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Victims file class action suit against FEMA

More than a dozen Hurricane Katrina victims from Louisiana, Mississippi and Alabama filed a lawsuit Thursday [11/10] accusing the federal government of wrongfully denying them temporary housing assistance.
Attorneys said this is probably the first of a string of suits to be filed against the Federal Emergency Management Agency and other government agencies...
The lawsuit, which asks for class-action status, seeks to make FEMA immediately provide trailers or other housing alternatives, especially to those still in shelters, and asks that victims with larger families receive more money...

Source. The San Antonio angle here.

Four no-bid contracts to be re-bid: in February, when almost done

A month ago FEMA promised to re-bid some of the no-bid contracts awarded after Katrina. They've yet to do that for four of the biggest contracts involving: the Shaw Group, Bechtel Corporation, CH2M Hill and Fluor Corporation. Those are for temporary housing and are worth about $400 million.
The DHS says they won't re-open those contracts until February, by which time they'll be nearing completion.

...The disclosure dismayed some lawmakers and business groups that believe the Bush administration has not done enough to ensure Katrina contracts are spread around. In particular, they say small and minority-owned businesses in the Gulf Coast have been shortchanged.
FEMA promised to boost the number of contracts given to minority-owned businesses but in the last month the percentage has increased only slightly, from 1.5 percent to 1.8 percent of the $3.1 billion awarded. That's still well below the 5 percent of federal contracts normally set aside for minority-owned firms.
"FEMA's performance falls far short," said Mississippi Rep. Bennie Thompson, ranking Democrat on the House Homeland Security Committee. "The federal government must make a major shift in both policy and implementation if the lives of the people of the Gulf Coast are to be effectively rebuilt and restored."

Brownie no longer doing heckuva job

As of November 2, Michael Brown was no longer on FEMA's payroll, the DHS reports. He stepped aside on Sept. 12 but was kept on to help provide input.

But Brown ended his contract early, said [DHS spokesman Russ] Knocke, responding to an inquiry about House Democratic demands to remove Brown from the payroll.

Davis might subpoena WH, DHS, HHS, state documents

From this:

The Republican chairman of a House panel investigating the response to Hurricane Katrina threatened Wednesday to issue subpoenas for documents if the White House and other agencies don't provide them by Nov. 18.
Rep. Tom Davis of Virginia made the commitment after a Louisiana Democrat, Charlie Melancon, pointed out the panel still hadn't seen some documents it requested more than a month ago. The original request pertains to the White House, Department of Homeland Security, Department of Health and Human Services and the states of Alabama, Louisiana and Mississippi.
Davis said there had been a significant response from the White House, Alabama and Mississippi and that the Department of Homeland Security had assured him it would provide documents within a week.
...The committee made its initial request in late September and set a due date for Oct. 4. Some of those documents have been provided, including a few pertaining to budget issues and e-mails between former Federal Emergency Management Agency chief Michael Brown and Homeland Security headquarters.
However, Melancon said most of the key documents are missing _ including anything involving Homeland Security Michael Chertoff, Defense Secretary Donald Rumsfeld and correspondence between federal agencies. Louisiana has indicated it will provide documents but has requested an extension, Melancon's office said.

From a week ago: "House Panel complains administration dragging feet on document request".

FEMA wants $3.7 billion from Louisiana for services rendered

FEMA has sent LA a bill for "its share of hurricane relief". Governor Kathleen Blanco says she can't pay it.

...Staffers for the governor "about fell over" Wednesday night when they received the Federal Emergency Management Agency's estimate of the state's costs for hurricanes Katrina and Rita, said Mark Merritt, a consultant working for Blanco.
FEMA projects that it will spend a total of $41.4 billion in Louisiana, about $9,000 per resident. Federal law requires state and local governments to pay a portion of disaster relief costs. That share can be as much as 25%. The $3.7 billion estimate is roughly 9% of FEMA's projected costs in Louisiana.
The $3.7 billion represents just under half of the $8 billion the state spends per year and comes as the extensive flooding around New Orleans has severely undercut tax revenue. The state is in the midst of heavy cost-cutting to whittle down a projected $1 billion shortfall...
Merritt is a former FEMA official who now works with former FEMA director James Lee Witt, an adviser to Blanco on hurricane recovery. Merritt said the scope of the disaster far exceeded anything envisioned when the relief agency was created. He called the costs "astronomically unprecedented..."

Bush is required to get the money out of the states, but Congress can (and probably will) waive it.

Charlie Melancon and Michael Brown's emails

Reps. Charles Melancon and Tom Davis recently released a series of emails from former FEMA head Michael Brown. The headline-oriented bits were already discussed in Brownie, you're a "fashion god".
And, they've also complained about the DHS delaying releasing the other requested items: "House Panel complains administration dragging feet on document request".
The two themes are combined into one CNN article: " 'Can I quit now?' FEMA chief wrote as Katrina raged".
The emails are in this PDF file, and Melancon's analysis is in this PDF file.
And, the Rep himself provided "Hurricane Katrina Document Analysis: The E-Mails of Michael Brown", which was at melancon.house.gov/news.asp?ARTICLE3337=4608
However, that page has disappeared due to heavy traffic, so here it is in its entirety (until the original page comes back):

Hurricane Katrina Document Analysis: The E-Mails of Michael Brown
On September 30, 2005, Rep. Charles Melancon and Rep. Tom Davis, the chairman of the House select committee investigating Hurricane Katrina, wrote to Secretary of Homeland Security Michael Chertoff requesting documents and communications from the Department of Homeland Security and its components relating to the response to Hurricane Katrina. The request asked for a response within two weeks, by October 14, 2005.
To date, the Department of Homeland Security has provided few of the documents requested by Reps. Melancon and Davis. One exception, however, involves the e-mails of Michael Brown, the former director of the Federal Emergency Management Agency. Although it does not appear that the Department has provided a complete set of e-mails involving Mr. Brown, the Department has produced more than 1,000 pages of e-mail correspondence from Mr. Brown's office. About 100 pages of these e-mails were produced on October 14, 2005. The remainder, about 900 pages of e-mails, were produced on October 18, 2005.
At the request of Rep. Melancon, this staff analysis summarizes some of the key e-mails involving Mr. Brown. These e-mails paint a portrait of Mr. Brown that differs significantly from Mr. Brown's testimony before Congress about his actions. In his appearance before the House select committee, Mr. Brown described himself as an effective leader. He said, "I get it when it comes to emergency management. I know what it's all about." The e-mails, however, reveal that Mr. Brown made few decisions and seemed out of touch. In the midst of the crisis, Mr. Brown found the time to exchange e-mails about his appearance, his reputation, and other nonessential matters. But few of his e-mails demonstrated leadership or a command of the challenges facing his agency.
Although the Brown e-mails provide a unique window into FEMA's decision-making process, they do not appear to be a complete set of Mr. Brown's e-mails. Mr. Brown testified before the select committee that he "exchanged e-mails" with White House officials, including White House chief of staff Andrew Card, yet none of these e-mails are included. There are also no e-mails between Mr. Brown and Secretary Chertoff. Moreover, despite the requests of Reps. Melancon and Davis, the select committee has not received any of the relevant e-mails and communications involving Homeland Security Secretary Michael Chertoff, Defense Secretary Donald Rumsfeld, Army Corps of Engineers Commander Carl Strock, Health and Human Services Secretary Michael Leavitt, and White House chief of staff Andrew Card. The continued failure of Administration officials to comply with these document requests will impede congressional oversight of the federal response to Hurricane Katrina.
Mr. Brown's Testimony
On September 27, 2005, Michael Brown appeared before the House select committee to defend his response to Hurricane Katrina. At the hearing, Mr. Brown testified that "FEMA pushed forward with everything that it had, every team, every asset that we had, in order to help what we saw as being a potentially catastrophic disaster."
He testified that he had made only two mistakes:
First, I failed initially to set up a series of regular briefings to the media about what FEMA was doing throughout the Gulf Coast region. … Second, I very strongly personally regret that I was unable to persuade Governor Blanco and Mayor Nagin to sit down, get over their differences and work together. I just couldn't pull that off.
Mr. Brown also testified to his own leadership skills. Asked what credentials he brought to his job as FEMA Director, he said, "Management skills. … Organizational skills. … You need to be able to lead people, put the right people in place, put good people around you … not yes people but people who are going to argue and give you the pros and cons of the decisions that you have to make, and then be willing to make those decisions and carry forward with it."
Mr. Brown's E-Mails
The e-mails from Mr. Brown paint a different picture of Mr. Brown than Mr. Brown conveyed during the hearing. They reveal that Mr. Brown made few decisions and seemed out of touch. A number of the e-mails address nonessential matters such as what Mr. Brown should wear, how he could defend his reputation, and even who would care for his dog. Other e-mails are devoted to banter with Mr. Brown's staff. There are few e-mails that show Mr. Brown taking charge or issuing tasking orders.
1. Failure to Make Decisions
There are almost no e-mails from Mr. Brown in which he makes decisions and communicates them to his subordinates. In the e-mails, Mr. Brown receives incoming messages about specific problems, but rarely reacts.
On Wednesday, August 31, 2005, at 12:20 p.m., Marty Bahamonde, one of the only FEMA employees on the ground in New Orleans, sent a desperate message to Mr. Brown:
Sir, I know that you know the situation is past critical. Here are some things you might not know.
Hotels are kicking people out, thousands gathering in the streets with no food or water. Hundreds still being rescued from homes.
The dying patients at the DMAT tent being medivac. Estimates are many will die within hours. Evacuation in process. Plans developing for dome evacuation but hotel situation adding to problem. We are out of food and running out of water at the dome, plans in works to address the critical need.
FEMA staff is OK and holding own. DMAT staff working in deplorable conditions. The sooner we can get the medical patients out, the sooner wecan get them out.
Phone connectivity impossible.
Mr. Brown responded to Mr. Bahamonde at 12:24 p.m. This is Mr. Brown's full response:
Thanks for the update. Anything specific I need to do or tweak?
This indecisive response is not uncommon. Two days later, on Friday, September 2, 2005, Mr. Brown received a message with the subject "Medical help." At the time, thousands of patients were being transported to the New Orleans airport, which had been converted to a makeshift hospital. Because of a lack of ventilators, medical personnel had to ventilate patients by hand for as long as 35 hours. The text of the e-mail read:
Mike, Mickey and other medical equipment people have a 42 ft trailer full of beds, wheelchairs, oxygen concentrators, etc. They are wanting to take them where they can be used but need direction. Mickey specializes in ventilator patients so can be very helpful with acute care patients. If you could have someone contact him and let him know if he can be of service, he would appreciate it. Know you are busy but they really want to help.
Mr. Brown, however, did not respond to this message until four days later, when he finally forwarded it to FEMA Deputy chief of staff Brooks Altshuler and Deputy Director of Response Michael Lowder. The text of Mr. Brown's e-mail read: "Can we use these people?"
On other occasions, Mr. Brown did not appear to respond at all to reports of problems he received from FEMA staff. For example, on Thursday, September 1, FEMA officials were exchanging reports of severe shortages of ice and water in Mississippi. The next day's delivery was reported as 60 trucks of ice and 26 of water, even though the requirements were for 450 trucks of each. Robert Fenton, a FEMA regional response official, wrote: "We have not yet met any of our requirements even with two days' notice. If we get the quantities in your report tomorrow we will have serious riots." William Carwile, FEMA's coordinator in Mississippi, confirmed this assessment: "Will need big time law enforcement reinforcements tomorrow. All our good will here in MS will be very seriously impacted by noon tomorrow. Have been holding it together as it is." FEMA Deputy Director of Response Michael Lowder forwarded this chain of messages to Mr. Brown. Yet there is no response from Mr. Brown in the e-mails produced by the Department.
In the 1,000 pages of e-mails, there are few e-mails from Mr. Brown that task FEMA officials to perform specific tasks or respond to pressing problems. One exception occurred on September 8, over a week after the hurricane. After receiving a message from a member of the public complaining about FEMA's policy of not allowing evacuees to bring pets with them, Mr. Brown sent an immediate message to his staff:
I want us to start planning for dealing with pets. If evacuees are refusing to leave because they can't take their pets with them, I understand that. So, we need to facilitate the evacuation of those people by figuring out a way to allow them to take their pets. Bill and Ron, this may not be an issue for you in AL and MS, but it is a huge issue in LA. Please get some sort of plan together to start handling the pets. Thanks. MB
2. Misinformation about the Levee Break
A key question that has emerged is when federal officials learned that the levees in New Orleans actually breached and began flooding the city. In statements by senior Administration officials in the days after Hurricane Katrina, President Bush, Secretary Chertoff, and Chairman of the Joint Chiefs of Staff Richard Meyers stated that the 17th Street and London Canal levees, which flooded much of northern New Orleans, did not breach until Tuesday, August 30. In fact, the levees actually broke on Monday, August 29. The delay by federal officials in understanding when the levees broke has been criticized as a major failing in the federal response.
The e-mails reveal that Mr. Brown was apprised early on Monday of the levee failure and the dire consequences for New Orleans. For example, Mr. Brown received the following stream of e-mails on Monday, August 29:
· At 9:39 a.m., Mr. Brown received a message stating: "Report that the levee in Arabi has failed next to the industrial canal."
· At 9:53 a.m., Mr. Brown received a message stating: "A LEVEE BREACH OCCURRED ALONG THE INDUSTRIAL CANAL AT TENNESSE[E] STREET. 3 TO 8 FEET OF WATER IS EXPECTED DUE TO THE BREACH … LOCATIONS IN THE WARNING INCLUDE BUT ARE NOT LIMITED TO ARABI AND 9TH WARD OF NEW ORLEANS"
· At 10:20 a.m., Mr. Brown received a message stating:
From Marty Bahamonde in the New Orleans EOC (next to the superdome)
- Severe flooding on the St. Bernard/Orleans parish line. Police report water level up to second floor of two story houses. People are trapped in attics.
- Pumps starting to fail. The city has now confirmed four pumps are off line.
- Windows and parts of the east side of the Amaco building blown out.
- New Orleans shopping center (next to superdome) destroyed.
- Windows and parts of the East side of the Hyatt Hotel have been blown out. Furniture is blowing out of the hotel.
- Top floors of the Entergy building have been blown out
- Area around the Superdome is beginning to flood.
We should have pictures shortly.
· At 11:57 a.m., Mr. Brown received a message stating: "New Orleans FD is reporting a 20 foot wide breach on the lake ponchatrian levy. The area is lakeshore Blvd and 17th street."
The e-mails indicate that Mr. Brown responded to only one of these messages. At 12:09 p.m., Mr. Brown responded to the 11:57 a.m. report of the "20 foot wide breach on the lake ponchatrain levy" by dismissing the report. He wrote: "I'm being told here water over not a breach." The e-mails do not indicate who told Mr. Brown this misinformation. There is also no indication in the e-mails that Mr. Brown recognized the seriousness of his mistake or took actions to correct it. There are no further e-mails from Mr. Brown that day about the levees.
3. E-Mails about Appearance, Reputation, and Dog-Sitting
Hurricane Katrina was one of the worst natural disasters to strike the United States. Mr. Brown emphasized the scope of the disaster in his testimony, saying that Katrina was far worse than any other disaster FEMA had handled during his tenure. He said, "the geographical size of it, the urban area nature of it, the extent of the devastation, the total destruction of the infrastructure. I mean, those are big, big items."
Yet in the midst of the overwhelming damage caused by the hurricane and enormous problems faced by FEMA, Mr. Brown found time to exchange e-mails about superfluous topics such as his appearance, his reputation, and problems finding a dog-sitter.
On Friday, August 26, Mr. Brown e-mailed his press secretary, Sharon Worthy, about his attire, writing: "Tie or not for tonight? Button down blue shirt?" On Monday, August 29, between 7:00 and 9:00 a.m. on the day the hurricane struck, Mr. Brown exchanged additional e-mails about his attire with Cindy Taylor, FEMA deputy director of public affairs. Ms. Taylor wrote Mr. Brown: "I know its early, but … My eyes must certainly be deceiving me. You look fabulous - and I'm not talking the makeup!" Mr. Brown's reply was: "I got it at Nordstroms. … Are you proud of me?" An hour later, Mr. Brown added: "If you'll look at my lovely FEMA attire you'll really vomit. I am a fashion god."
Several days later, Mr. Brown received yet another e-mail about his attire. This time, Ms. Worthy instructed Mr. Brown: "Please roll up the sleeves of your shirt … all shirts. Even the President rolled his sleeves to just below the elbow. In this cris[is] and on TV you just need to look more hard-working … ROLL UP THE SLEEVES."
Mr. Brown also found time to send multiple e-mails about his reputation. Alerted by a friend, Howard Pike, that the media was investigating his tenure at the International Arabian Horse Association, Mr. Brown asked Mr. Pike to direct the media to people who would defend him: "Bazy and Sheila would be perfect. Can you make the connections?" Mr. Brown then forwarded Mr. Pike's message to Natalie Rule, a DHS press contact, and Lea Ann McBride, Vice President Cheney's press secretary, saying: "Howard Pike is the former head of the Air Line Pilots Association and a good friend of mine. I'll get on my laptop and get his contact info shortly." Mr. Brown also sent a message to Andrew Lester, an Oklahoma lawyer, asking him to call reporters about this issue.
There are even e-mails about finding a sitter for Mr. Brown's dog, for whom Mr. Brown's wife was apparently having difficulties locating care. On Tuesday, August 30, the day after the hurricane struck, Mr. Brown sent this e-mail to his assistant, Tillie James: "Do you know of anyone who dog-sits? Bethany has backed out and Tamara is looking. If you know of any responsible kids, let me know. They can have the house to themselves Th-Su."
Some of these e-mails from Mr. Brown convey the impression that he may have been overwhelmed by his responsibilities. In his e-mail to Ms. Taylor on the morning the hurricane struck, Mr. Brown wrote, "Can I quit now? Can I come home?" A few days later, Mr. Brown wrote to an acquaintance, "I'm trapped now, please rescue me."
The Need for Additional Documents
The e-mails received from Mr. Brown's office reveal valuable insights into what went wrong during the critical days following Hurricane Katrina. They also highlight the need to receive a complete set of e-mails from Mr. Brown and similar documents from other key officials. To date, however, Administration officials have failed to respond to the document requests from Rep. Melancon and Rep. Davis.
1. Gaps in the Brown E-Mails
On September 30, Rep. Melancon and Rep. Davis sent a letter to Secretary Chertoff asking for "documents or communications, including internal communications, received, prepared, or sent by officials in … the Office of the Under Secretary of Emergency Preparedness and Response," which is the office held by Mr. Brown. The letter requested that these documents be provided by October 14, 2005.
Although the Department has provided many e-mails from Mr. Brown, it does not appear that all of Mr. Brown's e-mails have been produced by the Department. In his congressional testimony, Mr. Brown referenced e-mails that he sent to the White House. Mr. Brown stated: "I exchanged e-mails and phone calls with Joe Hagin, Andy Card and the President."
However, no e-mail messages between Mr. Brown and Joe Hagin, who is White House deputy chief of staff, or Andrew Card, who is White House chief of staff, have been provided by the Department. There have also been no e-mails produced between Mr. Brown and President Bush or other senior White House officials. Moreover, it does not appear that any e-mails between Mr. Brown and Secretary Chertoff have been produced. These are significant gaps in the Department's compliance with the congressional document request.
2. Failure of Secretary Chertoff to Provide Documents
Secretary Chertoff has also failed to provide e-mails and other communications involving the Secretary or other officials in the Secretary's office. These documents were requested in the same letter that requested Mr. Brown's e-mails.
At an October 19, 2005, hearing with Secretary Chertoff, Rep. Melancon expressed his concern that the select committee had not received any documents or communications from Secretary Chertoff or his office. Rep. Melancon asked Secretary Chertoff directly for a commitment to providing the documents requested by October 27, 2005, and he agreed. The transcript reads:
Mr. Melancon: My understanding is that Chairman Davis had given you until
October 27 to respond to our request. Are you committed to making that
deadline?
Mr. Chertoff: Yes.
The Department did produce additional documents on October 27, 2005, and still more documents on October 28, 2005. However, these documents do not appear to include e-mails or other communications involving Secretary Chertoff or his immediate office.
3. Failure of Other Administration Officials to Provide Documents
In addition to the letter sent to Secretary Chertoff on September 30, Reps. Melancon and Davis sent similar document request letters to Andrew Card, the White House chief of staff; Donald Rumsfeld, the Secretary of Defense; Lt. Gen. Carl Strock, the Commander of the U.S. Army Corps of Engineers; and Michael Leavitt, the Secretary of Health and Human Services. Similar document requests were also sent to the governors of Louisiana, Mississippi, and Alabama. These letters requested an initial response within two weeks, a deadline of October 14, 2005. Rep. Davis extended the deadline to October 27, 2005.
Although the extended deadline has now passed, responsive documents have not been received from any of these officials.
Conclusion
The e-mails of former FEMA Director Michael Brown provide telling insights into the federal response to Hurricane Katrina. They depict a leader who seemed overwhelmed and rarely made key decisions. Many of the e-mails address superficial subjects - such as Mr. Brown's appearance or reputation - rather than the pressing response needs of Louisiana and Mississippi. Few of the e-mails show Mr. Brown taking command or directing the response.
The credibility and thoroughness of the congressional investigation into the response to Hurricane Katrina will hinge on access to key documents and communications. To date, there are significant gaps in the e-mails involving Mr. Brown that have been provided to Congress. Other key officials - including Secretary Chertoff, Secretary Rumsfeld, Secretary Leavitt, and White House chief of staff Andrew Card - have not provided any of their communications. The select committee will not be able to fulfill its objectives if these documents are not produced in a timely manner.

House Panel complains administration dragging feet on document request

From Panel Still Waiting for Hurricane Katrina Papers:

The Republican who heads a Congressional panel investigating the federal government's response to Hurricane Katrina complained Wednesday that the Bush administration had failed to turn over documents the panel requested weeks ago.
The official, Representative Thomas M. Davis III of Virginia, chairman of the House Committee on Government Reform, also threatened to issue subpoenas to compel administration officials to release the documents if they did not comply with the committee's request.
"Our time is short for conducting our investigation," Mr. Davis said. "We are not going to be stonewalled here. I will continue to press the administration for full compliance with our requests as soon as possible."
The documents in question are e-mail and other correspondence between officials in the White House and other agencies during the response to the hurricane, as well as agency documents dealing with specific preparations for and responses to Hurricane Katrina. The panel requested the documents on Sept. 30.
A White House spokesman, Trent Duffy, took issue with the suggestion that the administration had been slow to respond to the committee's request. "It's a lot of information," Mr. Duffy said. "White House staff were instructed to collect information, and the White House counsel's office is working with Davis's committee to provide them with the appropriate information..."

Are roofing, school-building companies making windfall profits?

From Winners of Katrina contracts defend deals:

...During the [House] hearing, lawmakers criticized several contracting deals. They cited some news reports in which roofing companies allegedly were making a windfall from overpriced Army Corps deals.
When Col. Norbert Doyle, who handles contracting for the Army Corps, said he didn't have any information about the agreements and would need to look into it, lawmakers responded testily.
"The biggest complaint I have is who's in charge here?" said Rep. Michael McCaul, R-Texas.
Davis noted later: "If there are problems here, we need to look at the contracting officers. They're the ones who negotiate the deal."
David Cooper, a director at the Government Accountability Office, the auditing arm of Congress, released a preliminary report that found initial signs of inflated prices.
The initial report criticizes a no-bid deal to provide classrooms with a company that had a pre-existing relationship with the government. In its haste to get a deal, the Army Corps accepted the unnamed company's $39 million price tag based on open-ended terms that have been since repeatedly modified, the audit said.
"We found the Corps modified the contract, the day after it was awarded, to allow the contractor to substitute a different mix of classrooms than required by the contract," Cooper said. "We found little evidence that the Corps conducted a complete analysis to determine the impact of the modifications on the contract price."
Earlier in the hearing, Doyle told lawmakers that the Army Corps expected to be awarding a new round of contracts by year's end for demolition work in Louisiana, $500 million, and Mississippi, $600 million.
Priorities will be given to local and minority-owned business, although for now, contracts will still be awarded on an expedited, limited-bid basis.
"It is our goal to return to standard procurement operations as soon as possible," Doyle said.

Carnival Cruise Lines defends FEMA contract

Carnival Corp... defended its $236 million U.S. government contract to provide ship-based housing after Hurricane Katrina, telling lawmakers on Wednesday the firm was charging only what it would have earned from its regular cruise business.
...Terry Thornton, vice president of marketing planning at Carnival Cruise Lines, told the U.S. House of Representatives Committee investigating the government's response to Hurricane Katrina that it was a competitively bid contract.
"From the outset of the charter negotiations, Carnival informed the government that its objective was to charge only what it would have otherwise earned from the vessels operating in a post-Katrina marketplace," he said in testimony.
...Thornton said Carnival pay U.S. taxes on the money it earned from the contract.
The contract includes charges to cover U.S. taxes and also has provisions allowing the firm to recoup costs if it is determined its international work force is subject to the U.S. taxes and minimum wages, Thorton testified.
...Thornton said the company had incurred substantial loss of business because of the contracts. The company had to cancel reservations for 120,000 customers and provide full refunds to them. He said the company also paid commissions to travel agents who had booked the canceled vacations.

source
More in Winners of Katrina contracts defend deals.

Who delayed body collection: Blanco, FEMA, or Kenyon?

La. Gov. Blamed for Slow Removal of Bodies

Bodies of people killed by Hurricane Katrina went uncollected for more than a week in the New Orleans area as the federal government waited for Louisiana's governor to decide what to do with them, according to memos released Thursday by a Republican-led House committee.
The 38 pages of e-mail between FEMA representatives and Pentagon officials contradict the contention by Louisiana's Democratic Gov. Kathleen Blanco, two weeks after Katrina hit on Aug. 29, that the federal government was moving too slowly to recover the bodies...
The memos indicate that morgues were not ready to receive bodies until Sept. 7 - two days after the first memo complaining about Blanco's inaction, and nine days after Katrina slammed into the Gulf Coast...
..."This issue must be addressed, and frankly, there is operations paralysis at this point," [Army Col. John J. Jordan, the military assistant to former Federal Emergency Management Agency director Michael Brown] wrote [in a Sep 5 email]. "FEMA is pushing state to see what they want to do, and indications are that governor is involved in some of the decisions," especially regarding burial.
"Believe organized collection must begin today once morgue is operational or it will become evident to media that plan for collection is not in place," Jordan wrote in the e-mail, which was sent to Brown and Lt. Gen. Russel L. Honore, the military coordinator for the disaster.
But the morgue did not open until two days later, according to the Sept. 7 e-mail from Jordan.
"First morgue site is fully operational," Jordan wrote to the Pentagon officials. "...Believe media and family member interest will continue to cause security concerns."
Nearly a week later, on Sept. 13, Blanco lashed out at the federal government, accusing it of moving too slowly in recovering the bodies and saying it was disrespectful to wait so long.
Blanco spokesman Bob Mann said Thursday it was FEMA's responsibility for removing bodies, which was delayed because the agency failed to sign a contract with Houston-based Kenyon International Emergency Services to do so.
Blanco "was almost literally jumping up and down and screaming about FEMA's failure to execute the contract with Kenyon," Mann said. "There were few things during that period that were more important and more urgent to the governor than doing something about this body removal. It was important to her that these people be treated with dignity, that these bodies not be allowed to lay out in the street."
"Yes, there was paralysis, but it was on the part of FEMA," Mann said.
Kenyon International's president Robert Jensen said in a telephone interview Thursday night that it was his company's decision not to sign a contract with FEMA. He declined to give reasons, other than to say that money was not the issue. Kenyon later accepted a contract with the state...

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