Editorial: Disastrous money managing

Monday, Oct. 10, 2005 | 8:55 a.m.

The Federal Emergency Management Agency was paralyzed, to put it mildly, in its response to Hurricane Katrina. The agency failed to adequately prepare for the looming disaster and didn't swiftly respond after the hurricane devastated the Gulf Coast along Louisiana and Mississippi.

Yet FEMA wasted no time in handing out $430 million in no-bid contracts for emergency housing to aid the Katrina recovery effort. FEMA's rush to hand out this money has resulted in concerns about waste and even fraud occurring because these contracts didn't meet the scrutiny normally provided by competitive bidding.

Understandably, FEMA wanted to get essential services to victims as soon as possible, but there shouldn't have been a need to issue no-bid contracts so hastily. As Sen. Joe Lieberman, D-Conn., noted, the agency could have had standby contracts for emergency services in place -- contingency contracts awarded through competitive bidding -- and implemented them as soon as a disaster hit.

While this was incredibly poor planning by FEMA, at least the acting director of the agency, David Paulison, is moving in the right direction. Last week Paulison told congressional committees investigating the Katrina debacle that he will seek bids on the $430 million that has been awarded.

Those contracts went to four groups that specialize in construction and engineering. Fluor Corp. received $300 million, $63 million went to CH2M Hill, $35 million to the Shaw Group and $32 million to Bechtel. While these corporations are experts in their fields, some of them have close ties to the administration. For example, Joe M. All-baugh, the former FEMA director who is a close friend of President Bush, is the lobbyist for the Shaw Group.

Meanwhile, USA Today reported late last week that the Department of Homeland Security's inspector general, Richard Skinner, said he is investigating other types of no-bid contracts issued by FEMA following Katrina. Specifically, Skinner is reviewing contracts for debris removal, 90 percent of which were awarded on a no-bid basis.

We shouldn't be too surprised that the Bush administration -- despite claims to the contrary by the president that he is a sound fiscal steward of taxpayer money -- would so casually hand out huge no-bid contracts. Bush hasn't had any qualms about getting Congress to pass huge tax cuts, which principally have benefited the wealthy and large corporations, even though these tax cuts have caused the national debt to soar to record levels. The White House couldn't care less if future generations are stuck paying the tab.

While Michael Brown was rightly forced out of his job following his miserable performance during Katrina, we shouldn't fall into the trap of making him the scapegoat. Don't forget that it was the White House that showed how little it cared about emergency preparedness when it made Brown the director of the agency. It knew full well that he didn't have any real experience in this area when he joined the agency in 2001 as its legal counsel. Brown got the job at FEMA for a simple reason -- he was a longtime friend of Allbaugh.

The more we learn about the complete breakdown at the top of FEMA, the more we wonder if looming disasters of mismanagement and fiscal recklessness have yet to be unearthed at other federal agencies.