[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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        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.
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    \1\ The prepared statement of Mr. Jackson with an attachment 
appears in the Appendix on page 53.
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    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----
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    \1\ The prepared statement of Diageo and Humanitarian Relief 
appears in the Appendix on page 66.
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    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.]


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