Ex-FEMA chief profiteering on Katrina?

Phony timesheets and cronyism?
Padding profits wasn’t the only thing going on, LaFosse says. He maintains that an RMI boss told him to falsify his timesheets. For the first several months after hurricanes Katrina and Rita hit, LaFosse says, there was nonstop work in Cameron Parish, where he was stationed. He says that for weeks after that, however, he informed his boss, in writing, that there was little or no work left to do.

“Every week, four to five times a week, I would write, you know, ‘very slow’ or ‘nothing going on,’ ” he recalls.

Yet, he says, his supervisor told him to report 11.5-hour workdays anyway.

“I was told by the supervisor that we had to do that or they would get somebody else to do it,” he says.

Family links Witt firm to subcontractor
RMI is a small firm operating out of a house in rural Dardanelle, Ark. It now has other Louisiana hurricane recovery contracts besides the one with Witt Associates. How did such a small out-of-state operation come to play such a big role in the Louisiana Katrina cleanup business?

RMI’s Arkansas headquarters happens to be the home of Martha and Ron Merritt, the parents of Mark Merritt — the same top manager running Witt Associates’ Louisiana operations. The Merritt and Witt families go back decades. Mark Merritt went to school with Witt’s sons and once worked for Witt at FEMA. After Witt Associates hired RMI, RMI hired Witt’s brother-in-law to work in Louisiana.

Mark Merritt plays no financial or operational role for RMI, according to the family. RMI referred other questions to Witt Associates. The company disputes any suggestion of cronyism, citing an opinion issued last year when the matter quietly came before the Louisiana Ethics Board.

The board’s advisory opinion, stated, in part: “Since [Mark Merritt] is not involved in the oversight of the subcontract with RMI, it does not appear that RMI is prohibited from providing the contractual services for the State.”

Scott Amey, an attorney for the Washington-based Project on Government Oversight, a federal spending watchdog group that is monitoring post-Katrina contracts, believes the board should revisit its decision.

“There’s a relationship here that’s just way too cozy,” he says.

Amey is equally troubled by Witt Associates’ markups.

“I have a huge problem with 100 percent markups when there’s being little or no work being performed on the contract. Because at that point the taxpayers are being taken advantage of,” he says. “The real question for me is: If this isn’t profiteering, what is?”

Louisiana State Treasurer John Kennedy had a similar reaction when NBC News shared its findings on Witt Associates’ markups.

“If it wasn’t necessary, if they didn’t earn it, if they’re profiteering off of the misfortune of the people in Louisiana, then we ought to do something about it,” says Kennedy, who is pushing for stronger ethics laws in state contracting.

Informed of LaFosse’s allegations that he was told to submit phony timesheets, Kennedy told NBC News Senior Investigative Correspondent Lisa Myers: “That’s wrong. If that happened, somebody ought to be prosecuted to the fullest extent of the law.”

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