Oil industry benefits most from Katrina aid

[sinkingfeeling]

http://www.newsweek.com/2010/08/25/gulf-redevelopment-money-has-helped-oil-companies.html

The GO Zone program’s largesse included $323 million in tax credits for affordable-housing construction, significant tax deductions for real-estate investors, and billions in tax-free bonds for private development. Louisiana, which had suffered the most damage, received the lion’s share of the bonds: $7.9 billion out of an available $14.9 billion.

For battered and broke New Orleans, the untaxed borrowing was to be the cash infusion needed to attract developers facing sky-high insurance costs and a risky, uncertain market. “This was the money that was supposed to get people rebuilding our housing, our hotels, our stores,” said Jimmie Thorns, a New Orleans real-estate appraiser who, until 2008, headed the city-appointed board responsible for approving all local bond allocations.

But five years after Congress passed the Gulf Opportunity Zone Act of 2005, more of the tax-free benefits have gone to the state’s powerful oil industry than to development in hard-hit areas. New Orleans has so far received a total of $55 million in bonds shared between eight projects—or less than 1 percent of the more than $5.9 billion issued statewide. None of the bonds issued for New Orleans projects went to development in hard-hit and still-struggling areas like the Lower Ninth Ward.

Instead, the federal largesse has been poured into oil companies operating far from New Orleans. Since Congress’s unanimous approval of the GO Zone Act, Louisiana officials have issued nearly $1.7 billion in tax-free bonds—about one third of the total issued—for projects that contribute to the production of oil. Preliminary approval has been secured to tap millions more.

[joeybee12]

1. Nothing surprises me anymore...but this comes close...KNR

[Junkdrawer]

2. Disaster Capitalism at its finest. n/t