Disaster profiteers make millions while local companies and laborers in New Orleans and the rest of the Katrina-devastated Gulf Coast region are systematically getting the short end of the stick, according to a major new report from the nonprofit CorpWatch.
A CorpWatch analysis of FEMA’s records shows that “fully 90 percent of the first wave of (the post-Katrina reconstruction) contracts awarded – including some of the biggest no-bid contracts to date — went to companies from outside the three worst-affected states. As of July 2006, after months of controversy and Congressional hearings, companies from Louisiana, Mississippi and Alabama had increased their share of the total contracts to a combined 16.6 percent.” The CorpWatch analysis shows that more federal reconstruction contracts have gone to Virginia and Indiana – usually large, politically connected corporations – than to any of the three Katrina-devastated states.
The CorpWatch report also exposes abusive “contracting charge pyramids” where the companies doing the actual reconstruction work often get only a tiny (and insufficient) fraction of the taxpayer money awarded for projects and widespread non-payment of local companies and laborers, including what has been alleged to be the deliberate and systematic exploitation of immigrant workers, including undocumented individuals.
“One year after disaster struck, the slow-motion rebuilding of the Gulf Coast region looks identical to what has happened to date in Afghanistan and Iraq. We see a pattern of profiteering, waste and failure – due to the same flawed contracting system and even many of the same players” says CorpWatch Director Pratap Chatterjee. “The process of getting Katrina-stricken areas back on their feet is needlessly behind schedule, in part, due to the shunning of local business people in favor of politically connected corporations from elsewhere in the U.S. that have used their clout to win lucrative no-bid contracts with little or no accountability and who have done little or no work while ripping off the taxpayer.”
The US government is very experienced at outsourcing war work.