Over the last seven years, St. Tammany Parish District Attorney Walter Reed has paid nearly $95,000 to two companies belonging to his son, campaign finance reports show. The two firms controlled by Steven Reed — Globop Inc. and Liquid Bread LLC — provided “production expenses” and catering services to the campaign, the reports say.
The senior Reed’s habit of spending campaign money on companies owned by his son, who is 42, was first reported in November by nola.com.
The district attorney’s latest campaign report, filed in February, shows the practice continued in 2013, when he paid more than $9,000 to the two firms. However, the payments were made before the media organization published its story questioning earlier payments to the companies.
Nearly all of the spending on the firms owned by Steven Reed occurred during a time when Walter Reed was not campaigning actively. But that didn’t stop him from spending freely: In fact, Reed has spent roughly $700,000 in campaign funds since the last time he faced the voters, in a 2008 election in which he was unopposed.
Reed has previously said his current term would be his last, although he has since hinted strongly at making another run. He is expected to make an announcement soon. The primary will be Nov. 4.
Reed’s spokesman, Rick Wood, said Tuesday that Reed had called the state Ethics Board for clearance before making any payments to his son’s firms.
“Of course, they told him what the rules are, and he has followed those,” Wood said. “Keep in mind, none of this is taxpayer money.” He added that Reed would continue to hire his son in the future if he needs his services.
State law bars use of campaign funds to pay a member of a politician’s immediate family directly. But the law allows campaign money to flow to a company owned by a politician’s relative, even a close one — provided that the expenses are legitimate campaign costs, that the campaign doesn’t purposely overpay for the services and that the company has been “doing business regularly” in the state for at least a year.
Both Globop and Liquid Bread had been incorporated for at least that long before being paid by the Reed campaign — though barely in the case of Liquid Bread, which received its first payment from the campaign 14 months after it was organized.
It’s unclear whether either company could be said to be “doing business regularly” in the state or how such a determination would be made. The companies haven’t left much of a footprint: A Google search doesn’t turn up much basic information about either, such as a phone number, and both firms list an apartment in a 10-unit building in the Lower Garden District as their domicile.
Wood said the only reason the younger Reed doesn’t do more work along the lines of the work he does for his father is that few people put on events similar to those Reed hosts.
Robert Travis Scott, president of the Public Affairs Research Council, said the law is intended to prevent politicians’ relatives from forming companies whose sole source of revenue is a family member’s campaign fund.
“If the Board of Ethics is concerned about whether these standards are achieved, the board can investigate the matter,” Scott said. “In my view, the Board of Ethics should regularly review campaign payments and transactions with businesses owned by immediate relatives to see if some concern is warranted.”
Efforts to reach Steven Reed on Tuesday were fruitless. No one answered when a reporter rang the doorbell at his Lower Garden District apartment. A note asking him to call the reporter was not immediately answered. He also did not respond to a message sent to his personal email address.
While not demonstrably illegal, the payments to firms owned by Reed’s son highlight the loose nature of Louisiana’s campaign-finance laws, which critics say give politicians too much discretion in determining what they consider to be political expenses.
Walter Reed’s campaign reports describe most of the expenses he paid to Liquid Bread as “catering” costs, including a payment of $29,400 on Oct. 1, 2012. That was the third-largest payment the campaign has reported making in the last five years.
The business address Liquid Bread listed in its 2011 filing with the state — 428 E. Boston St. in Covington — is also that of Tugendhaft’s Tavern, a well-known bar, often known as “Tugy’s,” that closed in August 2012 when its landlord, the Southern Hotel, began renovations. Steven Reed held the liquor license at that bar, according to state Alcohol and Tobacco Control Commissioner Troy Hebert’s office.
It’s not clear precisely what the relationship between Liquid Bread and Tugendhaft’s is, but four of the five payments from the Reed campaign to Liquid Bread occurred after the tavern closed. The only expenditure made when it was open was categorized as a “campaign event,” while the others were all classified as “catering.”
Wood said the younger Reed provided alcohol for campaign events hosted by his father, using the bar’s liquor license. He said Steven Reed charged $12 a head for the service, which he said was within industry norms.
“Those fundraisers produce a lot of revenue,” Wood said. “But we do spend money on our fundraisers. Instead of you getting an hors d’oeuvre and a drink for $500, you get more, and we think that sits better with our supporters. In fact our supporters tell us that.”
An invoice for the event posted by nola.com Tuesday evening showed that Liquid Bread provided “beverage and liquor for 2,450” persons at the 2012 fundraiser. But the news organization said Steven Reed spoke to its reporters and insisted that he did not provide any alcohol, only “bar set-up and services.”
What exactly Globop does as a business is murky, as is the company’s role in the Reed campaign. Wood said the DA’s son “does production work, and he’s very good at it. ... He is big-time when it comes to putting on a show — organizing the talent, the sound, the lighting. I don’t know if he actually hires the band, but he works with them.”
Globop’s Facebook page indicates the company’s name is an acronym for “global bebop hip-hop opera,” and it says the firm “designs and produces interactive multi-media events.”
When Globop was incorporated in 2002, its only officers were Steven Reed, who was president and treasurer, and Mikel Prester, of New York, who was secretary, according to state records. The most recent report, filed in November, shows Steven Reed as president, treasurer and secretary.
Nola.com reported last year that Walter Reed had also been listed as an officer on the firm’s 2012 report to the secretary of the state. Walter Reed issued a statement saying he had “no ownership” in it.