Home-Grown Success: Witt Turns Expertise Into $40 Million Business

by Mark Carter  on Monday, May. 16, 2011 12:00 am  

James Lee Witt has successfully transitioned his model from FEMA to the private sector.

The business of emergency management and planning for disasters has never been so relevant.

As Cabinet-level director of the Federal Emergency Management Agency under then-President Bill Clinton, Arkansan James Lee Witt transformed FEMA from a dumping ground of political appointees into a model organization emulated by countries.

Witt, the former Yell County judge tapped by then-Gov. Clinton to lead the state's emergency management efforts, and later asked by Clinton to take over FEMA, parlayed his experience into a multi-million dollar private enterprise that maintains a presence in Little Rock.

Witt and his partners paid $22 million last year to buy back their emergency management company from Global Options Group, which had absorbed Witt Associates in 2006 for $6 million and stock options.

The firm's 2010 revenue topped $40 million.

According to SEC filings, the Witt emergency management arm of Global Options brought in revenue of $30.8 million, $39.1 million and $39 million in the years 2007-09. During that time, the five to eight companies operating under the Global Options umbrella combined for revenue of $100 million; Witt's crew was responsible for a third or more of Global Option's revenue each year that it was a part of that group.

"We knew this niche of business would be fairly good," Witt said recently from the River Market regional office his firm shares with retired Gen. Wesley Clark. "There was no one else doing it. It's become a competitive business now."

Own Private FEMA
Witt Associates not only helps companies, cities, states and countries prepare for and respond to disasters, it helps them navigate the federal regulations and deal with the red tape that follows in the wake of catastrophes. (Domestic clients can pay standard Government Services Administration schedule rates.)

Witt hired many of his former FEMA colleagues, and their familiarity with the process and expertise in turning a government bureaucracy into a model of efficiency is renowned.

The firm's client list includes U.S. cities, states, university systems and countries. The Chinese government discovered many deficiencies in its emergency management process following the Wenchuan earthquake in 2008 and remembered Witt's expertise as FEMA director. It asked him to help establish a Chinese FEMA equivalent. Witt even opened a permanent office in Beijing, where the firm's charge is enhancing urban search-and-rescue capabilities, training center design and development, firefighter safety training, airport safety and emergency planning.

Witt lent FEMA's expertise to Japan after the 1995 Kobe earthquake, and his firm has been back. It was in Southeast Asia following the 2004 Asian tsunami, contracting with the governments of Singapore, Indonesia and Thailand, and provided about $1 million worth of pro bono work in Haiti associated with the 2010 earthquake there. Witt hinted at potential future work with the Brazilian government in a recent talk to Little Rock Rotarians, but wouldn't supply details.

Essentially, Witt Associates has become its own private FEMA.

Kim Fuller, director of media relations and communications for Witt Associates, said the firm often is hired by other emergency management companies.

"We have a unique business," she said. "The other businesses that we might consider our competitors may do debris removal or emergency housing, but don't really do the same thing that we do. Nobody really does what we do, which is to be intimately involved in helping a business or community prepare for and respond to disasters, and especially their role with FEMA."

Perhaps nothing better captures the scope of the firm's expertise than an indirect reference in a 2010 news story about a dispute between the city of New Orleans and FEMA over post-Katrina damage assessment at Charity Hospital, which ended up before a federal arbitration panel. Hired by the state of Louisiana, Witt sent a group of about 250 workers to New Orleans.

"In their ruling, the judges noted that the [FEMA] agency's officials 'were less experienced and less credible' than the [Witt Associates] consultants hired by the state to assess damage at Charity,'" The New York Times reported on Jan. 28, 2010.

Arkansas Connections

Founded by Witt and partners Mark Merritt (a fellow Arkansan), Barry Scanlon and Pate Felts, the firm has 130 full-time employees and a cadre of 500 or so contract employees. It has never advertised, instead relying on word-of-mouth referrals to grow the business.

Based in Washington, D.C., it operates regional offices in Little Rock, Atlanta, Chicago, Sacramento and Jackson, N.J.

Witt said he always intended to maintain a local presence, and spends as much time as his schedule will allow at his 300-acre Mount George homestead in his native Yell County.

The Little Rock office is staffed by veteran Arkansas lobbyist Hal Hunnicutt; Bob Nash, former director of the Arkansas Development Finance Authority and USDA official; Ed Fry, longtime chief of staff to a succession of Arkansas 2nd District congressmen (Tommy Robinson, Ray Thornton and Vic Snyder); and Witt's son, Jimmy.

Little Rock served as a base of operations for the firm's post-Katrina work.

Witt Associates' contract with the city of Little Rock extends beyond emergency management. It is paid $45,000 per year to lobby and help procure federal funds for the city, Little Rock National Airport and the Little Rock Port Authority.

"Witt Associates helps make sure that our requests are in the proper form and filed in a timely manner," said Assistant City Manager Bryan Day. "Over the years, with their help, we've been successful in securing funding for emergency communications upgrades, the River Trail, the Ninth Street extension, the I-430/630 interchange and the Fourche Creek wetlands."

The firm helped the airport secure partial reimbursement for federally mandated expenditures and is working to secure more funding for airport land development.  Also, Witt worked with the Port Authority to get funding for recertification of the levees along the Arkansas River.

"They've helped us for several years acquire funding through federal earmarks and grants," Day said. "They also helped us work through the federal government. About two years ago, the river trail collapsed behind City Hall due to heavy flooding. It took months to get FEMA to help with the repairs. Witt made that process easier."

Witt's success comes as no surprise to those who know him in Arkansas.

"When he's back home, he's just James Lee," said Arkansas Tech University's Mary Ann Rollans, dean of the ATU College of Professional Studies and Community Outreach. Witt worked with Rollans in 1997 to help the Russellville university start and grow what has become the country's largest emergency management curriculum. Rollans credits Witt with taking FEMA "out of the ashes."

Founded in 1997, Tech's program was the second of its kind in the country. It's grown to become the largest and pulls students from all over the world.

"Had it not been for James Lee's assistance, we wouldn't have enjoyed the success we've had," said ATU President Robert Brown. "He's a native son, and we're proud of that connection."

It didn't take long after leaving the Clinton administration for Witt to realize his business model would work. Six months after founding the firm, he was offered a $5 million buyout. Nine months in, he was offered $10 million in venture capital funding, and "we just started building it," he said.

The original focus was creating a niche business with state and local governments and businesses.

"That's how we started," he said. "It's much more broad and diverse now. I didn't think we'd make a profit our first year. But we did."

 

 

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