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Day 679: Cleanup Begins At The Top

Almost two years after the flood, the concept of transparency comes up. It’s a small drop of dishsoap in the murky waters that extend all the way up to Washington. The front page of Saturday’s USA Today blares Katrina Fraud Swamps System, citing that most of the cases involve individuals who milked the initial $2000 emergency payout system. Here in New Orleans, WDSU.com publishes the six-figure salaries of FEMA and LRA representatives, the mayor and a neighboring governor. Apparently, anyone that has anything to do with the recovery bureaucracy in New Orleans and Louisiana makes more than Haley Barbour.

Why do the media and government highlight the ones who made mere thousands off this post-disaster cottage industry when there are those who raked in millions and billions? House Homeland Security Committee Chairman Bennie Thompson, D-Miss. agrees with my assessment that there are bigger fish to fry. Let’s start with that government agency which offered the most non-fixed-price contracts, namely FEMA.

Unlike a fixed-price contract, which generally pays contractors a set amount — thus pressuring them to keep costs down because they are responsible for any overruns — cost-plus-fixed-fee contracts allow contractors to bill the government for all of their costs, plus an extra profit based upon a guaranteed amount.

… FEMA was responsible for nearly 94 percent of all of the hurricane-related cost-plus contracts, the Center [for Public Integrity]’s analysis shows. Most of those contracts were for installing and arranging for emergency temporary trailers for evacuees in Louisiana, Mississippi and Alabama. Those contracts were awarded to four large companies: Bechtel National Inc., Fluor Enterprises Inc., Shaw Environmental & Infrastructure Inc. and CH2M Hill Inc. Of the $3.3 billion awarded for those contracts, about $1.97 billion was cost-plus, according to the Center’s analysis of figures from the Federal Procurement Data System.

… In November 2005, a GAO report examining the Katrina and Rita contracts concluded that “the fact that disasters, such as hurricanes, are not entirely predictable must not be an excuse for poor contracting practices.”

Hurricanes are more predictable than terrorist attacks — they will occur along the Gulf and Atlantic Coasts. This is a question of emergency planning and preparedness, which we pay our government to take care of. While it attempts to find its financial backside on post-Katrina spending, this same government ignores that hurricanes are one of the largest threats to national security. Assuming that individuals and agencies will abuse a poorly-run system and hopefully having learned from this boondoogle, what contingency measures does FEMA have in place for the next such disaster? Enter Bennie Thompson once again with the news that the Department of Homeland Security currently has no leadership. We’re in the 2007 hurricane season – so much for planning and preparedness.

It doesn’t stop there. Scout Prime analyzes the timing of the USAToday article against the Department of Justice’s deadline to bring a case against the 8 insurance companies that allegedly overbilled the National Flood Insurance Program, to the tune of $9 billion. Forget FEMA, now we’re running with the big dogs.

I would be shocked if Bush’s DoJ would agree on Monday to enter into this case given evidence is mounting of the administration’s role in allowing the fraud to occur. I suspect Dugas will have to show cause on Wednesday then.

So isn’t it interesting to NOW hear Dugas sounding the alarm in USA Today that he is up to his ass in fraud cases. Of course this administration only cares about making cases in the court of public spin, not a court of law but I do wonder if his accounting of being swamped which went over so well with USA Today, will go over as well with a federal judge? A federal judge waiting for DoJ to represent the people in a matter that may have cost taxpayers as much as $9 billion dollars?

Update: Federal Judge Withdraws Order Seeking Justice Department Involvement In Insurance Case

“The Government wishes to emphasize that its decision not to intervene at this time was not formally a declination of this matter, nor was it a judgment that the relator’s allegations lack merit or should not proceed.”

Meanwhile, back at City Hall, Mayor Wonka asks us to clap our hands and say yeah on August 29th. You know, because “he’s doing all he can to move New Orleans’ recovery ahead,” while “getting worn out” and on the “downslope of [his] political career.”

Nagin said residents must stand up and stand united, because TV images of a divided community hurt efforts to negotiate with state and federal agencies to get things done.

What precisely are these things that New Orleanians are not united about and need done?

Those include an out-of-court resolution to a lawsuit over federal plans to bulldoze four public housing developments and replace them with sites meant for residents with various levels of income …

At all levels, a government entirely out of touch with its people and their needs. And a media that does its bidding.

3 comments… add one
  • Mark Folse July 9, 2007, 11:47 AM

    I haven’t followed the link yet (due to issues of bloglines via Blackberry) but I have to wonder how many of those “fraud” cases involving immediate cash assistance were people filing from the same address. It hardly rises to fraud to accept your own $2000 when you don’t even know where the rest of your family is.

  • Maitri July 9, 2007, 11:53 AM

    The other thing is multiple individuals/families living at one residence who are unrelated to one another. Still, this does nothing for people who stayed here during the storm and flood who haven’t yet received their $2000 because they couldn’t prove residency. Doesn’t the government/census have records of these things for exigent circumstances?

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