    [Senate Hearing 109-538]
    [From the U.S. Government Publishing Office]

                                                            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

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    _____________________________________________________________________________
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            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                       SUSAN M. COLLINS, Maine, Chairman
    TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
    GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
    NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
    TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
    LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
    ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
    PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
    JOHN W. WARNER, Virginia

               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

                                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

                        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 witnesses 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.

                 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 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, so-called, 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 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.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Ratcliffe appears in the Appendix
    on page 33.
    ---------------------------------------------------------------------------
        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.
        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-for-profit educational institutions and
    government across the United 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.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Litow appears in the Appendix on
    page 39.
    ---------------------------------------------------------------------------
        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 communications 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-to-date 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.
        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.

      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.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Regan appears in the Appendix on
    page 44.
    ---------------------------------------------------------------------------
        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.
        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.
        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 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. Wal-Mart
    Stores wants to thank the Committee for its work that it is
    doing here and for holding this hearing today. We are very
    honored to be present and pleased to be part of this process.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Jackson with an attachment
    appears in the Appendix on page 53.
    ---------------------------------------------------------------------------
        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.
        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 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 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 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.
        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----
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Diageo and Humanitarian Relief
    appears in the Appendix on page 66.
    ---------------------------------------------------------------------------
        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.
        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, 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
    voice-over 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, 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.
        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?
        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 understand 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.
        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.
        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?
        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 with it--you don't have
    to--there are some people who have responded 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 Wal-
    Mart? [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.
        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?
        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, 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.]

                                A P P E N D I X

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