Katrina Reconstruction - Who will profit? - Tilted Forum Project Discussion Community

Elphaba · 09-10-2005, 03:09 PM

The following is a Reuters article that Yahoo.com posted today. The article clearly states that patronage plays a part in both political parties, so I hope that we can discuss this question in a bipartisan manner. One way or the other we will all be paying for the reconstruction of the damage done by Katrina.

http://news.yahoo.com/s/nm/20050910/...NlYwN5bnN0b3J5

Quote:

Firms with Bush ties snag Katrina deals
Sat Sep 10,11:03 AM ET

Companies with ties to the Bush White House and the former head of FEMA are clinching some of the administration's first disaster relief and reconstruction contracts in the aftermath of Hurricane Katrina.

At least two major corporate clients of lobbyist Joe Allbaugh, President George W. Bush's former campaign manager and a former head of the Federal Emergency Management Agency, have already been tapped to start recovery work along the battered Gulf Coast.

One is Shaw Group Inc. and the other is Halliburton Co. subsidiary Kellogg Brown and Root. Vice President Dick Cheney is a former head of Halliburton.

Bechtel National Inc., a unit of San Francisco-based Bechtel Corp., has also been selected by FEMA to provide short-term housing for people displaced by the hurricane. Bush named Bechtel's CEO to his Export Council and put the former CEO of Bechtel Energy in charge of the Overseas Private Investment Corporation.

Experts say it has been common practice in both Republican and Democratic administrations for policy makers to take lobbying jobs once they leave office, and many of the same companies seeking contracts in the wake of Hurricane Katrina have already received billions of dollars for work in Iraq.

Halliburton alone has earned more than $9 billion. Pentagon audits released by Democrats in June showed $1.03 billion in "questioned" costs and $422 million in "unsupported" costs for Halliburton's work in Iraq.

But the web of Bush administration connections is attracting renewed attention from watchdog groups in the post-Katrina reconstruction rush. Congress has already appropriated more than $60 billion in emergency funding as a down payment on recovery efforts projected to cost well over $100 billion.

"The government has got to stop stacking senior positions with people who are repeatedly cashing in on the public trust in order to further private commercial interests," said Danielle Brian, executive director of the Project on Government Oversight.

TWO BUSH APPOINTEES AT HALLIBURTON

Allbaugh formally registered as a lobbyist for Halliburton subsidiary Kellogg Brown and Root in February.

In lobbying disclosure forms filed with the Senate, Allbaugh said his goal was to "educate the congressional and executive branch on defense, disaster relief and homeland security issues affecting Kellogg Brown and Root."

Melissa Norcross, a Halliburton spokeswoman, said Allbaugh has not, since he was hired, "consulted on any specific contracts that the company is considering pursuing, nor has he been tasked by the company with any lobbying responsibilities."

Allbaugh is also a friend of Michael Brown, director of FEMA who was removed as head of Katrina disaster relief and sent back to Washington amid allegations he had padded his resume.

A few months after Allbaugh was hired by Halliburton, the company retained another high-level Bush appointee, Kirk Van Tine.

Van Tine registered as a lobbyist for Halliburton six months after resigning as deputy transportation secretary, a position he held from December 2003 to December 2004.

On Friday, Kellogg Brown & Root received $29.8 million in Pentagon contracts to begin rebuilding Navy bases in Louisiana and Mississippi. Norcross said the work was covered under a contract that the company negotiated before Allbaugh was hired.

Halliburton continues to be a source of income for Cheney, who served as its chief executive officer from 1995 until 2000 when he joined the Republican ticket for the White House. According to tax filings released in April, Cheney's income included $194,852 in deferred pay from the company, which has also won billion-dollar government contracts in Iraq.

Cheney's office said the amount of deferred compensation is fixed and is not affected by Halliburton's current economic performance or earnings.

Allbaugh's other major client, Baton Rouge-based Shaw Group, has updated its Web site to say: "Hurricane Recovery Projects -- Apply Here!"

Shaw said on Thursday it has received a $100 million emergency FEMA contract for housing management and construction. Shaw also clinched a $100 million order on Friday from the U.S. Army Corps of Engineers.

Shaw Group spokesman Chris Sammons said Allbaugh was providing the company with "general consulting on business matters," and would not say whether he played a direct role in any of the Katrina deals. "We don't comment on specific consulting activities," he said.

The information in this article that I find particularly disturbing is Allbaugh's previous hand in FEMA, followed by his clients being award reconstruction contracts from the very same FEMA. The current head of FEMA, Brown, was handpicked by Allbaugh. It also appears that it took less time to assign these contracts, (even though the scope of the damage remains unknown), than it did for FEMA to provide emergency aid.

This doesn't strike me as "patronage as usual" will the oft used excuse that everyone does it. Shouldn't there be some congressional oversight in these decisions?

Rekna · 09-10-2005, 04:39 PM

i was going to jokingly reply halliburton but i guess that is uncessary

irateplatypus · 09-10-2005, 05:05 PM

part of the issue is that only a small handful of contractors are able to take on these massive projects... so the same names get thrown around each time. however, washington lobbyists and appointed officials have always maintained a very incestuous relationship.

the root problem is congress' unquenchable thirst for more bureaucracy coupled with the tradition of the executive branch's ability to appoint those positions. more bureaucracies are created, which means more appointments by the incoming elected executives, which means more links in the chain, which means more congressional funding, which means more power to the lobbyists who secure that funding for their own ends.

i'm not well enough informed to cry foul in this case, but I wouldn't mind seeing some changes made in the overall process.

cj2112 · 09-10-2005, 05:12 PM

Kellog, Brown and Root have extensive experience with these types of projects, they also have the capital to be able to undertake such projects. Would you rather these projects were awarded to contractors incapable of making payroll, or purchasing the materials, or even qualifying for the necessary performance bond for a project such as this?

hunnychile · 09-10-2005, 05:46 PM

3 words: Halliburton, Bush and Cheney.

Elphaba · 09-10-2005, 10:38 PM

Quote:

Originally Posted by cj2112

Kellog, Brown and Root have extensive experience with these types of projects, they also have the capital to be able to undertake such projects. Would you rather these projects were awarded to contractors incapable of making payroll, or purchasing the materials, or even qualifying for the necessary performance bond for a project such as this?

I don't agree that it is an either/or decision as you have stated it. Is it not possible that an open bidding process with a known damage reconstruction RFP might bring forward equally competent providers? Certainly, Bush's executive decision to override comparable pay laws in the area will make it pretty damn easy to meet payroll.

cj2112 · 09-10-2005, 10:51 PM

Ok so you open it to competitive bidding, so now you've got to spell out precisely what work is the bidders responsibility, which with projects such as these it's nigh impossible to know what you'll find. You also will end up with several delays to the project because of negotiating change orders, forced accounts, etc. I can think of three likely companies that would bid on the job, Kellog Brown and Root, Bechtel, and Shaw. These are companies that are of the size necessary and have demonstrated the ability to do this scale of work. Your talking about building an entire cities infrastructure here, not remodeling a bathroom, there simply isn't a large number of construction companies capable of taking on a project of this scale.

Hardknock · 09-10-2005, 10:55 PM

Quote:

Originally Posted by hunnychile

3 words: Halliburton, Bush and Cheney.

Actually, thats four words.

Elphaba · 09-11-2005, 12:33 PM

Quote:

Originally Posted by cj2112

Ok so you open it to competitive bidding, so now you've got to spell out precisely what work is the bidders responsibility, which with projects such as these it's nigh impossible to know what you'll find. You also will end up with several delays to the project because of negotiating change orders, forced accounts, etc. I can think of three likely companies that would bid on the job, Kellog Brown and Root, Bechtel, and Shaw. These are companies that are of the size necessary and have demonstrated the ability to do this scale of work. Your talking about building an entire cities infrastructure here, not remodeling a bathroom, there simply isn't a large number of construction companies capable of taking on a project of this scale.

I find it difficult to believe that in a country the size of ours that there are only three companies capable of a project this size.

pig · 09-11-2005, 12:55 PM

Quote:

Originally Posted by cj2112

Ok so you open it to competitive bidding, so now you've got to spell out precisely what work is the bidders responsibility, which with projects such as these it's nigh impossible to know what you'll find. You also will end up with several delays to the project because of negotiating change orders, forced accounts, etc. I can think of three likely companies that would bid on the job, Kellog Brown and Root, Bechtel, and Shaw. These are companies that are of the size necessary and have demonstrated the ability to do this scale of work. Your talking about building an entire cities infrastructure here, not remodeling a bathroom, there simply isn't a large number of construction companies capable of taking on a project of this scale.

I have a couple of questions about this position:

1. Why does the entire contract, or even very sizable portions of it, have to go to a single company?

2. If you would say that it's more efficient this way, I would have to point to some of the glaring ineffiiencies we have seen in the KBR work in Iraq, and particular in the area of fiscal accountability, that might cast some doubt on the truth of that claim. I think there are going to be very similar problems for a large company handling multiple sites within the city, and smaller companies handling individual sites, areas etc. A company that large has its own communications issues and mismanagement issues within its various departments.

Although I can certainly see how the current situation arises, with industry consultants being hired from the current administrations...I personally think that if you serve high up in the government beurocracy for, say disaster management, you should have a period of say, 3-5 years, where you can not lobby or consult private industry in that area. These types of agreements are fairly common in private industry as non-disclosure and non-competition agreements, and it might stem some of the current use of high government position as stepping stones to high-pay consulting / lobbying jobs for the obvious network connections that are encumbant with the positions.

You might say, but how will these people get jobs after public office? I would say "change fields." I might suggest judging Arabian thorougbred horses, for instance, as there is an obvious connection to disaster managment.

cj2112 · 09-11-2005, 01:38 PM

Quote:

Originally Posted by pigglet

I have a couple of questions about this position:

1. Why does the entire contract, or even very sizable portions of it, have to go to a single company?

The logistics alone make managing hundreds if not thousands of small projects very difficult, similar to coordinating multiple subcontractors doing the same type of work on the construction of a large building (like a large hospital) Although I will concede that this might not be a bad idea with a couple tweaks.

Quote:

2. If you would say that it's more efficient this way, I would have to point to some of the glaring ineffiiencies we have seen in the KBR work in Iraq, and particular in the area of fiscal accountability, that might cast some doubt on the truth of that claim. I think there are going to be very similar problems for a large company handling multiple sites within the city, and smaller companies handling individual sites, areas etc. A company that large has its own communications issues and mismanagement issues within its various departments.

So you would take one recent project, that your only knowledge (correct me if you're actually involved in said project) is what you've been told by a third, fourth or possibly even a 5th party who may or may not have an agenda? I would agree that some of the billing questions and methods tend to cast some ugly light in KBR's direction. However the only way I can see to do some of the work in question in NO, is on a time and materials basis. You could possibly put the labor rate out for competitive bidding, but to actually put the entire project out for bid is just not practical.

pig · 09-11-2005, 02:00 PM

Quote:

Originally Posted by cj2112

The logistics alone make managing hundreds if not thousands of small projects very difficult, similar to coordinating multiple subcontractors doing the same type of work on the construction of a large building (like a large hospital) Although I will concede that this might not be a bad idea with a couple tweaks.

I think there might be a happy middle ground - I think that the extreme case of giving a ton of work out to a very few companies, who conspicuously have serious ties to the current administration is dangerous...and that having every contractor/subcontractor/dude-with-a-bucket running around fixing each little thing independently is a pain in the ass. I'm just not sure that the extremes are the only two choices we have.

Quote:

Originally Posted by cj

So you would take one recent project, that your only knowledge (correct me if you're actually involved in said project) is what you've been told by a third, fourth or possibly even a 5th party who may or may not have an agenda? I would agree that some of the billing questions and methods tend to cast some ugly light in KBR's direction.

Well, I'll be the first to admit I'm hamstrung in my news sources, much like everyone is pretty much all the time. However, as far as I know the accountability issues haven't been answered by the administration. I'll have to go and look for it, but I seem to recall Rumsfeld being put on the spot about this stuff, and despite a lot of handwaving and smoke and mirrors, not being able to actually answer the question. In my opinion, this is essentially the same thing as "conflict of interest" issues in the legal sense, but we don't seem to have the same ethics laws applied here. I don't understand why not. There are tons of $$$ at stake, and that always brings out the worst in people.

Quote:

However the only way I can see to do some of the work in question in NO, is on a time and materials basis. You could possibly put the labor rate out for competitive bidding, but to actually put the entire project out for bid is just not practical.

I can understand having the project in two phases: immediate reaction and medium - long term rebuilding. Immediate reaction is no-bid get-in-there and clean up the initial problems. Long range goes out competitive. When I say immediate, I mean first couple of weeks - while you're finding survirors, setting up temporary shelter and getting the dead bodies out. After that, it's going to take a long time to rebuild, no matter what. It's going to have work stoppages, no matter what. Contractors will be contractors, I don't care what the little insignia says under the tag on their shirt that says "Buddy" or "tiger" or whatever. I think that the claims that it's going to massively more efficient with a huge company aren't necessarily true...they can be just as inefficient as tons of small companies, for somewhat different reasons. Things like TPS reports, for instance.

AVoiceOfReason · 09-12-2005, 10:26 AM

The bottomline in this discussion should be OUR bottomline; which companies are going to make money for their shareholders off this? We can decry the inequity of the system, but to not participate in it to raise some money (which we can then use to try to defeat politicians we don't like, perhaps?) makes no sense to me.

Trouble is, I saw this article after several of the ones involved have already had a run-up past a prudent buying point (I'm an Investors Business Daily type of investor).

Elphaba · 09-13-2005, 06:38 PM

I agree AVOR.

Say what you will about the source of this article, but very strong connections are made to why we keep returning to the same companies whether in Iraq or New Orleans. There are blue links in the original that don't appear here for source checking. I recommend reading the original at:

http://www.tomdispatch.com/

Quote:

Corporations of the Whirlwind
The Reconstruction of New Oraq
By Tom Engelhardt and Nick Turse

"At times it is hard to ignore the comparisons between Baghdad (where I was less than a month ago and have spent more of the last two years) and New Orleans: The anarchy, the looting, some of it purely for survival, some of it purely opportunistic. We watched a flatbed truck drive by, a man on the back with an M-16 looking up on the roofs for snipers, as is common in Iraq. Private security contractors were stationed outside the Royal St. Charles Hotel; when asked if things were getting pretty wild around the area, one of them replied, ‘Nope. It's pretty Green Zone here.'" (David Enders, Surviving New Orleans, Mother Jones on-line)

In the decade before September 11th, 2001, "globalization," a word now largely missing-in-action, was on everyone's lips and we constantly heard about what a small, small world this really was. In the aftermath of Katrina, that global smallness has grown positively claustrophobic and particularly predatory. Iraq and New Orleans now seem to be morphing into a single entity, New Oraq, to be devoured by the same limited set of corporations, let loose and overseen by the same small set of Bush administration officials. In George Bush's new world of globalization, first comes the destruction and only then does one sit down at the planetary table to sup.

In recent weeks, news has been seeping out of Iraq that the "reconstruction" of that country is petering out, because the money is largely gone. According to American officials, reported T. Christian Miller of the Los Angeles Times last week, "The U.S. will halt construction work on some water and power plants in Iraq because it is running out of money for projects." A variety of such reconstruction projects crucial to the everyday lives of Iraqis, the British Guardian informs us, are now "grinding to a halt" as "plans to overhaul the country's infrastructure have been downsized, postponed or abandoned because the $24bn budget approved by Congress has been dwarfed by the scale of the task."

Water and sanitation projects have been particularly hard hit; while staggering sums, once earmarked for reconstruction, are being shunted to private security firms whose hired-guns are assigned to guard the projects that can't be done. With funds growing scarce, various corporations closely connected to the Bush administration, having worked the Iraqi disaster for all it was worth (largely under no-bid, cost-plus contracts), are now looking New Orleans-ward.

Ground Zero Iraq

The American occupation of Iraq began in April 2003 with a prolonged moment of chaos that set the stage for everything to follow. In the first days after Baghdad fell, the occupying army stood by idly (guarding only the Oil Ministry and the intelligence services) while Iraqi looters swept away the institutional, administrative, and cultural underpinnings of the country. The newly installed Coalition Provisional Authority (CPA), soon to be led by American viceroy L. Paul Bremer, followed up by promptly disbanding the only institution that remained half-standing, the Iraqi military. At the same time, a new American administration was set up inside the increasingly well-fortified and isolated Green Zone in Baghdad, staffed largely by Bush cronies. ("Neocon kindergarten" was the way some insiders derisively referred to the young Bush supporters sent out from Washington to staff the lower levels of the CPA for months at a time.)

The CPA then instituted a flat tax, abolished tariffs, swept away laws that might have prevented the foreign ownership of Iraqi companies, allowed the full repatriation of profits abroad, and threatened to reduce state-sponsored food and fuel subsidies. For Iraqis, this was more than just "shock and awe"; it was to be caught in the whirlwind. Call it Year Zero for Iraq or Ground Zero for the new Bush order. Iraq, stripped for action, was ready to be strip-mined -- and it was then that Washington called in its crony corporations to "reconstruct" the land.

Leading the list was Kellogg, Brown & Root (KBR), a subsidiary of the energy firm Halliburton, the mega-corporation Vice President Dick Cheney once presided over. From providing fuel to building bases, doing KP to supplying laundry soap, it supported the newly privatized, stripped-down American military -- and for that it "received more money from the U.S. involvement in Iraq than any other contractor," a sum that has already crested ten billion dollars with no end in sight. The Bechtel Corporation, the San Francisco-based engineering firm, known at home for its staggering cost overruns on Boston's "Big Dig" and its especially close ties to the Republican Party, raked in almost $3 billion in Iraq reconstruction contracts just in the nine months after the fall of Saddam Hu! ssein. Fluor Corporation, an Orange County, California-based firm that inked a joint $1.1 billion deal with a London company in 2004 for "construction services for water distribution and treatment systems in Iraq" was a winner; as was the Shaw Group Inc. which, in early 2004, opened a Baghdad office to support "an approximately $47 million task order in Iraq for facility upgrades, installation of utilities and other infrastructure improvements" and was also awarded a separate $88.7 million construction deal, among other contracts. Another successful bidder in the Iraqi lottery was CH2M Hill, a Colorado-based company that, in a joint venture, took in a $28.5 million reconstruction contract in 2004 and teamed up with other contractors for a $12.7 million electrical power generation deal. These firms were joined at the table by other heavy-hitters and a dizzying array of smaller-fry American subcontractors, from the KBR-connected food service company Event Source to Bechtel's marine survey subcontractor Titan Maritime.

Over two years after the American superpower occupied Iraq and called in its reconstructors, however, the scorecard for "reconstruction" looked remarkably like one for deconstruction. The country was essentially looted and no one was left on guard, not even at the Oil Ministry. Money was spent profligately, and sometimes evidently simply pilfered. L. Paul Bremer himself reputedly had a slush fund of $600 million dollars in cash for which, according to Ed Harriman (who did a superb study of the various reports by U.S. auditors on the ensuing mayhem in the London Review of Books), there was "no paperwork."

When Bremer left Baghdad in June of last year, the CPA had already run through $20 billion dollars in Iraqi funds, mostly generated by oil revenues and earmarked for "the benefit of the Iraqi people" (though only $300 million in U.S. funds). Much of it seems to have gone to American companies for their various reconstruction tasks. U.S. auditors, Harriman reports, "have so far referred more than a hundred contracts, involving billions of dollars paid to American personnel and corporations, for investigation and possible criminal prosecution." It was evidently a field day of malfeasance and -- a particular signature of the Bush administration -- lack of accountability. In the meantime, KBR was massively overcharging the Pentagon for all those privatized tasks the military no longer cared to do, while its officials were living the good life. (Typically, KBR's "tiger team" of accou! ntants, sent out to Kuwait to check on company overcharges, stayed in a five-star hotel to the tune of $1 million in taxpayer money.)

The results we now know well. Electricity and oil production, for instance, still remain at or below the figures for the worst days of Saddam Hussein's embattled regime; and on that cleared land at Ground Zero Iraq, a fierce resistance movement rages, while, from Basra to Mosul, disappointment with and disapproval of the American occupiers only grows.

Now, these same corporations are being loosed on the Southeastern United States on the same no-bid, cost-plus basis. Like Baghdad and much of Iraq, New Orleans and the Mississippi coast have just experienced "shock and awe" -- Katrina's winds and waters, not U.S. cruise missiles. With troops occupying New Orleans, the Bush administration-allied corporations of the whirlwind that feed off chaos and destruction are already moving in. In this sense, the next wave of chaos has, from their point of view, arrived like the proverbial cavalry, just in the nick of time.

Bringing the Post-War Home

As Reuters reported recently, "A slowing of reconstruction work in Iraq has freed up people for Fluor Corp. to begin rebuilding in the U.S. Gulf Coast region after Hurricane Katrina, the big engineering and construction company's chairman and chief executive said on Friday. ‘Our rebuilding work in Iraq is slowing down and this has made some people available to respond to our work in Louisiana,' Fluor chief Alan Boeckmann said in a telephone interview." And Fluor responded in a thoroughly reasonable way -- they put an experienced man on the job, sending their "senior project manager" in Iraq to Louisiana.

In fact, with Congress already making a $62 billion initial down payment on post-Katrina reconstruction work, the Bush administration has just given out its first 6 reconstruction contracts, five of them -- could anyone be surprised -- to Iraqi reconstructors, including Fluor. Small world indeed. The Bush version of crony capitalism should perhaps be termed predatory capitalism, following as it does so closely in the wake of war and natural disaster much as camp followers used to trail armies, ready, in case of victory, to loot the baggage train of the enemy.

But let's pull back for a moment and try to reconstruct, however briefly, at least a modest picture of the massively interconnected world of the reconstructors. A good place to start is with George Bush's pal Joseph Allbaugh, a member of his "so-called iron triangle of trusted Texas cohorts." Allbaugh seems to display in his recent biography just about every linkage that makes New Oraq what it is clearly becoming. He ran the Bush presidential campaign of 2000; and subsequently was installed as the director of FEMA which, in congressional testimony, he characterized as "an overstuffed entitlement program," counseling (as Harold Meyerson of the American Prospect pointed out recently) "states and cities to rely instead on ‘faith-based organizations... like the Salvation Army and the Mennonite Disaster Service."

As at the Coalition Provisional Authority in Baghdad, so at FEMA in Washington, the larder of administrators would soon be stocked with second and third-rate Bush supporters and cronies. Five of FEMA's top eight managers would, according to Spencer S. Hsu of the Washington Post, arrive with "virtually no experience in handling disasters," three of them "with ties to President Bush's 2000 campaign or to the White House advance operation." A "brain drain" of competent administrators followed as -- à la the Pentagon -- FEMA's focus turned to the war on terror, money was drained from natural-disaster work, and the agency was "privatized" with previously crucial activities outsourced to Bush-friendly corporations.

In March 2003, Allbaugh departed FEMA, putting the increasingly starved and down-sized operation in the hands of Michael Brown, an old college buddy whose previous job had been overseeing the International Arabian Horse Association. He then made his faith-based career choice -- no, not to join the Salvation Army or the Mennonite Disaster Service. Instead he opted for what the Bush administration really believed in -- both in Iraq and at home. He became a high-priced consultant/lobbyist, founding in the ensuing years three consulting firms. At Blackwell Fairbanks, LLC, he teamed up with Andrew Lundquist, who led the Dick Cheney task force that produced the administration's National Energy Policy, to "successfully represen[t] clients before the executive and legislative branches of the United States government." Then there was the Allbaugh Company through which he represents Halliburton's KBR as well as military-industrial powerhouse Northrop Grumman. Finally, there was New Bridge Strategies, LLC, where he serves as chairman and director. New Bridge Strategies bills itself as "a unique company that was created specifically with the aim of assisting clients to evaluate and take advantage of business opportunities in the Middle East following the conclusion of the U.S.-led war in Iraq."

Not surprisingly, the firm's vice chairman and director, Ed Rogers (who, during the "2004 campaign cycle... made over 150 live TV news appearances defending and promoting the Bush administration") also serves as vice chairman of the consulting firm Barbour, Griffith & Rogers, Inc. (which he founded with Haley Barbour, now the governor of storm-battered Mississippi); New Bridge's Director, Lanny Griffith, who serves as the CEO of Barbour, Griffith & Rogers, "was national chairman for the Bush/Cheney Entertainment Task Force and coordinated entertainment for the 2001 Bush Inaugural." He was, typically enough, one of the 2004 Bush campaign's "Rangers" -- an elite group of fundraisers, each of whom was responsible for gathering up over $200,000 for the President; while New Bridge Strategies' Advisory Board Member Jamal Daniel is "a Principal with Cres! t Investment Company" -- a firm co-chaired by the president's younger brother Neil.

In answer to critics who claimed he and others were cashing in on their service to Bush and Cheney, Allbaugh responded, "I don't buy the ‘revolving door' argument. This is America. We all have a right to make a living."

As President and CEO at Allbaugh Co. and assumedly as a former head of FEMA, not to say as close friend and mentor to FEMA's (now departed) head and as a Presidential pal, he found himself at the front of the Katrina disaster line, apparently pushing hard (although he denied it) for such companies as -- you guessed it -- KBR and the Shaw Group. By September 7 at the latest, unlike the administration, he was down in Louisiana surveying the damage in the Gulf Coast and the wreckage of the agency he once presided over, while directing his clients to the lucrative world of American disaster, now that the lucrative world of Iraqi disaster had been sucked reasonably dry.

Ground Zero New Orleans

On September 12, 2005, the Wall Street Journal reported, "FEMA and the Army Corps of Engineers have awarded six contracts, most for as much as $100 million, for recovery and rebuilding work." It should be of little surprise that the Shaw Group landed two of these $100 million deals (a FEMA contract to refurbish existing buildings and for other emergency housing tasks as well as an Army Corps of Engineers contract to aid recovery efforts, including pumping water from New Orleans). Others on the list included a who's who of favorite Bush administration contractors from Iraq: Bechtel, Fluor, and CH2M Hill (all signed on to construct temporary housing). In fact, of the companies on the Journal's list, only one (Dewberry, LLC) was not, apparently, involved in Iraq. Halliburton was, of course, not left out in the cold. In the immediate aftermath of the hurricane, its KBR subsidiary reaped "$29.8 million in Pentagon contracts to begin rebuilding Navy bases in Louisiana and Mississippi."

These companies, however, aren't the only ones returning from Iraq, like so many predator drones, to pick up lucrative deals. In the wake of Katrina, Intelsat, a global satellite services provider that, in Iraq, had teamed up with Bechtel on a big USAID reconstruction program, agreed to new post-Katrina contracts with the Defense Department and FEMA. Similarly, just two days after Katrina ravaged the Gulf Coast, the Air National Guard contracted with another satellite services provider, Segovia, which, according to a 2004 company press release, had "emerged as a key telecommunications provider for the Iraqi reconstruction efforts."

Along with their service in Iraq, the Katrina reconstruction companies are tied together in another important way. They tend to be particularly well linked to the Bush administration and the Republican Party. As former Oklahoma Republican Governor Frank Keating said of Allbaugh, "Joe... knows how elected officials and appointed officials like me think and work, and that culture is a fraternity." Halliburton, for instance, picked off "another high-level Bush appointee, Kirk Van Tine, earlier this year to work as a lobbyist. Similarly, in 2001, Bush appointed Robert G. Card, then a senior vice president at CH2M Hill, undersecretary at the U.S. Department of Energy, a position he held until 2004. Today, Card is the p! resident and group chief executive of the International Group at CH2M Hill.

Not surprisingly, during the 2004 election season, CH2M Hill was the top "construction services" contributor to political campaigns, sending nearly 70% of its $476,800 in contributions to Republican candidates. In fact, fourteen people on the CH2M payroll contributed to Bush's 2004 campaign, including the company's chairman and CEO, president, senior vice-president, and president of regional operations, each of whom gave between $1,000 and $2,000. Meanwhile, Bechtel's political action committee contributed 68% of its funds to Republican candidates and causes; while Halliburton, which ranks among the top twenty "Oil and Gas" contributors to political campaigns, handed out 87% of its money to Republicans.

Theoretically, there should be nothing more glorious than the job of healing the war-torn or rebuilding the lives of those devastated by natural disaster, nor anything more relevant to government. Unfortunately, in the case of KBR World, there's nothing glorious about it, except the 5-star hotels for the reconstructors. Prediction is usually a dismal science for any writer. In this case, however, it's already easy to imagine -- as some Democrats in Congress are beginning to do -- the consequences of Bush-style "reconstruction" in the United States.

Those no-bid, cost-plus contracts already being dealt out to the usual suspects tell you what you need to know about future cost-overruns, klepto-reconstruction activities, and the like which are practically guaranteed to deconstruct the bulk of the Gulf Coast and leave New Orleans, the destroyed parts of Mississippi, and the hundreds of thousands of evacuees, not to speak of Congress, gasping for breath amid a landscape largely sucked dry, not of water, but of cash and sustenance.

George Bush's version of capitalism is of a predatory, parasitical kind. It feeds on death, eats money, goes home when the cash stops flowing, and leaves further devastation in its wake. New Orleans, like a rotting corpse, naturally attracts all sorts of flies. Reports have been trickling in that the private security firms -- call them mercenary corporations like Blackwater USA -- which have flooded Iraq with an estimated twenty to twenty-five thousand hired guns (some paid up to $1,000 a day), have been taking the same route back to New Orleans and the Mississippi coast as KBR, Bechtel, and the Shaw Group.

They first arrived in the employ of private corporations and local millionaires who wanted their property protected. A week or so into September, however, Jeremy Scahill and Daniela Crespo of Democracy Now! found the hired-guns of Blackwater cruising the streets of New Orleans, carrying assault weapons, claiming to have been deputized, insisting that they were working for the Homeland Security Department and that they were sleeping in camps the Department had organized. ("'When they told me New Orleans, I said, "What country is that in?,"' said one of the Blackwater men.") Then, on September 13, the Washington Post reported that "Blackwater USA, known for its work supporting military operations in Iraq, said it would provide 164 armed gua! rds to help provide security at FEMA sites in Louisiana."

Today, New Orleans' streets are under military occupation; its property is guarded by hired guns; and the corporations of the whirlwind are pouring into town. All that's missing is the insurgency.

spongy · 09-13-2005, 07:16 PM

I find it interesting that many of the same people who criticized Bush and FEMA for slow response times for the initial stages of Katrina's devastation are now lambasting Bush and FEMA for acting too quickly.

smooth · 09-14-2005, 06:17 AM

the really interesting thing is that these companies aren't going to pay prevailing wages.
compounding that problem, they are ok'ed to hire illegal immigrants for the clean-up
Bush is allowing a two month amnesty and also suspended the normal background/record checks of employees

Now you can sit there and act like I'm just hating on Bush, but I don't know the guy...I'm just writing what I heard on the news--not saying whether it's good or bad

j8ear · 09-14-2005, 05:49 PM

Quote:

Originally Posted by smooth

the really interesting thing is that these companies aren't going to pay prevailing wages.
compounding that problem, they are ok'ed to hire illegal immigrants for the clean-up
Bush is allowing a two month amnesty and also suspended the normal background/record checks of employees

Now you can sit there and act like I'm just hating on Bush, but I don't know the guy...I'm just writing what I heard on the news--not saying whether it's good or bad

What news was that? I have a few followup questions:

1. Was this a specific OK to hire illegals, or is it the generally accepted wink and a nod that nothing will be done to these "employers" just like every other contractor, landscaper, meat packer, and farm in this country?
2. Which background/record checks are being suspended?
3. What is a prevailing wage?

btw, I'll sit here and hate on Bush, and I'll say that I think this is bad

....well except for the background check and prevailing wage part.

-bear

09-10-2005, 05:05 PM	#3 (permalink)
irateplatypus can't help but laugh Location: dar al-harb	part of the issue is that only a small handful of contractors are able to take on these massive projects... so the same names get thrown around each time. however, washington lobbyists and appointed officials have always maintained a very incestuous relationship. the root problem is congress' unquenchable thirst for more bureaucracy coupled with the tradition of the executive branch's ability to appoint those positions. more bureaucracies are created, which means more appointments by the incoming elected executives, which means more links in the chain, which means more congressional funding, which means more power to the lobbyists who secure that funding for their own ends. i'm not well enough informed to cry foul in this case, but I wouldn't mind seeing some changes made in the overall process. __________________ If you will not fight when your victory will be sure and not too costly, you may come to the moment when you will have to fight with all the odds against you and only a precarious chance for survival. There may even be a worse case. You may have to fight when there is no hope of victory, because it is better to perish than to live as slaves. ~ Winston Churchill

09-10-2005, 05:46 PM	#5 (permalink)
hunnychile Alien Anthropologist Location: Between Boredom and Nirvana	3 words: Halliburton, Bush and Cheney. __________________ "I need compassion, understanding and chocolate." - NJB

09-12-2005, 10:26 AM	#13 (permalink)
AVoiceOfReason Psycho Location: Greenwood, Arkansas	The bottomline in this discussion should be OUR bottomline; which companies are going to make money for their shareholders off this? We can decry the inequity of the system, but to not participate in it to raise some money (which we can then use to try to defeat politicians we don't like, perhaps?) makes no sense to me. Trouble is, I saw this article after several of the ones involved have already had a run-up past a prudent buying point (I'm an Investors Business Daily type of investor). __________________ AVOR A Voice Of Reason, not necessarily the ONLY one.

09-13-2005, 07:16 PM	#15 (permalink)
spongy Psycho	I find it interesting that many of the same people who criticized Bush and FEMA for slow response times for the initial stages of Katrina's devastation are now lambasting Bush and FEMA for acting too quickly. __________________ The man in black fled across the desert, and the gunslinger followed. Stephen King

09-14-2005, 06:17 AM	#16 (permalink)
smooth Junkie Location: Right here	the really interesting thing is that these companies aren't going to pay prevailing wages. compounding that problem, they are ok'ed to hire illegal immigrants for the clean-up Bush is allowing a two month amnesty and also suspended the normal background/record checks of employees Now you can sit there and act like I'm just hating on Bush, but I don't know the guy...I'm just writing what I heard on the news--not saying whether it's good or bad __________________ "The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

09-10-2005, 04:39 PM	#2 (permalink)
Rekna Junkie	i was going to jokingly reply halliburton but i guess that is uncessary

09-10-2005, 05:12 PM	#4 (permalink)
cj2112 Unbelievable Location: Grants Pass OR	Kellog, Brown and Root have extensive experience with these types of projects, they also have the capital to be able to undertake such projects. Would you rather these projects were awarded to contractors incapable of making payroll, or purchasing the materials, or even qualifying for the necessary performance bond for a project such as this?

09-10-2005, 10:51 PM	#7 (permalink)
cj2112 Unbelievable Location: Grants Pass OR	Ok so you open it to competitive bidding, so now you've got to spell out precisely what work is the bidders responsibility, which with projects such as these it's nigh impossible to know what you'll find. You also will end up with several delays to the project because of negotiating change orders, forced accounts, etc. I can think of three likely companies that would bid on the job, Kellog Brown and Root, Bechtel, and Shaw. These are companies that are of the size necessary and have demonstrated the ability to do this scale of work. Your talking about building an entire cities infrastructure here, not remodeling a bathroom, there simply isn't a large number of construction companies capable of taking on a project of this scale.