USA: No-bid contracts to rebuild New Orleans after Hurricane Katrina raise questions.

Record ID: 183979

  • Title: USA: No-bid contracts to rebuild New Orleans after Hurricane Katrina raise questions.
  • Date: 14th October 2005
  • Summary: (AM) WASHINGTON, D.C., USA (SEPTEMBER 29, 2005) (REUTERS) (SOUNDBITE) (English) U.S. CONGRESS BENNIE THOMPSON SAYING: "In my state for instance, the governor represented one of the companies when he was a lobbyist here in Washington. What we need is transparency. We don't need to start the reconstruction process with a cloud over our head."
  • Embargoed: 29th October 2005 13:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Disasters / Accidents / Natural catastrophes,Weather
  • Reuters ID: LVA6D35AYCGTVWJHWH7SGL07I9IX
  • Story Text: In the days since Hurricane Katrina slammed into the U.S. Gulf Coast last month, more than $1.5 billion US dollars in contracts have been signed by FEMA to help in the relief, recovery and rebuilding efforts. Of that amount, 80 percent of the contracts were awarded without bidding or with limited competition.
    The contracts, for everything from clearing away trees and homes to purchasing trailers and mobile homes for displaced families, have provoked concerns among auditors and government officials about the potential for abuse, favouritism and even fraud. "We need to give the public the confidence that their taxpaying dollars are being spent in a manner that is absolutely accountable," said Mississippi Congressman Bennie Thompson, the lead Democrat on the House Homeland Security Committee. "In my state for instance, the governor represented one of the companies when he was a lobbyist here in Washington. What we need is transparency. We don't need to start the reconstruction process with a cloud over our head." In the wake of the contracting controversies that the Bush Administration faced in post-war Iraq, questions have also been raised about the political connections of two major contractors - the Shaw Group and Kellogg, Brown & Root, a subsidiary of Halliburton - that have been represented by Joe Allbaugh, President Bush's former campaign manager and a former leader of FEMA. The Inspector General of the Department of Homeland Security told lawmakers Wednesday (September 28) that some of the contracts may have resulted in a lot of taxpayer waste.
    His staff is now examining all post-Katrina contracts signed by FEMA, including a deal worth almost $200 million US dollars that would allow Hurricane Katrina evacuees to be housed in three luxury cruise liners owned by Carnival Cruiselines. Those ships are only housing a fraction of their capacity.
    "When you try to deal with a situation like this - an emergency situation and you aren't geared up to provide services yourself, the odds are that you're gonna overpay for some things, that there will be some who take advantage of the situation, some favouritism, some fraud - almost inevitable," said Thomas Mann, a research fellow at the Brookings Institution. As of last week, the federal government was spending more than $260 million US dollars a day on the recovery effort-- with some contracts signed on nothing more than a handshake.
    WIth the total rebuilding effort estimated to top more than $200 billion US dollars , lawmakers for both parties are now calling for greater scrutiny and accountability for all contracts associated with the recovery from Hurricane Katrina.
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