KATRINA -- REPORT SAYS MILLIONS WASTED ON NO-BID CONTRACTS FOR KATRINA RECOVERY: According to a report by the Homeland Security Department's office of inspector general, "The government wasted millions of dollars on four no-bid contracts it handed out for Hurricane Katrina work." The Associated Press called the report "the latest to detail mismanagement in the multibillion-dollar Katrina hurricane recovery effort, which investigators have said wasted at least $1 billion." In the new report, investigators cite temporary housing contracts that were "awarded without competition to Shaw Group Inc., Bechtel Group Inc., CH2M Hill Companies Ltd. and Fluor Corp." by the Federal Emergency Management Administration (FEMA). Investigators found that FEMA "did not always properly review the invoices submitted by the four companies" and "also issued open-ended contract instructions for months without clear guidelines on what work was needed to be done and the appropriate charges," which "wasted at least $45.9 million." Approximately $20 million of the wasted money went towards "a camp for evacuees that was never inspected and proved to be unusable." FEMA said that it "generally agreed" with the report and "would further investigate the $45.9 million in questioned costs and recoup the money as necessary."

ETHICS -- REPORT DETAILS 'CULTURAL OF SUBSTANCE ABUSE AND PROMISCUITY' AT GOVT. OFFICES: Yesterday, the Interior Department's inspector general revealed that 13 government officials "handling billions of dollars in oil royalties improperly engaged in sex with employees of energy companies they were dealing with and received numerous gifts from them." The report notes that nearly a third of the Denver Minerals Management Service's 55-person office "received gifts and gratuities from oil and gas companies." The report reveals that government officials tried to rewrite ethics rules in order to accommodate their partying and cover up their misdoings. In the summer of 2006, Royalty in Kind (RIK) employees wrote up a document titled, "Initiative to Clarify Guidance for RIK Interaction with Industry," which would codify employees' "uniqueness." Employees also illegaly took drugs, often while at the office. Gregory Smith, Program Director of the RIK, referred to cocaine as "office supplies" and rewarded his employees for obtaining it for him. House Speaker Nancy Pelosi (D-CA) criticized "how cozy the relationship between Big Oil and the Administration's regulators have been." The AP called the scandal part of a "culture of substance abuse and promiscuity." (The Progressive newsletter)