Landfill magnate Fred Heebe fighting litigation brought by family of man who died after Heebe’s boat capsized _lowres

Fred Heebe

Jim Ward and Fred Heebe, the owners of the River Birch landfill in Waggaman whose prodigious political donations were at the center of a sweeping, four-year federal criminal probe that eventually imploded without any charges being filed, have re-established themselves as a dominant force in Louisiana king-making.

Ward, Heebe and other landfill executives are some of the largest financial backers of the effort to reelect Gov. John Bel Edwards even as they gird for a civil trial that will air long-standing accusations that some of their earlier political donations constituted bribes — in particular, a batch of checks they gave to disgraced New Orleans Mayor Ray Nagin, who sits in prison on unrelated corruption charges.

New Horizons USA PAC, a political group formed by Dominick Fazzio, the longtime chief financial officer at River Birch, has donated at least $200,000 to Gumbo PAC, an organization that is expected to play a crucial role in Edwards’ reelection bid. That tied New Horizons for the title of largest in-state donor to Gumbo since Edwards took office.

New Horizons is funded primarily by two companies owned and operated by Heebe and Ward: River Birch and Willow LLC, a development company. Since Edwards’ election in 2015, River Birch has funneled at least $150,000 into New Horizons, and Willow has contributed $100,000.

Heebe has remained a ubiquitous campaign donor in the years since River Birch came under scrutiny by the FBI, a case that fell apart amid a notorious online commenting scandal that felled the leadership of the U.S. Attorney’s Office in New Orleans.

In recent years he has made personal donations to dozens of politicians, including Democrats like New Orleans Mayor LaToya Cantrell and Gov. Edwards, as well as Republicans like state Treasurer John Schroder and Lt. Gov. Billy Nungesser.

State campaign finance laws limit the size of those donations, meaning Heebe can donate only $5,000 to a candidate per election. Heebe and Ward allegedly violated that law when they bundled $20,000 in contributions to Nagin through four sham companies in 2006 — a claim central to a pending state ethics lawsuit against them.

Four years after those donations were made, the landmark U.S. Supreme Court decision known as Citizens United radically altered the landscape for political funding, and four years after that, a judge invalidated a state law that capped contributions from Super PACs. Those rulings allow groups like New Horizons to raise and spend unlimited sums as long as they don’t coordinate directly with any candidate's campaign.

That’s how Heebe and Ward, through the PAC, were able to write a $200,000 check to Gumbo PAC last October. Through their PAC, they also sent $9,000 to a PAC run by Jefferson Parish Councilman Mark Spears that is dedicated to get-out-the-vote efforts. Spears represents Council District 3, which includes Heebe’s landfill.

Ward, whose only personal donation was to Gov. Edwards last year, said in an interview that he thinks the governor has done a good job. He added that he is not involved in the political side of the business; that area is managed by Heebe, his stepson.

“I haven’t been the big promoter in this, but I’ve been a Democrat all my life going back to when I voted for Harry Truman, and I voted Democrat all the way since,” Ward said in an interview.

Heebe did not return calls seeking comment.

Bribery lawsuit involving landfill owners, ex-New Orleans mayor Ray Nagin gets new life

River Birch’s owners have regained their status as fundraising heavyweights at an interesting time: A 2011 civil racketeering lawsuit that accuses them of dirty pool in the jockeying over where post-Katrina refuse would be dumped in New Orleans is finally going to get a hearing.

The case has been delayed for a host of reasons over the years — initially because the since-junked federal investigation targeting Heebe and Ward appeared to be focused on many of the same allegations contained in the lawsuit.

The suit was filed by the garbage giant Waste Management. It alleges that River Birch’s owners received favorable treatment in New Orleans and Jefferson Parish by bribing each government’s chief executive: Mayor Nagin and Parish President Aaron Broussard, both of whom went to prison on unrelated corruption charges.

The allegations involving Jefferson Parish and its landfill, which was operated by Waste Management, have been settled. But the New Orleans allegations — which are potentially much more lucrative for the plaintiffs — received new life last year from the 5th U.S. Circuit Court of Appeals.

Civil racketeering cases allow for plaintiffs to recover triple the amount of actual damages. That could add up to a big number in this case. An expert for Waste Management pegged the landfill’s lost profits at $50 million, having a present value of $62 million, court records show.

Civil racketeering cases are similar to criminal RICO (Racketeer Influenced and Corrupt Organizations Act) cases, but because they are civil suits, they require a lower burden of proof.

Waste Management claims that Nagin effectively shut down a landfill he had allowed the firm to open in New Orleans East as payback for the $20,000 in campaign cash that Heebe and Ward funneled into Nagin’s struggling campaign just before the 2006 election.

After it opened in February 2006, Waste Management’s Chef Menteur landfill was competing with Heebe and Ward’s Waggaman dumps for a big share of the city's post-Katrina waste. Tens of millions of dollars in tipping fees were at stake.

The federal probe into Ward and Heebe was investigating, among other things, the pair’s use of shell companies to bundle multiple donations to favored politicians. While a person can give a politician no more than $5,000 per election cycle, corporations are considered separate entities under the law, and each one may give $5,000 as well.

However, it’s illegal to set up phony companies — that is, firms with no legitimate business purpose — for the purpose of circumventing campaign finance laws. In the case of the $20,000 routed to Nagin, the money came in four $5,000 checks, hand-delivered to Nagin by Heebe’s chauffeur. The checks were in the name of four firms that Ward, in a deposition, admitted were phony.

Under questioning, Ward was unfamiliar with even the names of some of the firms, let alone what they supposedly did.

Ward testified that such campaign bundling was “pretty much a matter of policy with all our companies” because “we didn’t want to go being as obvious as it — as it was.”

After the election, according to records turned up in the civil case, Ward followed up with the mayor, sending Nagin a fax reminding him that “We have been major contributors to Mayor Nagin, contributing through various corporations.” He also placed three calls to Veronica White, the city’s sanitation director at the time, according to testimony.

Within weeks, Nagin had allowed a zoning waiver he had granted Waste Management to expire, shutting the landfill down for good.

Waste Management’s claims involving Nagin and the Chef Menteur landfill were thrown out in late 2017 by then-U.S. District Judge Kurt Engelhardt.

Engelhardt, who was nominated by President George W. Bush at the behest of then-U.S. Sen. David Vitter, granted a motion for summary judgment from Heebe and Ward, finding that the evidence of a link between the payments the two men made to Nagin and the mayor’s decision to close the landfill was “far too speculative and conclusory” to allow a jury to consider.

But a three-judge panel at the 5th Circuit Court of Appeals — of which Engelhardt is now a member — disagreed. In a 2-1 ruling, the appellate court last year restored Waste Management’s claims, clearing the way for a trial.

Perhaps because of Heebe's prodigious political activity, it's been difficult to find a judge to hear the case.  

The case was initially remanded to the district court’s newest judge, Wendy Vitter, the wife of David Vitter. But on Aug. 16, Wendy Vitter recused herself.

Former federal prosecutor felled by comments on River Birch investigation weighs in on current landfill saga

She gave no reason for her action, but Heebe and Ward over the years were consistent donors to David Vitter's campaigns. In addition to being put forward for his judgeship by Vitter, Engelhardt worked as a lawyer for Vitter when he was a state representative. He later served as treasurer for Vitter’s congressional campaign.

As of Thursday, the case sat before Judge Carl Barbier after two other federal judges, Mary Ann Vial Lemmon and Greg Guidry, recused themselves.

Along with making a ruling in the civil case that massively limited the financial exposure faced by Heebe and Ward, Engelhardt separately played a crucial role in the collapse of the criminal case that federal authorities had been building against the two. 

Heebe’s lawyers filed a suit in Civil District Court in 2012 alleging that federal prosecutors in U.S. Attorney Jim Letten’s office had been posting inappropriate pseudonymous comments under stories at NOLA.com, some of them about Heebe. The suit resulted in the unmasking of two of Letten’s top lieutenants.

Engelhardt, meanwhile, had presided over the case of five New Orleans police officers convicted of various roles in shooting civilians on the Danziger Bridge after Hurricane Katrina and covering it up afterward. A lawyer for one of the officers — who separately represented Heebe — seized on the commenting scandal, accusing prosecutors of gross misconduct.

Engelhardt pushed for a deeper inquiry, and the scandal widened, leading to Letten’s departure as U.S. attorney and months later an unusual announcement from the office that the case against Heebe and Ward was dead. Charges against Fazzio, who had already been indicted, were ultimately dropped.

Engelhardt ultimately granted major reductions in the sentences for the police officers convicted in the Danziger case.

No trial date has been set for Waste Management’s lawsuit, but because so much pretrial skirmishing has already taken place — there are more than 450 items listed in the online docket — a trial could come fairly soon.

River Birch and its affiliates also still face the lawsuit filed by the state Ethics Board in Jefferson Parish in 2012. That case largely mirrored the federal investigation, accusing the firm and its principals of violating state campaign laws by bundling donations through bogus companies. That matter has been on hold because of the other litigation.

Editor's note: This story was changed Aug. 31 to clarify that the Chef Menteur landfill closed because Mayor Ray Nagin allowed its zoning waiver to expire.  

Email Sam Karlin at skarlin@theadvocate.com