Post-Katrina Aftermath: In Absence of Oversight, Reconstruction Workers Became Another Casualty

After Katrina, the Bush administration relaxed worker protection rules, allowing companies tasked with rebuilding New Orleans to become predators in a lawless environment. Part one of a two-part series.

| Mon Jul. 16, 2007 2:00 AM EDT

After Hurricane Katrina pummeled the Gulf Coast in late August 2005, tens of billions of dollars in federal and private contracts (the largest of which went to companies like Bechtel, Halliburton, and its then-subsidiary Kellogg, Brown, and Root) were dispatched to New Orleans. The alleged goal was to fund a clean-up effort President Bush said would require "a sustained federal commitment to our fellow citizens." That, of course, never came to pass.

Thanks to its initial disastrous rescue effort, today, the Federal Emergency Management Administration (FEMA) receives most of the blame for the chaos in New Orleans. But it wasn't just FEMA. The anatomy of the failed reconstruction is complicated, but understanding what went wrong requires examining the Department of Labor (DOL).

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The DOL has been in decline for a generation, suffering from long-term decreases in funding even as the number of people whose livelihoods it is supposed to protect has grown. Those problems have been exacerbated through the six-and-a-half years of the Bush administration. But the consequences have never been more appalling than in New Orleans, where the failure of high-level DOL officials to require proactive oversight of reconstruction employers led to an endless string of abuses. After Katrina, employers, unfettered by rules, became less concerned with the task at hand than with profiting at the expense of workers without protection. They became predators in a lawless environment.

In the two years since the disaster, there have been thousands of testimonials—issued to both government officials and private advocates—about a wide taxonomy of abuses, which are the focus of part one of this series. The most frequent complaint workers cite is withheld wages, but almost as numerous are accusations of employee intimidation, toxic and hazardous working conditions, immigrant abuse, trafficking, exploitation and monetary extortion.

On June 26, Rep. Dennis Kucinich (D-OH), chairman of the Domestic Policy Subcommittee of the Government Reform and Oversight Committee in the House of Representatives, convened a hearing to investigate the origins of the abuses perpetrated by subcontractors and other employers against those working to clean up New Orleans. The subcommittee heard testimony from advocates, attorneys, organizers, DOL officials, and a man named Jeffrey Steele.

Now 49-years-old, Steele says he traveled from Georgia to New Orleans in the first weeks after the hurricane out of both a sense of duty and the hope that he could earn enough to cover debts and, perhaps, even collect some savings at the same time. A subcontractor he identified as the Reverend Carroll Harrison Braddy had recruited Steele and others in Georgia, promising $10 per hour, along with free food and lodging. Soon after he arrived, in a van full of similarly minded men, he learned that none of his employers were willing to pay him the full wage or provide him with the sanitary living conditions he had been promised.

Steele worked for more than a week before his first employer belatedly provided him the vaccines he needed to avoid illnesses like tetanus and hepatitis B that were idling in the toxic stew fermenting throughout much of the city. Most nights he slept on floors in houses and hotels with about seven other men, sharing a bathroom and scrounging for Meals Ready to Eat (MREs) that the National Guard had trucked in for workers and residents. After his first two weeks on the job—12 hour shifts, seven days a week—he was owed $1,400, not including overtime. He was paid $230.

Steele's story was hardly uncommon. Forty-four year-old Tyrone Wilson, known as "Coach" to his friends, worked for Phoenix & Global, a company subcontracted by a different company called ECC, which was paid in turn by the Army Corps of Engineers to help clean up debris. This sort of subcontracting chain could be of any length and often ran many companies deep, with each additional tier masking more potential fraud and making lost pay harder to reclaim.

Wilson's job with Phoenix & Global entailed removing heavy trash—refrigerators and other appliances—from city grounds. The employers of his "foul smelling" job, he said, "would hold pay a week back on us. I worked three weeks and nothing was paid. Twelve hours a day, seven days a week, for three weeks. I got paid less than half of what I deserved. Mexicans got even less. I think they got paid three- or four-hundred dollars." On December 30, 2005, Wilson received $865 in pay for the 94 hours of work he did from November 20 through Dec 7. For a similar stretch between January 5 and January 18, he was paid only $206.10. In each case, he should have been paid about $1,500.

Yet Wilson and Steele are, in some ways, the lucky ones. Unlike many others, they, at least, had jobs. Because the Bush administration suspended affirmative action and immigrant-worker documentation requirements and at the same time stopped requiring employers to pay regionally standard rates (prevailing wages), many local black workers and the out-of-town poor found themselves underbid by foreign workers. These immigrants came from countries as close as Mexico and as far off as Thailand, and were either unaware of standard pay scales or susceptible to deportation if they complained too loudly.

Saket Soni is a 29-year-old organizer with the New Orleans Workers Center for Racial Justice. He points out that many of the policies the administration adopted vis-à-vis workers were mutually contradictory. Immigration is a perfect example of this. While the federal government did not require employers to demand documentation from their workers, they also, at the request of Sen. Mary Landrieu (D-LA), sent hundreds of Immigration and Customs Enforcement (ICE) agents into town with the authority to deport anybody working without proper papers.

The result was astounding. On payday, subcontractors, faced with undocumented workers seeking cash, often called ICE to report their own operations, causing frightened workers to either scatter without pay or face deportation to their home countries. This, Soni says, was a routine practice. His group—one of several—fielded at least a dozen such reports.

Likewise, employee recruiters, dispatched by subcontractors to foreign countries, would offer often-destitute men and women the promise of good work and fair wages at any number of reconstruction jobs in New Orleans. Enticed by that promise, the workers would pay the recruiters a flat fee, cover the costs of their own transportation, and then arrive in a city where they were at best exploited, and at worst left abandoned without lodging or jobs.

One female recruiter, according to Soni, approached members of the White Mountain Apache Nation of Arizona, promising jobs to about 20 poor, able-bodied male members of the tribe. "The tribal government raised money to pay her," Soni said, "and sent a lot of young men with her. They paid a flat fee for getting them jobs and another for transportation. When they arrived [in New Orleans] in vans, there was no sign of the recruiter. The jobs she promised either didn't exist or had vanished, so the van dumped them in front of a FEMA office. FEMA directed them to a local church where a pastor sent them to City Park. They lived in the park, in toxic conditions, paying subcontractors a rate of $300 per month per tent, four people sharing each tent."

In an environment where so many labor standards had been sacrificed, it becomes unclear whether practices like this were against the law. In New Orleans, after Katrina, there were almost no legal standards by which to judge employer behavior or almost anything else.

Certainly, some companies, contractors, and individuals did make sure that their workers were documented. But many of them also took advantage of the temporary (H2B) visa program for the purposes of selling the services of their employees for large sums of money. One case involved an agency that brought Bolivian workers into the country and handed them to an American subcontractor who had been approved for H2B visas. The company promptly leased the immigrants to other contractors instead of providing them with the jobs they had been promised. It was a situation that landed middle-aged women—women who expected to be working as receptionists in hotels or offices—in factory jobs intended for 18- to 25-year-old men.

At the Congressional hearing, Kucinich disclosed that another man named Matt Redd, "filed with the Department of Labor to sponsor guest workers from countries such as Mexico. But he apparently lied when he stated that these 'H2B' workers had jobs waiting for them. Rather, he was a human trafficker, and he rented those unfortunate migrant workers out to garbage collection companies and restaurants at an hourly wage."

These are what the abuses looked like and what occurs when the option of instilling a regulatory order is eschewed in favor of implementing a favorable climate for business interests.

Tomorrow: The second, and final, installment of this series explores the Labor Department's failure to regulate the companies charged with rebuilding New Orleans.