A billion in waste?

Finally the reports I’ve been waiting to see…

In January, investigators will release the first of several audits examining more than $12 billion in Katrina contracts. The charges range from political favoritism to limited opportunities for small and minority-owned firms, which initially got only 1.5 percent of the total work.

“Based on their track record, it wouldn’t surprise me if we saw another billion more in waste,” said Clark Kent Ervin, the Homeland Security Department’s inspector general from 2003-2004. “I don’t think sufficient progress has been made.”

The IG is right. I suspect the audits will show incredible waste and much of it will be in the large debris removal contracts. Remember NBC News reported on how 4 and 5 layers of subcontractors were taking their cuts…

Here’s an example of how it worked: The Ashbritt company was paid $23 for every cubic yard of debris it removed. It in turn hired C&B Enterprises, which was paid $9 per cubic yard. That company hired Amlee Transportation, which was paid $8 per cubic yard. Amlee hired Chris Hessler Inc, which received $7 per cubic yard. Hessler, in turn, hired Les Nirdlinger, a debris hauler from New Jersey, who was paid $3 per cubic yard.

Nirdlinger is not happy.

“It’s a pyramid,” says Nirdlinger. “And everybody is taking a piece of the pie as you work your way up, and we’re at the bottom. We’re doing the work!” he says

The audits will likely show a similar pattern in the blue roof contracts. Between fraud, cronyism, no-bid contracts and lots of waste, it will be more than a billion lost.

7 thoughts on “A billion in waste?

  1. graft? but but but i thought it was all them welfare cheats that live in that sinful burg.

  2. I think that when the history of this incoherent, incompetent administration is written, one unifying strand that will run through it from beginning to end will be graft. Theft … economic rape and pillage. With them every program, every initiative, and, yes, every disaster is treated as yet another opportunity to funnel taxpayer dollars to themselves and their wealthy and well-connected friends.
    From Rove’s insider positions in Intel stock, if I’m remembering the early days correctly, through Iraq, where in Baghdad bales of hundred-dollar bills were pitchforked like cattle feed from the tailgates of pickup trucks, through Katrina … and on.
    Very little about the administration makes any coherent sense — but if you accept for the sake of argument that they’re all about stealing money, a lot of it seems to fall into place.

  3. As much as I’d like to place the blame for these insane layers in the federal contracting system on this administration (because I completely agree with everything anonymous says above) the fact is that I can’t. I work for a demolition contractor in GA and we have a waste hauling division. We have been repeatedly asked to go down to the Gulf states since Katrina, but because of all the layers you so perfectly describe, long ago built into our disaster relief system, there just isn’t any money in it. All federal contracts must go through a handfull of pre-chosen gigantic companies (of which Ashbritt is one). Period. It’s been that way for much longer than we’ve been enduring the agony of the shrub and his pilfering band. It’s intended to be that way. It’s a gigantic system set up by law. It’s insane and it’s a big part of why the clean-up still needs doin’. Great post, Scout.

  4. the problem with the ‘invisible hand of the market” is that it can (and it will) pick your pocket without you seeing it.

  5. I don’t think there is anything accidental about whose pockets have been lined here.
    This administration has redistributed wealth upwards, by ANY means neccesary. I do mean ANY.

  6. Couldn’t agree with you more. Using the numbers in Scout’s article:
    Ashbritt got $23 and paid the next layer down $9 per unit – Profit = $14 and I’m suspicious that they didn’t even have to travel to Lousiana to get it.
    Next layer down got $9 and paid $8 per unit – Profit = $1 per unit.
    etc.
    Thinking about this, why were the middle layers willing to collect a pitance compared to the fat cats even though they were doing the same chicanery? Because the republican dream is to make it big and act like a fat cat and getting even a small slice convinces them that they will break in big on the next deal – not to mention it buys their silence on the graft. (Kind of like in Freakonomics trying to explain why most drug dealers lived with their mothers).
    –MapleStreet

  7. This is “new” news?
    Here in Pensacola the exact same thing was going on after Ivan in Sept. 2004. It is standard operating procedure.
    Nirdlinger is the one with the pickup truck and cobbled-up trailer feeding at the same trough as hundreds of others hired to haul at $3/cu yd.

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