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24–932 PDF 2006

S. Hrg. 109–538

HURRICANE KATRINA: WHAT CAN THE

GOVERNMENT LEARN FROM THE PRIVATE

SECTOR’S RESPONSE?

HEARING

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

NOVEMBER 16, 2005

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

DAVID T. FLANAGAN, General Counsel 

AMY L. HALL, Professional Staff Member 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Counsel 

ROBERT F. MUSE, Minority General Counsel 

MICHAEL L. ALEXANDER, Minority Professional Staff Member 

TRINA DRIESSNACK TYRER, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Collins ................................................................................................. 1

Senator Lieberman ........................................................................................... 3

WITNESSES 

WEDNESDAY, NOVEMBER 16, 2005

David M. Ratcliffe, President and Chief Executive Officer, Southern Company ....................................................................................................................... 5

Stanley S. Litow, Vice President, Corporate Community Relations, and President, IBM International Foundation, IBM Corporation ................................... 6

Kevin T. Regan, Regional Vice President of Operations, Southeastern United 

States and Caribbean, Starwood Hotels and Resorts Worldwide, Inc. ............ 10

Jason F. Jackson, Director of Business Continuity, Global Security Division, 

Wal-Mart Stores, Inc. ........................................................................................... 13

ALPHABETICAL LIST OF WITNESSES

Jackson, Jason F.: 

Testimony .......................................................................................................... 13

Prepared statement with an attachment ....................................................... 53

Litow, Stanley S.: 

Testimony .......................................................................................................... 6

Prepared statement .......................................................................................... 39

Ratcliffe, David M.: 

Testimony .......................................................................................................... 5

Prepared statement .......................................................................................... 33

Regan, Kevin T.: 

Testimony .......................................................................................................... 10

Prepared statement .......................................................................................... 44

APPENDIX

Diageo and Humanitarian Relief, prepared statement ........................................ 66

(1)

HURRICANE KATRINA: WHAT CAN THE 

GOVERNMENT LEARN FROM THE PRIVATE 

SECTOR’S RESPONSE? 

WEDNESDAY, NOVEMBER 16, 2005

U.S. SENATE, 

COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:04 a.m., in room 

342, Dirksen Senate Office Building, Hon. Susan M. Collins, Chairman of the Committee, presiding. 

Present: Senators Collins, Voinovich, Lieberman, Akaka, Carper, 

and Pryor. 

OPENING STATEMENT OF CHAIRMAN COLLINS 

Chairman COLLINS. The Committee will come to order. Good 

morning. 

Today, the Committee continues its investigation into the preparation for and response to Hurricane Katrina. Our focus this morning, at our seventh hearing, is on the effective actions taken by the 

private sector before, during, and in the immediate aftermath of 

this disaster, and what Federal, State, and local governments can 

learn from the private sector. 

In the first hours and days after Katrina struck, drinking water, 

food, and other vital supplies poured into the devastated cities and 

towns of the Gulf Coast. Building materials, tools, generators, and 

trained personnel were brought to the front lines of the disaster to 

provide shelter, to reopen roads, and to restore essential services. 

This remarkable performance was not the result of a coordinated 

effort across all levels of government. Rather, it was the result of 

individual efforts by businesses large and small, efforts that were 

not directed by a central command, but rather by a common purpose. 

Not only were businesses able to recover and reconstitute quickly, but they were also able to provide supplies, equipment, and food 

and water to aid in the recovery of the local communities—something for which they should be commended. We are here today, 

however, to learn how they were able to respond so quickly and so 

effectively when government did not. 

At our hearing last week, we examined the actions of the principal government agency that responded with similar speed and effectiveness, the U.S. Coast Guard. As we will learn from our witVerDate 0ct 09 2002 09:51 Aug 28, 2006 Jkt 024932 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\24932.TXT SAFFAIRS PsN: PAT
2

nesses today, their businesses and the Coast Guard share some 

crucial characteristics that resulted in success. 

Like the Coast Guard, these businesses prepared for this disaster 

by learning the lessons of previous disasters and by configuring 

their disaster preparation and response capabilities accordingly. 

They prepositioned their assets and personnel out of harm’s way 

so that they would be available to deploy as soon as conditions allowed. They brought in assets and personnel from other locations 

to assist. They anticipated the failure of conventional communications systems and took measures to overcome those failures. And 

perhaps most important, they empowered their front-line leaders 

with the authority to make quick decisions and to take decisive action. 

There is, of course, a fundamental difference between the Coast 

Guard and the private sector. The Coast Guard’s core mission is to 

protect the American people. The core mission of a business is to 

maintain its operations and its ability to provide useful goods and 

services to consumers. But by protecting their assets and personnel, and by taking steps to restore their operations so quickly 

in the storm zone, these companies were positioned to help others 

and to serve society as a whole. 

Our witnesses today represent four business sectors that played 

key roles in Katrina relief: Retail, hospitality, power, and technology. Although their individual experiences differ, they share key 

success factors of strategic planning, tactical preparation, and 

front-line decisionmaking. 

As a result of those factors, Wal-Mart was able to use its massive 

and highly efficient distribution network to get needed commodities 

to those who had lost everything in the storm. 

Starwood Hotels used its extensive experience in hurricane-prone 

regions to become an invaluable source of shelter during Katrina, 

never completely shutting its doors and leading New Orleans hotels 

in returning to full operations. 

Mississippi Power is a company that, of course, was unable to 

move its assets out of the storm’s path, and almost every piece of 

its infrastructure was devastated. Yet, because it prepared for just 

such a possibility, the company was able to get back up and running ahead of any reasonable expectation. 

Through extensive planning, IBM recognized that restoring communications would be essential in the aftermath of any disaster. 

From prioritizing expertise in immediate humanitarian relief to 

helping displaced workers find jobs, IBM’s communications expertise has greatly assisted the recovery. 

The outpouring of generosity, the demonstration of competence, 

and the unleashing of initiative by Americans—whether individuals or businesses—have been the bright spots in a story that has, 

in far too many other ways, been discouraging. The quick and efficient delivery of private sector relief to Katrina’s victims was not, 

however, a matter of luck. It was the result of planning, preparation, and action. 

We have much to learn from the private sector, and we must do 

all that we can to apply those lessons to the operations of government. 

Senator Lieberman. 

3

OPENING STATEMENT OF SENATOR LIEBERMAN 

Senator LIEBERMAN. Thank you very much, Madam Chairman. 

Thanks to the witnesses for being here. I look forward to their testimony. Thanks, Madam Chairman, for convening this seventh 

hearing on our ongoing investigation into the preparations for and 

response to Hurricane Katrina. 

Today, as you have indicated, we temporarily turn away from examining the role of Federal, State, and local agencies and focus instead on the role of private companies that were prepared and 

uniquely positioned to help save lives in emergencies like this one, 

companies like those represented before us today. And, of course, 

we are focused, as you have said, also on what government might 

learn from what these companies prepared for and did after 

Katrina struck. 

In some areas hit by the storm, stores like Wal-Mart, Target, and 

Home Depot were virtual lifelines for dazed and bereft citizens who 

were fortunate enough to have survived Katrina’s wrath. These 

companies and their employees became key distribution points for 

food, water, clothing, generators, and other supplies because they 

were prepared and because they had the capacity to do what they 

do every day, which is to move goods and provide services. 

Mississippi Power, a subsidiary of Southern Company, as you 

have indicated, was able to restore life-sustaining electricity to 

hundreds of thousands of customers well ahead of schedule, apparently in good part because it has a culture of empowering managers to make decisions free from bureaucratic authorization requirements and other entanglements. 

Starwood Hotels, which operates three properties in New Orleans, provided vital services to its customers, employees, and first 

responders during and immediately after the storm and was able 

to get its hotels back up and operating within days after the storm. 

I believe I saw you on CNN. 

Mr. REGAN. You probably did, yes. 

Senator LIEBERMAN. You looked good. [Laughter.] 

Mr. REGAN. Tell my wife that. 

Senator LIEBERMAN. And IBM, one of the world’s leading information technology companies, has much to teach us in terms of 

how to harness technology to plan, manage, share information, and 

coordinate disaster-related activities better than government obviously did in response to Hurricane Katrina. 

We examine these stories today again to learn lessons that can 

help other businesses, but also can help the government be better 

prepared to respond when disaster strikes. 

I want to, Madam Chairman, make just one broader point here 

as we focus on the private sector, which is after September 11, as 

we began with a sense of urgency to examine how to protect ourselves, in that case, from terrorist attack, we became aware of a 

surprising fact, which is that the private sector owns 85 percent of 

our Nation’s critical infrastructure, which is to say our communications networks, power grids, financial and health services, chemical 

plants, oil refineries, transportation systems, and the list could go 

on. These companies really form the backbone of our society and 

economy and, therefore, must be prepared in the national interest 

4

to respond to crises, and we must work with them in government 

to protect them at all costs. 

That is why we created an Infrastructure Protection Division, socalled, literally, in the Department of Homeland Security, which 

was the first of its kind at any Federal agency. The point was that 

the government needed to work with the private sector to make 

sure that systems so crucial to our lives and way of life are adequately protected, and if attacked by terrorists or, as we saw in 

Hurricane Katrina, overwhelmed by the forces of nature, we are 

able to recover quickly and restore services. 

Among the lessons reinforced by the witnesses that we will hear 

today is that it is the old lesson, but it is true in these unusual, 

in some ways unprecedented, times, there is no substitute for preparation, and that leadership is a key to crisis response, and in our 

day particularly, even more than always, communications are critical to response to a crisis, particularly, and I suppose self-evidently, by those who are on the scene, the ability to communicate. 

We also learned that the Homeland Security partnership between government and the private sector must be improved. In the 

final analysis, when the lives of the American people are at stake, 

whether from terrorist attack or natural disaster, we must unite as 

a team, as you and each of your individual organizations did, using 

all of the strengths of this great and extraordinary country, whether from public, private, or nonprofit sectors. We have to operate as 

one to get the job done. You did that, and I hope your testimony 

today helps us prepare our country to do better at achieving that 

kind of cooperation and unity of effort when the next disaster 

strikes. Thank you very much. 

Chairman COLLINS. Thank you, Senator Lieberman. 

I am very pleased to welcome our panel of witnesses this morning. Our first witness is David Ratcliffe, the President and CEO of 

Southern Company, one of America’s largest producers of electricity 

and the parent company of Mississippi Power. Mr. Ratcliffe has 

served as the President and CEO of Mississippi Power and has 

been with Southern Company’s family of companies for over 30 

years. 

Our second witness is Stan Litow. Mr. Litow is IBM’s Vice President of Corporate Community Relations and President of the IBM 

International Foundation. Prior to joining IBM, he served as Deputy Chancellor of Schools for New York City, which is certainly an 

interesting background. I won’t ask whether there is a particular 

link to disaster preparedness there or not. 

Mr. LITOW. Just a little bit. [Laughter.] 

Chairman COLLINS. We are also pleased to have with us today 

Kevin Regan, Regional Vice President of Hotel Operations with 

Starwood Hotels and Resorts Worldwide. Mr. Regan is responsible 

for Starwood operations in seven States and the Caribbean and is 

a 30-year veteran of the hospitality industry. We were talking prior 

to the hearing, and we decided that he has the best job of any of 

the witnesses today. 

And finally, we are joined by Jason Jackson, the Director of Business Continuity for Wal-Mart. Mr. Jackson, I am particularly interested to learn that you have undergraduate and graduate degrees 

in emergency and security management, and I will look forward to 

5

1The prepared statement of Mr. Ratcliffe appears in the Appendix on page 33. 

hearing how that background contributes to your ability to oversee 

your duties at Wal-Mart. 

Because we are doing an ongoing investigation, we are swearing 

in all of the witnesses who appear before us, so I would ask that 

you all stand and please raise your right hand so I may swear you 

in. 

Do you swear the testimony that you are about to give to the 

Committee will be the truth, the whole truth, and nothing but the 

truth, so help you, God? 

Mr. RATCLIFFE. I do. 

Mr. LITOW. I do. 

Mr. REGAN. I do. 

Mr. JACKSON. I do. 

Chairman COLLINS. Thank you. Mr. Ratcliffe, we are going to 

start with you. 

TESTIMONY OF DAVID M. RATCLIFFE,1 PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, SOUTHERN COMPANY 

Mr. RATCLIFFE. Thank you, Chairman Collins and Members, for 

the opportunity to appear before you today on behalf of the Southern Company. I am David Ratcliffe, the President and CEO of 

Southern Company. Our company is a Fortune 500 company with 

40,000 megawatts of electric generating capacity and over 26,000 

employees. We are among the largest energy providers in the Nation, providing electricity to more than 4 million customers in Georgia, Alabama, the Southeastern part of Mississippi, and the Florida 

panhandle. 

Hurricane Katrina was the worst natural disaster in the history 

of our Mississippi Power Company subsidiary and one of the biggest operational challenges that Southern Company has faced in its 

more than 80 years of existence. Katrina’s 140-mile-per-hour winds 

and 35-foot storm surge left all 195,000 customers of Mississippi 

Power Company and 600,000 customers of Alabama Power Company without power. Nearly two-thirds of Mississippi Power’s 

transmission and distribution system was damaged or destroyed. 

The company’s second-largest electric generating plant was flooded. 

And its headquarters building in Gulfport was so damaged that it 

will not be fully operational until late next year. 

Our employees, with the help of many outside resources, worked 

to restore power across the devastated Gulf Coast region in a remarkable 12 days. Your questions to me were related to how we 

accomplished this. Let me hit some of the key elements of our successful response. 

First, extensive preplanning. Based on many years of experience 

that go back as far as Hurricane Camille in 1969 and continue all 

the way through Hurricanes Ivan and Dennis of last year, we have 

developed extensive storm response and restoration plans. In fact, 

each year, as part of our annual planning process, we actually rehearse or drill our restoration plans. In fact, in Mississippi Power 

Company, for example, each employee has a storm assignment. 

They know exactly what their responsibility is, and we drill that 

responsibility prior to each hurricane season. 

6

1The prepared statement of Mr. Litow appears in the Appendix on page 39. 

Second, we have a discipline of continuous improvement through 

rigorous post-storm critique. We learned much from Hurricane 

Ivan last year and its impact on our Gulf Power subsidiary in the 

panhandle of Florida that helped us better prepare for Hurricane 

Katrina. And, in fact, we are now in the process of debriefing Hurricane Katrina’s impact in Mississippi and throughout the Southern Coast. 

Third, a bent toward self-sufficiency and front-line empowerment. Our Mississippi Power Company management team began 2 

weeks before Katrina to prepare. By the time it hit, we had spent 

$7 million in securing equipment and logistical support and had 

staged 2,400 out-of-state workers on the fringe area of the storm 

to be ready to respond. Being a vertically integrated company enabled us to provide significant in-company support. 

All of this is how we were able to provide 140,000 gallons of fuel 

to 5,000 trucks every day, over 30,000 meals to workers every day, 

and to provide our own 250-person armed security force, and our 

own internal communications subsidiary, Southern Link Wireless, 

allowed us to continue to communicate even the immediate day 

after the storm. In fact, it was one of the only networks available 

to us. 

Next, as the song says, we had a lot of help from our friends. We 

received exceptional assistance from Mississippi Governor Haley 

Barbour, who had the foresight to call a joint meeting the day after 

the storm with the Federal Emergency Management Agency, the 

Mississippi Emergency Management Agency, County EMAs, and 

Mississippi Power to share plans and communicate actions. This 

meeting was instrumental in the excellent coordination and cooperation between Mississippi Power and all agencies involved. In 

fact, we embedded one of our employees with FEMA and MEMA 

operations to deal continuously with issues as they arose. We had 

no instances in Mississippi of FEMA confiscating staging areas, 

fuel, or food. 

Through our industry mutual-assistance agreement, we were 

able to add 11,000 workers from throughout the United States, 

even as far as Canada, to our restoration efforts. Our suppliers provided significant support. In fact, we never ran out of supplies. 

And last but certainly not least, we have a strong culture 

amongst our 26,000 wonderful employees that is driven by teamwork and trust, superior performance, and total commitment to our 

customers. It is an honor for me to have the opportunity to represent them here today. Thank you. 

Chairman COLLINS. Thank you. Mr. Litow. 

TESTIMONY OF STANLEY S. LITOW,1 VICE PRESIDENT, CORPORATE COMMUNITY RELATIONS, AND PRESIDENT, IBM 

INTERNATIONAL FOUNDATION, IBM CORPORATION 

Mr. LITOW. Thank you very much. I am Stanley Litow, and I 

oversee IBM’s corporate citizenship and philanthropic activities 

worldwide. Over the last 10 years, IBM has been one of the leading 

corporate contributors of cash, technology, and talent to not-forprofit educational institutions and government across the United 

7

States and around the world, and we are committed to applying 

our skill and our ability as an innovator against the challenges 

that exist in communities across the globe, addressing education 

and societal concerns and doing so in a fundamental and systemic 

way. 

As a global company with over 330,000 employees and customers 

in more than 165 countries around the world, we have a unique 

understanding, we believe, how a single devastating event in one 

city in America or in one corner of the world can be destabilizing 

for us all. Natural and manmade disasters remind us just how 

interconnected we all are and how fragile our networks can be. But 

they also remind us how generous, how resourceful, and how focused we can be as a global community when we can put political, 

economic, and other self-interests aside and pull together, responding in a time of crisis, whether it happens next door or halfway 

around the world. 

We have a long-term and deep-seated commitment to corporate 

citizenship, and our work includes launching the world’s first humanitarian public grid project to help find a cure for diseases like 

Alzheimer’s and AIDS, raising literacy by finding a new way to 

teach children and non-literate adults to read, and making the 

Internet more accessible for seniors and people with disabilities. 

But through our experience, we have learned that corporate citizenship is exemplified most clearly in times of a crisis, and in the 

face of earthquake, hurricane, and an act of terrorism, IBM has responded immediately, working collaboratively with not-for-profit organizations and government and other private sector players to 

bring our expertise and our technology to affected areas as promptly as possible. 

You referenced September 11. After September 11, IBM was on 

the ground within 48 hours. We provided the communications network for the police and for rescue workers and not-for-profit organizations. We set up an infrastructure for communications systems, 

and we also provided a coordinated system to track services being 

provided to victims and their families after September 11. 

IBM has a Crisis Response Team that has responded to more 

than 70 critical incidents in 49 countries during the last decade. 

The team provides immediate 24/7 assistance, including international humanitarian relief, emergency management, and on-site 

services, as well as business services to government and business 

entities in the United States and around the world. 

After the tsunami hit in Southern Asia, IBM deployed over a 10-

week period our Crisis Response Team and more than 700 of our 

employees, business partners, and customer volunteers across four 

countries, in India, Sri Lanka, Indonesia, and Thailand. It was 

clear within the first week that the tremendous challenges faced by 

these governments as well as relief agencies, businesses, and organizations could be aided significantly through technology. 

So among the solutions we provided were open-source applications to address a complex set of needs, including the tracking and 

identifying of the missing, dead, and injured, as well as displaced 

individuals and orphans. We consolidated services to the United 

Nations, NGOs, private sector, and government information, and 

provided on-the-spot analysis and reporting systems because comVerDate 0ct 09 2002 09:51 Aug 28, 2006 Jkt 024932 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\DOCS\24932.TXT SAFFAIRS PsN: PAT
8

munications was critical there, too. We developed an organization 

registry, a camp management system, relief and assistance databases, logistics management, financial restitution tracking systems. 

In fact, we deployed a high-speed wireless data and voice transmission system and a range of equipment for mobile computers, 

services, hubs, and routers to specialized education solutions. And 

to help the countries become self-sufficient in managing the ongoing crisis, we trained thousands of volunteers and government officials on customized software applications. 

After our work concluded in Southern Asia, we left with a set of 

customized open-source solutions that we believe could be easily 

modified and deployed across other disaster areas, as well, and 

they included a relief material management system, a fund management tracking system, a victim tracking system, a relief camp 

management and I.D. card system, including biometrics fingerprint 

and photo identification, report generation, statistical analysis, a 

help line tracking system, and a range of systems that could be deployed and customized across the world in any disaster. 

Four days before Katrina hit, we opened our emergency operations center in Louisiana, and because of our intensive experience 

across multiple disasters in the United States and globally, after 

Katrina hit and subsequently after Hurricane Rita, and recently in 

Pakistan after the earthquake hit, IBM was able to deploy assistance more effectively and efficiently. IBM talent, technology, and 

systems were on the ground and on the ground quickly. 

After Hurricane Katrina hit, our goal was to deploy the crisis response team, locate it in Baton Rouge, to set up the Missing Person 

Reunification Project. A number of websites and local registries, including two that IBM hosted, one for CNN and the other for the 

Urban Broadcast Network, were helping evacuees and the public 

locate missing family members, friends, and colleagues. We worked 

with the State of Louisiana to implement the Entity Analytic Solution, a new IBM solution that integrated these different databases 

and made it possible to search for a single, unduplicated, up-todate list of people to support reunification. 

We set up Jobs4Recovery with the U.S. Chamber of Commerce 

so that jobs for people who had been displaced could be posted. Individual businesses could identify what people that they needed, 

and people could use them in the not-for-profit or the government 

sector. 

For the American Red Cross, we set up a disaster relief self-registration Internet site. We designed it, we developed it, and we deployed it, working with the Red Cross. The Internet site captures 

and stores demographic and family data in a secure database 

through a user-friendly webpage. These are particularly helpful in 

moving forward with those who are affected by a disaster and can 

apply for benefits online. The Red Cross has the ability to validate 

information, check for duplication, and manage the application 

process. 

We worked for the Centers for Disease Control. We provided support to CDC, U.S. Department of Health and Human Services to 

address health needs and assure that evacuees had access to their 

prescription records and care for both chronic illnesses and trauma 

resulting from the disaster. 

9

We set up an online curricula management application because 

students from New Orleans who went elsewhere needed information to their new teachers and new administrators on their standards and tests out of Louisiana so that teachers in other States and 

other geographies could keep track on where they were. 

We also provided trauma specialists, and we worked with them 

to train the teachers and welcome evacuees into their classroom 

and identified how to provide direct services. 

We worked with the City of Houston to develop an application 

to track and manage temporary housing and manage and assign 

individuals to appropriate facilities, and we helped Points of Light 

set up a volunteer website, volunteer.org. 

Obviously, things are far from completed, and the IBM team and 

resources are still at work in Louisiana. And while we are still involved, we moved several of those people to Pakistan to intervene 

after the earthquake. 

In recent years, IBM has learned a great deal about disaster relief. Let me summarize them. 

First, we can’t predict disasters, but we can prepare for them. 

The degree to which we are able to do so can make a tremendous 

difference for the people and governments that move forward in 

times of crisis. As a Nation, we must ensure we have the plans, the 

resources, the people, and the technologies—we don’t need to duplicate them—that are ready. 

Second, advanced planning of people, tools, and technology, formal agreements among public agencies and voluntary agencies to 

share information, be on common databases, to make decisions is 

vital and important. 

Third, in cases such as Katrina, September 11, or after the tsunami, rapid response is critical to the assurance of the safety of the 

situation. Basic communications systems are vital. They must be 

established and restored immediately so that local and regional officials can get the help that they need to be able to deploy on-site. 

Fourth, local, regional, and national governments, along with the 

private and the voluntary sector, must work collaboratively. Models 

and best practices are available. They are critically important to 

learn from, and technology isn’t something separate that you buy. 

It is integrated into everything that you do. It is how you respond 

in times of crisis. It can only be effective if it is integrated into a 

set of services, operational plans and strategies, and prepared in 

advance. 

It is a most sobering thought to know that disaster will strike 

again, often without warning and always without regard for the 

people and places it leaves in its wake. If any good can come from 

a disaster, then it must be our ability to take the absolute best 

most effective practices from one situation and bring them to the 

next. We must be sure to customize our resources and be ready for 

the next disaster if and when it should strike. Thank you very 

much. 

Chairman COLLINS. Thank you. Mr. Regan. 

10

1The prepared statement of Mr. Regan appears in the Appendix on page 44. 

TESTIMONY OF KEVIN T. REGAN,1 REGIONAL VICE PRESIDENT 

OF OPERATIONS, SOUTHEASTERN UNITED STATES AND CARIBBEAN, STARWOOD HOTELS AND RESORTS WORLDWIDE, 

INC. 

Mr. REGAN. Good morning, Madam Chairman and distinguished 

Members of the Committee. I am Kevin Regan, Regional Vice 

President of Operations for Starwood Hotels and Resorts Worldwide. Starwood operates 750 hotels worldwide, and we have three 

major hotels in New Orleans. Thank you for allowing me the opportunity to participate in this hearing on behalf of Starwood to discuss how our company successfully met the challenges faced from 

Hurricane Katrina. It is with great pride that we offer this information so it may provide some insights that may be helpful to our 

government in managing future crises. 

Let me assure you that while we are proud of our accomplishments, we are also cognizant that the difficulties Starwood faced in 

New Orleans were of a much smaller scale than the entire region 

faced. In our frame of reference, however, the challenges were incredibly huge. The lessons we learned from Katrina, in our view, 

are the keys to successfully managing almost any crisis—planning, 

leadership, teamwork, and communication. 

After Katrina left the city devastated, we were the first hotels 

downtown with power, trucked-in water, air conditioning, and were 

the first hotels to open back up with restaurants. While some of the 

other hotels may have closed and evacuated their employees for 

weeks, we were able to accomplish those things because we had a 

plan, we had leadership, we had coordinated teamwork, and because we communicated. 

Post-September 11, we had to increase our focus on non-natural 

disasters and plan even more for the unexpected. Development of 

our new global crisis management plan involved dozens of Starwood executives worldwide and some key consultants. Starwood 

today has in place a comprehensive emergency and crisis management plan and a preparedness and response at the corporate, division, and hotel levels. It instills responsibility and authority at 

each level, and very importantly, it provides for ongoing communication throughout the organization and within the team directly 

involved in the crisis. 

At the core of all our plans are the mandates to always, one, do 

the right thing, and two, to ensure the safety of our guests and associates above all else. I spoke earlier of leadership being a key to 

successfully managing a crisis, and it certainly was with Katrina. 

I am personally humbled by the praise, but I share rightfully with 

many others at Starwood, including teams of corporate executives, 

area managing directors, local general managers, and other States 

that we were fortunate to have with us. 

Without any of these, we would be talking today of failure instead of success because in any crisis, the difference between success and failure is the quality of leadership. It is a dedicated team 

of knowledgeable people that can take the plan devised during 

calm and execute the elements of that plan during a crisis. 

11

A most critical element in success of leadership is empowering 

those leaders with the authority to act. At Starwood, the crisis plan 

provides for decisionmaking at different levels of the organization 

based on needs and appropriateness, and within the chain of command, authority is provided at the level closest to the crisis as possible with other levels in the chain providing support. 

For example, our team in New Orleans had full authority to 

order whatever equipment and services we felt necessary to deal 

with each need, including generators, water trucks, construction, 

clean-up crews, and more. Decisions to provide free housing and 

food to all evacuated associates for a month at any Starwood hotel 

in the country were made at the corporate level because it impacted the organization more broadly. And all levels jointly reached 

the decision to pay all New Orleans-based associates for 1 month 

of September regardless of where they were living after the storm. 

Those who could return to work in New Orleans to assist in recovery were paid double. 

Our plan calls for a series of actions. At the beginning of the 

storm season, we set up communications for all our hotels in the 

region to review extensively. We had check-lists of what must be 

done in the preparation time frame during the hurricane season to 

ensure we had overall readiness. As a possible storm approaches, 

our plan helps organize each hotel with the supplies they need to 

have on hand and the steps necessary to secure the safety of both 

our guests and associates. 

Once a hurricane warning is issued, we set up an emergency 

command center in each hotel that will give access to communications, and we begin daily communication between our regional recovery teams and our corporate leadership team and property 

teams and secure all needed assistance prior to the storm. We 

begin communicating with guests. We establish hotlines for our associates, and we establish a final list of guests and associates remaining on the property. 

In the case of Katrina, on Friday, August 26, we began a series 

of daily conference calls with the hotel management in New Orleans, our regional recovery teams on stand-by, and our appropriate 

corporate staff in White Plains. Our hotels began all preparations 

according to the plan, even though predictions then said the storm 

would miss New Orleans. For example, the Sheraton ensured that 

there was enough food and water for 1,000 guests for 5 days. Emergency generators were checked, along with supplies of diesel oil 

and batteries. Essential personnel were notified to be on stand-by. 

By Saturday, August 27, it was clear that Hurricane Katrina was 

headed for the city. Unfortunately, by the time the evacuation orders came, especially the mandatory evacuation on Sunday, despite 

our best efforts, there was neither ample time nor resources to 

evacuate many of our guests. Once it was no longer possible to 

evacuate, our priority shifted to ensuring the safety of our guests, 

associates, and their families within our facility. 

On Sunday, August 28, we transferred the guests from the W 

French Quarter Hotel to the W New Orleans, which had greater 

emergency resources. At the W French Quarter, we offered to 

house the Eighth District Police Command, which turned out to be 

helpful in securing the properties in the days to come. 

12

At the Sheraton, we had approximately 1,500 guests, associates, 

and family members, with another 600 at the W Hotel. I am 

pleased to say none of the guests, associates, or family members in 

the hotels suffered any injuries. 

While our hotels were taking care of hundreds of details that I 

simply don’t have time to outline, our regional and corporate team 

had assembled the equipment, generators, power technicians, assessors, and recovery teams and positioned them in strategic locations for ease of transportation once the storm had passed. Dehumidifiers, diesel fuel, gasoline, and replacement supplies of food 

and water were all staged so we could bring them in once we assessed the damage. 

In most hurricanes, we anticipate more short-term loss of power 

and water, but the massive flooding of the city due to the collapsed 

levees created substantially greater challenges than we ever had 

faced before. We alerted our ground teams in Atlanta, where we 

had moved our sales teams, and the corporate office in White 

Plains regarding the need for temporary housing for our 850 associates and their families. 

On Tuesday, August 30, the rising flood waters created intense 

urgency to evacuate the remaining guests and associates. At the W 

Hotel, we found buses in Lafayette and still took more than 7 

hours to get from there to the hotel to get the guests out. At the 

Sheraton, we thought we had found buses, but before all arrangements had been made, the water was too deep to move them. The 

team scrambled again to find buses, eventually arranging for 14 

buses from two tour companies out of Baton Rouge. 

By 6 p.m., Wednesday, August 31, all our guests and most associates had been evacuated to Dallas. Neither the Sheraton nor the 

W Hotel at any time sent any guests to any New Orleans shelters 

or otherwise added to the burden of the city. In fact, we are proud 

of the support we provided to the city and Federal agencies during 

the time, including housing the Eighth District and the Fifth District Police and 400 U.S. Immigration and Customs Enforcement 

officers. 

On Wednesday, August 31, our corporate team arrived in New 

Orleans and immediately gathered at the command center to get 

the latest update and determine the priority needs and the next 

steps. Our corporate team surveyed the situation and began the 

process of releasing equipment we had staged, arranging for it to 

come to New Orleans—not an easy task. 

Thursday, September 1, we inspected each of our properties and 

found that security was the biggest concern, as lawlessness was everywhere. Out of concern for our remaining managers, I ordered 

the evacuation of all but five of our local management team. The 

W French Quarter was safe with the Eighth District housed there, 

but not the larger W New Orleans. As we pulled back from the W 

New Orleans to the Sheraton Hotel, we saw looters break into the 

hotel behind us. As part of our daily conference call with the corporate headquarters team in White Plains, we decided to contract 

with Blackwater Security. Their presence allowed us to return to 

the W New Orleans and move safely between our hotels. 

Also on Thursday, our big delivery arrived under escort with 

dehumidification systems to start pumping cool, dry air into our 

13

1The prepared statement of Mr. Jackson with an attachment appears in the Appendix on page 

53. 

hotels to reduce moisture content and stop the growth of mold and 

mildew. 

On Friday, September 2, we had our first deliveries of generators 

from California, and we powered up the W French Quarter and lit 

up the New Orleans skyline with the first lights since the storm. 

On Saturday, September 3, we had our next shipment of generators arrive by 3 a.m. Sunday morning, we had power at the Sheraton on Canal Street. We contracted to have water brought in to 

fill our fire protection system and contracted with a company to 

pump the sewage out of the hotel so that we could then circulate 

water through, getting into our cooling towers and condition the air 

to prevent more mold growth. It was not until the middle of the 

next week that we were able to restore city electrical power at the 

Sheraton. 

By Sunday night, September 4, all hotels’ exterior signage were 

lit up and a time of celebration for our teams. 

In the following weeks, there were continuing challenges, beginning with construction, repairs, exposed windows, removing wet 

carpets, drywall, and the detailed recovery work that allowed us to 

get back operating before virtually every other hotel in the central 

business district. We took in our first paying guests at the Sheraton on September 12, 2 weeks to the day after Katrina struck. 

To get the hotels operating again, a significant issue that we had 

to face was getting our associates back to New Orleans. As a hotel 

company, we had a significant advantage over other businesses in 

that we could provide a place for our people to live. I wish I had 

the time to talk about all the things that our incredible people did 

while we were there. 

In closing, the key lessons for our team were to have a plan and 

execute the plan well, which also means being flexible and creative, 

to expect the unexpected, and to rely on our people, and most importantly, communicate, communicate, and communicate. Leadership is more than taking responsibility for your actions. It is making the decisions when they must be made and not waiting for 

someone else to make them for you. It is having the decisionmaking at the ground level. 

New Orleans is a great city with such a rich history. It is, in fact, 

my birthplace, and its foundation is built on its people. The heart 

of the city isn’t the Quarter or the Garden District. It is the people 

who live there, work there, and love there. 

I appreciate the opportunity to appear before this distinguished 

panel today, and I hope that what I have said will benefit the city 

that I love and help solve problems for the future. Thank you. 

Chairman COLLINS. Thank you. Mr. Jackson. 

TESTIMONY OF JASON F. JACKSON,1 DIRECTOR OF BUSINESS 

CONTINUITY, GLOBAL SECURITY DIVISION, WAL-MART 

STORES, INC. 

Mr. JACKSON. Good morning, Chairman Collins, Ranking Member Lieberman, and distinguished Members of the Committee. WalMart Stores wants to thank the Committee for its work that it is 

14

doing here and for holding this hearing today. We are very honored 

to be present and pleased to be part of this process. 

My name is Jason Jackson. I am the Director of Business Continuity for Wal-Mart Stores. My department is responsible for mitigation, preparation, response, and recovery to all types of business 

disruptions globally, from natural disasters to manmade disasters, 

significant epidemiological issues, and security-related events, such 

as a terrorist incident. 

Wal-Mart is based in Bentonville, Arkansas, and our company 

employs approximately 1.3 million associates from all 50 States 

and approximately 1.7 million associates worldwide. Each week, 

over 138 million customers choose to shop at Wal-Mart, and we believe that reflects our dedication to providing everyday low prices 

to our customers. 

Wal-Mart doesn’t just operate stores, clubs, and distribution centers in communities, though. We take a very pro-active stance in 

involving ourselves in those communities. And with crises being 

the discussion today, really, the sustainability of those communities 

is really near and dear to our hearts. 

Each of you has a copy of my written statement for the record, 

and I invite you to look at that as it is more detailed testimony as 

to what we did during Hurricane Katrina, but I will briefly sum 

up the highlights for you today. 

Being properly prepared to manage a crisis is critical to corporate sustainability, and the approach that we take to crisis management is similar to the government’s. We take an all-hazards approach. And because of Wal-Mart’s large footprint throughout the 

country, probability suggests to us that we will have to address crisis on a regular basis at a local, State, national, and sometimes 

global level. 

Before we start to focus on the hurricane, it is important to share 

with you that in the emergency management process, Wal-Mart 

really has three basic focuses that we look at, the first being the 

welfare of our associates; the second being continuity of operations 

and reconstitution of operations; and the third being community 

support, and these serve as the basis for which we build all of our 

plans. 

There are certain elements oftentimes that are specific to an industry or to a business that we feel are critical to success. Very 

quickly, these for us in emergency management are quick situation 

identification, knowing what is coming, and mitigating it as much 

as possible. 

Emergency structure, as far as having good and proper solid 

plans in place, having an emergency operations center that functions 24/7 to watch out for all of our facilities, and work on a 

proactive basis to try to mitigate and prepare the company for potential business disruptions and then also to orchestrate the response and recovery when those do occur, and also having good 

communications processes. 

Having scalable and flexible operations, operations that can 

change with the variables that present themselves as they unfold 

in a disaster, operations that are capable of growing in size, consummate with the level of the disaster. 

15

Just as important is total company support, again, having that 

balance between the strategic that may be coming from the home 

office, but also the tactical and the autonomy of the managers at 

the local level to make decisions that are the best for the community and for the situation at hand. 

Having efficient communications, and I am not just saying communications, which we know is key to success, but efficient communications in the way that we transmit information from the field, 

collect it into a big picture, and then disseminate that back out so 

that we can take the best action points. 

Also, leveraging our strengths. Each of us that sits here before 

you has strengths in our company. For us, one of those things is 

moving things from point A to point B very efficiently and effectively. We do it every day, as Senator Lieberman said, so capitalizing on these strengths becomes very important during a crisis. 

Some of the other strengths that we have is our information systems and how we utilize our technology to know what the consumer and the communities are going to need pre-disaster, if we 

are offered that opportunity, and then also post-disaster to make 

sure that those people have what they need to properly recover 

from whatever situation just occurred. 

Our logistics system, of course, is very robust, and we have over 

100 distribution centers and thousands of trucks, but they operate 

in a very coordinated fashion. This also includes eight distribution 

centers that are reserved with disaster merchandise, square footage that is set aside just for merchandise should a crisis occur. 

Also, understanding the big picture, and while we talked about 

Hurricane Katrina and the impact that it had on the States of Louisiana, Mississippi, Alabama, and Florida, it is important to note 

that there is the rest of the Nation that we still have to look after 

while the crisis is occurring, so understanding what the needs are 

and making sure that the needs are met for those people in the 

other portions of the country. 

And finally, our corporate culture as one of the key elements. We 

teach people to strive for excellence and to do the right thing, and 

most importantly, to be active participants in the situation and not 

just sit on the sidelines. 

For us in Hurricane Katrina, things really began when the storm 

developed into a tropical depression. Most people think, a lot because of the news media, that the hurricane was more about Louisiana and Mississippi and the second impact that it had, but we 

had a significant investment in Southern Florida that we had to 

look after, as well, as far as our associates and our stores and facilities and operations. So looking at August 23 is really when our 

operations started, and from there, the response that was kicked 

off as far as the merchandise that was dispatched into the stores 

for the communities, these teams that were staged, the generators 

that were staged, and all the other preparative and mitigative actions that were taken prior to that initial landfall. 

Once the storm moved out of Florida, we had to look at then a 

recovery operation and community support operation in Florida, at 

the same time preparing for the second landfall in the Gulf States. 

With that, as the storm moved ashore, it was actually our moment 

16

of peace and quiet because there was nothing that we could do at 

that point in further preparing for that storm. 

But as soon as that storm passed through in the Gulf States, we 

immediately found ourselves operating on a number of fronts. We 

found ourselves taking care of our associates and making sure that 

they had food and water, and we are talking about 34,000 people 

that were impacted related to our company, and with that, making 

sure that they had money and that they had a job to go to. We operated in restoring our facilities and reconstituting our own operations. We had 171 facilities that were impacted in the Gulf States 

and in Florida, and with that, we were able to reconstitute operations up to a level of 66 percent within 48 hours after landfall, 

and then in 6 days, up to 83 percent. 

With that, we also had to provide community support and relief 

in liaising with local agencies, finding the needs, working with the 

NGOs and other private sector entities to make sure that the communities were supported. We sheltered police officers. We fed and 

clothed people in communities and in the emergency services located in the immediate impact zone. We provided resources across 

the region. We dispatched generators and provided power to places 

that didn’t yet have power during the early days, and in some cases 

continue not to have power. We provided communications by dispatching in our systems teams to provide temporary satellites that 

restored network and voice communication, and the list goes on as 

far as the actions that we took in the immediate area. 

But one of the fronts that people sometimes don’t discuss or 

think about is what happened in the peripheral. At the same time 

that we were providing support to the immediate, we were also 

providing support to the States that took in all the evacuees. We 

saw a mass population shift during Hurricane Katrina, and it became evident that we would need to help and be that support 

mechanism to those States, to those shelters, and to the communities in the peripheral States. 

And in that, we saw ourselves doing things like setting up donation centers, for instance, at the Astrodome in Houston or at Fort 

Chafee in Arkansas, and with that, a tremendous amount of other 

actions that we took as a company, including setting up a web locator website that had over 53,000 posts and 5 million hits, provided 

computers to 150 shelters, provided mobile and temporary pharmacies to help with the pharmaceutical needs of evacuated populations, and so forth. 

There were just a few key lessons as you read through my testimony that you will come to find, and I think they are very universal, communication being No. 1, internally and externally, how 

we communicate with each other, institutionalizing the process of 

emergency communications between the public and the private sector. 

Also, development of expectations is also a key point in making 

sure that we understand each other, both across the private sector 

and across the public and private sector and the NGOs and the 

other entities that are involved, to make sure that we are developing solid plans based upon good information from each other 

about what FEMA is going to do or what the State agencies are 

17

going to do or what Wal-Mart is going to do or what we are capable 

of doing and what our limitations are. 

Additionally, learning from those that know. We know that we 

don’t know everything. We know that there are best practices out 

there in government and in other areas of the private sector that 

we can learn from. But at the same time, we can be a teacher, for 

instance, our logistics systems, as you mentioned. 

And then partnering for success. Emergency management and 

response to emergencies has to be a comprehensive effort on the 

part of the private sector, the public sector, and the NGOs and 

other entities that are involved. 

In life, there are certain absolutes. One of those absolutes is the 

fact that we will face another major crisis in the future. Whether 

it is a natural disaster, a manmade disaster, a significant pandemic event, or a terrorist event, we will all be required to respond 

again, and whether we are successful or unsuccessful depends 

wholly upon whether we learn the lessons that we are talking 

about here today and whether we continue to take advantage of the 

opportunities that present themselves. 

I thank you for your time and allowing me to speak on behalf 

of Wal-Mart. 

Chairman COLLINS. Thank you very much for your excellent testimony. 

As I listened to each of you today, I was struck by the meticulous 

planning and the escalating series of actions that you took in advance of Katrina making landfall. It contrasts so sharply with the 

lack of planning and the slow response of FEMA, which sent only 

one person in advance of Katrina’s striking New Orleans to be in 

the city. 

Mr. Ratcliffe, I think you said in your testimony that you start 

taking action 2 weeks prior to a potential storm, and then you 

track it every day and adjust accordingly. You talked about in the 

case of Katrina that you had activated your disaster plan with 20 

storm directors implementing their clearly understood responsibilities, and you talked about that by the time Katrina struck, you 

had already spent $7 million in securing equipment and logistical 

support. 

Mr. Jackson, I think you said in your testimony that by August 

23, you were already preparing and tracking Katrina. 

Mr. Regan, I want to ask you, when did Starwood decide that 

Katrina was a threat to your operations to which you might have 

to respond? 

Mr. REGAN. Well, early enough, we had Katrina coming into the 

Southern part of Florida, which is also part of my region, so we 

were dealing with that prior to probably about as soon as the storm 

was named, which was a few days in advance. It was a Category 

1 when it came across South Florida, and I think that from that 

perspective, as it went across, we were already planning in New 

Orleans. 

We had planned for a long time in New Orleans because of the 

situation there with being below sea level and everything else. We 

have all our game plans at the beginning of the season, which is 

June 1, we have all our preparedness in place, and what happens 

18

is as soon as a storm is named, we start tracking it from that 

point. 

Chairman COLLINS. Mr. Litow, same question for you. 

Mr. LITOW. Yes. We started our planning several weeks in advance, 2 to 3 weeks in advance, and we deployed our emergency response team, our crisis response team, on-site 4 days in advance 

of it hitting. 

Chairman COLLINS. To me, that is such a fundamental difference 

in the private sector response versus government’s response. On 

what information did you rely to start to implement your plans? I 

think I read in your written testimony that some of you actually 

have private meteorologists. Mr. Ratcliffe. 

Mr. RATCLIFFE. That is correct. We use a contract meteorological 

service. It is the most important information in trying to get prepared for a storm, to figure out how intense it is going to be and 

where it is going to go, and that is often very difficult to project. 

When you have a major service territory, like Mr. Jackson and I 

are talking about, and even Mr. Regan, the challenge in trying to 

be prepared at the right place at the right time is not insignificant. 

So having good meteorological data is an absolute necessity. 

Chairman COLLINS. Mr. Jackson, does Wal-Mart also have a private meteorologist service? 

Mr. JACKSON. We do. We contract with a consulting company 

that provides that data, but we also utilize the National Weather 

Service, National Hurricane Center data, as well. We are looking 

at the storms, particularly for hurricane season, back when they 

are tropical waves and they are not even a depression yet so that 

we have an idea of, this may be coming in the next 10 days. So 

we try to go out as far as possible to make sure that we are taking 

the proper actions and watching those storms closely. 

Chairman COLLINS. Another aspect that you all have in common 

is you were able through ingenuity to maintain communications 

with your employees or with the managers during the storm. Mr. 

Regan, I want to ask you, however, what communications were like 

from your perspective with the local and State Government and 

with the Federal Government, as well. 

Mr. REGAN. I guess the easiest way is there was a lack of communication totally on the outside. We would find out information 

that was being transferred around the city through the local police 

department that was in the hotel. 

During the course of time, for about 3 or 4 days, there was absolutely no communication whatsoever. There was no support from a 

standpoint of military or anything else downtown that we saw. The 

flood waters, all we would hear from the police were that the flood 

waters were still coming up, which they never came up any higher 

than where we were. We sat a little bit higher than everybody else, 

so we had a little water probably on the street and that was about 

it. 

But from a communications standpoint, we did not hear anything. The Mayor did have a hearing at the hotel about 4 days, 5 

days after the storm, but he wasn’t there. I think it was one of his 

representatives or a spokesperson came to talk about just what 

things were going on and what they were trying to do. 

19

1The prepared statement of Diageo and Humanitarian Relief appears in the Appendix on page 

66. 

The one key thing that I think in any crisis or anything that you 

look at is leadership, and the sad part about it in New Orleans is 

there was no visible leadership anywhere. The police department, 

they had no leadership. They had lost their precinct. It was underwater. Seeing anybody from the Mayor to the Governor to the 

President not there in the first few days left a lot of things for people to say, who really cares what is going on? And it also left anarchy in the city. It was very chaotic. 

From my perspective, and strictly the way that we did it, we hit 

the ground running. We got there as soon as the levee broke, and 

we had plans going in there anyway, so we were all set. We hit the 

ground running. And the thing was, we were there talking to people and the media was there, and there were people that were looking for stories that they could get out that were positive. Of course, 

there were a lot of negatives, but I think the key to everything is 

leadership. 

And communication-wise for us, we went in with satellite telephones, but our team in the hotel was able to get us up and operating right after the storm. So we were down for maybe a couple 

of hours at the most. 

Chairman COLLINS. That is very impressive. I think it was the 

Fortune magazine piece that was entitled, ‘‘As Government Broke 

Down, Business Stepped Up,’’ and I think what you have described 

is exactly what happened. Thank you. 

Senator Lieberman. 

Senator LIEBERMAN. Thanks, Madam Chairman. Thanks to the 

panel. This is very encouraging, I suppose even inspiring testimony, which I hope we learn from. 

I will say to you that the one Federal agency that we feel very 

proud of in its response, and in some sense mirrors, or maybe you 

mirror them, was the Coast Guard. They responded to the weather 

signals. They did so much of what you have done. They moved 

their personnel out of the immediate danger area. They brought in 

more personnel from around the country, and they were right there 

within hours of landfall to start rescuing people. 

Madam Chairman, I really want to briefly put a statement in the 

record.1 These four companies are models, but there are a lot of 

other companies who jumped right in and helped out. I just heard 

a report, and I had my staff write it down, Diageo, a distilled spirits company, happens to be international. It is London-based, but 

it has its North American headquarters in Norwalk, Connecticut. 

Four days before landfall, they moved power generators and water, 

not distilled spirits——

Chairman COLLINS. I thought you were going to say they sent 

much-needed alcohol to the region. [Laughter.] 

Senator LIEBERMAN [continuing]. To Baton Rouge. I was struck 

in the report because Senator Collins and I visited Pass Christian 

in Mississippi, but it happens that one of those big generators 

ended up in Pass Christian, and so thanks to all you other folks 

in the private sector who really did well. 

20

Senator Collins’ first few questions really got to part of what I 

wanted to talk about. The breakdown of communications here was 

really unsettling at the government level. Is there anything else 

any of you want to tell us about how you were prepared to maintain your communications so critical to the way you functioned in 

a disaster? Mr. Ratcliffe, you made a very brief reference that I 

wanted to have you build on a little bit. 

Mr. RATCLIFFE. Thank you, Senator. We are fortunate in that we 

actually operate a subsidiary company that is a wireless network 

and a dispatch mobile radio. We operate it as a requirement for our 

own core business, but it has incremental capacity that we sell in 

the marketplace, also. It is basically exactly the same Motorola 

technology that Nextel sells commercially and we sell in our footprint. We own and operate that subsidiary and its infrastructure, 

and it is absolutely critical to our success and day-to-day operations. 

On day one after the storm, it was the only network available to 

us, and I cannot emphasize how important it is (one of the lessons 

we have learned) for the first responders to be able to communicate 

with each other. 

Senator LIEBERMAN. Right. 

Mr. RATCLIFFE. That is an absolute necessity, and one of the 

things we have to do in this Nation is to build in the capability in 

these kind of restoration efforts for first responders to communicate. 

Senator LIEBERMAN. We are going to bring you back, Mr. 

Ratcliffe, to testify on behalf of a bill that Senator Collins and I 

have that does exactly that, but thank you. 

Mr. RATCLIFFE. We were the only folks who had the ability to 

communicate——

Senator LIEBERMAN. Why was that? What happened to the other 

networks that you were able to avoid? 

Mr. RATCLIFFE. Well, first of all, we were somewhat lucky. I 

would be remiss if I didn’t say that. 

Second, our design criteria, because of the business we are in, 

are more rigorous than other networks. 

And third, we stood the test in keeping our systems running. 

There were some situations where the other providers did not have 

adequate backup generators, did not fuel their generators——

Senator LIEBERMAN. So that once the electricity went out, the 

towers, for instance, were not working? 

Mr. RATCLIFFE. In some cases, the towers were down. 

Senator LIEBERMAN. Or they were down——

Mr. RATCLIFFE. In other cases—understand that electricity drives 

everything that we do. 

Senator LIEBERMAN. Right. 

Mr. RATCLIFFE. Even the switching networks require electricity. 

So we have to have backup generators for the switching stations 

and the communications network. To the extent people don’t have 

backup generators or don’t provide fuel in an extended fashion then 

they are going to fail. 

Senator LIEBERMAN. Let me ask this question. One of the most 

poignant stories that came out, for me, of New Orleans was the picture of Mayor Nagin in a hotel room, no communications ability, 

21

one staff member has a personal computer, and over that computer, they hooked into one or two or three—or I think it might 

have been six or seven—phone lines, and that is it for the Mayor 

of New Orleans, I think it was Tuesday. It wasn’t even Monday, 

the day of landfall. 

From your own experience, what should New Orleans do as it rebuilds to make sure that never happens again? 

Mr. LITOW. I think, first and foremost, you need a communications plan and strategy in advance. There are two things that are 

involved here. One is restoring communications, and we provided 

for a whole range of government and non-government agencies 

after September 11, and after the tsunami a communications network that people used. 

Senator LIEBERMAN. You mean that you actually brought in 

yourself? 

Mr. LITOW. Yes, we did. The second thing that you can do is you 

can make sure that through collaborative software, the variety of 

information systems can work with one another. That is a second 

and more difficult issue. After the war in Bosnia, for example, refugees came over the border in a variety of different sources, and 

they went into a variety of different camps. Because of not having 

one collaborative software system, they couldn’t locate people when 

they came to different places. 

So when you have a core base of information about a victim 

being served by a variety of different agencies, you have got to 

have an integrated system so that people can understand who 

needs what services and everybody can have the same information, 

and it is not all that difficult to get everybody operating on the 

same page. 

Senator LIEBERMAN. Mr. Jackson, my time is almost up. Just 

give me a few words about how Wal-Mart prepares itself to continue to communicate in a crisis like this. 

Mr. JACKSON. One of the things, and I think we face the same 

challenges that a lot of people face when you lose telephone lines 

and you lose cellular towers and such, and to kind of add on to 

what Mr. Litow was just saying, is to have a backup plan, also. 

Having a good communications plan is fine, but having a backup 

plan that is separate from that system, that is tested and——

Senator LIEBERMAN. Were you able to continue to communicate 

from Bentonville to your people in the Katrina-hit area during the 

storm? 

Mr. JACKSON. Yes and no. There were periods of blackouts, for 

instance, and that is when you have to rely on different systems, 

like associate accountability. I am going to go down the road and 

check on the store, and if I am not back in an hour, please send 

someone for me. Having that accountability process is much more 

mundane and fundamental, but still serves the same purpose. 

Senator LIEBERMAN. What is your backup system? 

Mr. JACKSON. Our backup system is tactically sending in as 

quickly as possible our temporary satellite systems that have voiceover phones. 

Senator LIEBERMAN. Just a final question. The two of you that 

have the most presence here—maybe I am not being fair to IBM—

in New Orleans, as you watched the weather forecasts coming in, 

22

did your emergency plans include preparation for response to the 

possibility of the levees breaking and flooding occurring, or were 

you planning simply for response to a bad hurricane? 

Mr. REGAN. We had plans—from Starwood’s perspective, ours 

was basically a plan for the hurricane, and we do have flood plans, 

also. So we knew exactly what we were doing. We knew that we 

were in trouble from the levee standpoint. If it was going to hit and 

it was going to be to the west of the city or to the east of the city, 

we were going to get hit no matter what. It was going to flood. So 

that has been part of our preparedness——

Senator LIEBERMAN. So flooding was part of your preparedness 

for New Orleans? 

Mr. REGAN. Yes. 

Mr. JACKSON. And ours would be the same. We have a flooding 

policy in general as far as emergency procedures go. So we knew 

that we were going to be looking at a potential flooding situation 

in New Orleans and responded accordingly. 

Senator LIEBERMAN. Thank you. Thank you very much. 

Chairman COLLINS. Thank you. Senator Voinovich. 

Senator VOINOVICH. Thank you, Madam Chairman. Thank you 

for holding this hearing and for your continued investigation into 

the aftermath of Hurricane Katrina. 

I am particularly interested in today’s hearing, based on my conversations with many private business executives. They have expressed deep frustration with FEMA in getting their respective jobs 

done. 

I believe there is much that the Federal Government can learn 

from the private sector in terms of best business practices and 

streamlined response in the event of an emergency. We have heard 

that sentiment reiterated here this morning. I believe that in order 

for our response to Katrina to be effective, we must have a clearly 

defined role for the private sector. If we expect to be successful, we 

will need a robust public-private partnership. 

I find it troubling that in some instances, private sector companies were prepared to respond swiftly to the devastation on the 

Gulf Coast, while the response from all levels of government were 

mired in bureaucracy. 

I am frustrated by the Federal Government’s seeming inability 

to manage offers of assistance from the private sector. Additionally, 

I understand that there were a number of reports that FEMA could 

not even pay contractors who were already helping with reconstruction in a timely fashion. Madam Chairman, I wish that FEMA representatives were here so that they could hear some of this testimony today. 

The first question I want to ask is, to date, has anyone from 

FEMA or the Department of Homeland Security contacted any of 

your companies to get your perspective on the topics we are discussing here today? 

Mr. REGAN. Not with Starwood at this point. 

Mr. JACKSON. At a lower level, yes, we have had some representatives, some of the alert networks from Department of Homeland 

Security come and benchmark with us this last week. 

Senator VOINOVICH. Mr. Litow. 

23

Mr. LITOW. We do work for FEMA and for other Federal agencies 

on particular contracts, but in terms of the overall coordination and 

planning and advance knowledge, most of the advance communication and contact with Federal agencies doesn’t take place because 

people feel that they are precluded for them bidding on contracts. 

So there are certain intricacies in the bidding process that make 

it difficult for businesses who are expert in this area to be able to 

have pre-planning conversations and discussions that run across a 

variety of areas with government agencies. 

Senator VOINOVICH. Mr. Ratcliffe. 

Mr. RATCLIFFE. Senator, I am not aware that we have been contacted. 

Senator VOINOVICH. If the Department and Secretary Chertoff 

were to put together a task force to look at the way FEMA 

interacted with and tapped the private sector, would you be willing 

to serve on that task force? 

Mr. LITOW. Absolutely. 

Mr. REGAN. Absolutely. 

Mr. JACKSON. Yes. 

Mr. RATCLIFFE. Yes. 

Senator VOINOVICH. Mr. Litow, it sounds as if in response to 

Katrina you accomplished quite a bit. Of the eight areas that you 

mentioned in your testimony—how many were addressed after 

Hurricane Katrina hit? Were any actions taken before the hurricane made landfall? Generally, I’d like to understand what assets 

were in place prior to landfall. Were these preparations made by 

Homeland Security or FEMA in order to be ready to respond to a 

hurricane? 

Mr. LITOW. Virtually all of the software tools that we deployed 

were pre-prepared in a variety of different disasters, and we refined them after September 11, after the tsunami, so that when we 

sent our people on the ground after Hurricane Katrina, we were 

able to do a demonstration of a set of software applications that 

could be used by State agencies, Federal agencies, or voluntary 

agencies——

Senator VOINOVICH. The question I have is, how much of your 

preparation was in conjunction with FEMA? 

Mr. LITOW. In some cases, it was in conjunction with FEMA. In 

some cases, it was in conjunction with the State of Louisiana. In 

some cases, it was working directly with voluntary agencies or 

school systems in a variety of different States. 

Senator VOINOVICH. I would be very interested if you would clarify the answers to the questions I have about the eight areas that 

you have listed here. Please provide me with information about 

how much of the preparations were in place as part of FEMA’s 

work with you? Did you have a contract with FEMA? How many 

of the assets were established in a reactionary fashion that occurred when you arrived on the ground? 

Mr. LITOW. Most of them were customized on the ground. 

Senator VOINOVICH. In other words, they just happened, and you 

had the capacity to do it because of your previous experience? 

Mr. LITOW. That is correct, Senator. 

Senator VOINOVICH. Who called upon you to do the things that 

are listed here? 

24

Mr. LITOW. Well, we worked on the ground, and we did demonstrations for a variety of agencies of what we had and what we 

thought we could do, and then we asked them to pick and 

choose——

Senator VOINOVICH. What agencies were those? 

Mr. LITOW. The State of Louisiana, State Government, city government, school system, FEMA, Red Cross, and the Salvation 

Army. We presented those solutions to a variety of different agencies. When we work internationally, we present them to international agencies. After the tsunami, we presented them and 

showed them at the United Nations. So they are available. They 

can all be viewed. The people can determine which are most applicable, and they can be customized in any case. It has nothing to 

do with whether it is a hurricane or another kind of disaster. The 

core systems are universal. 

Senator VOINOVICH. And does FEMA, or did FEMA have a list 

of your capabilities to share those with people who might need the 

services? 

Mr. LITOW. I can’t answer that. They had some of the information, but not all of it was shared. 

Senator VOINOVICH. Have any of you had contracts with FEMA? 

Mr. REGAN. Yes. 

Mr. LITOW. Yes. 

Senator VOINOVICH. How has that worked out for you? 

Mr. REGAN. We have a contract for guest rooms at the Sheraton 

New Orleans for 750 rooms a night. 

Senator VOINOVICH. In terms of the management of the contracts 

and the payment for services, how has the process worked? 

Mr. REGAN. No issues. 

Mr. LITOW. We have a subcontract, three contracts with FEMA, 

and everything has worked fine. 

Senator VOINOVICH. Thank you. 

Mr. JACKSON. One of the issues that arose for us was the early 

identification of the payment processes. We are not a normal contractor with FEMA. During hurricanes and other disasters, we will 

be asked to provide certain resources that we have available to us. 

But one of the processes that we ran into was, and again, in the 

development of expectations, like I talked about, not necessarily 

having the request come from a purchasing agent, which created 

some problems for us on the back end. So I think that the further 

development of those expectations and communications is what is 

going to preclude that from happening in the future. 

Senator VOINOVICH. Thank you. 

Chairman COLLINS. Thank you. Senator Akaka. 

Senator AKAKA. Thank you very much, Madam Chairman. I am 

pleased that you are holding today’s hearing, and I must tell you 

that I was struck by the impressive contributions of the private 

sector during Hurricane Katrina. I also saw that when I toured the 

Gulf Coast States with members of the Energy Committee in September. It is important that we learn from the experiences of private companies as we determine how to best improve the Federal 

Government’s emergency management capabilities. 

Senator Lieberman mentioned, and I am so glad he did this, how 

effective the Coast Guard was during Hurricane Katrina, and I unVerDate 0ct 09 2002 09:51 Aug 28, 2006 Jkt 024932 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 C:\DOCS\24932.TXT SAFFAIRS PsN: PAT
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derstand that GSA also anticipated the direction of the storm and 

secured Federal buildings, and being the Ranking Member of the 

Veterans’ Committee, I learned that the VA was to be commended 

for their response and the follow-up to the storm, so there were 

Federal agencies that worked out well there. 

The lesson may be that government can function well and our 

task is to ensure it functions better, so we look forward to that, but 

I was really impressed by all of your statements. 

Mr. Regan, you said that on Monday, August 29, Starwood Hotels began lining up buses to evacuate the hotel guests at the Sheraton. Why did you take the initiative to look for buses before you 

knew the levees had failed? 

Mr. REGAN. Well, really, we started lining up the buses after the 

levees had failed. The levees started failing at 11 o’clock on Monday. As soon as the issue happened when the storm came through 

at 6 a.m. and then hit New Orleans about 9:30, 10 o’clock, the levees started to breach at 11 a.m. There was no communication, that 

was one of the things, but we did have communication with the police department. When we knew the levees were breached, we knew 

the opportunity was going to be minimal to be able to get buses to 

get our people out. 

Senator AKAKA. You also decided to evacuate your guests rather 

than relocate them to the Superdome. 

Mr. REGAN. Right. 

Senator AKAKA. How did you know that the Superdome was at 

capacity, even though local officials kept sending people there? 

Mr. REGAN. Well, the way that we knew that the Superdome was 

pretty much at capacity is because they started floating them over 

to the convention center. That was the backup, apparently, for the 

Superdome. So when they started sending people to the convention 

center and we had people walking up Canal Street who were being 

told, no, you have to go to the convention center because the Superdome is full, and that is what people were being told, we decided 

that it was better to evacuate our people out of the city because we 

felt like it would be a burden put on the city itself. 

Senator AKAKA. Mr. Jackson, you have described how Wal-Mart 

response teams are deployed to disaster areas to secure Wal-Mart 

stores. How many response teams does Wal-Mart have nationally 

and are these permanent teams or are team members redeployed 

from other positions in Wal-Mart when a disaster occurs? 

Mr. JACKSON. We actually utilize the existing structure that we 

have in place across the Nation and actually around the globe. We 

use a pseudo incident command process similar to NIMS or the ICS 

systems that are typically used, but with local incident management teams really being representatives of those facilities in which 

they operate normally as well as members of the asset protection 

teams and loss prevention teams. 

So, long story short, the teams are representatives of the people 

that normally function in that area, and so the number of teams 

is really not as much the answer to the question as is the structure 

that is in place to be able to develop teams based upon the scope 

and size of the disaster itself. 

Senator AKAKA. It would be useful to know if other businesses 

have similar response teams to respond to disasters. 

26

Mr. Ratcliffe, you discussed the importance of Mississippi Power’s hurricane recovery plan and the fact that the plan is regularly 

exercised and revised. However, one of your storm directors was 

quoted in the press as saying the plan is not utilized by employees 

during a disaster and that he has not reviewed the plan in years. 

I am trying to understand the extent to which your plan contributed to your successful response efforts because many government 

agencies that faltered during Hurricane Katrina also had response 

plans. Would you please comment on the storm director’s remarks? 

Mr. RATCLIFFE. Senator, I think the key to any planning is the 

drilling or the rehearsing of the plan. A lot of folks write plans and 

put them on the shelf, but if you don’t actually force yourself to go 

through the practice exercise, the drill itself, the plan is not much 

good. You learn a lot in the practice exercise. 

So to the extent we force ourselves to do that every year in anticipation of the hurricane season, we actually work through the response so that our people don’t have to try to go find the book on 

the shelf. They have been through it. They know what the response 

is by firsthand experience. I think that is why the person responded, he hadn’t looked at the book. He knew what to do because 

he had already rehearsed the drill. 

Senator AKAKA. Thank you very much, Madam Chairman. My 

time has expired. 

Chairman COLLINS. Thank you. 

I want to follow up on Senator Voinovich’s question to you about 

your contacts with the Department of Homeland Security. When 

we wrote the law creating the Department of Homeland Security, 

we specifically created an office to be a liaison with the private sector. In addition, the law provides for a Private Sector Advisory 

Council, and it is because we wanted DHS to have a robust relationship with major players in the private sector when it comes to 

disaster preparedness and response and many other issues that the 

Department is involved with. 

To the best of your knowledge, does your company have an ongoing relationship with the Department of Homeland Security? We 

will start with you, Mr. Ratcliffe. 

Mr. RATCLIFFE. We do, and we have been contacted and have 

interfaced. One of the things that we have done in our industry is 

look at critical infrastructure and had conversations with Homeland Security about what infrastructure is critical and how should 

we try to prepare for protecting that infrastructure going forward. 

So there is not only with our company, but with our industry, a 

routine interface. 

Chairman COLLINS. Mr. Litow. 

Mr. LITOW. Yes, we do have regular contact with the Department, and we do have contracts with them, and we work with them 

regularly. 

Chairman COLLINS. Mr. Regan. 

Mr. REGAN. We don’t, to my knowledge. 

Chairman COLLINS. Mr. Jackson. 

Mr. JACKSON. I believe you are referring to the Private Sector Office of the Department of Homeland Security. 

Chairman COLLINS. Yes. 

27

Mr. JACKSON. We have frequent communications with them, and 

during Hurricane Katrina, multiple calls coming into our emergency operations center from Al Martinez-Fonz’s group, Rich Cooper, and some of the other players from the Private Sector Office. 

Chairman COLLINS. If you do have that kind of relationship, 

which I would hope that you would, I am trying to figure out why 

the Department doesn’t tap into your expertise more. 

Mr. Jackson, staying with you for a moment, each of the members of this panel have specialized expertise, goods, or services that 

were really needed in the response to Katrina. Is there anything 

that you saw a need for and actually offered to government at any 

level, and yet that was not accepted? Mr. Jackson. 

Mr. JACKSON. I don’t know necessarily that we stated certain 

quantities, but we did reach out across all levels of government and 

said, these are the resources we can provide. Normally, during a 

disaster, we work on a basis where we want the agency to ask us 

for what they need and then we will try to procure that or deliver 

that to them so that they are not getting things that they don’t 

need because they didn’t ask. But I am not aware of any situation 

where we offered resources and that they weren’t accepted or at 

least discussed. 

Chairman COLLINS. Mr. Regan. 

Mr. REGAN. Yes. I am trying to rack my brain, but I don’t believe 

there was anything during the period of time that I was there that 

they turned down that we offered. 

Chairman COLLINS. Mr. Litow. 

Mr. LITOW. Yes. We did offer to provide the kind of communications network that we used after the tsunami in South Asia, and 

we were told that they had other priorities and they went down the 

list and selected other things. 

Chairman COLLINS. And yet the lack of a communications network greatly hampered the response. 

Mr. Ratcliffe, your situation is a little different, I realize. 

Mr. RATCLIFFE. I am not aware of anything. 

Chairman COLLINS. OK. Thank you. 

Mr. JACKSON. Madam Chairman, may I add on to that? 

Chairman COLLINS. Yes. 

Mr. JACKSON. There was one resource that we did offer similar 

to what we did after September 11 and to the private sector. We 

offered human resources. In the discussions that we had, we talked 

about possibly utilizing some of our logistics managers to help 

manage the staging areas or develop a disaster warehouse in that 

region, and those conversations basically just drifted off. 

Chairman COLLINS. Mr. Jackson, following up with you, I mentioned before the hearing the odyssey of the ice, where FEMA was 

frantically ordering ice and 250 truckloads of it got shipped off to 

Portland, Maine, not exactly the heart of the hurricane region. To 

this day, to my knowledge, 150 of those truckloads remain in dry 

storage. 

This raises questions to me about how FEMA orders, tracks, and 

delivers vital supplies. You were contacted by FEMA and asked to 

provide some supplies, such as water. Did you get the sense that 

was the result of an assessment of what would be needed, or was 

it more a frantic search for the commodities that are needed? 

28

Mr. JACKSON. I would say it sounded more like an assessment, 

and the reason I say that is this. When the purchasing agent from 

FEMA contacted us, they say, and they have done this in previous 

storms, we need 100 trailers of water, and immediately, our questions are, well, do you have the logistics network on the other end 

to offload 100 trailers of water in a timely manner, or do you know 

what 100 trailers of water looks like? The response normally to 

that question is, I was just told to go buy 100 trailers of water. 

So it would seem that—of course, not seeing their plans—that 

they have some type of set, you need to go do this and here is how 

much money you have, as compared to directing it to a specific 

need. 

Chairman COLLINS. Thank you. Senator Lieberman. 

Senator LIEBERMAN. Thanks, Madam Chairman. Thank you 

again, all of you. 

I was struck when Mr. Jackson and Mr. Ratcliffe, particularly, 

talked about the fact that you retain private consultants as weather forecasters. To ask the question as directly as I can, does that 

suggest any lack of respect for or confidence in the National Weather Service or the Hurricane Center? 

Mr. JACKSON. Absolutely not on our end. 

Senator LIEBERMAN. So why do you do it, just because you need 

more tailored information? 

Mr. JACKSON. Somewhat. I think from our perspective, it is more 

about we want to take in as many pieces of information as possible. 

Senator LIEBERMAN. Right. 

Mr. JACKSON. Occasionally, we utilize modeling software to look 

at hurricane patterns and such. So it is not just relying on one 

source for information, is the key. 

Senator LIEBERMAN. Mr. Ratcliffe. 

Mr. RATCLIFFE. That is the same. 

Senator LIEBERMAN. The same? 

Mr. RATCLIFFE. Multiple inputs. 

Senator LIEBERMAN. That is reassuring to hear because we quite 

correctly praised the Coast Guard, but it did appear to me that the 

National Weather Service performed well here, too, and, in fact, as 

you look at the record, they seemed to almost be screaming by Friday night to everybody, including in our government, that this is 

going to really be bad. 

Mr. Jackson, as the Director of Business Continuity at Wal-Mart, 

it strikes me that you might be described as the Secretary of 

Homeland Security for Wal-Mart, maybe International Security in 

that sense. 

Mr. JACKSON. I don’t know if my boss would like that, but—— 

[Laughter.] 

Senator LIEBERMAN. Senator Pryor said I could use that title. He 

will clear it with the management. [Laughter.] 

I note as we on this Committee look at organizational questions 

and issues that are raised by Katrina and generally that Wal-Mart 

has chosen to put a series of major related functions—mitigation, 

preparation, planning, response, and recovery—in the same department under you. I want you to talk a little bit about what you see 

as the advantages of that. To be real explicit, if you want to deal 

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29

sponded to FEMA’s bad performance in Katrina by saying, the 

problem is they are in the Homeland Security Department. Get 

them out. 

Now, we actually put them there because we thought it made 

sense to have them with the other disaster preparedness and response, recovery groups. What does your experience tell us about 

that kind of judgment? 

Mr. JACKSON. Actually, I report to the Vice President of Global 

Security, which I think more appropriately has that title. 

Senator LIEBERMAN. He is the Secretary of Defense for WalMart? [Laughter.] 

Mr. JACKSON. If you so choose. But in that, really, where we are 

positioned in the company is a good place. As far as having those 

four components under my area of responsibility, I think it works 

best because all four of those areas are supposed to work together. 

And so in utilizing the resources that I have available to me, to 

have my planners talk to the people that are working in the emergency operations center, where they are cross-trained and able to 

seamlessly work together and develop the best strategies is the 

best way to operate. 

As far as the way that the company reacts as a whole, we had 

total company support from our CEO all the way down and had 

twice-daily conference calls during Hurricane Katrina with the 

CEO, his direct reports, and their direct reports, and everyone 

knew that they would function through the emergency operation 

and use the structure that was in place. 

Senator LIEBERMAN. Thank you. Very helpful. 

Mr. Regan, you mentioned and the record shows that some of the 

hotels in New Orleans are housing first responders and other government personnel. To the best of your knowledge—I guess a series 

of questions. First, was there any pre-disaster arrangement for that 

to happen or was it just fortunate that you stayed in operation and 

were able to house them? 

Second, do you think, because you are in this business, that as 

part of our emergency preparedness, the government ought to have 

pre-set arrangements for housing the large number of people we 

are inevitably going to send into a disaster area? 

Mr. REGAN. To answer your question, Senator, the first part was 

Shaw came in and was looking for accommodations after the storm. 

So none was done prior to the storm at all. There was no anticipation, I don’t believe for that. 

Senator LIEBERMAN. Yes. 

Mr. REGAN. To answer the second part, I think it would make 

sense logistically to have housing set up for emergency personnel 

that can respond directly from one location. When we talked about 

a command center that I brought up before and why we do that 

is so that we have a nucleus of a working office so that everybody 

can branch out from that point. Bringing our people and staying 

in the hotels is probably the most important thing. We can set up 

command centers for everybody, and one of the things we talked 

about in New Orleans was the lack of the planning, and it was 

more reactionary than it was proactive——

Senator LIEBERMAN. Yes. 

30

Mr. REGAN [contining.] And that is probably the biggest concern 

that we had. 

Senator LIEBERMAN. I agree. I think you just said it, that there 

wasn’t real planning, it was a reactionary approach, and when you 

do that in the midst of a crisis, obviously, you are running terrible 

risks, and unfortunately, a lot of people paid the price. 

Mr. RATCLIFFE. Senator, might I add a comment there? 

Senator LIEBERMAN. Yes, please. 

Mr. RATCLIFFE. One of the things that we learned in the response to Hurricane Ivan in the panhandle of Florida in our subsidiary Gulf Power Company, we traditionally plan on using the existing infrastructure to house restoration and recovery workers, but 

in the case of a hurricane of the magnitude of Ivan or Katrina, that 

infrastructure is often destroyed. You have to have Plan A, but in 

the event Plan A is not available, you had better have Plan B to 

house your own workforce. We brought in 11,000 people to the Gulf 

Coast of Mississippi and provided temporary housing. We fed them 

twice a day. We showered them. We did their laundry——

Senator LIEBERMAN. How did you do it? 

Mr. RATCLIFFE. Well, it is logistics planning. Again, it is lessons 

learned from prior experience——

Senator LIEBERMAN. Did you bring in trailers or——

Mr. RATCLIFFE. We had trailers. We had tent cities. We had caterers. 

Senator LIEBERMAN. That is impressive. Last question, if I may, 

and this is something contemporary. I don’t believe your company 

serves New Orleans——

Mr. RATCLIFFE. No, sir. 

Senator LIEBERMAN [continuing]. But we have been hearing—I 

have been hearing some complaints from people in New Orleans 

who have had to wait for inspections of their buildings or houses 

before the power can be restored and the inspections are slow in 

coming because the personnel in the city is not up and running 

with adequate resources. Are there similar problems that you are 

having in your service area, and if so, how are you trying to get 

around them? 

Mr. RATCLIFFE. Well, let me explain just on the front end of my 

remarks. Our focus is obviously starting back up the system, getting the poles and wires back up so that we can deliver power is 

our primary objective. But in situations where you have had potential damage to the facility, it is absolutely critical that you get a 

certified electrical inspector to go in and make certain before we restore the service, we don’t run the risk of burning the house or the 

facility down because there has been some internal damage to the 

house. 

Senator LIEBERMAN. Right. 

Mr. RATCLIFFE. That process is something that we don’t do. It is 

an independent private provider situation. You have to have electrical inspectors available, and that is one of the things that often 

lags, simply because you don’t have a staff of existing people in anticipation of this magnitude of event. So I think that is what you 

are running into. 

Senator LIEBERMAN. Let me understand clearly. Are these people 

who are retained by the municipalities? 

31

Mr. RATCLIFFE. Private contractors. They are simply qualified 

electrical inspectors. 

Senator LIEBERMAN. That you bring on? 

Mr. RATCLIFFE. No, sir. They are in the communities. 

Senator LIEBERMAN. That an individual home owner might have 

to retain? 

Mr. RATCLIFFE. That is exactly right. 

Senator LIEBERMAN. OK. And so part of what is going on here 

is that there are not enough of them in New Orleans. Same problem in your service area in Mississippi? 

Mr. RATCLIFFE. To some extent, yes, sir. 

Senator LIEBERMAN. Thank you all very much. Thanks for what 

you did in the crisis, which helped a lot of people an awful lot, and 

thanks for the lessons that you provided us with this morning. 

Chairman COLLINS. Thank you. 

Let me ask you each one final question. Our Committee, at the 

conclusion of its investigation, will be preparing a report with our 

findings and recommendations. We are committed to improving the 

Federal Government’s preparedness and response so that the slow, 

halting, and woefully inadequate response to Katrina is not repeated, and we are sincerely committed to that task. What final advice do you have for us on what should be done to improve the preparedness and response at the Federal level? I am going to start 

with Mr. Jackson and work backwards this time. 

Mr. JACKSON. I think the same things that we learned out of 

Katrina and that we continue to learn, is focusing on communication. Pro-active communications on the front end are going to lead 

us to those discussions about expectations and limitations, which 

we can build that comprehensive plan that is really going to take 

us to that unprecedented level of disaster preparedness that we 

have yet to achieve. 

Chairman COLLINS. Mr. Regan. 

Mr. REGAN. In our case, we are going through and really evaluating learned lessons again from Katrina, as we have with every 

other storm. I think the one thing is we look at the process of how 

we handled it. We look at the process of our plans, and we change 

the process of what didn’t work, where we adapted to what did 

work. 

And I think if you go back from the very beginning and you look 

at where everything was established, from the breakdown in communications to the breakdown in deployment to everything that 

happened, you need to go through each one of those plans and determine what part of the process broke down. And once you determine that, you correct that, then you move forward. And I think 

that is really the most important part from a learning standpoint. 

It is going back in and finding out exactly what part of the process 

broke down and correct that part. 

Chairman COLLINS. Thank you. Mr. Litow. 

Mr. LITOW. I would say, sadly, we have been through many disasters, and in each of them, whether we are talking about September 11 or the hurricanes or international disasters like earthquakes or the tsunami, there are good examples of best practices 

and practices that are not so good, and we ought to learn from all 

of them to be able to prepare a comprehensive plan and strategy, 

32

and then make sure that all the various sectors who are called 

upon to respond have a common set of information. That is public, 

that is private, that is not-for-profit, and that is the education sector, as well. Get everyone on the same page, understanding exactly 

what went right and what didn’t, and have a comprehensive strategy and plan in place. The next disaster may not be a hurricane. 

Chairman COLLINS. Thank you. Mr. Ratcliffe. 

Mr. RATCLIFFE. Senator, I would certainly agree with my colleagues. The only thing I would add would be to try to create a 

spirit amongst the leadership in the various agencies of cooperation 

and teamwork and a single mindset to make sure that we are focused on the main objective, which is to restore order and to restore society to some sense of normalcy. To the extent we have 

leadership that cooperates and is driven by teamwork, we would be 

much better off. 

Chairman COLLINS. Senator Lieberman and I serve on the Senate Armed Services Committee, and we spend a lot of time talking 

about jointness. I think what you are all talking about is that 

jointness needs to exist at the local, State, and Federal level and 

in cooperation with the private sector. 

We have learned a great deal from your testimony here today, 

and I want to thank you very much for sharing your experiences 

and your expertise with the Committee. 

Senator Lieberman, do you have any other final comments? 

Senator LIEBERMAN. I don’t, just to join you in thanking everybody here. There is a lot to learn about preparedness, leadership, 

and the cultures it sounds like you all created, which we did see 

in the Coast Guard, which is—don’t worry about the bureaucracy. 

If there is a crisis about to happen, let us just go according to our 

pre-prepared plans and get this done. Sadly, we didn’t see that 

with FEMA, which is supposed to play the major role here, and 

that is what we have to correct. So I thank you again. 

Chairman COLLINS. This hearing record will remain open for 15 

days for the submission of additional materials. Your full written 

statements will also be included in the record, and again, thank 

you so much for testifying today. 

This hearing is now adjourned. 

[Whereupon, at 11:43 a.m., the Committee was adjourned.] 

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Æ


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