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Windfall: How Conservatives, Contractors, and Developers Cashed In on Katrina

The grim pictures from the Superdome had barely faded from your TV screen when the Bush administration and its allies set to work redefining the meaning of the hurricane. A timeline of how disaster became opportunity.

| Thu Aug. 30, 2007 3:00 AM EDT

September 18

  • In an interview on Fox News, Senator Lindsey Graham, the South Carolina Republican, says, "You know, there's so much opportunity here to go back into the budget and extract some savings to help pay for this hurricane relief that I look at it as an opportunity for the Congress to get back to its roots of being fiscally sound and conservative. Maybe something good can come from this hurricane." While Katrina recovery costs are immediate and temporary, the cuts that Graham refers to are meant to be permanent, yielding an overall gain for conservative budget and policy goals.

September 19

  • David Safavian is arrested in connection with the Jack Abramoff scandal on charges of obstructing a criminal investigation.

September 21

  • The Republican Study Committee, a group that includes Congress' most conservative members, issues its own plan for paying for Katrina recovery, which it calls "Operation Offset." The plan aims to reduce the federal budget by nearly $100 billion in 2006 alone and nearly $950 billion over 10 years—nearly five times the projected cost of hurricane reconstruction. OMB Watch, the government watchdog group, later describes the proposal as "a historical laundry list of nearly every budget cut Republicans have proposed, imagined or yearned for over the years." These include cuts to most entitlement programs that serve the poor, as well as an array of the right's favorite targets—from foreign aid and family planning for teens to the National Endowment for the Arts and Corporation for Public Broadcasting.

September 21

  • In response to "Operation Offset," the Center on Budget and Policy Priorities points out that nearly 40 percent of the cuts are in assistance to the nation's lowest-income residents, which would disproportionately affect African Americans, women, children, the elderly, the sick, and the disabled—in other words, the same vulnerable groups that had suffered most from Hurricane Katrina.
  • In one of the first comprehensive reports on the environmental impact of the storm, the U.S. Public Interest Research Group offers a grim assessment. The affected areas are a center of the oil, gas, and chemical industries and "home to 31 hazardous waste sites and 466 industrial facilities that handle large quantities of hazardous substances." Numerous oil spills and the widespread release of toxic chemicals add to the existing public health crisis. Contributing to the disaster is a history of weak environmental regulation in the region.

September 23

  • The Los Angeles Times reports that after meeting with White House aides, Department of Housing and Urban Development (HUD) officials nixed plans to issue housing vouchers to help the estimated 650,000 people displaced by Katrina. Vouchers enjoy considerable bipartisan support, but the Bush administration decides to limit the use of vouchers and instead give some families a one-time payment for housing, and warehouse others in trailer parks.

September 24

  • The suffering of Gulf Coast residents is compounded by the arrival of another major hurricane, Rita, on the Texas-Louisiana border. A handful of people are killed by the hurricane itself, but dozens more die in the largest two-day evacuation in history, which leaves people trapped in gridlock for hours or even days, some without enough water, food, or gasoline.

September 26

September 28

  • Republican Senator Charles Grassley, chair of the Senate Finance Committee, complains that the White House is behind efforts to block a bill he coauthored that seeks to extend Medicaid coverage to more Katrina and Rita victims and help affected states with Medicaid costs. The program, modeled on one implemented for victims of 9/11, has the support of both the Democratic and Republican Senate leadership, state governors, the American Medical Association, the Red Cross, and more than 100 other nonprofit organizations. Instead, the administration continues to support its program of state Medicaid Wavers, despite reports that many storm survivors are being denied Medicaid and are living without basic health care or medications.

September 29

  • During a visit to Houston, HUD Secretary Alphonso Jackson declares, "Whether we like it or not, New Orleans is not going to be 500,000 people for a long time. New Orleans is not going to be as black as it was for a long time, if ever again." Jackson predicts that the African American population of the city will drop from 67 percent to 35 to 40 percent simply because black neighborhoods have been the worst hit. "I'm telling you, as HUD secretary and having been a developer and a planner, that's how it's going to be." Jackson also expresses doubts about whether the Ninth Ward should be rebuilt at all, and tells the Houston Chronicle's editorial board, "I wish that the so-called black leadership would stop running around this country, like Jesse and the rest of them, making this a racial issue." But it will grow increasingly clear that the disaster is being used to advance what some have already begun to call an "ethnic cleansing" of New Orleans.

September 30

  • New Orleans Mayor Ray Nagin announces the formation of the Bring Back New Orleans Commission, which is made up largely of local businessmen. Joseph Canizaro, one of the city's biggest developers and a member of the commission, echoes comments by HUD Secretary Jackson when he says, "As a practical matter, these poor folks don't have the resources to go back to our city, just like they didn't have the resources to get out of our city. So we won't get all those folks back. That's just a fact. It's not what I want; it's just a fact."

October 6

  • After criticism from both parties during congressional hearings, FEMA's new acting director, R. David Paulison, announces that four $100 million no-bid contracts awarded for Katrina relief (including one granted to the Shaw Group) will be reopened for competitive bidding, with an eye toward hiring more small businesses and minority-owned firms. Fast Forward: A month later, the Department of Homeland Security postpones the rebidding process until February 2006. In the end, only a fraction of the work is reopened for bidding.
  • Evacuees begin moving into makeshift trailer parks despite numerous warnings that they are unsafe, overpriced, and likely to create "ghettos of despair" that will further impede any transition back to normal life. The soon-to-be-infamous "FEMA trailers" are in high demand among desperate evacuees, most of whom must wade through paperwork and wait for months to move in—while elsewhere, thousands of trailers sit empty. Fast Forward: True to predictions, the trailer parks are grim places, with high rates of crime, depression, and suicide, where residents feel they have been placed "in storage." For a week, FEMA actually blocks social services, community activities, and even religious gatherings because the sites are supposed to be "temporary," and at one point prevents journalists from interviewing residents.

October 15

  • FEMA manages to almost meet its self-imposed deadline to clear Katrina evacuees from often-nightmarish temporary shelters—from a peak of 270,000, only about 15,000 remain. This is accomplished, however, largely by moving them to hotel rooms, where about 600,000 evacuees now live, at a cost of $11 million a day.

October 17

  • Governor Kathleen Blanco creates the Louisiana Recovery Authority to "coordinate the continuing rebuilding effort." The group's membership, The Nation points out, is "dominated by representatives of big business, has only one trade unionist and not a single grassroots black representative." The LRA will control the allocation of federal recovery funds, a large share of which is slated for the state's primary housing initiative, the "Road Home" program. Fast Forward: As of May 2007, the program has provided rebuilding funds to just 16,000 of the 130,000 homeowners who requested Road Home assistance. At this point, ICF Consulting, the firm that received a contract to administer the claims, announces that the program is facing a $3 billion shortfall and unable to pay those who've been promised assistance.

November 1

  • Governor Blanco announces plans to conduct a series of meetings on budget cuts. On the first day (November 6), she announces $500 million in cuts from the Louisiana state budget, with health care and higher education taking the biggest hits. Blanco and her supporters say the cuts reflect the expected precipitous drop in tax revenues—but critics point to the large tax breaks being offered to business and industry in the name of encouraging reconstruction.

November 2

  • In Senate hearings, a group of civil engineers and scientists release the preliminary findings in their investigation into the causes of the New Orleans levee failures. They conclude that the breaches primarily responsible for flooding the city were caused by flaws in the design and construction of the levees by the Army Corps of Engineers. Fast Forward: These findings are confirmed by other independent investigations, as well as by the Corps' own report. Some former Corps officials blame Bush-era funding cuts. Other critics argue that congressional earmarks misdirected Corps funding toward pork-barrel projects, rather than toward the most pressing needs.

November 29

  • FEMA attempts to evict the approximately 150,000 evacuees who still remain in hotels. Fast Forward: FEMA eventually issues two month-long extensions—the first after evacuee protests and bad press, the second after a court order. Most of the evacuees are finally forced out in February and March of 2006.

December 1

  • For the first time since Katrina struck, residents of the Lower Ninth Ward are permitted to visit their homes after being given shots and masks and passing through National Guard troops that have been blocking access to certain neighborhoods. Meanwhile, residents have been locked out of public housing projects. Many dangers to health and safety are real, but policies—and plans for the city's reconstruction—seem designed to discourage the return of African Americans and especially low-income residents, wiping certain neighborhoods off the map while enriching developers and corporate contractors.

December 2

  • Governor Blanco postpones the New Orleans mayoral election, which is slated to be held in February. Fast Forward: The election is held in April after a federal judge refuses to grant a second postponement, despite evidence that a disproportionate number of African Americans displaced by the disaster will find it difficult or impossible to participate.

December 11

  • A New York Times editorial titled "Death of an American City" states bluntly that "we are about to lose New Orleans," while other media outlets note that the president has not visited the disaster zone for two months and has mentioned the Gulf Coast in speeches "four times in November and twice so far this month, and then only fleetingly." A White House adviser tells a reporter that Katrina has "fallen so far off" the president's "radar screen, you can't find it."

Additional links to comprehensive reports, document collections, and other web resources that provide up-to-date facts and assessments on Katrina and its aftermath can be found at the following sites:

For sites gathering oral histories by survivors, look here, here, here, here, here, and here.

Links to local grassroots organizations working for community renewal, social justice, and environmental restoration can be found here.

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