The member of St. Tammany Parish District Attorney Walter Reed’s staff who sometimes stood in for him at St. Tammany Parish Hospital board meetings has been subpoenaed to appear before a federal grand jury, sources familiar with the situation said Thursday.
Leo Hemelt, an assistant district attorney, was served a subpoena while vacationing in Florida with his family, the sources said.
It’s not clear who else in Reed’s office may have been subpoenaed. The FBI visited the office two weeks ago. But in response to a public-records request by The New Orleans Advocate, the office said that if such subpoenas exist, they belong to the individuals who received them and not the office.
Hemelt’s subpoena is the second to come to light apparently concerning Reed’s finances. The grand jury also subpoenaed records from the Castine Center in Mandeville that deal with Reed and his son, Steven Reed — the first solid indication that the six-term district attorney is in the sights of federal prosecutors. However, the FBI has been gathering information on Reed for months, interviewing people close to him, according to one person close to Reed who was visited by agents last year.
WVUE-TV and nola.com reported that at least 10 subpoenas were sent to members of Reed’s staff. Those reports, which cited unnamed sources, did not identify the staff members. Reporters from various media outlets staked out the grand jury room in federal court in New Orleans on Thursday, but no one from Reed’s office was spotted.
Hemelt did not return calls for comment. But the subpoena he received is a clear sign that Reed’s work for the hospital is being examined by the grand jury. The hospital refused a public-records request by The New Orleans Advocate that sought any subpoenas, saying that if such records exist, they would not be public.
Reed quit his job with the hospital in late May, saying he hoped the board could return to doing its work “without the unnecessary distractions of the past few weeks,” a statement that presumably alluded to media scrutiny of his private business dealings.
Reed, who was paid $30,000 a year for attending board meetings, has said that he was paid as a private lawyer and that Hemelt was paid as a private lawyer when he attended meetings for him.
But he has offered no proof of how Hemelt was compensated for his time, and neither Reed nor Hemelt answered calls Thursday asking about that issue.
The question of how Hemelt was paid is important in determining whether Reed enriched himself from work that was at least partly billed to taxpayers — a situation potentially similar to that of former St. Tammany Parish Coroner Peter Galvan, who benefited from a private contract to provide medical services to Slidell jail inmates. That work was actually done by a Coroner’s Office employee, whose salary was paid by the public.
That deal figured in Galvan’s indictment, guilty plea and two-year prison sentence.
In response to a public-records request, St. Tammany Parish Hospital provided copies of 1099 tax forms it mailed to Reed from 2008 to 2013. They show that Reed was paid the full amount each year — $30,000 — except for 2010, when he was paid $32,500. The forms indicate the money went to Reed and not the District Attorney’s Office.
Meanwhile, the checks from the hospital were made out to “Reed, Walter,” at the address of the District Attorney’s Office: 701 N. Columbia St. in Covington.
Reed’s explanation of his arrangement with the hospital is at odds with the one offered by the hospital. Hospital CEO Patti Ellish said prior to Reed’s resignation that he “is on retainer for legal services as the district attorney,” and noted that when Reed could not make a meeting he “sent a subordinate in his place.”
She described his services as attending meetings and providing “legal counsel on matters and topics.”
WVUE and nola.com reported that Hemelt attended two of the last 16 board meetings in Reed’s stead.
St. Tammany Parish Hospital did not have a contract with Reed, according to the hospital. Reed said in his resignation letter that he had worked for the hospital for 20 years.
Reed, who is the highest-paid district attorney in the state, also maintains a private law practice and a gold-buying business. Those two side ventures together generate a six-figure income for Reed, according to financial-disclosure forms Reed filed with the state. The forms do not require Reed to be more specific about how much those businesses bring in.
Follow Sara Pagones on Twitter @spagonesadvocat.