The New York Times | Cronies at the Till

It is so blantant, it is unbelievably sad for the taxpayers of America

Cronies at the Till
The New York Times Editorial

Tuesday 27 September 2005

The first results are in on who is set to profit from the Katrina cleanup, and - surprise - many of the firms winning major contracts have big political connections. Congressional investigators are already looking into AshBritt, a Pompano Beach, Fla., company with ties to Mississippi's governor, Haley Barbour - the former chairman of the Republican National Committee. AshBritt has nabbed $568 million in contracts for trash removal. Questions have also been raised about the political connections of two other major contractors: the Shaw Group, and Kellogg, Brown & Root, a subsidiary of Halliburton. Both companies have been represented by Joe Allbaugh, President Bush's former campaign manager and the former head of the Federal Emergency Management Agency - although Mr. Allbaugh says he does not help any of his clients obtain federal contracts.

And there's more. An article in yesterday's Times by Eric Lipton and Ron Nixon reports that more than 80 percent of the $1.5 billion in contracts signed by FEMA for Katrina work were awarded without bidding or with limited competition. The Times article even finds a federal employee - Richard Skinner, the inspector general for the Homeland Security Department - willing to go on the record with his concern, saying, "We are very apprehensive about what we are seeing."

So are we. The government is spending more than a quarter of a billion dollars every day on rescue, relief and reconstruction along the Gulf Coast. Anyone who pays taxes in America should be concerned about how the money is being spent and who is profiting. We think that when Congress appropriates money for disaster relief, the advantage should be maximized for the victims, not for the same cast of characters that have been profiting from no-bid contracts in Iraq. Kellogg, Brown & Root, Americans may recall, is the company that came up with those $100-per-bag laundry bills for work in Iraq.

All of this comes back to cronyism. The resignation of the FEMA chief, Michael Brown, was only one of the recent departures. The head of federal procurement policy at the Office of Management and Budget resigned just before he was arrested on charges of lying to federal investigators, and the Pentagon's former inspector general has left for the private sector but remains the target of a Congressional inquiry.

Last week, the Homeland Security Department appointed the National Weather Service's chief financial officer, Matthew Jadacki, to head a new Office for Hurricane Katrina Oversight. That's a step in the right direction. The office itself is a good idea, and Mr. Jadacki's experience is a welcome contrast with that of many of the inexperienced political appointees who have been exposed by this crisis. But the administration will have to go a lot further if it wants any chance of regaining the American people's trust, which it has so squandered. The true test of the new oversight office will be in its financing and staffing. America doesn't need a public relations stunt; it needs a functioning means of curbing abuse.

A promising legislative initiative comes from Senators Tom Coburn, an Oklahoma Republican, and Barack Obama, Democrat of Illinois. They have called for a chief financial officer to review expenditures before the money is spent, rather than more inspectors general to audit records after the fact. That strikes us as a fine idea.

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