updated 11/16/2005 7:06:26 PM ET 2005-11-17T00:06:26

A politically connected business that landed $108 million in no-bid FEMA contracts to supply emergency housing to Hurricane Katrina victims violated state law because it did not have a Louisiana license to sell new trailer homes, a state commission has found.

The business is a motorcycle shop owned by the father and uncle of state Rep. Gary Smith.

The Louisiana Recreational and Used Motor Vehicle Commission will hold a hearing next month to hear from the business and determine a fine, said John Torrance, executive director of the agency.

Investigators said the motorcycle shop did not have the necessary license until mid-October, well after it sent the first trailer homes to the Federal Emergency Management Agency. Glen Smith, the lawmaker’s uncle, said he already had a license to sell used trailers and did not know he needed another one for new trailers.

The commission turned down an offer Tuesday from Glen Smith to plead no contest to selling trailers without a license and pay a $10,000 fine.

FEMA wants 125,000 campers and mobile homes for those who lost their homes in the storm that struck Aug. 29. The Smith family motorcycle shop received FEMA contracts to provide 6,400 trailers.

Trailer dealers in the state were angry that Smith’s New Orleans-area shop won three FEMA contracts even though it did not normally sell trailer homes.

Glen Smith said he was able to secure the contracts because he has worked with the federal government for nearly four decades during disasters, including providing mobile housing following Hurricane Andrew in 1992.

FEMA spokesman Larry Orluskie said all no-bid contracts are being reviewed.

Critics of the government’s no-bid contracts have called them gifts to politically connected companies. Glen Smith said the contracts had nothing to do with his nephew, who he said only handles legal work for the business.

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