[CPEO-BIF] Gulf Coast profiteering

[Lenny Siegel <lsiegel@cpeo.org>]

Press Release
CorpWatch
August 17th, 2006

Big, Easy Money
Disaster Profiteering on the American Gulf Coast

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."

"Big, Easy Money" report author Rita J. King said:  "The devastation of 
the Gulf Coast is tragic enough, but the scope of the corporate greed 
that followed, facilitated by government incompetence and complicity, is 
downright criminal. Sadly, disaster profiteering has become commonplace 
in America. Well connected corporations are growing rich off of no-bid 
contracts while the sub-contractors - the people who actually perform 
the work - often do so for peanuts, if they get paid at all."

###

For the original press release and links to the entire report, go to
http://www.corpwatch.org/article.php?id=14023

--


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
<lsiegel@cpeo.org>
http://www.cpeo.org


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