DAVID GREENE, HOST:
The nation's disaster relief agency, FEMA, is having a public relations problem in Northern California. It has spent billions in recent years providing relief to survivors of wildfires caused by the bankrupt utility PG&E. But now FEMA is being criticized for trying to recoup that money from the very people it is supposed to be helping. Lily Jamali of member station KQED has more from Paradise, Calif.
(SOUNDBITE OF MACHINE ENGINE RUNNING)
LILY JAMALI, BYLINE: Here in Paradise, PG&E has spent the 14 months since the Camp fire rebuilding the power and gas lines the fire destroyed, burying some of its system underground to make them less of a fire hazard. The 2018 fire killed 85 people here and leveled 11,000 homes including Patti Savage's (ph).
She walks me to what's now an empty plot, once nestled among tall pine trees that made it feel like home for 12 years.
PATTI SAVAGE: It's unbelievable. You know, it - the property looks so much different vacant.
JAMALI: FEMA helped many survivors after the Camp fire, but Savage wasn't one of them because she had insurance. She does qualify for some of the $13.5 billion PG&E offered up to settle claims. Now FEMA could upend that plan with a $4 billion claim of its own.
SAVAGE: I think that they should have their own settlement with PG&E and not take it from us.
JAMALI: And it turns out FEMA agrees.
DAVID PASSEY: We have no interest in competing with survivors for settlement funds.
JAMALI: FEMA spokesman David Passey says fire survivors are entitled to all the money PG&E has promised them in its plan to exit bankruptcy. The problem, Passey says, is that attorneys who brokered that colossal deal allowed PG&E to lump FEMA in with survivors even though FEMA's been left out of the talks.
PASSEY: We haven't been involved in the negotiations despite multiple efforts to be included and to ensure that legitimate government claims to hold PG&E responsible could be accounted for without making it seem like somehow we're fighting survivors for funding.
JAMALI: Right after these fires, FEMA cut checks to people desperately seeking housing and to cities and towns needing help paying firefighting costs. That money came from taxpayers, and FEMA says they're entitled to their money back. That's because state fire investigators have found PG&E equipment sparked many of these fires in the first place. The congressman who represents this district, Doug LaMalfa, disputes FEMA's reasoning.
DOUG LAMALFA: They're saying that that's not their first thing they want to do. But it kind of sounds like the last resort, which is still unacceptable because these survivors have already been through more than enough without this hanging over their head.
JAMALI: PG&E says it's been actively talking to stakeholders, even as FEMA maintains it's been excluded. Melissa Subbotin is a spokesperson for the utility.
MELISSA SUBBOTIN: FEMA does not have a valid legal claim against the company. The bankruptcy court has approved our settlement agreements resolving all major wildfire claims.
JAMALI: The judge overseeing PG&E's bankruptcy has greenlit its multibillion-dollar deal with survivors. He's expected to consider FEMA's claims at a hearing next month.
For NPR News, I'm Lily Jamali in Paradise.
(SOUNDBITE OF DYLAN SITTS' "NOTES") Transcript provided by NPR, Copyright NPR.