Firms that Donate to the GOP Get Katrina
Contracts
Seattle Times
By Hope Yen The Associated Press
October 20, 2005
WASHINGTON — When Hurricane Katrina struck, AshBritt Inc. was
well-positioned to take advantage of the torrent of government dollars that
followed.
The Pompano Beach, Fla., firm had spent years cultivating its relationship
with the federal government, contributing tens of thousands of dollars to the
Republican Party and, more recently, hiring a powerful firm to lobby the Army
Corps of Engineers on "disaster mitigation."
After Katrina hit, AshBritt was given the largest award to date: a deal
worth up to $1.1 billion from the Corps for debris removal.
It is a story of government ties that is repeated time and again for the
winners of the 10 largest Katrina contracts, according to an Associated Press
review. At least four of those contracts are now being reviewed for possible
waste and abuse.
All 10 companies are located outside the affected Gulf Coast region, most
are politically active and most got the work after a limited bidding
process.
"How can the government say it is serious about reconstructing the Gulf
Coast and edge out small and minority-owned businesses?" said Rep. Bennie
Thompson, D-Miss., the ranking Democrat on the House Committee on Homeland
Security. "The only way to make sure the relief funds reach hurricane victims
and damaged areas is to be aggressive about oversight."
The Federal Emergency Management Agency and the Army Corps, which award the
bulk of Katrina contracts, say they are committed to handing out contracts
based on merit and open competition.
FEMA also has pledged to rebid four contracts worth $100 million each to
politically connected firms — Shaw Group, Bechtel, CH2M Hill and Fluor
— that were awarded with little or no competition. Priority will be given
to small and minority-owned businesses.
But the winners of even larger Katrina deals — those valued at $170
million or more — will not have to rebid or renegotiate. Most of the
companies had done previous work for the government, either with earlier
hurricanes or in Iraq, and those existing relationships were key to winning new
deals.
"This shows the best government contractors don't always get hired, the most
politically influential do," said Keith Ashdown, vice president of the watchdog
group Taxpayers for Common Sense. "We need to strive for more competitive
bidding."
Some of the deals:
- A $521.4 million contract to Gulf Stream Coach of Nappanee, Ind., for
travel trailers to house evacuees. Since 2000, company founder James Shea and
his family have contributed more than $20,000 to GOP candidates, including
President Bush.
- A no-bid modification to an existing contract with Landstar Express America
for about $300 million worth of trucking services. Company Chairman Jeffrey
Crowe recently headed the U.S. Chamber of Commerce, whose political action
committee regularly contributes to the GOP. In a preliminary review, government
auditors this week found that the Transportation Department approved payments
on the Landstar contract without issuing written orders or otherwise recording
them in ways to allow adequate oversight.
- • A $236 million rush order with Carnival Cruise Lines for six months
of temporary housing. The Miami company or its executives have contributed more
than $200,000 each to the Republican and Democratic parties since 2000. Sens.
Tom Coburn, R-Okla., and Barack Obama, D-Ill., have called for investigations
into whether the contract price, which amounts to roughly $1,275 a week per
passenger if the three ships are at full capacity, is too high. (commentary:
Carnival Cruise offered to donate their ships.)
Also being reviewed is a $287.5 million FEMA contract for temporary housing
with Circle B Enterprises, an Ocilla, Ga.-based company that Thompson says is
not properly licensed to build manufactured homes in several states.
Circle B says it is not building the homes but has subcontracted the
work.
FEMA and Army Corps officials say their early contract awards went to known
companies in the interest of providing fast emergency assistance and political
connections were not a factor.
The Commerce Department, pledging to boost minority contracts, has created
an information center and Web site at www.rebuildingthegulfcoast.gov to help
smaller businesses get details and establish contacts on how to bid.
Still, FEMA and the Army Corps have declined to rebid more than the four
construction contracts.
"A lot of the contracts that were previously awarded without competition are
completed or are beyond the point where it would be economically feasible to
re-compete," said Larry Orluskie, spokesman for the Homeland Security
Department, of which FEMA is a branch.
Watchdog groups such as Taxpayers for Common Sense say one contract that
should be rebid is AshBritt's. The company, which did about $56.7 million in
initial Katrina work based on an existing contract, won a $500 million deal for
debris removal with an option for $500 million in additional work based on an
expedited, open-bid process.
Since 2000, company executive Randal Perkins and his wife, Saily, have given
$50,000 to the Republican National Committee, $10,000 to the Florida Senate
campaign of Republican Mel Martinez, Bush's former Housing and Urban
Development secretary, and thousands more to Florida's GOP, according to the
nonpartisan Political Money Line.
AshBritt earlier this year hired the lobbying firm Barbour Griffith &
Rogers, which was founded by Republican Mississippi Gov. Haley Barbour, and
paid the firm $40,000 to lobby the Army Corps and Congress, according to Senate
records.
Investigators are examining the contract for possible waste as well as
whether AshBritt had improperly registered with the government previously as a
small business, allowing it to get priority for certain kinds of work,
according to a congressional staff member who requested anonymity because the
review hasn't been made public.
Barbour Griffith & Rogers, which began representing AshBritt in March,
declined to comment; AshBritt referred media inquiries to the Army Corps.
Doug Garman, a spokesman for the Army Corps, said it selected AshBritt and
three other companies for debris removal out of 22 bids submitted in three
days. Typically the bidding period is at least 30 days. The final four
companies were chosen based both on cost and on experience and past performance
with the government.
"We strive to have full and open competition and normal contracting
procedures wherever and whenever possible," Garman said. "Politics and pressure
from the outside played no role in the decision."
Copyright © 2005 The Seattle Times Company
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