Walter Reed, the former 22nd Judicial District Attorney who was indicted earlier this year for allegedly committing fraud by taking payments from a public hospital, now faces ethics charges for the same arrangement.
The Louisiana Board of Ethics this month filed charges against Reed, who already faces numerous criminal allegations outlined in an 18-point federal indictment.
The board said Reed broke a state law that prohibits a public servant from receiving anything of economic value for providing services related to his public position.
The $82,500 from St. Tammany Parish Hospital that Reed deposited in the bank from Aug. 4, 2011, to March 27, 2014, was “funds due his public agency,” rather than his own account, according to the board’s charges.
The Ethics Board notes that Reed actually received much more than that — $572,067.75 — and started getting payments much earlier, beginning in June 1994. Kathleen Allen, the state’s ethics administrator, said the board can bring charges only for violations that happened within the past four years.
Richard Simmons, an attorney for Reed, pointed out that the ethics charge mirrors allegations in the federal indictment, which is scheduled to go to trial Jan. 11.
“The Board of Ethics charge is not an additional ‘criminal charge’ but deals with ethics issues on the same factual situation,” he said.
Simmons said his client disclosed the money he was paid by the hospital in annual filings with the Ethics Board.
“How is he hiding it?” Simmons asked. “Who is he hiding it from?”
There is no question that the fees were paid, he said. The issue is in what capacity Reed performed the services. Reed maintains that it was as a private lawyer, an agreement he says he made verbally with Paul Cordes, who was chairman of the hospital’s board at the time. Cordes died in 2005.
Louisiana law does not bar district attorneys from engaging in an outside law practice, Simmons said.
However, the Board of Ethics cited a state law that says district attorneys have a responsibility to provide counsel to parish boards and commissions and mentions hospital boards specifically, among others. It also noted that from 1985 to 1990, an assistant district attorney represented the hospital for no additional compensation apart from his regular salary.
The federal charges against Reed make a similar point. While the bulk of the federal case against Reed focuses on alleged misuse of campaign funds, the indictment also accuses the former DA of committing fraud by taking money for himself — about $30,000 a year from the hospital — that should have gone to his office.
The indictment notes that on “dozens of occasions,” Reed sent an assistant district attorney to sit in at hospital board meetings in his place. The indictment also accuses Reed of transmitting an unsigned hospital board resolution last July that claims to recognize that Reed advised the board in his personal capacity since May 1, 1994.
“As Walter P. Reed well knew, the Hospital Board did not discuss, vote on or pass the purported resolution,” the indictment said.
The hospital has provided news media with board resolutions from 1992, 1994 and 2001 that name the DA’s Office, not Reed personally, as representing the board.
Simmons said it’s regrettable that Reed and his attorneys can’t find any signed contracts, although he cites a letter dated October 1996 and a draft resolution faxed to Cordes in 1995 as reflective of Reed’s understanding of the relationship.
Reed resigned his position at the hospital in May of last year “because of the obvious misunderstanding with the present board as to his status, not because of any misconduct,” Simmons said.
Reed disclosed the money every year since 2008, when state law began requiring public officials to disclose income from political subdivisions.
“For six years, it was never a matter of scrutiny until shortly before the qualifying period for District Attorney’s Office,” Simmons said.
The next step is for the Ethics Adjudicatory Board to hold a hearing. If found guilty of the ethics violation, Reed could face a fine of up to $10,000 and be ordered to pay restitution.
He faces up to 277 years in prison if he is found guilty on all 18 counts in the federal indictment.
Follow Sara Pagones on Twitter, @spagonesadvocat.