NEW YORK - February 6 - A previously undisclosed longtime business relationship between the two former FEMA directors appointed by President Bush (replete with unpaid debts, personal bankruptcies and questionable business ethics) lies at the root of the disastrously failed government response to Hurricane Katrina, according to a new investigative report.

The report, published by the Real News Project, lays out the checkered pasts of Bush’s first FEMA director, Joe Allbaugh, a longtime confidante of the president, and Michael Brown, the neophyte unaccountably selected by Allbaugh to replace him when Allbaugh left government to launch a career as a consultant and lobbyist.

The report explains for the first time why Allbaugh chose Brown, a man with virtually no experience in government or management of any type, and no familiarity with disaster response, to follow him to Washington, and then arranged for Brown to replace him in the top slot. Allbaugh then began signing up clients who wanted – and got – FEMA’s lucrative contracts.

Both Brown and Allbaugh were accused in the past of fiduciary malfeasance. Before coming to Washington, both were known to associates and creditors not as rising stars but as ethically-challenged, and frequently failed, entrepreneurs.

AMONG THE FINDINGS:

• Brown was fired from his longest-held position, his principal job preceding his hiring at FEMA, for obtaining a personal loan from a prominent horse owner under false pretenses. When an official of the horse association confronted him, Brown tried to make a deal with the man to make the matter go away.
  
  
• Allbaugh accepted and defaulted on several questionable loans. These included one from an elderly widow, and another loan guaranteed by a large contractor doing business with the state of Oklahoma while he was a top aide to the governor; he never repaid the loan.
  
  
• When Allbaugh left FEMA, he immediately began setting up a network of lobbying interests to benefit from his connections. His clients were selected by FEMA under Brown, and by other agencies, for major contracts.

The full report appears on www.realnews.org

The Real News Project is a new, not-for-profit news organization assembling a team of experienced and conscientious journalists to produce original investigative reports on the realities behind the biggest controversies of our time. The editor-in-chief, Russ Baker (author of the above story), is a longtime, award-winning investigative journalist. The organization’s board includes many respected names from the industry.

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