Newsweek 's Fineman linked Shaw Group to Blanco cronyism in Katrina relief; ignored ties to Bush administration

››› ››› ANDREW SEIFTER

Highlighting "concerns" about the "cronies who surround" Gov. Kathleen Babineaux Blanco (D-LA), Newsweek chief political correspondent Howard Fineman cited the Democratic ties of a construction firm that recently obtained a Federal Emergency Management Agency (FEMA) contract for Hurricane Katrina relief efforts -- while ignoring the company's well-publicized ties to the Bush administration.

In the lead news story in the September 26 edition of Newsweek, Fineman noted that Jim Bernhard, the chief executive officer of the Shaw Group Inc., has made political contributions to Blanco and recently served as Louisiana Democratic Party chairman:

The president is dispatching "inspectors general" to audit the books, but they had better be a cross between George Patton and Eliot Ness if they are going to master the folkways of Louisiana. Concerns have already been raised about the cronies who surround Governor Blanco. Jim Bernhard, a major financial supporter, last week quit the chairmanship of the state Democratic Party so he could devote himself full time to his company, the Shaw Group, which had just won a $100 million contract from the Feds for reconstruction work.

But Fineman neglected to note Shaw's links to the Bush administration. Joe Allbaugh, a former Bush-Cheney national campaign manager who served as FEMA director from 2001 to2003, is a paid lobbyist for the firm. Indeed, as The New York Times reported on September 14, the federal contract with Shaw is now under investigation by Department of Homeland Security (DHS) inspector general Richard L. Skinner, who will apparently be looking into the Shaw Group's relationship with Allbaugh:

The inspector general of the Department of Homeland Security said Tuesday that his office had received accusations of fraud and waste in the multibillion-dollar relief programs linked to Hurricane Katrina and would investigate how no-bid contracts were awarded to several large, politically well-connected companies.

[...]

He [Skinner] said that his investigators would focus on several no-bid contracts awarded over the last two weeks to large, politically influential companies, including the Fluor Corporation of California, a major donor to the Republican Party, and the Shaw Group of Baton Rouge, La. Shaw is a client of Joe M. Allbaugh, a consultant who is the former head of FEMA and was President Bush's campaign manager in 2000.

Another of Mr. Allbaugh's clients -- Kellogg Brown & Root, a subsidiary of Halliburton, the giant defense contractor once led by Vice President Dick Cheney -- is doing major repairs at Navy facilities along the Gulf Coast that were damaged by the hurricane. That work is being done under a $500 million contract with the Defense Department.

Mr. Skinner said he had no reason to believe there was anything wrong with the no-bid contracts, "but we're going to be looking at all of the contracting, the decision-making that was used to determine a sole-source contract."

"We want validation and we want documentation to show that it was rational to go one way or the other" in offering a no-bid contract, he said.

The Washington Post reported on September 8 that, although Allbaugh claims that he has not "personally approach[ed] any government agencies about contracts," he traveled to Louisiana following the hurricane and has been "helping his clients get business from perhaps the worst natural disaster in the nation's history."

The Shaw Group's ties to the Bush administration have been widely reported by others as well. For example, the same September 26 edition of Newsweek featured an article noting that President Bush's appointment of inspectors to monitor Katrina relief spending "hasn't prevented accusations of cronyism, especially given that the president's former campaign manager Joe Allbaugh is a paid consultant to Shaw and Halliburton." Similarly, Time magazine reported on September 18 that, although Shaw has "equally close connections to the Louisiana Democratic Party," the company has "strong ties to the Bush administration," having "recently built a helicopter pad for Vice President Dick Cheney's home in Washington."

Posted In
Government, The Presidency & White House
Stories/Interests
Hurricane Katrina, Natural Disasters
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