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2005-09-23

Big, Easy Iraqi-Style Contracts Flood New Orleans

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As Katrina’s flood waters recede, government contractors are flowing into the Gulf Coast and reaping billions of dollars in pre-bid, limited bid, and sometimes no-bid contracts. We speak with Pratap Chatterjee, managing editor of CorpWatch.org, about his latest article titled "Big, Easy Iraqi-Style Contracts Flood New Orleans." [includes rush transcript]

In it, he writes, "In Iraq, limited accountability, corruption, massive cost overruns, and devastating failures fed the chaotic mess that has followed the 2003 fall of Baghdad. Nonetheless, the largest Katrina contracts have been won by many of the same politically connected companies that oversaw that failed reconstruction. And it is perhaps no coincidence, since many of the same people in the Army Corps of Engineers are awarding them-and in much the same manner: as open-ended, no- or hastily bid contracts with guaranteed profit margins."

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Pratap Chatterjee, take it from there.

PRATAP CHATTERJEE: Thank you Amy. I want you to remember one name, and that is Carl Strock. He’s the commander of the chief engineer of the Army Corp of Engineers. He’s the man who basically created the no-bid contract for Halliburton to repair the oil pipelines in Iraq. He presided at a meeting at which Bunny Greenhouse, the woman who actually basically blew the whistle on these no-bid illegal contracts was asked the Halliburton people who were sitting in the meeting to leave. He was the man who then demoted her, and asked her, you know, now not to oversee these kinds of contracts. He was then sent to Iraq, where he oversaw all of the Army Corps contracts in Iraq. So, he oversaw the multibillion dollar contracts that Halliburton had.

This is the same man now in charge of the Corps of Engineers, and therefore the man who is now issuing no-bid contracts, so-called no-bid contracts to Halliburton. They’re not actually no-bid, they’re illegal. And the reason is, the Army Corps has no contract with Halliburton. The navy does. These are contracts in Mississippi to fix the navy facilities like the Stennis Space Center. They borrowed a contract from the sister agency and used it to have Halliburton come in and assess the floodwater damage, something they’re not supposed to do.

So, now, Carl Strock, the man in charge of the Iraq contract, he is also the man because he was in Iraq, oversaw the fact that this money, that should have been spent in the levees in New Orleans, was diverted to Iraq. Part of the reason was his boss, Robert Flowers, who authorized all of the stuff under the direction of course, of the White House. The White House called the shots. The Army Corps of Engineers if you go back in history is the agency that basically straightened and the Mississippi river and therefore led to the devastating floods, so now, come the 1990’s, they said, well, we need to rebuild and correctly so, they need to fix the levee system.

When the bush administration said to them, we need the money for Iraq, they gave them a palate of what they could spend and they what they couldn’t. They cut the Army Corps of Engineers spending by 44%. All the individuals who would have fixed the wetlands in Louisiana were helping fix the Iraq’s southern marshes. The man who was in charge was Carl Strock’s boss at the time, his name is Robert Flowers. He now has a new job with a company called HNTB. HNTB is based in Kansas City, Missouri. He — what they do is they build levees.

AMY GOODMAN: Well, the republicans have tried to portray this as well, well, you know, the situation with the levees and the problems in New Orleans have gone back for decades through democratic and republican administrations, and there was nothing that could have been done in the few short years between when Bush became president in 2001and now to have been able to affect the situation. What’s your investigation found out about that?

PRATAP CHATTERJEE: To a certain extent, that’s true. This is a historical thing. But do remember that the Army Corps of Engineers is the people who straightened the Mississippi River in the first place, built a system of levees and created the navigation system. You have to look over 80 years and go back to the floods in Louisiana in 1926, I think it was. So, the problem wouldn’t be there. It wouldn’t be such devastating floods if they hadn’t caused the problem in the first place.

Could they have fixed if in the last three years, probably not. There I have to agree. However, they did and both The New York Times and Wall Street Journal has detailed the engineering problems in how the reconstruction of the levees was done. So, where they could have built t-walls that would have — the levees would have held, they could have built higher levees. They decided to spend less money because they were sending the money to Iraq. Where it was $4,000 a foot, they basically built I-wall designs that broke at the 17th Street Hammond street, forget the exact name — intersection, the infamous 17th street canal that broke. So, they tried to cut costs. That’s one of the problems.

AMY GOODMAN: Pratap, we only have a minute left. Summarize, again, the title of your piece at Corpwatch, "Big, Easy Iraqi Style Contracts Flood New Orleans." What should people take away with this?

PRATAP CHATTERJEE: Of course the Big Easy is New Orleans, and the exactly the same companies —- let me leave you with one thing, Fluor, the company that has a lot of the contracts that Halliburton lost -—

AMY GOODMAN: Fluor is spelled —

PRATAP CHATTERJEE: Fluor. They were doing a lot of the reconstruction contracts in Iraq. Their work that ground to a halt, because of the strength of the resistance there. Their man who is in charge in Iraq flew from Baghdad to New Orleans to take charge of the contracts they now have in New Orleans.

AMY GOODMAN: Pratap Chatterjee, thank you very much for joining us. Managing editor of Corpwatch.org.

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