State Fires a Disaster Relief Subcontractor Founded by Former ReBuild NC Boss

The North Carolina Division of Emergency Management last week fired a subcontractor that had been founded by top officials at ReBuild NC, the now discredited state agency that botched response efforts after hurricanes Matthew and Florence in 2016 and 2018.

The company, PathBuilt, had been hired to work on disaster recovery in western North Carolina.

Will Ray, director of the Division of Emergency Management, fired PathBuilt after Inside Climate News learned, through sources and documents, that a mid-level official in the division who once worked for ReBuild NC steered the subcontract to her former bosses.

The official, Jessica Southwell, the program director for disaster case management, told the division’s main contractor, IEM, in April to hire the subcontractor, PathBuilt. The company was founded by former ReBuild NC Director Laura Hogshead; Ryan Flynn, her ex-chief of staff; and Matt Arlyn, former chief recovery officer, according to Secretary of State filings.

Hogshead left PathBuilt earlier this year, before the company was hired as an IEM subcontractor, Arlyn said. 

Southwell worked as deputy chief recovery officer for ReBuild NC until earlier this year. She then moved to the Division of Emergency Management to oversee case management for survivors of Hurricane Helene, state records show.

Southwell did not respond to multiple requests for comment.

Jody Donaldson, communications chief for the Department of Public Safety (DPS), which oversees the Division of Emergency Management and Rebuild NC, said Monday that PathBuilt’s firing came after ICN raised questions about the subcontract.

“I am writing to follow up on our telephone conversation earlier today,” wrote Ray, on May 15, in an email provided to ICN by Donaldson. “As we discussed, I was surprised to learn that IEM was using PathBuilt, LLC as a subcontractor for the above referenced contract. Please consider this email confirmation of my directive that IEM fire PathBuilt effectively immediately.” 

Joe Stanton, the Division of Emergency Management’s assistant director for recovery, knew that PathBuilt was a subcontractor, Donaldson said, “but was unaware of any personnel connections to any previous [ReBuild NC] employees.”

The state “specifically requested that we work on it,” Flynn, Rebuild NC’s former chief of staff, who currently serves as PathBuilt’s co-founder, told Inside Climate News. “We’re not really sure why they ended the contract. They provided no reason why they terminated our services after requesting them.”

Arlyn incorporated PathBuilt on January 8, 2025, while still employed at the agency, according to North Carolina Secretary of State filings. He left ReBuild NC in the last week of January.

Hogshead left PathBuilt April 15, according to an exit agreement provided by the company to ICN. Her departure occurred before the company received the IEM subcontract, Arlyn said.

“We certainly understand how having Laura involved could be construed as a concern for many parties,” Arlyn said of Hogshead, whose management of ReBuild NC was heavily criticized by lawmakers and hurricane survivors, “but in this instance, she was not involved” in the IEM contract.

The PathBuilt subcontract was for software and technical services, not direct involvement with storm survivors. Flynn said he wrote a proposal for the scope of work—a list of tasks to be completed—which was finalized by Emergency Management officials and IEM.

Two software developers who were under contract with PathBuilt also lost their jobs as a result of the contract cancellation, he said.

Stephanie Tennyson, IEM’s communications director, confirmed that the company was directed to subcontract with PathBuilt. “At the [state’s] direction, we engaged the subcontractor, PathBuilt, to assist.”

PathBuilt had been an IEM subcontractor since mid-April, Donaldson, of DPS, said.

As of May 9, PathBuilt’s total compensation was less than $24,000, which was paid with disaster recovery funds eligible for FEMA reimbursement, Tennyson said.

A spokesperson for Democratic Gov. Josh Stein’s office said the cancellation of the contract “was the right result.”

The State of North Carolina  has been awarded more than $450 million in FEMA individual and public assistance funds for various programs to help people, businesses and local governments affected by Helene. 

IEM is paid by the state based on work accomplished; the state then seeks reimbursement from FEMA. 

“I understand that ReBuild NC has a really tarnished reputation in the state, but there are a lot of individuals who have a lot of experience as well,” Arlyn said. “In many ways, our knowledge of how the system of record works and some of those really difficult lessons learned and challenges gives us an opportunity to make sure that those issues and challenges aren’t repeated. And I was hopeful and optimistic that this was something we could provide.”

IEM is based in Morrisville, North Carolina. The firm works with government agencies and private companies worldwide on disaster preparedness, response, long-term recovery and mitigation. 

IEM has contracted with North Carolina before its current work in the aftermath of Hurricane Helene, which devastated a swath of western North Carolina, including Asheville, in September.

In June 2018, IEM won a $15.5 million bid for project services with the Division of Emergency Management related to Hurricane Matthew recovery. At the time, the division was managing hurricane relief, prior to the legislature creating ReBuild NC in late 2018. ReBuild NC took over the disaster recovery program in early 2019.

IEM sued ReBuild NC in 2021 for nonpayment related to contract work; the case was settled out of court.

Hogshead led ReBuild NC from early 2019 until her abrupt departure on November 20, 2024, two days after a scathing legislative oversight hearing about the agency’s financial mismanagement. 

Flynn worked for Democratic Gov. Roy Cooper as deputy hurricane recovery director from January 2017 to July 2018, according to Flynn’s LinkedIn profile. He then joined ReBuild NC, where he was Hogshead’s chief of staff for nearly three years. 

In addition to hurricane recovery, Flynn and Hogshead administered the HOPE program, which provided rental and utility assistance to residents during the peak of the COVID-19 pandemic. The HOPE program ultimately foundered, as it struggled to distribute money to tenants and landlords.

In 2021, Flynn moved to Oregon to head up a disaster recovery program in response to that state’s wildfires. Under his leadership, wildfire survivors were without permanent homes for three years, according to media reports. Those delays were exacerbated by contractors who built 140 manufactured homes that the state deemed uninhabitable because of construction defects.

Flynn’s LinkedIn profile shows he left his post in Oregon last December, but a ReBuild NC spokesperson confirmed that he had begun working in North Carolina four months earlier, in August. Flynn worked as a ReBuild NC subcontractor providing staff support.

“Good morning, so excited to have Ryan back on the team!” Southwell wrote on August 14. 

“Connecting Ryan and Matt by email to help with integrating into all the things.”

“Thank you! And so excited to be back!” Flynn replied. “I’m getting all the things set up over here, and working now on Salesforce access too. Things should be all set shortly. Thank you and look forward to talking soon!”

Before Helene hit, as a project manager, Flynn helped ReBuild NC plan for future disasters, according to an agency spokesperson. 

Emails show that Flynn’s involvement went beyond those duties, as he became embedded in ReBuild NC’s daily operations, despite his subcontractor status. He routinely conferred with Arlyn and Hogshead about ReBuild’s overspending of $220 million in federal money, and he strategized about how to ask the legislature to cover the shortfall with state funds.

After Helene, Flynn said he worked on developing systems and procedures for disaster case management, both from a technical and a policy perspective in relation to the ongoing response and preparation for long-term recovery.

Even as ReBuild NC was grappling with its own financial and operational crises, emails show Hogshead planned to insert the agency into Helene recovery and capture some of the federal funding. 

“We are planning to be involved as early as [the Division of Emergency Management] will let us be,” Hogshead wrote in an email September 30, three days after the historic storm. 

“We are also helping them plan for the housing recovery from Helene, which will be massive. As we have discussed over the summer, we are planning to use all of our case management experience, Salesforce experience, and construction experience to help Western NC recover. … As long as we do everything compliantly, which we know how to do, our activities should be reimbursed from either FEMA or HUD.”

Flynn said shortly after the storm hit, it wasn’t yet clear that ReBuild NC would not be involved in Helene recovery. “But eventually, that scope changed or went away as ReBuild’s role with Helene became more apparent.”

Many state lawmakers were adamant that ReBuild NC should be excluded from working on Helene recovery, given its poor oversight of recovery efforts after hurricanes Matthew and Florence. ​​“Why in the world with ReBuild’s past history would we give y’all the west?” asked Republican state Sen. Brent Jackson, at a November legislative oversight hearing. 

The PathBuilt arrangement is the second instance of questionable contracting related to Hurricane Helene recovery. Last week, ICN reported that Mississippi-based Horne, LLP, won the prime contract for disaster recovery administered by the N.C. Department of Commerce. 

A former partner at Horne, Jonathan Krebs, is Gov. Stein’s adviser for western North Carolina recovery. The company also has an uneven performance record and recently paid a $1.2 million federal settlement over alleged improper billing in West Virginia.

A legislative oversight committee has scheduled a hearing May 22 as part of its probe into the contract between Horne and the State of North Carolina.

Lisa Sorg is the North Carolina reporter for Inside Climate News and has covered energy, climate, environment, and agriculture for 30 years.