From Scout:
Companies that received 4 FEMA Katrina contracts “repeatedly faulted” by the DHS inspector general, congressional auditors and the Senate received 4 new FEMA contracts for future hurricane work.
From WaPo…..
Four no-bid contracts awarded by the Federal Emergency Management Agency to house Hurricane Katrina evacuees have ballooned in value from $400 million to about $3.4 billion, prompting renewed scrutiny from Congress and federal auditors about the disaster agency’s management of the aftermath of the storm.
A review is underway into how the contracts were awarded, the parties involved and their documentary support, according to Marta Metelko, spokeswoman for [DHS] Inspector General Richard L. Skinner.
The companies that received the contracts were:
–Shaw Environmental & Infrastructure
–Bechtel National
–CH2M Hill Inc.
–Fluor Enterprises Inc.
Despite this the same 4 companies have been awarded contracts for future hurricane work. From the Times Picayune….
WASHINGTON (AP) — The Bush administration on Wednesday awarded temporary housing contracts worth up to $1.5 billion for future hurricane disasters, including four to companies that previously received no-bid contracts for Katrina work.
Why? Well DHS is a mess (see WaPo article) and then there is this from same Times Picayune article….
Some of the companies have strong political and government ties, and Homeland Security inspector general Richard Skinner has been reviewing the propriety of the contracts, with a report expected in October.
The Shaw Group’s lobbyist, Joe Allbaugh, is a former FEMA director and is a friend of President Bush, while Bechtel CEO Riley Bechtel served on Bush’s Export Council from 2003-2004, and CH2M Hill Inc. and Fluor Corp. have done extensive previous work for the government. The companies have denied that connections played a factor. (all emphasis mine)
One other interesting piece from WaPo is the effect of the Katrina contracts on the Shaw Group’s stock…
The initial contracts began under murky circumstances. Two FEMA officials have said the four firms were tapped even before Hurricane Katrina made landfall, and the Shaw Group announced on Aug. 30, one day after the hurricane struck, that it was in contact with FEMA to mobilize assistance. Its stock rose 21 percent in two days and 32 percent that week after the news. (emphasis mine)
More interesting is Shaw was in trouble just last month. This from AP on July 10, 2006…
Shares of engineering and construction firm Shaw Group Inc. tumbled 14 percent Monday as the company reported a net loss for the third quarter, largely a result of the federal government canceling a sizable chunk of its hurricane recovery contracts and failing to pay hundreds of millions of dollars for work already performed.
SNIP
Shaw reported a net loss of $16.7 million, or 21 cents per share, for the quarter ending May 31. It’s a less severe drop than a year ago, when Baton Rouge-based Shaw reported a plunge of $21.7 million, or 31 cents per share.
SNIP
To stay afloat, Shaw was forced to take out a loan while it waits for the tardy payments, costing the company approximately $4 million in interest per quarter.
So they plunged last July then got the Katrina FEMA contract under “murky circumstances” making stocks shoot up and this July they were barely able to stay afloat and they get the new FEMA contract though reviews are ongoing from the last contract.
Source Here
Appears that those FEMA contracts repeatedly come along just in the ta-da-knick-of-time for the Shaw Group.
Oh yeah but look over there! A poor drowned out Katrina victim bought a Louis Vuitton handbag with a debit card.
Sheesh!