From: Marta Russell <ap888 at lafn.org> Subject: crony capitalism hurricane Date: Wed, 28 Sep 2005 19:56:15 -0700
By Jonathan Turley
September 28, 2005
IT IS ONE OF THE secrets of the Beltway: Washington loves disasters. With large-scale disasters, government expands, its friends get wealthy and citizens become as docile as kittens. That is why Congress calls it "disaster relief" - the relief is from the usual restrictions on revenue spending and individual responsibility.
Hurricanes Katrina and Rita are like dinner gongs for Beltway lobbyists, who are lining up for the windfall of tens of billions of dollars. Even before Katrina finished plowing through the South, special interests moved to plow under restrictions on competitive bidding. The principal protection against sweetheart deals for administration friends is the requirement that large federal contracts must be awarded on the basis of competitive bidding. The administration's chief procurement official, David Safavian, pushed a provision in a disaster bill to increase the number of contracts that Congress could award on a noncompetitive basis. Safavian was in a hurry: The week his provision became law, he was indicted for allegedly lying to investigators in a different controversy.
Safavian has resigned, but hundreds of noncompetitive contracts live on in his name. More than 80% of the $1.5 billion in FEMA contracts were awarded without competitive bidding. Even the inspector general of the Homeland Security Department has said he is "very apprehensive" about how the administration is handing out contracts.
In the meantime, members of Congress are demanding billions from the Treasury over and above the billions in charity and the $62.3 billion already appropriated for disaster relief. The Louisiana delegation alone is asking for the equivalent of $50,000 for every person in New Orleans. This reportedly includes $40 billion in projects for the Army Corps of Engineers - 16 times the amount that the Corps says is necessary to protect New Orleans.
The usual players are circling. Halliburton, with ties to Vice President Dick Cheney and other high-level officials in the administration, has already received a contract related to Katrina. Another company, AshBritt, with ties to Mississippi Gov. Haley Barbour, was handed a $568-million deal.
Of course, the key to becoming a disaster millionaire is to strike when the disaster's hot. Take Sunnye Sims, who until three years ago was a meeting-and-events planner living in a $1,025-a-month, two-bedroom apartment in San Diego. Post-9/11, Congress was gushing out domestic security money to well-connected companies, which in turn were subcontracting out the work after taking hefty profits. Sims secured one of those subcontracts to help set up and run assessment centers for airport screeners. She eventually charged the government $24 million, paying herself $5.4 million in compensation, with a $270,000 pension, and now lives in a stunning $1.9-million hilltop mansion. Auditors recently stated that $15 million in expenses for her company are still unsubstantiated.
With noncompetitive contracts and sparse auditing, Katrina will probably spawn hundreds of disaster millionaires like Sims the way that hurricanes spin off tornados.
Of course, not all disaster relief takes the form of money. This month, the administration sent an e-mail to federal prosecutors in New Orleans: Had prosecutors in the Big Easy faced "claims brought by environmental groups seeking to block or otherwise impede the Š work on the levees protecting New Orleans"? It appears that the administration was looking for evidence that the levy breaches and the resulting devastation could be laid at the feet of environmentalists - not the Army Corps of Engineers, FEMA, Bush budget cuts or state and local planners. This week, administration officials suggested that environmental rules governing refineries and oil companies should be relaxed in the name of disaster relief - measures long sought by lobbyists. Perhaps if we scrap the Clean Water Act entirely we could prevent hurricanes altogether.
This follows an opportunistic pattern. After 9/11, the administration blamed not government lapses but civil liberties and civil libertarians for part of the nation's vulnerability. Within two years, it had used 9/11 to limit those liberties, increase the power of the presidency and federal agencies such as the FBI, and even to push through its long-stalled energy legislation.
Of course, all the fun and frenzy associated with disaster relief may be lost on the thousands of Gulf Coast residents trying to find shelter and subsistence. But they should know that folks are doing fine in Washington. In fact, they could not be doing better.
----
JONATHAN TURLEY is a professor at George Washington Law School.