WASHINGTON – Louisiana Gov. Kathleen Blanco (search) promised Congress on Tuesday that the spending of billions of federal tax dollars to help her state recover from Hurricane Katrina will be "transparent and wide open" as never before.
Responding to statements that some lawmakers made noting a history of public corruption in her state, Blanco told a House panel that she intends to hire a national accounting firm to audit all federal recovery spending in Louisiana and has directed the state recovery authority she created this week to set up an audit committee to account for all such spending.
"The financial affairs of Louisiana will be transparent and wide open as it pertains to this period of recovery, more so than it ever has been before," Blanco said. "We will stand well to the expected scrutiny by the public, the Congress and the media."
Congress already has provided $62 billion in emergency relief for Louisiana, Mississippi and Alabama, following the destruction of Katrina (search) in August and Hurricane Rita (search) in September. Louisiana lawmakers have introduced legislation calling for another $250 billion in federal outlays to help the state recover.
The Bush administration agreed Tuesday to allow the Army Corps of Engineers to rebuild the New Orleans levees to their pre-Katrina condition without requiring state and local governments to pay a share of the costs. The decision does not cover funding for any enhancement of the levees.
Corps officials have estimated it will cost $1.6 billion to rebuild the levees to their pre-Katrina condition and another $5 billion to enhance them to provide protection against a Category 5 hurricane. Louisiana lawmakers are pushing for the enhancement, which has not been authorized by Congress.
Blanco, who testified from Baton Rouge via a teleconference hookup, was joined by New Orleans Mayor Ray Nagin (search) and Lt. Gov. Mitch Landrieu in pledging that federal money will be spent wisely and in complaining that Louisiana is being treated differently than other states who have experienced natural or manmade disasters.
"Louisiana does not have a corner on the market in terms of public corruption," said Landrieu, citing the forced resignations over the past decade of top officials in half a dozen states. He also noted that the Justice Department's public integrity section has prosecuted hundreds of cases in states all across the country.
"Just as no member of Congress would like to have themselves painted by the actions of a few, nor do the people of Louisiana." Landrieu said. "Let's stay focused on the issue at hand, and the issue is whether or not you want to rebuild one of the great states of America."
Rep. Bill Shuster, R-Pa., chairman of the House transportation subcommittee on economic development, public buildings and emergency management, questioned whether some sections of New Orleans that are most flood prone should be rebuilt at all.
Blanco deflected the question by saying that her state recovery authority would be looking at all such issues in the coming weeks.
Right now, she said, the state needs a commitment from Congress to rebuild and upgrade the New Orleans hurricane protection system and to provide tax incentives to bring back businesses and jobs. She specifically asked for $30 billion in tax exempt hurricane recovery bonds, a job creation tax credit to lure large businesses back to the state, and $10 billion in grants to small businesses.
"If you help us with these incentives, we believe we only have to step aside and let business" lead the recovery of New Orleans and the state, Blanco said.