The International Writers Magazine: Comment- Reality Check

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CHING-CHING, CASH IN ON TRAGEDY– Part I & 2 • James Campion Report Uncovers Corporate Lunacy in the Wake of Hurricane Katrina Rita J. King is a colleague, a friend, and a fine freelance investigative journalist who has gone deep inside many nasty corners of society, business, and politics for the Village Voice among other publications. In 2003, the New York Press Association awarded her first place for investigative reporting on the nuclear industry and in 2005 she placed first in the NYPA news category for "The New Agent Orange," an investigative article about nine soldiers who returned from Iraq and are now suing the government because they believe they were knowingly exposed to Depleted Uranium.

Her new work, completed just last month for CorpWatch, (http://www.corpwatch.org) a decade-old nonprofit monitor of all-things-corporate online, is called "Big, Easy Money: Disaster Profiteering On The American Gulf Coast", a tirelessly researched and frightening insight into the rapacious milieu of scavenger business practices that inevitably follows the type of historic disaster that was Hurricane Katrina.

Now, one year removed from the litany of mistakes and tragedies that have rendered the gulf coast a watery graveyard, we find its reconstruction to be less than ethical, and in most cases, downright deplorable. I figure it's high time Ms. King was given a proper voice at Hackwriters.

jc: How did you initially get involved with this story?
RJK: I frequently write about Indian Point nuclear power plants, which a company called Entergy Corp. owns, and they're headquartered in New Orleans, so I figured chances are there's a story there. CorpWatch asked me to write a feature about Entergy, which, consequently, declared bankruptcy in the wake of Katrina, and has asked for a $718 million Community Development Block Grant so taxpayers and ratepayers can bail them out. There's also an Entergy subsidiary in Mississippi that's asking for a similar bail out. Between the two of them it is a billion and half dollar bail out to shelter the corporation from the cost. As I was gathering the information for the Entergy piece, CorpWatch asked if I would write the whole report.
So for six months I did hardcore investigative research on the contract procurement process, which involved scouring through all the records of contracts of prime contractors and government agencies, and I found the numbers to be very convoluted and unclear, but in the process I interviewed a lot of people who were beyond the focus of the scope of the report. And so my hope was to use the report as a platform to segue into some of the deeper social issues involved.

jc: When you began the report, were you already assuming that there was likely to be some cloudy areas of where the relief money was coming from and how it would be spent, or even a fertile ground for corporate malfeasance?
RJK: Going in I knew this was the most pervasive disaster that had ever taken place on American soil. And I knew that some of the corporations that were notoriously profiting off the Iraq War were involved. I also knew that it was cheaper to do domestic disaster than foreign conflict, but I did not know going in what the specific ramifications were going to be and I did not go in assuming malfeasance was an issue as much as ineptitude - you have to keep in mind that FEMA was gutted in the 90's, and it has continued to be gutted, and as the Department of Homeland Security grows in the number and worth of contracts it gives out, personnel is being cut back. What I didn't except to find, but came away with, is this feeling that the "bumbling bureaucrat" image that used to pervade our thinking on these things has been replaced with a "fox in the henhouse" image. Corporations are far savvier than the governments they manipulate and the politicians they enrich.

For example, on 9/7/05, a week after Katrina, President Bush suspended the Davis-Bacon Act, which protects workers' wages. Two months of controversy followed. He reinstated it, but not retroactively, so all of the contracts that were given out during that time were exempt form the Davis-Bacon Act, which resulted in a lot of workers not being paid or being paid slave wages. Then there is the contracting pyramid, wherein corporations benefit greatly from undocumented workers performing the labor at the bottom, because each successive subcontractor is only responsible for the layer below them. So, as a prime contractor, if I subcontract the work to you and you subcontract the work to someone else, and so on, I am not ultimately responsible for what the last subcontractor who hires the workers chooses to do, and whether they pay them...or not.

Some of what I learned is shocking, and largely unreported. The two largest Chinese construction companies, Beijing Construction Engineering Company Unlimited and Beijing Urban International Company, have made a proposal to the city of D'Iberville, Mississippi through Gulfco Construction, which is actively trying to procure visas for thousands of Chinese laborers so they can work cheaply, and with their own materials, to rebuild vast swaths of the coast. Who is going to own those areas when they're done?

jc: So the cloudy numbers add up to hidden profits for those insidious enough to exploit the chaos?
RJK: Exactly. Prime contractors like AshBritt received $500 million, or $23 per cubic yard, to remove debris, according to an investigation conducted by NBC. At the bottom of their pyramid the company hired C & B Enterprise, which was paid nine dollars per cubic yard. That company hired Amlee Transportation, which they paid eight dollars a cubic yard, and they turned around and hired Chris Hessler Inc. for seven dollars a cubic yard, who then paid a debris hauler from NJ, who was paid three dollars per cubic yard, which is less than the cost of actually doing the work. So AshBritt gets paid $23 a cubic yard for nothing more than subcontracting.
jc: I have to say this does not shock me.
RJK: AshBritt was listed in the Small Business Data Base as both a minority-owned and woman-owned company in order to tap into the federal regulation for set-asides, which stipulates that a portion of the contracts go to businesses owned by people who are categorized thusly (the same applies to other special groups, such veterans or physically disabled individuals). AshBritt's owner, Randall Perkins, listed his wife, Cuban-born Saily Perkins, as the company's president. However, I found a list of 2004 campaign contributors compiled by the federal election commission that listed her occupation as homemaker. Perkins later claimed it was a clerical error.

jc: These "business practices", while being sneaky and rotten, are pretty much expected as shenanigans as usual. The question must be then, is all of this unethical behavior technically illegal?
RJK: It's not necessarily illegal, but it clearly demonstrates the degree to which laws are set up to favor corporations. At a certain point you have to say it's not a matter of politics, or anything other than the obvious fact that the greater good is not being served. I am not prepared to completely blame corporations for that -- they're playing a game. It's called capitalism. I understand that. But if the system isn't working, this is how empires crumble. In the history of the world, I'm not sure there's ever been a civilization that has recognized its own demise in time to do anything productive to avoid the calamity.
    Taxpayers need to know that the Army Corps of Engineers, Bechtel and Halliburton, among others, are using the same contract vehicles in the Gulf Coast as they did in Afghanistan and Iraq. They need to know that there are indefinite delivery/indefinite quantity open-ended contingency contracts being used on the Gulf Coast to squeeze out local companies, and cost-plus contracts that allow them to collect a profit on everything they spend, which really gives them an incentive to overspend. The report lays out the astronomical charges in detail. The American people need to read it.
jc: After all this research and investigation, what is your final assessment of these repeated money-grabs? Will they eventually bleed taxpayers and/or the federal government dry and consequently stall the rebuilding of the Gulf Coast or New Orleans specifically?
RJK: Corporate law requires that corporations put profit above everything else. People need to keep that in mind. The law is subject to the people. If people don't like their taxes to skyrocket and their money to be squandered they must act. It's not just that it's expensive to get things done, we're throwing billions of dollars at things that are not getting done – it's wasteful, it's disgusting, and how can we really expect the rest of the world to believe we're interested in preserving their respective cultures, if we're willing to decimate our own?
    I wonder, in the absence of the minority voices, whose master plan to rebuild will be followed. The Louisiana Recovery Authority is coming up with a master plan, but in whose image? What are the values being used? It's very unclear. It is one of the most precious regions in this country for its cultural diversity. You can't rebuild what was already there, but you can value the history. I think the single most important characteristic of the rebuilding effort needs to be a creative approach to synthesizing the past to build a viable future.

jc: Ironically, I watched a documentary on the rich and mysterious history of New Orleans only a few weeks before the devastation, and it was one of the first things I thought of, how much of it will be washed away inevitably?
RJK: When the early French settlers came to New Orleans, they almost perished from the heat, and so they brought in slaves from Ghana, because the climates are so similar, and the slaves wove into the wrought-iron gates of the city a symbol called the Sankofa, which still stands today. It is a heart with spirals on the inside and the outside and it means – which Bob Marley immortalized in his wonderful, "No Woman/No Cry"; "In this great future, you can't forget your past." You can't rebuild unless you take the past into account. I believe the image of the Sankofa should stand as the pervasive symbol of the entire rebuilding effort of New Orleans.
jc: But will it ever be rebuilt -- physically, culturally, or symbolically?
RJK: The future of the city is uncertain, but I question the wisdom of rebuilding it in an area where the levees haven't been improved. Climatologists are predicting increased ferocity in weather patterns in the near future. So rebuilding in this climate has to be undertaken with the utmost caution.
jc: You're talking planning, wisdom and compassion, so my humble guess is it will never be rebuilt.
RJK: Well, will it be rebuilt to my utopian vision? No. But it will be rebuilt to someone's vision, and as such I think people need to keep a sharp focus on this process. We've been given an unprecedented opportunity here to look at our values, and the manner in which this rebuilding process is accomplished says something about the lives of every American. So people can hash out their ideas of American values until they're red, white, blue in the face, but if they do not take a step back and realize this is the defining gesture of our lifetime, how we rebuild the Gulf Coast, then there is the risk it can be inevitably turned into a Mardi Gras theme park.
    Really, what it comes down to is there's something different about that place, and if we lose it, it will be a huge victory for homogenization.

jc: Besides the public, or those who go to the Corpwatch web site, who is going to see this report?
RJK: The 20,000-word report is available with photographs online, in PDF format, and it's also available as a pamphlet, the size of a magazine, which has been disseminated to most major media, and I believe it will be given to all congressional representatives. We are hoping to do a book, because, to my knowledge, CorpWatch is the only not-for-profit organization that has trailed Homeland Security's spending since its inception. CorpWatch has written reports on spending in Afghanistan, Iraq, an alternative Halliburton report, and now this. All of it can be viewed on their site.
For more on the report and Rita J. King's continued investigative journalism, please visit: http://www.ritajking.com/

© Jame Campion Sept 25th 2006
realitycheck@jamescampion.com

New Orleans Update: Sept 25th The Superdome reopens:
Paid for with $115 million from the Federal Emergency Management Agency, $15 million from the NFL, $13 million in state funds and $41 million from refinancing of the Superdome bonds, with $25 million for operating the building, the Superdome was remodeled in a record nine months due to an executive order by the governor expediting the construction process. Source: The Shreveport Times

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