Housing

The New York Times
March 20, 2006
Behind Louisiana Aid Package, a Change of Heart by One Man
By SHAILA DEWAN

Louisiana was in a foul mood on the February day that President Bush's Gulf Coast rebuilding coordinator, Donald E. Powell, stood before an audience of fellow bankers in Baton Rouge.

Two weeks before, the administration had rejected Louisiana's housing recovery plan. Mr. Powell's own idea of housing aid excluded thousands of homeowners, many of them poor, who lived in the flood plain but did not have flood insurance when Hurricane Katrina hit.

Asked about those who had counted on federally built levees to protect them, Mr. Powell, a wealthy man from the dry Texas Panhandle, noted that he had been responsible enough to buy flood insurance for his home in Amarillo.

The members of the Louisiana Bankers Association were not won over. Nor was The Advocate, Baton Rouge's newspaper, which demanded Mr. Powell's dismissal, calling him a "flint-souled" bean counter whose only concern was "guarding the money."

Those with a more charitable view, Senator Mary L. Landrieu, Democrat of Louisiana, among them, complained that he lacked the authority to be effective, and some critics wondered if he was simply another presidential crony.

But barely a week would pass before Mr. Powell did an about-face that turned many of his critics into fans, showing that not only had he listened to the locals, but also that his conclusions had carried weight with Mr. Bush.

With Gov. Kathleen Babineaux Blanco and Mayor C. Ray Nagin at his side, Mr. Powell announced that the president would seek $4.2 billion more for Louisiana to compensate homeowners — even those in the flood plain.

Mr. Powell's epiphany came after hours of listening to Louisianians: the decision makers; the woman who cleaned his room at the Sheraton; Victoria Reggie Kennedy, the wife of Senator Edward M. Kennedy (whom he called after hearing she was a Louisiana native); the inspectors examining high-water marks in homes. As he drove through New Orleans with Mr. Bush on March 8, he pointed to a small restaurant in the Ninth Ward and rattled off the owner's real estate woes.

"He had a learning experience," said Walter Isaacson, vice chairman of the Louisiana Recovery Authority. "It's the most amazing thing for somebody of his stature. It's because by himself, he walked around. He walked around and talked to people."

Mr. Powell says walking about in the region incognito, in blue jeans and boots, is becoming a bit harder now that people are starting to recognize him. "I went with no preconceived thoughts," he said. "And I realized that while Mississippi was an act of God, Louisiana was an act of God and man. There were some flaws. The levees breached."

Last week, Mr. Powell spent much of his time lobbying House members, successfully, to preserve the appropriation. For several days, other states mounted an effort to siphon off some of the money, and conservatives said the entire amount was too large, but on Thursday the House overwhelmingly approved it.

Mr. Powell's work on the housing plan made many Louisianians think that in appointing him, the administration had finally done something right. Garland Robinette, a talk-radio host in New Orleans who has interviewed Mr. Powell several times, recalled telling him, "I was totally prepared to not like you at all, and it aggravates me that you're doing something to make me think you might be a good guy after all."

For Mr. Powell, former chief executive of the First National Bank of Amarillo, the listening tour was part of any banker's due diligence. Texas bankers are a particular breed — conservative, unpretentious and keenly competitive. One newspaper columnist recalled that years ago, after being offered a job in Amarillo, he received a solicitation call two hours later from Mr. Powell's bank. Asked about the incident, Mr. Powell said, "I probably was mad at our people because it was two hours."

Given his prominence in the Texas Panhandle, Mr. Powell's political connections go almost without saying. To the first President Bush, he is an old friend; to the second, he was a top fund-raiser. He had been to Washington only three times, he said, before he was appointed chairman of the Federal Deposit Insurance Corporation in 2001, a position he left several months early to take his current post in November.

Mr. Powell, 64, is from a working-class family in Amarillo, where he helped his father peddle tobacco and snacks to shopkeepers. A football scholarship made him the first in his family to go to college. He began his career by walking into a bank and asking for a job. During the Texas banking crisis of the 1980's, Mr. Powell hauled the Amarillo bank from the brink of failure.

The $4.2 billion was not his first accomplishment as recovery czar. Until he intervened, state officials had spent hours trying to ensure that the federal government would continue to pick up all recovery expenses, a routine matter that, nevertheless, was authorized for a month at a time.

He also persuaded the president to ask Congress for an additional $1.5 billion for the state's levee system, doubling the previous request. And he became a go-to guy for local officials who hit snags in issues like debris removal and trailer placement.

But his rejection of the housing buyout plan, called the Baker bill after Representative Richard H. Baker, the Louisiana Republican who created it, infuriated many state officials. State leaders had taken great pains to build support for the plan, which called for the creation of a federal agency to buy and sell damaged property. Mr. Powell caused further outrage by skewering the Baker bill — gratuitously, many thought — in an opinion article in The Washington Post.

But he continued to push for an alternative. The first step was to agree on how many houses were damaged, and how badly. Mr. Powell forced Louisiana to justify its figures house by house, using aerial photographs and numbers collected from the Federal Emergency Management Agency, the Red Cross and insurance companies.

He was involved in details including how to reward those who had carried insurance and how to provide incentives for people to rebuild more safely. But he made no promises.

"He's a good poker player," said Andy Kopplin, a former chief of staff for Governor Blanco who is now the executive director of the Louisiana Recovery Authority. "I'd been getting calls and making calls to those guys at 10 o'clock on a Saturday night and sending data sets up. There was an extraordinary effort going on that gave us hope; at the same time, it was never clear to us that we were going to get a breakthrough."

Some Louisiana Democrats suggested the $4.2 billion was nothing more than damage control by the administration, noting that the president had been hammered for his lack of attention to Hurricane Katrina in his State of the Union address and quickly responded by announcing $18 billion in new money for the Gulf Coast. Further reviled after rejecting the Baker bill, they say, Mr. Bush opted to devote the $4.2 billion to Louisiana, which had been shortchanged in an earlier appropriation.

But Mr. Powell said that the entire effort was influenced not by politics, but by hard data. "I'm on a mission, and I can't — while I'm sensitive to it — that can't guide me," he said of public opinion. "I can't be either pushed or held back. I know if we're attempting to do the right thing. I have a conscience. If you're moving, someone's going to be critical."

In the meantime, the flint-souled banker seems to be winning the battle for hearts and minds. Louisianians who might have been his adversaries have taken to inviting him over for brunch with the family and praising his frugality.

But Mr. Robinette, the talk-show host, reserves the right to change his mind if Mr. Powell starts to deliver bad news despite Mr. Bush's promises to the region.

"It could still be good cop, bad cop," Mr. Robinette said, "and we just haven't seen the bad cop yet."
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