12. ATM woes

Hibernia operated the largest bank ATM network in Louisiana and had a significant number in Texas.  It provided ATMs for casinos, several of them in other states.  The entire network consisted of some 585 automated teller machines running 24 hours a day, 7 days a week.  These handy machines, which most people take for granted, in crises become a vital link to the bank and source of cash.  And in a disaster, cash is king.  Hence, the smooth operation of ATMs is one of the more important services a bank can provide during and after weather emergencies.

Important, but vulnerable

However, ATMs are vulnerable to the same forces that damage everything else.  First, they depend on electricity.  Then, they must have “connectivity,” a link through telephone lines to servers, switches and routers that tie the machines to a central server somewhere.  This computer hookup provides the channel for processing and recording the transactions when customers slide credit or debit cards into the ATM slot.

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‘In denial’ at first

BIG HEADACHE: ATM vendors wouldn't perform / Photo: Russ Hoadley

BIG HEADACHE: ATM vendors wouldn’t perform / Photo: Russ Hoadley

Barton Black, 35, was a nine-year Hibernia employee.  He was ATM operations manager as well as the information technology administration manager.  Married 11 years, he and his wife, Esther, lived in Mandeville with their four children, 8, 6, 5 and 1.  An LSU grad with a degree in accounting and a CPA, he started with Hibernia as a line of business controller.

On Friday before Katrina, Black checked voicemails on his way to work and heard his boss, Bart Bragg say the storm might be coming.  Black did not want to believe it, and in denial, went out to play golf with his friend Donald Barry, head of item processing.  Conference calls kept interfering with the game.  And, Esther, meanwhile, had begun to get the kids ready to leave.  They had a destination already picked out, a camp in Lake Bruin, in north Louisiana  By this time both the mayor and the governor had urged everyone to evacuate.

They left about 2 p.m., Saturday, took back roads to I-55 and made their way north.  The normal three-hour drive took seven.  Even near the Arkansas border, they found the storm  brought wind, a power failure and felled trees.  “What’s amazing, as easy as it was for us, the amount of stress we went through.”

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Finally, of course, ATMs must be stocked with cash.  Some can hold as much as $500,000, although most would not be stocked with that much.

As ATM operations manager, Black was responsible for this network, and after Katrina, he had a serious mess on his hands.  About 190 machines were out of commission or just gone.  The ones in casinos along coastal Mississippi and Alabama were especially hard-hit. Some of those machines may have washed out to sea.  Other machines were only temporarily out of order.  Some were damaged or destroyed.  And then there was a worry of vandalism and looting, but Black said they did not see much of that.

ATM preparation

The remainder of the network continued to be operated from servers at the Hibernia Center in New Orleans, and this hub was working just fine immediately after the storm.  In New Orleans and Baton Rouge, most ATMs were housed in branches and serviced by office employees.  If a branch was open and operating, the ATM was being maintianed and replenished.  If a branch was damaged, destroyed or closed, the ATM was out of commission and probably did not need immediate attention.

Through the computer system, Black and his staff could monitor the amount of funds in each machine.  ATMs along the evacuation routes “got hammered” as people stopped for cash on their way out of town.  Machines emptied out fast in Eastover in eastern New Orleans, on Gen. DeGaulle on the West Bank, Gentilly in New Orleans, Elmwood and Airline/LaBarre in Metairie.

BUSTED ATM: 190 machines were out of commission / Photo: Paul Bonitatibus

BUSTED ATM: 190 machines were out of commission / Photo: Paul Bonitatibus

Loading with cash

Working into the night Friday and Saturday, Black’s staff made sure their cash vendors packed some 125 machines with as much currency as they would hold.  Among these were four at the Superdome and three at the Morial Convention Center.

Once evacuation began, it became hard to get armored cars to continue replenishing any of the ATMs.  Drivers and guards were trying to evacuate, and transport companies were moving armored vehicles to safer places.

ATM - DSCN0573-1Casino ATMs

Hibernia’s casino ATMs were spread among Louisiana, Mississippi, Alabama and even California.

The most-exposed of the entire network were 12 machines in three gaming establishments in Biloxi and Gulfport.  Black had just installed six new ATMs at a Biloxi casino, and two in Gulfport.

“Everyone responds differently to a storm,” he recalled, and “casinos don’t want to close.”  One was having its grand opening and stayed open until Saturday night.  They finally closing after the armored car service said it could not get any drivers to deliver more cash.

After the storm, a scout team found one of those coastal machines sitting on top of the remnants of a hotel in Gulfport.  They found another in the middle of Highway 90.  A couple of others vanished into the Gulf.

Gulf Coast devastation

Whether the devastation along the picturesque gulf coast was greater than in New Orleans was hotly debated by each area, but it was certainly more visually compelling.  New Orleans housing and business stock was mostly left standing, though ruined by stinking floodwater.  Along the Gulf Coast, buildings just disappeared, brutalized by wind and storm surge.  When the maelstrom subsided, the landscape was either naked or littered with twisted remnants.

NOTHING LEFT: Hibernia banker Mike Wack and his wife, Mary Alice, survey what had been a family home in Biloxi, MS / Photo: Mike Wack

NOTHING LEFT: Hibernia banker Mike Wack and his wife, Mary Alice, survey what had been a family home in Biloxi, MS / Photo: Mike Wack

The eye of Katrina came ashore east of New Orleans and drove over the vulnerable, low-lying area of Pass Christian and Bay St. Louis.  Satellite images showed the eye wall covering this famous seaside highway area

This was a stretch of white beaches and lovely old homes nestled among oaks close to the lapping waves of the Gulf.

Generations of Louisianans have been drawn there for weddings and honeymoons, vacation getaways, summer places and retirement homes.

Calming down

Black saw things begin to calm down Monday night.  A large part of his network was still operating and there was nothing he could do yet about damaged ATMs.  His team concentrated on Texas and unaffected parts of Louisiana.   In the disaster recovery plan, Black’s operation was not considered a top-level need, so he had not sent anyone to Shreveport.

Surprise call

Tuesday afternoon he drove back to Mandeville to check his home.  He got there about 7 p.m., carrying extra gas.  It was eerie.  There was dead silence, no one anywhere.  There was no electricity, but everything was intact.  He would sleep there that night.  Black continued to participate in conference calls, locate his staff, and monitor the cash-machine network.

It was about this time he got a call from recovery coordinator Greg Stelly.  “We need you in Shreveport,”  he was told as he stood in his darkened home.  “I wasn’t prepared for that,” Black recalled.

Stelly told him, “Things were getting rough,” and reiterated, “We need you here.”

Wednesday morning he headed north after checking homes of friends.  When he hit Baton Rouge, he found lines of cars at service stations trying to buy gas.  However, even here there was no electricity.  The people were stuck and “looked wiped out.”  A little further, in Port Allen, he found both power and gas.  He wanted something to eat, but the convenience store had been cleaned out except for a rack of “fusions.”  “How bad could they be?” he thought and bought some.

GULFPORT DEVASTATION: Aquarium battered / Photo: Unknown

GULFPORT DEVASTATION: Aquarium battered / Photo: Unknown

On he drove, arriving in Shreveport about lunchtime.  He found the information technology group “All crowded into one room.  It seemed the whole world was down.  I’d never been part of so many people so singly focused to get one thing done.”  Black went to work “on anything, any assignment.”

His most pressing ATM need was to find temporary machines for branches that had some damage but would be re-opened soon.

What to do about family, children?

“Everyone was dealing with things they never dealt with before,” he recalled. His wife, Esther, was back in Mandeville and did not know where to go with their four children.  A big concern was school, which was about to start.  They decided she should come to Shreveport, where a friend could help get the kids enrolled.  “That was fantastic!” Black recalled.  When they arrived, Black found it painful to leave his colleagues even to help his kids get their uniforms and visit classrooms.  He hated to be away from the recovery center and he hated to be away from his family.  When he showed the girls their classes, “The kids were crying, I was crying.”

‘Etched in our lives forever’

Then, too, where were they to live?  An offer came from a cousin of Esther’s.  Debbie and Robert Grand invited them to stay in their house, take over the second floor.  “They were just wonderful to us … They are etched in our lives forever,” Black said.  “We were very blessed.  The kids started school.  They stayed four weeks before we moved back to Mandeville Oct. 1.”  Black drove his family home and “then I went back to Shreveport and stayed another four weeks.”

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The simplest things were the most difficult.

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The ATM network

About mid-week, the ATM network was about to hit a major snag.  To this point, supplying cash had been the biggest problem.  However, when operations in the Hibernia Center had to shut down and the IT team there evacuated, it knocked out all of the New Orleans and Baton Rouge machines as well as 18 the company operated for a Sacramento, CA, casino named.  System engineers worked through the night to find a way to keep those California machines running.  “A couple of guys actually went and bought some modems from Office Depot.  They did amazing work.”

‘Beauty behind what was going on’

Through all of the crises, Black mused, “There was beauty behind what was going on … Despite the devastation … all of the people up there in Shreveport loved Hibernia.  You had to, to do the things they were doing … to throw family out and dive into what they were doing.”  Also, there was “tremendous continuity … The people have been here a long time,” and “when the merger was postponed, they all knew ‘it affected me’.  If it didn’t go through, personally they were very affected.  What would the bank look like?  What exposure was there in the loan portfolio?  The bank seemed so devastated.  We thought there probably would have to be some kind of sale … and we’d all lose our jobs and maybe our investments.  It could even be a forced regulatory situation.  We knew this matters … how we respond … how we recover.”

‘Heroic efforts’

“These were heroic efforts … I don’t know if we will ever see anything like it again.  We drove each other … We felt guilt about leaving even when necessary.  There were massive amounts of stress.  Families were struggling and we still had to not deal with that.”

“We were locking arms … going into it together even though each of us had individual responsibility … and our own project list … Sometimes we made decisions bigger than we’d ever made before.  Instead of taking eight weeks of meetings, we might spend 10 minutes on the phone and then take action.”

CASINO BOAT: It's there in the top photo, but gone after the storm / Photo: Unknown

CASINO BOAT: It’s there in the top photo, but gone after the storm / Photo: Unknown

The casino boat machines

In the second week, Black was able to get somewhere on the casino boat ATMs.  At first, he could not reach any of his regular contacts, so he met the SWAT team of former military men and police that Hibernia had hired and they went scouting.

Although the missing units were not easy to steal, the team was not sure what to expect.  A simple ATM dispenser weighed 800 pounds and an in-wall machine about 1,400 pounds.  Picking through rubble, the scouts found and recovered three machines.  Then, unbelievably, laborers Black had hired to clean them up tried to make off with one!  They were not successful.

Eventually, 8-10 ATMs on the Gulf Coast, containing as much as $2.5 million, could not be found.

The New Orleans machines

In New Orleans, one of Black’s operations specialists, Billy Arnold, began assessing damage.  Arnold had evacuated to Arkansas, then to Lake Providence, and soon after, to an apartment in Baton Rouge.

He began driving into New Orleans to check out the non-branch ATMs, which he and Black thought, were probably sitting ducks for theft, what with all the stories of lawlessness.  “But we did not see that,” Black noted.  “Even the Dome and Convention Center machines were intact.”  They had money and were operating, even though no one was there to use them anymore.  Black’s people found only one branch machine vandalized, at an office on St. Claude Ave.  Whoever finally managed to break into it only got $520 for their trouble.

MUD AND MONEY: Some ATMs and night-drop boxes were a stew of muck / Photo: Property Management

MUD AND MONEY: Some ATMs and night-drop boxes were a stew of muck / Photo: Property Management

‘Nasty, contaminated, stinking’

The money extraction process involved about 30 ATMs.  Arnold and ATMs crews called riggers picked up the machines and took them to a warehouse.  Each one represented an investment of between $13,000 and $32,000, depending on its function, and it could contain thousands of dollars, depending on how heavily it had been used.

Pulling cash from these damaged machines was unpleasant work.  “It was nasty, contaminated, stinking.  We had to count it and bag it, but no one wanted to count this stuff and no one wanted to take it,” Black remembered.  Finally, they got it bagged and took it straight to the Fed for credit.

After the floodwater was drawn down further, the riggers made a second run, this time to Hibernia’s Main Office on Carondelet, the Hibernia Center on Tulane and a machine on Baronne.  They also cleaned out an ATM at a supermarket in Metairie — “The stench was awful.”

Vendor headaches

Looking back, Black thought vendor support was his most difficult issue.  Smaller vendors were homeless and scattered, while larger vendors just did not care.  “There was more red tape (with national firms), and they would just refuse to send their employees in.  We had to plead with vendors to be flexible.  If they were not in the middle of it, they did not understand.”

INSIDE DAMAGE: Some ATMs in offices also damaged / Photo: Property Management

INSIDE DAMAGE: Some ATMs in offices also damaged / Photo: Property Management

During the early part of the recovery, his operations specialists, Arnold and Denny Rogers, had to go to Baton Rouge themselves to get money and take it to branches.

Even in Texas, Black had trouble with suppliers.  He was setting up a temporary ATM trailer at the Houston Astrodome where thousands of displaced people were living. It “turned into a massive ordeal.”  First, it was hard to get a phone line set up, and then it was hard to get money to the machine.  Armored car people did not want to drive in or walk the money through the crowds. “We had to pay for extra guards, and they would not go at night. It was very difficult.”

Thinking about the whole experience, Black was saddened by having to “leave and dump family,” by not being able to deal with home and possessions.  “The simplest things were the most difficult.”  As the crisis wound down, his people were still working on “flaky phone lines,” trying to reconcile and balance cash in ATMs, and replacing about 30 machines, with “more to go.”

“It was a life-changing event for me.”

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