Even as Hurricane Katrina flushed the Bush administration’s mendacious Federal Emergency Management Agency (FEMA) head Michael Brown out of office, a slippery menagerie of bottom feeders, swamp things, carpetbaggers, and looters swarmed in behind the storm to feed on what could top $200 billion in spoils. Two profiteers who rushed to the scene—former FEMA-chief Joe Allbaugh and his old mortician chums at Houston-based Service Corporation International (SCI)—co-starred in one of Texas’ last repugnant scandals of the 20th century.
The world’s largest funeral corporation, SCI gained notoriety seven years ago in Texas’ Funeralgate scandal. The Texas Funeral Service Commission (TFSC) recommended a record $445,000 fine against SCI in April 1998. In its drive to cut costs, SCI allegedly used unlicensed embalmers whose corpses and coffins had been known to leak embalming fluid. TFSC fired its executive director, Eliza May, in 1999 after she turned to campaign reports for clues about why so many politicians were pressuring her agency to back off SCI. The top beneficiary of SCI’s largesse was then-Governor George W. Bush, who had taken $45,000 from SCI’s PAC and CEO.
In May 1998 Joe Allbaugh used his office as Bush’s gubernatorial chief of staff to convene a meeting where SCI CEO Robert Waltrip and his lobbyist looked on as May got worked over about the SCI probe. SCI lobbyist Johnnie Rogers later told Newsweek that during a visit that he and Waltrip made to Allbaugh’s office a month earlier Governor Bush poked his head in and said, “Hey Bobby, are those people still messing with you?” This contradicted an affidavit that Bush had submitted in response to a lawsuit over Eliza May’s firing in which the governor swore that he “had no conversations with SCI officials, agents or representatives” about the probe. By the time SCI settled the TFSC complaint for just $21,000 in 2003, Bush and Allbaugh were long gone to Washington.
Given Allbaugh’s hatchet work on SCI’s behalf, it must have come as a betrayal when SCI joined the post-Katrina choir accusing FEMA—under Allbaugh’s old pal Michael Brown—of being a disaster unto itself.
Decomposing flesh was the most pungent indicator of sluggish Katrina response. SCI’s “mobile-morgue” disaster arm, Kenyon Worldwide Disaster Management, got the Katrina call under an ongoing disaster contract with FEMA. Telling The New York Times that Kenyon had workers on location three days after landfall, a company spokesman said FEMA failed to order the body harvest to begin until five fetid days later. “FEMA couldn’t get the live people out in time,” former New Orleans health director Brobson Lutz told the Times, “and they can’t get the dead people out in time.”
A windfall’s landfall
What some people find offensive about Allbaugh this time is that he hustled his Bush administration ties and his FEMA credentials to disaster-industry clients—even as his old agency fumbled its Katrina-relief efforts. Eighteen months after September 11th sent disaster-industry stocks soaring, Allbaugh stepped down as FEMA director in March 2003, tossing the agency’s keys to his chum of 25 years, Michael Brown. Allbaugh quickly began selling his connections, often to clients that make money from human or natural disasters.
In one of his post-FEMA ventures, Joe Allbaugh teamed up with veteran Republican lobbyist Lanny Griffith to start New Bridge Strategies, a firm that helps businesses exploit opportunities in a man-made disaster area: U.S.-occupied Iraq. Griffith hailed from Barbour Griffith & Rogers, which became Washington’s top-grossing lobby firm after co-founder Haley Barbour finished a stint as Republican National Committee chair. As Allbaugh ran FEMA in 2002, Barbour Griffith & Rogers recruited FEMA first lady Diane Allbaugh into its ranks. By the time Joe Allbaugh left the government to become a lobbyist in 2003, Haley Barbour was headed the other way through the revolving door, running a successful campaign to be governor of Katrina-landfall state Mississippi. One of the top federal contractors to emerge from the storm’s immediate aftermath was Barbour Griffith & Rogers client AshBritt, which landed a $568 million Army Corps of Engineers contract to haul away Katrina debris.
After FEMA, Joe Allbaugh also started the lobby shop Allbaugh Co. with his wife. Allbaugh Co.’s early anti-terrorism clients included Manhole Barrier and Grab Barrier, which sell devices to keep unauthorized people out of manholes and parking lots. Also waiting outside FEMA’s revolving door were fire engine maker Oshkosh Truck, TradeWinds environmental remediation company, FEMA debris-removal contractor MLU Services, and FEMA videoconferencing supplier Polycom.
This year, before the storm’s birth, the Allbaughs signed two of Katrina’s first big contractors: Shaw Group and Halliburton subsidiary Kellogg Brown & Root (KBR). Shaw landed two federal contracts of up to $100 million apiece to rebuild housing and levees. KBR is repairing Gulf Coast naval facilities and providing facilities for FEMA workers in New Orleans. It also landed federal contracts to pump floodwater and build a temporary morgue. On the ground at ground zero, Joe Allbaugh said that he urged another new client, Ultrastrip Systems, to market its water purifiers to local health facilities.
Not to be outdone, Clinton FEMA Director James Lee Witt is advising Louisiana Governor Kathleen Blanco on disaster relief—even as he lobbies for such disaster-industry clients as warning-siren maker Whelen Engineering and communications systems designer Harris Corp.
Not buying it
The Allbaugh family, which has raked in some $1.5 million in lobby income since Joe Allbaugh joined Bush’s inner circle, is keenly aware that its insider lobbying looks and smells bad to some outsiders. Diane Allbaugh defused an early ethics scandal in Texas by agreeing to stop lobbying state officials in 1996. Critics complained at the time that her marriage to Governor Bush’s right-hand man had everything to do with her signing Texas lobby contracts worth up to $250,000 just 18 months after her family moved from Oklahoma to Austin. Diane Allbaugh ended her lobby furlough after her husband became Bush’s presidential campaign manager in 1999. At that time, she booked clients both in Austin and Washington. In fact, Diane Allbaugh presciently registered her first disaster-relief clients in 2000 (wireless radio and positioning companies Com-Net Ericcson and TruePosition), a year before her husband’s FEMA appointment.
Played backwards from Katrina’s aftermath to the time that the Allbaughs joined Bush’s nascent gubernatorial administration, it’s uncanny how this family seemed to fall into the perfect place to exploit the perfect storm. It also is remarkable how Diane Allbaugh’s lobbying not only tracked opportunities created by her spouse’s political career but at times even seemed to anticipate them. Diane Allbaugh’s disaster-relief clients predate her husband’s FEMA appointment, which spanned the astonishing boom in disaster-relief spending unleashed by September 11th. Within a year of the World Trade Center attacks Diane Allbaugh landed a new job at the firm of future Katrina landfall state governor Haley Barbour.
Now the Katrina debacle that exposed the failures of FEMA under Allbaugh’s resume-inflating pal has opened floodgates of federal spending that look like they will enrich the Allbaughs. In a 2004 National Journal article posted on his lobby firm website, Joe Allbaugh said, “I don’t buy the ‘revolving door’ argument. This is America. We all have a right to make a living.” If Allbaugh doesn’t buy the ‘revolving door’ argument, it may be because he is too busy selling it.
Andrew Wheat is research director of Texans for Public Justice.