Profiles in Profiteering
by Elena Everett
Gulf Coast Reconstruction Watch
Even before Katrina made its Gulf Coast landfall, the usual suspects stepped up to claim their share of federal contracts. In return for political connections and years of generous campaign contributions, the disaster profiteers have raked in millions, secured by savvy former government officials-turned-lobbyists who are all too familiar with the players and the game.
Meanwhile these contracts, which went primarily to companies outside the Gulf, have been fraught with waste, overcharges and fraud.
$580 million for debris removal in Mississippi
This Pompano Beach, Fla. firm spent years cultivating its relationship with the federal government, contributing tens of thousands of dollars to the Republican Party and, more recently, hiring a powerful firm to lobby the Army Corps of Engineers on “disaster mitigation.”
In 2005 AshBritt hired the lobbying firm of Barbour Griffith & Rogers, which was founded by Republican Mississippi Gov. Haley Barbour, and paid the firm $40,000 to lobby the Corps and Congress. AshBritt is currently being sued by several companies across the Mississippi coast.
Also on the AshBritt lobbyist payroll: Joe Allbaugh, the Bush administration’s former Federal Emergency Management Agency director.
$1.4 billion for temporary housing
The Fluor Corp. is a multinational industrial construction company with clients such as Exxon Mobil, Chevron and several gas and oil consortiums from Saudi Arabia and Kazakhstan.
It has several former government officials on its payroll including Kenneth J. Oscar, former acting administrator for the Office of Federal Procurement Policy in the White House Office of Management and Budget under the Clinton administration.
Fluor’s political action committee has contributed nearly $1 million toward political campaigns since 2000, primarily for Republican candidates.
Landstar Express America
$286 million for trucking and busing services
Landstar was the company responsible for the tardy evacuation from the New Orleans Superdome and Morial Convention Center, which resulted in the deaths of at least 34 people – including several babies who died of dehydration.
Company chairman Jeffrey Crowe recently headed the US Chamber of Commerce, whose political action committee regularly contributes to the GOP. The US Department of Transportation approved payments on the Landstar contract without issuing written orders or otherwise recording them in ways to allow adequate oversight.
Kellogg, Brown & Root
$168.9 million to fix pumps and repair military bases
The Army Corps of Engineers awarded millions to this Halliburton subsidiary. Halliburton – for whom Vice President Dick Cheney served as chief executive from 1995 to 2000 – has come under investigation by the Securities and Exchange Commission for its accounting practices and was charged $2 million in 2002 for overbilling on another KBR government contract.
The KBR PAC has contributed nearly $200,000 to Republican candidates and causes since 2000.
Among its lobbyists: Allbaugh, the Bush administration’s former FEMA director.
Carnival Cruise Lines
$236 million for “pass through expenses” and temporary housing onboard three cruise ships
The Miami-based company provided cruise-ship cabins that went primarily to New Orleans police officers and their families at a cost to taxpayers of $240,000 per family for six months of housing.
Carnival is incorporated in Panama to avoid US taxes, but it has contributed $347,500 to both the Republican and Democratic parties since 2000.
The company’s advertising director, Ric Cooper, began lobbying for the contract even before Katrina hit. Soon after the storm, Florida Gov. Jeb Bush sent an encouraging e-mail regarding Carnival’s bid to then-FEMA Director Michael Brown. Cooper has donated $115,000 to Republican Party committees since 2002 to support Jeb and George W. Bush’s reelection campaigns.
The Shaw Group
$950 million for temporary housing, blue-tarp roofing and delivery services
This politically connected company was immediately awarded $100 million after Katrina, but when controversy erupted FEMA announced it would terminate the contract and re-bid the remainder of the work. Several months later, however, Shaw’s existing contract was increased to $500 million and in August 2006 it was again increased – to $950 million.
Shaw’s executive vice president, Edward Badolato, served as deputy assistant secretary for security affairs at the Department of Energy as well as senior consultant to the President’s Commission on Critical Infrastructure Protection.
On the company’s lobbyist payroll: former FEMA director Allbaugh.
$575 million for temporary housing
A recent Defense Contract Agency audit found that Bechtel was double-billing for trailer maintenance at an overcharge of $48 million over the life of the contract. The company is currently the subject of a review by the state of Massachusetts over its handling of the Boston urban construction project known as “The Big Dig,” which is currently about $1.6 billion over budget.
On the Bechtel payroll is J. Bennett Johnston, US Senator from Louisiana from 1972 to 1997 and author of the Energy Policy Act of 1992.
The PAC for Bechtel and its related companies has contributed more than $1.34 million to Republican and Democratic candidates since 2000.
CH2M Hill Inc.
up to $530 million for debris removal, support for emergency operations, setting up temporary classrooms, portable buildings and temporary housing
This Colorado-based company offers engineering, construction and operations services with a special focus on hazardous-waste cleanup and waste-treatment design. CH2M Hill has also been awarded contracts in the West Bank and Palestinian territories, Iraq, Honduras, Russia and Kuwait.
There are six lobbying firms working on behalf of the corporation. Since 2000, CH2M Hill and its affiliate PAC have contributed $926,704 to Republican and Democrat campaigns and party committees.
Unless otherwise noted, information on companies’ political donations and history comes from Taxpayers for Common Sense’s “Profiles of Selected Katrina Contractors” and the Center for Public Integrity.