Investigative Classics is a weekly feature on noteworthy past examples of the reporting craft.
At least since Noah and “The Epic of Gilgamesh,” floods have been a staple of storytelling. With a hurricane's rains now inundating the Carolinas, we are reminded that they are also a staple of journalism in modern times, with reporters looking to distinguish themselves through vivid accounts of the heroism people often muster in the face of suffering and devastation.
But what happens later, as things begin their slow return to normal, can be just as revealing of human nature.
And that was Gordon Russell and James Varney's focus in the New Orleans Times-Picayune’s Pulitzer Prize-winning coverage of Hurricane Katrina in 2005. They exposed the systemic greed that arose in the storm’s wake by telling the story of a common object: the blue tarp.
Here’s how they opened their exposé:
Blue FEMA tarps are a common sight in post-catastrophe tableaus from New Orleans to Puerto Rico, above. They're also an emblem of inflated disaster-relief costs -- in other words, greed.The blue-tarp roof, a symbol of hurricane damage in south Louisiana and Mississippi as recognizable as curbside debris, may wind up as a post-Katrina emblem of government waste reminiscent of the Pentagon's fabled $435 hammers and $640 toilet seats.
Depending on the extent of damage and the size of the roof, the federal government is paying anywhere from a few hundred dollars to $5,000 to install a typical tarp. The cost to taxpayers to tack up a covering of blue vinyl is roughly the same, on a per-square-foot basis, as what a homeowner would pay to install a basic asphalt- shingle roof.
Yet the laborer putting nail to tarp typically earns only a fraction of that. The cost is driven up by layers of subcontractors, an expensive flowchart that sometimes produces the sub-sub-sub-sub- subcontractor, known in post-Katrina parlance as a "fifth-tier sub."
The arrangement isn't unique to roofing. On almost any contract let by either the Federal Emergency Management Agency or the Army Corps of Engineers, who together control most of the more than $60 billion earmarked by Congress for hurricane aid, a similar system of tiering exists. Nor are such contractual layers indigenous to a universe shattered by Katrina and Rita. Those involved in the work say similar arrangements are commonplace after natural disasters throughout the United States.
Temporary housing, for example, provides another area in which contract nesting proliferates. FEMA buys trailers from brokers, who bump up the price per unit by thousands of dollars. And on New Orleans' housing inspection contract, the federal government paid The Shaw Group nearly $80 an hour, city officials said, for building inspectors who earn about a quarter of that amount, according to city inspectors.
In other words, the guy spinning a Bobcat choked with tree limbs on a residential street may be earning as little as $1 per cubic yard of debris, although the prime contractor may be billing 20 times that amount for the service.
Russell and Varney brought this “tiering” system to life through trickle down math. They began at the top, with the prime contractors, including The Shaw Group, charging about $160 per roofing "square," or 100 square feet.
Todd Woods, owner of A-1 Construction and Roofing, a subcontractor to Shaw, said Shaw pays him $75 for each square laid by subcontractors who report to him. Further down the chain, Erik Larsen, whose Wescon Construction is a subcontractor to A-1, said he gets $30 a square for tarps that he and his subcontractors lay.
But Larsen said his subcontractors also have subs, who in some cases have subs themselves. Those at the bottom sometimes earn as little as $2 per square, Larsen said.
They also reported that the federal government abetted this gaming of the system through rules that thwarted transparency and accountability. The government, for example, said it couldn’t release the proposals it received before awarding valuable, open-ended contracts because regulations require it to keep bids confidential to protect the competitive interest of the bidders.
After noting that this “tiering” system was probably costing taxpayers billions of dollars, Russell and Varney ended their piece with a quote:
"Pyramid schemes may be OK on TV commercials, but they're not good when we're trying to rebuild a significant portion of our country," said Keith Ashdown, another member of Taxpayers for Common Sense. "I don't think you should go beyond one subcontractor. There's no way we should be paying this."
