Surprise! More Problems Revealed!

In an article released today, AP writer JOHN MORENO GONZALES reports that "tens of thousands" of people in New Orleans

"... are still waiting for their government rebuilding checks, and many complain they can't even get their calls returned. But the company that holds the big contract to distribute the aid is doing quite well for itself."

Some of these folks have been living in trailer homes for 2 1/2 years. Simply outrageous.

The company that has been placed in charge of managing the housing operation, ICF International of Fairfax, Va., seemed to be able to talk the great state of Louisiana into giving it a pay raise, despite the poor work record. As the article notes:

"In the waning days of Gov. Kathleen Blanco's administration, state officials increased the management contract ceiling from $756 million to $912 million — this, after the Legislature wanted to fire ICF over its handling of the homeowner recovery program, called Road Home."

Not bad. A for-profit company bungles the job ... and gets a $156 million pay raise. (Clearly, I'm in the wrong line of work.)

Soon after Katrina, the Federal Government and Louisiana Government set up this "Road Home" program to help people out. From the AP article:

"Road Home was created in June 2006 as a state-run, federally funded plan to compensate homeowners for the breach of New Orleans' government-run levees. Homeowners can apply for grants to repair their homes, or obtain buyouts if they don't want to fix things up."

Yet, 56,000 applicants — nearly 40 percent of the qualified total — had yet to receive a cent as of last month ...

Good news and bad news here, folks. But I'll get to that in a minute.

As one might guess, ICF began pointing fingers at the state while splitting hairs at the same time. The article goes on,

"ICF spokeswoman Gentry Brann blamed the state's ever-changing rules and political meddling by officials and community groups for many of Road Home's difficulties.

She said that Road Home has come to be regarded as an entitlement program, and said the company must carefully evaluate 157,000 applications to guard against fraud.

"The state essentially redefined the goal of the program from rebuilding to relief in midstream," Brann said.

She said the $912 million that the company could be paid is to cover the costs of the program and was approved by public officials.

"It's very important to note this is not a `pay increase.' It's not actually even `pay' to ICF. Rather it is an increase in the contract ceiling to cover the additional unit price costs incurred by our subcontractors," Brann said."

As a consultant and independent contractor myself, this last paragraph is one of the best examples of hair-splitting that I've seen in a long time. If I usually charge $9,000 for a corporate keynote speech, and then decided that I needed $18,000 per speech, yes, technically, since I don't get "paid" by a company when I give a keynote speech (in the same sense that the company pays an employee), so I can't really say I get a "pay raise." But money does change hands ... and that's the point here.

Now ... the good news and bad news?

The bad news? From the AP article:

"Plagued by cost overruns and delays, Road Home is expected to cost the taxpayers $10 billion in federal money and has become another glaring symbol of frustration and red tape in post-Katrina New Orleans."

$10 billion dollars. That's significantly bad to people like you or I.

The good news? To use a phrase I heard when I was volunteering in Mississip, compared to what the U.S. is spending on the military, "That ain't nothin'."

It's a bit tricky to get a handle on U.S. military spending, since estimates on U.S. military spending range from approximately $500 billion (White House) to $711 billion (Center for Arms Control and Non-Proliferation).

But even at the most conservative amount ($500 billion from the White House), the U.S. is spending about $1.37 billion PER DAY on military expenditures. So the $10 billion "cost overruns and delays"? It takes about ONE WEEK to spend that much money in the military. (And again, that's using the more conservative figures, so reality is probably far worse.)

As I said in my book HEALING KATRINA, I'm not opposed to the military. I AM opposed to wrong-headed priorities, though. Leaving people to rot in poisonous trailers is the wrong thing to do.