Jerry Wayne Cox, a Pentecostal preacher whose Franklinton church got a $25,000 payment from former north shore District Attorney Walter Reed’s campaign fund, testified in federal court Monday that he referred seven to 10 personal-injury cases to Reed, who also had a private law practice.
But when Cox sought a donation for his church’s gym building fund from Michael Sistrunk, whose law firm handled the cases referred to Reed, the preacher got a chilly reception. “He treated me like a red-headed stepchild,” Cox said as the Reed trial entered its second week.
Cox said he cried after talking with Sistrunk. Then he called Reed, who said he would try to help him out. About a year later, Reed donated $25,000 to the church’s building fund.
Assistant U.S. Attorney Jordan Ginsberg asked why Reed made the donation.
“I guess because the other man didn’t do nothing for me, he wanted to give me something for what I done for them,” Cox said.
Cox estimated attorneys had gotten $2 million to $3 million from the accident and malpractice cases he referred. “I figured he’d be grateful to me for giving him the cases,” Cox said of Sistrunk. “Not that I was trying to do any sinful deed.”
Cox pleaded guilty last year to a single count of structuring financial transactions to avoid tax reporting requirements.
Shortly thereafter, the government filed a superseding indictment that added the $25,000 payment from the Reed campaign fund as an eighth wire-fraud count against Reed, bringing the total number of charges against the former District Attorney to 19.
Cox testified that the charge he pleaded guilty to had no connection to Reed.
But Richard Simmons, an attorney for Reed, asked about an IRS visit to Cox and the more than six hours of questioning that followed.
Cox said he let the agents in because he did not know he had done anything wrong.
The preacher’s folksy demeanor on the stand drew some chuckles from the jury and other courtroom observers, the first comic relief in six days of often dry testimony in the public corruption case against Reed and his son Steven.
Cox testified Reed helped him out by getting charges reduced when members of his church had traffic tickets, although he would not do that for DWIs. “He helped me, and he respected me in doing that,” Cox said, noting Reed would let him in ahead of others waiting to see him.
“We was actually kind of crazy about Mr. Reed,” Cox said.
Cox also testified about two large dinners for Pentecostal preachers for which Reed picked up the tab. The government claims those dinners were examples of Reed using campaign funds to drum up business for his private law practice, one of several ways prosecutors say he misused campaign money.
One of the dinners, on June 4, 2010, was at a steakhouse in Franklinton for $2,635. In a memo to the Sistrunk law firm seeking reimbursement, Reed said he had gotten one good personal-injury case from the dinner.
The other dinner for preachers was in Little Rock, Arkansas, in August 2012. Cox said he didn’t know how much Reed paid for that dinner, although he believed the entire cost would have been $20,000. According to the indictment, Reed paid $4,702.
Simmons asked who would have paid for the dinner in Franklinton if Reed had not done so, and Cox said his church would have. “So it was like he gave a donation to the church?” Simmons asked.
Cox agreed it was.
For most of the afternoon, the prosecution concentrated on campaign finance spending, extensively questioning Ronald Garrity, Reed’s campaign treasurer and CPA, about why certain expenditures were listed on his campaign finance disclosure forms as being campaign-related rather than personal. Invariably, he said that Reed instructed him to do so.
But the morning saw apparently damaging testimony concerning the other leg of the government’s case: claims that Reed pocketed $30,000 a year from a public hospital that was intended to go to the District Attorney’s Office.
Leo Hemelt, a former assistant district attorney under Reed, testified that his boss asked him to sign a false affidavit misrepresenting the time he had spent attending the hospital’s board meetings.
“I was kind of dumbfounded, shell-shocked,” said Hemelt, telling jurors that Reed approached him about the affidavit in May 2014.
Hemelt’s testimony, and that of former Assistant District Attorney Lane Carson, confirmed that employees inside the District Attorney’s Office believed the legal arrangement was between St. Tammany Parish Hospital and the District Attorney’s Office.
During cross-examination by Reed’s defense attorney, Hemelt said he was never presented with an actual affidavit.
But the mild-mannered former assistant district attorney linked his retirement from the office in July to what he described as “a very unfortunate turn of events” that began when news reports surfaced saying Reed had been paid directly to attend hospital board meetings. Hemelt, who sometimes substituted for him at the meetings, said he thought the questions concerning the hospital’s payments would “bring me into it.”
During the years he worked for Reed, from 2004 to 2014, Hemelt attended 17 hospital meetings, according to a chart presented by Ginsberg, the assistant U.S. attorney. He was never paid any extra money for that work, he said, and viewed it as part of his job.
But after Reed’s pay became an issue, he was approached by his boss. “The defendant said, ‘Leo, I want you to sign an affidavit that said you went to the hospital as a favor to me, and I offered you money and you refused it,’ ” Hemelt said.
“Did he ever offer to pay you to attend a hospital meeting?” Ginsberg asked.
“No,” Hemelt said. He also testified he never did any work for Reed’s private law firm.
Carson, who attended hospital board meetings for several years for the District Attorney, said he never received any extra pay for the work. “I assumed all along it was going to the Office of District Attorney,” he testified.
Carson worked for the District Attorney’s Office from 1985 until 2007, heading the Civil Division. At some point in the mid-1990s, he said, Reed came by his office and said Reed would be going to the board meetings in the future, Carson testified.
He didn’t explain why, Carson said.
Follow Sara Pagones on Twitter, @spagonesadvocat.