Hospital clerk: Walter Reed’s brother took over her job _lowres

Advocate staff photo by SUSAN BROADBRIDGE-- The St. Tammany Parish Hospital in Covington, La. Tuesday, July 22, 2014.

Walter Reed, the beleaguered district attorney for St. Tammany and Washington parishes, and St. Tammany Parish Hospital issued dueling public statements Friday night through hired public relations guns, taking their conflicting accounts of Reed’s work with the hospital to a new, more contentious level.

But Reed, who is under investigation by a federal grand jury, has yet to explain why, supposedly acting as a private lawyer, he sometimes had an assistant district attorney on his staff fill in for him at the hospital board meetings he was paid $30,000 a year to attend, or how that staffer, Leo Hemelt, was paid for the work.

Reed has listed his income from the hospital separately on disclosure forms he has submitted to the state since that requirement went into effect in 2008. Each time, he put the money under Schedule D, which covers income from the state, political subdivisions or gaming.

Rafael Goyeneche, president of the Metropolitan Crime Commission, said Saturday that if Reed was being paid by the hospital as a private attorney, he should have shared his fee with Hemelt or paid him for his work.

“Walter hasn’t produced anything. If he has proof, he would have provided it by now and put it to bed a long time ago. His silence is deafening,” Goyeneche said.

St. Tammany Parish Hospital has produced a paper trail of sorts: a series of board resolutions setting out legal retainer fees that name the 22nd Judicial District Attorney’s Office, not Reed as a private lawyer, as working for the board.

Reed’s recently hired public relations consultant, Morgan Stewart, fired back, questioning the completeness of the hospital’s documents, one of which came from a private law firm, and citing a conversation between Reed and Paul Cordes, then chairman of the hospital board.

“In the mid-90s, the then-chairman of the St. Tammany Parish Hospital board, Paul Cortes (sic), approached Walter Reed and suggested that the board wanted Mr. Reed to personally perform legal representation services, instead of the personnel being provided at that time from the District Attorney’s Office,” Stewart’s release said.

Reed’s understanding of this conversation was that his relationship with the board was as a private lawyer, Stewart said. He said Reed resigned from the hospital job in May because that misunderstanding had come to light, not because of any wrongdoing on his part.

But Goyeneche scoffed at the notion that the board chairman would act against his board’s wishes. “It makes no sense,” he said.

“Why would the chairman go against the wishes expressed by the board to contract with the DA’s Office and instead contract with the DA in a private capacity?” Goyeneche asked.

What’s more, he said, Reed — who was paid to attend the board meetings — would have been present when the resolutions were discussed and put to a vote, and therefore he would have known that the hospital considered its arrangement to be with the District Attorney’s Office.

“Even if the chairman made that offer, he (Reed) didn’t have to accept it,” Goyeneche said. Instead, he said, Reed could have continued to provide services to the public, not-for-profit hospital as part of his duties as an elected official in St. Tammany Parish.

Cordes, who was chairman of the hospital board from 1993 through 1998, died in 2005.

The conflicting accounts of Reed’s hospital role come in the midst of a federal grand jury investigation that seems to be focused, at least in part, on Reed’s relationship with the hospital. Hemelt, according to sources, was subpoenaed by the grand jury while on vacation in Florida.

The hospital said in its statement Friday that it had not previously produced the records concerning Reed’s arrangement with it because it did not wish to impede the investigation — the first time the hospital has publicly acknowledged the probe.

The issue of how Hemelt was paid is critical because Reed was taking the hospital’s money as personal income. If an assistant district attorney paid by the public did some of the work, it raises the question of whether Reed was enriching himself at the public’s expense — a situation similar to former St. Tammany Parish Coroner Peter Galvan, who had a business arrangement with the Slidell Jail through his private practice but used a Coroner’s Office employee to do the work.

Reed’s spokesman did not answer a question Saturday about how Hemelt was paid.

Reed announced this month that he will not seek a sixth term in office, making the announcement in a statement that excoriated local news media for what he described as an obsessive focus on him. He did not mention the grand jury investigation — which has included subpoenas issued to the Castine Center in Mandeville, where he held several large campaign fundraisers — nor a visit by FBI agents to his office in June.

The resolutions that the hospital released on Friday are dated 1992, 1994 and 2001, and they explicitly name the District Attorney’s Office as the entity that the hospital was retaining as special counsel. The 1992 resolution named then-Assistant District Attorney Lane Carson as the person the board wished to attend its monthly meetings, along with other assistant district attorneys as necessary, and named Richard Muller, also an assistant district attorney, as its choice to handle special legal matters in coordination with the hospital’s general legal counsel.

The 1994 resolution named Carson, with other assistant district attorneys to fill in as needed.

While Reed described his relationship with the hospital in his resignation letter to the board as being 20 years in duration, the resolutions indicate that his personal attention came later. Reed’s name does not show up as the lawyer designated to attend board meetings until the 2001 resolution, with the caveat that assistant district attorneys would fill in for him.

Beginning in 2009, the hospital said, it began approving the retainers on an annual basis.

Checks obtained by The New Orleans Advocate through a public-records request indicate that for at least some period of time, monthly checks from the hospital were being endorsed with the District Attorney’s Office stamp, which would suggest the money was being deposited into that account, Goyeneche said.

The checks, which run from 2005 to 2014, are made out simply to “Reed, Walter” with the address of the St. Tammany Parish Justice Center, where his public office is located.

In 2005 and 2006, each check was endorsed with a stamp that read: “For Deposit/Walter P. Reed/District Attorney.” That’s as much as 10 years after the conversation between Reed and Cordes cited by Stewart.

In 2007, most of the checks also carried the office stamp, although two were simply stamped “Deposit Only.” Two checks in 2008 and one in 2009 were endorsed with the office stamp. But from 2010 forward, the checks do not have the office stamp. Most are endorsed with a “Deposit Only” stamp; a smattering are endorsed with Reed’s handwritten signature.

Stewart, in an emailed statement, said the form of the endorsement on the back of the check doesn’t matter but only the account in which it was deposited. All the checks at issue were deposited into Reed’s personal account and declared as personal income outside his income as district attorney, Stewart said.

There is no dispute that all the checks were written to Walter Reed, he said, not to Walter Reed as district attorney or to the district attorney of St. Tammany and Washington parishes.

“These are the only relevant, 100 percent verifiable facts and should be reported as such,” he said.

Staff writer Faimon A. Roberts III contributed to this report. Follow Sara Pagones on Twitter at @spagonesadvocat.