Tuesday, February 07, 2006

Louisiana governor vows 'hardball' with Washington

Louisiana governor vows 'hardball' with Washington

By Stuart Grudgings

NEW ORLEANS (Reuters) - Louisiana Gov. Kathleen Blanco warned state lawmakers on Monday that corruption could no longer be tolerated as the area rebuilds from the Hurricane Katrina disaster and vowed to "play hardball" with Washington over oil and gas revenues.

Opening a special legislative session in the New Orleans Convention Center, where thousands of residents took refuge in the days after Katrina flooded the city, Blanco said the disaster that killed 1,300 people had become "yesterday's problem" for many in Washington.

"We had all better put Louisiana politics aside and worry about Washington politics or our people and our state will lose," she said.

Five months after Katrina, much of the city remains in ruins and two-thirds of its population has not returned. Local and federal officials have blamed each other for the lack of a clear recovery plan and the White House has come out against a proposed bill that would have bailed out uninsured homeowners with billions of federal dollars.

Blanco, a Democrat, has threatened to block planned August sales of offshore oil and gas leases unless Washington agrees to give the state 50 percent of the royalties.

Louisiana currently gets no royalties from leases more than 6 miles off its coast and says it needs the billions of dollars it would receive to help repair coastal wetlands that oil industry development has left vulnerable to hurricanes.

U.S. Interior Secretary Gale Norton could override the governor on the lease sale but that could trigger a lengthy legal battle.

"Industry leaders understand our predicament," Blanco said. "It's time to play hardball as I believe that's the only game Washington understands."

Blanco pledged to use the 12-day legislative session to push bills to unify the area's various levee management boards, which are widely seen as corrupt; to reorganize New Orleans' government to make it more accountable; and to create a housing trust to help families move back to their homes.

"Louisiana can no longer tolerate the perception that you must pay to play if you expect to do business in this state," she said. "We must put the sins of the past behind us and use our recovery as an opportunity to earn the trust and confidence of the nation."

Blanco chose to hold the session in the convention center, marking the first time in 125 years the legislature has met outside the state capital Baton Rouge, to draw attention to New Orleans' struggles.

Some analysts have attributed the Bush administration's reluctance to pour money into recovery efforts to the perception that local politics is rife with corruption.

Washington has made some relief funds contingent on reforms, such as the unification of the state's levee boards.

"The legislature is going to be analyzed in Washington to see if these people are serious about spending the money wisely or not," said Susan Howell, a political science professor at New Orleans University.