Jacob Johnson, the director of a little-known state agency who was accused a year ago of presiding over a feckless operation, awarding improper contracts and misspending the agency's money, has reached the end of his own contract, but he says he will not relinquish his job without a board vote.
Johnson runs the Health Education Authority of Louisiana, a quasi-state agency that can issue tax-free bonds for construction projects that benefit teaching hospitals across the state, as well as other institutions.
He was notified in an email by board Chairman Charles Cravins on Thursday that his contract would expire on Sunday, which was Dec. 31. Cravins also instructed the board's attorney to stop payments to Johnson, according to an email Johnson provided.
Johnson said the email amounted to an improper termination notice and that Cravins should not have stopped his salary. He intends to continue reporting to work until a board vote is taken, he said.
“They never had a board meeting to decide this,” Johnson said. “Our bylaws dictate that (the right to take) unilateral action cannot be awarded to one person.”
Cravins declined to discuss the matter.
In January 2017, the state legislative auditor issued a blistering audit of the agency, saying that despite increased expenses between 2012 and 2016, the agency had not funded the construction of a medical facility since 2004.
The organization was created to help develop a medical corridor in New Orleans and finance the building of other medical facilities under the auspices of the Louisiana Department of Health and Hospitals.
The audit also claimed that the agency had failed to create a transition plan after legislation in 2016 expanded its scope to include teaching hospitals throughout the state and transferred it to the Department of Education. The Health Department had been providing human resources, payroll and other support for the agency. Auditors said it had no apparent way to run its own operations.
In response, state Sen. Karen Carter Peterson filed a bill to abolish the agency and transfer its duties to the Governor’s Office. The bill passed the Senate but stalled in a House committee. Another proposal, to strip the agency of its prime source of funding — operating a garage on La Salle Street near City Hall — also failed.
In April, a defiant Johnson filed suit in East Baton Rouge Parish, claiming state auditors were out to discredit him.
Then in June, all nine members of the board resigned, a move Johnson said was forced by Gov. John Bel Edwards.
Cravins and five other new board members were appointed within the past few weeks but have yet to meet, Johnson said.
Johnson said he’s not leaving his post unless the board meets in public to discuss the matter, regardless of what his contract says.
“If that is their determination, to terminate my employment," he said. "I will pack my things and go.”
Johnson cited work during his tenure that he claims the auditors overlooked — notably, $12 million the agency put toward building a new dormitory at the University of Holy Cross in 2016.
But auditors slammed the group for engaging in only one project since Hurricane Katrina — approving about $6.6 million in revenue refunding bonds for the Greater New Orleans YMCA in 2015.
As of last January, however, those bonds hadn’t been issued because the YMCA was still searching for a site to build its new home, the auditors said.
Auditors also rapped the organization’s spending — which exceeded its revenue in fiscal years 2014, 2015 and 2016 — and contracts it entered into that the auditors said violated state purchasing regulations and were not approved by the Health Department.
The audit was inaccurate on several counts, Johnson said Friday, noting that contracts and other activity must be approved by the agency's board and that he had no authority to act alone. Johnson said he became executive director in 2011 and began working to revive the dormant agency.
He also said that about $19 million in bond applications the agency has received remain in limbo because of the “infighting and dysfunction” caused by the audit and moves to abolish the agency.
The agency receives no state funding and survives on money it takes in from its parking garage, from administrative fees associated with the projects it helps finance, and from interest income.