NBC News Investigative Unit
updated 7/23/2007 5:59:18 PM ET 2007-07-23T21:59:18

James Lee Witt Associates (JLWA) provided the following responses to questions from NBC News:

James Lee Witt Associates routinely bills the State of Louisiana double what it actually pays it subcontractors, netting the company millions of dollars for what documents and sources state is little more than administrative work. Some critics call this profiteering.

JLWA: James Lee Witt Associates is available to provide extensive support in managing the State of Louisiana’s disaster assistance programs at an average $45 per hour lower than even the government could provide it and thus a savings to the taxpayer, which has always been paramount in our work ethic. Because of the support provided by JLWA, we were able to meet those responsibilities, moving an unprecedented $2.2 billion in recovery money to our communities in less than 18 months an amount unmatched in any other disaster in United States history.

One of the subcontractors hired by James Lee Witt Associates, Recovery Management Inc. (RMI), is operated by the parents of Mark Merritt, a top JLWA executive running the firm’s Katrina relief operations in Louisiana. Some critics call this cronyism.

JLWA: A review of RMI’s corporate background by the State demonstrated that they were fully qualified to do the work asked of them. Because of the concern over appearances, JLWA identified the relationship between Mr. Merritt and his parents (who own RMI) early to the State, and even a review by the State Ethics Board deemed that the relationship was not improper in any way.

An RMI employee named Wendell LaFosse says that in the last months that he was employed by RMI, he submitted written reports stating that there was little or no work to do. Regardless, he says he was told by his supervisor to continue to submit timesheets showing that he worked 11.5 hours each day.

JLWA: Louisiana has taken great steps to prevent fraud through monthly 100% audits by State auditors, which have identified no problems with JLWA’s work or billing practices. Had this practice been done, JLWA would have immediately forwarded this allegation of fraud to the auditors for investigation. JLWA only charges for the work that was performed. JLWA has made tens of thousands of documents available to NBC News and they should have found that timesheets in question DID NOT show charges for every day not worked, because this particular employee had habitual absenteeism.

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