Saturday, October 8, 2005

Commentary: Bush’s Cronies Shouldn’t Be Only Ones to Profit from Gulf Rebuilding

Commentary: Bush’s Cronies Shouldn’t Be Only Ones to Profit from Gulf Rebuilding
By: Judge Greg Mathis, Special to

After Hurricane Katrina struck the Gulf Coast, the federal government set aside over $62 billion in emergency funds to be used for, among other things, aid to victims and post-storm clean up. Now that the critical rebuilding process has begun, independent contractors are being called in to help with everything from debris removal to roof repair. This will be a large-scale and complicated effort; there are millions of dollars to be made. What’s ironic is that friends of the federal government -- the same federal government that was negligent in its handling of the disaster -- are now benefiting from the devastation caused by the storm.

A major “winner” in the post-Hurricane clean up work is the Shaw Group. Based in Baton Rouge, the construction and engineering firm received two $100 million no-bid contracts -- one from Federal Emergency Management Agency, the other from the Corps of Engineers -- to work on levees and to pump water out of New Orleans. Joe M. Allbaugh, President Bush’s 2000 campaign manager and a former director of the FEMA, is a lobbyist who represents the Shaw Group and Halliburton, Vice President Dick Cheney’s former employer. Kellogg Brown & Root, a Halliburton subsidiary, stands to earn millions under a no-bid contract for work at Naval facilities in Louisiana and Mississippi. Cheney was Halliburton’s CEO until 2001; he stepped down after the presidential elections.

Unfortunately, minority-owned businesses aren’t quite as lucky as the president’s friends. About 1.5 percent of the $1.6 billion already awarded by FEMA has gone to minority businesses. That’s less than one third of the five percent usually required.

To expedite the rebuilding process, Congress and the Bush administration decided to waive certain rules, like open and competitive bidding, for Hurricane Katrina recovery contracts. This opened the door for companies like Shaw, which already had the ear of the decision makers, to lay claim to the billions at stake.

As a result, minority-owned firms are pushed to the side, along with the debris.

This scenario is all too familiar. In 2001, Kellogg Brown & Root was awarded a no-bid contract worth several hundred million dollars by the U.S. Army Corps of Engineers to repair Iraq's oil infrastructure and put out oil fires.

For far too long, the wealthy establishment in this country has prospered on the backs of the poor. We can no longer allow this to continue. To see the same circle of individuals that were originally neglectful -- directly contributing to the loss of property and human lives -- now profit in Katrina’s aftermath is appalling. It is also unacceptable to know that minority-owned firms are losing out on these multi-million dollar contracts. It only seems fair that a majority of the clean up work in New Orleans, a predominantly black city, should go to local firms, owned by people of color. These companies and their employees have ties to the community. These personal, emotional and financial connections are necessary to ensure the city is rebuilt and repopulated as quickly as possible.

With millions being handed out in such a haphazard manner, there are plenty of opportunities for waste and fraud; the federal government must be held accountable. As a community, we must protest this good old-boy network and publicly criticize the way these government contracts are being awarded.


Judge Greg Mathis is chairman of the Rainbow PUSH-Excel Board and a national board member of the Southern Christian Leadership Conference.