that are available for them. So we 
will give them notice prior to going through the proper 
process, to get it into their hands.
    Senator Landrieu. It is not just notice--I want to finalize 
this--it is not just notice to them. It is your own due 
diligence to determine whether something is a surplus or not. A 
surplus, by definition, is something that is not needed; it, 
therefore, becomes a surplus.
    But you didn't even make one phone call to anyone to 
determine if they were needed or not. You just declared 
surplus, turned it over to Mr. Brasseux and then he operated 
under the technical application of the law. But what that did 
was, it left out thousands of families that are still in need.
    My time is up.
    Mr. Cuellar. Thank you, Senator. At this time I would to 
recognize for 5 minutes the Chairman, Mr. Thompson, from 
Mississippi.
    Mr. Thompson. Thank you very much, Mr. Chairman.
    Mr. Smith, can you provide this committee with any written 
policy by which you operate and determine whether or not goods 
are to be surplused?
    Mr. Smith. We are in the process of developing those 
processes and procedures right now. As you are well aware, the 
FEMA logistics directorate is just a little over a year old, 
and as these incidents like this come up, we do aggressively 
attack them and figure out how to best execute against them. So 
in the process--we are in the process of developing our 
procedures for excessing supplies.
    I would like to also----
    Mr. Thompson. Well, I only have so much time. So as of this 
hearing there is no written policy or governance for the excess 
and the surplusing of donated goods and supplies?
    Mr. Smith. Yes, there is. The Federal Management 
Regulation, that is the regulation that we use.
    Mr. Thompson. I understand that. That is not the FEMA 
regulation; that is the GSA regulation. But you should have an 
operating policy by which you make that determination.
    Mr. Smith. Yes. And now----
    Mr. Thompson. And you don't have it?
    Mr. Smith. I will take that question for the record and get 
back to you. Because I know we have to make a determination 
whether supplies are excessed to our needs before we can 
actually turn it over to GSA for excess. I will have to get 
that for you in our property accountability records.
    Mr. Thompson. Do you have a method of determining whether 
or not outreach has taken place to nonprofits and eligible 
individuals who should receive donated supplies?
    Mr. Smith. No, Mr. Chairman. That is not my responsibility, 
that is not my area of expertise; that is an assistance area 
for outreach.
    Mr. Thompson. Well, that is fine.
    Mr. Castillo.
    Mr. Castillo. Yes, sir. Specifically, in Louisiana and 
Mississippi, we work with our voluntary agency liaisons that 
participate on the long-term recovery committees in both 
States.
    In addition, all of the--for instance, Louisiana was 
brought up. The case managers that are working with the folks 
that are still in mobile homes and temporary housing units 
that--we work closely with them to identify their needs; and 
they are told regularly, once there--as was mentioned before, 
the living kits. As people transition from a temporary housing 
unit into a rental unit or another home, then we provide them 
with that, with those supplies.
    Mr. Thompson. So your testimony is that, to your knowledge, 
there are not any Katrina survivors who could have benefited 
from any of these donated items that had been surplused because 
the outreach effort of FEMA was so robust that you covered the 
waterfront?
    Mr. Castillo. I didn't actually say that, sir.
    I can tell you that the victims that are eligible 
applicants, households that are eligible applicants, I feel 
comfortable we have a good outreach, a good coordination with 
them through our Gulf Coast and our long--or Louisiana 
Transitional Recovery Office. I feel confident that those 
people who are still--are eligible applicants have been reached 
out to and have been coordinated.
    Now, part of what, you know, and I think was mentioned in 
the testimony--just to repeat--what we have, when it is 
disaster relief, purchased goods and supplies for hurricane or 
disaster victims in that area, that is who we focus on.
    There were--part of what is under discussion here is part 
of what has been in supplies and goods was purchased by the 
Federal Government, part was donated goods.
    Mr. Thompson. Well, and I am glad you mentioned that 
because you also said that there was no policy in place to 
distinguish between the two in your testimony; am I correct?
    Mr. Castillo. Well, there is no--to manage those two, and 
primarily to manage the donations, the purchased--the DRF, the 
Disaster Relief Fund, purchased supplies. That is what Mr. 
Smith's directorate was established to manage.
    The challenge was donated goods that come in.
    Mr. Thompson. So you don't have it?
    Mr. Castillo. We didn't at the time. To manage----
    Mr. Thompson. You do now?
    Mr. Castillo. Well, sir, for managing and helping track 
donated goods through a matrix being a State resource that we 
have provided allows them to request, to track and to allow it 
to distribute and tracking those donated goods at the State 
level.
    Mr. Thompson. Well, I guess part of what we are trying to 
do is that if we provided information to you that there are 
still people who could benefit from those goods that have been 
surplused, I mean, what should we do?
    Mr. Castillo. Well, sir, we have taken that. If there are 
victims--working through the VOAD, the national VOADs and the 
State VOADs, I think that is a good way to get that word out. I 
understand that there is a process in place that the States 
have mentioned here that are able to coordinate that.
    As I said, what we outreached to, and what we have I 
believe is a good handle on, is the people who are still 
applicants under FEMA's responsibility.
    Mr. Thompson. Well, and I guess for the record we will 
submit some additional questions, because I think we will hear 
from some people on the next panel who have been actively 
involved in working with Katrina victims, who will say they 
still are not aware of this system you have just explained.
    I think part of what we are trying to get at as a committee 
is to make these services and goods, whether they are purchased 
or donated, available to the people for which they are 
intended. That is one of the things we are trying to establish.
    Also, for the record, I want to say that, Mr. Smith, 
Congress in its wisdom exactly separated part of the function 
that you do now in the reorganization of FEMA because we saw 
the very problem you are dealing with right now. Logistics is a 
nightmare, and that is why we specifically mandated the 
logistics and coordination function to be separated. Obviously 
we still have to have some work going forward to be done for it 
to be effective.
    Thank you, Mr. Chairman.
    Mr. Cuellar. Yes, sir.
    Before I move on to Mr. Etheridge, a quick question. How 
much time do you need to get the policy--if you do have a 
policy--I think the Chairman had requested? I want to make sure 
we don't let this go on for too long in the future.
    Mr. Smith. We have a revised property management regulation 
that we have right now. I just need to go back and look at it 
to make sure that our excess process is covered in that manual. 
I am pretty sure it is.
    Mr. Cuellar. Five working days from today?
    Mr. Smith. Yes, Mr. Chairman.
    Mr. Cuellar. So no later than 5 working days--if you can, 
of course, sooner--submit it for the committee.
    At this time, I would like to recognize the gentleman from 
North Carolina, Mr. Etheridge, for 5 minutes.
    Mr. Etheridge. Thank you, Mr. Chairman. Thank you for 
holding this hearing.
    You know, in your response, Mr. Smith, to Senator Landrieu, 
I couldn't help but think--and the Chairman's response just now 
of separating logistics from operations, et cetera--we used to 
have a FEMA that worked. I do remember that. I remember we had 
a horrible flood in North Carolina called Flora.
    We have lots of hurricanes. North Carolina sort of has that 
reputation; we sort of stick out there. We watch weather in 
hurricane season, because normally when it dials 911, it sort 
of heads our way.
    But they responded. I recognize that Katrina and Rita were 
substantial hurricanes, but here we are now almost 3 years 
after, over 3 years after it happened, and we are trying to 
figure out what is happening to stuff people have donated. It 
really bothers me, and I am sure people are really concerned 
about whether we can respond to something else.
    That leads me to a couple of questions because I think 
there are a lot of people in this country and around the world 
who are good-hearted people; they want to help others. But we 
sure have left a blotch when they want to help again if we 
can't say to them, we are going to look at the stuff you are 
going to send us and it is going to get to the people who 
really have a need.
    I have been fortunate. I have never been in that situation, 
and I hope you haven't. But I have seen a lot of folks sitting 
on the curb crying, and the only thing they had left, maybe, 
was a family Bible, if they were lucky. The fact that we are 
still scrambling to find out why we can't get this done bothers 
me greatly, because people, when in an emergency, they want to 
help.
    Mr. Smith, my question to you is, what steps has your 
directorate taken to ensure that there will be sufficient 
amounts of commodities available for victims should another 
major catastrophic event happen?
    No. 2, can you or Mr. Castillo reassure the public that 
next time they want to help out in a disaster that their 
efforts will not go in vain; and we won't be here again talking 
about stuff that is in a warehouse that didn't get there and 
then we are trying to figure out what happened to it? Because I 
am concerned about what happened in the past, but I am really 
concerned about what is going to happen in the future.
    I don't need 5 minutes. I just need about 30 seconds, yes 
or no.
    Mr. Smith. Yes.
    Well, first of all, recent incidents that we supported, the 
Midwest floods, a hurricane in Texas, are a testament to the 
fact that we can deliver when we have to. We delivered over 6 
million liters of water to the Midwest floods, over 200,000 
meals, and so on and so on. We simultaneously supported eight 
States at one time, and then for a period of time we also added 
California in there for the fires.
    So the issue that we are talking about today are decisions 
or issues that happened in Katrina.
    Mr. Etheridge. So you are telling me, we aren't going to be 
revisiting this again in the future?
    Mr. Smith. No, sir, not as long as I am there we won't.
    Mr. Castillo. Sir, on the second part of your question, as 
long as I have been involved in emergency response, I have 
learned from responses here and internationally that donated 
goods or unsolicited volunteers, if not managed, if not 
coordinated and understood, adds to the problem.
    I believe when people, as you said, good-hearted people 
that want to donate supplies and want to give to help out--if 
they are explained what is appropriate to donate and what is 
actually needed, because what they want to know is that what 
they have given or what they want to give will get to the 
people that need it.
    I believe what we have put in place since Katrina, 
especially with Aidmatrix, to help the States coordinate that 
so that they can ask for----
    Mr. Etheridge. So you are telling me you have that taken 
care of?
    Mr. Castillo. I believe so, sir.
    Mr. Etheridge. All right. I am running out of time.
    Mr. Brasseux, the committee staff was told us that GSA 
needed to terminate the lease with FEMA expeditiously because 
warehouses were not up to Federal codes and standards, which 
may have led FEMA to hastily declare the goods stored in 
excess.
    Two questions: What is the current status of the warehouses 
that FEMA leased? No. 2, have the warehouses been destroyed, 
upgraded or serviced since the surplus property was removed 
from those warehouses?
    Mr. Brasseux. Sir, I believe you are talking about the 
additional warehouse space that FEMA requested in our Fort 
Worth area. We have provided five additional warehouses at 
approximately 240,000 square feet each for FEMA to use. The 
initial agreement was, they needed to be out of those by 
September 7. At the time, I believe FEMA actually considered 
even purchasing some of those warehouses----so we continue to 
grant extensions----and they actually moved out on April 8.
    I am not aware of any issues with the buildings themselves. 
That is our Public Building Service, but I can certainly take 
that question and get back to you.
    Mr. Etheridge. Would you please?
    Mr. Brasseux. I certainly will.
    Mr. Etheridge. Thank you.
    Thank you, Mr. Chairman. I yield back.
    Mr. Cuellar. At this time, I would like to recognize the 
gentlewoman from Texas, Ms. Jackson Lee, for 5 minutes.
    Ms. Jackson Lee. Mr. Chairman, let me thank you for your 
courtesies, that of the Ranking Member of a subcommittee of the 
House Homeland Security Committee. Let me thank my dear friend, 
Senator Landrieu, for her persistence in leading on what has to 
be characterized as a major historic tragedy in America.
    I thank my Chairman, who has been a consistent champion, a 
General, on methodically discovering the fractures on both 
Homeland Security as it relates to the war on terror, but also 
the needs of the people of this country.
    I just, gentlemen, want to characterize that I think 
America looks to the Federal Government in time of need. The 
world looks to us as the Good Samaritan, the Red Cross when it 
does right, the knight in shining armor, the Boy and Girl 
Scouts, and first responders all wrapped up into one. For those 
of us who were early into the Gulf region after the 
catastrophic event of Hurricane Katrina and, of course, 
subsequently Hurricane Rita, which impacted my community in 
Houston, we saw not only the devastation but the pain.
    So my first question is to Mr. Castillo and Mr. Smith. When 
did you come to FEMA?
    Mr. Castillo. I started FEMA July 2, 2007.
    Ms. Jackson Lee. After Hurricane Katrina?
    Mr. Castillo. Yes, ma'am.
    Mr. Smith. April 2, 2007.
    Ms. Jackson Lee. Well, gentlemen I walked along the Gulf 
Coast in a big tent and saw people that had absolutely nothing. 
I went back and I went back, and they were still in that tent 
and they were eating out of soup kitchens; and they had 
absolutely nothing.
    I walked in the Astrodome where people were on cots and 
they had, as I think my colleagues have said, maybe a Bible, 
and clothing that had been given to them by others.
    So let me just say to you that I will focus questioning, 
because there are many of us who see this globally. But like 
me, we lived this, whether it was Galveston in the early 
1900's, where 6,000 died, or whether it was a series of 
incidents here.
    So let me ask you this: Do we still have these goods left 
over? Do you still have goods left over?
    Mr. Smith.
    Mr. Smith. We are in the process of cataloging what we 
have, and we think that may be donated goods for hurricane 
victims.
    Ms. Jackson Lee. What about goods that were bought with our 
tax dollars?
    Mr. Smith. That is our dilemma, ma'am. They are all 
commingled.
    Ms. Jackson Lee. I understand. But there are goods 
somewhere? You can say, yes, that they exist?
    Mr. Smith. Yes.
    Ms. Jackson Lee. Do you have a national utilization office?
    Mr. Smith. Yes.
    Ms. Jackson Lee. How old is that office?
    Mr. Smith. It predates me.
    Ms. Jackson Lee. But does it predate Katrina?
    Mr. Smith. I believe so.
    Ms. Jackson Lee. So, in essence, they were derelict in 
their duty, and they did nothing; because if they existed, the 
responsibility is to develop a process for dealing with surplus 
goods. So they obviously didn't function.
    Are you revising them?
    Mr. Smith. Yes.
    Ms. Jackson Lee. They will be under your shop?
    Mr. Smith. We just had that conversation this morning, 
ma'am. My recommendation is that it is under my shop.
    Ms. Jackson Lee. Well, you have been doing very well here 
today, and we hope that maybe you will get that opportunity.
    So do we know whether these goods are good or spoiled, 
meaning, are they usable goods or have they gotten soiled, 
spoiled--they have gotten mold on them?
    Mr. Smith. That is a process that we are undergoing right 
now, whether they are usable goods.
    Ms. Jackson Lee. I would like that information. I would 
also like if you would be able to give us a cost estimate of 
how much those goods might be worth on the market.
    If I may just finish, can you tell me the role that you 
will be playing in reaching out to States and nonprofit 
organizations regarding what is left, so that we can ensure 
that remaining survivors that exist can get these goods? What 
will you be doing to get goods to the needy?
    Mr. Smith. My role would be to ensure that the States who 
are the point of contact for the people that need them 
understand what we have and what is available for them. I will 
work through the recovery officers in each one of the States to 
make sure that they talk to their State counterparts.
    Ms. Jackson Lee. All right.
    Let me quickly say, what were the factors considered when 
deciding to classify donated goods or surplus? Do we have any 
process for that?
    Mr. Smith. Yes, ma'am. They are what we call ``initial 
response resources.'' There are about seven items that we carry 
on a regular basis for response. If they are outside of that, 
those items, then for the most part we determined they may be 
donated items. Because there were clothing, things like that; 
we don't carry that type of stuff.
    Ms. Jackson Lee. So you would know they were donated.
    Let me just read into the record what I think the problem 
is, on behalf of the committee. When the Secretary was asked--
Secretary Chertoff was asked about FEMA's logistical 
shortcomings, he testified these words, that ``FEMA's logistics 
systems simply were not up to the task.''
    Let me acknowledge the great work of FEMA employees all 
over this country, and congratulations on these immediate 
issues of Iowa and other places that you have had and thank 
your administrator, Mr. Paulson. There is a difference of night 
and day.
    But what I would say to the committee, and what I believe 
is the crux of the problem--and I would like Mr. Smith and Mr. 
Castillo to comment, because Mr. Brasseux has already commented 
that he doesn't have any more warehouse issues to deal with 
right at this point.
    The point is that I think it is broken. Your answer was, I 
want to deal with the State in order for them to handle the 
issue. I guess Governors take pride in you dealing with them. I 
frankly believe that is a broken system, and I would commend to 
this committee that we need legislation to reorder the 
structuring of the distribution of aid to the needy. Because 
every State government that has gotten this distribution gets 
an F, particularly in Hurricane Katrina.
    For you to say to me that I am going to get with the State, 
then all I can see is a warehouse with mold and animal 
droppings over goods; and human beings that need pots and soap 
and all of that not there.
    So let me try to find out, how do you leap over the 
bureaucracy of a State government to get aid to people who are 
in need--for example, if they existed today? I end on that 
question.
    Mr. Smith. I don't know if I can actually answer that 
question, because it is engrained in the Stafford Act. The 
Stafford Act says we provide--the State is our customer under 
disaster response, and I have to respond to the needs of the 
Governor who is responsible for his citizens.
    Ms. Jackson Lee. So you are saying there are no emergency 
conditions where you can work to get immediately to the victims 
as far as you know?
    Would you look and determine that, please, for me, as far 
as you know?
    Mr. Smith. Well, under the Stafford Act, under a declared 
disaster, yes, we get it directly to the victims under a 
Presidential declared disaster.
    Ms. Jackson Lee. All right. So you are saying--you are 
constrained by the Stafford Act, you are saying, when there is 
a declaration of disaster? That is what I am asking.
    Do you have a way of going around that?
    Mr. Smith. During the disaster, under the declaration, we 
can provide assistance to any citizens that are affected by 
disaster.
    Ms. Jackson Lee. As a disaster is ongoing?
    Mr. Smith. Yes, ma'am.
    But we are talking about recovery, these donated items now. 
How do we get, in a long-time recovery period, how do we then 
do that?
    Ms. Jackson Lee. So there is a timing question of how long 
we have the declaration of disaster and when we start recovery.
    Mr. Castillo, is that the same answer you would give?
    Mr. Castillo. Well, ma'am, from my perspective, in disaster 
assistance, we do work with the States. I believe what our 
approach to help facilitate them, improving, when needed, their 
distribution and their tracking and receipt and request of 
needed goods, I believe that is a positive step that has been 
undertaken since Katrina.
    Ms. Jackson Lee. But you don't know right now whether you 
have any spoiled goods? You don't have an accounting of 
spoiled, soiled goods or good goods?
    Mr. Smith. I have that.
    No, we don't have any spoiled goods in my inventory.
    Ms. Jackson Lee. You know that for a fact.
    Mr. Smith. Yes, ma'am, I know that for a fact.
    Ms. Jackson Lee. Let me just thank the Chairwoman and 
certainly these witnesses; and, Mr. Chairman, your courtesies 
of me being on this committee.
    I think we said it over and over again that there needs to 
be a revisiting of this question of aid, declaration of 
disaster going through the recovery period. I think there are 
spoiled goods. I respect the gentleman.
    I think there are people that did not get aid. I respect 
the comments of the gentleman.
    I do think that America can do better. This is clearly not 
acceptable on behalf of the American people.
    I want to thank both of you, and I yield back.
    Mr. Cuellar. Thank you. I think you bring some great 
questions and some insight. We thank you for the work that you 
have done, Ms. Jackson Lee.
    At this time I recognize Senator Landrieu.
    Senator Landrieu. I just have one follow-up question.
    But before the Congresswoman leaves, I just wanted to 
recall again--and I can appreciate her comments about sometimes 
our States have not acted with the dispatch necessary to reach 
communities, individuals, neighborhoods, communities on the 
ground; I think our States are getting better at that.
    But I just want, for the record, that our State, Louisiana, 
actually requested these household goods in February before 
they were designated as surplus in exactly an attempt to 
supplement aid to families transitioning out of trailers.
    So our State had acted; and the question to me is, why 
didn't anyone respond to this letter?
    So we are going to submit this for the record. Hopefully, 
they will tell us. But I can appreciate your comment.
    Ms. Jackson Lee. If the gentlelady would yield, let me say 
that my comments were global. I thank you for having that 
letter placed on the record.
    I do think we should find a way to complement the States, 
to help the States, and to give FEMA the opportunity to go 
straight to the victim if necessary in complement with a State 
and with a State's request.
    I thank the gentlelady. I yield back.
    Senator Landrieu. Well, I appreciate that.
    My last question: Mr. Castillo, I was very interested in 
not just what you said, but how you said----and I want to 
paraphrase. You said something like: Sometimes, or many, many 
times, I think you said, unsolicited donations can be more of a 
problem than a benefit. I think I understand what you are 
saying.
    But my question is, what have you done since you have been 
in your office to lessen the problems associated with 
unsolicited items; and how do you intend to coordinate that in 
the future?
    In other words, a disaster happens. It is terrible. There 
is a natural outpouring of support on behalf of the United 
States and the world. So just give us a minute of what your 
thoughts are.
    Are you going to issue a dictate that says, don't send 
anything; or are you going to say, if you send something, send 
X, Y and Z? What are some of your ideas about that?
    Mr. Castillo. Well, first of all, it is always recommended 
if people want to help that they provide cash donations 
whenever possible. This way, cash donations to established 
organizations that do this work all the time know what is 
needed, how it is best packaged, shipped and distributed.
    Second, although we would never say, ``Don't send'', I 
think if it is focused on the need, and that is, one--as 
Aidmatrix has been established, and already we have 23 States 
and one large city that is part of this network. I think that 
is a way forward to ensure that, one, when the State identifies 
a need--and we will help them with that in this partnership, 
once they have identified the need--then, as that is 
transmitted and people want to know what to give, if they are 
told exactly what is needed, then it ties or it brings together 
the donor with a recipient.
    I think those two things are key in moving forward.
    Senator Landrieu. I would not disagree that sometimes cash 
is better to receive. But I hope that this Government is not 
moving toward throwing our hands up, because we can't seem to 
manage donated items well, to just assume that we don't want 
donated items because we can't seem to manage them well in a 
disaster.
    The second thing I will note--I am not sure the Chairman is 
aware of this--but in our situation when the city of New 
Orleans was virtually destroyed, 80 percent of it, so were--
most of the nonprofit groups that operated went out of 
business. Their executive directors left because they lost 
their houses; their volunteers were in Houston; there was no 
more nonprofit community, at least for a while.
    The Federal Government has no process right now to lend 
them money. It is actually prohibited. So if you are going to 
solicit cash from outside sources, it is going to be 
interesting to me who you give it to. Because in a catastrophe, 
one of the things we have to do is reestablish as quickly as 
possible sort of the nonprofit infrastructure so that they can 
help the community respond.
    It is just a thought. I don't want to pursue it. But 
because the last thing we need is for cash to be solicited and 
given--let me finish--given to strangers who know nothing about 
the communities as we attempt to rebuild them the way the 
people that live there actually would like to see them rebuilt. 
So we can give a little thought to that.
    Mr. Castillo. If I can just clarify.
    Mr. Cuellar. Before you respond, Mr. Castillo, I am looking 
at the time up here, we have about--less than 4 minutes to head 
back. At this time, I am going to go ahead and give the gavel 
over to the Senator to take over, and we are going to go out 
and vote.
    Again, I would ask--I have seen this with other, and I am 
going to start making this my policy now--that instead of the 
Government officials just walking out, I would ask you to just 
stay here and listen a little bit to the other folks; and that 
way we can all learn.
    So we are going to be stepping out. We will leave this in 
the hands of the Senator. We will try to be back as soon as we 
finish our six votes.
    I want to thank the witnesses--Mr. Smith, Mr. Castillo and 
Mr. Brasseux. Of course the other witnesses are here also. 
Thank you.
    Senator Landrieu [presiding]. Thank you. We will conclude 
this panel and ask the other panel to step forward please. 
Thank you all very much for your testimony, and we will follow 
up.
    If the panel would take their seats, I would like to begin 
the second panel, please. Our witnesses have already been 
introduced.
    So at this time I would like to start with Mr. Paul 
Rainwater, and ask each of the panelists to summarize their 
remarks in the 5 minutes allocated, and then we will open it up 
for questions.
    Mr. Rainwater.

  STATEMENT OF PAUL RAINWATER, EXECUTIVE DIRECTOR, LOUISIANA 
                       RECOVERY AUTHORITY

    Mr. Rainwater. Thank you, Madam Chair. It is good to see 
you today. Thank you for everything you are doing in Louisiana.
    In January, 2008, Governor Bobby Jindal appointed me to 
serve as his chief of all recovery matters, effectively giving 
me authority and oversight for more than $20 billion worth of 
recovery programs in the State with responsibilities ranging 
from ensuring that local governments can rebuild lost 
infrastructure to addressing our housing crisis head on.
    One of Governor Jindal's first actions was to name me as 
the authorized representative to the Federal Emergency 
Management Agency for all issues relating to Hurricanes Katrina 
and Rita, a role previously held by the head of the Governor's 
Office of Homeland Security Emergency Preparedness. By giving 
me this authority, he also designated one clear contact for all 
recovery issues so there would be no confusion with local, 
State and Federal officials as to who was in charge.
    I have direct control over each of our programs with the 
ability to make changes as necessary, and have the full support 
of the Governor in doing so.
    Louisiana has worked diligently to improve its relationship 
with FEMA. At the beginning of the Jindal administration, we 
worked to reset our relationship with FEMA senior management. 
The miscommunication we are speaking of today is unfortunate, 
but we do not seek to cast fault on Jim Stark or Harvey Johnson 
from FEMA. I feel as though they are committed to helping our 
State recover from those catastrophes, but we have got to find 
a way to cut through the red tape.
    Today's discussion has larger implications on the need for 
clear communications in response to and recovery from disasters 
and is relevant not only in Louisiana and Mississippi, but all 
across the Nation.
    To speak to the matter that FEMA surplused supplies, I want 
to make it crystal clear, I never received any notice, formal 
or otherwise, of these supplies that sat in a warehouse in 
Texas for 2 years. Further, we have not been able to locate any 
notice from FEMA to the Governor's authorized representative 
under the previous administration. Had I known about these 
supplies, I would have moved quickly to put them to good use.
    There should be no doubt in anyone's mind about the unmet 
needs in Louisiana. At the time, hundreds of people were living 
in a homeless camp under the interstate in New Orleans and 
thousands of people were living in FEMA trailers. A simple look 
outside would have shown immense struggling and poverty in 
hurricane-affected areas across our State.
    In fact, less than 1 month into my office at the Louisiana 
Recovery Authority, we requested in writing to FEMA's 
Transitional Recovery Office, ``household establishment funds 
for 4,000 households.''
    ``In addition to case management assistance, many trailer 
residents require a jump start in order to transition to a new 
and sustainable housing. The working families who lost 
everything they owned during the storms will be postponed to 
sustain their housing situation with a little assistance at the 
beginning of the process.'' That ended the quote in the letter.
    It is clear that this letter did not make it into the hands 
of those at FEMA who had knowledge of the now-surplused 
supplies, just as the Federal notice of the surplused property 
did not come to those whose sole task was to work daily to move 
our recovery forward, like myself.
    There is plenty of blame to share in the situation. It is 
only through working together as partners that Federal and 
State agencies can serve our people to our fullest potential.
    The issue of the lost supplies is just the latest example 
of how regular disaster response and recovery protocols just do 
not fit as we attempt to rebuild after the catastrophic events 
such as Hurricane Katrina and Rita. State and Federal officials 
need recovery protocols with intuition and flexibility.
    My staff and I speak to FEMA staffers both locally at 
headquarters multiple times each day. That there would be a 
lack of coordination about these supplies after these daily 
conversations is hard to understand.
    What is troubling to me is that the State would have never 
known about these supplies if CNN had not reported on the 
issue. It is unfortunate it took a national media attention to 
alert us to a gap in our State response.
    It has been reported that Louisiana turned down these 
supplies because we said it did not have these kinds of needs. 
For the purpose of clarification, I have provided today e-mails 
that served as a notice from the General Services 
Administration to the Louisiana Federal Property Assistance 
Agency, which is a small State agency of only nine employees 
that helps local government entities and nonprofits access the 
myriad of supply Federal agencies mark as surplus.
    This notice was hardly unique. None of the e-mails ever 
notified the State that these supplies were meant for Katrina 
and Rita victims, nor do they offer supplies to Louisiana.
    What the Louisiana Federal Property Assistance Agency is 
accused of turning down was not actual goods, it was the chance 
to go to Texas for a 2-day screening of goods where we would 
have stood after Federal agencies had picked their supplies 
with 16 other agencies to sift through what was left and to 
have the supplies divided among the States.
    This was hardly a guarantee of aid. Nevertheless, the State 
was notified, however bureaucratically, that household supplies 
were available. Our own lack of coordination between State 
agencies caused us to miss out on these goods that we need to 
serve our citizens.
    Make no mistake, Louisiana should not have turned down the 
chance to bring these supplies back to the State. It is 
regrettable that we were not fully synced in State government 
at the time and that all the necessary recovery level 
organizations didn't know that the small agency that was 
dealing with these surplus goods could be the recipient of 
items intended to help hurricane victims in New Orleans and 
across south Louisiana.
    But we have begun remedying that situation. The day that 
the news broke and the unfortunate communication breakdown was 
reported by CNN, we began to coordinate our agencies. After it 
was made public that the supplies intended for Katrina and Rita 
victims had been surplused and given to other States, Governor 
Jindal tasked me with leading our efforts to locate supplies 
for nonprofits. Louisiana made a public request that States and 
organizations return any of these goods that were intended to 
help disaster victims in Louisiana, but were marked as surplus 
and remained unused.
    As it stands now, Texas, Arkansas and the United States 
Postal Service have returned surplus supplies to Louisiana. We 
thank them for their generosity and especially thank the Postal 
Service for transporting these supplies to Louisiana at no cost 
to us.
    We have been fortunate to use funds from a private 
foundation, the Louisiana Disaster Recovery Foundation, to help 
cover some of the shipping costs we have incurred thus far with 
Acadiana Outreach covering its own freight payments, costs that 
the State would not have shouldered had the supplies made it to 
us under the typical FEMA protocols. We ask any State agencies 
that have not used their surplus goods to consider sending them 
to us in Louisiana. I can attest to the fact that we will put 
them to good use.
    Working together with you, Senator Landrieu, and the 
Louisiana Federal Property Assistance Agency, we have moved 
quickly to return the supplies to those who need it. In fact, 
we ramped up so quickly that it took only a week from the date 
that the first CNN report ran to get the first round of 
supplies delivered to Unity of Greater New Orleans, a nonprofit 
that deserves much credit for its heroic efforts to eradicate 
homelessness in the city.
    Senator Landrieu. Can you try to wrap up, please?
    Mr. Rainwater. Yes, ma'am, I sure will.
    In conclusion, we seek not to point fingers, but to help 
people improve their lives and living conditions. This 
discussion is important, not only to those of us in Louisiana 
and Mississippi, but also the leaders in the Midwest who are 
struggling to recover from devastating flooding. It will mean 
something to leaders in the next States to be affected by 
disasters. Thank you.
    Senator Landrieu. Thank you, Mr. Rainwater.
    [The statement of Mr. Rainwater follows:]
                  Prepared Statement of Paul Rainwater
                             July 31, 2008
    Good morning Madam Chair, Mister Chairman and Members of the 
committee. I am Paul Rainwater, the Executive Director of the Louisiana 
Recovery Authority and the leader of the Office of Community 
Development's disaster recovery programs in the State of Louisiana. In 
January 2008, Governor Bobby Jindal appointed me to serve as his chief 
of all recovery matters, effectively giving me authority and oversight 
for more than $20 billion worth of recovery programs in the State with 
responsibilities ranging from ensuring that local governments can 
rebuild lost infrastructure to addressing our housing crisis head on.
    One of Governor Jindal's first actions was to name me as his 
authorized representative to the Federal Emergency Management Agency 
(FEMA) for all issues relating to Hurricanes Katrina and Rita, a role 
previously held by the head of the Governor's Office of Homeland 
Security and Emergency Preparedness (GOHSEP). In doing this, Governor 
Jindal acknowledged the challenges we still face in Louisiana. On one 
hand we are still recovering from Hurricane Katrina, the worst natural 
disaster in American history, which was exacerbated by the failure of 
the Federal levee system and further worsened by Hurricane Rita 3 weeks 
later. On the other, we must aggressively prepare for future storms and 
disasters.
    By giving me this authority, he also designated one clear contact 
for all recovery issues so there would be no confusion with local, 
State and Federal officials as to who was in charge. Whereas the 
previous administration delegated policy and planning issues to the 
Louisiana Recovery Authority and gave oversight and implementation of 
other programs to various State agencies including GOHSEP, I now have 
direct control over each of our programs with the ability to make 
changes as necessary and have the full support of the Governor in doing 
so.
    Louisiana has worked diligently to improve its relationship with 
FEMA. At the beginning of the Jindal administration we worked to 
``reset'' our relationship with FEMA. The miscommunication we are 
speaking of today as unfortunate, but we do not seek to cast blame on 
Jim Stark and Harvey Johnson from FEMA. I know that they are committed 
to helping our State recover from this catastrophe. Today's discussion 
has larger implications on the need for clear communication during 
response to and recovery from disasters and is relevant not only in 
Louisiana and Mississippi, but all across our Nation.
    To speak to the matter of the FEMA surplus supplies being discussed 
today, I want to make it crystal clear--I never received any notice, 
formal or otherwise, of these supplies that sat in a warehouse in Texas 
for 2 years. Nor did my predecessor at the LRA. Further, we have not 
been able to locate any notice from FEMA to the Governor's Authorized 
Representative under the previous administration.
    Had I known about these supplies, I would have moved to quickly put 
them to good use. I reject the notion that it is not clear that we had 
unmet needs in Louisiana--at the time hundreds of people were living in 
an homeless camp under the interstate in New Orleans and thousands of 
people were living in FEMA trailers. A simple look outside would have 
shown immense struggling and poverty in hurricane-affected areas across 
our State.
    In fact, less than a month into my service at the LRA, we 
requested, in writing to FEMA's Transitional Recovery Office, Household 
Establishment Funds (HEF), stating, ``In addition to case management 
assistance, many trailer residents require a jumpstart in order to 
transition into new and sustainable housing. The working residents who 
lost everything they owned during the storms will be positioned to 
sustain their housing situation with a little assistance at the 
beginning of the process.'' A copy of this letter is attached to my 
testimony. It is clear that this letter did not make it into the hands 
of those at FEMA who had knowledge of the now-surplused supplies, just 
as the Federal notice of the surplus property did not come to those of 
us whose sole task is to work daily to move our recovery forward. There 
is plenty of blame to share in this situation and it is only through 
working together as partners that Federal and State agencies can serve 
our people to our fullest potential.
    This issue of the ``lost'' supplies is just the latest example of 
how regular disaster response and recovery protocols just do not fit in 
Louisiana. As we rebuild after catastrophes like Hurricanes Katrina and 
Rita, the State needs recovery protocols with intuition and 
flexibility. My staff and I speak to FEMA staffers, both locally and at 
headquarters, multiple times each day. That there would be a lack of 
coordination about these supplies after these daily conversations and 
meetings is almost unfathomable. Our staff has committed to working 
with FEMA through sometimes difficult discussions and negotiations 
about our needs, both in repairing our infrastructure and in restoring 
our citizens' lives.
    What is most troubling to me is that the State would have never 
known about these supplies if CNN had not reported on the issue. These 
supplies would be gone and we would have never been notified by FEMA 
that tens of thousands of household goods that we desperately need are 
no longer available for our use. It is unfortunate that it took 
national media attention to alert us to a gap in our State response.
    It has been reported that Louisiana turned down these supplies 
because we said we did not have these kinds of needs. For the purposes 
of clarification, I have attached to this testimony e-mails that served 
as notice from the General Services Administration (GSA) to the 
Louisiana Federal Property Assistance Agency, which is a small State 
agency of only nine employees that helps Government entities and 
nonprofits access the myriad of supplies Federal agencies mark as 
surplus. This notice was hardly unique, as the agency reports it 
receives around 20 each year.
    None of these e-mails ever notifies the State that these supplies 
were meant for Katrina and Rita victims. Nor do they offer supplies to 
Louisiana. What the Louisiana Federal Property Assistance Agency is 
accused of turning down was not actual goods. It was the chance to go 
to Texas for a 2-day ``screening'' of goods, where we would have stood, 
after Federal agencies had picked their supplies on the second day with 
16 other States to sift through what was left and then have the 
supplies divided among the States. This was hardly a guarantee of aid.
    Nevertheless, the State was notified that household supplies were 
available and our own lack of coordination between State agencies 
caused us to miss out on goods that we need to serve our citizens. Make 
no mistake, Louisiana should not have turned down the chance to bring 
these supplies back to the State.
    It is regrettable that we were not fully synced in State government 
in that we at the recovery level didn't know that this small agency 
that dealt in surplus goods could be the recipients of items intended 
for hurricane victims or that it had access to such household goods.
    We began remedying that situation the day the news of this 
unfortunate communication breakdown was reported on CNN. After it was 
made public that the supplies intended for Katrina and Rita victims had 
been surplused and given to other States, Governor Jindal tasked me 
with leading our efforts to locate supplies for nonprofits.
    The State of Louisiana made a public request that States and 
organizations return to Louisiana any of these goods that were intended 
to help disaster victims in Louisiana but were marked as surplus and 
remain unused.
    As it stands now, Texas and Arkansas and the United States Postal 
Service have returned surplus supplies to Louisiana. We thank them for 
their generosity and we especially thank the Postal Service for 
transporting the supplies to Louisiana at no cost to us. We have been 
fortunate to use funds from the private Louisiana Disaster Recovery 
Foundation to help cover some of the shipping costs we've incurred thus 
far with Acadiana Outreach covering its own freight payments--costs 
that the State would not have shouldered had the supplies made it to us 
under typical FEMA protocols. And we ask any States or agencies that 
have not used their surplus goods to consider sending them to us in 
Louisiana. I can attest to the fact that we will put them to good use.
    Working together with the Division of Administration, United States 
Senator Mary Landrieu's office and the Louisiana Federal Property 
Assistance Agency, we moved to quickly return the supplies to those who 
need them. In fact, we ramped up so quickly that it took us only a week 
from the date of the first CNN report to get the first round of 
supplies delivered to UNITY of Greater New Orleans, a nonprofit that 
deserves much credit for its heroic efforts to eradicate homelessness 
in the city. UNITY did not even have time to recruit volunteers to 
unload the three truckloads of goods, so volunteers from my staff and 
Senator Landrieu's staff did the heavy lifting. In addition, we 
recently delivered a truckload of supplies to the Acadiana Outreach 
Center, which is serving the often forgotten victims of Hurricane Rita 
in Southwest Louisiana.
    Moving forward, we made it clear to everyone involved that I am to 
be the point of contact for FEMA when supplies for Katrina and Rita 
victims are set aside for our State. This should have been the case 
from the start, as FEMA should have called the Governor's Authorized 
Representative about the supplies. I am confident that if our local 
contacts at FEMA in the Transitional Recovery Office knew about these 
goods, they would have brought it to my attention, especially since 
they have deep knowledge of the situation on the ground.
    The State also launched a new protocol for handling such FEMA 
supplies, which consists of the following:
   Oversight.--The LRA will have oversight of ensuring that 
        Federal supplies that are either in FEMA's possession today or 
        were given to the General Services Administration (GSA) for 
        excess purposes meant for victims of Katrina and Rita are 
        dispersed to agencies and nonprofit organizations assisting 
        these people. The LRA will be the lead agency in working with 
        GSA or FEMA when property becomes available that could assist 
        disaster victims with their recovery.
   Coordination.--The LRA selected a nonprofit organization to 
        reach out to groups about how to access surplus supplies.
   Training.--To ensure that nonprofit organizations and 
        volunteer agencies working with hurricane victims can access 
        Federal supplies in the future, the LRA worked with Federal and 
        State agencies to coordinate education of nonprofits about how 
        to access these supplies in the future.
    Working with the Louisiana Association of Nonprofits (LANO), the 
State distributed fact sheets about accessing surplus property to 
Louisiana nonprofits. So far we've delivered supplies to two groups--
UNITY of Greater New Orleans and the Acadiana Outreach Center. There is 
an application process for groups to receive surplus supplies through 
the Louisiana Federal Property Assistance Agency so that the State can 
ensure that qualified groups that need the supplies get them and also 
so the LFPAA can track their needs. Currently, the State is working 
with ten more nonprofits to go through this application process. These 
applications are being expedited and the Agency's staff has started to 
conduct site reviews while final documentation is collected from the 
nonprofits.
    Further, my agency has been working with FEMA on an application for 
case management funds to assist residents in their transition from 
temporary FEMA housing to more permanent living situations. We will be 
requiring that all nonprofits working on our case management program 
are registered with this State surplus agency so they can request the 
supplies that they need and put them directly in the hands of our 
families who are working so hard to recover from these storms.
    We recognize that there is plenty of blame to go around in this 
situation and we seek not to point fingers, but to help people improve 
their lives and living conditions. This discussion is important not 
only to those of us in Louisiana and Mississippi, but also to the 
leaders in the Midwest who are struggling to recover from devastating 
flooding. And it will mean something to the leaders in the next States 
to be affected by disasters.
    Simply put, we cannot cast blame without solutions. We must fix our 
flawed communication between States and the Federal Government in times 
of disaster so that States never again lose the opportunity to use 
critical supplies simply because they were not properly notified of 
their existence. And I would encourage leaders in other States to look 
at their internal protocols for dealing with such supplies. As we have 
learned over and over again in Louisiana, the time to coordinate is 
before a disaster strikes, not as you struggle to recover in the years 
after a catastrophe.
    I would be remiss if I did not take the opportunity to remind 
everyone in the chamber today that while we are sitting here around 
12,000 Louisiana residents are living in FEMA trailers. More than 
16,000 people are participating in the United States Department of 
Housing and Urban Development's (HUD) Disaster Housing Assistance 
Program (DHAP) in Louisiana. And our homeless population stands at a 
staggering 12,000 people, which is more that double the pre-storm count 
of homeless individuals.
    We are working to resolve the housing crisis in our State that 
stands to get worse as we move closer to the March 2009 end of the 
Disaster Housing Assistance Program, at which time we worry that many 
families are at risk for becoming homeless. Louisiana is addressing 
this crisis on several fronts, including:
   Applying for case management funds from FEMA;
   Using $73 million recently awarded by Congress for Permanent 
        Supportive Housing vouchers;
   Developing a long-term comprehensive housing strategy so 
        that we know how many units will be coming on-line through 
        March 2009;
   Prioritizing homeowners living in trailers in the State's 
        Road Home housing program so that they can more quickly get 
        their grants. In general, any improvement to the Road Home 
        program improves the situation on the ground--as homeowners 
        move home, they free up rental units;
   Encouraging landlords to join HUD's DHAP program to help 
        provide more rental units;
   Allocating millions in Community Development Block Grant 
        (CDBG) funds to Homeless Supports and Services.
    We owe it to these families in transition and to the American 
taxpayers to work together to use every resource at our disposal to 
combat homelessness and create safe, sustainable housing situations for 
our people.

    Senator Landrieu. Mr. Davidson.
    Could you all scoot a little bit and give him a little bit 
more room there?
    There we go. Thank you.

     STATEMENT OF OLIVER R. DAVIDSON, DONATIONS MANAGEMENT 
 COMMITTEE, NATIONAL VOLUNTARY ORGANIZATIONS ACTIVE IN DISASTER

    Mr. Davidson. Thank you very much. Good afternoon Madam 
Chairwoman.
    I am Oliver Davidson; I work with the Humane Society in the 
United States. You have some information about me in my 
statement, so I am going to summarize in three different 
points, and talk a little bit about the National Voluntary 
Organizations Active in Disaster of which I have been a member 
and a committee member on the Donation Management Committee 
since 1989.
    So we have had a lot of experience with this subject, and I 
would like to talk a little bit about the voluntary agency 
piece of it.
    National VOAD has 49 member organizations. These are all 
the names that you are familiar with, starting with Red Cross 
and going down to the Adventists and the other relief groups 
that always respond on a national level.
    There are 55 State VOADs and there are hundreds of local 
VOADs that are all working with Government to try to improve 
victims after the disaster, but more importantly beforehand. I 
myself go to four VOAD meetings regularly and also DC Citizen 
Corps.
    So we try to keep the national level with a level of 
reality, and we work very closely with FEMA. Eighty-five 
percent of the members are actually faith-based, with millions 
of constituents across the country. So we start with that part 
of it. Then I would like to go to some of the lessons, because 
we have worked on a lot of disasters.
    When I left my Federal career, I had worked on 320 
international disasters, and I have worked on about 100 more 
since then, including working on, just recently, the California 
fires and Midwest floods. We should say that the Donation 
Management Committee of NVOAD organizes a conference call on 
relief and coordinating donated goods and services almost every 
other day when the disasters occur. So there is very close 
coordination.
    I have to say thank you to FEMA; they are the ones who pay 
for the call. So they help us organize. They are on the calls 
with us. They try to, shall we say, make sure these kind of 
glitches that happen, that we are talking about today, don't 
happen.
    I think that we need to understand that offers are usually 
made to nongovernment organizations, they are not made to 
Government. So when we complain about Government not managing 
unsolicited and donated goods, we may be talking to the wrong 
end of the animal.
    Obviously, they have a role. But the nongovernmental 
organizations, and now working with Aidmatrix, are the ones the 
offers come to. Most people don't want to give a donation to 
Government.
    So the offer--and many offers are not appropriate. As Mr. 
Castillo said, we need to make sure we have good offers of 
things that can help. Sometimes they are useful to help locally 
as opposed to halfway around the country where we have already 
had to pay transportation to get there. Of course, with the 
high cost of transportation, it is not cost-effective to take a 
donation from New York and send it to California. It may be 
better to just send the cash or send the money that would have 
been used to pay for the gasoline.
    Government transportation and storage is very useful if we 
can reduce the cost to taxpayers. In other words, a good 
donation, let the Government pay for the transportation and the 
storage, keeping records to keep it separate in our multiagency 
warehouses, which are frequently paid for by FEMA. Keep it 
separate, but Government support. That is very useful if it is 
a good donation.
    Thank you very much for the hearing because I think this is 
a subject that has been long misunderstood. I remember sitting 
in front of Mr. Rangel one day when we were talking about 
donations for the Caribbean. This is a subject that is not too 
complex, but it is not just so easy that it can be glossed over 
and say: Oh, well, FEMA will fix it. It is not a FEMA-fix 
problem, it is a cooperative effort to fix it.
    So the last part of my statement, which I will submit along 
with some other material for the record, has some ideas about 
what FEMA can do to better support the voluntary agency effort. 
Because if we look at the international side, the Agency for 
International Development has provided hundreds of thousands of 
dollars to interaction to do similar things which FEMA could 
have provided to the nongovernmental NVOAD over the last 
numbers of years. So if we look at that model--maybe we should 
encourage FEMA to look at that model, and do a little more 
support for national-level issues that will help every 
voluntary organization as well as helping the States.
    The one thing that has come up, just from listening here, 
is, most voluntary agencies have no access to the GSA 
warehouses. Well, let's look at how Government or 
nongovernmental disaster organizations working with the States 
can have access to those GSA supplies, whether they are 
purchased or whether they are gotten from some Government 
excess, whatever. I think that would be a very useful 
innovation. I think some agencies actually do have access, but 
not too many.
    Senator Landrieu. Could you wrap up, please?
    Mr. Davidson. Yes. I appreciate the hearing and would be 
happy to answer questions. Thank you.
    [The statement of Mr. Davidson follows:]
                Prepared Statement of Oliver R. Davidson
                             July 24, 2008
    Good afternoon, Chairman Thompson, Chairman Cuellar, Congressman 
Dent and Chairwoman Landrieu and Members of the subcommittees.
    As a Senior Advisor for Emergency Services for The Humane Society 
of the United States, I work with Government agencies, national 
nonprofit organizations, and other State and local partners to 
strengthen the critical work in communities to protect animals and 
people with animals from the impact of disaster 
(www.HumaneSociety.org). I served 20 years in the Office of U.S. 
Foreign Disaster Assistance, USAID, and I am a disaster advisor to the 
Business Civic Leadership Center, U.S. Chamber of Commerce.
    I am here today as a member since 1989 of the Donations Management 
Committee of National Voluntary Organizations Active in Disaster, or 
National VOAD (www.NVOAD.org). National VOAD is a national, nonprofit, 
nonpartisan forum where member organizations share knowledge and 
resources throughout the disaster cycle--preparation, response, and 
recovery--to help disaster survivors and their communities. National 
VOAD coordinates planning efforts by voluntary organizations responding 
to disaster. Member organizations provide more effective and less 
duplicative service by planning and training together before disasters 
strike. Once disasters occur, National VOAD, or an affiliated State or 
U.S. Territory VOAD, encourages members and other voluntary agencies to 
coordinate on-site. This cooperative effort has proven to be the most 
effective way for a wide variety of voluntary organizations and 
Government to work together in a crisis.
    The Donations Management Committee of National VOAD brings 
voluntary organizations, State and Federal Government, and private 
partners together to plan for and manage unsolicited goods and 
services. Managing the potentially overwhelming influx of unsolicited 
donated goods from the public can maximize these potential resources, 
because when uncoordinated, they have caused a disaster within a 
disaster.
    FEMA has worked closely with its partners since Hurricane Andrew 
(1992) and has increased this effort as a result of the Hurricane 
Katrina experience. Recent changes include updates to the National 
Response Framework which includes National VOAD and its member 
organizations in the plans; the creation of a technology tool for the 
organization of offers of goods, cash, and volunteer services; and the 
establishment of a national public-private coordination team to support 
the policies and procedures for more effective unaffiliated volunteer 
and unsolicited donations management.
    Although today's hearing is focused on how FEMA received and 
managed the donations made in 2005 to help those in the Gulf Coast, 
National VOAD members want to highlight and summarize the donation 
management lessons from numerous events.
                      donation management lessons
   Every ``offer'' is not an appropriate disaster donation--
        relief is to provide the right material when needed most.
   Donations are not free--expenses include transport, storage 
        and management.
   Government transportation and storage can be helpful to 
        ensure the use of donated goods and reduce the need for 
        Government purchases.
   Experienced State government donation coordinators are one 
        important key to success.
   A massive influx of goods distributed free can have a 
        negative impact on a local economy, especially small 
        businesses.
   After Action Reviews, although at times painful, can yield 
        valuable lessons, if implemented.
   Congressional referrals of offers can be helpful; however, 
        congressional influence, not supported by sound technical 
        evaluation, can be counterproductive and costly.
    Significant progress has been made to improve policy and to build a 
more streamlined process for donation management by FEMA in cooperation 
with States and with nonprofit partners. However, more effort and 
support is required to turn appropriate donations into disaster relief 
and recovery resources.
    FEMA could increase support for National VOAD to:
   Work with and support voluntary agencies, State and local 
        government and the business community (e.g. National VOAD, 
        Chamber of Commerce, and trade and professional associations) 
        in the development of standards and common operating 
        procedures.
   Increase Donation Management Training opportunities for 
        voluntary agency and State government staff.
   Include donation and volunteer management issues in 
        Government disaster exercises.
   Conduct public education campaigns and conferences to 
        promote ``appropriate donation methods'' (See The Center for 
        International Disaster Information, www.CIDI.org, supported by 
        USAID).
   Provide funding for capacity building so that National VOAD 
        and its Donations Management Committee can independently 
        develop the systems needed by its members to effectively get 
        these well-intentioned goods to the appropriate organization 
        and ultimately to the community in need.

    Senator Landrieu. Thank you very much.
    Mr. Stallworth.

 STATEMENT OF BILL STALLWORTH, EXECUTIVE DIRECTOR, EAST BILOXI 
                 COORDINATION AND RELIEF CENTER

    Mr. Stallworth. Thank you, Madam Chairperson. I really 
appreciate the opportunity, and I want to commend you on your 
diligent fight to try to make sure that we aren't forgotten 
along the Gulf Coast.
    I am a City Councilman in Biloxi, and I recently, at 
Hurricane Katrina, started a nonprofit organization. That 
nonprofit organization started with myself and two volunteers 
with a small grant from an international organization called 
OXFAM. It since has grown into 12 full-time persons with a full 
design studio and a true one-stop shop that we are able to take 
the residents that were affected by Katrina from the time that 
they walk in the door to the time they turn the key to the 
door. We are just very thankful for any help that we can get.
    But I want to apologize, because part of my comments I want 
to submit for the record, but I am going to take this 5 minutes 
to really just say this--let me apologize up front if I offend 
anyone--but I am sick and tired of being sick and tired.
    I am really sick of the excuses when we look at how this 
whole thing has been handled, including the eight--what is 
debated, $85 million or $18 million--regardless of the fact 
that those millions could have gone toward those people who are 
in need.
    I don't mean just those folks who are still in the FEMA 
trailers. I am talking about those folks who were pushed out of 
the trailers, who were told that they need to get out. I am 
talking about other people who are not in that system who are 
still in need of housing and household goods. Those folks could 
have received the benefit of the moneys and goods that were 
just wasted.
    Second, let us just look at that. Typically what we look at 
in terms of rebuilding homes in our area for building 
materials, we are looking at probably about $50,000; $50,000 to 
$60,000 in building materials, and we can put a family into a 
permanent house. Imagine what would have happened if we had $18 
million and how many people that we could--at $85 million that 
would be close to 1,700 new homes that people could have been 
in.
    But what we had to do to replace that loss is to go to 
other organizations, like the Red Cross, Salvation Army, take 
precious dollars that could have been used for building 
materials to supply these so that families could move in. That 
is just unconscionable. It is a shame.
    You know, I have heard a lot about this donation issue, and 
in deference to my colleague, I think that when we look at a $1 
billion was refused, somebody needs to be slapped upside the 
head. I don't see why anyone would turn down money.
    The software that FEMA is talking about now, we know 
nothing about. We have no way to plugging into this. This is 
the first I am hearing about any software that FEMA has that 
will allow us to plug in and determine what they may have to be 
available for supplies.
    Our State--God bless our State--but truly there is a major 
disconnect between what is happening in FEMA, what is happening 
in State level, and what is happening on the ground. I deal 
with people every day that is on the ground. I deal with the 
problems. I look into the faces of those individuals who need 
to have the help who simply cannot get the help. All I want to 
do is to try and do whatever we can here to bring home the 
point to FEMA that there has got to be a better-coordinated 
effort between themselves and the nonprofits and those grass-
root organizations who are on the ground.
    So, as a part of that, we need to talk about how to better 
include nonprofit organizations who are not the Red Cross, who 
are not the large multinational organizations, but those 
organizations that are in both Mississippi and Louisiana who 
are there day-in, day-out working to house people, to get 
people into some permanent housing.
    Currently FEMA is looking to have virtually 6,000--no, I am 
sorry, 8,000--families who are in their FEMA trailer, on their 
assistance, moved from there to permanent housing in the three 
coastal counties of Mississippi. Those three coastal counties 
basically have about 700 affordable units. Now, how do you fit 
8,000 families into 700? The need to be smart about what we use 
these funds for is paramount.
    But this is something that is not going to go away 
overnight; this needs to continue, and certainly not just in 
the early stages when there is a disaster declared, but there 
needs to be thought given to how to move forward into the 
recovery stage. Those dollars need to be afforded to nonprofit 
organizations.
    Senator, I can't agree with you more. Those organizations 
who are doing it need to have the help, and there is nobody 
there to give it.
    FEMA typically comes to us and says, well, you can find--
they need to have these special kinds of things, go to the 
long-term recovery committees. We don't have the money, we 
don't have the resources. We asked for it. Nobody told us that 
they had it.
    So I am going to conclude, and I know I am a little over my 
time, and as I said, I apologize because I can get very 
passionate about this. But I am truly sick and tired of being 
sick and tired.
    So I will stop at this point. Thank you.
    Senator Landrieu. You don't have to apologize to this 
Chairwoman, thank you, on that subject.
    [The statement of Mr. Stallworth follows:]
                 Prepared Statement of Bill Stallworth
                             July 31, 2008
    Chairman Cueller, Chairman Landrieu, and Members of the 
subcommittees, I would like to thank you for inviting me to testify 
before the subcommittees today about this important issue.
    I am Councilman Bill Stallworth from Ward Two of Biloxi, 
Mississippi. Before Hurricane Katrina bombarded the coast, I served as 
a councilman of East Biloxi for almost 11 years. East Biloxi, situated 
on the eastern tip of a barrier on the Gulf of Mexico, is comprised of 
minority and low-income citizens. Prior to Hurricane Katrina's 
devastation, East Biloxi was home to roughly 10,000 of the city's 
poorest residents, with an average median income of $23,527. The 
population is approximately 40 percent African American, 40 percent 
white, 15 percent Vietnamese, and 5 percent Latino.
    When I saw that not enough was being done for my community after 
Hurricane Katrina, I started the East Biloxi Coordination and Relief 
Center with a grant from Oxfam America. The Federal Emergency 
Management Agency (FEMA) took 8 weeks after Katrina to have a presence 
in East Biloxi, and help was urgently needed. Our organization helped 
citizens in the East Biloxi neighborhood when no one else would, and 
continues to do so. At its formation, the organization included only me 
and a couple of volunteers coordinating relief efforts in the Biloxi 
area.
    Our organization, other small non-government organizations, and 
church groups were the only relief for the citizens of Biloxi. FEMA and 
other major organizations were nowhere to be found. Our small group was 
able to get thousands of homes gutted out quickly, and we started the 
rebuilding process within a very short winter. What we all accomplished 
was impressive, but much more could have been done for thousands of 
other people if FEMA was there from the beginning. Since the storm hit 
the coast, East Biloxi Coordination and Relief Center has grown and now 
employs 15 full-time staff members.
    Immediately after Hurricane Katrina, volunteers came from every 
corner of the United States, but eventually volunteers must return to 
their own homes. Volunteers came and went, and housing projects stalled 
waiting for the next source of labor. In an atmosphere of chaos and 
desperation, it was easy for things to drop through the cracks. In 
times like that, it is crucial for a permanent and large organization, 
like FEMA, to have a long-term presence in disaster areas during the 
recovery and rebuilding stages so that important housing projects are 
not ignored.
    Rather than simply managing rotating volunteers, we turned East 
Biloxi Coordination and Relief Center into an efficient business; we 
hired staff and we case-managed. East Biloxi Coordination and Relief 
Center has become one of the only true ``one-stop-shops'' in the Gulf 
Coast region. Our clients come into our office to have their case 
assessed. Then, we put together funding, financing, draw up plans for 
refurnishing or rebuilding their homes with support from the university 
design studio, and then we start building. Hundreds of new homes have 
been built by East Biloxi Coordination and Relief Center and its non-
profit partners. We make homes safer and stronger than they ever were 
before. We pair construction crews and volunteers, and, as our 
volunteers move in and out, our construction coordinator helps provide 
consistency for each home. In the last 6 months, we have built 70 homes 
and we currently have another 70 homes that we are working on. The East 
Biloxi Coordination and Relief Center business and disaster relief 
model is very successful, which is why other local Gulf Coast 
organizations have adopted the model.
                          another fema fiasco
    When CNN first broke the story that supplies intended for hurricane 
victims were instead given to the Mississippi Department of Wildlife, 
Fisheries, and Parks, prisons, and volunteer fire departments, I was 
outraged. Cleaning supplies, small appliances, and a variety of other 
necessary home goods were stored for 2 years, while volunteers and non-
profit organizations used precious and limited funds to provide those 
same items to victims of Hurricane Katrina. Immediately after a 
catastrophe, the Federal Government has an obligation to deliver aid as 
quickly as possible to those with the greatest need. The only way to 
get aid to the people who need it most is for the Federal or State 
government to reach out to existing local organizations to help 
facilitate that exchange.
    Eighty-five million dollars' worth of home supplies given to 
unintended parties, as well as the additional $1 million per year that 
it cost to store them, could have been used in many important ways. 
Thousands of people are still homeless along the Gulf Coast, and FEMA 
wants everyone out of temporary housing programs by March 2009. There 
are many more people that have already moved into small apartments with 
aunts, cousins, and friends, to avoid the toxic formaldehyde trailers. 
Our organization has spent millions of dollars getting people back into 
homes. Money that we requested for household items from the Red Cross 
and Salvation Army could have been better spent on making new homes, 
and taking more families off of the streets.
    Instead, the money is gone, the materials are gone, and there are 
families left without a safe roof over their head because aid money was 
not properly allocated. In our business, $85 million in aid could have 
been used for 1,700 new homes if we spent $50,000 per house. Rather 
than buying household goods and then locking it up in a storage closet 
for 2 years, FEMA should have given the money to local organizations 
that would have properly used the funds. A bureaucratic mess cost the 
people of the Gulf Coast $85 million worth of support.
    Non-profits were not made aware of the goods, and it was clear that 
FEMA ground-workers were not aware of the warehouse either. FEMA agents 
meet with East Biloxi Coordination and Relief Center each week, and 
they never mentioned ``surplus'' aid. The people on the ground need to 
know where to find supplies, whom to ask for assistance, and how to 
make their way through the bureaucratic hoops to get things done. 
Instead of reaching out to us, one of the first things FEMA did in 
their Gulf Coast recovery was to build walls and put up red tape.
    There is a national sentiment that the Gulf Coast region has 
recovered. People assume that after 3 years, the citizens of 
Mississippi, Alabama, and Louisiana have landed on their feet. It is 
obvious that FEMA holds this ignorant belief. FEMA officials clearly do 
not think that the region is a region in need. Anyone who has spent 
time in Biloxi or New Orleans should understand that $85 million worth 
of cleaning supplies, small appliances, and other household goods needs 
to be in the hands of the people that lost everything, and not sitting 
in a warehouse. At East Biloxi Coordination and Relief Center, we are 
the ones that sit face-to-face with the survivors of Hurricane Katrina 
and tell them that we will help them rebuild their home, but we do not 
know where the money to fulfill these promises will come from.
    FEMA sought help from the State and cities, but they ignored the 
people who were on the ground making a difference, like the East Biloxi 
Coordination and Relief Center. The people that watched the waters wash 
away their schools, churches, and homes are the most determined to 
return to their lives as they were before Hurricane Katrina. The heroes 
of disaster recovery have been local leaders that decided they can not 
wait around any longer for the Government to start caring about their 
neighborhood. Those people want to see things ``the way they were'' 
more than anyone else, but we can not pretend the Gulf Coast is back to 
the way it was before the hurricanes hit.
    Non-profit organizations and church groups proved themselves to be 
better at working with local people than the Federal Government in the 
aftermath of Hurricane Katrina. Not only did FEMA fail to reach out to 
those in need, it failed to support the few organizations that already 
had relationships within the local communities. It is crucial that 
during future disaster recovery, FEMA identify and communicate with 
local non-profit partners that can assist them with the overwhelming 
job ahead. Small organizations should know where they can go to help 
the people of their neighborhood. It is difficult for East Biloxi 
Coordination and Relief Center because we only have 15 people, but for 
even smaller groups, it is impossible to get assistance from the State 
and Federal Governments. Hurricane Katrina was a lesson that the post-
disaster chain-of-command is broken; we now have an opportunity to 
learn from a bad experience and break the cycle of mistrust.
    FEMA's response to the hurricanes was embarrassing, but it will be 
tragic if the Federal Government learns nothing from experience. I come 
before Congress today to stress the importance of a strong, working 
relationship between FEMA and local non-profit organizations during a 
future disaster.
    Thank you. I look forward to answering any questions you may have.

    Senator Landrieu. Ms. Keller.

STATEMENT OF VALERIE KELLER, CHIEF EXECUTIVE OFFICER, ACADIANA 
                        OUTREACH CENTER

    Ms. Keller. Well, I think that I can say pretty much, 
``Ditto,'' to Mr. Stallworth's comments here and that clarity 
that comes from common-sense talk that has been so scarce in 
the last 3 years.
    My name is Valerie Keller, Madam Chair, and I do serve as a 
CEO of the Outreach Center. But additionally, I would like to 
say I serve as a member of the Louisiana Recovery Authority's 
Housing Task Force and as co-chair of the Louisiana Supportive 
Housing Coalition and the Louisiana Advocacy Coalition for 
Housing and Homelessness, so I am talking very much in the same 
perspective as my colleague here, representing about 300 
different nonprofit agencies across the State.
    We appreciate Congress' continued support and attention to 
the Gulf Coast recovery, and we are optimistic that what we are 
looking at here. We will be able to find some real solutions to 
the ongoing problems. Because it is frustrating that after 3 
years we are still facing a problem with people who have needs; 
and there are resources there, and we just simply cannot make 
the connection to be able to do it when you have 
organizations--nonprofit organizations, voluntary 
organizations--who exist for that purpose to help make that 
connection.
    The Outreach Center, specifically since Katrina, our case 
managers have provided more than 23,000 services touching the 
lives of more than 10,000 people since then. I would say that 
the services and supplies that we have been providing have not 
typically come from the Government.
    There is truly a lack of coordination and integration. It 
is important to know--I know that we said it is our 
responsibility to find out what was available, but we look 
under every rock. That is our role; we collaborate and we 
coordinate, and we don't operate in a vacuum. It is very 
surprising to hear that there are supplies out there when that 
is what we do, is look for resources and look for supplies to 
help meet that need.
    I would say, too, that in the aftermath of the storm, 
talking about the coordination of unsolicited donations, we 
coordinated close to 1 million pounds of food and personal care 
items and medical supplies to about 6,000 impacted homes. But 
because there wasn't a good system to coordinate those 
unsolicited goods, we would get things that didn't match the 
needs; and so it wasn't palleted, it wasn't inventoried. It was 
a logistical nightmare to sort it, inventory it in hot humid 
warehouses and try and get it back down to the people who 
needed it. It was incredibly, incredibly inefficient.
    The travesty of that is, as I was sitting here reviewing 
the inventory list of FEMA goods that Mr. Rainwater provided, 
it is Appendix 1 in his testimony, and I couldn't help but 
think back to those weeks and months following the storm, 
looking at the very items on his list.
    Those are the equivalent of gold for us; those are the 
basic items for human dignity that we would have given anything 
to have had, Madam Chairwoman--pillows and sheets, trash cans 
and hand sanitizers, dishes, utensils, shoes and bath towels, 
especially valuable because they were in bulk quantities, and 
they were palletized.
    Instead, because we didn't have any way of knowing the 
supplies were available, our agency and others, I will say, 
pulled meager funds from our pockets to purchase the very 
supplies that were listed in the FEMA inventory. This 
diminished money that we were using to help people pay rent, 
utilities, medical bills, fuel for their cars and bus passes 
enabling them to get to work.
    I will also say this, too--again, echoing my colleague's 
comments--that as Chair of the Louisiana Advocacy Coalition, 
very active in VOAD--helping integrate HUD's regional database 
systems was about these databases that can help provide 
efficiencies, but the very first time I have ever heard of 
Aidmatrix is here today.
    So it seems to me that there are on-going needs. The 
resources are there. This is the United States of America; we 
don't have a scarcity of supplies. It seems to me like we have 
a lack of effective and efficient system.
    Then, when we do put those systems in place we have a 
terrible, terrible way of communicating it to the people who 
need it and the boots on the grounds who can deliver it.
    I would say this, too: When the story broke on CNN about 
the long-needed disaster recovery supplies that were collecting 
dust in warehouses, that there was that sense of frustration 
that says, we are tired of being tired. Here is just one more 
example of where things were needed then; and, yes, they are 
still needed now. But, golly-gee, they sure could have been 
used 3 years ago.
    So we are tremendously grateful to Senator Landrieu and to 
the Louisiana Recovery Authority for providing the Outreach 
Center with these supplies, and to Senator Landrieu for her 
leadership working to secure the $73 million in permits for 
housing vouchers.
    I will say this: The supplies that we secured on July 14 
have generated an incredible amount of calls from families 
needing these supplies; and the supplies that sat for 3 years 
in a warehouse will be distributed to families who need it 
within about 3 weeks.
    I will say this, too: If the service providers know that 
things are available, we will jump through hoops to do whatever 
it takes to be able to access them. But we have to know what is 
out there, and we have to have access to the systems to be able 
to do it.
    To your point, Senator Landrieu, we have to have the 
capacity to be able to meet the need from the nonprofit arena. 
FEMA we should have known about, as we are not off their radar; 
since 2005, our case managers have been working with them, with 
HUD, with State agencies, helping people navigate the very 
confusing FEMA funding streams and accessing other resources to 
help people secure permanent housing. So it isn't like we were 
off the radar screen.
    I would say this, too: That the need is critical and 
ongoing. Is there a need for more supplies? Is there a need for 
more services? Yes, there is.
    The rents have increased 30 percent since the storm. 
Affordable housing is not available. A minimum wage worker is 
working now about 81 hours a week to afford market rate housing 
in our area. With the March 1 deadline, 2009, coming up with 
FEMA's program ending, Louisiana has about 40,000 households 
that are at risk of homelessness if they lose their rental 
assistance. We don't have enough affordable units on-line.
    So I know that the scope of our discussion today is about 
the supplies or the lack of coordination of those supplies--
that they existed; we just couldn't get them to people who 
needed it. But I would say that as we go forward, as we look to 
help get people into sustainable housing and to establish self-
efficiency, that we should be looking very holistically, not 
only at how the Federal and the State and the nonprofit 
organizations can work together, but how we can look at having 
the rental vouchers, the case management and the supplies that 
people need to be able to sustain self-sufficiency.
    Thank you for your time.
    [The statement of Ms. Keller follows:]
                  Prepared Statement of Valerie Keller
                             July 31, 2008
    I would like to thank the chairpersons and the distinguished 
Members of the committees for the opportunity to appear before you. I 
am Valerie Keller, CEO of Outreach Center, a nonprofit based in south-
central Louisiana, and I serve as a member of the Louisiana Recovery 
Authority's Housing Task Force and as co-chair of the Louisiana 
Supportive Housing Coalition and of the Louisiana Advocacy Coalition 
for Housing and Homelessness. We appreciate Congress' continued support 
and attention to Gulf Coast recovery and your commitment to looking 
critically at our national systems for response and recovery so that 
our country is better prepared to aid its citizens in future times of 
crisis.
    Today, I share with you information on the current need for housing 
and supplies along the Gulf Coast following the devastation of 
Hurricanes Katrina and Rita almost 3 years ago, in the hopes of 
informing your analysis of how critically needed supplies were not 
delivered to those who needed them and your efforts to prevent such 
unfortunate situations from occurring in future disasters.
    This testimony focuses on three main points:
   1. Our work helping families access housing and the supplies 
        they need for self-sufficiency and our efforts working with 
        FEMA and other Federal/State agencies;
   2. The ongoing needs on the ground across Louisiana's still-
        suffering coast and specifically focusing on the oft-overlooked 
        Hurricane Rita-impacted region;
   3. The impact of the recent CNN story and the Congressional 
        and LRA outreach directing long-needed supplies to help these 
        families still struggling to rebuild and recover.
    I will speak to those first two points first--our work providing 
services and the on-going needs on the ground--to set the stage on why 
the recovery supplies we're discussing today were and are much-needed.
    The Outreach Center is a grassroots nonprofit human services 
organization with a proven track record of delivering effective 
services to people in crisis. Founded in 1990 and serving eight (8) 
parishes, the Center utilizes a comprehensive services model designed 
to help people climb from rock-bottom to obtain safe housing, 
meaningful employment, optimal physical and mental health, and a sense 
of self-respect, hope and dignity. Its broad scope of services 
encompass a complete continuum of care that includes an extensive 
housing and case management program, licensed addiction and mental 
health treatment center, social enterprises, a women's and children's 
shelter, a day shelter, and a food and supply distribution center. In 
addition, the Center is now developing mixed-income housing and 
catalyzing urban revitalization.
    The Outreach Center's core competencies lie with the delivery of 
comprehensive, outcomes-based case management and supportive services 
to individuals and families. In the wake of Hurricanes Katrina and Rita 
the Outreach Center established the Transitional Recovery Action Center 
for Katrina/Rita (TRACK) based on the best practice ``housing first'' 
model to help hundreds of displaced families find solutions and access 
to housing, transportation, employment, and supportive services--
rebuilding and empowering one life at a time.
    A donation and distribution center for supplies and services was 
also established and in the aftermath of the storms the Center 
coordinated the distribution of goods from international relief 
organizations around the world, businesses, and Government agencies 
giving more than 800,000 pounds of food, personal care items and 
medical supplies valued at $2 million to more than 6,000 evacuees. 
Displaced families unsure of where or how to begin rebuilding their 
shattered lives turned to the Outreach Center and got the help they 
needed.
    Since the storms, even when other relief and emergency response 
efforts faded away, community-based nonprofits have continued to serve 
the overwhelming needs of their neighbors while scrapping together 
resources. Our case managers are still working one-on-one with 
displaced individuals and families to assess their needs and establish 
an action plan to address each need, including housing, employment, 
transportation, mental health, substance abuse, education/job skills 
training, childcare, legal needs and community connections. We have 
employed more than 50 evacuees who lost their jobs in the storms to 
serve other impacted families. Since August 29, 2005 we have provided 
23,817 services including case management and assistance accessing 
housing, employment, transportation, Government benefits to 1,045 
households, 2,367 individuals.
    Resources are scarce and our agency is currently leveraging local 
dollars with some funding from the Social Services Block Grant 
administered through the LA State Department of Social Services (DSS) 
Homeless Prevention and Rapid Re-housing Grant and the Louisiana 
Disaster Recovery Foundation Displaced Family--Housing Assistance Fund. 
These funds will aid approximately 300 displaced families in the 
Hurricane Rita-impacted parishes and FEMA trailer parks to obtain 
rental and utility assistance for up to a year. Since 2005 we have been 
working with FEMA, HUD, State agencies and nonprofits to ensure that 
services are not duplicated for the same families and that gaps are 
filled as people exit transitional housing and try to secure permanent 
housing.
    In our work with hurricane evacuees, we have helped to place many 
clients in permanent housing, often serving individuals that have 
recently been evicted from their FEMA trailers. Many of our clients 
have accessed HUD's Katrina Disaster Housing Assistance Program (KDHAP) 
and Disaster Voucher Program (DVP) rental subsidies, part of which pays 
a portion of their rent, and incrementally pays less and less, leaving 
the evacuee to pay more and more. In our experience this program has 
unfortunately not been a long-term solution for most hurricane-impacted 
families, as they are still often unable to pay their rent at the 
increased market rates and thus are unable to maintain permanent 
housing and self-sufficiency.
    Louisiana, like the rest of the Nation, was facing an affordable 
housing crisis pre-Katrina and Rita; however, an entirely new housing 
crisis was created when the hurricanes devastated south Louisiana in 
the fall of 2005, forcing the evacuation of hundreds of thousands of 
residents. One of the biggest challenges facing evacuees was, and still 
is, securing safe and affordable housing for their families. While many 
families have since returned to their hometowns, those unable or 
unwilling to return to the hurricane-ravaged areas remain in the area 
and the impact on housing availability has been substantial. South 
central Louisiana, a region best known nationally for its Cajun food 
and Zydeco and Cajun music, was the area hardest hit by Hurricane Rita 
also served as host communities for people resettling after Hurricane 
Katrina. In this region the rent for one- and two-bedroom units 
increased 30 percent since the storms and a minimum wage worker now has 
to work 73 hours per week to afford a one-bedroom and 81 hours per week 
to be able to afford a two-bedroom apartment for a family.
    Although these storms took a tremendous toll on all in their path, 
low- to moderate-income individuals were disproportionately affected, 
with the storms severely compounding problems that already existed. 
Current needs assessments reveal the top issue for hurricane-impacted 
families is still primarily a lack of affordable housing. As the 
Outreach Center continues to see a large number of families from the 
Hurricane Rita-impacted areas, it is obvious that they have many 
outstanding basic needs, including food, shelter, clothing, health care 
and transportation. They need help accessing affordable housing, rental 
and security deposit assistance, building materials, transportation, 
food, employment, legal counsel, household items, furniture, infant 
supplies, cleaning supplies, school supplies and school uniforms.
    In my capacity as co-chair of the Louisiana Supportive Housing 
Coalition representing more than 300 organizations across the State, I 
have had the honor of working closely with Senator Landrieu, and with 
the support of our delegation and Louisiana Governor Bobby Jindal, to 
secure $73 million for 3,000 supportive housing vouchers--2,000 of 
which will be used to house disabled and homeless people in the New 
Orleans region, while 1,000 of the vouchers to help people obtain 
housing in the other hurricane-impacted areas.
    Three years later the needs are very much on-going but the 
resources to meet those needs are scarce and people are understandably 
tired and frustrated. So when the story broke on CNN about long-needed 
disaster recovery supplies being given away for non-disaster purposes, 
it was quite disturbing to many of the impacted families and agencies 
like ours who are working with them every day to try and make ends 
meet. Many displaced families have nothing with which to furnish and 
keep up their homes and they could have used these supplies long ago. 
Families we have helped move out of FEMA trailers were not allowed to 
remove their furnishings and so they are in need of complete bed, 
living and dining room sets, as well as dishes, pots, pans, cleaning 
and infant supplies, school supplies, and school uniforms. Any supplies 
we receive can and will be put to good use as we help these families 
re-establish housing.
    We are tremendously grateful to Senator Landrieu and the Louisiana 
Recovery Authority for providing the supplies from FEMA that went to 
Arkansas. We were able to secure these supplies just 2 weeks ago and 
since then the calls for assistance have been pouring in from families 
needing supplies and other agencies looking to help people they are 
serving. We've talked to many of our nonprofit partners who are equally 
as disappointed that these supplies sat collecting dust in warehouses. 
If nonprofit service providers had even known it was available--if FEMA 
had simply communicated the existence of these critically needed 
resources--we would have jumped through whatever hoops necessary to ask 
for it and get it to people we're serving who need them so desperately.
    With rental assistance to help bridge the affordable housing gap 
and with household supplies providing a stable home life, individuals 
and families are better prepared to pursue employment, education for 
their children, maintain their health, and be able to afford 
transportation and childcare, thereby ensuring self-sufficiency and 
long-term sustainability.
    Chairpersons, Members of the committee, the bottom line is that 3 
years after these catastrophes, people are still in need of supplies 
they could have benefited by receiving years ago. The Outreach Center 
and community-based organizations stand ready and willing to partner 
with Government agencies to deliver vitally needed services and 
supplies. We are committed to using our full capacity to help families 
recover, to stimulate economic development, and to restore hope to 
communities. Thank you.



    Senator Landrieu. Thank you all very much. I really 
appreciate the conciseness of your statement. I think you all 
had very interesting points.
    I would like, Mr. Stallworth, to direct the first question, 
if I could, to you. You testified, generally, that you were 
unaware of these items as well.
    Have you subsequently contacted the State of Mississippi or 
been contacted by them, by anyone from the State since the 
story broke about any of the items that they have received as 
surplus for your needs or any other nonprofits that you know?
    Mr. Stallworth. Madam Chairperson, not a soul. We just 
simply have not had that contact. We are still looking for some 
help. Now, we have contacted the organization who received 
them, and we were told that they did not know that the 
nonprofits needed it. But we didn't know about the 
organization. The director of admin and finance was the group 
that received it, but no one told us.
    Senator Landrieu. Because it is our understanding that 
approximately $75,000--$746,000 of supplies is with Mississippi 
Wildlife and Fisheries and, to date, you haven't heard either 
from Wildlife and Fisheries or from anyone in the Mississippi 
State Government?
    Mr. Stallworth. No, Madam Chairperson, we have not. We have 
registered with that organization as a nonprofit. It is very 
interesting to note that they say they couldn't find anyone, 
but the Mississippi Nonprofit Association is located right in 
Jackson, we are listed with them, but they never bothered to 
ask anybody anything.
    Senator Landrieu. I am going to be sending a letter this 
afternoon just asking for the State of Mississippi to go on the 
record, because they might have information that has just not 
been made available and, in all fairness to them, I have not 
specifically requested it.
    But as you heard from Paul Rainwater, the State of 
Louisiana moved very quickly to try to identify what Federal 
agencies had received these items to try to recover what we 
could, recognizing in the testimony that has been given that 
there was some mistakes made at the State level. The agency in 
charge of surplus did not notify the recovery authority, and 
that was a breakdown that happened at our State level.
    But I am interested in the position or the understanding of 
what has happened since in Mississippi, and I will be asking 
the State for documentation. But I just wanted to hear from you 
that you have not yet received any official information or, to 
your knowledge, none of the other nonprofits in Mississippi?
    Mr. Stallworth. Madam Chairman, if you will, when you get 
that, please let me know?
    Senator Landrieu. Yes, I will send you a copy because maybe 
they have done some things that we are not aware of.
    Let me ask, Ms. Keller, what are the three--you mentioned 
some of these, but if you would restate--what are the three 
biggest challenges your organization is facing right now 3 
years after these storms?
    I understand you would be considered operating in a host 
region, although your region had some damage, actually your 
region had significant damage from Hurricane Rita. You were 
also a host region for Hurricane Katrina. So you became a host 
for families fleeing from Hurricane Katrina. Four weeks later, 
your region, parts of your region, which is in southwest, was 
also hit by Rita. So you all have really have had a challenge.
    What are the three maybe biggest challenges before you now? 
You mentioned housing, but I would like to give you a little 
bit more time to explain that.
    Ms. Keller. Thank you, Senator. You said it exactly too 
that as a host region it means that we had people who were 
displaced by Hurricane Katrina who flooded into the scarce 
housing market, already scarce, an already affordable housing 
crisis across the Nation and in Louisiana pre-Katrina. Then you 
had people come in and obviously a scarcity of housing with 
Rita, where that took some housing off the market.
    So what happened there is you have got an even greater 
scarcity of housing, rents have skyrocketed, and so rental 
assistance is a huge key factor right there. It says that you 
have got people who cannot make enough money to afford the 
increased rents.
    So one of our requests would be that as FEMA looks at 
ending their program, I know it can't continue forever and 
forever, but that there has got to be some rental assistance. 
To your credit, thank you again for securing the $73 million 
for performance housing rentals, and that was the key.
    The other piece is funds for case management. I know the 
LRA is working with FEMA to do a case management program. I 
have had some conversations with them today regarding that that 
says agencies like ours, Senator, are paying case managers out 
of our own pocket. We have got people that we are helping them 
move out of trailers right now, because their time is up, they 
need to try to get into housing, and we have cobbled together 
funds to try to be able to get them in housing. So there is a 
direct supply, moneys needed, utility assistance, funds to be 
able to provide them the supplies they needed because they 
weren't getting it from FEMA here, and we are paying for our 
case managers ourselves.
    Senator Landrieu. Doesn't FEMA have case management funding 
available? Ms. Keller?
    Ms. Keller. I don't control their budgets, but I would 
assume that they would.
    Senator Landrieu. Let me ask Mr. Rainwater, because you are 
basically coordinating this effort. What has FEMA provided to 
you to date, which they are authorized is my understanding, for 
case management?
    Mr. Rainwater. Yes, Senator, it is a good question. Since 
starting in January we have been talking to nonprofits like Ms. 
Keller and others and Unity and beginning to identify needs, 
and one of those obviously was the case for case management and 
indirect assistance, which is part of the surplus discussion. 
But Harvey Johnson, the Chief Operating Officer in FEMA, told 
me what they had in the beginning, in January and February, 
what were called Cora Brown funds, $1.1 million, that would 
help us to bridge from the time that, you know, folks, case 
management, some case management funding had ended, there was 
none left, so they provided $1.1 million.
    Then we were going to move into another phase, a much more 
comprehensive case management phase. We have submitted a grant 
to FEMA for $45 million to provide case management for 13,000 
folks that are in the DHAP program, and we still have another 
11,000 folks in FEMA trailers, and our--and other processes 
throughout that transitional housing piece.
    So we have submitted a grant application working with the 
Louisiana Family Recovery Corps and the New Orleans Disaster 
Recovery Group, which is part of the United Way. So we have 
submitted that grant application, we have made formal 
application for about a $45 million grant.
    Senator Landrieu. When did you submit that application to 
FEMA?
    Mr. Rainwater. Last week.
    Senator Landrieu. Because I am going to ask FEMA for their 
response to that, and then I will ask Mississippi if they have 
submitted any requests for case management.
    Mr. Stallworth, did you want to add anything?
    Mr. Stallworth. We are in the process, there is a meeting 
going on today my staff is a part of. The Mississippi Center 
for Volunteerism is negotiating a contract with FEMA to provide 
case management assistance, specifically to those folks who are 
still in FEMA trailers or on some type of FEMA assistance. My 
only comment is that we don't know what they are going to do, 
how much they are going to provide, and the timing is a 
virtually 9-month contract to try and get close to, in this 
case, 8,000 families, case managed and into some permanent 
housing.
    Again, how do you fit 8,000 people in the 700 homes? The 
problem with this--and one of the things that I would really 
hope this committee will do and recommend to FEMA and to HUD, 
is that they take a holistic approach to getting people back 
into homes. These temporary measures are just that. They don't 
solve the problem. We have to figure out a way that we can take 
those precious dollars and convert them not to temporary 
housing, but to permanent housing, and that requires a 
combination of volunteerism, nonprofits and moneys that will 
allow us to build the needed homes so that there is 8,000 homes 
available for 8,000 families, because the math doesn't work any 
other way.
    Senator Landrieu. Mr. Davidson, let me ask you, I was 
intrigued by your longevity in this national organization of 
the 55 prominent national organizations, most are familiar to 
the people listening to us and people listening to this 
hearing, is your organization, you call it, VOAD. What is it, 
VOAD?
    Mr. Davidson. Yes, the national organization is National 
Voluntary Organizations Active in Disaster so these are 
commonly recognized big organizations that have arms, legs, 
pieces.
    Senator Landrieu. Are you officially recognized by FEMA?
    Mr. Davidson. Yes.
    Senator Landrieu. As the nonprofit partner, as their 
nonprofit partner?
    Mr. Davidson. Yes. NVOAD was actually a signatory of the 
National Response Plan; in other words, of the previous 
response plan. So it has a long history of working with FEMA.
    I have to say after watching FEMA for all these years they 
have not been as responsive on a funding level. They are very 
cooperative and the long-term technical staff are very helpful 
to us, but from a financial standpoint FEMA has not provided 
much funding for the development, the capability building, et 
cetera, of a national organization.
    Senator Landrieu. Did they notify you of these goods before 
they declared them surplus?
    Mr. Davidson. No, I believe that we didn't know that. Diana 
Rothe-Smith, the Executive Director of NVOAD, is in the back. 
She may have heard something.
    Could you stand up and say if you were notified or not?
    Ms. Rothe-Smith. We were not notified, and the items are 
currently not in the Aidmatrix system.
    Senator Landrieu. I am finding this extremely hard to 
believe that FEMA had $18 million worth of items purchased with 
taxpayer dollars that they declared surplus and did not notify 
their nonprofit national partner, nor the two States most 
prominently involved in this particular disaster, to our 
knowledge, Mississippi or Louisiana, in any kind of appropriate 
notification fashion.
    I am having an extremely difficult time understanding how 
this could happen, and I am not convinced of the testimony 
given in the previous panel that steps have been taken to 
correct this. This is quite disturbing.
    Mr. Davidson.
    Mr. Davidson. Well, just to be clear, when FEMA gives 
things--first of all, there were two different things. There 
were donated supplies that were commingled, which I think is 
the first mistake. So the donated supplies should never have 
been commingled with FEMA supplies. There was a multi-agency 
warehouse in Mississippi, there was one in Louisiana. We worked 
with that multi-agency warehouse.
    I can't understand where those things and how they got 
lost, so just from that standpoint. But when FEMA provides 
excess property to the States, the State Emergency Management 
Office will often tell us that there are trailers or vehicles 
or other things that are available for excess property surplus, 
and there is a mechanism. But in most cases, it is difficult to 
get those things. But this does not deal with those specific 
supplies that are mentioned here today.
    Senator Landrieu. Well, I will conclude, I am not going to 
conclude this hearing, but I will come to this conclusion 
myself that the process that FEMA has currently established to 
determine whether something is surplus or not is completely 
broken and wholly inadequate.
    To determine if something is surplus, you would seem to me 
to ask someone if they need it before determining that they 
don't need it. You have to ask the questions, or at least, I 
think as one of our panelists suggested, open the window and 
look out yourself. Neither one of those was done. They didn't 
look out the window to see the thousands of homeless people. 
Maybe they had lines that were too difficult to open. But then 
they also failed to pick up a phone and call anyone, either 
State, the nonprofits, to determine if anyone needed these 
items.
    So we are going to hear more from FEMA about how they 
intend to fix this, but this is quite disturbing.
    Mr. Stallworth and then Ms. Keller, and then I think we are 
going to wrap up.
    Mr. Stallworth. Thank you, Madam Chairperson. One of the 
things that was disturbing, I think, in the previous testimony, 
was that somewhere FEMA decided that these supplies were not 
needed, and they were returned. I didn't quite get an answer at 
what point and who made that decision, because clearly, from 
what we know in both Mississippi and Louisiana, the need is--
there is absolutely no question about the need.
    All they would--if anyone who was there on the ground would 
need to do is just take a ride down my street to see the 
families who are still in need. So shipping stuff back to a 
warehouse, because some other--excuse the expression, for 
example--bureaucrat just decided they didn't want to deal with 
it is unacceptable.
    Senator Landrieu. Ms. Keller.
    Ms. Keller. While we have the opportunity, Senator, to talk 
to FEMA and educate them a little about what might be happening 
on the ground, from somebody who is on the ground, day in and 
day out working alongside in some cases, their folks, I would 
say that one of the gentleman had referenced that people who 
were in trailers had housing supplies given to them. Our 
experience has been that has been incredibly sporadic. We hire 
evacuees as well, in addition to serving them. Some of our 
staff members received things like a trash can and a pillow, 
and that was it, in terms of housing supplies.
    So I would just say that maybe that may be the protocol in 
the system, but it maybe just isn't translating into reality.
    The other comment that I would like, and as it relates to 
the Rita-impacted area as opposed to some of the Katrina-
impacted people, is if people are outside the trailers they are 
just off of FEMA's radar. Unfortunately, they are still in 
need, and throughout southwest Louisiana, and throughout 
Louisiana and throughout Mississippi as well.
    So as we are talking about the need, and we are so 
determined what surplus is, you look at what your existing need 
is, I would just remind us, particularly as well to FEMA, that 
there are a lot of people out there who maybe don't have a FEMA 
trailer that they are living in, but they are still very much 
part of the recipient population that needs to be served.
    Senator Landrieu. Right, they could be living with a family 
relative for 3 or 4 years, two or three families still living 
in a house, still struggling to rebuild their homes.
    Ms. Keller. That is the reality.
    Senator Landrieu. Based on the testimony today, I am not 
sure if FEMA recognizes them as citizens deserving or in need 
of help, which is another problem.
    Anybody who wants to close, Mr. Rainwater, and then I will 
bring this hearing to a close.
    Mr. Rainwater. Thank you, Senator Landrieu. I just want to 
kind of wrap this up. There are a couple of things, really, 
that I want you to know.
    As we work through this process, we are looking at a very 
nontraditional approach, recognizing when I took this job in 
January, in talking with the Governor and your own staff, that 
we couldn't just look at this, as we typically would in a 
disaster, because as you just said, there are people in very 
nontraditional situations.
    So we have reached out to the nonprofits. We are linking 
back to the State agencies that is responsible for this surplus 
equipment. We have taken the Louisiana nonprofit organization. 
We have sent out thousands of applications on how to get 
surplus equipment. We have got that linked up.
    But we are also getting out and talking to faith-based 
groups and these nonprofits so that we can create, as we create 
a comprehensive housing strategy to look, going forward in 
March 2009, as the deadline ends, we want to create some sort 
of safety net. We are going to need our Federal partners to 
help us with that.
    But what we promised is a plan. It says, this is our need, 
and we are quantifying it to you. We will bring it to your 
staff, obviously, and the committee and our Federal partners to 
move forward.
    Senator Landrieu. Okay. I would like to end on a positive 
note, but I actually can't think of a positive note to end on, 
because I just conducted a hearing earlier in the week, and 
just--I can see this train wreck coming. FEMA is now over a 
year late, I think, providing their housing plan for dealing 
with catastrophic housing, and the plan that we received is 
really not a plan, it is a strategy of which seven pages are 
completely blank.
    FEMA has now just decided to recommend to us, after 3 
years, to appoint a task force. That is going to provide 
answers to the question that you just asked, Mr. Stallworth, is 
what do I do with how many families, did you say?
    Mr. Stallworth. I have got 8,000 families trying to get 
into 700 homes.
    Senator Landrieu. There are 8,000 families trying to get 
into 700 homes. The report that I got this week is that FEMA's 
recommendation to Congress is that we should establish a task 
force to figure that out. So I hope that this task force can be 
quickly put together and have their recommendations, get their 
budget request in, and houses built in 9 months, because if 
that doesn't happen we are going to be having a lot of hearings 
on this and other related subjects.
    I would like to thank the witnesses today for their 
valuable testimony and Members for their questions. The Members 
of this joint subcommittee may have additional questions for 
the witnesses. We would ask that you respond expeditiously in 
writing.
    Hearing no further business before anyone, this hearing is 
adjourned.
    [Whereupon, at 3:20 p.m., the joint subcommittee was 
adjourned.]


                            A P P E N D I X

                              ----------                              

   Questions From Senator Mary L. Landrieu for the Federal Emergency 
           Management Agency, Department of Homeland Security
                 request for inventory of fema supplies
    Question 1a. On June 12, I wrote to Administrator Paulison 
requesting an inventory of surplus supplies in the custody of FEMA and 
DHS. I also requested his assistance in returning any unobligated 
supplies back to the State of Louisiana. On July 16, he responded with 
a letter indicating that `` . . . [FEMA] will work with you and your 
staff to ensure visibility into the distributed supplies as well as any 
remaining in storage.'' Please provide my office with an inventory of 
all FEMA household supplies currently in storage in Louisiana.
    Are there any supplies designated for victims of Katrina and Rita 
that are still in storage elsewhere around the country?
    If yes, please provide my office with an inventory and location of 
these items.
    Answer. No.
    Question 1b. Will FEMA agree to provide a tour of the warehouses in 
Louisiana and Fort Worth for Louisiana State officials?
    Answer. Yes.
              request for inventory/status of dhs supplies
    Question 2a. On June 18, I wrote to Homeland Security Secretary 
Chertoff requesting an inventory of surplus supplies in the custody of 
DHS. It is my understanding, from documents provided by the General 
Services Administration, that DHS agencies, including the Border 
Patrol, received surplus supplies from FEMA. While FEMA responded to my 
request to their agency, DHS has yet to respond. I would like to 
receive additional information on surplus supplies received by DHS 
agencies in February 2008, as well as supplies which may have been 
provided to DHS agencies via the DHS Reutilization Officer in late 
2007.
    Please provide my office with an inventory and listing of all DHS 
agencies that received surplus supplies from FEMA between July 2007 and 
February 2008.
    Question 2b. Please provide my office with an inventory and listing 
of all DHS agencies that received surplus FEMA supplies from GSA in 
February 2008.
    Answer. Attachments 1, 2 and 3 provide the information requested on 
all DHS agencies that received surplus supplies from FEMA between July 
2007 and February 2008, as well as surplus FEMA supplies from GSA in 
February 2008.
































 Questions From Senator Mary L. Landrieu for Paul Rainwater, Executive 
                 Director, Louisiana Recovery Authority
    Question 1. Has collaboration between the LRA and FEMA's logistics 
staff improved since this incident occurred?
    Answer. Response was not received at the time of publication.
    Question 2. Do you feel that FEMA has taken the necessary measures 
to prevent a recurrence of this episode, or are there additional 
changes that you would recommend?
    Answer. Response was not received at the time of publication.
    Question 3. I am continuing to work with the LRA to return 
unobligated surplus supplies from the Federal Government and States. 
For the record, as well as for any Federal/State agencies that might be 
watching, can you outline what household items are still needed in 
south Louisiana? What State agencies should organizations contact if 
they have supplies that might be useful?
    Answer. Response was not received at the time of publication.
    Question 4. How many nonprofit organizations has the LRA registered 
to date to receive supplies that the LRA receives in the future?
    Answer. Response was not received at the time of publication.

                                 
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