PASCAGOULA -- A $3 billion grant program that has so far helped only 2,000 Coast homeowners recover from Hurricane Katrina has not yet satisfied U.S. Sen. Trent Lott, who says it is one of three major issues slowing down the Coast's rebuilding efforts.

Lott again questioned the state's handling of the Homeowner Grant Program while speaking to the Pascagoula Kiwanis Club at the LaFont Inn in Pascagoula.

"No, I won't be comfortable until we get every nickel that people qualify for into their hands," Lott, R-Miss., said. "This has drug on about three months longer than it should have."

The Homeowner Grant Program is part of $5 billion approved by Congress in December. Under the program, homeowners who lived outside the flood plain but were flooded during Katrina can receive grants of up to $150,000.

The Mississippi Development Authority, the state agency responsible for administering the program, has been criticized by state and federal lawmakers as well as Coast homeowners still waiting on grants that they applied for in April.

Adding to the frustration are timelines that were given and then missed by the state.

Gov. Haley Barbour, who oversees MDA, told homeowners in July they could expect to receive their grant checks by Aug. 29, the one-year anniversary of Hurricane Katrina.

One month later, only 75 people had received checks. More than 17,000 people applied for the program.

Thousands of homeowners who have finalized their grants were told at their grant closings they could expect to receive checks within 10 to 14 business days.

For some of those homeowners, that was seven weeks ago.

Still others have heard nothing from the state since they applied for a grant in April.

"I must say, I've reached the point of disbelief," Lott said. "I can't figure out what the problem is. All I can say now is, that money needs to be delivered. Somebody better make this happen, and I've got somebody in mind. And he's my friend. But he's got to make this thing move."

Referring to Barbour, Lott said he asked him in early August about the grant program.

"I was assured at that point that, Yeah, it's been slow and we're getting to it, and hundreds of checks are going to start going out each week," Lott said.

By Sept. 24, the number of checks delivered was still at 75.

One of the biggest reasons for the grant program's sluggishness is the federal government's requirement that the money goes to only those who deserve it, Lott said.

Barbour, who said federal audits in August slowed the distribution process, has been a vocal supporter of the anti-fraud measures.

More than 400 grant applications have been found to be fraudulent.

Lott, however, said thousands of other applicants have suffered.

"They built in all these protections and requirements because 472 people may be fraudulently inclined," Lott said. "So you're punishing the 12,000 people for that misconduct."

The process used by the state to administer the grant program has faced many other problems, Lott said.

"Small Business Administration was used, and their computer system is a disaster," Lott said. "That was one problem. The second problem was that they tried to involve the lending institutions and the insurance industry. You had to have verification that you had insurance and you had to get a sign-off by your lending institution. My argument was, Why? This is not their money.' It was a government requirement being laid on top of what we had done that has caused problems.

"This is a grant, not a loan. This is a grant to help people make up for what they lost. If they don't want insurance, well, this is still America, I think. So that was a problem, and that delayed it for a long time."

Lott again questioned why the state hired attorneys to finalize grants.

Three state lawmakers -- Sen. Tommy Robertson, Rep. Jim Beckett and Rep. Jim Simpson -- could make up to $1.2 million from their contract with the state. The lawmakers get paid regardless of when grant applicants receive checks.

The Mississippi Ethics Commission is investigating an ethics complaint alleging the lawmakers violated the state constitution.

"Shakespeare was right," Lott said. "First kill the lawyers. And I asked the question, Why are you making people close on a grant?' This is not a loan. Ask these people to sign an affidavit, promising to do this, that or the other and give them the money."

Lott hasn't been the only vocal critic of the Homeowner Grant Program's slowness.

Jackson County officials and state lawmakers have wondered if there is any sense of urgency to distribute the grants.

U.S. Rep. Gene Taylor, D-Miss., who urged federal lawmakers to approve the $5 billion last December, said he is "madder than most."

Lott said U.S. Housing and Urban Development, the federal agency that approved the money, is also to blame for the grant program's sluggishness.

"My hope was that we would have it ready to go on the federal level in March and that the checks would get to people in early summer. HUD drug it out and drug it out, so instead of getting the program defined and the money available for the state in March, it didn't actually get through that process until June."

HUD released $3 billion to the state on July 11.

The Homeowner Grant Program has picked up speed since Lott and Taylor began criticizing the program.

As of Oct. 18, 2,000 grants had been distributed and 5,178 grants had been finalized. About 2,500 applicants have been notified that they are eligible to receive grants.

The state has also made numerous changes to the program.

Affidavits are now used to verify insurance records instead of waiting on non-responsive insurance companies to call back. Service centers have reopened and damage estimates are being recalculated.

When asked if he would continue to pressure Barbour to distribute the money as quickly as possible, Lott said, "I am. I talked to him a while ago, but I try not to fuss at him every time about the same subject."

Lott also blamed "arrogant, greedy and mean-spirited" insurance companies for hindering recovery efforts in south Mississippi.

Federal hearings will be used to investigate how insurance companies should be regulated, he said. Several hundred Coast homeowners, including Lott, are suing State Farm Insurance after the company refused to pay for damage.

Strict post-Katrina requirements imposed by local governments are also not helping homeowners rebuild, Lott said.

"I wanted to put a private trailer on my private lot temporarily, and I was told by the city, you got to put it nine feet off the ground,"

Lott said. "And I said, Excuse me?' But that was the rule. So the trailer's not on my lot. The cities and counties are going to have to back off on some of the requirements and the hoops you have to go through to rebuild on your own lot. We've got to find a way to be responsible, but be flexible."

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By NATALIE CHANDLER

Reporter Natalie Chandler can be reached at nchandler@themississippipress.com or (228) 934-1435.

© 2006 The Mississippi Press.