Lafayette Neighborhoods' Economic Development Corp. on Wednesday put off any action against city-parish official Marcus Bruno, whose participation in the nonprofit’s federally funded small business loan program is being scrutinized by local and federal officials.
The city-parish community development department last month found that the company Bruno jointly owns with his wife, LA Consultants, had failed to show compliance with the loan terms, and recommended Lafayette Neighborhoods consider taking one of three corrective actions. The nonprofit could modify the loan agreement, force payment on accelerated basis or seize the Brunos’ home, according to the administration's recommendations.
Meeting for the first time since the administration’s April 17 report, the Lafayette Neighborhoods board instead chose to wait for the results of a U.S. Dept. of Housing and Urban Development review before deciding what to do.
“We can’t make a proper response until we get what are going to get from HUD. I don’t know what HUD is going to also recommend,” said Regis Allison, the Lafayette Neighborhoods board president.
LA Consultants in October 2016 received a $35,000 loan from Lafayette Neighborhoods, which administers a loan fund for small businesses with federal grant money provided by city-parish government. Bruno then helped Lafayette Neighborhoods secure additional grant money and exercised influence over the organization’s operations, including providing advice on new board members and revisions to bylaws.
Mayor-President Joel Robideaux staunchly defended Bruno in February after The Advocate reported on the loan, claiming in a statement that any suggestion that “this is anything other than a properly issued loan is a serious distortion of the facts.”
Robideaux’s own administration, however, found Bruno’s loan file contains no evidence that LA Consultants created or retained jobs with the loan proceeds, per federal guidelines. Nor did the file contain any receipts or other documentation showing how the loan was used.
The file “was remarkable for the amount of documentation that was absent, especially when compared to other LNEDC loan files previously reviewed,” the community development department report states.
Staffers with HUD’s Departmental Enforcement Center reviewed the loan program during a visit to Lafayette the week of April 23, one week after the Robideaux administration’s report. There is no timeline for delivery of the federal review.
Bruno indicated on the loan application that half the requested amount of $48,000 would go toward computer software and hardware, which LA Consultants would use in teaching court-ordered courses to criminal defendants. Another $20,000 would go to employee salaries, and $4,000 to office supplies.
The only employee at the time was his wife, Traci Bruno, who served as office manager as well as partial owner, according to the loan application. Under a section for jobs to be created, Bruno listed “own/op” as a full-time position to be filled immediately.
Lafayette Neighborhoods then approved a $35,000 loan, to be used for two purposes: court-ordered courses for defendants and to “automate” those courses with telecommunication. Bruno still has not provided proofs of purchase for any computer equipment three weeks after the administration delivered its report, according to Shanea Nelson, the community development director who addressed City-Parish Council on Tuesday.
A city-parish contract attorney, Stephen Oats, told council members the unaccounted-for computer equipment represented only a “small percentage” of expenses covered with the loan proceeds, with the rest to be used “to pay employees, to run the business, cash flow.”
Oats said in an email Wednesday he was mistaken in his description of how much was supposed to go to computer equipment, and how the proceeds were used overall.
“I do not know where the money was spent. I was referring to my recollection of the loan application,” Oats said in the email.
Calls to Bruno and his wife, Traci, were not answered Wednesday.
Bruno, in a January interview, told The Advocate in January that it’s nobody’s business how he spent the money.
“What I do with the loan is irrelevant,” he said.
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