St. Tammany Parish President Pat Brister expects a phone call any day now from the 22nd Judicial District Attorney’s Office asking the parish, which provides a little over $2 million annually for the office, for another infusion of midyear money.
That happened last year, when DA Walter Reed’s office asked for an additional $362,000, and in 2012, when the request was for an extra $150,000.
“I know that they will be back this year,” Brister said. “They are not budgeting correctly. We just want to know why.”
Brister has asked the state legislative auditor to do an emergency audit of the office’s finances. The pattern of running out of money — without explanation, according to Brister — combined with media reports about expensive extra benefits Reed gave himself and a coterie of selected employees, including an enhanced retirement plan and a generous prescription-drug benefit, prompted her to make the request.
“I don’t know if they’re connected,” Brister said of the extra benefits, which cost taxpayers more than $500,000 in just the past three years. “That’s one of the reasons I asked for the audit. The auditor can look at everything. We want to find out the truth.”
Reed stopped both of the programs before his office started coming under heavy scrutiny from the news media and eventually from a federal grand jury.
Beginning in 2006, Reed started a 401(a) retirement program for himself and 10 employees. The office sent monthly contributions equaling 20 percent of each employee’s annual salary to the fund; the employees didn’t have to contribute a dime.
The fund was in addition to the pension plan in which all employees of Louisiana district attorneys’ offices are automatically enrolled. Under that plan, which is adjusted depending on the fund’s performance, the office currently contributes an amount matching 9 percent of the employee’s salary, while the employee kicks in 7 percent.
The additional program allowed Reed and a select few employees to get nearly 30 percent of their retirement benefits paid for with public funds.
In response to a public-records request from The New Orleans Advocate, the DA’s Office provided records for 2010 through 2012, less than half the time that program was in place. The cost to the public for that span was $531,799, suggesting the full cost likely topped $1 million.
The monthly contributions for Reed — the highest-paid district attorney in the state — were consistently the largest, since he had the highest salary. They rose from $2,808 per month in January 2010 to $3,711 in the final month of the program, April 2012. Over the three years, the office poured $87,727 into Reed’s supplemental retirement fund.
Although a Reed spokesman has described the benefit as a tool for recruiting and retaining key employees, only one of the 11 people who received it was a courtroom prosecutor.
Rafael Goyeneche, president of the Metropolitan Crime Commission, said trial attorneys are a district attorney’s most important asset. The fact they weren’t the focus of the benefit shows the rationale Reed has given for the program is hollow, he said.
Those enrolled in the 401 program included five attorneys: Reed; Lane Carson, who was the chief of the Civil Division but who has since left the office and was dropped from the program before it ended; Houston “Hammy” Gascon, the first assistant district attorney; Donald Kearns, an assistant district attorney who serves as full-time counsel for Slidell Memorial Hospital; and Harry Pastuszek Jr., an assistant DA who does legal work for the St. Tammany Parish School Board.
The other participants were Robert Allen, an administrative officer and investigator; Stephen Bordelon, a security specialist and investigator; Sandra McDougall, the office manager; Lewis Murray III, the lead assistant district attorney for Washington Parish, now retired; Gerald Reed III, an administrative assistant and investigator; and Jean Young, Reed’s executive secretary, now retired.
The participants were allowed to roll over their money when the program was ended.
The 401 program “was a way to funnel money to his inner circle of friends and cronies, and that included himself, first and foremost,” Goyeneche said.
Reed, 68, recently announced he will not seek a sixth term in office.
His state pension will allow him to collect retirement pay equal to an average of his five highest years of income, Goyeneche pointed out, which means that with the extra retirement program, taxpayers will have paid for Reed to get more than 100 percent of his income for the rest of his life.
“That’s not what the people of St. Tammany Parish signed up for or voted for,” Goyeneche said.
Figuring out Reed’s exact salary is difficult because of inconsistent reporting on his part: His office reported higher earnings to the state retirement system than he listed on disclosure forms to the state Board of Ethics.
The Times-Picayune has reported that in 2013, for example, Reed turned in forms to the retirement system indicating he made $204,852. That same year, he reported making $188,566 to the Ethics Board. Overstating his earnings would have given him a slightly higher pension payment than warranted.
Reed’s spokesman, Morgan Stewart, said that during 2012, an overage of $24,000 was reported to the retirement system. When the discrepancy was discovered, an amended report was submitted to correct the error. But because the retirement system operates on a fiscal year of July 1 through June 30, two years were affected by the mistake.
The effort to correct the error “occurred long before the recent media inquiries,” Stewart said.
In addition to the enhanced retirement benefits, Reed also devised a program that picked up the cost of insurance co-payments and prescription drugs for himself and seven employees, a benefit that cost the public $28,047 from 2010 through 2012. The DA’s Office provided records to The New Orleans Advocate, for those three years only, nearly three weeks after the newspaper requested them.
The special drug and retirement benefits were first reported by nola.com and WVUE-TV. When Reed’s subordinates provided the records on the drug benefit to those organizations, they failed to redact information on prescriptions that is supposed to be kept private by federal law. The DA’s Office cited the need to remove that information as a reason for the lengthy delay in providing records to The Advocate.
For the three years provided, Reed’s own medical costs made up 42 percent of the total spending.
All of the participants in that program were also in the 401 program, except Bart Pepperman, a division director and investigator. The others were Walter Reed, Gerald Reed, Young, Allen, McDougall and Gascon.
That program apparently ended in early 2013. It had a similar intent to that of the retirement program, Stewart said.
Both “were intended as an added benefit for the retention of key employees to continue the stable operation of Mr. Reed’s office and to ensure the office continued as one of the most successful and efficient DA offices in the state,” he said. “The programs were legally created for executive staff. However, there are five attorneys with substantial prosecutorial experience included in this program.”
Retaining quality attorneys and staff is critical because they can make far more money in the private sector, Stewart said.
Reed’s own participation “violated no law or ethics considerations,” Stewart said.
Brister tried to get to the bottom of the DA’s financial woes before turning to the legislative auditor, she said. When Reed’s office requested additional money last year, she met with representatives from his office, the Sheriff’s Office and the judges of 22nd Judicial District Court.
She invited the other parties because they are interconnected with the DA’s Office, she said. Reed’s office gets revenue from traffic ticket and court fines, for example.
The parish wanted to know whether the pattern of shortfalls reflected a revenue problem or a spending problem, she said. “They never said ... we could not get an answer.”
She’s hoping for a quick response from the legislative auditor because the parish is working on next year’s budget and is expecting a request from Reed’s office soon. “We know they have a deficit,” she said.
Reed’s office also asked the legislative auditor to conduct an audit of areas in his office that have been questioned in news reports. Auditor Daryl Purpera said it will likely be two to three weeks before he decides what kind of audit, if any, to conduct.
Staff writer Gordon Russell contributed to this story.
Follow Sara Pagones on Twitter at @spagonesadvocat.