NBC reports today results of eight months of looking into the billings by Arkansas native and former FEMA chief James Lee Witt's consulting firm for handling Hurricane Katrina work in Louisiana. The lead:
In the traumatic days after Hurricane Katrina, Louisiana Gov. Kathleen Babineaux Blanco turned to one of the most respected names in emergency management: James Lee Witt, the so-called Master of Disaster. But an eight-month investigation by NBC News into the performance and billing practices of Witt’s firm, James Lee Witt Associates, raises questions about profiteering, cronyism and possible falsification of records by one of Witt Associates’ subcontractors.
Much of the attention focuses on huge billing ($90,000 in one month) by top manager Mark Merritt, a long-time friend of the Witt family, and a Dardanelle-based recovery firmed headed by Merritt's parents. The reporting questions the number of hours billed by Merrit and the 100 percent markup of the cost of work by his parents' company and includes an allegation by one worker of padded timesheets. The Louisiana Ethics Board has cleared the arrangement of a subcontract with a firm headed by relatives of one of Witt's managers, but I don't this eliminates the odor.
Witt defends his firm's markups and the amount of hours billed by Merritt. But further investigation seems certain in Louisiana. Witt's reputation seems likely to take further tarnishing.
UPDATE: The Witt Associates formal response is on the jump.
WITT NEWS RELEASE
As you know, tonight, NBC Nightly News aired a story about James Lee Witt Associates ' contract in Louisiana. They interviewed two people, a former subcontractor 's disgruntled employee and the Louisiana State Treasurer who has Gubernatorial aspirations. And frankly, the State Treasurer did not throw us under the bus.
See the detailed facts that rebut what was said in the story . We worked very hard to educate NBC about our work, but frankly, they had 10 words, by two people that they could make into a three minute story and they did a fine job of that. They did not examine the 70,000 pages of documents and put them in the context we provided to them, 6 months into their investigation, when they first talked to us on the record.
In an open and honest manner, we cooperated with NBC Investigations for almost a year providing them with over 70,000 pages of documents. At no time, would NBC Investigations have a meeting off camera with us and allow us to answer their questions or explain our business model, our State of Louisiana contract or subcontracts. Even with ethics rulings stating that there was no improper relationship between us and our subcontractors, NBC Investigations proceeded to air this story even when the premises of their story was false.
The facts are as follows:
Any state facing disasters the size and complexity of Hurricanes Katrina and Rita would need help from a qualified and experienced firm like James Lee Witt Associates to navigate Federal red tape and represent the interests of impacted communities in the face of thousands of FEMA and other Federal personnel. Prior to the hurricanes, Louiisian had only five staff trained to manage its responsibilities under the disaster assistance programs.
Because of the support provided by JLWA, the State of Louisiana was able to meet their responsibilities, moving an unprecedented $2.2 billion in recovery money to Louisiana communities in less than 18 months -- an amount unmatched in any other disaster in United States history.
JLWA also helped Louisiana recruit and train local staff -- who are now State employees -- to build in-state capacity and reduce the State's long-term costs of recovery.
JLWA brought qualified people to provide the debris monitoring services required by the State. At the time, only two firms in the country had the staff and capacity to service disasters the size of Katrina and Rita: PBS&J and RMI. Since PBS&J was fully engaged in Mississippi (and RMI had excess capacity still available), RMI was selected for the task.
A review of RMI's corporate background by the State demonstrated that they were fully qualified to do the work asked of them. Because of the concern over appearances, however, JLWA identified the relationship between Mr. Merritt and his parents (who own RMI) early to the State, and even a review by the State Ethics Board deemed that the relationship was not improper in any way.
Louisiana has taken great steps to prevent fraud through monthly 100% audits by State auditors, which have identified no problems with JLWA’s work or billing practices.
JLWA is proud of its accomplishments in Louisiana . While we are a private company our costs have been reasonable
and without releasing propriety information,within the industry average and we have approached our work with the interest of the taxpayer in mind
This is not the standard to which we are used to seeing NBC News operate and we are strongly disappointed in airing a story which doesn't tell the hard work and value that the State of Louisiana is getting for recovery work. In fact, NBC News ignored our efforts to inform them of the value when we provided them data spelling out that we are able to provide this service to the State of Louisiana at even lower rates than FEMA can provide the same service. We are able to provide this service at an average of $45 per hour lower than even the government could provide it and thus a savings to the taxpayer, which has always been paramount in our work ethic.