Posted on 12/25/2006 9:44:57 AM PST by Extremely Extreme Extremist
(AP) WASHINGTON -- Already at $1 billion, the tally for Hurricane Katrina waste will balloon next year as investigators shift their attention from fraudulent aid to the lucrative government contracts awarded with little competition.
Several of the contracts were hastily given to politically connected firms in the aftermath of the 2005 storm and were extended without warning months later. Critics say the arrangements promote waste and unfairly hurt small companies.
In January, federal investigators will release the first of several audits examining abuse in more than $12 billion in Katrina contracts. The charges range from political favoritism to limited opportunities for small and minority-owned firms, which initially got only 1.5 percent of the total work.
Currently, half of the government's contracts valued at $500,000 or greater are no-bid.
"Based on their track record, it wouldn't surprise me if we saw another billion more in waste," said Clark Kent Ervin, the Homeland Security Department's inspector general from 2003-2004. "I don't think sufficient progress has been made."
He called it inexcusable that the Bush administration would still have so many no-bid contracts, noting that auditors and Federal Emergency Management Agency director David Paulison himself have said they are prime areas for waste.
"It's a combination of laziness, ineptitude and it may well be nefarious," Ervin said.
FEMA spokesman James McIntyre said the agency was working to fix its mistakes by awarding contracts for future disasters through competitive bidding. Paulison has said he welcomes additional oversight but cautioned against investigations that aren't based on "new evidence and allegations."
"As always, FEMA will work with Congress in all aspects to ensure that we are carrying out the agency's responsibilities," McIntyre said.
Katrina swept ashore on Aug. 29, 2005, in southern Louisiana, Mississippi and Alabama, leveling homes and businesses along the Gulf Coast. Its storm surge breached levees in New Orleans, unleashing a flood that inundated the city. The hurricane left more than 1,300 people dead, hundreds of thousands homeless and tens of billions of dollars worth of damage.
A series of government investigations in the storm's wake faulted the Bush administration for underestimating the threat and failing to prepare by pre-negotiating contracts for basic supplies in what has become the nation's costliest disaster.
Earlier this month, the Government Accountability Office said its initial estimate of $1 billion in disaster aid waste was "likely understated," citing continuing problems in which FEMA doled out tens of millions of dollars in fraudulent housing assistance.
Democrats in Congress called for more accountability. When they take over in January, at least seven committees plan hearings or other oversight — from housing to disaster loans — on how the $88 billion approved for Katrina relief is being spent.
A study earlier this year by Rep. Henry Waxman (news, bio, voting record), D-Calif., estimates that hundreds of millions of dollars were likely wasted on contracting, citing instances of double-billing and thousands of trailers meant as emergency housing sitting empty in Arkansas.
Among the current investigations:
• The propriety of four no-bid contracts together worth $400 million to Shaw Group Inc., Bechtel Group Inc., CH2M Hill Companies Ltd., and Fluor Corp. that were awarded without competition.
The contracts drew immediate criticism because of the companies' extensive political and government ties, prompting a promise last year from Paulison to rebid them. Instead, FEMA rebid only a portion and then extended their contracts once, if not twice — to $3.4 billion total — so the firms could finish their remaining Katrina work.
The four companies, which have denied that connections played a factor, were among six that also won new contracts after open bidding in August. The latest contracts are worth up to $250 million each for future disaster work.
• The propriety of 36 trailer contract awards designated for small and local businesses as part of Paulison's promise to rebid large contracts.
Homeland Security Inspector General Richard Skinner is reviewing whether some small and local businesses were unfairly shut out in favor of winners such as joint venture PRI-DJI. DJI stands for Del-Jen Inc., a subsidiary of Fluor, which has donated more than $930,000 to mostly Republican candidates since 2000.
"It's not what you know, what your expertise is. I don't even believe it's got much to do with price. It's who you know," contends Ken Edmonds, owner of River Parish RV Inc. in Louisiana, a company of 9 people whose application was rejected.
PRI, a minority-owned firm based in San Diego, said it is the "majority partner" with Del-Jen as part of a federal mentoring program offered by the Small Business Administration. The joint venture received four Katrina contracts worth up to $100 million each based on price and "knowledge of work with the federal government," president Frank Loscavio said.
• Whether small and minority-owned businesses were unfairly hurt after the Bush administration initially waived competition requirements.
For many weeks after the storm, minority firms received 1.5 percent of the total work — less than one-third of the 5 percent normally required — because they weren't allowed to bid for many of the emergency contracts.
The National Black Chamber of Commerce called the figure appalling because of the disproportionate number of poor, black people in the stricken Gulf Coast, prompting Sen. Olympia Snowe (news, bio, voting record), R-Maine, and Rep. Donald Manzullo (news, bio, voting record), R-Ill., to request GAO to investigate.
FEMA has since restored many of its competition rules, and the number of contracts given to minority firms is now about 8.8 percent, according to the agency.
Stephen Ellis, vice president of the watchdog group Taxpayers for Common Sense, said he has no doubt that new reports of significant waste have yet to emerge. The challenge now, he said, is to fight the urge to slacken oversight as Katrina recedes in people's minds.
"In business, people are like sharks — they smell money in the water," Ellis said. "Companies will continue to swarm at this type of government spending. The incentive is still there to take advantage of free money."
They demanded action from him, blamed him when things (to their perception) didn't turn out right, and when he did take action & responsibility, they point out the massive abuse of fraud & waste (like the debit cards for example, the things liberals were advocating for and wanted FEMA to provide, then denounced Bush for handing them out when people started abusing them)
Can't win with liberals. Should've just declared NOLA a tax-free zone for 5 years and private enterprise would've fixed that area up in no time.
$200 billion in FedAid and only $1 billion goes to fraud? Does anybody still believe in the Tooth Fairy?
---yep--the upcoming "investigations" into the "Katrina" situation would be fun to watch except that the fact that most of the cheating will have been by Demotraitors will be covered up--
I agree. Doesn't it seem strange with all the fraudulent happenings going someone would be prepared for that and then take action or is that to sane.
Not a bad idea.
Apparently the DB enMedia does! She's their only source for "fakcts".
This won't be the first OR LAST time millions of dollars were wasted because someone played the race card. The taxpayers have no one to blame for this but themselves. They bought the garbage spewed by the liberal MSM that the Bush Administration didn't pump millions of dollars into New Orleans because people in the Bush administration are a bunch of racists.
--yep--wonder how Wal-mart and Home Depot are doing by now there in the NO basin---
Liberals were screaming do more, do more---do it NOW,do it Now. They screamed and they yelled and George fell for it, Rushed in money haphazardly and now they will blame him for rushing and fraud.
A blind man could see this coming from a mile away.
Let me step in here and defend the gov't, who I typically have a lot of criticism for.
Gov't contracting is difficult at best and to keep things fair, the gov't has numerous programs for small and minority businesses. Unfortunately, most of these small businesses aren't qualified and don't have the resources to take on large projects, especially large emegency services contracts.
Large contractors, capable of such large undertaking are actually very few and in the case of an emergency, it is common for the contract to go to the contractor who can convince the gov't that their company is up to the task.
Unfortunately, this looks pretty bad in retrospect and the MSM and any who feel slighted use this to scream they've been screwed by an out of control gov't.
I would instruct federal law enforcement agencies to investigate and prosecute Katrina fraud including attempting to recoup the $$.
That's exactly why I didn't give a penny. The MSM turned me off to giving. To this day they blame President Bush... give me a break. Stupid sheeple.
Just remember one thing all...The democrats are simply going to say you're a bunch of "racists" because you will dare to point out fraud among so many who are black & Democrat! If they own and frame the debate then it will never be anything other than you're a bunch of racists cat calls that the media will dutifully promote.
I don't think the American people will care what the RATS cry about because it's "our" money that was stolen.
absolutely...a fool and his OUR money.
The waste number is going to be much higher than the fraud number.
I'm sure that every disaster has this kind of fraud--and probably quite often on the same scale. The difference is that because it's a GOP administration, the media writes about it, while they will ignore it if a Democrat is in the White House.
Almost the entire federal aid spent in New Orleans would be considered fraud in my book.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.