Crony Contractors
Clean Up On Katrina
By Charlie Cray
07 October, 2005
Providence Journal
FEMA,
the Federal Emergency Management Agency, has given out huge no-bid contracts
for post-hurricane debris removal and reconstruction: contracts guaranteeing
that many of the companies now looting U.S. taxpayers in Iraq will be
cleaning up from the Gulf Coast disaster.
People whose jobs and homes were washed away in the U.S. hurricanes
are finding it difficult to get in on the action.
First, President
George Bush signed a waiver of the wage requirements that apply to federal
contractors. He also junked affirmative-action requirements for contractors.
Minority contractors say they are being shut out -- just as many Iraqi-owned
companies are excluded from working on their own country's reconstruction.
FEMA has made the
contracting process even more opaque by outsourcing procurement and
contracting processes to such companies as Ashbritt and Acquisition
Solutions.
Ashbritt's ties
to Mississippi Gov. Haley Barbour may be one reason that company got
a $500 million contract. Barbour knows how the game works; he helped
Ashbritt get similar work in Florida last year, and he consulted for
companies bidding on contracts in Iraq, along with former FEMA head
Joseph Allbaugh. Allbaugh, whose Baton Rouge offices are in the eye
of the current contracting windfall, is reportedly consulting for Halliburton
and for Shaw, another no-bid FEMA contractor.
Back in Washington,
Sen. Mel Martinez (R.-Fla.) held a "Katrina Reconstruction Summit"
for contractors. The Sept. 26 meeting was co-sponsored by Halliburton.
The Bush administration
should have learned from the botched reconstruction of Iraq that success
requires the involvement in planning of those with the most at stake.
But the administration apparently can't figure out why, when it's got
so many friends working as lobbyists and contractors, it should bother
talking to anyone else.
Of course, the Gulf
Coast is not the Persian Gulf. And a modest effort is afoot to prevent
the kind of contracting abuses witnessed in Iraq. House and Senate appropriations
committees have sent dozens of inspectors to monitor the Katrina contractors.
In addition, a bipartisan group of senators, led by Susan Collins (R.-Maine)
and Joseph Lieberman (D.-Conn.), wants to let the inspector general
-- whose office uncovered the fraud and waste in Iraq -- oversee the
Katrina contracts. Meanwhile, Sen. John Cornyn (R.-Texas) has introduced
a bill that would establish stiff criminal penalties for misuse of relief
and reconstruction funds.
These are good ideas.
But if Congress really wants to prevent the waste, fraud, and other
abuses seen in Iraq, it must exclude companies with a record of contracting
abuses from participating in any contracts.
On the same day
that Republican Senator Martinez was helping Halliburton, 19 members
of the Congressional Progressive Caucus called on President Bush to
suspend Halliburton from any new federal contracts, because of its history
of fraud, bribery, and other abuses, in Iraq and elsewhere.
The caucus's proposal
will probably be dismissed as partisan sniping. But it makes sense:
The federal government suspended Enron from any new federal contracts
after that company's crimes were revealed, even before any of its executives
were indicted or convicted. Similarly, we should protect taxpayers by
applying the same exclusion to Halliburton.
Federal acquisition
regulations require the use of "responsible contractors."
Surely there are few companies with Halliburton's astonishing record
of bribery, fraud, and other abuses. Recall the truckloads of overpriced
gas imported from Kuwait to Iraq; the $100 laundry bags'; the $45 cases
of soda; the deliberate torching of $85,000 trucks in need of repair;
multiple cases of bribery in Iraq and Nigeria; the use of a Cayman Islands
subsidiary to do business in Iran (in violation of U.S. policy); and
so forth. Numerous investigations into Halliburton's contracting practices
and abuses are still under way at the Department of Justice, the Securites
and Exchange Commission, and the Treasury Department.
The Army Corps of
Engineers cannot be trusted to enforce the requirement of "responsible
contractors." It recently demoted Bunnatine Greenhouse, the high-ranking
whistleblower who told Congress that contracts awarded to Halliburton
represented "the most blatant and improper contract abuse I have
witnessed during the course of my professional career." Greenhouse
says she was "removed because I steadfastly resisted and attempted
to alter what can be described as casual and clubby contracting practices."
Another federal-government
office charged with enforcing responsible-contracting standards has
been undermined by Bush's penchant for placing political cronies with
questionable competence in high-level bureaucratic positions. David
Safavian -- whose Office of Procurement Policy at the General Services
Administration oversees an estimated $300 billion worth of annual government
contracts -- was recently arrested for lying to investigators and obstructing
an investigation of Republican lobbyist Jack Abramoff.
With incompetent
or corrupt cronies in charge of enforcing responsible-contracting rules,
it's not surprising that Halliburton got a $16 million contract after
Katrina. But if Congress is serious about preventing the kind of waste,
fraud, and other abuses that we witnessed in Iraq, Congress must exclude
such corporate criminal recidivists as Halliburton from any future contracts.
Charlie Cray, a
contributor to Foreign Policy in Focus, is director of the Center for
Corporate Policy, in Washington, and co-director of HalliburtonWatch.org.
© 2005 Providence Journal