Donovan fights for transparent federal contracts for disaster relief

U.S. Rep. Dan Donovan (R-NY) on Thursday introduced bipartisan legislation to protect taxpayer dollars by ensuring that federal disaster response contractors cannot prohibit contract audits.

The Taking Responsibility by Accounting for Corruption and Excess (TRACE) Act would make sure that those contractors cannot hide their expenses and activities from contract audits and reviews. Under H.R. 4462, the Federal Emergency Management Agency would be prohibited from reimbursing contractors if their contract prohibits audits and reviews.

“It’s mind-boggling that a contract payable with taxpayer dollars could so brazenly stipulate ‘audits not allowed.’ Emergency spending after a disaster is chaotic and sometimes difficult to track, as New Yorkers know all too well after Sandy and 9/11,” said Donovan, whose district includes Staten Island and parts of Brooklyn.

“But whenever public funds are spent, auditors need to account for the money and defend against corruption. Our legislation rightfully prohibits ‘no-audit’ contracts,” said Donovan, who serves as chairman of the House Homeland Security Subcommittee on Emergency Preparedness, Response, and Communications.

Rep. Kyrsten Sinema (D-AZ) joined Donovan in introducing the bill.

Sinema said, “It is outrageous that contractors tasked with helping Americans recover from disasters would instead take generous perks for themselves, shield themselves from government oversight, and leave Arizonans with the bill. The TRACE Act is a common sense fix that brings much needed transparency and accountability to disaster relief contracts, ensuring that funds are spent appropriately to help American families and small businesses recover from natural disasters.”

Donovan’s office cited Puerto Rico’s experience with Montana-based Whitefish Energy after Hurricane Maria as an example of “no-audit” federal contracting.

According to Donovan’s office, Whitefish Energy’s $300 million contract stated, “in no event shall [government entities] have the right to audit or review the cost and profit elements.”

The contract was cancelled, Donovan’s office said, but the firm still is doing work on the island and being paid by the Puerto Rico Electric Power Authority. About half of Puerto Rico still has no electricity more than two months after the hurricane, Donovan’s office said.