After catastrophic floodwaters submerged wide stretches of southern Louisiana in 2016, displaced homeowners and officials criticized the federal recovery effort as dangerously slow, leaving thousands of people homeless for months.
But the auditors’ boss, John V. Kelly, instead directed them to produce what they called “feel-good reports” that airbrushed most problems and portrayed emergency responders as heroes overcoming vast challenges, according to interviews and a new internal review.
The watchdog concluded that FEMA’s response in Louisiana, where 13 people died in the disaster, was a huge success, a “remarkable,” “resilient and mission focused” effort that “provided hope and a way forward” for flooded communities.
Under pressure from Congress, the inspector general in 2017 retracted and purged from its website the Louisiana flooding report, and then followed the next year by retracting a dozen other audits of FEMA’s initial responses. The office called them “not compliant” with federal auditing standards.
Now the oversight agency, which evaluates the performance of FEMA and the rest of Homeland Security, has turned the spotlight on itself. Last month it released a 14-month internal review of how Kelly, a career government auditor who rose to acting inspector general in late 2017, chose to flatter FEMA’s staff in some reports, instead of hold them accountable.
Kelly’s staff routinely praised FEMA’s initial disaster responses from 2012 to 2017 with “superlative language,” investigators found — and they followed a formula. Each audit found the response “effective and efficient.” Some reports used fawning terms.
They identified challenges FEMA faced. But invariably they praised the agency for overcoming them. Other negative information, if it pointed to systemic problems, was removed from drafts and sometimes placed in separate “spin-off reports,” the internal review found. The audits made no recommendations for improvements.
Investigators determined that Kelly didn’t just direct his staff to remove negative findings. He potentially compromised their objectivity by praising FEMA’s work ethic to the auditors, telling them they would see “FEMA at her best” and instructing supervisors to emphasize what the agency had done right in its disaster response.
The review concluded the office had not met its own standards.
“Our prior approach resulted in unacceptable failures,” Jennifer Costello, the deputy inspector general, wrote to the head of the internal review team on May 21, calling the “retraction of publicly issued reports because they are not reliable . . . not an insignificant matter.”
The reports, Costello wrote, “represent millions of wasted taxpayer dollars and understandably cast doubt on our credibility.” She said the inspector general’s office needs to “hold ourselves to the same standards to which we hold the Department when conducting oversight of its programs and operation.” Kelly recused himself from the review.
Costello noted that the flawed audits represent a tiny fraction of the watchdog’s otherwise hard-hitting oversight of FEMA.
In an interview with The Washington Post, Kelly denied directing his staff to sanitize its initial disaster reports. “There was no motivation to make FEMA look good,” he said.
He sent his staff an apology when the internal review was made public on May 23.
“I take responsibility for failing to set a tone that all of our products need to be fully objective,” Kelly wrote. “While I did not intend to set that tone with respect to the [FEMA] reports, I obviously did.”
Kelly, 64, oversees a staff of 600 auditors and investigators charged with rooting out waste, fraud and abuse in the third-largest federal agency. He plans to retire when the Senate confirms a permanent chief. President Trump has nominated Joseph V. Cuffari, a policy adviser to Arizona Gov. Doug Ducey (R) and experienced federal investigator.
The internal review did not find that Kelly “was improperly influenced by a personal or family relationship,” spokeswoman Arlen Morales said in an email. Nor did investigators find any “deliberate effort to benefit FEMA for personal gain,” she said.
Kelly has not faced discipline for coaxing his staff to produce the flawed reports.
“Because Mr. Kelly is the senior-most official in our organization, no one within [the office] has authority to impose corrective action upon him,” Morales said.
Across the federal government, agencies depend on inspectors general to provide them with independent, fact-driven analysis of their performance, conducting audits and investigations to ensure that taxpayers’ money is spent wisely.
Emergency management experts said that oversight, particularly from auditors on the ground as a disaster is unfolding, is crucial to improving the response, especially in ensuring that contracts are properly administered.
“I read a couple of those [retracted reports] and realized they weren’t good enough to help me,” said W. Craig Fugate, FEMA administrator for eight years under President Barack Obama.
“We’re not that good,” Fugate said of how the reports characterized FEMA’s performance. “The whole idea of the IG going out early was to find things we could do to take corrective action then.”
Even with improvements to emergency response in the deeply flawed aftermath of Hurricane Katrina in 2005, FEMA’s performance is still closely watched by local communities and Congress, where disaster response in the Trump administration has become particularly politicized.
Congress agreed only this week to send billions of dollars in long-delayed relief to lingering recovery efforts from multiple natural disasters, including Puerto Rico’s 2017 hurricane.
John Roth, who preceded Kelly as inspector general and promoted him to his second-in-command, called the flawed reports an aberration and described Kelly’s oversight of other FEMA operations as “unstinting.”
“This was not a rogue IG gone bad,” Roth said, calling Kelly as “as square and true blue as you could get.” Roth acknowledged, though, that the mistakes underscore a challenge for inspectors general, who want to maintain credibility with the agencies they oversee while they are issuing critical reports.
After Hurricane Isaac, which killed 41 people in Louisiana and caused more than $3 billion in damage in 2012, auditors found several problems and proposed fixes on the ground before Kelly intervened.
Kelly wanted to “downplay all the negatives” because he believed the agency’s “overall” response was “good,” the review found.
So the report cast the problems as “pressing challenges” for FEMA that included a shortage of experienced staff and a slow response from headquarters to requests from field staff. FEMA met the challenges, the since-retracted report said.
Auditors emphasized the good that arose from problems. Slow processing of funding requests was blamed on a byzantine process.
After Hurricane Sandy pummeled New York and New Jersey in 2012, Kelly told the staff in an email to alter their draft audits. Since “FEMA’s initial response was generally good for both disasters at all locations it would be best if all three reports were similar,” Kelly wrote, referring to both Isaac and Sandy.
The audits became known among the staff as “feel-good” reports.
When tornadoes struck Oklahoma in May and June of 2013, a supervisor who reported to Kelly tamped down the efforts of auditing teams that wanted to be more critical.
“Yes, we will identify some problems, but the point is — how did FEMA overcome them?” the supervisor wrote to the auditing team, copying Kelly.
“These are feel-good reports to tell the public how well FEMA initially responds to disasters,” the supervisor wrote. The reports were not to identify “systemic problems.”
Kelly did not correct or clarify any of the assertions made in the email, the internal review said. “These opportunities allow us to write quick, meaningful reports that actually help FEMA, and FEMA usually loves the reports,” the supervisor wrote.
Months later, when catastrophic flooding devastated wide swaths of Colorado, auditors again tried to include their concerns about FEMA’s shortcomings, but “those efforts were ultimately rebuffed,” investigators found.
The team wrote two spin-off reports following the flooding that found serious problems with the response. Disaster survivors who could not communicate in English or Spanish had problems finding FEMA staff to help them register for disaster aid. And the agency hired only half the workers that it needed for a proper response.
Kelly did not dispute investigators’ conclusions about the retracted reports. He defended his approach, telling them he “thought a report with a single message would be clearer and less likely to get lost or be ignored by FEMA,” the internal review said.
It was the message the inspector general conveyed after the Louisiana flooding in 2016 that caught the attention of House Republicans. As they complained that FEMA was spending too much money on mobile homes that took months to arrive, the team supervisor changed the draft report to add language that discounted their complaints, investigators found.
Instead, the audit characterized FEMA’s response in heroic terms, including “superlative language,” and said members of Congress were misguided in their criticism.
“The IG is telling us ‘everything’s fine,’ when it obviously wasn’t. It just never matched up,” recalled former congressman Jason Chaffetz (R-Utah), who was chairman of the House Oversight and Reform Committee. “I wonder how much more pain was inflicted [on disaster victims] by the fact that people weren’t being held accountable in real time.”
The committee had held two hearings on the flooding after Chaffetz’s staff and two congressmen, including Rep. Garret Graves (R-La.), who represents the flooded area, had flown to Baton Rouge to tour the damage.
An elderly man had died in a FEMA trailer with faulty air conditioning. The committee staff kept waiting for the inspector general’s team to release its audit, hoping that professionals would confirm their observations and press FEMA to do better, recalled Mike Howell, a former staffer who worked on the issue.
But when the report came out, lawmakers were shocked — and livid.
“Our jaws just dropped,” Howell recalled. “They said everything is fine. I said, ‘Did you even look at this issue, that issue and the man’s death? All of the unoccupied FEMA trailers sitting on lots? The people still not in their houses who can’t get a straight answer from FEMA?’ They had no answer and we were enraged.”
In a report issued in October 2018 that criticized FEMA’s disaster response, committee Republicans also took the inspector general to task.
A manager interviewed by the committee called the reports “useless” but said the staff “kept producing them because that was what [Deputy Inspector General] John Kelly wanted.”
The internal review has led to changes: a new practice of rotating auditors to “promote the objectivity and independence,” a reduced “reliance on testimonial evidence” and an increased “reliance on source documentation.”
The office is also training auditors to comply with auditing standards and to maintain independence from the people and agencies they are evaluating.
Costello, the deputy inspector general, said in an email, “We have all learned from this experience and are determined not to repeat these mistakes.”
Alice Crites contributed to this report.