My Three Cents: More Bad News Regarding Katrina and the Gulf Coast

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Waste. Fraud. Billions in no-bid deals. Promises for an open bid process reneged on. Businesses struggling to stay open or reopen.

These are just the latest (meaning released within the last day or so) bits of news that have been released, of course with little to no fanfare, as we approach the one-year "anniversary" of one of the worst things that this reverse-Midas administration has done. And we all know there is a list that is probably too long to measure all of the absolute disastrous, incompetent and dangerous decisions and actions that have been taken since the Supreme Court installed Dear Leader as our ~~dictator~~, I mean, President.

And you can bet that none of this will even get a mention as compared to Bush's once-again staged photo op earlier this week with a lifelong Republican or the upcoming PR blitz that will no doubt exploit more of the people who have suffered because of Bush's dangerous incompetence.

For starters, an article in today's NY Times outlines a new Louisiana State University study with respect to the struggling businesses in New Orleans. According to the article, 60% of the businesses have yet to reopen, and those that have reopened are struggling mightily.

Even before the storm, New Orleans's economic ship was powered not by a couple of whales, but by a school of minnows. The city estimates that 95 percent of the 22,000 businesses here before Hurricane Katrina employed fewer than 100 workers (fewer than 25, in most cases). These included not just shops, but also the artists and manufacturers and wholesalers that supplied them, and the accountants and lawyers and cleaning companies that served them.

About 60 percent of the businesses within the city limits have probably not reopened, according to a recent study by Louisiana State University, which tried to call about 8,500 of the 10,000 businesses registered with the state. At about 5,000 of the businesses, the phone had been disconnected or was not answered after five calls.

The article has some heartwrenching stories about people who cannot afford the insurance, are struggling with sales and cannot count on a steady flow of electricity, water pressure or even safety. It talks about how, even if there is to be a return of business activity, that it will likely not be even close to the types of businesses which have thrived in the City for decades and made New Orleans the cultural mecca that it was.

Long term, more than 40 percent of those businesses are likely to disappear, said Timothy P. Ryan, an economist who is chancellor of the University of New Orleans. As residents return and the city rebuilds, new businesses will eventually open, but Dr. Ryan predicted that they would not be the same kind of businesses as their predecessors. "Many of them may be in Sheetrocking," he said.

So the fallout will be cultural as well as economic. Or as Dr. Ryan put it, if the city loses the quirky shops and the independent restaurants, "we'll lose part of the character and charm and culture of the city."

With respect to waste, fraud, cronyism and abuse in contracts given out by the Government, we have a report released yesterday by Rep. Henry Waxman and the Democrats on the House Committee on Government Reform, titled Waste, Fraud, and Abuse in Hurricane Katrina Contracts. This panel of six Democrats put this report together because (you guessed it), the rubber-stamp Republican Congress had resisted the investigation of such contracts, waste and fraud. The audit consisted of a review of nearly 500 reports which were prepared by the Defense Contract Audit Agency, the Government Accountability Office, numerous agency inspectors general as well as interviews with outside experts and investigative reporters.

In the 22 page report, there are a number of areas cited which will make your stomach turn. They include the following:

Full and Open Competition is the Exception, Not the Rule. As of June 30, 2006, over $10.6 billion has been awarded to private contractors for Gulf Coast recovery and reconstruction. Nearly all of this amount ($10.1 billion) was awarded in 1,237 contracts valued at $500,000 or more. Only 30% of these contracts were awarded with full and open competition.

Contract Mismanagement Is Widespread. Hurricane Katrina contracts have been accompanied by pervasive mismanagement. Mistakes were made in virtually every step of the contracting process: from pre-contract planning through contract award and oversight. Compounding this problem, there were not enough trained contract officials to oversee contract spending in the Gulf Coast.

The Costs to the Taxpayer Are Enormous. This report identifies 19 Katrina contracts collectively worth $8.75 billion that have been plagued by waste, fraud, abuse, or mismanagement. In the case of each of these 19 contracts, reports from the Government Accountability Office, Pentagon auditors, agency inspectors general, or other government investigators have linked the contracts to major problems in administration or performance.

Some of the waste and abuses include excessive charging for miles, double billings, payments for removal of ineligible debris, lack of oversight of subcontractors, overpayments for removal of partial loads, nearly 1,400 cases of reported criminal activity, including fraud and abuse which are currently under investigation and discuss the FEMA trailer fiasco, the Carnival Cruise debacle, temporary housing waste and a number of other areas.

The report also has an Appendix which highlights a number of contracts that are identified as "problem contracts". Much of these 19 contracts were no-bid contracts that totaled nearly $9 Billion, and not surprisingly have strong links or ties to Bu$hCo or other government links:

The Federal Emergency Management Agency has broken its promise to reopen four multimillion-dollar no-bid contracts for Hurricane Katrina work, including three that federal auditors say wasted significant amounts of money.

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R. David Paulison, acting FEMA director, pledged last fall to rebid the contracts, which were awarded to Shaw Group Inc., Bechtel Corp., CH2M Hill Inc., and Fluor Corp.

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Shaw Group's lobbyist, Joe Allbaugh, is a former FEMA director and a friend of President Bush. Riley Bechtel, Bechtel CEO, served on Bush's Export Council from 2003 to 2004, and CH2M Hill Inc. and Fluor Corp. have done extensive work for the government in the past.

And just to give another reminder of what the government and this administration's greedy grubby paws are playing politics with, below are some pictures that were taken by my friend who visited the Ninth Ward a few months ago: