First the Flood, Now the Fight

In St. Tammany Parish, officials were told last year that to obtain FEMA reimbursement, they needed to prove that each tree stump was the work of Katrina before it could be removed. Cleanup waited for months while the parish photographed and obtained global positioning satellite data on each one.

When the evidence was presented to a new FEMA crew, they asked, "Why did y'all GPS all these things?" the parish president, Kevin Davis, said in an account first reported by National Journal.

FEMA's Jamieson said that inconsistent interpretation of rules has been a daunting problem and that FEMA is trying to keep senior officials in place. He also cited successes, such as the scheduled Sept. 25 reopening of the state-owned Louisiana Superdome, a $94 million FEMA project.

Still, Jamieson said, "the time is right" to hold the nation's disaster law "to the light of day."

"We need to take a look at how well the legislation has served us."

Under the law, known as the Stafford Act, FEMA exerts its greatest long-term influence over rebuilding communities by deciding which projects are eligible for funding and by negotiating reimbursement of most state and local governments' costs. Generally, the federal government will pay only to restore facilities to pre-disaster conditions, not upgrade them, as a way of protecting taxpayers. But several former federal and state officials said the rules are open to broad interpretation and congressional intervention.

In the wake of the Gulf Coast hurricanes, FEMA appears to be taking a harder line, several current and former officials said.

So far, FEMA has approved about 34,000 aid applications from state and local agencies, 16,000 of them from Louisiana. It has rejected 1,015 requests, 95 percent of them from Louisiana. The state is appealing 200 decisions. Art Jones, the state's deputy coordinating officer, said he expects state appeals to grow at least sevenfold over eight to 15 years, topping 1,000.

"It's . . . a process designed to wear you down until you finally give up," said Richard A. Andrews, former California homeland security adviser.

State and federal disaster experts said they are hindered by burdensome rules and a shortage of expertise.

In New Orleans, city officials have received only 30 percent of $394 million requested and expect their requests to roughly triple over the next three years as work goes on. The city's deputy chief administrative officer, Cary Grant, said FEMA is underestimating the value of buildings and presuming wrongly that the city will be able to recover $500,000 in insurance for each of 394 damaged city facilities.

Elsewhere, local officials say a parade of new FEMA officials -- the overstretched agency rotates workers every 90 days or so and relies on temporary employees as well -- leads to constantly changing decisions on project approvals and paperwork.

One reason for mistakes is that FEMA has suffered a "brain drain" of top officials familiar with the complex rules to retirements and agency upheaval in recent years, said David Fukutomi, a FEMA consultant who is serving as a spokesman. But Fukutomi, who left FEMA this spring to become director of response and recovery for contractor EG&G, noted that experience shows that local officials spend more freely when they expect the federal government to pay their bills.

The state of Louisiana had only 14 disaster recovery employees before the storm and is relying on 173 contract workers provided by James Lee Witt Associates, the firm headed by the Clinton administration FEMA director, to help it manage the process, Jones said. FEMA has more than 700 people in the Gulf states working on the program, about 90 percent of them interim or contract workers, Fukutomi said.

Inconsistencies by Congress and FEMA also feed the acrimony.

After the Northridge earthquake in 1994, for example, U.S. and California authorities struggled with engineers to reach consensus on the price tag of repairing costly structures such as the UCLA Medical Center. FEMA rejected a state attempt to repair older buildings to meet newer building safety codes, for example.

After the Sept. 11, 2001, attacks, however, Congress directly gave the city and state of New York $20 billion -- but said no more would be forthcoming -- and directed FEMA to interpret the law liberally. FEMA approved $2.8 billion to repair and improve Lower Manhattan's transit system and waived a $680 million local match requirement, both counter to its normal practice. The state reported appealing none of its 1,900 aid requests to FEMA.

So far FEMA has allotted more than $7.9 billion to reimburse states for hurricanes Katrina, Rita and Wilma, and expects that number to grow significantly. Louisiana emergency managers say they expect the toll of facilities repair, as well as emergency expenses -- currently at $3.3 billion -- to exceed $25 billion. In Mississippi, emergency managers say they expect their costs -- now at $1.6 billion -- to total about $2 billion.

Jones said that at $3.3 billion so far, Louisiana is only 10 percent into what he expects will be a final tab of $25 billion to $50 billion.

In comparison, FEMA's Public Assistance program paid $8.8 billion to help New York's recovery after the 2001 terrorist attacks, $7 billion to repair damage after the Northridge earthquake, and $1.8 billion to rebuild after Hurricane Andrew in Florida in 1992.

Andrews and other officials proposed that Congress rely more on block grants as it did for New York, allow arbitration of appeals and reduce paperwork, and give FEMA field coordinators more authority.

Craig, the New Orleans consultant, said costs will escalate as crews uncover hidden damage and the enormous reconstruction effort sends building prices soaring. He said he expects federal costs to climb by as much as $75 billion. The federal government has committed about $123 billion to the recovery so far.

"It's going to be a $200 billion disaster," he said. "The real, permanent reconstruction hasn't started yet. They're still cleaning up debris."

Database editor Sarah Cohen contributed to this report.