Katrina profiteering, war on workers Bechtel, Halliburton drive up costs

[Omaha Steve]

http://www.pww.org/article/articleview/9725/1/337

Katrina profiteering, war on workers

Bechtel, Halliburton drive up costs while local contractors, workers are shut out


One year after Hurricane Katrina, one thing is clear: the term “masters of deceit” could be accurately applied to the Bush administration for its handling of the Gulf Coast reconstruction. Despite the president’s photo-op appearances in the region on Aug. 29, his promises ring hollow when compared to the facts on the ground.

A report released Aug. 17 by CorpWatch, titled “Big Easy Money,” details a litany of abuses of money and power by Bush cronies jumping on the gravy train. It is a familiar cast of characters, including many of the same firms that have looted and bungled the reconstruction of Afghanistan and Iraq, such as Bechtel, Service Corp. International and Halliburton. The report dubs them “disaster profiteers” who, as in Iraq, have been given “cost-plus” contracts “that allow them to collect a profit on everything they spend, which is an incentive to overspend.”

The corporations receiving the lucrative contracts have used non-local contractors, driving up costs and reducing revenues for the devastated communities, the report says. African American contractors were excluded even when they offered to do the work for free for the good of the community — for example, cleaning up dead bodies after the storm.


Lower Ninth Ward resident Chevelle Washington and her five-month-old grandson David join with friends and relatives of people who died in the aftermath of Hurricane Katrina at a memorial service, Aug. 29. AP photo by Alex Brandon.


CorpWatch reports that corporations received astronomical contracts for cleanup work, but, by using “contracting pyramids,” reduced the money actually spent on cleanup to a fraction of the amount the companies received from U.S. taxpayers.

For example, AshBritt received a $500 million contract for debris removal, amounting to about $23 per cubic yard of debris removed. This contract was subcontracted four times. The New Jersey firm that ended up doing the work was only paid $3 per cubic yard.

In some cases, local firms received subcontracts but were paid only a fraction of the original contract. One company received $150,000 on a $3.1 million contract.

Divisive and abusive hiring practices are another problem. Opportunity Agenda, a social justice advocacy group, notes, “Many African American survivors of the hurricane were shut out of reconstruction jobs due to failed housing policies, discrimination, and the lack of transportation and other services.” At the same time, the group says, “Interviews with reconstruction workers in New Orleans — many of whom are immigrant laborers who are vulnerable to abusive employment practices — revealed that large numbers have experienced problems of wage theft and nonpayment for labor, leaving low-income workers even more economically vulnerable.”

Rosana Cruz, Gulf Coast field coordinator for the National Immigration Law Center, told CorpWatch, “The level of assault against workers feels like a war.”


FULL story at link above.