After obtaining a federally funded loan from a nonprofit development group to help his private business, an aide to Lafayette Parish's mayor-president helped secure additional grant money for the organization while consulting on revisions to its bylaws and recommendations of people to add to its board of directors.
Marcus Bruno, Mayor-President Joel Robideaux's assistant for government affairs, borrowed $35,000 from the Lafayette Neighborhoods' Economic Development Corp. in October 2016 for use by LA Consultants, a firm he owns but won’t say anything about.
Three months later, the City-Parish Council, at the Robideaux administration’s request, agreed to direct $150,000 in federal grant money to Lafayette Neighborhoods to loan to small businesses. It was the first time the city-parish had authorized any money for Lafayette Neighborhoods in 16 years, although the revolving loan fund operated continuously in that span.
The U.S. Department of Housing and Urban Development, which provides the money through its Community Development Block Grant Program, would not comment on whether the loan to Bruno was proper. Generally, government employees cannot benefit from federal block grant programs if they are “in a position to participate in a decision-making process or gain inside information,” according to HUD regulations.
Records show Bruno was closely involved. A city-parish employee provided Bruno with detailed information about the grant-fed loan fund in May 2016, according to an email The Advocate obtained through a public records request. Bruno later sent an application to the loan program from his city-parish email address to his personal address.
The City-Parish Council authorized the $150,000 grant to Lafayette Neighborhoods in a January 2017 ordinance, and the community development department worked with the organization over the next year on a grant agreement providing for release of the funds.
The Lafayette Neighborhoods chairman said Bruno helped spearhead a Robideaux administration initiative to forge closer ties with the organization, and emails obtained through public records requests show that Bruno consulted on revisions to its bylaws and new board member selections.
“He was suggesting that the administration and LNEDC should form a relationship that would be beneficial to both sides,” said Regis Allison, the chairman of the Lafayette Neighborhoods board.
The Lafayette Neighborhoods board is responsible for, among other things, deciding when to foreclose on delinquent borrowers.
Bruno had three consecutive monthly loan payments rejected because of insufficient funds late last year, according to Lafayette Neighborhoods bank statements obtained through public records requests.
It is not clear if Bruno made additional payments to make up for those that were returned, or if any payments were returned in any other months. The Advocate obtained Lafayette Neighborhoods bank statements for September, October and November. Also unclear is whether the Lafayette Neighborhoods board considered any legal action against Bruno.
Bruno said he had “trouble with the bank on a few issues” and that the problem has been resolved. As of October, LA Consultants owed $30,495.66, according to a report that Lafayette Neighborhoods provided to the administration.
Bruno's role with the Robideaux administration is his most recent in more than two decades of working in and around city-parish government. He worked on anti-blight initiatives under Robideaux's predecessor, Joey Durel, until 2009.
Bruno said he wasn’t aware of the HUD restrictions on who is eligible to receive loans or even that that the loan was funded with a federal grant. He also said he had no connection with Lafayette Neighborhoods in an official capacity, despite his consultation on bylaws and new board members.
“I don’t have anything to do with LNEDC at all,” Bruno said.
City-parish community development director Shanea Nelson forwarded Bruno a historical summary of Lafayette Neighborhoods and the loan program in May 2016, five months before he obtained his loan. The loan summary was prepared by a staffer in Nelson’s department, Anthony Branham, and specifies that the fund was “capitalized with CDBG funds” from the U.S. Department of Housing and Urban Development.
Bruno was in frequent contact with Lafayette Neighborhoods staff in 2017 after the city-parish authorized additional funding. Nelson’s emails show Bruno's involvement in the bylaws changes and board appointments. Lafayette Neighborhoods staff forwarded draft bylaws to Bruno in one-on-one correspondence, and Nelson copied Bruno in her emails to the organization.
Nelson set up a meeting with Bruno and Lafayette Neighborhoods staff in December 2017 to discuss the administration's board appointment recommendations. It’s not clear if anyone in the administration knew that Bruno had a personal financial relationship with the group.
The Robideaux administration did not respond to repeated requests for interviews and statements concerning Lafayette Neighborhoods and Bruno's loan.
In March last year, one of the new Lafayette Neighborhoods board members, Bently Senegal, forwarded an email to Bruno that Senegal had received from another board member requesting a meeting with Senegal over coffee. Senegal told Bruno to “stay tuned,” and that he would keep Bruno apprised of what came of the meeting, to which Bruno replied “Thanks bro!”
Senegal did not return voicemails concerning Lafayette Neighborhoods or his correspondence with Bruno.
Loan use is 'irrelevant'
The city-parish is responsible for ensuring block grants used for private business loans result in a "public benefit," according to HUD guidelines, which set forth two ways to meet that standard: creation or retention of one full-time job per every $35,000 of block grant funding, or provision of goods and services to low- and moderate-income people.
Bruno said he took the loan in 2016 to “start my business,” although he had formed LA Consultants more than a decade prior, according to incorporation documents.
“That’s what everyone else goes to the agency for, to start a small business,” Bruno said, referring to Lafayette Neighborhoods. “That’s what I did.”
Bruno then said he “needed the loan to move forward” when it was pointed out his business was already in existence. He refused to say what he did with the proceeds, calling the question “irrelevant.”
Bruno declined to answer further questions about LA Consultants, including its business activities.
Why HUD rules are there
The federal prohibition on those “in a position” to participate in decision-making or gain inside information suggests that it covers a broader group of people than those who work directly with the grants, said Kathleen Clark, a Washington University law professor and government ethics expert.
“The point of this regulation is to prevent government officials and others who have access to inside information from benefiting from it, from essentially abusing their inside status,” Clark said.
Casual advice could constitute participation in a decision, and, in other types of employment contexts, all co-workers — no matter their job functions — are presumed to have the same inside information, Clark said. The onus is on the city-parish administration to ensure employees don’t commit violations, even if it’s unclear precisely whom the prohibition applies to, Clark said.
“Under this standard, it seems like the city would have to be on the cautious side and would need to put in place guardrails, or trainings, on this specific conflict-of-interest standard,” Clark said.
Local officials are expected to request a formal exception, supported with a legal opinion, when faced with a potential conflict of interest, according to HUD spokesman Brian Sullivan. No one in the Robideaux administration submitted such a request regarding Bruno's loan, according to HUD officials.
Public officials can request advisory opinions from the Louisiana Ethics Board, although there is no requirement to do so. None has been requested concerning Bruno, according to Kathleen Allen, the board administrator.