While thousands of Mississippians who lost their homes to Hurricane Katrina remain in FEMA trailers, the federal government on Friday approved a state plan to spend $600 million in grants earmarked for housing on a major expansion of the state-owned port — a project that could eventually include casino and resort facilities.

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The money in question is part of $5.5 billion in HUD Community Development Block Grants (CDBG) that Congress authorized for Mississippi after Hurricane Katrina struck on Aug. 29, 2005. Administered by the Mississippi Development Authority, about $3.4 billion was allocated to replace and repair some of the nearly 170,000 owner-occupied homes destroyed or damaged by the storm. Another $600 million was set aside for programs to replace public housing, help small landlords fix their units and foster construction of new low- and moderate-income housing.

When it became clear that homeowners, who had to meet specific criteria on damage and insurance, would not tap all of the grant money, Barbour instructed the state development agency to seek a waiver from HUD to redirect $600 million for work on the port.

Mississippi, with the highest poverty rate of any state by several measures, already had won HUD waivers of rules that require the funds to benefit low- and moderate-income residents. Critics see the waivers as a product of the unparalleled influence with the Bush administration enjoyed by Barbour, a former Reagan White House political director, Republican National Committee chairman and legendary fixer who continues to receive checks from the Washington lobbying shop that still bears his name.

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After the storm, an update to the master plan found that Katrina had “accelerated redevelopment of port areas and opened new opportunities for the growth of the maritime and gaming markets.” The plan raises the prospect of new casino-resort development on port land as part of a public-private partnership, financed separately from the CDBG money.

It wasn't until early December, six months after the update was adopted by the port authority, that the state development authority sought a waiver from HUD to divert $600 million of the housing grant money to the port — more than double the net dollar damage reportedly sustained by the port from Katrina.

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Barbour’s current position that part of the housing grant pool was always intended for the port is at odds with his March 2006 testimony before a Senate committee, in which he emphasized that the CDBG money was mostly committed to housing and sought new funds for the port. A year later, Gray Swoope, executive director of the Mississippi Development Authority, did not mention port funding in testimony before Congress about the use of grant funds a few months before the new port master plan was adopted.

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Port Executive Director Don Allee agreed to an interview with msnbc.com, then canceled it and did not schedule another despite repeated requests.

Cindy Singletary of Living Independence For Everyone, one of 50 nonprofit, religious and social advocacy groups that make up the Steps Coalition, sees the move to divert the housing funds as a bait-and-switch maneuver. “I have nothing against the port itself,” she said. “The main thing I’m against is the priority of it. … We have jobs on the coast. There’s ‘help wanted’ signs everywhere. But we don’t have homes, we don’t have apartments. … That, to me, should be the No. 1 priority for Mississippi.”