Ex-FEMA chief profiteering on Katrina?

Witt and Blanco respond
In a statement, Witt Associates disputed questions raised about its work and billing practices in Louisiana. Witt’s firm vigorously defends its record, saying taxpayers have gotten good value and that its markups are “reasonable” and in line with industry practice.

Of the 100 percent markups, the company says: “[T]he way we mark up costs is reasonable in the business environment” and less than what it would cost for the government to perform the same work.

As for the monthly bills submitted by Mark Merritt, the company states, in part: 

“There were MANY hours worked and we know that the amount of work was unprecedented. Even though the principles of the team worked 7 days a week averaging 16-20 hours a day, they NEVER billed for more than 12 hours even though they worked more. We have consistently been conscious of reducing costs wherever we could including shared lodging and accommodations saving the State more than half in expenses.”

The company also challenges LaFosse’s allegations of timesheet fraud. “Had this practice been done, JLWA would have immediately forwarded this allegation of fraud to the auditors for investigation,” the company wrote. “ JLWA only charges for the work that was performed.”

Asked for comment, Blanco said in a statement that Witt Associates should “take appropriate action if necessary,” adding, “We expect James Lee Witt to make sure work charged is work performed.”

But Kennedy, the state treasurer and a Democrat like Blanco, believes the state needs to do more than leave it to Witt Associates to take action. He is calling for a full investigation into all Katrina contract markups, including Witt Associates’.

“I think if you made a 100 percent markup, you damned well better have earned it,” he told Myers. “Because if you didn’t, that’s cheating the American taxpayer who’s given our people money to rebuild.

“And even worse, that’s cheating our people. They’re not trying to profiteer. They’re trying to get back their futures. They’re trying to get back into their homes and educate their kids and just survive. It’s our job to make sure that every single penny gets to the people who were hurt by these storms.”

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