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Greedy Companies Hammer Katrina Survivors, Workers |
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One year after Hurricane Katrina struck last August, the residents and workers on the Gulf Coast still are getting hammered—this time by the courts and some of the nation’s biggest and richest corporations.
One hammer is being wielded by giant contractors like Halliburton, Vice President Dick Cheney’s former company. According to Big, Easy Money, a report released Aug. 17 by the nonprofit CorpWatch, large disaster profiteers such as Halliburton are making millions of dollars while local companies and laborers throughout the Katrina-devastated region are systematically getting the short end of the stick.
Politically well-connected companies from outside the most-affected states received 90 percent of the first wave of the post-Katrina reconstruction contracts—including some of the biggest no-bid contracts, the report says.
Rather than hire local residents who badly need jobs to rebuild their lives, the profiteers farmed much of the $6 billion in federal Katrina reconstruction funds to subsidiaries and low-wage, out-of-state subcontractors, according to CorpWatch. These companies, in turn, brought in mostly immigrant workers and exploited them by paying low wages, if they paid them at all.
CorpWatch cites an example of one Halliburton subsidiary, Kellogg Brown and Root (KBR), which subcontracted with a company called Tipton Friendly Rollins. Tipton, in turn, subcontracted the work to Kansas City Tree, which passed the duties on to a small construction company to rebuild a military base in Mississippi.
The immigrant workers at the end of the subcontracting chain were forced to live in rickety trailers “not fit for rats,” according to Victoria Cintra of the Mississippi Immigrants Rights Association (MIRA). After paying her employees for one week’s work, the owner of the construction company claimed she couldn’t pay or feed the laborers any more. MIRA eventually got the U.S. Labor Department to force Halliburton to pay the workers some $141,000 in back pay, Cintra told CorpWatch.
Rita King, author of Big, Easy Money, says:
The devastation of the Gulf Coast is tragic enough, but the scope of the corporate greed that followed, facilitated by government incompetence and complicity, is downright criminal. Sadly, disaster profiteering has become commonplace in America. Well-connected corporations are growing rich off of no-bid contracts while the subcontractors—the people who actually perform the work—often do so for peanuts, if they get paid at all.
Big insurance companies also are beating down Katrina survivors, and this week they picked up an ally in a federal court in Mississippi. In a ruling that could affect future claims against insurance companies, U.S. District Judge L.T. Senter ruled a Mississippi Gulf Coast family could not recover for damages to their home from floodwaters or storm surge.
Senter sided with Nationwide Insurance, which claimed its home insurance policy issued to police Lt. Paul Leonard and his wife did not cover water damage. Instead of the estimated $130,000 the Leonards need to rebuild their home, Senter awarded them $2,889 for wind damage. To add insult to injury, the Leonards’ $500 deductible was subtracted before they received their benefits.
Here’s the bigger problem: Even though Senter’s ruling was a disaster for the Leonards, it could set a precedent for some 3,000 court challenges to the insurance industry for denying billions of dollars in claims after the hurricane ravaged the coasts of Louisiana and Mississippi.
At Daily Kos, cyrus dugger, not surprisingly, notes:
Shares of most property and casualty insurers rose following the ruling, amid a generally surging stock market. American International Group Inc. shares added 73 cents to $62.43. Allstate Corp. shares gained 80 cents to $57.22. St. Paul Travelers Cos. shares rose 93 cents, or 2.1 percent.
The best route to safe, well-paying jobs and affordable housing on the Gulf Coast would be to increase the number of union jobs. To help provide affordable housing and create good jobs, the AFL-CIO announced in June a $1 billion Gulf Coast Revitalization Program, which will finance badly needed affordable housing, spur economic development and create family-supporting union jobs in communities devastated by Katrina.
In the first project of the Gulf Coast Revitalization program, New Orleans Mayor Ray Nagin announced last week that the AFL-CIO Investment Trust Corp. (ITC) and Providence Community Housing Inc.—the post-Katrina housing initiative organized by Catholic Charities of New Orleans—had been awarded 196 properties to develop in the Tremé/Lafitte and Tulane/Gravier areas.
ITC and Providence plan to develop up to 200 units of housing in Tremé/Lafitte and Tulane/Gravier as a first step in a $35 million comprehensive plan to rebuild and revitalize communities across the city.
The Gulf Coast Revitalization investment is the first major infusion of private capital into the area since last summer’s hurricanes. In the absence of meaningful help from the Bush administration, the AFL-CIO project is expected to open the door for other substantial investments in rebuilding the area.
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