FEMA Officials Plead Guilty to Charges of Federal Public Bribery

7 April 2006

Two Federal Emergency Management Association (FEMA) officials working in New Orleans, Andrew Rose and Loyd Holliman, plead guilty in federal court to soliciting bribes as public officials, U.S. Attorney for the Eastern District of Louisiana Jim Letten announced today. According to the indictment, Rose and Holliman, both residents of Colorado, are FEMA Disaster Assistance employees who were charged with managing the FEMA base camp located in New Orleans and are public officials in their capacity as employees of FEMA, an agency with the United States Government.

"The swift and decisive investigation and conviction of these two FEMA employees is compelling evidence of the absolute commitment of the U.S. Department of Justice, as well as the FBI and the Department of Homeland Security, to tolerate no abuses whatsoever by citizens or public officials in the wake of the devastation of Hurricane Katrina," said U.S. Attorney Letten. "The convictions of these two individuals confirm our personal commitment to continuing our district's well established priorities of fighting public corruption. We will remain vigilant in protecting our citizens and their right to rebuild their lives and their communities, free from corruption."

Both defendants, as FEMA employees, were supervisory managers of the supply unit at the base camp known as the L.B. Landry Camp, located in New Orleans on the west bank of the Mississippi River. The camp provided housing needs and assistance to disaster relief workers in the area. In performance of their official duties, both defendants had the authority to monitor and recommend contracts from various vendors who provided services to the base camp.

On Dec. 7, 2005, both defendants met with a Louisiana businessman who had contracted to provide meals to the base camp. During that meeting, Rose and Holliman solicited bribes from the contractor in exchange for agreeing to inflate the per-meal headcount upon which the meal contract was based. In the meeting, the defendants told the contractor that they would falsely inflate the number of meals served and would, in turn, require the contractor to pay them bribes for providing the inflated meal counts.

After being confronted with demands for illegal bribe payments by the two FEMA supervisors, the contractor reported the ongoing offense to the Department of Homeland Security Inspector General's Office, which in turn immediately notified and worked with Special Agents of the FBI and members of the United States Attorney's Office in pursuing a criminal investigation.

In a subsequent meeting between the contractor and defendant Rose on Jan. 19, 2006, Rose requested a payment of $20,000, which according to plan, would be split evenly between Rose and Holliman in furthering the inflated meal count scheme they had proposed.

Only a few days later on Jan. 24, 2006, in a meeting between the contractor and both Rose and Holliman, the defendants again requested the payment of $20,000 explaining that the bribe was for both defendants as payment for securing the meal service contract and falsely inflating that contract. At this meeting, both Rose and Holliman discussed various ways in which the contractor could falsely inflate the meal service count. On the same day at a subsequent meeting, both defendants met again with the contractor to discuss ways to falsely inflate the meal service count, later telling the contractor that they would provide the inflated count to be used by the contractor in exchange for a bribe payment of $20,000 for each of them per week.

Three days later, on Jan. 27, 2006, during the course of the undercover investigation, the contractor, while cooperating with federal authorities, met both Rose and Holliman at the FEMA base camp, and per their instructions, provided an envelope to each of them containing $10,000. Upon receipt of the money, both Rose and Holliman confirmed that these payments covered the inflated meal service count from about Dec. 3, 2005 until approximately Jan. 15, 2006. Additionally, following their receipt of the bribe payments from the contractor, both defendants continued to plan how the contractor was to fraudulently inflate the meal service count on a continuing basis, and would pay them $2,500 each per week. Immediately following the meeting on Jan. 27, 2006, both defendants were placed under arrest by Special Agents of the FBI and Department of Homeland Security Inspector General, and were indicted by a federal grand jury one week later.

"The FBI has been clear that any individual, whether they be federal, state or local, whether they be elected, appointed or hired, who misuses their position for profit, will be vigorously investigated and brought to justice," said FBI Special Agent in Charge James Bernazzani. "The FBI with our law enforcement partners, are fundamentally committed to work day and night to ensure that the people of Louisiana who have been victimized by the storms will not again be victimized by the criminal element."

"FEMA is comprised of many dedicated men and women who work quietly helping people get back on their feet after their lives are disrupted by a disaster," said Richard Skinner, Inspector General of the U. S. Department of Homeland Security. "The conduct of these two former FEMA employees is serious and will not be tolerated, as evidenced by their arrest and conviction. We remain committed to working with our internal and external partners to aggressively investigate all allegations of corruption to protect the integrity of the Department of Homeland Security personnel, programs and operations."

In September 2005, Attorney General Alberto R. Gonzales created the Hurricane Katrina Fraud Task Force, designed to deter, investigate and prosecute disaster-related federal crimes such as charity fraud, identity theft, procurement fraud and insurance fraud. The Hurricane Katrina Fraud Task Force - chaired by Assistant Attorney General Alice S. Fisher of the Criminal Division - includes members from the FBI, the Federal Trade Commission, the Postal Inspector's Office and the Executive Office of United States Attorneys, among others.

U.S. Attorney Letten was joined in today's announcement by Special Agent in Charge for the FBI New Orleans Division James Bernazzani, Special Agent in Charge for the Department of Homeland Security Office of the Inspector General Charles Haas, and Resident Agent in Charge for the Department of Homeland Security Office of the Inspector General Michael Brannan.

Sentencing is scheduled for July 26, 2006. This matter was investigated by Special Agents of the Federal Bureau of Investigation and Agents of the Department of Homeland Security Inspector General's Office. This case is being prosecuted by Assistant U.S. Attorneys James R. Mann and Salvador Perricone.

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