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Of all the calamities caused by Hurricane Katrina, perhaps the least appetizing was the one that befell New Orleans Cold Storage and Warehouse Co. The storm knocked out power to three of its freezer facilities near the city’s port, and within days 52 million pounds of frozen chicken slated for export to Russia, Africa, and South America weren’t frozen anymore. A month after the storm, according to a report in the New Orleans Times-Picayune, thousands of tons of meat were still rotting in the company’s warehouses. The problem, a Cold Storage executive told the newspaper, was the slow response by the Federal Emergency Management Agency and the U.S. Army Corps of Engineers, which hired an out-of-state disposal company, instead of a local contractor. Faced with a problem so putrid only a lawyer could clean it up, the company turned to its longtime outside counsel, New Orleans-based Jones, Walker, Waechter, Poitevent, Carr�re & Den�gre. “They had a rather horrible biohazard,” says R. Christian Johnsen, a lawyer in the firm’s Washington office who is representing the company. The firm went to work, pressing FEMA and the corps to get rid of the chicken so the company could clean up and get back into business. “Ultimately, we got the attention of the right folks,” says Johnsen. Getting the attention of the federal bureaucracy is, of course, the specialty of legions of Washington lawyers and lobbyists. And three months after Hurricane Katrina devastated the Gulf Coast, the storm is still reshaping business along K Street. At the fore are questions over the federal government’s relief and reconstruction efforts. Immediately after the storm, Congress passed a $62 billion emergency relief package, but much of that aid has yet to be spent, and lawmakers are still haggling over a reconstruction bill that could authorize additional billions in relief and reconstruction funds. How those funds will ultimately be used remains very much up for grabs. Government contracts specialists, insurance litigators, toxic tort specialists, and others will all certainly see a boom in Katrina-related business. But at the moment, Washington’s government relations specialists are at the center of the money scrum. LOUISIANA LIAISONS Firms with strong Louisiana roots are naturally playing a central role, one fueled in part by personal knowledge of loss and hardship. Jones Walker, New Orleans’ largest law firm, was hit hard by the storm. The firm’s downtown offices were evacuated, and dozens of employees lost their homes. Six of Jones Walker’s New Orleans lawyers were temporarily posted to the firm’s small D.C. office. (The New Orleans office has recently reopened.)
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The refugee lawyers proved useful. In addition to New Orleans Cold Storage, the firm represents a laundry list of some of the region’s largest institutions whose future will be very much affected by decisions made in Washington in the coming months � namely, the city’s municipal government, Tulane University, the Port of New Orleans, the Southern Shrimp Alliance, the New Orleans Metropolitan Convention and Visitors Bureau, and a number of barge and shipping companies. Also helpful: the firm’s strategic alliance with the Livingston Group, the lobbying firm founded by former Louisiana Republican Rep. Robert Livingston. Besides its regional client base, Johnsen says, the firm’s ties to the region have also helped it land work from outside businesses interested in bidding on Katrina reconstruction. This fall, Jones Walker signed on Fluor Corp. and TRC Cos., two large engineering and construction firms. Jones Walker isn’t the only firm with Gulf ties being swamped with Katrina-related work. Adams and Reese, another New Orleans-based firm with offices in Washington, has also struggled to cope both with the effects of the storm and the immensity of clients’ needs in its aftermath. The storm forced the evacuation of 100 lawyers from the firm’s downtown New Orleans offices to Baton Rouge. By Sept. 9 its “New Orleans West” office was up and running and the firm was holding thrice-weekly meetings on Katrina-related business. Among the firm’s lobbying clients are Xavier University and the University of New Orleans. Their priority: “Trying to change financial aid rules at the Department of Education to keep [the schools] viable,” says B. Jeffrey Brooks, managing partner of the firm’s six-person Washington office. Adams and Reese has also sought to represent companies looking to get a slice of the billions in coming reconstruction work. One approach to drumming up business it used was sending Washington lobbyist Shane Doucet to a Baton Rouge seafood restaurant last month to speak at a “Flow of Funds” seminar for Gulf Coast members of the Associated Builders and Contractors Inc. Among those the firm is helping with Katrina-cleanup work are W.G. Yates & Sons Construction Co., Mississippi’s largest construction company, and Achieve 3000 Inc., an Orleans Parish provider of Web-based educational services that’s seeking new business from the region’s rebuilding schools. No D.C.-based firm has deeper Louisiana roots than Patton Boggs. The firm’s chairman, Thomas Hale Boggs Jr., is the son of two former U.S. representatives from the state. Fortuitously, Patton Boggs signed on former Sen. John Breaux (D-La.) after he stepped down from the Senate in January. Given its Bayou State pedigree, Patton Boggs hasn’t had to beat the bushes for new clients. Breaux estimates that work from its Gulf Coast clients has doubled. “Our connections were existing,” he says. “It’s just been expanded.” Breaux has advised clients with a range of interests, from an association of community bankers concerned about mortgage repayments on houses damaged by the storm to insurers seeking federal aid to cover health insurance premiums. He’s also counseled the Shaw Group, a 19,500-employee construction firm whose headquarters are in Baton Rouge. Within a week of the storm the company had garnered from FEMA a no-bid contract worth as much as $100 million, to provide emergency housing for refugees and temporary shelter for hospitals and public buildings. Under criticism from Congress, the agency later agreed to rebid the contract. REPPING THE LITTLE GUYS But it isn’t only big businesses and associations that have been looking to Washington for counsel on Katrina-related work. Take Louisiana Demolition Co., a $5 million-a-year business with headquarters in New Orleans that specializes in tearing down houses. Given the storm’s swath of flood damage, local wrecking-ball operators would seem to be up to their waists in work. But since much of the reconstruction is being coordinated by FEMA and other federal agencies, the company has signed on Larry Flick of Duane Morris Government Affairs in Washington. Flick’s job: make sure that his client isn’t ignored by FEMA or the big contractors when the federal purse is opened. “This is a hometown, minority-owned business that would keep the jobs in the area,” Flick says. “They’re the kind of business that FEMA is looking for.” The new business for Flick was generated by the firm’s existing relationship with Orill Cordell & Beary, Louisiana Demolition’s local counsel. “It seemed like the smart thing to do if we could hire somebody who could keep their eye on the contracts that were coming out,” says W. Christopher Beary, a partner at the New Orleans firm. “We figured, might as well hire someone who knows.” FEMA and the U.S. Army Corps of Engineers aren’t the only federal agencies whose disbursements are anxiously awaited by Louisiana businesses. After Katrina, the Small Business Administration was given $2.6 billion for loans. It was soon swamped with more than 200,000 applications. The SBA’s response was widely criticized and led to a public dressing-down of the agency’s administrator earlier this month by a Senate committee. Slow response to SBA loan applications was a problem for Slidell Community Hospital in Slidell, La. After the hurricane struck, the hospital was forced to cancel dozens of surgeries and its facility soon became a temporary shelter for refugees from the storm. Through it all, doctors and nurses continued to be paid even though the hospital was generating little income. The hospital applied for a $2.3 million SBA loan in early September to cover its losses. Two and a half months later, the hospital is still waiting for the SBA’s decision. In an effort to speed the process along, the hospital hired Flick. His role, Flick says, is “to get some folks who have political interests here in Washington to see that their constituents get these kinds of services and make sure they’re updated on the agency’s follow through.” AWAITING THE DELUGE With the disaster’s total cost estimated to rise to as much as $200 billion � almost five times the cost of Hurricane Andrew, previously the country’s most expensive hurricane � lobbyists are watching Congress keenly as it struggles to pass a final reconstruction bill before the Christmas holiday. “We had to adjust our way of doing business,” says Steven Phillips, a lobbyist for DLA Piper Rudnick Gray Cary. “The whole political situation in Congress changed. This had ripple effects on all types of issues.” And while the government relations specialists take to the field to influence the appropriations process, contracts lawyers are waiting on the sidelines, ready to coach their clients through the process of winning and executing contracts from FEMA, the Army Corps, and other agencies. “Right now it’s still very early,” says Thomas Abbott, a government contracts lawyer with McKenna, Long & Aldridge. “The corps is doing emergency-response activities.” Once the focus of the government has shifted from emergency response to reconstruction, bigger contracts will be put out for bid. That’s when those in Abbott’s field will be hired to advise contractors on thorny issues such as subcontracting with local and minority-owned businesses, complying with environmental regulations, and avoiding charges of fraud and profit gouging. Stung by criticism of its Iraq procurement policies, the federal government has vowed to keep a close eye on Katrina funds. Within days of the storm the Justice Department announced the formation of a special Hurricane Katrina Fraud Task Force, headed by Assistant Attorney General Alice Fisher. Earlier this month one local official was arrested on charges of taking $100,000 in kickbacks from a contractor with a debris-hauling contract. Litigators too can look forward to a raft of court cases contesting Katrina-related insurance and environmental claims. Even while many insurers are still tabulating their losses, Mississippi Attorney General Jim Hood has filed suit against Allstate Corp., Nationwide Mutual Insurance Co., and a number of other homeowners insurance providers. And Mississippi plaintiffs attorney Richard “Dickie” Scruggs has reported he’s already signed up at least 3,000 policyholders for suits against providers of homeowners insurance. Commercial litigation has begun as well. D.C.-based Dickstein Shapiro Morin & Oshinsky has filed a billion-dollar suit against insurer Factory Mutual Insurance Co. on behalf of Northrop Grumman, a defense contractor that operates a shipyard in Pascagoula, Miss., that was damaged by the storm. And there are more suits on the way. Kirk Pasich, a Dickstein partner who filed the Northrop suit, says the firm is counseling a dozen other Fortune 500 companies on potential litigation on policies valued between $25 million and $1 billion. Much of the legal activity will center on the question of whether property damage was caused by hurricane winds or floods, which are frequently covered by different types of policies. But Katrina raises new issues as well, beyond the scope of property damage. “There are going to be tens of thousands of people who don’t move back to New Orleans,” Pasich says. “How do you measure your business loss because of that? Is an insurance company liable for that? If so, for how much and how long?” That so much profitable legal business has its basis in human misery is a fact that most firms haven’t overlooked, as evidenced by the donations and pro bono work done by large and small firms alike. “We’ve picked up some work,” says Adams and Reese’s Brooks. “But it’s been in the midst of a tragedy where people’s lives have been destroyed.”


Jason McLure can be contacted at [email protected].

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