Progress Report: The Disaster Profiteers

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Mon, 12 Sep 2005 08:02:27 -0700

Progress Report: The Disaster Profiteers

" American Progress Action Fund "

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AMERICAN PROGRESS ACTION FUND

The Progress Report

by Judd Legum, Faiz Shakir, Nico Pitney, and Christy Harvey

 

www.progressreport.org

 

 

 

9/12/2005

 

For news and updates throughout the day, check out our new blog at

ThinkProgress.org.

 

CORPORATE POWER

The Disaster Profiteers

 

First came the phone calls -- 6,300 by last Wednesday to the U.S. Army

Corps of Engineers alone, from contractors offering " 'cure-all'

technologies and services " for the Gulf Coast reconstruction effort.

Then came the cash: more than $500 million a day is being spent

already, much of it on Iraq-style no-bid contracts, since normal

federal contracting rules were " largely suspended " in the days

following Katrina's landfall. The White House mindset, according to

Time magazine: " Spend freely, and worry about the tab and the

consequences later. 'Nothing can salve the wounds like money,' " one

official said. It's the same mindset that has governed the

reconstruction efforts in Iraq, which have lined the pockets of

politically connected corporate interests while leaving Iraqis with an

infrastructure less capable than it was under Saddam Hussein. " This is

very painful, " says Danielle Brian, director of the Project on

Government Oversight, a nonprofit government spending watchdog group.

" You are likely to see the equivalent of war profiteering -- disaster

profiteering. "

 

IN FEMA WE TRUST: FEMA proved itself largely incapable of carrying out

its primary responsibility of emergency preparedness but was rewarded

with a $50 billion windfall and vast new responsibilities. Congress

last week passed a $51.8 billion Katrina aid package after just 40

minutes of debate, during which members were barred from proposing

amendments. All but $2 billion was placed under the control of Mike

Brown and his associates at FEMA. " As the title says, FEMA is an

emergency management agency, not a reconstruction agency, " Josh

Marshall points out. " It doesn't have the organizational structure or

competence to run the economy of a significant chunk of the United

States for the foreseeable future, which is what this amounts to. " But

the funding would be questionable even if FEMA did have the

organizational structure -- just last year, the agency was caught

" giving out FEMA money as political pork with an eye to the 2004

elections. "

 

THE KARL ROVE OF CONTRACTING: Joe Allbaugh made it to Louisiana before

most FEMA officials. By August 31, Allbaugh -- the manager of the 2000

Bush-Cheney campaign and the Bush administration's first FEMA director

-- was on the ground " helping coordinate the private-sector response

to the storm. " You'd expect that reaction time from " the Karl Rove of

contracting, " the nickname given to Allbaugh by Charlie Cray of

Halliburtonwatch.org. Already at least two of Allbaugh's major

corporate clients have " been tapped to start recovery work along the

battered Gulf Coast. " One is Halliburton subsidiary Kellogg Brown and

Root. The other is Shaw Group Inc., whose website now reads,

enthusiastically, " Hurricane Recovery Projects -- Apply Here!

Subcontractors/Suppliers & SBA Apply Here! Personnel Applicants Apply

Here! "

 

BEYOND CONTRACTS -- LOW WAGES, BIG PAYOUTS: Big contracts aren't the

only post-Katrina kickbacks being served up in Washington. For years

congressional conservatives " doggedly tried -- and repeatedly failed

-- to repeal a Depression-era law (the Davis-Bacon Act) that requires

federal contractors to pay workers the prevailing wages in their

communities. " Following Hurricane Katrina, it took President Bush all

of eleven days to banish the requirement, " at least temporarily, with

the stroke of his pen. " Congress also passed a major White

House-backed change to federal contracting regulations. The new rules

allow holders of government-issued credit cards " to spend up to

$250,000 on Katrina-related contracts and purchases, without requiring

them to seek competitive bids. ... Before Thursday, only purchases of

up to $2,500 in normal circumstances or $15,000 in emergencies were

exempt. " Rep. Henry Waxman (D-CA) calls the rule change an " unwise

provision that could lead to contract abuse and extensive waste,

fraud, and abuse, " pointing out that even honest federal employees

" are not trained to make purchases of this magnitude to ensure that

taxpayers get the best value for their money. " Even President Bush's

cultural conservative base was rewarded. FEMA designated Pat

Robertson's group Operation Blessing " as the No. 2 charity for

donations in the wake of Hurricane Katrina, " despite the fact that the

group " gave more than half of its yearly allocation of cash donations

-- $885,000 -- to the Christian Broadcasting Network, " according to

its most recent tax filings.

 

THE SILVER LINING: Not everyone is closing their eyes to possible

contract abuse. The nonpartisan Government Accountability Office,

which monitors public spending, already says it plans to audit

Katrina-related contracts, and House Minority Leader Nancy Pelosi

(D-CA) yesterday announced her support for an independent anti-fraud

commission to oversee Katrina-related government contracts. These are

some important first steps to ensure oversight of " the largest

domestic rebuilding effort ever undertaken, " but they can't be the

only measures. As Rep. Waxman points out, " The administration has an

abysmal contracting record in Iraq. We can't afford to make the same

mistakes again. We must make sure taxpayer funds are not wasted,

because every dollar thrown away today is a dollar that is not

available to hurricane victims and their families. "

 

SUPREME COURT

Does Roberts Take Ethics Seriously?

 

Supreme Court nominee John Roberts " has been practicing for [his

Senate confirmation] hearings for weeks in front of panels of

colleagues posing as committee members. " Today, the real thing starts.

Many of the questions will focus on traditional issues such as

privacy, civil rights, federalism and the balance of power between the

executive branch and the courts. One fundamental line of questioning

should not be overlooked: does John Roberts have the ethical character

to be chief justice of the Supreme Court? Roberts, who is currently a

judge on the U.S. Court of Appeals in D.C., " heard arguments about the

Bush administration's policy [on military commissions in Guantanamo]

as he was discussing a Supreme Court appointment in private

conversations with the White House. " On July 15, " when Judge Roberts

met with President Bush for the job-clinching interview, he joined a

ruling in favor of the defendants, who included Mr. Bush. " Several

prominent legal scholars have argued that Roberts' conduct was

unethical. The Senate Judiciary committee has an obligation to

question Roberts about his conduct to ascertain whether the man

nominated to be the nation's most powerful judge takes ethics seriously.

 

DID ROBERTS ASK WHETHER HIS CONDUCT WAS ETHICAL?: On April 1, Roberts

interviewed with Attorney General Alberto Gonzales about a Supreme

Court nomination. Gonzales was a named defendant in the case of Hamdan

v. Rumsfeld, " a hotly contested challenge to the president's military

commissions. " Roberts was one of three judges assigned to the case.

Roberts subsequently interviewed " with Vice President Dick Cheney;

Andrew H. Card Jr., the White House chief of staff; Karl Rove, Bush's

chief political strategist; Harriet Miers, the White House legal

counsel ... and I. Lewis Libby, the vice president's chief of staff. "

Many of those officials were influential in creating the military

commissions. The law " deems public trust in the courts so critical

that it requires judges to step aside if their 'impartiality might

reasonably be questioned.' " Did Roberts conduct legal research about

whether his conduct was ethical? Did Roberts seek independent legal

advice as to whether it was ethical for him to remain on the case

while participating in the interviews?

 

WHY DIDN'T ROBERTS INFORM OPPOSING COUNSEL?: Short of recusing himself

from the case, Roberts could have informed opposing counsel about the

interviews. That would have given Hamdan's attorneys the opportunity

to file a formal recusal motion. Why didn't Roberts inform opposing

counsel?

 

WHY DIDN'T ROBERTS RECUSE HIMSELF AFTER BEING NOMINATED?: After his

formal nomination, Roberts' conflict relating to the Hamdan case

became even more acute. Roberts was consulting closely and regularly

with several administration officials who were named defendants.

Nevertheless, Roberts remained on the panel considering whether to

grant the plaintiff's motion " to stay its ruling while the Supreme

Court decides whether to hear an appeal. " After receiving the

nomination, why didn't Roberts recuse himself from the case?

 

ROBERTS STOCKED WITH ETHICAL CONFLICTS: Roberts has a net worth of

$4.6 million. He holds much of his wealth in individual stocks

including Merck, Pfizer, Intel, Texas Instruments, Microsoft, Johnson

& Johnson, Hewlett Packard, XM Radio and Time Warner. Legal guidelines

require justices to divest themselves of holdings " of companies whose

cases routinely come before the high court. " Time Warner is an

example. Alan Morrison, a Stanford Law School professor, said,

" There's almost nothing the [Federal Communications Commission] can do

in the cable area that doesn't have an impact on Time Warner. " Justice

Sandra Day O'Connor " excused herself from considering hundreds of

hearing petitions, citing her stock holdings. " If confirmed, will

Roberts divest himself of Time Warner stock? Will Roberts recuse

himself from cases where he holds the stock of one of the parties?

UNDER THE RADAR

 

TORTURE -- U.N. INVESTIGATING BRITISH COMPLIANCE WITH CIA'S PRACTICE

OF RENDITION: The Guardian reports that the United Nations is

" investigating the CIA's use of British airports when abducting

terrorism suspects and flying them to prisons around the world where

they are alleged to have been tortured. " The article suggests that

British Ministry of Defence officials are aware of the practice, known

as " extraordinary rendition, " and that they have decided to turn a

blind eye to it. Previously, a former U.S. official disclosed that the

CIA was exporting torture " with strict government oversight and with

approval from the White House and the Department of Justice. " White

House Communications Director Dan Bartlett said at the time, " We will

not torture here in America, and we will not export torture. "

 

DEFENSE -- PENTAGON LAYS OUT NUCLEAR-POWERED PREEMPTION DOCTRINE: The

Pentagon has updated its Doctrine for Joint Nuclear Operations to

allow the United States to use nuclear weapons to preempt possible

enemy attacks. The previous version of the doctrine, drafted in 2001,

contains no mention of using nuclear weapons preemptively or

specifically against threats from weapons of mass destruction. This

new draft, not yet seen by Congress and undergoing final Defense

Department review, seems to go against the president's pledge to

significantly reduce " our operationally deployed strategic nuclear

warheads ... over the next decade. " Not only would nuclear weapons be

acceptable to use against an " imminent attack " or an enemy " intending

to use WMD, " but would also be used to attack " adversary installations

including WMD, deep, hardened bunkers containing chemical or

biological weapons. "

 

MILITARY -- LOUISIANA AND MISSISSIPPI NATIONAL GUARD TROOPS REFUSED

TEMPORARY LEAVE FROM IRAQ: The Katrina recovery, combined with the war

in Iraq, is putting an extra strain on the already-stretched National

Guard. The Washington Post reported this weekend that " scores of

Mississippi National Guardsmen in Iraq who lost their homes to

Hurricane Katrina have been refused even 15-day leaves to aid their

displaced families, told by commanders there are too few U.S. troops

in Iraq to spare them. " Bush administration officials have denied that

the National Guard is stretched thin; Condoleezza Rice has said that

it is " hogwash " and Donald Rumsfeld said it is a myth that " ought to

be knocked down hard. " But the reality is that had the National Guard

units from Louisiana and Mississippi been in their home states rather

than in Iraq when Katrina struck, the response to the hurricane would

have been faster, according to the chief of the National Guard Bureau.

 

KATRINA -- EPA COVERING UP THE PUBLIC HEALTH DANGER OF NEW ORLEANS'

TOXIC WATERS: The Independent reports that an EPA official believes

" toxic chemicals in the New Orleans flood waters will make the city

unsafe for full human habitation for a decade. " Worse yet, the Bush

administration is covering up the danger, according to Hugh Kaufman,

an expert on toxic waste who has been at the EPA since its inception

35 years ago. Kaufman believes the way the polluted water was being

pumped out of the city was increasing the danger to public health, and

the administration is failing to report the damage by taking too few

water samples and refusing to disclose the results of those it has

analyzed.

 

ADMINISTRATION -- WHITE HOUSE SMEAR MACHINE BURNS ANOTHER

TRUTH-TELLER: When your boss is friends with Karl Rove, be sure to

never truthfully answer any phone calls from the press that may

reflect badly on Bush's closest adviser. Attorney Elizabeth Reyes was

fired by her boss, Texas Secretary of State Roger Williams, after she

spoke to a Washington Post reporter on Texas residency requirements.

Reyes, who was never specifically asked about Karl Rove and was not

aware she was speaking to a reporter, noted that her office policy

allows employees to talk to the media, unless " it's a controversial or

special issue. " Washington Post reporter Lori Montgomery used this

information in a story to note that Karl Rove, who is still registered

as a resident and voter of Texas, is therefore not entitled to the

Washington, DC tax deductions he's been receiving for the past 3 1/2

years and may be committing voter fraud. Williams' office had no

comment on Reyes' dismissal other than that she " was not authorized to

speak on behalf of the agency. "

 

GOOD NEWS

 

The American Red Cross has created a program that it says is now

picking up hotel bills for at least 57,000 people who fled Hurricane

Katrina. " Room charges are being paid out of the $503 million that the

Red Cross has collected so far for hurricane relief. "

 

DON'T MISS

 

KATRINA: How Bush blew it

 

CIVIL LIBERTIES: Judge lifts gag order allowing librarian to speak out

about FBI practices in regards to Patriot Act

 

BUDGET: After four years of uncontrolled spending, now conservatives

are voicing concerns about the impact of Katrina aid on federal deficit

 

DAILY GRILL

 

" So today I want to speak to every person who voted for my opponent:

To make this nation stronger and better I will need your support, and

I will work to earn it. I will do all I can do to deserve your trust.

A new term is a new opportunity to reach out to the whole nation. "

-- George W. Bush, 11/3/04

 

VERSUS

 

" Bush's bubble has grown more hermetic in the second term, they say,

with fewer people willing or able to bring him bad news -- or tell him

when he's wrong. "

-- Time Magazine, 9/11/05

 

DAILY OUTRAGE

 

Vice President Dick Cheney referred to the hurricane recovery efforts

as an " exercise " this weekend. " I think we are in fact on our way to

getting on top of the whole Katrina exercise, " Cheney said.