Tuesday, April 11, 2006

Louisiana officials say Katrina recovery wasteful

Louisiana officials say Katrina recovery wasteful
By Michael Depp

NEW ORLEANS (Reuters) - Multibillion-dollar hurricane recovery efforts on the U.S. Gulf Coast are plagued by bloated costs and waste with too many contractors getting a piece of the action, lawmakers said at a hearing on Monday.

Louisiana legislators frustrated by the slow pace of recovery accused the Federal Emergency Management Agency and Army Corps of Engineers of spearheading a flawed rebuilding process with little transparency and contractor oversight.

U.S. Sen. Tom Coburn, an Oklahoma Republican and chairman of the Senate Subcommittee on Federal Financial Management, held the field hearing as part of efforts to avoid the mistakes made after Hurricane Katrina in future crises.

"There seems to be a great pillow in the middle," Kevin Davis, president of storm-ravaged St. Tammany Parish, said of a disconnect between FEMA management and on-the-ground personnel. "Creativity and flexibility are discouraged."

The August 29 storm killed at least 1,300 people along the Gulf Coast. The region is bracing for the formal start to the 2006 hurricane season on June 1 against a backdrop of often-fractious relations with the federal agencies.

Coburn questioned the Corps' debris removal contracts as an example of mismanagement. He asked why details were not being divulged and questioned FEMA's deferral of key cleanup initiatives to the Corps.

"We believe that they have the requisite experience that we don't have within FEMA," responded Tina Burnette, deputy director of acquisitions for Katrina under the Department of Homeland Security, which oversees the agency.

But Sen. David Vitter, a Louisiana Republican, said the Corps contracted out its key cleanup operations to large, private firms, which in turn sub-contracted down a lengthy chain of companies before any work was done.

Too much of $100 billion-plus earmarked for Louisiana hurricane relief efforts is tied up in wasteful subcontracting practices, lawmakers said often at the hearing.

Also, local contractors are frequently being shut out of big jobs despite laws guaranteeing their role, Vitter said.

Derrell Cohoon, chief of the Louisiana Association of General Contractors, which represents 700 firms, said local players were getting subcontracts that were too small and piecemeal to be either profitable or meaningful.

Several politicians complained about FEMA travel trailers used for temporary housing, which have cost the agency $50,000-$70,000 each to buy and install. The money would be better put in residents' hands to repair their homes or to find other housing, the said.

The trailers themselves have been troublesome. One local politician testified some of his constituents have had them delivered, only to be locked out because different contractors were in charge of handing out the keys.