'Disaster profiteers' cash in on Katrina rebuilding

WASHINGTON - A year after Hurricane Katrina, the reconstruction of the devastated Gulf Coast is being severely hampered by waste and inefficiency overseen by "disaster profiteers" who are making millions of dollars, according to a watchdog group. The group claims the inefficiency - along with the companies' political connections - follows a similar pattern to what happened in Afghanistan and Iraq.

With much of New Orleans still in ruins and its population half of what it was before the hurricane, a new report claims millions of dollars have been squandered by wasteful processes that have seen 90 per cent of the first wave of reconstruction contracts awarded to firms outside Louisiana, Mississippi and Alabama. Local firms have been frozen out while immigrant workers have been exploited and often unpaid.

"One year after the disaster, the slow-motion rebuilding of the region looks identical to what has happened in Afghanistan and Iraq," said Pratap Chatterjee, the director of Corpwatch. "The process of getting the Katrina-stricken areas back on their feet is needlessly behind schedule, in part, due to the shunning of local business people in favour of politically connected corporations from elsewhere in the US that have used their clout to win lucrative no-bid contracts with little or no accountability."

When President George W. Bush addressed America from floodlit Jackson Square in New Orleans on September 15 last year, he said: "Our goal is to get the work done quickly. And taxpayers expect this work to be done honestly and wisely ... And in the work of rebuilding, as many jobs as possible should go to the men and women who live in Louisiana, Mississippi, and Alabama."

Yet the report details how the overwhelming majority of initial contracts for construction went to companies - "usually large, politically connected corporations - based outside these three states".

Among the biggest winners of contracts were Florida-based Ashbritt, which received a US$500 million ($782 million) contract; Bechtel of San Francisco, which has received US$575 million worth, and Texas-based Fluor Corp US$1.4 billion. One Louisiana company, the Shaw Group, won a a US$950 million contract.

There is no suggestion that any of the companies acted illegally or stepped outside acceptable commercial practice.

- INDEPENDENT