St. Tammany Parish Hospital produced proof late Friday in the form of board resolutions that its arrangement with District Attorney Walter Reed to provide legal advice at its board meetings was with the 22nd Judicial District Attorney’s Office and not, as Reed has asserted, with his private law practice.
A spokesman for Reed issued a statement Friday night saying Reed was under the impression he was representing the hospital in a private capacity. The statement also questioned the completeness of the hospital’s files.
Reed resigned from his $30,000-a-year job with the hospital in late May, saying he didn’t want to create a distraction for the board of the private, not-for-profit hospital.
But while Reed has claimed that during their more than 20-year relationship, he did the work for the hospital as a private lawyer, hospital administrator Patti Ellish has said the hospital’s agreement was with the DA’s Office and that Leo Hemelt, an assistant district attorney, filled in for Reed when he couldn’t attend the board meetings.
According to sources, Hemelt has been subpoenaed by a federal grand jury, which apparently is investigating Reed’s campaign finance spending and his dealings with the hospital.
The question of whether Reed’s hospital work came under the umbrella of the District Attorney’s Office or not raised the possibility that he was enriching himself personally from work that was essentially billed to taxpayers — much in the way that former St. Tammany Parish Coroner Peter Galvan benefited from a private contract to provide medical services to inmates at the Slidell jail, a contract he satisfied by sending an employee of the Coroner’s Office whose salary was paid by the public. That side deal figured in Galvan’s recent indictment and guilty plea, which resulted in a two-year prison sentence.
For the first time Friday, the hospital acknowledged the federal investigation, in a statement sent out by the public relations firm Deveney Communication.
“Various news reports have advanced the misconception that an absence of contract or invoice equals the absence of an appropriate professional legal service arrangement between our hospital and the District Attorney’s Office,’’ the statement said. “We have not shared this information earlier because we do not want to impede an ongoing investigation.’’
The statement said the hospital decided to release information showing that it had appropriately negotiated and managed a professional services arrangement between it and the DA’s Office.
The evidence provided by the hospital consisted of resolutions adopted by the hospital’s governing board in 1992, 1994 and 2001 that approved a retainer to engage the District Attorney’s Office for up to 333 hours of legal work. Compensation after that amount of time was to be at an hourly rate. The retainer started out as $2,084 per month, going up to $2,247.75 in 1994 and up again to $2,500 per month in 2001. That amount remained in effect for 13 years, the hospital said.
In 2009 the board began to approve fees for all its attorneys annually. “The District Attorney’s Office was approved as one of the legal counsels in 2009, and each subsequent year, on a retainer basis, at the same rate of $2,500 a month,” the statement said.
“The executed professional services arrangement was proper, authorized by board resolution, and the requested services were provided,’’ it said.
Morgan Stewart, a spokesman for Reed, issued this statement Friday night:
“In the mid-90s, the then chairman of the St. Tammany Parish Hospital board, Paul Cortes, 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. Walter Reed’s understanding of that arrangement was based on those conversations.
“The new board’s view that Mr. Reed’s participation was in his official capacity as district attorney created an obvious misunderstanding and distraction to the hospital management. When this misunderstanding became apparent, it became the sole reason why Mr. Reed withdrew from the arrangement. He did not resign due to misconduct of any kind.
“The fact is, trying to re-create documentation from two decades ago is very difficult. As such, over the last few weeks, we also requested these documents that the hospital decided to release tonight. That one of these key ‘resolutions’ was in a lawyer’s file outside of the hospital records department calls into question the completeness of the documentation from the hospital.”
Follow Sara Pagones on Twitter, @spagonesadvocat.