Top officials who managed U.S. reconstruction projects in Iraq have
been hired by some of the same big companies that received those contracts and
which are now involved in a rush of deals to rebuild after Hurricane Katrina.
A review of company statements and documents show that two former directors
of the Projects and Contracting Office in Baghdad are now working -- either
directly or indirectly -- with major Iraq contractors.
Top officials from the Army Corps of Engineers and the Pentagon's inspector
general office have also joined companies that are benefiting from Katrina contracts
and subcontracts in what is expected to be one of the world's biggest reconstruction
efforts, worth as much as $200 billion by some accounts.
Some lawmakers and watchdog groups complain that contractors like Shaw Group
Inc., Bechtel National Inc., and Halliburton Co. subsidiary Kellogg Brown and
Root are using inside connections to win lucrative deals.
Scott Amey, general counsel for the Project on Government Oversight, accused
the government of "throwing money to the usual suspects" and warned
that the "revolving door compounds the problem of the government steering
contracts with little, or no competition, to non-responsible contractors."
House Democratic leader Nancy Pelosi said on Thursday: "Under the Bush
administration, the revolving door is spinning out of control;" Acting
FEMA Director David Paulison said federal contracts for Hurricane Katrina recovery
efforts that were handed out with little or no competition would be rebid.
FROM BAGHDAD TO BATON ROUGE
Pentagon audits released by Democrats in June showed $1.03 billion in "questioned"
costs and $422 million in "unsupported" costs for Halliburton's work
in Iraq. Vice President Dick Cheney is a former head of the company.
About six months ago Charles Hess stepped down as head of the Projects and
Contracting Office in Baghdad, which oversees multibillion-dollar reconstruction
projects in Iraq. In September, after Katrina struck, he was hired by Shaw Group.
A Baton Rouge-based construction and engineering firm with more than $100 million
in contracts in Iraq, Shaw has landed two separate $100 million federal contracts
since Katrina hit, one with the Army Corps of Engineers and one with the Federal
Emergency Management Agency.
Shaw spokesman Chris Sammons said Hess -- who has held top jobs at both the
Army Corps of Engineers and FEMA -- was hired to oversee "all aspects"
of its contract with FEMA to set up temporary housing for people displaced by
"Hess had no direct contact or involvement in our work in Iraq,"
said Sammons. "There is absolutely no conflict here."
He said Hess was hired because of his "experience and expertise"
in the field of disaster response and reconstruction.
Shaw Group already employs Joe Allbaugh, President George W. Bush's former
campaign manager and FEMA director, as a lobbyist.
Another former head of the Projects and Contracting Office, David Nash, is
now president of BE&K Government Group, which was recently hired by Kellogg
Brown and Root and Bechtel National Inc., a unit of San Francisco-based Bechtel
Corp., as a subcontractor for projects in Louisiana and Mississippi funded by
the Defense Department and FEMA.
Kellogg Brown and Root and Bechtel won some of the biggest -- and most controversial
-- postwar reconstruction contracts in Iraq.
"Although Dave served in a management position during the initial reconstruction
effort in Iraq, he had no authority to award contracts. There is no connection
between the hurricane-related work we are doing in Mississippi and Louisiana
and Nash's involvement in Iraq," said Susan Wasley, a BE&K spokeswoman.
Another official from the Projects and Contracting Office, Amy Burns, joined
Nash at BE&K Government Group earlier this year as vice president of business
development, but Wasley said she resigned last month.
Nash also recently joined the board of defense contractor EOD Technology, which
has contracts with the Contracting and Projects Office in Baghdad, as well as
with the Army Corps of Engineers and the Navy.
Another top official involved in Iraq's reconstruction, former Army Corps of
Engineers chief Robert Flowers, now runs the federal contracts subsidiary of
HNTB, an engineering company recently hired by Louisiana as a subconsultant
for emergency repairs to bridges over Lake Pontchartrain.
Under federal "revolving door" prohibitions, Flowers was not allowed
to deal directly with Corps officials for a specified period on matters under
his control when he was Chief of Engineers.
But that period has now passed, an HNTB spokesman said. "It is his job
to help us win work," said the spokesman.
Flowers recently hired as vice president Robert Vining, who oversaw the Army
Corps' $4.6 billion annual civil works program.
The Pentagon's inspector general, Joseph Schmitz, also recently stepped down
to take a top job at the parent company for Blackwater USA, one of the largest
private security firms in Iraq. Blackwater has also been active since Katrina.
A spokeswoman said Schmitz would abide by rules that temporarily restrict his
involvement in matters related to the Pentagon.