A long-dormant federal civil lawsuit accusing landfill owner Fred Heebe and his father-in-law of racketeering has been revived, and it’s bringing a surprise witness to New Orleans on Thursday: former Mayor Ray Nagin, who is expected to be questioned in the courthouse on Poydras Street by lawyers on both sides of the case.
Nagin's testimony is likely to take place behind closed doors. His unusual appearance — one-fourth of the way through a 10-year prison term — is just one of several subplots in the re-emergence of a mostly forgotten case, one that’s now set for trial in August.
In a sense, the bare-knuckled lawsuit brought by trash conglomerate Waste Management represents the closest thing yet to a public airing of the corruption claims against Heebe and Jim Ward, his father-in-law, that were once at the center of a sprawling federal investigation.
That’s because the criminal case the federal government was building collapsed amid evidence, unearthed by Heebe’s legal team, of major misconduct by top officials in the U.S. Attorney’s Office.
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The case is resurfacing at the same moment that the leader of Heebe’s legal team, defense lawyer Kyle Schonekas, is expected to be nominated by President Donald Trump to run the office whose leadership he helped topple five years ago.
In another odd convergence, the jurist presiding over Waste Management’s civil racketeering case, U.S. District Judge Kurt Engelhardt, is the same judge who embraced the evidence of prosecutorial misconduct that Heebe brought to light in 2012, and who embarked on his own effort to measure its extent.
By the time the case gets to the courtroom, in late August, it's possible that Engelhardt, the chief judge in the district court, will have moved on as well: He is said to be a leading contender for an open seat on the New Orleans-based 5th U.S. Circuit Court of Appeals. Such a nomination would also come from Trump, with input from Louisiana's two U.S. senators.
The lawsuit was filed in 2011, and its central allegation appears to closely track the criminal case that federal prosecutors were pursuing against Heebe and Ward: that the duo, and other employees of their two West Bank landfills, called River Birch and Highway 90, used bribes and other illegal enticements to influence politicians to hurt their competitors.
The suit states flatly that the federal investigation was abandoned "for reasons of prosecutorial misconduct and not for reasons related to the defendants' innocence."
In the wake of Hurricane Katrina, the jostling for contracts for debris collection and disposal was intense, with an estimated $175 million in fees from storm debris in play.
Waste Management claims it was hurt by the River Birch group in two major ways.
First, Nagin in July 2006 abruptly ordered the closure of a landfill operated by Waste Management in New Orleans East that he and state regulators had allowed to open on an expedited basis months after Katrina struck.
The company alleges that the mayor’s action — a puzzling about-face, since he had earlier been an enthusiastic proponent of the Chef Menteur landfill — was the result of the mayor's receipt of $20,000 in campaign funds from four “shell companies” tied to Heebe. A 2012 newspaper story raised similar questions.
The Waste Management suit alleges those payments were bribes.
Secondly, the trash giant complains that Heebe and Ward “corrupted a public bidding process” in Jefferson Parish by giving various members of the parish administration “undisclosed financial benefits.” The result, it says, was a 25-year contract for River Birch, one of Heebe and Ward’s landfills, to be the exclusive recipient of trash collections in the parish. At the same time, the parish agreed to close its own landfill, which had been run by Waste Management.
That deal was eventually scrapped amid a related federal investigation into the Jefferson Parish government, which led to charges against Parish President Aaron Broussard; his top aide, Tim Whitmer; and the parish attorney, Tom Wilkinson.
In addition to Waste Management, taxpayers were also hurt by River Birch's underhanded dealings, the suit claims. Not only did the closure of the Chef Menteur landfill drive up costs, but it slowed New Orleans' recovery, it says.
When Waste Management's lawsuit was filed, federal charges against Heebe and Ward appeared likely, and the company's suit piggybacked on those expected charges. At the time, Henry Mouton, a former state Wildlife and Fisheries commissioner, had just been charged with accepting bribes from Heebe and Ward in exchange for badmouthing landfills owned by their rivals.
Several other figures in the River Birch hierarchy were also in trouble by then, including Dominick Fazzio, chief financial officer for the landfill, who was charged with fraud and money laundering in an unrelated case.
Mouton pleaded guilty, but Fazzio fought the charges against him and won. The charges were dropped by the feds in March 2013, when the Justice Department announced it was abandoning its entire investigation into Heebe, Ward and their landfills, after it emerged that two of then-U.S. Attorney Jim Letten's top lieutenants had been posting pseudonymous comments online about federal targets, including Heebe.
Mouton, who unsuccessfully sought to undo his plea, was eventually sentenced to 30 months of home detention.
Waste Management's racketeering suit was one of several similar ones filed by River Birch rivals as government investigators appeared to be closing in on their targets. But the two other suits, one filed by AMID/Metro, owner of another landfill in New Orleans East, and another filed by Concrete Busters, were both dropped after the feds threw in the towel on the criminal case.
The state Ethics Board also filed a state suit against River Birch and Fazzio in the 24th Judicial District in early 2012, alleging they had engaged in a pattern of bundling illegal campaign contributions through shell companies. But that suit was put on ice because of the pending criminal probe; court records show it was continued indefinitely in July 2013, a few months after the feds dropped their effort.
Kathleen Allen, a lawyer for the Ethics Board, said in an interview Tuesday that the board's suit is "still pending."
The suit claims Fazzio used at least seven shell companies to funnel donations to at least 24 Louisiana politicians, contributions it alleged were “through or in the name of another” — a violation of state law.
Three of those purported shell companies also made donations to Nagin in 2006 as the incumbent mayor struggled to raise money amid a hotly contested runoff election against then-Lt. Gov. Mitch Landrieu. Nagin won that election narrowly, and shortly thereafter, he ordered Waste Management’s dump closed.
While Nagin's sudden change of heart raised questions, it's not clear how Waste Management intends to prove the payments were bribes. When Nagin was charged with 21 counts of bribery and other corruption-related crimes in 2013 in a federal indictment that covered a range of schemes, his dealings with River Birch were not mentioned.
Court records show that Waste Management intends to question Mouton, and that the company is seeking records of correspondence between Mouton and Peter Butler, an attorney for River Birch. According to the suit, Mouton — who admitted taking more than $460,000 in bribes from Heebe and Ward — funneled at least $24,000 in bribes to "various public officials" in April and May 2006 in an effort to torpedo River Birch's rivals. It's unclear who received that money.
It does not appear that Nagin’s surprise appearance in New Orleans on Thursday will be open to the public, though it will take place in a courtroom. According to a staffer in the office of U.S. Magistrate Judge Karen Wells Roby — who ordered Nagin to appear — the proceeding probably will not be public because it is “between the two sides.”
Roby’s order directs the warden of the Federal Correctional Institution in Texarkana, Texas, where Nagin is serving his term, to bring the former mayor to the courthouse at 10 a.m. and to return him to prison when his deposition is over.
It’s an unusual order, a fact Roby acknowledged in her decision. She had previously authorized the two sides to visit Nagin in prison and take his deposition there. But when they went to Texarkana on March 15, Nagin “did not consent to having his deposition taken,” according to the order.
“Nagin made clear he would not participate despite the fact that he had been served a subpoena pursuant to this court’s order,” Roby wrote.
In the end, she ordered him to be brought to New Orleans, a decision both sides welcomed.
“The parties argue that Nagin possesses information material to these allegations, his testimony is essential in resolving the issues, and that his 10-year sentence makes a continuance impractical,” she wrote.
Federal Bureau of Prisons records show Nagin, now 60, is being housed at a facility in Oakdale, La. It's not clear when he was moved from Texarkana, or whether the move was related to his court date in New Orleans.
A bureau spokeswoman said that for security reasons, she could not disclose the reasons for Nagin's move. An official in Roby's office said that the order reflects Nagin's status at the time the order was written, April 18.
The Bureau of Prisons projects a release date for Nagin of May 25, 2023.