Cronyism
September 19, 2006
A state judge in Baton Rouge has determined that Bourget's, the politically connected custom motorcycle shop that has sold almost $120 million of trailers to FEMA, does not have to pay a fine for selling travel trailers without a license, according to attorneys who have read the judge's unsigned ruling. The Times-Picayune reports that the decision also appears to let Bourget's off the hook for potentially hundreds of thousands of dollars in Louisiana sales tax, the attorneys said.
May 9, 2006
Through a partnership with a smaller, minority-owned company, a multinational firm with ties to the Federal Emergency Management Agency has landed four rebid deals that could be worth $400 million, federal records show. The Times-Picayune reports that the contracts were awarded to PRI/DJI, a joint venture between Del-Jen Industries and the Asian-American-owned PRI Inc., therefore qualifying under the terms of a federal program for disadvantaged businesses. However, Del-Jen is a wholly owned subsidiary of Fluor Corp., which held a mammoth FEMA disaster relief work contract that was up for rebidding when Katrina hit. FEMA then broke that contract up and awarded four $500 million deals for temporary housing work, but later agreed under pressure to rebid them. PRI/DJI’s success has angered competitors who say it’s outrageous that one partnership — especially one linked to the disaster relief giant — would win four of the 36 contracts awarded when no other company appears to have landed two. FEMA insists the process has been aboveboard.
March 30, 2006
The FBI has launched a multifaceted investigation into post-Hurricane Katrina spending in St. Bernard Parish, examining several public contracts. Among them is a $370 million debris pickup deal that parish officials granted without bids five days after the storm and gave again to the same firm later last year despite receiving lower offers, according to interviews with competitors and a parish official who have been questioned by federal agents. The Times-Picayune reports that agents also are scrutinizing parish spending on temporary trailers, employee overtime and a no-bid contract for removal of hazardous waste and sewage, the interviews indicate.
March 23, 2006
Parish's seven-assessor system and recommended consolidating the offices as a long overdue change. The Times-Picayune reports that in a two-page report, the nonprofit watchdog organization said the current system wastes money and is prone to corruption and inefficiency. It also noted that Orleans is the only parish in Louisiana with more than one assessor, despite having similar and in some cases smaller workloads. The seven-assessor system in Orleans Parish has become a hot target in the wake of Katrina. A BGR study issued in January concluded that post-Hurricane Katrina assessments in Orleans Parish were wildly inconsistent from district to district. The report, which examined only unflooded areas, determined that the haphazard pattern of appraisals in the city, already well-documented, had only gotten worse since the storm.
March 20, 2006
Long before the New Orleans suburb of Kenner, La., was shaken by Hurricane Katrina, it was notorious for its fierce political infighting, for name-calling and mudslinging, for charges and countercharges of cronyism and corruption. But accusations about matters like ticket-fixing are one thing, and allegations involving millions of federal dollars for storm recovery are quite another, The New York Times reports. In February, federal prosecutors in New Orleans began bringing witnesses before a grand jury looking into possible fraud in Kenner municipal contracts that were awarded immediately before and after the hurricane. The mayor and the entire City Council have been subpoenaed to testify, although the government has not made clear its target. Growing numbers of subpoenas may soon be issued across Louisiana, where local politics remains a blood sport and corruption has been a bad habit.
February 8, 2006
Levee board consolidation doesn't sound like political dynamite. But as residents of post-Katrina New Orleans wrestle with whether it is worth rebuilding shattered homes and lives, it has become a potent symbol of efforts to tackle a long-standing culture of cronyism that may have worsened the disaster, Reuters reports. Critics say the local bodies in charge of the barriers that failed to stop Hurricane Katrina's devastating floods were rife with patronage, with officials handing out contracts to friends and neglecting their main duty of ensuring the levees were in good condition. Boards even branched into real estate and gambling.
February 2, 2006
Gary Froeba managed to find a business opportunity in those first delirious days after Hurricane Katrina, The Times-Picayune reports. A former operations director for Wyndham hotels, Froeba secured one of almost three dozen contracts that Jefferson Parish President Aaron Broussard awarded during the state emergency declaration that gave him extraordinary authority to hand out public work without adhering to normal competitive bidding procedures. Froeba, who was between jobs at the time, was paid $15,000 for one month of Katrina work before moving to Atlanta to manage an Omni hotel. It was a small piece of the more than $38 million in work that Broussard initiated during the Katrina emergency, according to newly released parish records.
January 18, 2006
Hurricane Katrina left New Orleans in shambles. But the storm also gave the business community something that didn't seem possible just six months ago: a clear shot at a new beginning. USA TODAY reports that business and community leaders plan to use the reconstruction effort to address a host of systemic problems, including racism, inferior schools, high crime and unemployment. They also hope to tackle a problem as old as New Orleans itself: corruption. It's a major deterrent to outside investors, who have long been repulsed by the city's grease-the-palms style.
January 3, 2006
It was Aug. 30 and the winds from Hurricane Katrina had barely died down, but Orleans Levee Board legal consultant George Carmouche already was cashing in on the storm by greatly expanding his previously limited role at the flood protection agency. The Times-Picayune reports that during the next two months, Carmouche, his family and his law firm associates collected fees for everything from office space to boat salvage work to media consulting—a myriad of nonlegal services that currently total about $90,000 and counting, according to Levee Board records.
See The Times-Picayune article
December 23, 2005
A New Orleans citizens' group has gathered more than 47,000 signatures in the latest attempt to unite the region's six levee boards and stamp out any political patronage within them, USA TODAY reports. The Citizens for One Greater New Orleans is pushing Louisiana Gov. Kathleen Blanco to call a special legislative session in January to pass a law creating a single levee board made up of hurricane experts. Currently, the members are political appointees.
December 7, 2005
Rosemary Barbour happens to be married to a nephew of Mississippi's governor, Haley Barbour. The New York Times reports that she also happens to be one of the biggest Mississippi-based winners of federal contracts for Hurricane Katrina recovery efforts. The $6.4 million in contracts received by her company, Alcatec LLC, have raised questions about possible favoritism.
November 21, 2005
When Hurricane Katrina washed away the Orleans Levee District's lakefront headquarters, the agency's Baton Rouge lawyer quickly found it a new home — his office, at a cost of $5,000 a month. Before he even owned the property, George L. Carmouche hammered out a lease with his wife's cousin, Levee Board President James Huey, reports The (Baton Rouge) Advocate. Then district employees stocked the place with furniture, telephones and computers. Now he and Huey have resigned, and the Levee District — which didn't approve the lease until two months after it took effect — wants FEMA to foot the bill for everything.
N.O. levee district BR office raises questions
November 17, 2005
A politician from suburban New Orleans was accused of demanding $100,000 in kickbacks from a subcontractor who won a contract from the Federal Emergency Management Agency to handle Hurricane Katrina debris, the Associated Press reports. Joseph Impastato, 33, a member of the council that oversees St. Tammany Parish, was arrested on Tuesday when he accepted two cashiers checks totaling $85,000 from a subcontractor with Omni Pinnacle, who cooperated with authorities.
http://www.katc.com/Global/story.asp?S=4129865
November 15, 2005
The uncle and father of a Louisiana lawmaker have won three no-bid contracts worth $108 million to provide temporary housing for Hurricane Katrina evacuees even though their motorcycle shop didn't have a license to sell new trailers until after the first deal was signed, the Associated Press reports. No-bid contracts awarded by the Federal Emergency Management Agency for temporary housing in trailers and on cruise ships have come under question by state and federal lawmakers and businesses complaining of favoritism.
Lawmaker's father, uncle got $108 million FEMA trailer contract
November 14, 2005
The Federal Emergency Management Agency has failed to reopen four of its biggest no-bid contracts as it pledged in early October, the Associated Press reports.
FEMA has yet to reopen no-bid contracts
Organizations such as OpenTheGovernment.org petition the government to post Hurricane Katrina relief work contracts online, FCW.com reports.
Petitioners want Katrina contracts online
Complaints, audits and investigations mark the post-Katrina period in Louisiana, according to the Washington Times.
Price gougers spot prey in New Orleans
November 10, 2005
Former FEMA chief Michael Brown was taken off the agency's payroll after Nov. 2, ending his nearly two months of compensation after he resigned under fire, the Associated Press reports. Brown had received contract extensions through mid-November from Homeland Security Secretary Michael Chertoff to help the agency complete its review of the response to Katrina but ended the arrangement early.
Former FEMA chief Brown off payroll
Rep. Tom Davis of Virginia, chairman of the House select panel investigating the response to Hurricane Katrina, threatened Wednesday to issue subpoenas for documents if the White House and other agencies don't provide them by Nov. 18. The committee made its initial request in late September and set an original due date of Oct. 4. According to a Louisiana congressman, key documents are missing — including anything involving Homeland Security Secretary Michael Chertoff, Defense Secretary Donald Rumsfeld and correspondence between federal agencies
House Chairman May Subpoena Katrina Papers
U.S. Attorney Jim Letten is investigating possible corruption in the design, construction, maintenance and oversight of New Orleans' failed levees, the Times-Picayune reports. "We are aware of individuals in public situations who have undisclosed conflicts of interest, and we're extremely concerned about those," the New Orleans native said. "Our interest is primarily to determine if any federal laws have been violated."
Members of a Louisiana Senate committee complained over the small percentage of post-Katrina federal contracts going to Louisiana companies, but praised the Shaw Group for awarding 91 percent of its federal contract dollars to Louisiana subcontractors, the Shreveport Times reports. Only 4 percent of the other $3.5 billion in FEMA funds has filtered to local businesses, the state economic development secretary said.
Few La. firms get FEMA contracts
November 9, 2005
Louisiana Attorney General Charles Foti Jr. has filed a lawsuit in Jefferson Parish against Metairie-based Stuart Electric Inc., alleging that the electrical contractor has been charging rates that are three times the normal amount, Baton Rouge's Advocate reports. A second Metairie contractor, B&B Electrical Services, could be taken to court if the company refuses to make restitution to its customers, Foti said. The attorney general added that Orleans Parish will be "fertile ground" for price-gougers for years and that residents can protect themselves in a number of ways — starting with refusing to pay for services with cash.
Federal inspector general offices have opened 92 investigations into possible misconduct in the aftermath of hurricanes Katrina and Rita, according to a biweekly report from the President's Council on Integrity and Efficiency, GovExec.com reports. There have been 23 arrests and 12 indictments as a result, according to the report.
Oversight of hurricane relief efforts keeps inspectors general busy
An announcement on the Department of Homeland Security's Web site that people have been posing as Federal Emergency Management Agency inspectors describes how to identify a real FEMA inspector.
Hurricane Victims Should Be Aware Of Fake Inspectors
November 8, 2005
USA Today examines the federal government's relationship with Titan Co., a defense contractor that has been awarded more than $550,000 in Katrina-related contracts by the Federal Emergency Management Agency. Critics point to a list of scandals involving Titan: two federal lawsuits that allege it acted negligently in hiring and supervising an employee suspected of abusing Abu Ghraib prisoners; a settlement of charges that it was involved in an international bribery scheme; and a federal inspector general report that concluded that it was overpaid by $229 million for a military contract because it subcontracted "substantially all of the work." A FEMA spokeswoman said Titan's Hurricane Katrina awards "didn't raise any red flags" because the firm has not been barred from receiving government work.
Company under fire won Katrina contracts
Titan's Profile in Center's "Windfalls of War"
Titan's Profile in Center's "Outsourcing the Pentagon"
USA Today also reports that a Government Accountability Office official's testimony before a House panel last week supports the contention that the price of portable classrooms in a $39.5 million no-bid contract awarded to Akima Site Operations by the Army Corps of Engineers in Mississippi was inflated.
Official questions cost of Katrina contract
Akima's Profile on Taxpayers for Common Sense Web site
November 7, 2005
Louisiana Gov. Kathleen Blanco has opened a 17-day legislative special session that will focus on post-Katrina rebuilding, but with a budget deficit expected to exceed $1 billion, state lawmakers will be limited in what they can do with the 77 hurricane-related items on the agenda, the New York Times reports. The governor's proposed legislation requiring that state officials disclose their business dealings with regard to recovery efforts is being criticized, reports New Orleans' Times-Picayune. Some argue that officials and their immediate family members should be barred from contention for federal government rebuilding and cleanup contracts.
Louisiana Lawmakers Begin Special Session on Rebuilding
Blanco plan on disclosing contracts takes heat
The U.S. Government Accountability Office released its report to the House Select Bipartisan Committee to Investigate the Preparation for and Response to Hurricane Katrina.
GAO: Contracting for Response and Recovery Efforts
November 4, 2005
Officials from the Department of Homeland Security, the Federal Emergency Management Agency, and the Army Corps of Engineers in charge of hurricane recovery expenditures told a House committee investigating the government's slow response after Katrina that they are still not sure why some efforts have stalled and local firms are not getting a larger share of the work, and that they must do more research to learn how reconstruction and relief money is being spent, the Washington Post reports.
Katrina Recovery Officials Unsure What's Been Spent
Fluor Corp., a recipient of large no-bid contracts for Hurricane Katrina cleanup, will pay $12.5 million to settle allegations that the company knowingly overbilled the Department of Energy and Defense from 1995 to 1998, the Corporate Crime Reporter reports.
Fluor to Pay $12.5 Million to Settle False Claims Act Lawsuit
Center's profile of Fluor Corp. from "Windfalls of War"
Center's profile of Fluor Corp. from "Outsourcing the Pentagon"
November 3, 2005
During hearings Wednesday before the House panel investigating the federal government's response to Hurricane Katrina, officials from companies such as Carnival Cruise Lines defended their much-assailed government contracts, the Associated Press and Reuters report. Meanwhile, The New York Times reports that some lawmakers are sharply criticizing the Bush administration for failing to submit related documents that include e-mails and other correspondence between various agencies and the White House. Also, former Federal Emergency Management Agency chief Michael Brown drew fire over now-released agency internal e-mail messages that some on the committee said showed him to have appeared overwhelmed in his leadership position and overly preoccupied with his image on television when the storm struck.
Winners of Katrina contracts defend deals
Carnival defends $236 million Katrina contract
Panel Still Waiting for Hurricane Katrina Papers
November 2, 2005
Reps. Bennie G. Thompson, D-Miss., and Bill Pascrell, D-N.J., called on the U.S. Army Corps of Engineers inspector general to investigate several Operation Blue Roof contracts awarded to provide temporary roofs for homes damaged by Hurricane Katrina, BizNewOrleans.com reports. News reports have suggested the government is paying $2,980 to $3,500 for plastic tarps that should cost about $300; as many as 300,000 homes in Louisiana may need roof repairs. "If contractors are excessively overpaid for the standard commercial value of their work, we've got a problem," said Thompson. "The federal government is wasting taxpayer dollars and it needs to start doing a better job of managing federal contracts."
Congressmen want investigation of 'Operation Blue Roof'
November 1, 2005
Baton Rouge's Advocate reports that Louisiana state Reps. Eric LaFleur, D-Ville Platte, and Don Cazayoux, D-New Roads, have urged the governor to present a proposal in the special session that would require all public officials to report any federal money they receive personally from hurricane relief and recovery efforts.
Two legislators want relief funds disclosed
The Department of Homeland Security's Office of the Inspector General released the first President's Council on Integrity and Efficiency Biweekly Interagency Homeland Security Roundtable Report on Hurricane Katrina, which includes statistics on things such as arrests, convictions, indictments and contracts.
Memorandum from the Inspector General
October 31, 2005
The New Orleans Times-Picayune looks at some of the emergency contracts given out by local officials after Hurricane Katrina that have raised ethical concerns. In one such instance, Mayor Phil Capitano of Kenner, La., gave a contract worth more than $690,000 to Innovative Sales of Baton Rouge to provide trailers. The company's owner had donated $2,500 to Capitano's campaign fund last year.
In Katrina's wake, questionable ethics
Speaking to labor union members and Democratic activists at a rally Saturday in Baton Rouge, Louisiana Gov. Kathleen Blanco criticized the Bush administration for allowing hurricane rebuilding contracts to go to out-of-state, politically connected companies using low-wage workers, reports Reuters.
Governor Faults White House over rebuilding
October 28, 2005
Orleans Levee Board President James P. Huey resigned this week amid controversy over Katrina recovery contracts awarded to members of his wife's family and his collection of almost $100,000 in back pay before the storm hit, reports the Los Angeles Times. Huey was also involved in awarding contracts for the design and construction of two levees that failed during the hurricane.
Levee Chief Resigns Amid Nepotism Claims
October 27, 2005
Jim Huey, the head of the Orleans Levee Board, has quit amid questions about no-bid Katrina-related contracts awarded to his relatives and his collecting nearly $100,000 in back pay before the storm, reports the New Orleans Times-Picayune. Huey defended his conduct and the propriety of the contracts after sending his resignation to Gov. Kathleen Blanco.
Orleans Levee Board President Quits
Bourget's of the South, a custom motorcycle business owned by the father and uncle of Louisiana lawmaker Rep. Gary Smith, was given a $2.4 million FEMA contract to provide travel trailers days after Hurricane Katrina, reports the Baton Rouge Advocate. Competing RV suppliers in the area claim the contract was improperly awarded and have filed complaints with the state.
Suppliers criticize FEMA trailer deal with motorcycle dealer
Yahoo! News looks at Florida-based AshBritt's $500 million U.S. Army Corps of Engineers debris removal contract. The company has a successful track record dating back to Hurricane Andrew in 1992, but also has several inside-the-Beltway connections.
Anatomy of a Katrina Cleanup Contract
October 25, 2005
Florida-based debris-removal company AshBritt Inc. hired Mike Parker, a former assistant secretary of the U.S. Army Corps of Engineers, as its lobbyist shortly before winning a $500 million Katrina cleanup contract from the Corps, reports The Hill. Corps officials deny a link between the hiring of Parker and the awarding of the contract.
Firm hired ex-Corps head before winning deal
October 21, 2005
Hurricane Katrina has been a boon for Indiana, with companies based in the state landing about a fourth of the $2.3 billion in federal construction contracts awarded so far, reports the Indianapolis Star. Most of that has gone to the Gulf Stream Coach Inc., which won a $521 million contract to provide temporary housing for hurricane victims. Critics have noted that Gulf Stream founder James F. Shea and his family have contributed more than $20,000 to Republican candidates, including President Bush.
State firms land $586M in Katrina FEMA contracts
October 20, 2005
The Associated Press lists the 10 largest contracts awarded by the government for cleanup and recovery after Hurricane Katrina. The top five each have values of $500 million or more. All 10 were awarded to companies based outside of the affected region.
A look at the 10 largest contracts for Katrina cleanup
The Associated Press follows up on its list of the 10 largest Katrina contracts, finding political connections to be a common theme among the winners.
Katrina's big contracts go to political loop
Orleans Levee Board President Jim Huey's effort to steer two no-bid, post-Hurricane Katrina contracts to relatives has drawn the scrutiny of state officials, reports the New Orleans Times-Picayune. One contract calls for leasing office space from board legal consultant George Carmouche, who is a cousin of Huey's wife. The other gives a company owned by Carmouche's son the task of coordinating the salvage of boats damaged or destroyed by the hurricane at the board's two marinas. Huey claims that the two contracts were awarded under emergency conditions immediately following the storm.
Thanks to a loophole in federal regulations, reports the Washington Post, the list of small businesses receiving Katrina-related contracts includes one of the country's largest debris-removal companies and a billion-dollar firm with a former vice president on its board of directors. The Small Business Administration is facing pressure to change its regulations, which consider a business small if it was small when it won its first government contract.
October 19, 2005
The mob of private companies converging on Congress as it deals with the aftermath of Hurricane Katrina has been a boon for Washington-area lobbyists, reports the Newhouse News Service. Capital One Corp., part of a coalition of banks and investment firms pushing for tax credits to spur construction projects, hired the Cypress Group. The firm employs Patrick Cave, former aide to House Committee on Financial Services member Rep. Richard Baker of Louisiana. To get a piece of the debris removal work being managed by the U.S. Army Corps of Engineers, Southern Recycling has hired former Louisiana Rep. Bob Livingston, who oversaw the corps while he was chairman of the House Appropriations Committee.
Lobbyists Jockey to Win Post-Katrina Money
October 17, 2005
Last Friday, the Associated Press reported that $347 million was being spent with little or no competition, despite a FEMA pledge to reopen such agreements.
FEMA still spending on limited competition contracts
The Shaw Group has been contracted by FEMA to run shelters in San Antonio, according to the local Express-News. The newspaper takes a look at the company's hurricane relief awards.
No-bid shelter contracts to be reopened
The Miami Herald reports that $7,500 or more in daily fees are helping to keep the Alabama Cruise Terminal in Mobile afloat. It is the home port and current location for Carnival Cruise Lines' the one of three Carnival ships housing evacuees under a $236 million contract with FEMA. The Holiday is slated to move to Mississippi, the home state for most of its estimated 1,400 passengers.
Mobile to bill FEMA for lost revenue on evacuee ship
McGraw-Hill Construction takes a look at four $100 million FEMA contracts for evacuee housing awarded to Fluor, Bechtel, Shaw Group and CH2M Hill, and reports that agency officials say FEMA "always intended to renegotiate."
FEMA Explains Early Contracts After Director's Senate Grilling
A Louisiana Daily Advertiser guest editorial criticizes the lack of contract awards to local businesses.
Guest Editorial: Contacts mean contracts for storm cleanup
October 14, 2005
An article by the Center for Responsive Politics analyzes the political ties of some of the companies that have won the bulkiest Hurricane Katrina-related contracts. Among them:
- More than 86 percent of the federal contributions by employees of Florida-based AshBritt Environmental since 1999 have been to Republican candidates. Federal investigators are looking into a $568 million Katrina contract for debris removal awarded to the company by the Army Corps of Engineers.
- Two other companies that got big Katrina contracts, Halliburton subsidiary Kellogg Brown & Root and Shaw Environmental, are represented by lobbyist Joe Allbaugh, a former Bush administration FEMA director who also served as George W. Bush's gubernatorial chief of staff in Texas.
- About 60 percent of Carnival Cruise Lines employees' political contributions since 1999 have landed in Republican pockets. The company got a $236 million contract to house Katrina evacuees aboard three of its ships.
AshBritt Environmental's debris removal contract, now under scrutiny by federal investigators, comes as little surprise if one examines the company's record for getting government business. An investigation by the The Sun-Sentinel newspaper finds that Randal Perkins, a Republican Party contributor who runs the company, aggressively lobbied the office of Florida Gov. Jeb Bush in 2004 seeking state business during the hurricane season. Records show that then-state Transportation Secretary Jose Abreu complained with the governor about AshBritt's lobbying blitz.
Aggressive lobbying by Pompano alarmed adviser to Gov. Bush
October 13, 2005
Need a Katrina contract from FEMA? Hire James Lee Witt, the agency's former head during the Clinton administration. The former federal official-turned-disaster consultant/lobbyist helped Atlanta-based AmeriCold Logistics win contracts worth up to $85 million for work related to Katrina and other 2005 storms, USA Today reports. Witt has also been hired as a consultant by clients that include the state of Louisiana.
Ex-FEMA chief's client won contract
October 12, 2005
Inspectors general from several agencies and officials from the Government Accountability Office told a House subcommittee that they will conduct several audits to prevent fraud and waste in spending on Katrina-related contracts, the Associated Press reports. The announcements came as a number of bills aimed at assuring accountability in the Gulf Coast reconstruction process also are pending in Congress.
Government auditors pledge to investigate Katrina contracts
A day after federal officials vowed that they will give preference to local businesses in the contracting process, USA Today reports that a Department of Homeland Security business liaison tasked with helping local businesses resigned in frustration last week because he couldn't secure catering contracts for Louisiana vendors. DHS officials said the ex-official's proposal "skirted around" ruled of the process.
Louisianans get few post-Katrina contracts
The Department of Defense yesterday posted details of two contracts awarded to Halliburton subsidiary Kellogg Brown & Root Services. The $43 million in competitive contracts include reconstruction, reproofing and debris removal work at Naval Air Station (NAS) Pascagoula, NAS Gulfport, Stennis Space Center and other Navy installations in the Southeast. The Pentagon also awarded a $20 million, no-bid contract to Louisiana-based Science and Engineering Associates to provide technical service support to critical Navy programs.
The Center for Public Integrity profiled Kellogg Brown & Root and its longstanding government ties in the 2004 project "Windfalls of War."
Kellogg Brown & Root background
In response to accusations of cronyism in the awarding of contracts, the federal government announced yesterday the creation of the Department of Commerce Hurricane Contracting Information Center to help U.S. businesses, especially minority- and women-owned companies, be better informed about contracting opportunities. The center includes a Web site where businesses can register with government agencies providing reconstruction and relief work.
Department of Commerce Hurricane Contracting Information Center
October 11, 2005
Having shouldered strong criticism for awarding no-bid contracts to large, well-connected companies, FEMA officials guaranteed yesterday that firms run by women, minorities and the disabled will be given part of the Katrina reconstruction work, The Washington Post reports. FEMA also said that local companies will be given preference in the new competitive contracting process.
FEMA to reserve contracts for disadvantaged companies
While FEMA promises to be more inclusive in its contracting process, stories by WLBT of Jackson, Miss., and U.S. News & World Reports show that local minority-owned businesses are not yet seeing results on the ground.
Key advisors to Louisiana's senators, who drafted federal legislation to fund rebuilding the Gulf Coast, were lobbyists representing energy, transportation and other special interests, an investigation by the Los Angeles Times shows. The Louisiana Katrina Reconstruction Act, introduced last month by Democrat Mary L. Landrieu and Republican David Vitter has a price tag of about $250 billion.
Lobbyists Advise Katrina Relief
Disaster consulting firm Witt Associates is advising the governor of Louisiana on recovery efforts, helping employees of a Mississippi company whose casino was destroyed by the hurricane, and aiding New York client Allstate Corp. in pushing for the creation of a catastrophe fund that will ease the burden on disaster insurers. According to The New York Times, what has kept the consulting shop busy post-Katrina is its owner, James Lee Witt, who was director of FEMA during the Clinton administration. Witt, said to be one of the savviest, and best-connected, professionals in the country on disaster relief matters, says that he is not profiting from the devastation in the Gulf Coast.
FEMA director under Clinton profits from experience
"Follow the money" is the most obvious step in government and corporate accountability. Yet with Katrina contracts the rule may prove difficult to apply. The government databases tracking post-Katrina contracts are incomplete and sporadic, the Associated Press reports. And the law does not require the government to disclose no-bid contracts.
Tracking Katrina money is not easy
October 7, 2005
In today's editions, newspapers analyze the implications of the announcement by the Federal Emergency Management Agency's director that the agency will rebid Katrina-related contracts with a combined worth of $400 million that had been awarded with limited or no competition. Highlights include:
- The contracts up for rebids were awarded to four companies specializing in construction, consulting and engineering: the Shaw Group of Baton Rouge, La., Fluor Corporation of Aliso Viejo, Calif., Bechtel National of San Francisco and CH2M Hill of Denver. They have long-benefited from government contracts, and some employ lobbyists or executives with close ties to the White House and the Republican Party. The New York Times reports that the Shaw Group's lobbyist, Joe M. Allbaugh, is a former FEMA director and a friend of President Bush.
- The actual impact of the decision to rebid contracts could prove limited. FEMA doesn't plan to have competition for other Katrina deals, and the Army Corps of Engineers has not expressed intention to revise its own no-bid contracts.
- The Los Angeles Times says that FEMA Acting Director David Paulison could not answer how many contracts have been awarded with limited or no competition.
Katrina Contracts Will Be Reopened
In Shift, FEMA Will Seek Bids for Gulf Work
FEMA Reopening Its No-Bid Contracts
In Shift, FEMA Will Seek Bids for Gulf Work
FEMA Reopening Its No-Bid Contracts
Gulf Stream Coach, an Indiana company that in recent years made contributions primarily to Republican candidates, was awarded two contracts worth $521 million to provide trailers to displaced Katrina victims, Bloomberg.com reports. The contracts were won under limited competition, meaning that only up to five firms are allowed to compete for them.
Gulf Stream, Donor to Republicans, Wins Hurricane Housing Order
In remarks offered before the FEMA chief's testimony, Sen. Joseph Lieberman said that the agency's no-bid contracts have "created opportunities for fraud, waste and abuse."
Sen. Joseph Lieberman's statement
Department of Homeland Security Inspector General Richard L. Skinner appeared Thursday before two House committees to explain the oversight plan for Katrina expenditures.
Testimony of DHS Inspector General
Top government officials who managed U.S. reconstruction projects in Iraq have been hired by some of the giant construction companies that got deals in Iraq and now are profiting from Katrina, Reuters says. Some have obtained positions with Shaw Group Inc., Bechtel National Inc., and Halliburton Co. subsidiary Kellogg Brown and Root. The Center for Public Integrity did an exhaustive investigation of Iraq and Afghanistan reconstruction contracts in its 2004 project Windfalls of War.
Katrina work goes to officials who led Iraq effort
October 6, 2005
In the midst of increasing concerns about cronyism and abusive spending, FEMA chief R. David Paulison said today that the disaster relief agency will rebid several Katrina-related contracts that were awarded with little or no competition, according to news service reports. More than 80 percent of the $1.5 billion in contracts that have been awarded by the agency so far fall into this category.
FEMA to Hold Re-Bid on Katrina Contracts
Hurricane contracts to be rebid - U.S. official
October 5, 2005
Only 1.5 percent of the $1.6 billion awarded by FEMA so far for reconstruction and relief contracts has gone to minority-owned businesses, The Associated Press reports. To speed up the contracting process, Congress and the Bush Administration waived some rules normally attached to government contracting, including affirmative action regulations.
Minority firms getting few Katrina pacts
Corporate Watch—an organization that investigates "multinationals that profit out of war, fraud, environmental and human rights abuse"—notes that some of the same well-connected firms that got the biggest contracts for the reconstruction of Iraq are now benefiting from Katrina's recovery effort.
Big, Easy Iraqi-Style Contracts Flood New Orleans
Former President Bill Clinton said yesterday in Baton Rouge that FEMA should hire more local companies and workers to rebuild the hurricane-hit areas, the Shreveport Times reports.
Clinton to FEMA: Hire La. companies, workers
In an op-ed for The Seattle Times, Rep. Adam Smith, D-Was., says that Congress should enact a commission, similar to the Truman Commission of World War II, to ensure proper oversight of Katrina-recovery spending.
Federal relief efforts a fiscal disaster
While the Department of Homeland Security announced this week that it will create a procurement control board to oversee Katrina-recovery expenditures, some legislators say the government's initiative is inadequate.
Congress seeks to codify post-Katrina contracting restrictions
October 4, 2005
Despite government claims that it is trying to funnel contracts to small Gulf Coast companies, an investigation by The Washington Post shows that more than 90 percent of the money spent so far has gone to firms outside the states most affected by Hurricane Katrina.
Gulf Firms Losing Cleanup Contracts
As questions on Katrina-related contracts continue to arise, FEMA is also under fire for failing to disclose how it spent taxpayers' money after four hurricanes raked Florida in 2004. Three newspapers sued the agency when it refused to provide the pay-out records for the $5.3 billion that were awarded in after-storm contracts.
Newspapers seek access to FEMA files
October 3, 2005
A U.S. News & World Reports article analyzes the challenges faced by the inspectors general of several federal agencies as they try make sense of Katrina-related contracts.
The Clarion-Ledger of Jackson, Miss., reports that Rep. Bennie Thompson, R-Miss., will call for a federal investigation on the $40 million no-bid contract for the construction of temporary classrooms awarded to a Akima Site Operations, politically connected Alaska Native company. Its parent, NANA Regional Corp., was profiled in the Center for Public Integrity's report "Outsourcing the Pentagon."
Congressman wants probe of no-bid contract
"Outsourcing the Pentagon" profile on NANA Regional Corp.
The Boston Herald reported Friday that Bechtel National was awarded a multimillion-dollar contract to provide temporary housing to hurricane victims in Mississippi:
Dig contractor Bechtel gets big FEMA deal
September 30, 2005
Greece's offer of the free use of ships for evacuee housing was turned down and instead FEMA signed a $236 million contract with Carnival Cruise Lines. Sens. Barack Obama and Tom Coburn are asking Homeland Security Secretary Michael Chertoff why the Greek offer wasn't accepted.
See Chicago Tribune article: Senators ask why U.S. paying when free ships offered
See USA Today article: Carnival CEO defends cruise ship deal for hurricane evacuees
Senators want cruise ship deal explained
Knight Ridder reports that contractors, including the Shaw Group, are charging government as much as 10 times the normal rate to cover roofs with temporary tarps and perform other roofing repairs:
U.S. paying a premium to cover storm-damaged roofs
Rep. Bennie Thompson says that the government is paying more than twice what it should for temporary classrooms in a $39.5 million no-bid contract awarded under special provisions to Akima Site Operations, and Alaska Native company that is a subsidiary of NANA Regional Corp. NANA Regional Corp. and its subsidiary NANA Pacific LLC have been profiled in previous Center for Public Integrity reports.
Mississippi Classroom Contract Questioned
Alaska firm gets Gulf rebuilding job
Alaska firm gets Gulf rebuilding job
The Wall Street Journal has more on how former FEMA officials Joseph Allbaugh and James Lee Witt are using their influence on behalf of clients:
Connections Are Key to Contracts for Katrina Aid (subscription required)
September 29, 2005
Following up on yesterday's congressional hearings, several publications report on the testimony of several agency inspector generals, including that of the Department of Homeland Security's Richard Skinner, who told Congress that he was concerned over the award of several no-bid contracts.
No-Bid Contracts To Get Close Look
Katrina contracts worth billions raise worries about waste
Katrina contracts worth billions raise worries about waste
Homeland Security's chief oversight official also told representatives yesterday that the initial $15 million allotment was insufficient to police Katrina contracts and that more funds would be needed:
Homeland Security to request additional funds for Katrina oversight
Koch's Low Profile Belies Political Power
Winners: SEJ 4th Annual Awards for Reporting on the Environment
Homeland Security's inspector general released a report yesterday indicating that FEMA's former head Michael Brown was warned of agency shortcomings prior to Katrina, contradicting Brown's Tuesday congressional testimony:
FEMA's Brown was warned early of shortages
Government Executive has more on FEMA's unraveling in the last few years:
FEMA's decline: an agency's slow slide from grace
Katrina Galvanizes Lobbyists As Costly Rebuilding Begins (subscription required)
Officials fear contracting abuses in wake of Hurricane Katrina
September 28, 2005
Few Katrina-related contracts were announced today. News coverage focused on the grilling of former Federal Emergency Management chief Michael Brown in yesterday's congressional hearings and the resignation of New Orleans' police chief. News organizations continued to look into existing contracts, especially the awarding of one worth a potential $236 million to Carnival Cruise Lines and a $568 million award to Ashbritt, client of the former firm of Mississippi Gov. Haley Barbour. Government auditors from several agencies have promised Congress that no-bid contracts and purchases on government credit-cards will be investigated.
See Associated Press article: Government auditors to probe Katrina deals
See Washington Post article: $236 Million Cruise Ship Deal Criticized
The Washington Post looks into complaints about the Carnival award:
$236 Million Cruise Ship Deal Criticized
While visiting Miami, Homeland Security Secretary Michael Chertoff indicated that Katrina-related contracts could be canceled or payments withheld if the deals did not measure up. However, he avoided responding to questions regarding former FEMA head Michael Brown's testimony as to whether federal, state or local authorities were to blame for the poor response to Katrina.
In Miami, Chertoff sidesteps questions about response to Katrina
The post-Katrina lobbying blitz among prospective contractors is picking up speed, according to newspaper reports.
See Washington Post article: Lobbies Line Up For Relief Riches
See Wall Street Journal article: Industries Angle for Share in Relief Package (subscription required)
Industries Angle for Share in Relief Package (subscription required)
September 27, 2005
Michael Brown is back at the Federal Emergency Management Agency working as a consultant to the agency he was recently forced out of, according to news reports. Newspaper editorials also criticize the coziness of relationships between those giving and receiving contracts, following up on yesterday's New York Times article that reported that many awards were granted without full competition.
See CNN article: Brown serving as consultant to FEMA
See New York Times article: Cronies at the Till
See USA Today article: No-bid storm contracts prompt warnings
No-bid storm contracts prompt warnings
Several government agencies and divisions have posted downloadable reports on contracts awarded through last Friday, although some of the most expensive, controversial contracts, including the more than $500 million Ashbritt award, are not listed:
Federal Government Procurement System - Excel File
Army Corps of Engineers 
September 26, 2005
Today's must-read Katrina-related story is the New York Times' detailed analysis of contract awards. The Times reports that the Federal Emergency Management Agency has awarded more than $1 billion in contracts with little or no competition. The Homeland Security inspector general raises concerns about how some of the contracts were awarded.
Many Contracts for Storm Work Raise Questions
Over the weekend, the Los Angeles Times reported on the criticism of Carnival Cruise Lines' $236 million deal to house evacuees on ships. The article included Democratic Rep. Henry Waxman's letter to Homeland Security Secretary Michael Chertoff calling for more information on the contract.
Ships' Housing Deal Is Under Scrutiny
Louisiana Goes After Federal Billions
September 23, 2005
The Associated Press reports that government auditors are questioning open-ended contracts to Halliburton and other subsidiaries:
Auditors targeting open-ended Katrina contracts
September 22, 2005
CorpWatch offers an overview of relief contracts, with a focus on fast-track agreements.
Big and Easy Iraqi-Style Contracts Flood New Orleans
September 20, 2005
Other News
The New York Times and the Washington Post both report on the arrest of David Safavian:
Ex-White House Aide Charged in Corruption Case
Bush Official Arrested in Corruption Probe
September 16, 2005
Many of todays newspapers feature articles about the questions regarding overall rebuilding costs:
Economists, Housing Experts Question Proposals (The Washington Post)
G.O.P. Split Over Big Plans for Storm Spending (The New York Times)
Conservatives Balk As Spending Soars In Katrina's Wake (The Wall Street Journal, subscription required)
CounterPunch revisits Service Corporation International, parent of body-removal contractor Kenyon International, which settled a $100 million lawsuit several years ago for dumping bodies:
Corpse-Abusing Company Gets FEMA Contract
AP's Sharon Theimer reports that former Clinton FEMA head James Lee Witt registered to lobby for disaster relief for Allstate Insurance before signing up with Louisiana. Gov. Kathleen Blanco:
Relief adviser also is lobbyist for big insurer
In older news, USA Today explored controversy behind the Shaw and Fluor contract awards:
Contracts for recovery work raise controversy
September 12, 2005
Boh Brothers Construction
In Storm's Ruins, a Rush to Rebuild and Reopen for Business
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