October 6, 2005

Katrina work goes to officials who led Iraq effort

By Adam Entous

WASHINGTON (Reuters) - Top officials who managed U.S.
reconstruction projects in Iraq have been hired by some of the
same big companies that received those contracts and which are
now involved in a rush of deals to rebuild after Hurricane

A review of company statements and documents show that two
former directors of the Projects and Contracting Office in
Baghdad are now working -- either directly or indirectly --
with major Iraq contractors.

Top officials from the Army Corps of Engineers and the
Pentagon's inspector general office have also joined companies
that are benefiting from Katrina contracts and subcontracts in
what is expected to be one of the world's biggest
reconstruction efforts, worth as much as $200 billion by some

Some lawmakers and watchdog groups complain that
contractors like Shaw Group Inc., Bechtel National Inc., and
Halliburton Co. subsidiary Kellogg Brown and Root are using
inside connections to win lucrative deals.

Scott Amey, general counsel for the Project on Government
Oversight, accused the government of "throwing money to the
usual suspects" and warned that the "revolving door compounds
the problem of the government steering contracts with little,
or no competition, to non-responsible contractors."

House Democratic leader Nancy Pelosi said on Thursday:
"Under the Bush administration, the revolving door is spinning
out of control;" Acting FEMA Director David Paulison said
federal contracts for Hurricane Katrina recovery efforts that
were handed out with little or no competition would be rebid.


Pentagon audits released by Democrats in June showed $1.03
billion in "questioned" costs and $422 million in "unsupported"
costs for Halliburton's work in Iraq. Vice President Dick
Cheney is a former head of the company.

About six months ago Charles Hess stepped down as head of
the Projects and Contracting Office in Baghdad, which oversees
multibillion-dollar reconstruction projects in Iraq. In
September, after Katrina struck, he was hired by Shaw Group.

A Baton Rouge-based construction and engineering firm with
more than $100 million in contracts in Iraq, Shaw has landed
two separate $100 million federal contracts since Katrina hit,
one with the Army Corps of Engineers and one with the Federal
Emergency Management Agency.

Shaw spokesman Chris Sammons said Hess -- who has held top
jobs at both the Army Corps of Engineers and FEMA -- was hired
to oversee "all aspects" of its contract with FEMA to set up
temporary housing for people displaced by Katrina.

"Hess had no direct contact or involvement in our work in
Iraq," said Sammons. "There is absolutely no conflict here."

He said Hess was hired because of his "experience and
expertise" in the field of disaster response and

Shaw Group already employs Joe Allbaugh, President George
W. Bush's former campaign manager and FEMA director, as a

Another former head of the Projects and Contracting Office,
David Nash, is now president of BE&K Government Group, which
was recently hired by Kellogg Brown and Root and Bechtel
National Inc., a unit of San Francisco-based Bechtel Corp., as
a subcontractor for projects in Louisiana and Mississippi
funded by the Defense Department and FEMA.


Kellogg Brown and Root and Bechtel won some of the biggest
-- and most controversial -- postwar reconstruction contracts
in Iraq.

"Although Dave served in a management position during the
initial reconstruction effort in Iraq, he had no authority to
award contracts. There is no connection between the
hurricane-related work we are doing in Mississippi and
Louisiana and Nash's involvement in Iraq," said Susan Wasley, a
BE&K spokeswoman.

Another official from the Projects and Contracting Office,
Amy Burns, joined Nash at BE&K Government Group earlier this
year as vice president of business development, but Wasley said
she resigned last month.

Nash also recently joined the board of defense contractor
EOD Technology, which has contracts with the Contracting and
Projects Office in Baghdad, as well as with the Army Corps of
Engineers and the Navy.

Another top official involved in Iraq's reconstruction,
former Army Corps of Engineers chief Robert Flowers, now runs
the federal contracts subsidiary of HNTB, an engineering
company recently hired by Louisiana as a subconsultant for
emergency repairs to bridges over Lake Pontchartrain.

Under federal "revolving door" prohibitions, Flowers was
not allowed to deal directly with Corps officials for a
specified period on matters under his control when he was Chief
of Engineers.

But that period has now passed, an HNTB spokesman said. "It
is his job to help us win work," said the spokesman.

Flowers recently hired as vice president Robert Vining, who
oversaw the Army Corps' $4.6 billion annual civil works

The Pentagon's inspector general, Joseph Schmitz, also
recently stepped down to take a top job at the parent company
for Blackwater USA, one of the largest private security firms
in Iraq. Blackwater has also been active since Katrina.

A spokeswoman said Schmitz would abide by rules that
temporarily restrict his involvement in matters related to the