Burdens of Past Limit New Orleans's Future

"We were told there were two ways to be licensed: You could take the test and pass it, or you could bribe the chairman of the licensing board," Goyeneche said. When Nagin announced an anti-corruption campaign shortly after taking office, 1,500 people called the group's tip line within 10 days.

Two judges in Jefferson Parish, the largest New Orleans suburb, face bribery charges. About 50 law officers and employees have been convicted in the past five years of crimes including payroll fraud, drug dealing and extortion. And more than 20 Orleans Parish school employees were recently charged with fraud and extortion. One special-ed teacher pleaded guilty to conspiring to extort money from a student in exchange for a passing grade.

In August, FBI agents raided the Washington and New Orleans homes of eight-term Rep. William J. Jefferson (D-La.), suspecting he had illegally pocketed an investor's money. They reportedly found a large amount of cash in a freezer. The same month, a grand jury charged Glenn Haydel, uncle of former mayor Marc Morial, with skimming $550,000 in city money.

In a development that offers little comfort for funders of the post-Katrina rebuilding project, three Louisiana emergency-preparedness officials are awaiting trial on charges that they tried to block federal auditors from uncovering the alleged misuse of Federal Emergency Management Agency funds. FEMA is demanding that the state repay $30 million, alleging that the money was mishandled.

"It's always been an exciting and depressing place at the same time," said Christopher Morris, a historian at the University of Texas at Arlington. "Maybe exciting and tragic."

Asked recently how he would make sure the requested federal money for rebuilding would be spent wisely, Nagin replied "You know about our colorful past?" and laughed for a full five seconds.

But the mayor vowed that the contracting process for the rebuilding would be "transparent." "That's why we've set up this 17-member commission," he said. "We've got the archbishop and several civic and business leaders on there. Our mantra is that transparency breeds self-correcting behavior."

Among the many challenges Nagin faces, the most daunting prospect is finding housing for those who left the city and want to come back. More than 60,000 homes are so battered that they qualify for a maximum payout of aid money from FEMA, but there is no guarantee that those homeowners will come back.

If they do, many may be living in trailers for months or even years. FEMA has ordered thousands of trailers that eventually may be set in "trailer-cities" in parks and parking lots.

As for providing basic services, the city has not delivered in the past. Under the state's accountability system, 73 of the more than 120 city schools are considered to be failing. After the school district appeared close to missing payroll this spring and auditors raised questions about the spending of $71 million in federal grant money, the system's leaders were pushed to hire an outside firm to handle finances.

In their response to Katrina, leaders planned badly and executed worse. A state evacuation plan called for low-lying areas -- such as New Orleans, much of which is below sea level -- to arrange bus transportation out of town ahead of a storm. City officials dedicated to the effort 64 buses and 10 vans, with a total capacity of fewer than 4,000 people, even though about 100,000 residents had no other escape.

Once the winds came, knocking out power and much of the telephone system, city and state authorities could not cope. Police stations were stocked with too little food and water to last even a day. The police radio system failed, the battery-operated satellite telephones at City Hall ran out of power, and the emergency call center flooded -- forcing 911 operators to flee even as panicked residents pleaded to be freed from their attics and rooftops.