Revolution #60, September 10, 2006


In the Wake of Katrina:
Corruption and Profiteering

While little, if any, money has been spent to really help the victims of Katrina, there is an astounding amount of profiteering and corruption going on. CorpWatch, a research group which monitors corporations, released a report in August titled “Big, Easy Money: Disaster Profiteering on the American Gulf Coast” which shines a light on the nature of capitalism and the way it operates—the way PROFIT IN COMMAND stands in the way of actually solving the problems of the people. According to CorpWatch, among the key findings in the report are:

“Many of the same ‘disaster profiteers’ and government agencies that mishandled the reconstruction of Afghanistan and Iraq are responsible for the failure of ‘reconstruction’ of the Gulf Coast region. The Army Corps, Bechtel and Halliburton are using the very same ‘contract vehicles’ in the Gulf Coast as they did in Afghanistan and Iraq. These are ‘indefinite delivery, indefinite quantity’ open-ended ‘contingency’ contracts that are being abused by the contractors on the Gulf Coast to squeeze out local companies. These are also ‘cost-plus’ contracts that allow them to collect a profit on everything they spend, which is an incentive to overspend.”

The report reveals how billions of dollars in no-bid FEMA contracts went to Bechtel Corporation, the Shaw Group, CH2M Hill, and Fluor immediately after Katrina hit. And it describes how these companies are all well connected. Riley Bechtel, CEO of Bechtel Corporation, served on President Bush’s Export Council in 2003-2004. A lobbyist for the Shaw Group, Joe Allbaugh, is a former FEMA director and a former campaign manager for President Bush. The president and group chief executive of the International Group at CH2M Hill is Robert Card, who was a Bush appointee as undersecretary of the U.S. Department of Energy until 2004.

The New York Times reported that the single biggest receiver of early Katrina federal contracts was Ashbritt, Inc. of Pompano Beach, Florida, which received over $568 million in contracts for debris removal in Mississippi from Army Corps of Engineers. Ashbritt recently gave $40,000 to the lobbying firm of Barbour, Griffith & Rogers, which had been run by Mississippi Governor and former National GOP Chair Haley Barbour. In 2004, the owners of Ashbritt also contributed over $50,000 to the Republican National Committee.

The CorpWatch report detailed how profits are being made at multiple levels: “AshBritt’s $500 million contract for debris removal amounted to about $23 for every cubic yard of debris removed, according to an NBC News investigation. Ashbritt in turn hired C&B Enterprises, which was paid $9 per cubic yard. That company hired Amlee Transportation, which was paid $8 per cubic yard. Amlee hired Chris Hessler Inc, which received $7 per cubic yard. Hessler, in turn, hired Les Nirdlinger, a debris hauler from New Jersey, who was paid $3 per cubic yard—less than the cost of doing the work.” Another part of the report detailed how FEMA paid three companies nearly $2,500 for each blue tarpaulin used to cover storm-damaged roofs in the worst-hit areas—almost enough to pay for a new roof in many cases. (The tarps were only designed to last 3 months.) A whole line of vultures are making huge profits, just by pushing around some paperwork. All while the masses are suffering and unable to move back into their homes.

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