Disaster Capitalism in Action

Prospective FEMA Chief Overbilled Louisiana for Katrina Cleanup Al Kamen, Washington Post, November 25, 2008

"There's increasing talk that former director James Lee Witt, who took over the then-troubled agency at the start of the Clinton administration and left it eight years later with a much-enhanced reputation, is coming back from retirement to run FEMA for six months to a year, to whip it into shape…."

"Witt, however, is likely to be grilled about his work on Katrina relief. Witt and Merritt began their work in the days after the hurricane, when Louisiana Gov. Kathleen Babineaux Blanco (D) hired their disaster recovery firm with an open-ended no-bid contract.

"An NBC News investigation of Louisiana records found that James Lee Witt Associates was paid more than $40 million for its work. Merritt, who had been the firm's top manager in Louisiana, tallied $506,000 in billable hours over the 10-month span from September 2005 through June 2006, NBC News found in its July 2007 report. The firm allegedly billed the state double what it actually paid its subcontractors, the report said. For instance, the firm subcontracted an Indiana company to manage recovery grants. That company's workers were paid $19 to $20 an hour, but the company billed Witt Associates $37.50 an hour, and Witt Associates billed the state $75 an hour, according to the NBC report."