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JONATHAN MANN, CNN HOST: In the mess of Katrina, what happened to the money? One year after the storm, billions of dollars were promised, billions of dollars were spent, but with so much waste, so much delay and so much more money still needed.
Hello and welcome.
The air, the wind, the water. They're the elements of life, and a year ago the same powers, goaded by the unpredictability of nature, brought death instead to New Orleans and its surrounding areas. It was one of the worst natural disasters in U.S. history; 1,800 people died and 3/4 of New Orleans was submerged. A catastrophe compounded by several manmade failures; levees that couldn't withstand the waters and leadership that couldn't see the disaster swirling in front of it.
Joining us now to talk about what's gone wrong is Pratap Chatterjee, program director of CorpWatch, an investigative and activist organization based in San Francisco.
Thanks so much for being with us.
$44 billion should be solving a lot of problems, and yet people say the money isn't there, the help hasn't been there, only the problems are there. Why has the relief effort gone so badly?
PRATAP CHATTERJEE, CORPWATCH: Well, the problem is what we call a contracting pyramid. What you have is big companies at the top that get contracts, get paid a lot of money, and then very little trickles down to the ground.
I'll give you an example of where most of the money has gone, which is to hauling debris. There is a company called AshBritt. AshBritt is from Florida. They're well connected to Jeb Bush, the brother of the president, and they got $23 a cubic yard to haul debris.
Well, they subcontracted to another company called C&B Enterprise, and they paid them $9 a cubic yard. C&B Enterprise then hired a company called Amlee transportation, and they paid them $8 a cubic yard. Amlee then hired a guy by the name of Chris Hessler, paid him $7 a cubic yard and he, in turn, hired a guy by the name of Les Nirdlinger from New Jersey and paid him $3 a cubic yard. And this is repeated again and again.
Halliburton, in Plaquemine Parish -- actually, sorry, Halliburton in Mississippi got the contract to cleanup the Gulfport Base. So they hired a company called Tipton Friendly Rollins, who then subcontracted to a company called Kansas City Tree, who subcontracted to another company called Tovar, Karen Tovar Contracting.
So what happens is at the very top, you get a lot of money. At the very bottom, you know, the workers get very little of it. It's all taken up by overhead, administration and profits. So 1/6 of the money, on an average, ends up actually in the pockets of the workers, and very little work gets done, because in addition to a government bureaucracy that has properly been well criticized, you now have this layer, this pyramid of contracting, which is eating up 80 percent of the money. So you have twice the bureaucracy.
MANN: You're making a point that very few people do. Most of the attention, most of the criticism, has been focused on the bureaucracy itself, the fact that the federal government may make decisions and come up with money that isn't properly communicated to the states or the state government may have some of that money that isn't properly communicated to municipal governments, or the municipal governments themselves just fall down on the job. That's really what has been criticized in the case of New Orleans in particular.
How much of what we're seeing is government lethargy and how much of what we're seeing is money being filtered through the system and ultimately frittered away by private companies?
CHATTERJEE: I think it's a combination. I think you have to share the responsibility, and I speak of this as somebody who has investigated the same thing in Iraq and in Afghanistan. I've been to the Middle East and Central Asia several times. So this is not new. It's not unusual.
But one of the key numbers to remember here is that 1/6 of the contracts in dollar numbers goes to companies from Louisiana and Mississippi and Alabama, so that's less than 17 percent. Thirty percent goes to companies in Virginia. When you look at the size of the business, 87 percent of the dollar value goes to big businesses, 13 percent to small companies. That's on the total number of contracts.
So you see this pattern and you look at.
MANN: Well, let me jump in and ask you about that, because wouldn't you expect that to happen anyway? If a storm hits an area and wipes out small businesses, it will be larger businesses from areas of the country that were not hit that are still going to have the equipment in place, the manpower in place and the ability to move quickly while everyone on the Gulf Coast is still trying to pick up the pieces and find out where they were going to spend the night.
CHATTERJEE: That's partly true, but not entirely true.
Right when the storm hit, in fact, the numbers were even lower. It was 10 percent of the contracts went to local businesses. But a year later you would think that they'd be able to set up and be able to do work. And oftentimes, these are the people that know best what to do.
Let me give you the example of a company called Kenyon. Kenyon was hired from out of state to pick up bodies. They picked up 1/3 of the bodies, 535 bodies. When you're searching for bodies in a place that's flooded, the best people to do that are local companies who know the back alleys, the back doors and that sort of thing. But when you hire someone from out of state who doesn't really know the geography, and everything is under water, you're going to end up paying what we paid, as taxpayers, to Kenyon, $6 million for 535 bodies. That's $12,500 per body. This company was buying, you know, its workers model cars, beef jerky, DVD players, when at the same time local business had volunteered to help, African American funeral parlors in Louisiana were willing to do this job. They were willing to do it for free and, in fact, in one of your previous news pieces that you did they actually talked about how local businesses and local volunteers are putting back, you know, Mississippi and Alabama and Louisiana together.
Common Ground in the Ninth Ward, this is one of the most devastated communities, the federal government hasn't shown up to fix anything. The local people, Common Ground is run by Malik Rahim, have fixed houses, without being paid. The same thing in the community of Versailles. The Vietnamese American community there, 45 out of 53 businesses have been restored with no help from the federal government. And what do they get in return? Big business, Waste Management, Incorporated, is hauling debris from other parts of town and dumping it in the Chef Menteur landfill.
So, something is wrong here. The local community can pull together and has pulled together, but big business and corporations and big government bureaucracy, and really the responsibility is shared. Another example.
MANN: I'm going to cut you off. I think you could probably give us examples for a good long time.
CHATTERJEE: I could.
MANN: Another year, probably.
Pratap Chatterjee, of CorpWatch, thanks so much.
CHATTERJEE: Thanks so much.
MANN: We take another break. When we come back, why bother to rebuild? We'll hear from one survivor after the break.
Stay with us.
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