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Senator Gary Smith (D-Norco) speaks at the podium before legislative session ends sine die, Thursday, June 6, 2019, at the Louisiana State Capitol in Baton Rouge, La.

After Hurricane Katrina, RV dealers in Louisiana were incensed when the family of then-state Rep. Gary Smith Jr. landed a lucrative contract with the Federal Emergency Management Agency, worth more than $100 million, to deliver trailers around the state.

The fix was in, other dealers groused - an argument bolstered by the fact that the Smith family business in question, a motorcycle shop, initially lacked the required license to sell trailers.

Since then, legislators and two different governors have passed laws requiring disclosure of such dealings, and prohibiting some elected officials--if not their families--from cashing in on hurricane recovery.

101721 Almedia debris staging map

But the network of companies owned by the family of Smith, now a state senator, has secured deals with debris contractors picking up wreckage left by Hurricane Ida, and Smith’s family members have not reported them.

Three different governmental entities -- the state Department of Transportation and Development, Jefferson Parish and St. Charles Parish Schools -- are using a site owned by Smith family members to stage debris before it is hauled off to landfills, records show.

Debris removal is typically one of the most expensive parts of hurricane recovery for the government: After last year’s hurricanes in southwest Louisiana the costs ran up to at least $250 million.

And it is paid for entirely by tax dollars. The Federal Emergency Management Agency will pick up most of the tab, while the state and local governments usually foot a small share of the costs.

Deciding where to stage debris doesn’t involve public bids. Instead, debris contractors typically use sites owned by the government. When those run out, or aren’t available, the companies lease additional sites they need from private landowners. That’s where Smith’s family stepped in.

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Smith, a Democrat from Norco, was listed as the owner contact for the property on at least one form with the state Department of Environmental Quality, and was involved in a meeting with local officials in St. Charles Parish about where to stage debris. The parish itself is not using his family’s site, and the parish president’s office said officials there did not recommend that contractors use it.

Unlike a normal real estate deal, where a tenant pays a flat rate to lease land, the Smith family gets a cut of the total amount of tree branches, stumps and other debris hauled onto the site.

Glen Smith, Gary’s uncle and the CEO of Magnolia Companies of Louisiana LLC, the family business, confirmed the company is making 50 cents for every cubic yard hauled onto the property. So far, contractors have staged more than 210,000 cubic yards of debris there, according to state records.

It’s not clear how much the company will rake in from the arrangement. That’s because Smith’s father, Gary Smith, has not filed a disclosure with the Louisiana Board of Ethics reporting income from the deal.

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Legislators and then-Gov. Kathleen Blanco passed the law requiring such arrangements be disclosed shortly after Katrina in 2005. The law required any state elected official or member of their immediate family to disclose income from any contract related to “addressing needs directly emanating from a gubernatorial declared disaster or emergency” when the deal is funded or reimbursed with federal funds. The disclosure requirement applies when the official or their relative owns at least 10% of the company.

The senator’s father owns 50% of the company in question, according to a separate financial disclosure the senior Smith had to file because of his role on the New Orleans Aviation Board.

Three years after the initial reforms, lawmakers and then-Gov. Bobby Jindal went further, passing a law that barred elected officials from entering into such deals when they own 5% or more of the company with the contract.

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It’s not clear why the senior Smith, who reported in a separate financial disclosure that he owns 50% of both Magnolia and MHI Investments, did not report income from the debris arrangement. But he’s hardly alone.

The last time anyone filed a disclosure with the Ethics Board for any kind of disaster work was in 2015, for work done in 2014. That was Ascension Parish Councilman Kent Schexnaydre, who reported $844,000 in home elevation contracts.

After Katrina, a host of lawmakers and their family members reported income from such work.

Why the reporting has disappeared in recent years is unclear. Kathleen Allen, the Ethics Board’s administrator, said the agency recently put out a notice on the board’s website reminding people about the law and linking to the forms. She said part of the reason could be that the 2008 law banned elected officials from entering into most deals.

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Still, that doesn’t explain why no family members, local elected officials or state appointed officials have reported receiving any storm-related contracts in six years.

“I don’t know if it’s a lack of knowledge or there’s certain prohibitions that are going to apply and those have restricted the number of contracts,” Allen said.

Glen Smith, who returned calls made to the senior Gary Smith, said he expects his brother will file a disclosure about the deal, adding that Gary Smith Sr. is typically in charge of the marine division of the company, while he handles the recovery work. State law requires the disclosure be filed no later than 30 days after the contract is signed; the site was given verbal approval by DEQ for debris staging on Sept. 8 for use by DOTD’s contract and the next day for Jefferson Parish’s contractor. It’s not clear exactly when the contracts were inked, but Glen Smith said they were likely signed about a week after the storm hit.

Glen Smith downplayed the amount of money the firm is making, and said the company has been doing hurricane recovery work for decades.

Part of the land being used is listed for sale on an online real estate website for $9.9 million.

Smith Jr., the senator, said in an interview he doesn’t have any ownership in the network of companies. His financial disclosures likewise do not report any ownership interest. He said he is merely the company’s attorney, and that he usually handles contracts. He is listed on Magnolia’s website as vice president of the operations, acquisitions and investments division.

The firm was previously run by Smith’s grandfather, who was involved in state Democratic party politics.

The debris site is on a big piece of land on Airline Highway in Saint Rose, a few miles from Louis Armstrong International Airport. It’s owned by M.H.I. Investments, the real estate arm of the Smith family business Magnolia Companies of Louisiana.

Thomas Capitano, owner of Creative Improvements, the debris contractor for St. Charles Parish Schools, said he didn’t end up using the property much. That’s because the lines got long--three different prime contractors were hauling debris from the region to the site--and rains turned the site muddy.

Smith said it was a mistake that he was listed as the contact for the site on the DEQ forms. He said the tract is one of the largest cleared pieces of land on the east bank, which is why it got attention.

“People were asking about it,” he said. He acknowledged helping to get things started, but said he then “passed it off” to his uncle and father.

“It’s a very up-and-up deal,” Smith said. “And I have no financial involvement in it.”


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