Katrina: disaster profiteers pocket millions in deals
A watchdog group overseeing the reconstruction of New Orleans have said that work is being severely hampered by "disaster profiteers" who are making millions of dollars in profits thanks to their political affiliations, but are conducting their work in a similar manner to that of other private companies hired to the same kind of work in Afghanistan and Iraq.
Apparently, the process is so wasteful that they have seen "90 per cent of the first wave of reconstruction contracts awarded to firms outside Louisiana, Mississippi and Alabama. Local firms have been frozen out while immigrant workers have been exploited and often unpaid.""One year after the disaster, the slow-motion rebuilding of the region looks identical to what has happened in Afghanistan and Iraq," said Pratap Chatterjee, the director of Corpwatch. "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 favour of politically connected corporations from elsewhere in the US that have used their clout to win lucrative no-bid contracts with little or no accountability."
When Bush visited Jackson Square he promised:
"Our goal is to get the work done quickly. And taxpayers expect this work to be done honestly and wisely.... And in the work of rebuilding, as many jobs as possible should go to the men and women who live in Louisiana, Mississippi, and Alabama."The reality on the ground is very different. The report finds that the companies hired to do most of the reconstruction were "usually large, politically connected corporations - based outside these three states".
Among the biggest winners of contracts were Florida-based Ashbritt, which received a $500m contract; Bechtel of San Francisco, which has received $575m worth; and Texas-based Fluor Corp - $1.4bn. One Louisiana company that received a large contract was the Shaw Group, which was awarded $950m worth.The report goes on to show how these companies then subcontract the work, keeping most of the money to themselves and paying peanuts to subcontractors who then hire illegal immigrants to do the jobs rather than the local population who would cost more.
The government is handing company's it chooses millions of tax payers dollars. These people then hire other companies to do the work at a fraction of the rate set by the government.The report's author, Rita 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. Corporations are growing rich off no-bid contracts while the sub-contractors [get] peanuts."
Rosana Cruz of the National Immigration Law Centre said: "The level of assault against workers feels like war. There is vulnerability in each successive layer of sub-contracting. This is a microcosm of what is happening around the world. If you're poor and you're brown we can do what we want with you."
The report claims many large companies established 'contracting pyramids', with each layer skimming money. It highlighted the $500m contract awarded to Ashbritt to remove debris, which worked out at $23 per cubic metre of rubbish moved. In turn, it hired C&B Enterprises to do the work for $9 per cubic metre, which in turn hired Amlee Transportation which was paid $8 per cubic metre. Amlee hired another company for $7 a cubic metre. Finally, the work was done at $3 per cubic metre by a haulier from New Jersey.
Couldn't the government simply have hired the company that finally agreed to do the work at the price they agreed to do the work for? Why do Ashbritt get to keep $14 per cubic metre simply for choosing someone else to do the work for them?
That's more than profiteering, that's a racket. And, as they are dealing with public money, it's a bloody scandal.
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