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Bloggers' Note: Following the money trail. Washington Post article attempts to untangle the money web, supporting accountability, and keeping Katrina front and center in its coverage.
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Two-Thirds of Katrina Donations ExhaustedCharities Faced With Difficult Decisions and Countless Requests as They Spend What Is Left
By Jacqueline L. Salmon and Leef SmithWashington Post Staff WritersMonday, February 27, 2006; A01
Six months after Hurricane Katrina laid waste to the Gulf Coast, charities have disbursed more than $2 billion of the record sums they raised for the storm's victims, leaving less than $1 billion for the monumental task of helping hundreds of thousands of storm victims rebuild their lives, according to a survey by The Washington Post.
Two-thirds of the $3.27 billion raised by private nonprofit organizations and tracked by The Post went to help evacuees and other Katrina victims with immediate needs -- cash, food and temporary shelter, medical care, tarps for damaged homes and school supplies for displaced children.
What's left, say charities and federal officials, will need to be stretched over years to rebuild lives and reconstruct the social fabric of the Gulf Coast -- from job training to mental health counseling to rebuilding the homes of the poor to reestablishing arts organizations and paying clergy as they wait for their congregations to return.
The Post survey, the first detailed examination of the largest outpouring of charity in the nation's history, also found the following:
· The American Red Cross, which was criticized for slow distribution of donations after the Sept. 11, 2001, terrorist attacks, has given out 84 percent of its Katrina and Rita donations.
· 50 cents of each donated dollar went out in cash to victims.
· 6 percent of contributions came in the form of supplies -- building materials, food, water, clothing, heavy equipment -- donated mostly by corporations.
· 56 percent of remaining donations are controlled by faith-based organizations. They include such well-known institutions as Catholic Charities USA and the Salvation Army but also such lower-profile groups as the United Methodist Committee on Relief and United Jewish Communities.
What remains to be done goes well beyond even the staggering costs of rebuilding infrastructure -- projects estimated to require nearly $200 billion in government aid over the long term.
"There are many, many needs that the federal government cannot cover," said Don Powell, a former Federal Deposit Insurance Corp. chairman who was named coordinator of the Gulf's long-term recovery by President Bush in November. Many are "the crucial part of life that we all depend on," he said. "It's not public works. It's not water, sewage or utilities. It's the soul of our life."
No one has put a price tag on restoring the "soul" of a region after such devastation, but the current charitable resources of about $960 million, as calculated by The Post, will not be sufficient, Powell said.
The line between what the government pays for and what charities will cover is blurred. Even though many Gulf Coast residents are eligible for federal assistance for some housing costs, plenty of other residents will not qualify, say charities, who predict they'll have to pick up the slack.
Also, the law that governs federal spending after a disaster strictly limits how much can go to private entities -- places of worships and arts groups, mental health services, youth programs and child-care centers.
The desolate fiscal situations in Mississippi and Louisiana leave those states in no position to cover what the feds cannot. Charity officials say their organizations will try to step into that breach.
For weeks after the storm, Americans and their employers poured hundreds of millions of dollars into charities, churches, synagogues and other religious organizations. Thousands of truckloads of supplies were sent to the Gulf Coast.
The speed of the charitable inflow after Katrina topped the torrid pace of donations after the Sept. 11 attacks, when donations hit the $1 billion mark in six weeks and ultimately rose to $2.8 billion, according to Indiana University's Center on Philanthropy.
Donations to Katrina, in contrast, hit $1 billion in three weeks.
Even so, Katrina presents far broader challenges -- simply because the money must be spread over so many more victims.
"Even if we doubled, tripled or quadrupled what we have, we still wouldn't be able to meet the need," said Gary Lundstrom, director of projects for Samaritan's Purse, which is rebuilding homes along the Mississippi coast and in Louisiana's ravaged St. Bernard Parish with much of its $34 million.
Despite the charitable outpouring, some victims feel shortchanged. And there is often a disconnect between the realities of how much has been contributed and the vastness of the need.
Johnnie and Hurley Smith clung to their bedroom skylight to survive Katrina after eight feet of water inundated their home in Biloxi, Miss. They got $1,000 from the Red Cross to use for daily expenses such as lodging and food, and $100 and a new mattress from the Salvation Army. They also ate Salvation Army and Red Cross meals, and their wrecked home was gutted by a church group.
Nevertheless, Johnnie Smith, 57, says she wishes a little more of the billions in donations had come her way.
"I should have been given more assistance," said Smith, a real estate agent who is still unable to work and needs therapy to deal with the trauma of Katrina. (Her husband, Hurley, is retired.) "There was a lot of money donated, and there is still a lot of money being donated."
Some small groups along the coast complain that the big charities are ignoring them.
Saving Our Selves Coalition, a grass-roots recovery group, relies on funds from smaller organizations and individuals.
"I would hope that the [big charities] won't move like our federal government is moving," said the group's founder, LaTosha Brown. "We're six months out, and people are still up in the air. The resources are not getting to the communities."
Charities are braced for hard decisions as they spend what is left. In December, 1,000 Gulf Coast ministers jammed into a New Orleans hotel ballroom for an agonizing debate over whether $20 million donated to faith organizations by the Bush-Clinton Katrina Fund should be divided among many organizations or focused on a few.
Their decision: Rather than funding a "full dinner" for a limited number of groups, many organizations should receive a "sandwich," said the Rev. William Gray III, co-chairman of the fund's ministerial advisory committee.
Disillusioned by the sluggish government response to the storm, some nonprofit organizations are choosing to spend private dollars on projects that might otherwise be publicly funded.
The Baton Rouge Area Foundation has hired planners and other consultants at a cost of $15 million to devise a blueprint for development in southern Louisiana, a task normally taken on by the Federal Emergency Management Agency. It also is spending $1.2 million on consultants to map out a regional health care system. The foundation has yet to raise all the needed cash, having exhausted the millions in relief funds it raised earlier.
"We can do it, and we can do it much better" than the federal government, said John Davies, chief executive of the foundation.
And many homeowners and renters are turning to nonprofit groups after failing to qualify for government aid.
"We've been swamped" with inquiries, said Ken Meinert, senior vice president for Habitat for Humanity's Operation Home Delivery project, which is rebuilding 1,000 houses along the coast with the $80 million it has raised. It hopes to raise additional money to build another 1,000 residences.
Catholic Charities USA hopes to build 5,000 housing units for the poor in New Orleans, some of it on church-owned land, leveraging its money with loans and grants, said the Rev. Larry Snyder, the group's chief executive.
The group has so far disbursed $58 million of the $142 million it collected to 76 Catholic Charities agencies and other organizations in 29 states for counseling, job placement and housing.
New Orleans resident Tyler Jones, 45, who lost everything in the storm, said Catholic Charities provided his family with medical care, money for clothes, counseling and other support to get their lives back on track. "They restored my faith and my hope by helping me," said Jones, a New Orleans sheriff's deputy.
In its survey, The Post identified 15 charities that collected the most money, based on a database from the Center on Philanthropy of 141 charities raising money for hurricanes Katrina, Rita and Wilma.
It asked for the amounts collected and how much has been disbursed. It also obtained breakdowns of how much had gone for short-term relief and amounts remaining for long-term recovery.
Some of that money is causing tension on the Gulf Coast.
Doctors struggling to rebuild practices are clashing with emergency clinics set up after the hurricane. The physicians say the free medical care is diverting paying patients from their practices.
For much the same reason, International Aid, a Michigan group that raised $50 million in cash and supplies, has stopped distributing food now that many grocery stores have reopened.
There comes a point, said the Rev. Myles Fish, the group's chief executive, when "you don't want to harm the local economy, so you've got to discontinue the free stuff."
Some charities that have focused on the more immediate needs of the storm's victims are winding down.
The American Red Cross announced earlier this month that it had received enough donations to cover the $2.1 billion cost of its operation and asked donors to give to other hurricane-relief groups.
It is, however, reserving $194 million for its local chapters for long-term recovery, it said.
Other groups focused on longer-term programs are just gearing up.
The United Methodist Committee on Relief, an arm of the United Methodist Church, hasn't completed its strategic plan for the $69.6 million it raised from church collection plates. The group also has a $60 million contract from FEMA.
UMCOR's plan will focus on "case management," assigning paid personnel and volunteers to help the neediest victims get back on their feet over the next four to six years, said Kristin Sachen, UMCOR's assistant general secretary, who oversees the group's relief efforts.
"It is slower," said Sachen of her group's efforts. "It is not emergency work. It is long-term recovery."
Staff researcher Derek Willis contributed to this report.
© 2006 The Washington Post Company
Monday, February 27, 2006
Sunday, February 26, 2006
A Link: Dubai Ports and Secretary Snow (Bush Secretary of Treasury)
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Blogger's Note: I appreciate the article for connecting the dots. Good investigative reporting includes assimilating seemingly minute points of information and seeing if a picture emerges. This article accomplishes that end.
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It's just yet another blurry line -
David Lazarus
Sunday, February 26, 2006
SF Chronicle
Say what you will about the propriety -- and national- security implications -- of having a government-owned Middle Eastern company manage major U.S. ports.
What's even more remarkable is that once again President Bush is forced to defend a controversial deal involving a corporate entity linked to a senior member of his administration.
To date, the gold-medal winner in potential corporate-political logrolling has been Vice President Dick Cheney, whose former employer, Halliburton, has received millions of dollars in government contracts in Iraq and elsewhere.
Now we have as silver medalist Treasury Secretary John Snow, who previously served as head of transportation giant CSX Corp. The company sold its global port assets to Dubai Ports World for $1.15 billion a year after Snow left for the White House.
Snow's Treasury Department was the government agency that subsequently vetted and approved the $6.8 billion sale of a British company to state-run Dubai Ports World. The Dubai conglomerate in turn will take over the British firm's management of six U.S. ports.
The Treasury Department says Snow played no role in CSX's dealings with Dubai Ports World.
"If people do look into it, they'll see in fact there's absolutely no personal interest or relationship on the part of Secretary Snow with business activities at CSX Corp.," Tony Fratto, a Treasury spokesman, told reporters last week.
But the situation once again highlights how blurry the line separating political and corporate interests has become. This is the danger of having former CEOs running the country, especially when they come from powerful industries like oil and transportation.
"The potential for conflict of interest is greater today than it's ever been," said Kirk Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University.
The concern, he said, lies not just in an official's affiliation with a former employer but also in the fact that the official typically maintains relationships with executives who remain with the company.
Snow may have had nothing to do with CSX selling its ports division to the Dubai company, Hanson observed. But it's likely that Snow knows high-level people who now work for the Mideast firm.
Dubai Ports World's general counsel, George Dalton, and its head of business development, Matt Leech, came to the company from CSX.
"As more Republican and Democratic officials move into private-sector jobs and then move back into the public sector, you'll see more and more cases like this," Hanson said.
Some critics of the deal, not unreasonably, have noted that two of the 19 hijackers behind the Sept. 11, 2001, attacks on the World Trade Center and Pentagon were from the United Arab Emirates.
Moreover, 11 of the hijackers -- all Saudis -- flew to the United States from Dubai. And U.S. officials say that Dubai played a central role in Osama bin Laden's financial network prior to the attack.
Last but not least, Dubai was also used by the man called the father of Pakistan's nuclear program, Abdul Qadeer Khan, to quietly provide nuclear technology to Iran and Libya.
On the other hand, Dubai serves as a base for U.S. military activities in the region and is credited by the Bush administration with being an ally in efforts to combat terrorism.
Bush, who has staked his presidency on national-security issues, told reporters last week that he's comfortable with Dubai Ports World overseeing commercial aspects of some of the largest ports in the United States.
"If there was any chance that this transaction would jeopardize the security of the United States, it would not go forward," he insisted.
"This is a company that has played by the rules, that has been cooperative with the United States, a country that's an ally in the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through."
What kind of signal does it send, though, to have yet another top administration official linked to yet another controversial corporation entrusted with vital (and profitable) aspects of the nation's defense?
Snow pocketed $33.2 million when he divested his CSX holdings before joining Treasury in 2003.
He got an additional $8 million in deferred compensation a year later and will receive annual pension payments of $79,129.
Snow parlayed a stint as head of the National Highway Traffic Safety Administration in 1976-77 to become a lobbyist for the Chessie System railway, which merged with the Seaboard Coast Line in 1980 to form CSX.
He was named president of the company in 1988, chief executive a year later and chairman in 1991. He remained with CSX until Bush tapped him for the Treasury post.
Snow sold CSX's shipping division, CSX Lines, to none other than the Carlyle Group in 2002 for $300 million.
Carlyle is a prominent Washington investment firm that in past years has counted among its associates the likes of former President George H.W. Bush, former Secretary of State James Baker and the bin Laden family (spawning a raft of conspiracy theories).
In 2004, Carlyle turned around and sold off CSX Lines (now called Horizon Lines) to another investment firm, Castle Harlan, for $650 million. Castle Harlan was co-founded by John Castle, a prominent Republican donor.
A few months later, CSX said it was selling its international terminal business to Dubai Ports World, making the Mideast company one of the leading operators of maritime facilities.
And now Dubai Ports World is set to assume management of docks in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia -- with the blessing of Snow's Treasury Department.
Daryl Koehn, executive director of the Center for Business Ethics at Houston's University of St. Thomas, said that even if Snow played no role in any of these events, citizens are right to be concerned.
"There's a smell test that has to be passed in these cases," she said. "The appearance of a conflict can be just as bad as a real conflict when it comes to the trust people place in government."
David Lazarus' column appears Wednesdays, Fridays and Sundays. Send tips or feedback to dlazarus@sfchronicle.com.
Page D - 1
URL: http://sfgate.com/cgi-bin/article.cgifile=/c/a/2006/02/26/BUGHIHDT5P1.DTL
Blogger's Note: I appreciate the article for connecting the dots. Good investigative reporting includes assimilating seemingly minute points of information and seeing if a picture emerges. This article accomplishes that end.
888888888888888888888888888888888888888888888888888888888888888888
It's just yet another blurry line -
David Lazarus
Sunday, February 26, 2006
SF Chronicle
Say what you will about the propriety -- and national- security implications -- of having a government-owned Middle Eastern company manage major U.S. ports.
What's even more remarkable is that once again President Bush is forced to defend a controversial deal involving a corporate entity linked to a senior member of his administration.
To date, the gold-medal winner in potential corporate-political logrolling has been Vice President Dick Cheney, whose former employer, Halliburton, has received millions of dollars in government contracts in Iraq and elsewhere.
Now we have as silver medalist Treasury Secretary John Snow, who previously served as head of transportation giant CSX Corp. The company sold its global port assets to Dubai Ports World for $1.15 billion a year after Snow left for the White House.
Snow's Treasury Department was the government agency that subsequently vetted and approved the $6.8 billion sale of a British company to state-run Dubai Ports World. The Dubai conglomerate in turn will take over the British firm's management of six U.S. ports.
The Treasury Department says Snow played no role in CSX's dealings with Dubai Ports World.
"If people do look into it, they'll see in fact there's absolutely no personal interest or relationship on the part of Secretary Snow with business activities at CSX Corp.," Tony Fratto, a Treasury spokesman, told reporters last week.
But the situation once again highlights how blurry the line separating political and corporate interests has become. This is the danger of having former CEOs running the country, especially when they come from powerful industries like oil and transportation.
"The potential for conflict of interest is greater today than it's ever been," said Kirk Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University.
The concern, he said, lies not just in an official's affiliation with a former employer but also in the fact that the official typically maintains relationships with executives who remain with the company.
Snow may have had nothing to do with CSX selling its ports division to the Dubai company, Hanson observed. But it's likely that Snow knows high-level people who now work for the Mideast firm.
Dubai Ports World's general counsel, George Dalton, and its head of business development, Matt Leech, came to the company from CSX.
"As more Republican and Democratic officials move into private-sector jobs and then move back into the public sector, you'll see more and more cases like this," Hanson said.
Some critics of the deal, not unreasonably, have noted that two of the 19 hijackers behind the Sept. 11, 2001, attacks on the World Trade Center and Pentagon were from the United Arab Emirates.
Moreover, 11 of the hijackers -- all Saudis -- flew to the United States from Dubai. And U.S. officials say that Dubai played a central role in Osama bin Laden's financial network prior to the attack.
Last but not least, Dubai was also used by the man called the father of Pakistan's nuclear program, Abdul Qadeer Khan, to quietly provide nuclear technology to Iran and Libya.
On the other hand, Dubai serves as a base for U.S. military activities in the region and is credited by the Bush administration with being an ally in efforts to combat terrorism.
Bush, who has staked his presidency on national-security issues, told reporters last week that he's comfortable with Dubai Ports World overseeing commercial aspects of some of the largest ports in the United States.
"If there was any chance that this transaction would jeopardize the security of the United States, it would not go forward," he insisted.
"This is a company that has played by the rules, that has been cooperative with the United States, a country that's an ally in the war on terror, and it would send a terrible signal to friends and allies not to let this transaction go through."
What kind of signal does it send, though, to have yet another top administration official linked to yet another controversial corporation entrusted with vital (and profitable) aspects of the nation's defense?
Snow pocketed $33.2 million when he divested his CSX holdings before joining Treasury in 2003.
He got an additional $8 million in deferred compensation a year later and will receive annual pension payments of $79,129.
Snow parlayed a stint as head of the National Highway Traffic Safety Administration in 1976-77 to become a lobbyist for the Chessie System railway, which merged with the Seaboard Coast Line in 1980 to form CSX.
He was named president of the company in 1988, chief executive a year later and chairman in 1991. He remained with CSX until Bush tapped him for the Treasury post.
Snow sold CSX's shipping division, CSX Lines, to none other than the Carlyle Group in 2002 for $300 million.
Carlyle is a prominent Washington investment firm that in past years has counted among its associates the likes of former President George H.W. Bush, former Secretary of State James Baker and the bin Laden family (spawning a raft of conspiracy theories).
In 2004, Carlyle turned around and sold off CSX Lines (now called Horizon Lines) to another investment firm, Castle Harlan, for $650 million. Castle Harlan was co-founded by John Castle, a prominent Republican donor.
A few months later, CSX said it was selling its international terminal business to Dubai Ports World, making the Mideast company one of the leading operators of maritime facilities.
And now Dubai Ports World is set to assume management of docks in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia -- with the blessing of Snow's Treasury Department.
Daryl Koehn, executive director of the Center for Business Ethics at Houston's University of St. Thomas, said that even if Snow played no role in any of these events, citizens are right to be concerned.
"There's a smell test that has to be passed in these cases," she said. "The appearance of a conflict can be just as bad as a real conflict when it comes to the trust people place in government."
David Lazarus' column appears Wednesdays, Fridays and Sundays. Send tips or feedback to dlazarus@sfchronicle.com.
Page D - 1
URL: http://sfgate.com/cgi-bin/article.cgifile=/c/a/2006/02/26/BUGHIHDT5P1.DTL
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