Huge stretches of the city are fallow: no power, no water, no sewer system, no life. Half the city workforce has been laid off, not a single public school is open, and the police department is being run by an acting chief after its former head quit. Mayor C. Ray Nagin is forced to hold town hall meetings in Baton Rouge, 70 miles away.
The litany of problems faced by New Orleans in the aftermath of Hurricane Katrina is unmatched by any other U.S. city in recent history. Billions of dollars in public and private funds are going to be spent on rebuilding New Orleans, but those efforts could be undermined by forces that have long beset the city -- a tradition of corruption and dysfunction and a weak economy that clouded New Orleans's future years before the rains began in August.
"Always broke. Worst school system in the state. Highest crime rate in the nation. Shrinking population. All the corporations have moved out," said Bernie Pinsonat, a political analyst in Baton Rouge. "Any poll I do, the rest of Louisiana thinks, 'New Orleans is a deep, dark hole, and no matter how much money we send, it doesn't seem to get better.' "
...The blue-ribbon commission he appointed to help with reconstruction is rife with internal squabbles, some of them racial, and with fears it could be reduced to irrelevancy because of the state government's own commission and the recent appointment of Donald E. Powell, chairman of the Federal Deposit Insurance Corp., to oversee federal relief work. "We're kind of a work in process," Nagin said during a recent interview...
...In a recent Louisiana State University poll of 419 business executives, corruption was ranked among the worst aspects of doing business in Louisiana. Investors and managers elsewhere are reluctant to come "because they don't want to pay the corruption tax," said Rafael C. Goyeneche, president of the Metropolitan Crime Commission.
"We've seen every type of corruption imaginable," said U.S. Attorney Jim Letten, whose office indicted 44 public officials in the past fiscal year alone. He pointed to skimming, bribery and shakedowns across a spectrum of government employment: judges, police, teachers, administrators and traffic court workers...