The Wisner Trust: Two sides to the story

In February, Mayor Landrieu issued a press release addressing the controversy surrounding the Wisner Trust.  Today the Wisner heirs released their own press release addressing the issues.  Here are both press releases:

February 26, 2013

Dear Members of the Edward Wisner Donation Advisory Committee and Beneficiaries of the Edward Wisner Donation:

As Trustee of the Edward Wisner Donation, I am pleased to report that 2012 marked a year of unprecedented profitability and progress on many fronts. We successfully generated record income while simultaneously serving as sound environmental stewards of the property. We also began to bring transparency to the operations of the Edward Wisner Donation Advisory Committee.

In 2012, the Donation generated over $8 million in total income, which represents more revenue in a single year that at any point in the Donation's history. Excluding one-time income, 2012 still remains the year with the highest gross income since the Donation's inception. The outlook for 2013 remains similarly positive. I look forward to continuing to work with the Donation Advisory Committee to maximize the value of this important asset.

The Donation also took action in 2012 that will lead to a major restoration of Fourchon Beach. The Donation granted the State of Louisiana access to Fourchon Beach that will result in approximately $55 million of coastal restoration activity. We expect phase I of the Caminada Headlands project to begin construction by summer 2013. By working with the Coastal Protection and Restoration Authority, we anticipate phase II of the Caminada Headlands project to produce over $100 million of additional coastal restoration. Considering the vulnerability of Fourchon Beach and damage it has sustained, much work remains to be done and we are committed to seeing that it is.

I am also pleased to report that we have brought unprecedented transparency to the operation of the Edward Wisner Donation Advisory Committee, as well as the City's use of funds it receives from the Donation. The public is now welcome to attend monthly Donation Advisory Committee meetings. Further, the City Widely publicizes the availability of grants and discloses how every penny of money received from the Wisner Donation is spent. By increasing awareness of and access to funding, the City has been able to invest over $3 million with over 80 local nonprofit organizations and public agencies that meet the mission and intent of Edward Wisner's donation. From enrichment programming for at-risk youth to critical social services for those most in need, we are investing in high quality programs and services that address the city's greatest needs.

 2012 was not without its challenges. Litigation and response activities continue with regard to the BP / Deepwater Horizon oil spill. Further, with the Donation Advisory Committee unable to resolve multiple issues relative to the public versus private nature of the Donation, I exercised my authority as Trustee under state law and filed a legal petition seeking judicial instructions. By doing so, I have provided every member of the Donation Advisory Committee, and any beneficiary, the opportunity to present their opinion to a judge. With the resolution of this case, I am confident that the Donation Advisory Committee will have clear instructions from the judiciary on how to conduct its activities.

As we approach August 2014, which will mark the 1DO-year term of the Donation, I have requested that the Donation Advisory Committee conduct a valuation of the Donation's assets as soon as possible. Once complete, this information will provide the Donation Advisory Committee the necessary data to offer informed advice relative to what is in the best interest of the beneficiaries and the property. To be clear, I have made no decisions regarding what should happen at the expiration of the donation except that an informed dialogue must take place so that all Donation Advisory Committee members and beneficiaries have an opportunity to offer informed opinions.

Finally, the 1929 Agreement of Compromise and Satisfaction provides a safeguard for the Trustee that when I act on the advice and consent of the Advisory Committee, the action shall be binding on all beneficiaries. I am pleased to report that I have availed myself of that opportunity and have acted upon the advice and with the consent of the Donation Advisory Committee on decisions regarding the Donation's assets.

As Trustee, I am committed to continuing to work with the Edward Wisner Donation Advisory Committee to maximize the value of the Donation and protect the property. I am confident that we can accomplish this task in an open, transparent, and accountable manner, and fulfill the vision of Edward Wisner who made this generous donation to the City of New Orleans to be used for municipal, educational, and charitable purposes.

Sincerely,



Mitchell J. Landrieu


And the response from the Wisner heirs:

Re: Mayor Mitchell J. Landrieu’s February 26, 2013 Letter 

In the face of mounting public scrutiny and criticism coupled with pending litigation regarding the duties and obligations of the Mayor as Trustee of the Wisner Donation and his obligations with respect to the Wisner Donation Advisory Committee, the Mayor recently distributed a self-serving, self-congratulatory, and somewhat misleading letter to selected persons. I have prepared this statement in response to several claims set out in the Mayor’s letter:

1. Mayor’s Statement: 2012 was the year of unprecedented profitability and progress.

Comment: This is true; however, it is not a consequence of the Mayor’s acts. To the contrary, it was due to the hard work of the Edward Wisner Donation Advisory Committee (the “Committee”) as a whole and the commitment and initiative of Cathy Norman – until recently the Committee’s Secretary-Treasurer/Land Manager. Regrettably, Cathy resigned at the end of 2012, after some twenty years of dedicated service to the Committee due to the disruption and interference of the Mayor’s representative in the affairs of the Committee that she stated had created a hostile work environment. 

It is a fact that since the 1950s the gross income of the Committee has increased steadily, year by year, under the responsible oversight of the Committee and the dedicated and stellar management of the persons serving as Secretary-Treasurer of the Committee through those years. 

2. Mayor’s Statement: We also began to bring transparency to the operations of the Committee. 

Comment: Acting through his representative, the Mayor set up a separate office for receipt of grant applications. He appointed a separate committee to deliberate on the issuance of those grants and the proceedings of that committee have never been made public. The Edward Wisner Donation Advisory Committee was not allowed to be included in, or to review, the proceedings of that committee. Further, he has failed and refused to personally attend a single meeting of the Committee since he took his oath of office. 

3. Mayor’s Statement: The Donation took action in 2012 that will lead to a major restoration of Fourchon Beach. 

Comment: Efforts to stabilize and maintain Fourchon Beach, including erosion control, have been on-going and persistent since the 1960s. The driving force behind the successful efforts prior to her resignation was Cathy Norman in her capacity as Secretary-Treasurer/Land Manager of the Committee. Her able initiatives were routinely reported to and approved by the Committee. The Mayor has had little to no input in this historical effort.

4. Mayor’s Statement: . . . we have brought unprecedented transparency to the operation of the Edward Wisner Donation Advisory Committee, as well as the City’s use of the funds it receives from the Donation. 

Comment: To the contrary, the Mayor’s actions, and those of his representative on the Committee, have been anything but transparent. As merely one example, a curtain of secrecy has been drawn around many of the Mayor’s actions regarding the Trust, accomplished in part by the separate grants committee formed by the Mayor, comprised exclusively of appointees by him, to receive grant applications. The deliberations of that committee have not been shared with the Committee. 

5. Mayor’s Statement: Litigation and response activities continue with regard to the BP/Deepwater Horizon oil spill. 

Comment: Last fall, at the insistence and instruction of the Mayor’s representative, capable and experienced environmental attorneys working in behalf of the Committee for several years on the BP/Deepwater Horizon oil spill matter, were summarily replaced, without cause or the issuance of a Request For Proposal, as the Mayor’s representative insisted the Wisner Donation was required to make, by attorneys then concurrently representing the City. The beneficiaries consider that the new attorneys, who now represent both the Committee and the City’s separate, independent interests, have a prohibited conflict of interest. Moreover, Cathy Norman, who for years led the Committee’s litigation efforts in this matter, resigned in direct response to obstructive and disruptive activities on the part of the Mayor’s representative in regard to that effort. Thus, the Committee not only lost the collective knowledge of competent counsel but also that of Ms. Norman who from inception had led the entire effort against the defendants in the BP litigation in behalf of the Committee.

6. Mayor’s Statement: The Mayor states that he has filed a petition seeking judicial instructions on his conduct as Trustee of the Donation and, by doing so, that he has “provided every member of the Donation Advisory Committee, and any beneficiary, the opportunity to present their opinion to a judge.” 

Comment: This matter was under discussion in the Committee for months but, before the Committee acted, the Mayor peremptorily filed his own petition. The Committee, chaired by the Mayor’s representative, was determining through counsel the nature of the petition the Committee would file. The Mayor apparently wasn’t pleased with the petition the Committee was considering so he elected to file separately. Clearly, it is not the Mayor, but the law, which gives all beneficiaries the right to file suit to plead their cause. Several members of the Wisner Family have filed a separate cause of action seeking additional relief for the Mayor’s several breaches of fiduciary obligations both to the beneficiaries and to the Trust and asking the court to remove the Mayor as Trustee or to order him to conduct his activities in accordance with the relevant Trust documents and a 1930 final judgment concerning the same. 

7. Mayor’s Statement: The Mayor has requested that the Advisory Committee conduct evaluation of the Donation’s assets as soon as possible. 

Comment: It is without doubt that the assets of the Trust are more valuable when maintained jointly in trust for the beneficiaries than they would be in the event of a forced sale. That said, the significant expense associated with a valuation of the Trust’s assets is unnecessary and a waste of funds. Moreover, if the assets of the Trust are sold, the ongoing revenue stream used for decades for charitable purposes will terminate, no longer exist, and will no longer be available for those good purposes. 

8. Mayor’s Statement: He has made no decisions as to what should happen at the expiration of the Donation. 

Comment: As a legal matter, we believe the Trust exists in perpetuity. Furthermore, until Mayor Landrieu took office, no one questioned the benefit of extending the Trust. The only reason to appraise Trust property is if it is to be offered for sale, which would be a disaster. So, what are the Mayor’s true intentions? To be clear, the termination of the Trust and the sale of its properties would be catastrophic to the beneficiaries, for all those who benefit from the existence of the Trust, including the charities that have benefitted for decades, and would place the fragile environment of the Trust wetlands and coastal areas at risk. One of the purposes of the Wisner Family’s suit is to insure that the Trust continues in perpetuity. 

9. Mayor’s Statement: The 1929 Agreement of Compromise and Satisfaction provides a safeguard for the Trustee that when I act on the advice and consent of the Advisory Committee, the actions shall be binding on all beneficiaries. 

Comment: The Committee for many years, acting cooperatively with prior mayors, operated in compliance with the 1929 Compromise and the 1930 Judgment. It was not until the current Mayor assumed office that he refused to continue to act in accordance with those documents in an unprecedented attempt to usurp the Committee’s authority that was established as a safeguard not for him, but for the beneficiaries, and to prevent the Trustee from violating his obligations to the beneficiaries.

As set out in the litigation initiated by several of the Wisner family beneficiaries, and confirmed by the minutes of meetings of the Committee, the representative of the Mayor has insisted that the Mayor does not act on the advice and consent of the Committee, and the Trustee has consistently refused to do so. For example, he has refused to bring grant applications before the Committee for advice and consent, as required by the 1929 Compromise and the 1930 Judgment and instead has appointed a separate committee (wholly controlled by him) to avoid the safeguard against improper acts by the Trustee, namely, the advice and consent of the Committee. 

Conclusion: 

Edward Wisner generously donated tens of thousands of acres to be used for designated charitable purposes for the benefit of Tulane University, Charity Hospital, the Salvation Army, and the City of New Orleans. Those lands now have enormous value as a result of oil and gas exploration and production and property leases, including at Port Fourchon, the gateway to the oil and gas industry’s Gulf of Mexico operations. Much of Port Fourchon is located on the Trust’s property. As a consequence of the 1929 Compromise and the 1930 Judgment, the Mayor, as Trustee, is required to act upon the advice and with the consent of the Committee in all actions related to operations of the Trust, including using or distributing funds the City receives from the Trust. The By-Laws of the Committee also set out that obligation. The purpose of the advice and consent provision is to insure that the Trustee acts in accordance with the donated intent of Mr. Wisner and that the funds of the Trust are used for the express purposes set out in the Donation. By refusing to obtain the advice and consent of the Committee and willfully acting independently of that, the Mayor has usurped the Committee’s authority and has breached his obligations to the Trust and its beneficiaries. The Mayor’s acts are now the subject of pending litigation and I am optimistic that the court will either remove the Mayor or instruct him to act in accordance with these obligations. 

Sincerely,

Michael J. Peneguy 

Representative of the Wisner Heirs 

I have my own insight that I will add later tonight, just don't have time at the moment.