In Katrina's wake.

• Author: Klinedinst, Mark
• Position: The Environment - Hurricane Katrina

DISASTER CAPITALISM as seen today often feeds off the same forces that fuel "crony capitalist" practices. Immediately after a catastrophe, there are predatory contractors taking advantage of those shellshocked by the disaster of their communities. Those politically connected companies get favorable contracts, often many times what the actual service providers receive. These large contractors and companies also typically have a front row seat on how rebuilding is to take place while those companies and individuals that were impacted directly may be left out or have a minor role.

After Hurricane Katrina, once the aid started to flow in from Federal and state organizations, there often was a tradeoff between getting things done and closely monitoring all expenditures. One of the most-questionable ways that money was spent was for large contractors, often well connected, to get a contract for debris removal or putting "blue tarps" (meant as a temporary roof cover that to this day remain visible in some places) on homes, and then turning around and paying subcontractors, who then might resubcontract to a local company. This multilayered payment system showed that the largesse that went to those top companies oftentimes was what the ultimate cost was.

Gordon Russell and James Varney of the New Orleans Times-Picayune uncovered a number of such cases. One of the most egregious were payments of $175 dollars to the Shaw Group of Baton Rouge to cover a 100square-foot section of roof that actually was put on by a contractor several layers down for two dollars. Reporter Sue Sturgis and others reported on connections to former Mississippi Gov. Haley Barbour and to his relatives when fraud was found (with possible kickbacks) from companies donating to Republican candidates and lobbyists.

One of the biggest threats in the rebuilding process comes from lobbyists from the construction and real estate development industries, whose expertise and abilities are crucial in the rebuilding, but they often will present "grand" projects that will keep their large firms busy for quite a while. These large projects, while in some cases necessary to move forward, also may involve destroying neighborhoods and diverting funds from struggling small businesses and homeowners.

One example was the initiative of Gov. Barbour, who wanted to improve the Gulfport harbor by diverting $600,000,000 in funds that were designated for housing, angering housing advocates and prompting Reps. Barney Frank (D.-Mass.) and Maxine Waters (D.-Calif.) to note that, according to FEMA, as of November 2007, there still were 40,897 Mississippians not back in their homes, with just a fraction of the money being used to benefit low- and moderate-income residents.

In the long run, there even are perverse incentives to not spend all of the money granted to a region since "management fees" for over seeing the money could not be...