Hospital, DA Reed differ on nature of Reed’s work _lowres

Walter Reed

A federal grand jury is investigating St. Tammany Parish District Attorney Walter Reed, who has been the subject of a raft of recent news stories detailing questionable financial dealings by the long-tenured prosecutor.

A grand jury subpoena was sent to the Castine Center on May 9, directing the Mandeville hall’s operators to turn over any records it had involving Reed and his son, Steven.

Walter Reed has hosted several political fundraisers at the center in recent years, including a 2012 event at which Steven Reed was paid $29,400 for services whose exact scope remains murky.

The subpoena, which seeks all records from Jan. 1, 2008, to the present, is the first hard evidence that Reed is under federal investigation.

It’s not clear what federal laws might be at issue in Reed’s dealings with the Castine Center. Federal authorities seldom build criminal cases around misuse of campaign funds, although such shenanigans sometimes are listed in indictments as part of a larger pattern.

Reed could not be reached for comment late Wednesday. It is not clear whether he has hired a defense lawyer.

Reed rented the Castine Center for large campaign parties in July 2008, June 2011 and September 2012, according to Castine Center records provided to The New Orleans Advocate in response to a public records request.

The paperwork describes the 2008 event as a “Red, White & Blue Celebration” and describes the latter two as Reed fundraisers.

Reed’s campaign spending, including the shindigs at the Castine Center, have been drawing attention, particularly his dealings with two companies owned by his son, Globop Inc. and Liquid Bread LLC. Reed has paid nearly $95,000 in campaign money to those companies over seven years.

Reed’s campaign reports describe most of the money paid to Liquid Bread as “catering” costs, including a $29,400 payment on Oct. 1, 2012 — the third-largest payment his campaign has reported in the past five years.

But it’s unclear what the younger Reed actually did for the money.

The father and son gave conflicting explanations for the expenditures, with a spokesman for the elder Reed saying the son provided alcohol for the events using his bar’s liquor license and charging $12 a head. The spokesman subsequently backtracked and said his explanation might have been “unintendedly inaccurate,” but he never clarified what services the younger Reed did provide.

An invoice posted by nola.com showed that Liquid Bread provided beverages including liquor for 2,450 guests.

But Steven Reed said he only provided bar setup and services.

Several caterers interviewed by The New Orleans Advocate said a $12 per-person fee for setups alone was well out of line with industry norms.

Reed paid the Castine Center $8,643 for rental of the hall and furniture in 2012 and a similar amount in 2011.

While the subpoena focuses on Reed and his son, Steven Reed isn’t the only person close to the district attorney who benefited from possible misuse of his campaign war chest. Reed also used $3,000 in campaign funds to throw a birthday party for his then-girlfriend, according to Claire Bradley, who said the 2005 function at the Dakota was a private party. Reed’s spokesman said it was a planning meeting for a fundraising golf tournament.

Bradley also told The New Orleans Advocate that she and her son were paid by Reed’s campaign for work they did not do in 2008 and 2011.

Reed, who is the highest-paid district attorney in the state, also draws a six-figure salary from side gigs he has as owner of a private law firm and co-owner of a gold business, according to state Ethics Board disclosure forms.

He has drawn criticism for recusing his office from prosecuting a truck driver for negligent homicide in a 2011 accident that killed two women so that Reed could profit from a civil suit that was undertaken by the McCranie Sistrunk law firm, where he is of counsel.

Neither Reed nor the firm would say what Reed did in the case or how much he was paid. But he bragged to a magazine for Pentecostals that he won a $2.4 million award for the families of the victims.

He recently gave up another side job that he told The Times-Picayune was part of his private practice: providing legal services to St. Tammany Parish Hospital for $30,000 a year. The hospital, which did not have a contract with Reed, contradicted his explanation of that arrangement, telling The New Orleans Advocate that Reed was under retainer as district attorney and that when he could not attend board meetings, he sent an assistant district attorney in his place.

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