Seven years ago, West Bank landfill owner Fred Heebe and his stepfather, Jim Ward, pulled off a stunning coup, exposing an online-commenting scandal in U.S. Attorney Jim Letten’s office as a federal corruption investigation bore down on them.
The scandal unseated Letten and his top lieutenants, and led to a remarkable announcement from the U.S. Department of Justice: Its long-running probe into Heebe, Ward and their firm, River Birch, was going into the dustbin.
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But now the allegations the feds were exploring may be getting some new life.
A federal appeals court Wednesday restored civil racketeering claims filed by Waste Management Inc. against Heebe and Ward in a lawsuit that alleges disgraced former New Orleans Mayor Ray Nagin ordered the closure of a Waste Management landfill after Hurricane Katrina because Heebe and Ward bribed him.
The bribery claims — part of a larger overall complaint — had been thrown out in 2017 by U.S. District Judge Kurt Engelhardt, who in a short opinion said the evidence supporting the allegations was “far too speculative” to warrant a trial.
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Waste Management’s suit charges that Nagin’s reason for abruptly closing the Chef Menteur landfill in New Orleans East was that Ward and Heebe had hand-delivered $20,000 in campaign contributions to him — routed through four bogus shell companies, in violation of state law — just before the 2006 mayoral election.
A three-judge panel of the 5th U.S. Circuit Court of Appeals, where Engelhardt now sits, ruled 2-1 that those claims should be heard.
“The evidence, which is primarily circumstantial in nature, is sufficient for a jury to make positive findings on both plaintiff’s claim that the $20,000 payment to Nagin was a bribe and that the bribe was causally related to Nagin’s action in shuttering the Chef Menteur landfill,” the ruling says, in part.
The lawyers representing Heebe and Ward, Kyle Schonekas and Billy Gibbens, did not immediately return a call seeking comment.
Ruling to restore Waste Management’s claims were U.S. Circuit Judges W. Eugene Davis and Gregg Costa, while Judge Andrew S. Oldham dissented.
Davis was nominated to the appellate bench by President Ronald Reagan; Costa was nominated by President Barack Obama; Oldham was nominated by President Donald Trump.
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All three judges agreed that Engelhardt’s decision to grant “summary judgment” to River Birch — that is, to throw out the suit without a trial — was a close call. Generally, they all noted, courts err on the side of allowing claims to be considered by a jury, unless it’s crystal clear that a case lacks merit.
The majority ruling, written by Davis, notes that the pattern of facts supporting Waste Management’s claims, though circumstantial, might be seen as persuasive by a jury.
Nagin had used emergency executive authority to allow the Waste Management landfill to open about six months after Katrina, when dumping sites were desperately needed. Though it was politically controversial, the landfill was a cash cow for Waste Management, and Nagin championed it as a solution for speeding up the city’s recovery.
He also touted the results of tests that found the landfill posed few environmental hazards. But weeks later, Nagin perplexed many observers — including some on his staff, plus state regulators — by suddenly announcing he wouldn’t renew the landfill’s permit.
While it wasn't widely known at the time, depositions and media reports later said that four $5,000 checks Nagin received in the waning days of his re-election campaign were actually written by Heebe and Ward. In addition, the pair had recruited plaintiffs and bankrolled a lawsuit that challenged the Chef Menteur landfill’s permit on environmental grounds.
During a five-hour grilling in a New Orleans courtroom last week, former Mayor Ray Nagin said he didn’t remember making a phone call to River …
Also, three days before the landfill permit would need to be renewed, Ward had his chauffeur hand-deliver a note to Nagin reminding the mayor of the recent checks, according to court documents.
In the majority opinion, Davis wrote that while there was no evidence of a smoking gun that demonstrated a clear case of corruption, that type of evidence rarely exists in bribery cases.
He added that a jury could well find the pattern of facts persuasive, noting that “Nagin’s felony conviction for public bribery in a different scheme provides abundant fodder for impeaching his testimony.”
In short, Davis ruled that there was enough circumstantial evidence to let a jury decide. “This close case — where the evidence could support a verdict for either side, depending on the evidence the jury credits and the reasonable inferences drawn from that evidence — is tailor-made for a trial, not summary judgment,” he wrote.
In his dissent, Oldham noted that “this case certainly smells fishy,” but argued that there isn’t any real evidence that the payments from Heebe and Ward caused Nagin to act the way he did.
“There’s an innocent explanation,” he wrote. “The landfill was politically unpopular, and Nagin did not want to continue taking political heat for authorizing it.”
Oldham said he did not condone the behavior of Nagin, or of Ward and Heebe, but felt the facts did not support holding a trial.
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“I don’t like granting summary judgment to campaign-finance violators,” he wrote. “Nor do I like giving the benefit of the doubt to disgraced ex-government officials. But, in the absence of evidence, it’s what the law commands.”