Archive - Hurricane Katrina and the Aftermath

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Thursday, February 28, 2008

IRS Investigating United Church of Christ for Obama Speech

On Feb. 26 the United Church of Christ published a statement revealing that the Internal Revenue Service (IRS) sent them a letter announcing it has launched an investigation into their tax exempt status because it says there is "reasonable belief" that the church violated the ban on partisan electioneering. At issue is a June 23, 2007 speech by Sen. Barack Obama (D-IL) at the church's 50th General Synod.

The IRS enforces the ban on partisan intervention in elections by 501(c)(3) organizations, which includes charities, religious and educational organizations, by applying a "facts and circumstances" test to each event. There are no set standards or clear definitions, so that groups that invite public officials to speak must make their best guess at the right way to go about it. OMB Watch has called on the IRS to develop clear standards so situations just like this can be avoided.

The following are among the "facts and circumstances" surrounding Obama's speech:

Obama was invited to speak in his capacity as a church member and elected official, a year before he became a presidential candidate
Before the speech church officials warned the crowd that the event was not about the campaign and no signs, buttons, leaflets or other campaign material would be allowed in the civic center where the event was held.
Obama campaign volunteers were not allowed into the civic center, but set up outside, presumably in public space
There were 60 speakers at the Synod, including Obama, who addressed the intersection of faith with their vocation .
Obama has been a member of Trinity United Church of Christ in Chicago for over 20 years.
Church leaders got legal advice before the event.

The church's statement denied wrongdoing, instead calling the investigation "disturbing" and likely to have "a chilling effect on every religious community." They have set up a legal fund to help defray the costs of the investigation, so that "money given for mission will not be needed to pay legal bills, instead of ministry needs."

Last September the Street Prophets blog reported that redacted IRS documents on the UCC Truths website revealed that a complaint about the Obama speech was filed with the IRS on August 2, 2007. The name of the complainant is blacked out. Church-state watchdog Americans United for Separation of Church and State had a different view in their June 25 blog statement, saying they saw no evidence that a violation had occurred, going on to note that "What happened at the UCC gathering is a lot different than some of the cases AU has reported to the IRS in the past. In those instances, there was a clear intent to intervene in a partisan race."

The UCC website has a list of news stories about the issue. You can also play the video of Obama's speech. The speech is also summarized in a June 24, 2007 New York Times article.

For backgroundn on IRS enforcement see our Resource Center: IRS Rules on Election Activities of Charities.

Posted by Kay Guinane, 06:07:19 PM

Wednesday, November 30, 2005

Latest Watcher
Be sure to check out the latest issue of our biweekly newsletter, The Watcher. Katrina-related articles this time:

Post-Katrina Survey Finds Wariness, Desire for Change

Posted by Robert Shull, 10:35:39 AM

Friday, November 18, 2005

Senate Passes Continuing Resolution

Just a short while ago, the Senate approved by voice vote this morning an extension through December 17 of the current continuing resolution (CR) funding the federal government. Sen. Mary Landrieu (D-LA) did not object to the voice vote, but went on record as voting no on the CR to highlight the plight of many still recoverying from the hurricanes on the Gulf Coast. It is still unclear what this accomplished for the people of Gulf Coast.

This particular CR is especially egregious because it drastically reduces funding for many federal programs, particularly the Community Services Block Grant (CSBG). Sen. Tom Harkin (D-IA) attempted to include an amendment to the CR that would continue funding the CSBG at a higher level instead of it receiving a 50 percent cut. Despite support for full funding from 58 Senators on a letter Harkin circulated, only 46 voted for the amendment today.

Posted by Adam Hughes, 10:51:28 AM

More Hypocrisy (Reg-Related!) from Budget/Tax Fights
If you haven't already been reading all about it, be sure to look over the OMB Watch BudgetBlog's coverage of the late night fiscal policy fiascoes -- the disastrous spending cuts bill in the House and the atrocious tax cuts bill in the Senate. The OMB Watch budget team is already calling out hypocrisy from a fiscal policy perspective, but there are additional hypocrisies worth noting from a regulatory policy perspective:

Two-Face Talk about "Up or Down Votes": The GOP mantra when radical conservative judges were renominated to the appeals courts -- nominees so radical that they threaten the very ability of the federal government to protect the public -- was that parliamentary maneuvers such as holds and filibusters should not prevent the nominees from going to the floor and getting an up-or-down vote (in other words, being allowed to simply be elevated to lifetime judgeships without any real fight). Much of this talk died down when a centrist coalition agreed to tie the hands of Democratic Senators and "save" the filibuster by making it irrelevant. Apparently, though, hashing things out in the open only matters when it comes to lifetime appointments to the federal bench, not when it comes to $60 billion tax cuts for the wealthy.
Unfunded Mandates -- Now They Care about Them, Now They Don't: We have been monitoring developments that threaten to expand the Unfunded Mandates Reform Act. A recent change to an UMRA parliamentary procedure was invoked to kill a proposal to raise the minimum wage. So "unfunded mandates" -- in the GOP parlance, it means opposing protections of the public on the grounds that federal policy decisions result in costs to state and local governments -- matter when it comes to killing the minimum wage, but not when it comes to kicking abused and neglected children out of federally-funded foster care. By restricting eligibility for the Title IV-E entitlement, the House bill shifts the cost for the now ineligible abused and neglected children entirely to the states. (By the way, those kids aren't getting any less abused or neglected.) Get more details on the cut programs here.) Just goes to show that the phrase "unfunded mandates" does not signify a problem that demands solutions; instead, it is a political weapon, deployed to freeze new public protections and then conveniently holstered when it would otherwise threaten an anti-government agenda.

Hypocrisy and hot air ... apparently, business as usual in Washington, where so many politicians fail to recognize that, just as 9/11 changed everything, so too has Hurricane Katrina changed everything when it comes to the government's role in protecting the public. Make sure you tell your representatives in Congress what you think.

Posted by Robert Shull, 10:41:14 AM

Wednesday, November 16, 2005

Help Get Katrina Contracts Online!

Join liberal and conservative groups in asking President Bush to put Katrina contracts online! Groups can add their name to our sign-on letter by emailing us.

Congress has put $62.3 billion into Hurricane Katrina relief, with billions more expected in help for Gulf Coast recovery efforts. With the federal government spending so much so quickly, opportunities for waste and fraud abound. To help find and stop misuse of taxpayer dollars, Congress, reporters, and the public must be informed of how the dollars are spent.

We call on President Bush to post on the Internet copies of every contract, requisition, task/delivery order, agreement or other authorization for spending on Hurricane Katrina relief and reconstruction as soon as contracts are signed, checks are approved or money is disbursed. For such spending that has already occurred, we urge President Bush to direct agencies to put such information online as soon as possible.

Posted by Emily Feldman, 02:17:27 PM

Friday, November 04, 2005

Katrina Victims Suffering From Staggering Unemployment

According to the latest report from the Bureau of Labor Statistics (BLS), the nation added a minute 56,000 new jobs in October, a large reduction compared to previous month's growth. Unlike the September report, BLS concluded that the weak job growth was "not attributable to the areas directly affected by Katrina" because job growth was down in all areas of the country.

The most disturbing aspect of the report was a preliminary estimate of the employment status of victims of Hurricane Katrina. Shortly after the hurricane struck, BLS - along with analysts at the U.S. Census created a short series of questions designed to identify and solicit information from survey respondents who had evacuated from their homes. Based on these questions, BLS estimated nearly a quarter (24.7 percent) of the Americans impacted by the hurricanes were currently unemployed. What's worse is this survey was not able to reach those still living in temporary facilities, shelters, or hotels, the vast majority of whom are most likely struggling to find steady employment. The 24.7 percent unemployment figure, therefore, is most likely too low.

Economic Policy Institute Senior Economist Jared Bernstein believes these new data call for congressional action:

These findings strongly suggest a necessary policy intervention that would significantly boost the job prospects of those evacuees who want to return home. Given that many of those who left the affected areas have low incomes and little savings, they need to get back to work as soon as possible. Congress therefore should quickly craft and implement policies to help these displaced persons find transportation, housing, and work.

BLS plans to continue to use these special Katrina-related questions through January 2006 to track trends in the employment status of Katrina vicitms.

Posted by Adam Hughes, 04:14:06 PM

Tuesday, November 01, 2005

More Evidence of Homeland Insecurity
The Department of Homeland Security has failed to meet security standards set after Sept. 11, according to USA Today.

The Bush administration has missed dozens of deadlines set by Congress after the Sept. 11 attacks for developing ways to protect airplanes, ships and railways from terrorists.
A plan to defend ships and ports from attack is six months overdue. Rules to protect air cargo from infiltration by terrorists are two months late. A study on the cost of giving anti-terrorism training to federal law enforcement officers who fly commercially was supposed to be done more than three years ago.
"The incompetence that we recently saw with FEMA's leadership appears to exist throughout the Homeland Security Department," said Mississippi Rep. Bennie G. Thompson, top Democrat on the House Homeland Security Committee. "Our nation is still vulnerable."

Some of the missed security deadlines could even have helped allay the damage caused by Hurricane Katrina, according to Rep. Thompson. "Thompson said the government has yet to develop a comprehensive plan to protect roads, bridges, tunnels, power plants, pipelines and dams. He said a broad plan to protect levies and dams might have helped prevent the New Orleans levies from being breached."

From chemical plant security to food safety, insecurity in our national infrastructure is pervasive and could have devastating effects in the event of a terrorist attack or another natural disaster. Read more about national security failures in the latest Watcher: "Katrina Exposes Some, But Not All, Unmet Security and Safety Needs"

Posted by Genevieve Smith, 12:50:31 PM

Friday, October 28, 2005

One More Thing About Davis-Bacon
One more thing about the White House's decision to rescind the waiver of Davis-Bacon Act prevailing wage requirements, per CNN's Lou Dobbs Tonight:

The reinstatement will not change the wages of those already working under contract. So far, the federal government has awarded $50 million in relief contracts. But it should make the contracting process from here on out more transparent and ensure displaced workers are first in line to rebuild their communities.

So there is $50 million in taxpayer money going to contractors who will continue to be allowed to pay less than the prevailing wage for construction and construction-related work.

Posted by Robert Shull, 06:04:23 PM

Hard Labor After Katrina
Times apparently aren't good for workers in the post-Katrina aftermath. Most notably, of course, the White House waived Davis-Bacon Act prevailing wage requirements for contractors, until the political pressure became too much to bear. Almost immediately after the hurricane hit, the Bush administration also announced a slew of waivers of regulatory protections, including waiver of the already atrocious rules for the maximum number of hours trucking companies can force their drivers to work without rest. (That waiver has now expired.)

Earlier this month, National Public Radio reported that thousands "of Latino workers, both documented and undocumented, fled the U.S. Gulf Coast in the wake of Hurricane Katrina. Now there are reports of discrimination by law enforcement officials, harassing suspected illegal immigrants at a Red Cross shelter in Long Beach, Miss. Contractors are also suspected of bringing undocumented workers into disaster areas for rebuilding projects, and dumping them at shelters as a form of subsidized housing."

Just last week came word that some "contractors leading reconstruction projects in the hurricane-hit southern United States have badly exploited workers and taken away business from local firms."

Cash alone won't rebuild New Orleans and the Gulf Coast; it will take the labor of American workers. Something's going terribly wrong if there are this many reports of failures to protect those workers.

Posted by Robert Shull, 04:19:28 PM

Thursday, October 27, 2005

Additional Katrina Spending Bill Expected Friday

The Bush administration is putting the finishing touches on another Katrina spending relief bill tonight and it is expected on Capitol Hill tomorrow. Early reports indicate the bill will propose to use up to $17 billion in already appropriated funds to begin reconstruction of federal facilities damanged by the hurricanes.

Although there is still a substantial amount of the previously appropriated $62 billion in relief funds left to be spent, federal rules prohibit that money from being spent on other projects, such as repairs of military bases, highways, and other federal infrastructure. The Associated Press reports the shift in funds would most likely be used for "repairs to Interstate 10 in Mississippi and Louisiana and Keesler Air Force Base in Mississippi."

AP: White House Readies New Hurricane Request

Posted by Adam Hughes, 07:50:21 PM

Tuesday, October 25, 2005

Mismanagement Failing to Keep America Safe
The dramatic (and heavily covered) speech by former State Dept. Chief of Staff Lawrence Wilkerson is most noted for its reference to a White House "cabal" that drove America into war with Iraq, but it's worth noting that Wilkerson's speech addressed a fundamental problem of mismanaging government that has not just international but also domestic policy consequences:

Generally with regard to domestic crises like Katrina, Rita -- and I could go on back -- we haven't done very well on anything like that in a long time. And if something comes along that is truly serious, truly serious, something like a nuclear weapon going off in a major American city, or something like a major pandemic, you are going to see the ineptitude of this government in a way that will take you back to the Declaration of Independence. . . . Read in there what they say about the necessity of the people to throw off tyranny or to throw off ineptitude or to throw off that which is not doing what the people want it to do. And you're talking about the potential for, I think, real dangerous times if we don't get our act together.

Underlying it all, according to Wilkerson, is a failure to engage the bureaucracy: "When you cut the bureaucracy out of your decisions and then foist your decisions, more or less out of the blue, on that bureaucracy, you can't expect that bureacuracy to carry out your decision out very well. And furthermore, if you're not prepared to stop the feuding elements in that bureaucracy as they carry out your decision, you're courting disaster."

The Bush administration's answer to the problem of a resistant bureaucracy appears to have been cronyism: installing people who are loyal to the administration, especially to its anti-regulatory, pro-corporate agenda, at the head of every agency and program in order to shove that agenda through as firmly as possible. Adbusters asks about the consequences of this approach: "in a crunch, just how many of Bush’s appointments can actually be trusted to do these jobs, both competently and with impartiality?"

When "truly serious, truly serious, something like a nuclear weapon going off in a major American city, or something like a major pandemic" happens, we'll find out the hard way.

Posted by Robert Shull, 06:37:54 PM

Friday, October 21, 2005

Are Govt. Rebuilding Contracts Too High?

Spending in the wake of Hurricane Katrina has elicited a lot of yelling and screaming from all sides, with worries ranging from how much we are spending, to how we will offset that spending, to whether or not tax and budget cuts are necessary or wise in the wake of the disaster. A new round of legitimate worries has gained more momentum recently, specifically over which giant corporations are getting government contracts, why they are getting those contracts, what their ultimate development goals are, and whether or not they are receiving too much money for the services they are providing (and thus wasting taxpayer dollars).

Halliburton has been the focus of much of this attention for receiving tens of millions of dollars from the Republican administration to work on rebuilding the Gulf Coast. Now, many are questioning the deal struck between the government and Carnival Cruise Lines, which is housing displaced hurricane victims on three of their cruise ships. The company is receiving $236 million for this six-month contract, to cover the costs of using the ships, and also to compensate for lost revenue Carnival would have received if the ships were stocked with paying vacationers.

The disconnect here, however, is that Carnival Cruise Lines is possibly making significantly more money than they should be, and thus wasting disaster-relief funds which are badly needed in many areas. The cruise line earned $150 million in revenue over a 6 month period (the data came from 2002), which is significantly lower than the $236 million being allocated to the company. (A spokeswoman for Carnival noted that revenue was down because it was the year following the September 11 attacks, but did not provide data to back up this statement). On top of this, many of the cruise line's entertainment services and staff -- a big chunk of their expenditures, no doubt -- will not be needed or used by the company over the next six months, thus arguably bringing costs even lower than $150 million.

Rep. Henry Waxman (D-CA) is a key lawmaker investigating this issue, and he sent a letter to Dept. of Homeland Security Secretary Chertoff yesterday demanding more accountability and transparency in federal contracting. The letter asks DHS to provide the following information:

All documentation regarding calculations of lost revenue provided by Carnival Corporation to justify the cost of the contract;

All documentation regarding the calculations of expenses incurred under normal operations and under the charter contract that were provided by Carnival Corporation to justify the cost of the contract;

All documentation regarding the decision to reimburse Carnival for federal taxes owed while under the charter contract; and

Any documentation regarding the development of the provision calling for return of excessive profits by Carnival.

In a time when lawmakers are calling for harsh budget cuts to offset the costs of Katrina-related spending, it is imperative that funds are not wasted through excessive government handouts to these major corporations. Lawmakers, who are responsible for these contracts, should know what the cost estimates for certain contracts should be and not be duped into paying more than what is necessary.

Posted by Becky Lewis, 02:09:02 PM

Small Business is Not So Small
The government's definition of small business is so expansive that billion dollar corporations are receiving Katrina cleanup contracts dedicated to small businesses. From the Washington Post:

The government's list of small businesses receiving Katrina-related federal contracts along the Gulf Coast includes one of the largest debris-removal firms in the country and a billion-dollar corporation that boasts former vice president Dan Quayle on its board of directors.
Neither company is a small business by any conventional standard. But because of a loophole in federal regulations, a company can be counted as one if it was once small even if it is not now, raising questions about the statistics the government has been citing to defend itself from charges that it has favored big companies in the massive Hurricane Katrina cleanup.

Big businesses taking advantage of special breaks provided for small businesses is not limited to Katrina clean up.

A study last year for the Small Business Administration found $2 billion worth of contracts awarded in fiscal 2002 that were listed as going to small businesses that were not really small. A Government Accountability Office review in 2003 found $460 million worth of small-business awards to five large firms in fiscal 2001.
"This is not an occasional occurrence. This is a problem they've had for quite some time. And they seem either unwilling or unable to correct it," said Steven Sims, vice president of the National Minority Supplier Development Council, a trade group.

Businesses that fall under the SBA's definition receive preferential treatment in the rulemaking process and in Congressional initiatives for regulatory reform. Under the Regulatory Flexibility Act, regulators have to consider the impact of regulations on small businesses. In Congress, legislators continually hold up the plight of small businesses as a rationale for regulatory reform. Yet the businesses that benefit are rarely the romanticized mom and pop store. Large corporations are in better position to take advantage of these special breaks while real small businesses are continually left out in the cold.

Read more: Small Businesses Not So Small

Posted by Genevieve Smith, 12:17:42 PM

Wednesday, October 19, 2005

Latest Watcher
Be sure to check out the latest issue of our biweekly newsletter, The Watcher. Katrina-related policy articles this time:

Katrina Exposes Some, But Not All, Unmet Security and Safety Needs
Republicans Use Katrina To Push For More Drastic Cuts
Congress Mistakenly Focusing On Katrina Spending As Top Fiscal Danger
Post-Katrina Affordable Housing Bill to Include Nonprofit Gag Provision

Posted by Robert Shull, 10:58:30 AM

Friday, October 14, 2005

Bills to Dismantle Government
Hurricane Katrina revealed more dramatically and tragically than ever before in recent memory just how much we need public institutions to protect the public and meet critical needs. There are bills pending in Congress that go in completely the wrong direction -- dismantling government rather than creating the public institutions we need.

The common themes are (1) shutting down government programs through mandatory sunsets, and (2) giving the White House the power to reorganize government with no effective oversight from Congress.

Click the links above for more information, including downloads of bill text.

Bills that mandate sunsets or call for power to shut down government programs: