The Disaster Profiteers

[paineinthearse]

by email from

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CORPORATE POWER
The Disaster Profiteers

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First came the phone calls -- 6,300 by last Wednesday to the U.S. Army Corps of Engineers alone, from contractors offering "'cure-all' technologies and services" for the Gulf Coast reconstruction effort. Then came the cash: more than $500 million a day is being spent already, much of it on Iraq-style no-bid contracts, since normal federal contracting rules were "largely suspended" in the days following Katrina's landfall. The White House mindset, according to Time magazine: "Spend freely, and worry about the tab and the consequences later. 'Nothing can salve the wounds like money,'" one official said. It's the same mindset that has governed the reconstruction efforts in Iraq, which have lined the pockets of politically connected corporate interests while leaving Iraqis with an infrastructure less capable than it was under Saddam Hussein. "This is very painful," says Danielle Brian, director of the Project on Government Oversight, a nonprofit government spending watchdog group. "You are likely to see the equivalent of war profiteering -- disaster profiteering."

IN FEMA WE TRUST: FEMA proved itself largely incapable of carrying out its primary responsibility of emergency preparedness but was rewarded with a $50 billion windfall and vast new responsibilities. Congress last week passed a $51.8 billion Katrina aid package after just 40 minutes of debate, during which members were barred from proposing amendments. All but $2 billion was placed under the control of Mike Brown and his associates at FEMA. "As the title says, FEMA is an emergency management agency, not a reconstruction agency," Josh Marshall points out. "It doesn't have the organizational structure or competence to run the economy of a significant chunk of the United States for the foreseeable future, which is what this amounts to." But the funding would be questionable even if FEMA did have the organizational structure -- just last year, the agency was caught "giving out FEMA money as political pork with an eye to the 2004 elections."

THE KARL ROVE OF CONTRACTING: Joe Allbaugh made it to Louisiana before most FEMA officials. By August 31, Allbaugh -- the manager of the 2000 Bush-Cheney campaign and the Bush administration's first FEMA director -- was on the ground "helping coordinate the private-sector response to the storm." You'd expect that reaction time from "the Karl Rove of contracting," the nickname given to Allbaugh by Charlie Cray of Halliburtonwatch.org. Already at least two of Allbaugh's major corporate clients have "been tapped to start recovery work along the battered Gulf Coast." One is Halliburton subsidiary Kellogg Brown and Root. The other is Shaw Group Inc., whose website now reads, enthusiastically, "Hurricane Recovery Projects -- Apply Here! Subcontractors/Suppliers & SBA Apply Here! Personnel Applicants Apply Here!"

BEYOND CONTRACTS -- LOW WAGES, BIG PAYOUTS: Big contracts aren't the only post-Katrina kickbacks being served up in Washington. For years congressional conservatives "doggedly tried -- and repeatedly failed -- to repeal a Depression-era law (the Davis-Bacon Act) that requires federal contractors to pay workers the prevailing wages in their communities." Following Hurricane Katrina, it took President Bush all of eleven days to banish the requirement, "at least temporarily, with the stroke of his pen." Congress also passed a major White House-backed change to federal contracting regulations. The new rules allow holders of government-issued credit cards "to spend up to $250,000 on Katrina-related contracts and purchases, without requiring them to seek competitive bids. ... Before Thursday, only purchases of up to $2,500 in normal circumstances or $15,000 in emergencies were exempt." Rep. Henry Waxman (D-CA) calls the rule change an "unwise provision that could lead to contract abuse and extensive waste, fraud, and abuse," pointing out that even honest federal employees "are not trained to make purchases of this magnitude to ensure that taxpayers get the best value for their money." Even President Bush's cultural conservative base was rewarded. FEMA designated Pat Robertson's group Operation Blessing "as the No. 2 charity for donations in the wake of Hurricane Katrina," despite the fact that the group "gave more than half of its yearly allocation of cash donations -- $885,000 -- to the Christian Broadcasting Network," according to its most recent tax filings.

more (with source links) at http://www.americanprogressaction.org/site/apps/nl/newsletter2.asp?c=klLWJcP7H&b=917053#3 (good stuff about Nancy Pelosi!)

[jean]

1. Masters of Disasters

[paineinthearse]

2. .

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