The Wall Street Journal: Agency Cancels A Housing Plan For Evacuees: "The effort had placed about 6,000 Louisiana workers in nearly 2,400 travel trailers at industrial sites across hurricane-ravaged southeast Louisiana. Most were at large refineries owned by energy and chemical giants including Royal Dutch Shell PLC, Exxon Mobil Corp., Murphy Oil Corp., Dow Chemical Co., DuPont and Monsanto Co.": Thursday 6 October 2005

BATON ROUGE, La. -- Even as the Federal Emergency Management Agency struggles to provide temporary housing for hundreds of thousands of displaced storm victims, the disaster-relief organization has ordered the abrupt end to a high-priority program to help restart key businesses by providing housing for displaced workers.

Louisiana officials expressed outrage that FEMA was shuttering what many saw as the one program that effectively got evacuees into temporary shelter and back into the work force near New Orleans. The effort had placed about 6,000 Louisiana workers in nearly 2,400 travel trailers at industrial sites across hurricane-ravaged southeast Louisiana. Most were at large refineries owned by energy and chemical giants including Royal Dutch Shell PLC, Exxon Mobil Corp., Murphy Oil Corp., Dow Chemical Co., DuPont and Monsanto Co.

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State officials familiar with the situation say that FEMA stepped in to shut down the program on Sept. 30. The federal agency distributed a memo that day from Daniel A. Craig, director of the recovery division, stating that while FEMA has received requests from various state and local officials to provide housing for employees of companies disrupted or damaged by Hurricane Katrina, "the first requirement for ... housing is that the entity must provide a service essential to the restoration of the community."

The FEMA memo, reviewed by The Wall Street Journal, classifies "essential services" as educational, emergency and medical facilities, utilities, and public-works agencies. FEMA hasn't ordered that the 6,000 workers be thrown out of their trailers, but the move prevents state officials from assisting with at least 2,000 other requests for trailers from companies seeking to provide housing to employees and their families. The program was placing as many as 500 trailers at a time on company-owned land, providing immediate shelter for hundreds of people.

A FEMA spokesman said the agency "had to get control" of the housing program to ensure that businesses weren't using the trailers to bring in outside workers. FEMA's mandate, the spokesman said, "does not allow us to assist private companies." Such help, he added, should come from the Small Business Administration. FEMA said the shutdown of the program was not prompted by any allegations of fraud or abuse by the companies.

The spokesman said further that "if these are actually displaced workers we're talking about, then they have home sites in the area and we can go to those home sites and place a trailer there."

State officials scoff at FEMA's stance. They point out that when the program began about a week after Katrina hit, President Bush stopped by one of the first trailer sites, a Folgers coffee plant in New Orleans owned by Procter & Gamble Co., where 113 trailers had been packed onto parking lots. The president praised the effort to get the plant running, saying, "There's progress being made in this part of the world … Behind me you see temporary housing -- this company has provided housing for the folks who work here." A White House spokeswoman said yesterday that the administration was aware of the situation and remains confident in FEMA's efforts to provide temporary housing for storm victims.

Those familiar with the program say the assistance wasn't aimed at businesses but at their workers. Moreover, they say, the people living in the trailers all had FEMA disaster-claim numbers to prove they were eligible to live in the two-bedroom 8-foot-by-35-foot trailers. State officials argue that the FEMA program that processes each worker individually will take far too much time and impair companies that need to be back on their feet immediately.

"Federal agencies that are wanting to take their time to work things out are taking so long to get things done that it's not helping us," says state Sen. Ken Hollis. "We've got to get people back to work or we're going to lose our employee base. This was one program that was working right to do that, and the feds have come in and shut it down."

Providing on-site housing to displaced workers has exploded into a huge issue in south Louisiana as companies across the region struggle to get back on their feet. Many of those businesses have lost access to suppliers and customers, and their work forces have been scattered.

By providing shelter on company-owned land, business owners are relying on the old, company-town model to get their operations moving again. In doing so, many are providing not only shelter for employees and families, but also potable water, waste-water services, a canteen, laundries, satellite dishes for television, a collection point to get kids to school -- and in some cases even a run for pet dogs. The employers say this approach allows them to rebuild their business, prop up the economy and provide paychecks to workers who otherwise would end up on the state's unemployment rolls or leave Louisiana.

The program is the brainchild of Louisiana's Economic Development Department, which sees the plan as the first building block in restoring the local economy. The department started shipping trailers to heavy-industry employers, such as Exxon and Shell. From there, the agency stepped down the economic food chain to barge and railroad companies serving the bigger players, then to trucking companies taking finished product to warehouses and retailers.

Trailers hadn't yet made it to the retailers themselves before FEMA stopped the program. A list obtained by the Journal shows that more than 225 companies had either received or requested trailers. Names range from giant bottler Coca-Cola Enterprises Inc. to Mimi's Italian & Seafood Restaurant in River Ridge, La. A secretary in the state's economic development agency says interest in the trailer program has been so intense that a team of five department workers has been handling several hundred calls a day.

PepsiAmericas Inc., the Pepsi bottler in Jefferson Parish, got 36 campers through the program. Late last week, employees and their families who lost homes began moving into trailers parked inside a company warehouse. The bottler gave the federal agency employees' FEMA claim numbers to qualify. The bottler's distribution center was shut down for about 10 days after Katrina, and only about 10 of its 160 employees were able to return to work before the trailers were provided.

"Our main mission right now is to provide housing for employees who are interested in coming back to the area so they can resume working again," says Rita Weary, human-resources manager for the company's southern division.

State officials say the day FEMA killed the program the agency delivered a pamphlet outlining the environmental reviews that must be done for each trailer site. That review encompasses everything from hazard materials and air, water and soil concerns to endangered species.

"The only endangered species down here now are Louisianans," says one state official. "And with a little help, they might actually survive."

FEMA's spokesman says "we want to help the state, but the state has to help us. We need to make sure the money is going to the right people. We have to justify who is getting these homes."

Write to Jeff D. Opdyke at jeff.opdyke@wsj.com