February 28, 2007

Buying Up the Coast for Fun and Profit—LOTS of Profit.

Filed under: Katrina — PolitiCalypso @ 8:48 am

As readers of this blog have undoubtedly noticed, I’ve been focusing heavily on the recovery process of Hurricane Katrina lately. Much attention has been devoted to the initial response and its shortcomings, but critiques of the reconstruction are harder to come by.

And now… we come to an issue that is not only being overlooked, but appears to have a very strong public relations effort underway to spin it a certain way.

This is a multi-pronged issue, but in a nutshell, it’s this: Big industry is getting free rein to buy up anything it can get its hands on, with encouragement and aid from the government at several levels. In the meantime, coastal residents and local businesses are having to rely on private charities (as well as an Attorney General who will fight for them against people trying to ruin them financially) to get back on their feet.

It’s fairly common knowledge that war profiteering on a truly grand scale is taking place in Iraq while the Iraqis and our own soldiers watch the country degenerate into total anarchy and civil war. This same type of corporate profiteering, often by the same companies, is taking place on our very own Gulf Coast as well, while the residents of the coast are left to fend for themselves.

This issue deals with the great divide between the haves and the have-nots, and as such, it is intimately related to the housing and insurance problems associated with the Katrina recovery. This story is likely to have some overlap with previous entries.
Private charity is a great thing, and it’s stories like this that restore some of my faith in humanity when it falters. However, these stories are deeply, deeply sad. The extent of the devastation in these communities is so great that these organizations, despite their heroic efforts, are swamped.

The government–federal and state–is doing next to nothing for the residents. Here is a sample of what’s going on, according to these articles from local newspapers in California and Minnesota.

The Reporter of Vacaville, CA , detailing a relief effort from the company Kaiser Permanente:

Almost 19 months after Hurricane Katrina ripped through the Gulf Coast, volunteers still are putting together their best efforts to rebuild homes reduced to rubble.


Pfeifer and the Kaiser team helped clean out homes, which included tearing out flooring and drywall that was covered in mold. The next step was to scrub the beams and the two-by-fours with a cleaning substance, followed by painting sealer to make sure the mold didn’t grow back. The group also helped clean up a children’s playground that was covered in debris.

The Herald of Spring Grove, MN, describing a church effort:

“You can’t believe how many homes have yet to be touched. They still sit there just as they did a year and half ago after the flood. They say some of the owners just left and have never returned. Some are still in legal battles with insurance companies, and others just haven’t been gotten to yet.”

Kimberly recalled observing the numerous cement slabs and steps going up to nothing…the house is gone. The water had been 16 feet high on two-story homes.

Depending on government structure and how they reacted to the disaster, there were different levels of recovery. For instance at Slidell, the government told the people to get their houses fixed.

Here’s one final account, from the Sun Herald of southern Mississippi. It’s a selection of comments made by children who were asked how the hurricane was affecting their lives. I can’t excerpt this. I wouldn’t be able to decide what should be taken out. You just have to read it all.

Even the three children who say that the storm isn’t affecting them anymore give as their reason “I still have my house.”

They still have their houses, so compared to what they see with their friends and neighbors, the storm isn’t affecting them.

This is beyond sad. Sad that these children and young teenagers have been jaded so much by what they have seen that they feel that because they have a house, the storm isn’t affecting them anymore.

Shame on the government. Is it helping anyone out?

Well, yes, technically. Just not whom you’d like.

For all the media hoopla about alleged overpayments to hurricane victims, one less-publicized fact is that the federal government has spent millions on private contractors with long-standing ties to top officials, with the money very poorly spent in many cases.

The New Standard reports on a study by the non-profit group CorpWatch that details fraud and waste by, guess who:

According to the report, the clearest instances of waste in Gulf Coast reconstruction are the contracting pyramid schemes – layers of subcontracting that turn an easy profit for the many middlemen. This layering creates distance between corporations such as Halliburton subsidiary Kellogg, Brown & Root (KBR) and the subcontractor that ultimately performs the work. It allows KBR, for example, to plead ignorance when labor abuses are uncovered, as happened when a subcontractor was caught employing undocumented immigrants late last year and accused of mistreating them.

Imagine that. But, oh wait, it gets better:

Federal procurement laws require that at least 23 percent of contracts go to small businesses, and according to CorpWatch, the Federal Emergency Management Agency has far exceeded that requirement. However, only 13 percent of FEMA dollars went to smaller firms. To date, only 16.6 percent of reconstruction funding has gone to businesses headquartered in the three states most damaged by hurricanes Katrina and Rita, according to the report.

In one prominent example of local-contractor exclusion, the Army Corps of Engineers chose an Alaskan firm with ties to former Department of Homeland Security Secretary Tom Ridge over local bidders to build portable classrooms in Mississippi, 3,500 miles from the company’s headquarters.

The date of this article is August 2006, granted. But there have been no substantial changes since then, according to the Katrina Information Network. In fact, Sen. Joe Lieberman (I-CT) has flat refused to investigate anything related to government mishandling of Katrina.

These small local businesses needed these contracts. Because, according to reports that have been recently released, the Small Business Administration thoroughly botched the approval of loans to small businesses that were hurt by Katrina and Rita:

Loan policies were applied inconsistently, Ms. Pankove said, and disaster victims’ paperwork was often misplaced or mailed out with errors.

“The rush to disburse loans put everyone at risk: the taxpayer, the agency and especially the borrowers,” Ms. Pankove said in an interview. “The people that we needed to serve the most were the ones getting hurt the most.”

For a small, local business that has been devastated by a massive hurricane, immediate relief could be the difference between stability and bankruptcy. And is it just me, or does this look like a pattern? FEMA “far exceeds” the requirements for the number of contracts that must be given to small businesses, but the value of those contracts is absurdly low. The SBA “rushes” to disburse loans, but the quality of the work suffers greatly. Sounds to me like these agencies have been following the letter of the law, so as to avoid investigation, while utterly perverting the spirit.

We’ve got new leadership on the Small Business Administration oversight committee, though. I have personal reasons to believe that some attempt will be made to do something about this particular mishandling:

“I’m worried that there may have been too much of a focus on quotas over quality of service for disaster victims,” Senator John Kerry, Democrat of Massachusetts and chairman of the Committee on Small Business and Entrepreneurship, said in a statement.

“And if that’s true, it’s unacceptable,” Mr. Kerry said. “If in a rush to get paperwork off their desks the S.B.A. shifted the burden to borrowers who have lost everything to Katrina, that’s not a policy, that’s an abdication of responsibility.”

There you go. Maybe he’ll give the parties responsible the Sam Fox treatment. That would be nice. But I digress.

There’s one last item that I have to call attention to. Mississippi Governor Haley Barbour has conducted a Mississippi Renewal forum to discuss the options for rebuilding the Gulf Coast. This is the man who, as one of his first actions toward recovery, pressured the state legislature into removing restrictions on gambling casinos, allowing them to move inland. That was his first priority.

Making the ravaged coastline available to the tourism industry at the expense of the locals is still his priority. His forum’s summary report, which can be found on this page, offers a grand plan to build up the coast for tourists. In fact, a headline emphasized on one of the early pages states, “Ten to 15 million tourists visit the Gulf area every year, but they visit the casinos and are cut off from the rest of the town.” This, according to the report, is a major problem that needs solving, as opposed to those minor problems that I described earlier.

Here are some other priorities of Barbour’s report:

  • Building a massive retail center on the coastal metropolis.
  • Corporate welfare to help rebuild the numerous Wal-Mart stores on the coast.
  • Building a highway as a “beachfront boulevard” to allow easy tourist access from one city to another.
  • Careful shunting away of residential areas. Massive creation of subdivisions.
  • Restoration of the golf courses.

Some things speak for themselves.

In conclusion, let’s have a rundown of this.

Private residents are having to rely on benevolent efforts from Minnesota and California to put their houses back together.

Children consider it “not affecting their life anymore” if they still have a house.

The usual suspects that are involved in war profiteering in Iraq are looting the federal treasury while pillaging the Gulf Coast.

A shamefully low percent of contract funds have been given to local industry.

The Small Business Administration has been flippant and casual in issuing loans to local businesses that were hurt by the storm.

Haley Barbour has approved a reconstruction plan, many parts of which are being put into action already, that turns the coast into a tourist extravaganza and sidelines those residents who have chosen to stay despite being given the back of their government’s hand repeatedly.

A popular bumper sticker says, “If you’re not outraged, you’re not paying attention.” I think this applies.


  1. Whenver I expressed frustration at the abysmal pace of “recovery” for the stricken area, my husband would say, “That’s because Bush and his pals want to buy up all that real estate and move the poor people to somewhere else.”

    I thought he was being a bit paranoid. Silly me.

    By now, it’s unmistakeable. It’s the plan, it’s been put into action and, let’s face it, it’s working.

    Comment by walshie — March 2, 2007 @ 11:58 am

  2. Unfortunately, it *is* working.

    And it seems that the governors are dealing with the fallout from it — in ways that do not benefit their constituents. The potential disaster with Blanco unless she swallows her pride, and the ugly fact that Barbour has the Mississippi press covering for him.

    Comment by PolitiCalypso — March 5, 2007 @ 8:07 am

  3. Two years ago at this exact day and exact minute, Hurricane Katrina made its first Gulf landfall on the Louisiana coast.

    I would like to mark this day by providing a series of links to recent news about the recovery, or what passes for it. First i

    Comment by PolitiCalypso — August 29, 2007 @ 4:14 am

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