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disaster capitalism
Progressives Demand Federal Action Against Companies 'Exploiting' Hurricanes for Profit
"This egregious price-gouging hampers evacuations and undermines recovery efforts, while putting vulnerable residents in serious jeopardy."
Oct 09, 2024
The head of the Congressional Progressive Caucus and a group of Florida representatives said late Tuesday that the federal government must do more to crack down on airlines, hotels, and other companies taking advantage of emergency conditions brought by Hurricanes Helene and Milton to jack up prices and pad their bottom lines.
"Instead of making it easier for people to evacuate, airlines and hotels are exploiting a horrific situation to charge astronomical fares only the rich can afford—from over $600 for a single night in a Hampton Inn to over $1,000 for flights that usually cost around $100," Rep. Pramila Jayapal (D-Wash.), the chair of the CPC, said in a joint statement with Reps. Maxwell Frost (D-Fla.), Sheila Cherfilus-McCormick (D-Fla.), Darren Soto (D-Fla.), and Frederica Wilson (D-Fla.).
"Exploiting vulnerable people fleeing a deadly storm for higher profits is a new low," said the CPC members as Hurricane Milton barreled toward Florida as a monstrous Category 5 storm, fueled by record-high ocean temperatures made far more likely by the climate crisis. The hurricane is expected to make landfall in the Tampa area on Wednesday night.
The federal lawmakers' statement came amid a flood of price-gouging reports from Florida residents seeking to escape Milton's path. A spokesperson for Florida's attorney general said earlier this week that the office had received hundreds of complaints about price gouging, particularly for fuel and water.
"There were also scattered instances involving overnight accommodations, including one Airbnb listing of a 'room in Tallahassee' for nearly $6,000 a night," The Tallahassee Democratreported Tuesday. The outlet noted that "during a storm-related state of emergency, state law prohibits price gouging for equipment, food, gasoline, hotel rooms, ice, lumber, and water needed as a direct result of the event."
The Biden Transportation Department, meanwhile, said it has "been in touch with airlines to get more information about the capacity and affordability of flights in the affected areas" amid reports of sky-high ticket prices. President Joe Biden said Tuesday that he is "calling on the airlines and other companies to provide as much service as possible to accommodate evacuations and not to engage in price gouging, to just do it on the level."
The Associated Pressreported that "by midafternoon Tuesday on the East Coast, airlines had canceled more than 700 U.S. flights, compared with fewer than 200 cancellations on Monday and fewer than 100 each of the two previous days, according to the FlightAware tracking service."
Major airlines, including Delta and United, said they capped fares under the emergency circumstances, but people seeking last-minute tickets reported dramatically elevated prices. One woman trying to buy a one-way ticket to New York said prices more than tripled "in a matter of seconds" as she examined her options.
"There were prices even as high as $1,000 for one leg. So wrong! So wrong!" the woman toldThe Associated Press.
In their statement Tuesday, Jayapal and the Florida lawmakers noted that "in North Carolina and Georgia, while families try to recover and rebuild from the devastating impacts of Helene, there have been hundreds of similar incidents of bad actors price gouging residents on everything from groceries to gas to hotel rooms."
"This egregious price gouging hampers evacuations and undermines recovery efforts, while putting vulnerable residents in serious jeopardy," they said.
While welcoming the Transportation Department's efforts to monitor and prevent airline price gouging, the progressive lawmakers said that "we will need a whole-of-government focus" in the coming days and weeks "on protecting the people impacted by these disasters from predatory price gouging."
"Further action is still needed from the federal government to stop the corporate exploitation that impacts all areas of American life, whether at the grocery store or gas station," the lawmakers said. "We need a federal ban on price gouging, more stringent antitrust laws and enforcement, and for Congress to reassert its role and governing power in this space—something CPC is deeply committed to and actively engaged in."
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Private Equity Exposed for Profiting From Fossil Fuels and Disasters They Cause
"Firms like Blackstone should be ashamed of this sinister investment strategy that contributes to catastrophe and rebuilds after it strikes," a report author said.
Sep 07, 2023
In yet another instance of disaster capitalism, private equity companies like Blackstone have found two ways to profit from the climate emergency: first by investing in fossil fuel infrastructure and then by buying up restoration companies that clean up after increasingly extreme weather events.
That's one of the main takeaways from a report released Thursday by the Private Equity Stakeholder Project (PESP) and Resilience Force titled Private Equity Profits From Disaster at the Expense of Workers, Communities, and Climate.
"Firms like Blackstone should be ashamed of this sinister investment strategy that contributes to catastrophe and rebuilds after it strikes," report co-author and PESP research coordinator Azani Creeks told Common Dreams.
"The investments Blackstone has made in both ServPro and its fossil fuel companies have long-term consequences that are borne primarily by already marginalized communities in the United States."
The report documents a shift that took place in the disaster recovery industry following Hurricane Katrina in 2005. Before that historic storm, cleanup work in a given area was usually done by smaller local companies.
"After the massive efforts required post-Hurricane Katrina and the increasing frequency and magnitude of climate disasters, private equity firms saw an opportunity to consolidate the market by buying up smaller companies," Creeks wrote in the report.
And the trend continues. Private equity firms bought 72 restoration companies between January 2020 and June 2023, with the number of purchases rising each year. They acquired 13 in 2020, 20 in 2021, 25 in 2022, and 14 during just the first six months of 2023. If that pace continues through the end of the year, the 2023 total will rise to 28, more than double the yearly purchases three years ago.
The report includes a list of 14 major disaster relief companies owned by private equity firms, five of which also invest in fossil fuels. For example, Blackstone, which owns ServPro, also bought Ohio's General James Gavin Power Plant—one of the leading single sources of coal pollution in the U.S.— in 2017.In another example, Louisiana-based disaster relief company the Lemoine Company also manages Lemoine Pipeline Services. The company is owned by the private equity firm Bernhard Capital Partners.
This profit-making strategy has major environmental justice implications.
"The investments Blackstone has made in both ServPro and its fossil fuel companies have long-term consequences that are borne primarily by already marginalized communities in the United States," Creeks told Common Dreams, adding that ServPro often hires immigrants and people of color who are vulnerable to unfair and unsafe labor practices like wage theft.
"Furthermore," Creek added, "Blackstone's financing of fossil fuel assets also inflicts direct harm on these same communities, who bear the brunt of toxic emissions and climate disasters."
Even if private equity firms aren't funding fossil fuels, their acquisition of restoration companies still means they have a responsibility to workers and communities, the report argues.
As disaster restoration companies have consolidated and gone national, they have organized themselves in a series of franchises and subcontractors. Of the 72 companies acquired in the last three years, more than 80% of them were instances of larger companies buying up smaller ones. These often-opaque corporate structures can make it difficult for workers to challenge their employers over issues like wage theft or unsafe working conditions. Undocumented workers are especially vulnerable, because any complaint may be met with a threat to contact immigration authorities.
"Though issues with wage theft and worker health and safety have long existed in the construction and disaster restoration industries, with an investment from the world's largest asset manager, you would expect to see these issues less frequently as more resources can be implemented to protect workers," Creek said. "Instead, the problems at ServPro and other private equity-owned disaster restoration companies persist, with even less mechanisms for accountability and public scrutiny than before."
One worker named Joél Salazar, who is also an organizer with Resilience Force, shared his experience ServPro subcontractor Royal Services. He said the company offered to pay his way from Florida to Colorado in early 2022 to help with wildfire recovery there, and promised him 40-hour workweeks and weekly paychecks when he arrived. But the travel costs never materialized, weeks started out closer to 20 hours, and the pay ended up being every other week instead.
"The company is stealing from me."
What's more, the payment was made via a Visa card. When Salazar said he had to return to Florida, the company canceled his card despite the fact that a significant amount of his earnings were still on it.
"The company is stealing from me," he said in the report.
Salazar said he wanted private equity firms and investors to be aware of what their companies were doing.
"Investors, I'm calling to ask you to consider worker safety at the companies you invest in, especially the private equity firms you rely on for profits," he said.
Another problem is unsafe working conditions. Companies owned by private equity firms racked up a total of 194 federal Occupational Safety and Health Administration violations between January 2015 and January 2022. The most common violations were exposing workers to asbestos and failing to provide them with respiratory protection, followed by failing to communicate dangers and protect workers from falls.
Recovery workers are organizing to protect themselves through the group Resilience Force, which says it is "building a strong, stable, inclusive, million-strong workforce that will be able to perform year-round climate preparation and adaptation work, as well as rebuild after disasters."
The group's founder and director Saket Soni said in the new report, "We must ensure that these companies, and their private equity backers who profit from disaster, pay and protect the resilience workers who are essential to helping communities adapt and recover."
What's better for workers will be better for the communities they help, as well. The report found that the private equity-owned firms engage in price gouging. For example, a ServPro franchise settled with the state of North Carolina for overcharging residents following Hurricane Florence.
The report highlights the legislative efforts of U.S. Rep. Pramilla Jayapal (D-Wash.), whose Climate Resilience Workforce Act would fund jobs and training through grants and make workers less vulnerable by providing a pathway to citizenship for immigrant workers and banning employers from asking about criminal history.
"The innovative Climate Resilience Workforce Act responds to the worsening climate crisis at the scale necessary by investing in a skilled workforce that is capable of not only responding to but preparing for the destructive impacts of climate change," Jayapal said when the bill was introduced in 2022. "As we create millions of good-paying, union jobs and center the very communities who are disproportionately impacted, we are finally building back better, greener, and stronger."
The report also issues recommendations to private equity firms to better protect the workers at the companies they own, such as setting up complaint lines, minimizing the use of subcontractors, funding programs to monitor their companies, and allowing their workers to unionize.
Finally, Creeks noted that firms like Blackstone manage public pensions, and have a responsibility to these workers as well.
"Public employees, such as teachers, nurses, and firefighters, have a right to know that their pension dollars are being used to purchase fossil fuel plants that are contributing to climate disasters all over the country," Creeks told Common Dreams. "In turn, their retirement capital is also being used to buy companies that profit off of these very disasters."
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A Just Recovery for Maui Must Center Native Hawaiians
As we look forward to how we not only rebuild, but work to reduce the threat of these climate change-fueled disasters, we have to change who is leading this work.
Aug 30, 2023
In the wake of the Maui fires, Governor Josh Green moved to prevent the sale of land to outside investors in an effort to prevent disaster capitalism, a common pattern we’ve seen play out in the wake of disasters from Hurricane Katrina to the tsunami in Thailand. This is an important first step to prevent further displacement of Native Hawaiians, but it only scratches the surface of a deeper issue.
In the days after the devastating wildfires on Maui, we saw patients with burns, wounds, infections, chronic disease flare-ups, displacement and, overwhelmingly, mental health crises. Neither of us would have ever imagined experiencing such a tragic crisis as a physician or seeing the amount of devastation right here at home. Treating these patients—and hundreds of Native Hawaiians in our careers—brings to life what research shows: When Native Hawaiians’ connection to land is severed, we suffer.
This is because when the land is sick, so are we.
Centuries before European settlers arrived in Hawai‘i, Native Hawaiians developed an elaborate and highly sophisticated public health system based on socioreligious tenets to ensure equitable access, availability, and distribution of natural resources to help minimize, if not eliminate, starvation and illness across islands with finite resources.
Human-triggered climate change is the latest environmental injustice threatening Native Hawaiian health and wellness. The Maui fires make this clear. The causes of the fires are complicated, but climate change played a key part. Climate change causes stronger, more frequent storms and droughts, and we see that in Hawai‘i, which is suffering worsening drought conditions, despite being surrounded by ocean. Dry conditions and dangerous wind changes produced by Hurricane Dora fueled the fires.
In responding to this disaster and charting a path forward, we need to look to those with the greatest commitment to acting as stewards of Hawai‘i. Centuries before European settlers arrived in Hawai‘i, Native Hawaiians developed an elaborate and highly sophisticated public health system based on socioreligious tenets to ensure equitable access, availability, and distribution of natural resources to help minimize, if not eliminate, starvation and illness across islands with finite resources.
Colonization changed Hawaiʻi’s natural landscape, through deforestation for sugarcane, pineapple, and cattle. Water from mountains was redirected from natural streams and aquifers to flow instead through concrete irrigation ditches, feeding golf courses and hotels. Fire-prone invasive grass species replaced native vegetation.
As we look forward to how we not only rebuild, but work to reduce the threat of these climate change-fueled disasters, we have to change who is leading this work. An important solution is stewardship of land by Native people. Indigenous peoples maintain sustainable relationships with their environment and recognize and respond to environmental changes in creative ways, drawing on traditional knowledge and science to find solutions that can help society at large. When Native communities have sovereignty to take care of the land, it helps everyone.
This work of respecting Native Hawaiian leadership is already happening. We are both kiaʻi (stewards) of sacred places, like Loko Iʻa Pāʻaiau, a 400-year-old royal fishpond at Pearl Harbor that was contaminated with fuel from military operations. Restoration of Pāʻaiau is one example of how allowing Hawaiians to practice aloha ʻāina—to honor and advocate for land so it will sustain all inhabitants—leads to increased community well-being and resilience, as demonstrated by the return of healthy native plants, animals, human descendants, and relationships in the area. Restoration remains incomplete until the flow of freshwater from the mountains is restored, but stewardship efforts persist forward, through a collaborative community-based partnership with the U.S. Navy, Native Hawaiians, and the larger community, centered around a practice of aloha.
There is a lot of blame going around right now; we do need to look at how the Maui fires happened, but we must focus on moving forward. That can only happen when Native Hawaiians are central to the decision making surrounding how our land is treated.
Tradition teaches that Hawaiians descend from nature gods; thus, to heal Native Hawaiians, we must heal the 'āina that sustains us. Like our connections with those who love and nurture us, our relationship with ʻāina dramatically influences overall health and wellness. If we are able to progress with centering land practices around Indigenous knowledge and rights, Hawai‘i can model how to recover from climate-related disasters in ways that build safer, healthier futures for our children and future generations.
Preventing outsiders from buying land in Lāhainā is important, but only preserves a troubled status quo. We need to build a better future, one that is informed by Native Hawaiians’ shared history, knowledge, and connections with the land. We need Native Hawaiians on the land, and at the table.
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