The much criticised Federal Emergency Management Agency (FEMA) has given its first big reconstruction contracts to firms that employ former FEMA head and Bush buddy Joseph M Allbaugh as a lobbyist. The Shaw Group announced on Friday that FEMA had given the firm a $100 million cost-plus reconstruction contract. The Shaw Group emphasised their local links – they are based in Baton Rouge, Louisiana . However, the Shaw group also hired former FEMA boss as a lobbyist this July. The Lobbying registration, which was given to the Senate on 5th August 2005, only weeks before Hurricane Katrina destroyed New Orleans, says the Shaw group has hired the Allbaugh Company to “educate the congressional and executive branch on various energy, homeland security and disaster relief issues that affect the Shaw group”

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Allbaugh did not have significant disaster management experience when made head of FEMA, but he had been George Bush’s election campaign manager in 2001. Allbaugh appointed his college buddy Michael Brown as his deputy. Brown became head of FEMA when Allbaugh left to form his own lobby company in 2003. Brown has since been taken off the New Orleans emergency work in disgrace, but he was in the management seat when the Shaw Group won its contract.

The award of the contracts is reminiscent of the “Iraq Reconstruction” contract awards. As in Iraq they are no-bid contracts open to cronyism and corruption. There is a strong argument FEMA should not award these contracts – they are disaster relief agency, not a reconstruction agency. Similarly the Iraqi reconstruction contracts were awarded by Army agencies with little reconstruction experience, resulting in poor oversight which allowed contractors to misbehave.

The Shaw contract puts the firm in charge of New Orleans vulnerable homeless people . They will not only be building housing, but also become the central administration for the “refugees”. As well as building shelters Shaw "will also provide administrative services to register displaced residents housed at emergency shelters in multiple locations in Texas and other impacted areas". As suspicions emerge that business and political interests will use the hurricane devastation to “cleanse” central New Orleans of its poor people, the Shaw Group could become the instrument for this social engineering. The Shaw Groups stock price, which had been falling due to disappointing results, jumped for $16 to $33 thanks to the contract win for New Orleans. Shaw and other contractors will also be helped by President Bush's decision to suspend an anti-low pay law (The Davis-Bacon) Act that says firms using federal funds should pay a "prevailing wage". By suspending the act, Bush makes it easier for Shaw and other firms to pay low wages in reconstruction work

The Shaw Group also recently hired another powerfully connected lobbyist. Andrew Lunquist , who was previously Dick Cheney’s assistant and the man behind the US vice President’s “Energy Taskforce”.

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Meanwhile ex FEMA head Allbaugh is now also a lobbyist for Cheney’s old firm, Kellogg Brown & Root, a division of Halliburton

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The lobbying registration is very similar to the Shaw registration, saying Allbaugh “will educate the congressional and executive branch on various energy, homeland security and disaster relief issues that affect Kellogg Brown & Root”.