After Bush stole the White House in 2000, he put his close crony Joe Allbaugh in charge of FEMA.
Allbaugh had been Bush's chief of staff when Bush was Texas Governor, and then served as Campaign Manager in the 2000 election. He was the least well known of the powerful "Iron Triangle" - Karl Rove, Karen Hughes, and Joe Allbaugh.
When Allbaugh was put in charge of FEMA, he was still at the center of a whistleblower lawsuit brought by Eliza May, the former executive director of the Texas Funeral Service Commission. The scandal became known as "Funeralgate":
Eliza May was head of the Texas Funderal Services Commission when it began receiving complaints about unlicensed embalmers being used by Service Corporation International (SCI), the world's largest funeral services company.
In one case, the mother of a popular newscaster went to lay flowers at her son's mausoleum. She was horrified to find it was "infested with gnats, and a malodorous maroon-colored fluid oozed out of her son's crypt," according to Newsweek.
May launched an investigation of SCI. But instead of receiving praise for defending the interests of Texas citizens, she was called into the Governor's office where Joe Allbaugh, Bush's Chief of Staff, was waiting with Robert Waltrip, the owner of SCI - and major Bush campaign contributor. These officials tried to pressure May into stopping her investigation - and George W. Bush stopped in to help them.
May refused to buckle under, and ultimately imposed a $445,000 fine. Soon thereafter, May was fired. May then filed a wrongful termination lawsuit against Bush, Waltrip, and SCI.
May's lawsuit made its way slowly through the courts. On June 8, 2001, while serving as FEMA Director, Allbaugh was scheduled to testify under oath. Alberto Gonzales, then White House counsel, was expected to follow. May's lawyers also intended to subpoena Bush himself, to explain his prior perjury in the case. Naturally, lying under oath a second time, while serving as President, could have exposed Bush to the same punishment as Bill Clinton - impeachment.
On November 9, 2001, the State of Texas and SCI decided to settle May's lawsuit. Texas taxpayers paid her $155,000, and SCI paid her $55,000. Naturally, Bush's lawyers imposed a gag order on Eliza May as a condition of the settlement, so little is known about the settlement.
Allbaugh went to FEMA with a mission to turn the agency over to disaster profiteers, as Jon Elliston described in 2004:
Some FEMA veterans complained that Allbaugh had little experience in managing disasters, and the new administration's early initiatives did little to settle their concerns. The White House quickly launched a government-wide effort to privatize public services, including key elements of disaster management. Bush's first budget director, Mitch Daniels, spelled out the philosophy in remarks at an April 2001 conference: "The general idea -- that the business of government is not to provide services, but to make sure that they are provided -- seems self-evident to me," he said.
In a May 15, 2001, appearance before a Senate appropriations subcommittee, Allbaugh signaled that the new, stripped-down approach would be applied at FEMA as well. "Many are concerned that federal disaster assistance may have evolved into both an oversized entitlement program and a disincentive to effective state and local risk management," he said. "Expectations of when the federal government should be involved and the degree of involvement may have ballooned beyond what is an appropriate level."
As a result, says a disaster program administrator who insists on anonymity, "We have to compete for our jobs -- we have to prove that we can do it cheaper than a contractor." And when it comes to handling disasters, the FEMA employee stresses, cheaper is not necessarily better, and the new outsourcing requirements sometimes slow the agency's operations.
William Waugh, a disaster expert at Georgia State University who has written training programs for FEMA, warns that the rise of a "consultant culture" has not served emergency programs well. "It's part of a widespread problem of government contracting out capabilities," he says. "Pretty soon governments can't do things because they've given up those capabilities to the private sector. And private corporations don't necessarily maintain those capabilities."
The push for privatization wasn't the only change that raised red flags at FEMA. As a 2004 article in the Journal of Homeland Security and Emergency Management would later note, "Allbaugh brought about several internal, though questionably effective, reorganizations of FEMA. The Bush-Allbaugh FEMA diminished the Clinton administration's organizational emphasis on disaster mitigation."
In February 2001, for example, the Bush administration proposed eliminating Project Impact, a move approved by Congress later in the year. (On the very day the White House proposal was submitted, a magnitude 6.8 earthquake rocked Washington state, which was home to several communities where Project Impact had sponsored quake mitigation efforts.) Ending the project and trimming other FEMA programs, the White House argued, would save roughly $200 million. In its place, FEMA instituted a new program of mitigation grants that are awarded on a competitive basis.
The administration also made a failed attempt to cut the federal percentage of large-scale natural disaster preparedness expenditures. Since the 1990s, the federal government has paid 75 percent of such costs, with states and municipalities funding the other 25 percent. The White House's attempt to reduce the federal contribution to 50 percent was defeated in Congress.
Allbaugh also appointed his college chum Michael Brown as General Counsel of FEMA - after he was fired from the International Arabian Horse Association, where he was called "an unmitigated, total fucking disaster" - and put him in charge of FEMA when he left.
The rest, as they say, is history.
