Contact l Sitemap

home industries issues reasearch weblog press

Home  » Industries » War & Disaster Profiteering

US: Lobbyists Advise Katrina Relief

A Senate bill includes billions of dollars in projects for clients of 'experienced experts.'

by Alan C. Miller and Ken SilversteinThe Los Angeles Times
October 10th, 2005

Lobbyists representing transportation, energy and other special interests dominated panels that advised Louisiana's U.S. senators crafting legislation to rebuild the storm-damaged Gulf Coast, records and interviews show.

The Louisiana Katrina Reconstruction Act - introduced last month by Louisiana Sens. Mary L. Landrieu, a Democrat, and David Vitter, a Republican - included billions of dollars' worth of business for clients of those lobbyists and a total price tag estimated as high as $250 billion.

One advisory panel member who discovered that most of his fellow panelists were lobbyists called the resulting legislation "a huge injustice" to the state.

"I was basically shocked," said Ivor van Heerden, director of a hurricane public health research center at Louisiana State University. "What do lobbyists know about a plan for the reconstruction and restoration of Louisiana?"

Van Heerden was the first participant of any of the senators' working groups to provide such a detailed and scathing account of the process and its outcome. He said he was shut out after he voiced his concerns.

The result, he said, was a lost opportunity "to come up with something innovative, something the people of Louisiana and the nation could really endorse."

Among the lobby-supported interests with a stake in the relief and recovery bill:

* Energy utilities. Entergy Corp. and Cleco Corp. lobbyists consulted with the senators' staffs. Five days before the bill was introduced, Cleco retained the lobbying services of Lynnel B. Ruckert, Vitter's former deputy campaign manager and the wife of his chief of staff.

In an unusual assist to private utilities, the recovery bill includes $2.5 billion to help Louisiana companies such as Entergy of New Orleans and Cleco of Pineville restore and rebuild their electricity systems and recover losses from sustained power outages.

* Supporters of a controversial industrial canal project serving the Port of New Orleans. Among those serving on advisory panels were two officials of Jones Walker, a New Orleans-based firm that lobbies in Washington for the canal project. One of those officials was Paul F. Cambon, an ex-aide to former House Speaker Bob Livingston (R-La.), whose Livingston Group also is a lobbyist for the canal.

The recovery bill asks Congress to give "priority consideration" to the Army Corps of Engineers project, which would build a lock along the canal at a cost of $748 million.

* Highway advocates. Among those on a transportation working group were lobbyists for highway projects seeking funds, including a lobbyist from a firm headed by former Sen. J. Bennett Johnston (D-La.).

In the bill, four Louisiana highways considered evacuation and energy supply routes would receive construction, maintenance and repair work worth $7 billion. At least two of those projects were represented by lobbyists on the working group.

The bill already has been widely criticized as excessive and opportunistic. Its price tag exceeds the high end of estimated costs of the storm and does not include the $60 billion in emergency aid already approved.

Landrieu and Vitter defend the bill as a necessary response to the region's devastation. The bill's supporters say that Louisiana is crucial to America's energy industry and that the state's ports handle 20% of all U.S. imports and exports each day.

"Key economic sectors took a big hit from the storm," said Landrieu spokesman Adam Sharp. "Standing up the region's economy will help stand up the American economy."

Sharp also said the recovery bill's final cost would be closer to $200 billion, not the estimated high of $250 billion.

Aides said the lobbyists were among those who made recommendations but did not draft the legislation. Lawmakers also consulted with local and state officials, and community and business leaders in the Gulf Coast region, the aides said.

"The lobbyists and the entities they represent tend to be among the most experienced experts available who have direct real-world knowledge of the situation," Sharp said. "They are advocating for a position and for a client, but usually from a vantage point of expertise that can be very beneficial to us."

Vitter's office did not return numerous calls seeking comment.

Johnston, the former senator whose clients include hard-hit New Orleans and Jefferson Parish, said the participation of lobbyists in the working groups was appropriate.

"There is no conflict of interest," said Johnston, a former Senate Energy and Natural Resources Committee chairman. "We represent areas that were impacted, and the needs of those areas need to be brought to the fore."

But the House's decision Friday to attach strings to $750 million in federal loans to cities racked by Hurricane Katrina suggested growing resistance to expensive reconstruction proposals.

Keith Ashdown of Taxpayers for Common Sense, a Washington watchdog group, said lobbyists were trying to exploit the catastrophe.

"They are using Katrina to get funding they haven't been able to get in the past," he said. "You want to help the region, but the bill they put together has a lot of projects that aren't needed. This is congressional looting at its worst."

The working groups were set up by the senators' staffs to advise the lawmakers on a variety of topics, including housing, education and healthcare. After an initial meeting at a Senate office, the participants consulted via conference calls and provided recommendations.

Jan Schoonmaker, a lobbyist for New Orleans educational, healthcare and other interests, said most members were "part of the Louisiana family" in Washington.

"If you go to the Washington Hilton during Mardi Gras, you'll see most of these people," Schoonmaker said. "They work together and play together. Many are alumni of the Louisiana delegation, former staffers. Many are people who were directly affected by Katrina or who have families down there."

The flood-control working group on which Van Heerden served was made up largely of Washington lobbyists with strong Louisiana ties but was headed by John M. Barry, the author of an acclaimed history of the great Mississippi flood of 1927.

Van Heerden had overseen Louisiana's coastal restoration program as an official in the state's Department of Natural Resources and has done hurricane research at Louisiana State University since 1997. Since Katrina, the public health center he directs has been engaged in such efforts as determining how and why the flooding occurred and conducting damage assessments.

Van Heerden said he participated in the working group as an individual, not as a representative of the university.

He said he was particularly outspoken about his recommendations to limit the role of the Army Corps of Engineers. The corps was responsible for the levees that Van Heerden said failed to keep the floodwaters out of New Orleans.

"We hadn't restored the coast and all we had was second-rate levees," he said.

He suggested the creation of a politically independent agency along the lines of the Tennessee Valley Authority to spearhead the restoration and reconstruction, but he said the lobbyists opposed the idea.

According to Van Heerden and a second working-group member, he and Barry also favored an oversight role for the National Academy of Sciences that was not included in the legislation.

"My concern was that the whole process was more about generating a lot of projects for the corps and [the lobbyists'] clients, rather than saving Louisiana," Van Heerden said.

The bill includes billions for the Army Corps of Engineers to protect the Louisiana coast from future flooding and to restore wetlands. It would establish a Pelican Commission - with six of its nine members from Louisiana - that would determine which projects were funded.

Barry declined to discuss the working group's recommendations or effect. But he said: "We need to do something dramaticŠ. The rest of the committee was not interested in doing something dramatic."

In response to Van Heerden's assessment of the Army Corps of Engineers' past performance, spokeswoman Carol A. Sanders said: "We are now collecting data to see how the hurricane protection system performed. It's too early to draw any conclusions at this point."

Highway projects that would receive billions of dollars under the bill employ high-profile lobbyists with deep ties to Capitol Hill and Louisiana.

Former Sen. Johnston's firm represents the I-49 Coalition that supports a partially completed interstate highway between Kansas City, Mo., and New Orleans.

Eric Tober, a former staffer for Johnston and a lawyer in the firm who lobbies for the I-49 Coalition, was on the Louisiana senators' working group on transportation. Tober did not return phone calls seeking comment.

A second highway artery covered in the bill is an elevated toll road known as LA 1, which is intended to provide a safer route to and from Port Fourchon in south Louisiana, which has played a growing role in the transportation of oil.

Philip A. Bangert, a lobbyist at Patton Boggs, a prominent Washington lobbying firm that also employs former Louisiana Democratic Sen. John B. Breaux, represents the road advocates. Bangert was on the transportation working group. He acknowledged seeking money for the highway, which he said was badly needed because of damage from Katrina.

"Part of what I did was to feed information to the [Louisiana] delegation," Bangert said. "That's what most of the people on the working groups did. The people in Washington were serving as conduits of information about the needs of the state."

This coalition is also represented by Rhod Shaw, a partner in the Alpine Group who was a member of at least one working group. Shaw's wife was the lead fundraiser for former Rep. W.J. "Billy" Tauzin (R-La.), who served as chairman of the Energy and Commerce Committee until stepping down last year. Shaw did not return phone calls seeking comment.

The Livingston Group and Jones Walker maintain a "strategic alliance" to jointly represent some clients. The Port of New Orleans retains both firms to lobby for the $748-million industrial canal lock, a project designed to increase barge traffic on the Mississippi River.

The project has been attacked as a financial boondoggle by budget watchdog groups. Environmental groups complain that construction of the lock would contaminate nearby wetlands and drinking-water sources with toxic sediments.

Gary LaGrange, president and chief executive of the Port of New Orleans, described the industrial canal as a vital connecting point on a 1,500-mile waterway that runs from Mexico to Florida. He said the lock that is to be replaced is 82 years old but was built to last 40 years.

"The environmental arguments against the project pale [compared] with its economic benefits," he said.

President Bush requested no money for the project in next year's budget; the House originally asked for $9 million and the Senate $15 million. But the bill submitted by the Louisiana delegation calls for the lock to be built with part of the funding sought for the Army Corps of Engineers.

Livingston declined to be interviewed or to respond to written questions submitted by The Times at his request. Cambon did not return phone calls.

The $2.5 billion for private utilities would benefit Entergy, Cleco and Southern Co. of Atlanta. Curt Hebert Jr., Entergy's executive vice president, told a Senate committee last week that more than 1.8 million of the company's customers had lost service because of hurricanes Katrina and Rita, and he urged "an immediate federal response."

Cleco reported catastrophic damage to its lower-voltage power lines north of New Orleans and has estimated the storm will cost the company $100 million to $125 million. Customers who have to rebuild their homes could suffer "a double whammy" of higher rates as well, said Kathleen Nolen, Cleco's senior vice president and chief financial officer.

But the Senate bill's provision has prompted concern because it requires waiving the Federal Disaster Relief and Emergency Assistance Act that prohibits such aid to for-profit companies.

On Sept. 17, Cleco retained Ruckert, whose firm, Adams & Reese, has extensive Gulf Coast ties, to lobby "on energy-related and disaster-related issues resulting from Hurricane Katrina."

The firm's lobbyists include former Louisiana Democratic Rep. Johnny Hayes and former aides to other Gulf Coast lawmakers. Ruckert served as a House aide, and her husband, Kyle Ruckert, is Vitter's chief of staff.

Nolen said Cleco was introduced to Lynnel Ruckert through her ties to Vitter and had retained her because "we needed to have a place at the table" on the utility relief measure.

Lynnel Ruckert joined lobbyists for the other utilities in drafting the provision, which Cleco had an opportunity to review before it was inserted into the bill, Nolen said.

Lynnel Ruckert could not be reached for comment over the weekend, and other Adams & Reese lobbyists did not return calls last week.

Tauzin recently joined Entergy's board. Kenneth Carroll, who worked for Rep. Tom DeLay (R-Texas) from 1985 to 1995, is one of Entergy's Washington lobbyists. He referred a reporter to a company spokesman, who did not reply to questions about Entergy's lobbying.

Most of the lobbying firms are major campaign contributors, and several are among the most generous donors to Landrieu and Vitter.

Between the 2000 election cycle and Aug. 8, Entergy accounted for about $2.4 million in contributions to all federal parties, candidates and other political committees; Patton Boggs, $2.3 million; the Livingston Group, $656,757; Jones Walker, $632,863; the Alpine Group, $475,060, Adams & Reese, $426,260; and Johnston & Associates, $161,564, according to data compiled by Dwight L. Morris & Associates, a Virginia firm that tracks campaign contributions.

The figures include contributions by the companies, their political action committees, and their employees and relatives.

Jones Walker and its employees donated $42,885 to Vitter and $16,250 to Landrieu. Adams & Reese contributed $28,350 to Vitter and $24,250 to Landrieu. Entergy gave $23,300 to Vitter and $18,750 to Landrieu.

Some lobbyists acknowledged an appearance problem even as they defended their advisory work.

"The delegation's heart was in the right place," said Schoonmaker, the lobbyist for various New Orleans institutions.

"It was not people intending to stuff pork in a barrel. We were looking for creative, outside-of-the-box ideas. That said, maybe we should have stepped back and thought about how it was going to look to others."

Times researcher Janet Lundblad in Los Angeles contributed to this report.






This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.