The Wisner Fund - Reboot

For those of you that have been following my reporting on the Wisner Trust issues with the current Mayoral administration....I have a major development for you.

I am going to attempt a brief synopsis of the previous posts regarding Wisner...it's incredibly complicated but just please try to get through this part and I'll give you some really easy stuff to understand in the next post.

If you recall, in part 2 of the Wisner chronicles I focused on the Wisner's litigation against BP for the ongoing effects of the 2010 BP Macondo oil spill disaster.  The Wisner property along Fourchon Beach was one of the hardest hit areas in the Gulf in respect to the continual onslaught of oil bombarding the Louisiana coast.

I chronicled this in a short video piece I produced here:

The Wisner Trust - Battle for the Bayou - Forrest Travica on Loop and Beach Integrity from Jason Berry on Vimeo.

I encourage you to read Part 2 to understand the under-the-table politics and back-room dealings that lead to Mayor Landrieu's administration firing Wisner's council in their case against BP, Waltzer and Wiygul, and replacing them with a select few of the attorneys who were appointed to the multi-district litigation case against BP by Judge Carl Barbier, also known as the PSC (Plaintiff Steering Committee) lawyers.

The documents in Part 2 show a clear collusion between the PSC/JV attorneys and BP attorneys regarding the Wisner case....BEFORE those attorneys were even authorized to represent Wisner.  

I know that is really hard to understand and I can't explain it to you if you don't already know the story.  But I will try, once again...please hang with me.

Mayor Landrieu launched a hostile takeover of the Wisner Committee and placed his own loyalists on the board in order to fulfill his agenda with not only the annual grants the Wisner Trust generated to the City, but also, the ongoing litigation the Trust had against BP for the oil spill.  For those in the know....we know that the Wisner petition against BP was/is perhaps the largest monetary amount left on the board against BP.  It's pretty much the last bargaining chip in the BP oil spill litigation.

It's a big fucking deal.  Please take note....the Wisner case against BP is the shit.  If you only understand one thing...understand this.

So last year, Mayor Landrieu, through his political prowess, ousted two Wisner Committee members from Tulane and LSU and replaced them with his own lackeys in order to create a majority vote in the 5 entity (vote) quorum that comprised the Edward Wisner Trust Advisory Committee.

 Immediately after he had successfully completed this coup, he had his lackeys fire the law firm, Waltzer and Wiygul, representing Wisner in their case against BP.  He replaced them, without an RFP, with the attorneys the City of New Orleans had already hired to represent the City's case against BP.

SUBTEXT:  Waltzer and Wiygul are environmental attorneys...this is their forte.  It's what they do.  The attorneys that were brought on, the PSC/JV attorneys, had little to no experience in environmental law and even less knowledge of the Wisner property and its best interests.

These attorneys also happened to be the same attorneys appointed to the "Plaintiff Steering Committee" by Judge Carl Barbier to represent all Gulf Coast claims...shrimpers, fisherman, restaurants, taxi drivers, tour operators, waiters, bartenders....you...yes...you.... under the Deepwater Horizon Economic Claims Center.

These law firms, that are ubiquitous in the City's multiple interests against BP are:

Herman, Herman, Katz and Cotlar;  Fayard and Honeycutt;  Domengeaux, Wright, Roy & Edwards.

Leger & Shaw  is also representing the City but they are not part of the multi-district litigation suit against BP.  For the record, Walt Leger's firm is not part of the PSC attorneys.  However, Leger's firm is representing LaFourche Parish, where the true cash generating part of the Wisner property is located, in their case against BP.

So the same small group of lawyers are not only dealing with the massive claims against BP for the private sector....they are also dealing with BP in respect to the City of New Orleans' grievances as well as the Wisner Trust ( the biggest claim on the board).

Oh....and....these same group of lawyers are representing the Orleans Parish Sheriff's Office in their claim against BP.  That leads me to the next post....stay tuned....

Double OH!!  Before I drop these new legal filings on you in the next post, I want you to remember this....Wisner property lies in only three parishes in Louisiana....burn this into your memory:

LaFourche
Jefferson
St. John

That's it.  Hang tight...

The Wisner Trust: Horse trading in Louisiana's wild, wild justice system

It was recently brought to my attention that the Wisner heirs had filed a complaint with the U.S district court, Eastern District of Louisiana in respect to the five JV attorneys hired by Mayor Mitch Landrieu to represent The Wisner Trust Advisory Committee in their case against BP for the damages inflicted upon Wisner properties during the 2010 Macondo oil spill.

I received that complaint last week.   Apparently it has already been dismissed by Federal Judge Sarah S. Vance:

Complaint against JV attorneys representing Wisner Trust v. BP

The five law firms I refer to as the "JV (joint venture) attorneys" are: Herman, Herman & Katz; Domengeuax, Wright, Roy & Edwards; Fayard & Honeycutt; Fred Herman and Leger & Shaw.  Three of these firms...Herman, Roy and Fayard....also serve on the Plaintiff Steering Committee for the Deepwater Horizon Economic Claims Center.

These JV attorneys also represent The City of New Orleans as well as Orleans Parish Prison in their lawsuits against BP.

Keep in mind that public entities are not allowed to enter the settlement program (DHECC), only private individuals.  Public claims against BP for the oil spill must be filed in open court.

The Great Wisner Train Robbery

For over a year, AZ has documented the shenanigans that occurred with the Wisner Trust Advisory Committee and how Mayor Landrieu, along with his appointee to the Trust, Michael Sherman, manipulated the five-seat committee in order to create a "hostile takeover":

American Zombie: The Wisner Fund - Battle for the Bayou - Part I

American Zombie: The Wisner Fund - Battle for the Bayou - Part 2

Immediately after two Mayoral cronies, Anthony Lorino for Tulane and Ron Gardner of LSU, were placed on the board by their respective entities; Michael Sherman called a vote to fire the Trust's existing legal counsel in their case against BP and replace them with the aforementioned JV attorneys.  Having the majority three-man vote needed to pass a motion, Sherman, Lorino and Gardner succeeded in their plan to fire the environmental law firm Waltzer and Wiygul in order to bring the JV attorneys on board.

After over a year of documenting this story, I've uncovered so many conflicts of interest with the JV attorneys and falsifications by City attorneys, specifically former Executive Counsel to the Mayor, Michael Sherman......it's difficult to keep up with them all.

In respect to conflict of interest issues, the most notable was in Part 2, when I posted an email chain between Sherman, Steve Herman and BP attorneys, Mark E. Holstein and  Nathan Block.  There, Herman was providing Holstein and Block with privileged information from a Wisner Trust Advisory Committee executive session.  Keep in mind....this is the plaintiff attorney providing the defense's attorney with privileged information from the claimant.  I'm not sure how a conflict of interest gets any more explicit than that and it's right there in black and white.

And the obfuscation and dissembling has continued even after Sherman quietly resigned his position as a city attorney to seek the brights lights of show business as an on-air legal analyst for WDSU (officially making him a public figure).

Indeed, the Mayor's counsel won a major victory in Orleans Civil District Court, per Ad Hoc Orleans Civil District Court (CDC) Judge Melvin Zeno, partially on the premise that The Wisner Trust Advisory Committee should have no oversight on the City's portion of the Wisner proceeds because an oversight body already existed in City Council.  Sherman's successor to the Wisner trustee postion, Erica Beck, sat through the entire hearing listening to her colleague, City Attorney Sharonda Williams, make the City Council oversight argument to Judge Zeno in order to avoid oversight from the Advisory Committee.

One month later Beck stood in front of City Council and told them no one in the Mayor's office envisioned City Council having oversight over the Wisner funds:

American Zombie: What wicked webs we weave...

One of the biggest revelations the blog uncovered was a complaint filed in may of 2013 against BP by the JV attorneys on behalf of the Orleans Parish Sheriffs Office (OPSO).  In that complaint, the JV attorneys claimed the Sheriffs Office had suffered economic losses, per taxes, because of the damage to Wisner property:

American Zombie: "Complaints"

1.  In item 31 of the Wisner complaint this grievance for OPSO is listed:  "...including New Orleans, was a foreseeable result of the oil spill. The adverse impacts to these industries resulted in reduced economic activity in New Orleans which is heavily dependent on the seafood, tourism and petrochemical industries. Due to the foreseeable adverse impact on these industries, the Sheriff of Orleans has lost, and continues to lose, ad valorem property tax revenues and other taxes."

The only problem with that is that there is no Wisner property in Orleans Parish.  This claim is fraudulent...pure and simple...and it was filed by the JV attorneys.

If you read the comment section of that post, you will see an exchange I had with an anonymous commenter who claimed the inclusion of Wisner in the Orleans Parish Sheriffs Office complaint was simply a "cut and paste" error.  A simple mistake on behalf of the law firm that filed it.  That would be a potentially multi-million dollar cut and paste error but the commenter assured me this happens all the time.

I'm curious if the legal filing was retracted or amended since last May....if not....it's still fraudulent... and it's still pending in Orleans Parish CDC.

I also noted that a "loss of natural resources" from Wisner land was claimed on behalf of the City and OPSO but was curiously absent from the Wisner claim filed by the JV attorneys:

Item #2  

Why would they fraudulently file a claim for OPSO in respect to Wisner while downplaying losses for the Wisner Trust, itself?  Let me provide a thesis.

Art of the horse trade:  

a clever and often secret agreement made by powerful people who are usually trying to get an advantage over others

Getting back to the Wisner heirs complaint filed with U.S district court, Eastern District of Louisiana  and the items within it I found to be of the greatest significance...the main problem with the JV attorneys representing the City, OPSO and Wisner is the potential for them to "horse trade", as Wisner heir Michael Peneguy refers to it on Page 28, item # 20 of the complaint.  The scenario being that the JV attorneys could be using the Wisner settlement as leverage to increase the amount on other settlements they are representing such as the City's or OPSO's:

After having followed this story for over a year, I believe this is exactly what is happening.  Keep in mind that any money awarded to Winser by BP has very strict guidelines in how it must be spent...but not so with the City.

In filing this complaint with  the U.S district court, Eastern District of Louisiana against the JV attorneys, the heirs hired University of Mississippi law professor, Benjamin Cooper, to offer a legal opinion on the possible conflict of interest issues.  In his affidavit, he offers the opinion that a conflict does indeed exist with bullet points to that effect in items 10 -12 on pages 10 through 13:

Click on the pic to expand or refer to the original document

These bullet points tellingly reflect Mayor Landrieu's MO with the Wisner Trust Advisory Committee since he took office and first placed Michael Sherman as his appointee.  Herman and Herman attorney and the point person for the JV attorneys on Wisner, Soren Giselson, echoes the Mayor's mantra perfectly, "...the ultimate decision-making authority should rest with the Mayor, as Trustee".

Waltzer and Wiygul were originally hired by the Committee after an extensive vetting process to find an environmental law firm that would have the best understanding of the damage incurred to the Wisner property from the BP spill.  Shortly after Sherman was appointed and the Committee was politcally stacked, W&W was then inexplicably removed at Sherman's suggestion and replaced with the JV attorneys.

But even with the crony votes on the Committee (Lorino and Gardner) following orders to approve the hiring of the JV attorneys the move was not congruent with Rule 1.0(e) of the Louisiana Rules of Professional Conduct regarding "Informed Consent" which states:

(e) “Informed consent” denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.   

In items 18 - 20 Cooper details how not only did they JV lawyers fail to obtain the required waiver from the Committee, they admitted that a potential conflict could exist due to their existing joint representation with the City of New Orleans in its case against BP.  However, they failed to explain to the Committee what that potential conflict may be.

Cooper also details how the JV attorneys presented the Committee with a proposed contract in the 11th hour, one day, before the September 25, 2012 meeting in which they were being asked to vote on its approval.  Cooper argues that there was no possible way the entire Committee could have vetted the JV attorneys' contract or sought outside legal advice as to their potential conflicts of interest within that 24-hour time frame.

Nonetheless, in that meeting Michael Sherman, Anthony Lorino, and Ron Gardner provided the 3 votes needed to contract the JV attorneys with the heirs and the Salvation Army casting the two minority dissenting votes.

Basically, the JV attorneys were steam-rolled in as the new counsel to replace Waltzer and Wiygul.  Later on in the complaint...we get a pretty good idea why.

In item number 23 on page 18, we discover that the JV attorneys created a contingency fee arrangment within their contract.  Cooper points out that under LRPC 1.5 (a), a lawyer "shall not make an agreement for, charge, or collect an unreasonable fee...".  He later points that there is almost no chance of the Donation not being able to recover a substantial damage amount and that even Soren Giselson has publicly acknowledged as much.  The Donation could have easily paid attorneys on an hourly basis and considering most of the leg work had already been accomplished by Waltzer and Wiygul the addition of a contingency fee is most likely inappropriate in this case.

He also points out that even though the heirs have requested the details of the contingency fee, the JV attorneys have failed to provide them.  Which brings me to a final point, independent of the complaint filed with the U.S district court, Eastern District of Louisiana.

There's only one Marshall in this town

Months ago, the heirs stopped receiving update statuses from the Wisner Field Inspector on the ongoing effects of the BP oil washing in on Wisner property.  Michael Peneguy contacted the Field Inspector by email asking why the update statuses had stopped.  The Field Inspector replied that he was told by JV attorney Soren Giselson to stop sending updates to the Advisory Committee.  After further inquiry by Peneguy to Giselson, City Attorney and current Mayoral appointee to the Advisory Committee, Erica Beck, informed Peneguy that she had instructed Giselson not to reply to him because she didn't want to "jeopardize the Committee's position with respect to its BP claim."

So understand this...Beck is ordering the JV attorneys not to share information with the Wisner Trust Advisory Committee....the counsel's clients.  Apparently the clients don't have the right to see information held by their attorneys in their own lawsuit.

This isn't surprising though if you look at the objectives of the Mayor and the JV attorneys.  The mayor believes the entire Trust is his...or rather the City's.  Actually I can't tell which.  The Lens calls actions like this being a bully (read the comment section)...the TP dutifully polished the turd and called it political hardball....other people call it being a productive asshole.

I call it not only unethical but quite possibly illegal.

The government, court and media roundup?

Both times I visited Wisner Beach, In February and October of 2013, to document the constant barrage of oil washing onshore there was a backlash from the Mayor's office towards the heirs for allowing me on the property.  The first trip I took in February resulted in Michael Sherman creating a "media policy" where the Advisory Committee would have to approve anyone wanting to visit the beach.  But Sherman didn't seem to think he needed Committee approval when he went on camera with John Snell of Fox 8.  Snell and Fox 8 had their cameras on the beach the same day I did.  (The beginning of that Snell story looks vaguely familiar does it not?)

Any rational legal person may look at this evidence and think at the very least there is an obvious malpractice suit waiting in the wings.  But the Mayor, his City attorneys and the JV attorneys may have even lassoed that bucking bronc....remember the City is now claiming that the heirs were never actually heirs to begin with.  Even though Ad Hoc Judge Zeno handed the mayor most everything he wanted in the hearing without much legal explanation, he refrained from ruling on the matter of the heirs' standing.  If the court decides the heirs aren't really heirs...they can't file a malpractice suit can they?

I recently made a post about "The $ Estate".  What I mean by The $ Estate is that I believe there are a a select few people within the city that have enough power and money to control all four estates of our democracy: executive, legislative, judicial and the press.  The three basic branches of government speak for themselves in this matter but the influence these power brokers have over the fourth estate, the press, may be a little harder to see.

If you scrape the surface, it reveals itself.  

I find it curious that the Times-Picayune's "Louisiana Purchased" series focused on politicians and campaign bundling but left Mayor Landrieu out of the fray.  I did point out back in February of 2013, a year ago, that three of the JV attorneys contributed at least 10%, possibly as high as 15% or more, of Mayor Landrieu's campaign contributions for 2012 through campaign bundling.  Herman and Herman alone accounted for approximately $71,000 of $755,882.

I guess it never occurred to the TP to look at the Mayor's campaign contributions.  I wonder why?

Seems like the $ Estate is truly above the justice system, eh?  Well....maybe not.  Stay tuned to AZ this week, cowpokes...this rodeo could get interesting.  

The Wisner Fund - Battle for the Bayou - Part I

Port Fourchon, Louisiana is perhaps the most valuable plot of land in the United States.  It is estimated that Fourchon supplies the United States with somewhere between 20 and 30% of its energy supply. Port Fourchon’s LOOP (Louisiana Offshore Oil Port) caters to about 90% of all deepwater rigs in the Gulf of Mexico while receiving about 15% of the country’s foreign oil imports.  The port’s pipeline distribution connects to over 50% of the nation’s refining capacity, producing over 1.5 million barrels of oil per day.

Port Fourchon as seen from Google Earth

The significance of Fourchon to this country is impossible to overstate.  This postage stamp of South Louisiana land is absolutely critical to the infrastructure of the United States.    

However, back in the late 1800’s, well before the offshore oil and gas boom, Fourchon and the area around it was considered mostly useless, valueless swampland, at least to the local Cajuns that populated the area.   

Enter one Edward Wisner, a Louisiana transplant from Athens, Michigan.  Wisner was a banker and newspaper editor who moved to Louisiana for health reasons.  Where everyone else saw undesirable swampland, Wisner saw the potential to develop the land and access its fertile soil for farming.  Over the next couple of decades Edward Wisner bought up over 1 million acres of land in South Louisiana, drained the water, and converted it into highly productive farmland which he then sold to farmers.  In fact, he was so successful his entrepreneurial efforts earned him the title, “Father of Reclamation”. (note:  the LL&E claim on this site may not be accurate) 

Before his death in March of 1915, Wisner made a donation in August, 1914, of approximately 52,000 acres of his most valuable land.  Much of this land is now considered to be Port Fourchon.  The land was put into a 100 year trust (that was the maximum amount a trust could be set up for at the time) that was to benefit 4 beneficiaries:  The City of New Orleans, Charity Hospital, Tulane University, and The Salvation Army.  In respect to the City, he put stipulations on how the money would be spent. Wisner intended the City funds to be spent for the use of beautification of the City, education and recreation for the children of the City, and the health of the citizens of the City.

Wisner, like many of us, had a great love for New Orleans.

An Aerial Overlay map of the Wisner property in Port Fourchon

A Grid map of the Wisner property in Port Fouchon

His estate contained about 1 million acres in the state of Louisiana,  much of which he left to his wife and children.  Unfortunately the attorneys and friends Wisner entrusted to take care of his wife and daughters after his death had other intentions and the family's fortune was lost before the end of 1917.  For the next 10 years the family got by as best they could until around 1928 when new attorneys reached out to Mary Jane and suggested that they may be able to revoke the Donation made in 1914.  The theory was that because the donation was of community property and the donation was not made for the benefit of the children of the marriage, the donation had to have been signed by both community owners.  Since Mary Jane Wisner had not signed the Donation, the attorneys argued it was invalid.  

After a year long legal battle, the parties reached an agreement on September 17, 1929.  The Compromise Agreement changed the ownership of the corpus of the trust to make the Wisner Family owners "in indivision" of 40% and the remainder divided among the original four beneficiaries named by Wisner.  On April 1, 1930, the Civil District Court of Orleans Parish issued a final judgment affirming the compromise. 

The official breakdown went like this:

City of New Orleans - 34.8 %

Tulane University - 12%

Charity Hospital - 12%

The Salvation Army 1.2%

Heirs - 40%

The Compromise Agreement also provided that an Advisory Committee oversee the Donation called the Edward Wisner Donation Advisory Committee.  This committee’s members would be comprised of the Mayor of New Orleans (or a mayoral appointee) and a representative from each of the remaining four trustees chosen at the discretion of each entity.  

According to the Compromise Agreement, the percentage of money received by the city, annually, from the trust can be spent at the Mayor’s discretion provided it falls within the stipulations set forth by Edward Wisner when the trust was created.  The seated mayor must first get the approval and consent of the Edward Wisner Donation Advisory Committee before the money is spent, in order to ensure that it is being used in a way that meets the stipulations set forth by Wisner. 

The goose that laid the golden egg 

Ok...that’s the background and basics of the Wisner Trust.  While the trust did not generate an exorbitant amount of money (close to nothing) in the early stages, the Gulf of Mexico oil and gas boom combined with the development of Port Fourchon has turned the land and the subsequent trust into a financial windfall.  The bulk of the revenues are generated by industrial leases followed by royalties and rents from oil and gas companies.  Also, other funds are generated from various rents and leases including campsites and fishing clubs. 

Through November, 2012, the annual income generated by the property amounted to $7,601,615.96.  That number is expected to continue to grow if the land remains parceled in its current state.
  

Historically, the trust has run pretty smoothly.  There were some minor disputes between former mayors and the Advisory Committee on how the City’s portion of the money could be spent, the most notable being a battle between former mayor, Moon Landrieu, and the Advisory Committee.  Moon tried to buy some garbage trucks for the city with the funds in the 70’s, which did not qualify as a valid expenditure under the bylaws of the trust.  The Advisory Committee hence filed suit and shut him down.

All and all, the fund has run pretty smoothly over the years as it continued to grow and has become a life-giving source of revenue for many arts and cultural entities around the city.  Among them, the New Orleans Museum of Art, the New Orleans Ballet Association, the Louisiana Philharmonic Orchestra, Marsalis Center for Music, the New Orleans Opera Association, Louisiana Children’s Musuem, The Preservation Resource Center and various other non-profit entities that focus on culture, education and the arts.   

What’s good for the goose is not so good for the gander

Since Mitch Landrieu took office there have been multiple battles arising between the heirs of the land and the Landrieu administration that have led to the heirs filing a lawsuit to remove the mayor from his position as a trustee.  Aside from the back room politics used to take control of the votes on the board, the lawsuit claims the mayor misappropriated over 2.4 million dollars in grant money without obtaining the required consent of the Advisory Committee. 

With the 2014 expiration date of the trust looming, the Landrieu administration seems to have launched an all out assault on the Advisory Committee in an effort to gain total control of the fund, even going so far as to attempt what could be considered a “hostile takeover” of the Committee.  Within the past year, two of the Advisory Committee members were curiously replaced by their sponsoring institutions, Tulane and LSU.  Both these new appointees to the committee have shown much more sympathy towards the mayor’s agenda in their voting record and seem to be falling in lockstep with Mayor Landrieu’s appointee to the board, Michael Sherman.  

In 2010, Landrieu halted all existing payments from the trust.  Even though the money from the trust is never co-mingled with city funds (it is deposited in an account called the Wisner Lands Trust Proceeds Account ), Landrieu has asserted that the money coming into the city is “the city’s money” and should be put into the general fund thereby overriding the need for the Advisory Committee to approve how it is spent.

In 2011, the mayor went so far as to create his own, separate, advisory committee to oversee the City’s portion of the proceeds.

The goose gets cooked and carved up?

City officials have always gazed with lustful eyes upon the Wisner funds with some even publicly stating that the city will take the whole cake when the trust ends because the seated mayor is the trustee. 

I was told that around 2000, there was a Wisner Advisory Council meeting where then city councilperson, Marlin Gusman, leaned over to a Wisner heir and said, “Don’t worry, in 2014 we’re going to take the whole thing.”  

For all of Gusman’s bravado,  the original trust agreement states that each of the five individual beneficiaries are owners of the land “in indivision”.  That means that when the trust ends, if there is a battle among the beneficiaries and they go to court, the interest in the land could be divided according to each individual beneficiary’s interest in the land.

This scenario could be catastrophic to the trust as a whole, and to the many city entities that rely on the money the trust generates.  I will discuss this scenario in a later post but understand that the current administration is under the assumption that the city will take over the entire trust and land in 2014....by hook or crook.  Or at the very least they will take over their 34.8% interest in the trust without having to meet the stipulations of the Advisory Committee on how the money should be spent.

The land could even be carved up and sold part and parcel.  If this happens it would create a large initial windfall for the City of New Orleans and its seated mayor, as well as those who purchase the land....a political win/win scenario.  Essentially, the goose that laid the golden egg could get carved up and consumed by guests who are lucky enough to be sitting at the dinner table.  However, the immediate gains would be a catastrophic loss in the long run when taking into consideration the ongoing revenue the property would generate for the city.

Do we want to enjoy cooked goose for a year?  Or eggs for decades?

The nest is oiled

In the meantime, the property is still being damaged by oil from the BP spill.  To this day, oil mats are steadily bombarding this fragile coastal area and the damage will continue to mount over decades.  I actually had the opportunity to see some of the damage on the property, firsthand, back in 2010 and it was heartbreaking to say the least.  We watched dolphins surfacing in areas that were heavily oiled and it was clear that this problem was not going away anytime soon.  

I will address the misappropriation issue in an subsequent post but the first issue I want to address (in Part II) is what I believe to be the most egregious...the actions by the City to remove the Wisner Trust’s previous council, Joel Waltzer and Robert Wiygul, in the lawsuit against BP for damages from the 2010 oil spill.  

The politics and subterfuge of this matter are complicated but the implications that could arise are massive.  Now that I’ve given you a basic background of the Wisner Trust, the Advisory Committee, and the City of New Orleans stake in it....stay tuned fellow zombies....we’re about to start digging in Part II.  

REFERENCES:  The following stories were referenced in compiling the information for this series of posts on the Wisner Trust battle:

Dispute jeopardizes future donations from benevolent organization - WWLT - Mike Perlstein

Mayor Landrieu chalks up victory in power struggle over Wisner Trust - FOX 8 - John Snell

Edward Wisner Donation Trust attorneys are replaced over objections from family, staff - Mark Schleifstein - Nola.com

Lawyers chosen by city of New Orleans will represent Wisner Trust in BP suit, federal judge rules - Mark Schleifstein - Nola.com

The Wisner Trust - How deep do the conflicts run?

If you've followed the Wisner story here on AZ, you know that some members of the Plaintiff Steering Committee for the BP settlement also serve as a team of joint venture (JV) attorneys for the City of New Orleans and The Wisner Trust Advisory Committee in their litigation against BP for economic and environmental damages sustained by the 2010 oil spill.

The JV attorneys that are also on the PSC are Stephen Herman, Calvin Fayard Jr., Walt Leger and James Roy.  A fifth attorney, Fred Herman, is also a member of the JV group representing CNO and Wisner but he is not on the PSC.

These JV attorneys were initially hired by Mayor Landrieu to represent the City's interests in their claims against BP.  They subsequently took over The Wisner Trust Advisory Committee's case through what amounted to a hostile takeover of the Committee's board members thanks to Mayor Landrieu's back room maneuvers.  The Trust was initially being represented by the environmental law firm Waltzer and Wiygul but Landrieu claimed they should be replaced because they had a conflict of interest due to a lawsuit they had pending against the City regarding the Old Gentilly Landfill.

The Wisner heirs, wanting to remain with Waltzer and Wiygul, filed a complaint stating that the JV attorneys were themselves conflicted due to their role as the City's attorneys and even their role as PSC attorneys.

Federal Judge Carl Barbier ruled that it was ok for the JV's to represent both stating:

"The mere fact that the city and the donation may have different types of claims does not create an actual conflict.  Consequently, the court will grant the motion to substitute counsel. If at some future time an actual conflict arises, the court can address the matter at that time."

Perhaps that time is upon us regarding JV firm Herman and Herman.

Turns out senior partner, Russ Herman, has a pending lawsuit against the City of New Orleans over the proposed Tracage residential development in the Warehouse District.  Herman first filed a complaint with the City back in November of 2013 objecting to the height of the building among other grievances.

Since then he's filed a lawsuit against the City of New Orleans, his own client, (as well as the Tracage developers) in an attempt to block the building's construction.  The suit is Herman v. City of New Orleans and the docket # in Orleans Parish Civil District Court is 2014-896.

This is the exact reason the Mayor used to justify the removal of Waltzer and Wiygul as the Trust's attorneys against BP.  I would expect the Mayor is going to remove Herman and Herman as the City's counsel and Wisner's council any day now?  I ain't holding my breath.

As luck would have it, City Council moved to waive the conflict back in April of this year.  Jump to about 02:10:18 in the video.

That's convenient but what say Judge Barbier?

It's become brazenly clear in the past few months that the conflicts of interest with these guys are numerous and detrimental to both the City and the Wisner Trust.  It's also become brazenly clear they are not environmental lawyers and were not properly vetted to handle the Wisner case which at its core is an environmental lawsuit.

In a recent memo regarding complaints against BP for abandoning the clean up on Wisner Beach, BP seems to be keenly aware to the bogus claim the JV attorney's filed on behalf of the Orleans Parish Sheriff's Office for damages incurred to Wisner property from the oil spill.  As I pointed out in this post, OPSO has no interest in Wisner land and could not have incurred any economic loss in respect to Wisner.

BP recently referred to the claims mentioned in that post on page 5 of this legal filing.

Let us also consider that one of these JV firms serving on the PSC turns out to be the firm mentioned on page 60 of the first Freeh report....the firm that allegedly filed fraudulent seafood claims with the DHECC.  If that surfaces, does it become ammunition for BP and how would it affect the City and Wisner's claims against them?

Take it one step further and consider if these conflicts are possibly being used by BP to squeeze the JV attorneys on the City's case, Wisner's case or even in their role as PSC attorneys.

I don't have a law degree but I understand there's a damn good reason why potential conflicts of interest in litigation should be taken with the utmost scrutiny.  The conflicts that exist here could have a staggering monetary effect on both the BP settlement class the PSC/JV attorneys represent as well as the City and Wisner's litigation.

The Wisner Trust: What's good for the goose...

I just received a rather biting email directed toward various local media resources from one of the Wisner heirs.  I'll forego the details of the email and simply publish the contents of the attached .pdf, a letter addressed to the Mayor's appointee to the Edward Wisner Donation Advisory Committee, Michael Sherman, asking him to tender his resignation immediately.

As I've reported previously, the Committee meetings are highly contentious with Sherman getting into repeated yelling matches with the heirs, including Stephen Green, the heir who authored this letter.  Sherman has previously demanded that Michael Peneguy be removed from the committee as the heirs' representative for being disruptive in the meetings.  Here's a couple of examples of a typical exchange between Sherman, Michael Peneguy and the heirs:

The Wisner Trust - Committee Meeting, Feb, 18, 2013 - Peneguy asks Sherman about shopping the sale of the land from Jason Berry on Vimeo.


The Wisner Trust - Committee Meeting, Feb, 18, 2013 - Agenda Item argument from Jason Berry on Vimeo.

It looks like Mr. Green took a chapter out of Mr. Sherman's playbook and is now demanding that Sherman resign.  Here's the letter:

Dear Mr. Sherman,

On more than one occasion you have asked the Wisner Family to consider removing Michael Peneguy as its representative.  Our family is confident of Mr. Peneguy’s ability and wants him to continue to represent our interests, as he has proficiently done for over 20 years.  Your inappropriate and warrantless requests to ask for the removal of any Edward Wisner Donation Advisory Committee member are not without notice and for this and the reasons outlined below, I am asking for you to tender your resignation immediately.

Your time with the Edward Wisner Donation has been marred with a great deal of strife, much of which you have been responsible for as you have represented the Trustee, Mitchell Landrieu.  I am uncertain as to whether you are acting at the direction of the Trustee or if you are acting of your own accord.  Nevertheless, it has damaged the Donation and the charities that it serves to the point where a number of my family members have sought relief from the Court. 

The recent letter to the beneficiaries of the Edward Wisner Donation under the Trustee’s signature contained a number of inaccuracies.  I must assume that this was authored by an individual who knows very little about the Donation or an individual whose agenda is self serving and who seeks to damage Edward Wisner’s legacy and his gift to the citizens and charities of New Orleans.  It is unclear who actually wrote that letter, the Trustee or his representative.

Your recent attempts to broker the sale of the Wisner Donation property, without the Committee’s knowledge, to numerous parties and entities have not gone unnoticed.  I am also aware of your manipulative actions and threats directed at Cathy Norman, the former Secretary-Treasurer of the past 20 years. Those actions and threats were so offensive that it caused Ms. Norman to tender her own resignation.  If nothing else, those actions alone have placed the Donation in great danger at such a crucial time in its history.

Your destructive actions are many and the list above is merely a sampling of your improper behavior. 

So that the Edward Wisner Donation Advisory Committee can continue with its work, I ask that you resign your position representing the Trustee and the City of New Orleans.

Respectfully,

Stephen J Green 
Wisner Family Member

"Complaints"

On April 20, 2013, three legal "complaints" were filed by the law firm, Herman, Herman, & Katz, on behalf of three independent clients they are representing in their case against BP for damages inflicted in the 2010 Macondo disaster.

Two of these clients are de facto public entities:  The City of New Orleans and The Orleans Parish Sheriff's Office.

One of these client's, The Wisner Trust, status as a public or private entity is still in dispute....it is currently being dealt with in Orleans Parish Civil Court by Judge Lloyd Medley (everyone say hi to Judge Medley).

Here are the complaints filed per entity...I encourage you to read all of them...carefully:

The City of New Orleans

Marlin Gusman (Orleans Parish Sheriffs Office)

The Wisner Trust

So there are three separate claims being filed here against BP by three separate entities yet they are all being represented by the same legal counsel and they were all filed on the same day, April 20, 2013 (as fate would have it...the anniversary of the oil spill).

In respect to the Wisner complaint, the Edward Wisner Trust Advisory Committee was not made aware of this April 20, 2013 filing until May 9, 2013.  So...the legal counsel was acting without the consent of the Committee.

There are two glaring issues with the Wisner filing that I want to point out but in this post I'm just going to present the first one:

1.  In item 31 of the Wisner complaint this grievance is listed:  "...including New Orleans, was a foreseeable result of the oil spill. The adverse impacts to these industries resulted in reduced economic activity in New Orleans which is heavily dependent on the seafood, tourism and petrochemical industries. Due to the foreseeable adverse impact on these industries, the Sheriff of Orleans has lost, and continues to lose, ad valorem property tax revenues and other taxes."

Now, dear readers, I need you to refer to the previous post.  If you did your homework you would know that the Wisner property lies in three parishes:  St. John, Jefferson, and LaFourche.

Noticeably absent in that list is Orleans.  Our beloved Orleans is absent because there is not a fucking square inch of Wisner property in Orleans Parish.  Nada....none....no shit.

How can the Sheriff of Orleans Parish claim a loss on ad valorem property tax revenues and "other taxes" if Orleans doesn't even host a square inch of Wisner property.  That's one helluva trick.

One could argue that the attorney(s) writing this complaint was/were not aware that Wisner had no property in Orleans.

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Of course, if one did make that argument...it would draw into question the competence of Wisner's legal council.  How could the legal council for Wisner not even know where the property was located?  And why would they even inject the Sheriff of Orleans into Wisner's claim in the first place if the Sheriff of Orleans already had a separate complaint against BP.... a claim that they, Herman, Herman, & Katz, were representing?

Is there even a window of plausible deniability here?  I'd love to hear it.

Jeez....those are pregnant questions, huh?

If you have time, please read Part 2.  I will follow up with my second point on this matter tomorrow....and believe me...it's going to get much sloppier.





  

The Wisner Trust - September 24, 2013 Hearing

The hearing on Tuesday went about like I expected it to, although I was left more confused on some matters than I was before I went in.  I think I've got a pretty good idea how this may play out and I'll play armchair court forecaster and give you my predictions as well as giving you the salient moments of the hearing.

Right out of the gate, let me boil down the three main points this hearing was meant to address:

1.  Perpetuity and standing - Is the Wisner Trust perpetual and are the heirs really heirs as challenged by the Mayor.

2.  Public or Private - Is the Trust a public or private entity.

3.  Breach of fiduciary duty - Has the Mayor breached his fiduciary duties as the Trustee of the Edward Wisner Donation Advisory Committee and should he be subsequently removed as the Trustee.

I'm going to take these points on individually even though they were addressed at different stages throughout the hearing.

Perpetual Motion

The most important point is obviously the perpetuity issue.  The Mayor is arguing that the trust should dissolve in 2014 and even went so far as to say that the heirs weren't really heirs at all.  Landrieu is essentially arguing that the "heirs" listed as beneficiaries in the Compromise Agreement ended with the death of Ed Wisner's daughters.

The heirs lawyers, led by Daniel Lund of the Montgomery Barnett law firm, refute the dissolution claim based not only on the wording of the original donation but also on a law passed by the Louisiana legislature in 1920 which declared all Louisiana charitable trusts as perpetual unless an express reserve is made to dissolve the said trust.  The law was also made retroactive so it covered charitable trusts already in existence.

Hey, you know what?  While we're on this subject, let me lay out a brief timeline of the history of the Trust for future reference:

1914 - Edward Wisner makes the donation.

1915 - Edward Wisner dies and also leaves a significant portion of his wealth to his wife, Mary Jane and two daughters, Elizabeth and Rowena.

A young and old portrait of Mary Jane Wisner - Tulane University Special Collections

1920 - The Louisiana legislature passes Act 167 outlining the parameters for charitable trusts.  Section 1 of the Act states the following:

Be it enacted by the General Assembly of the State of Louisiana, that wherever one or more persons, individuals or corporations has donated, subscribed, contributed or paid into a fixed or certain sum or amount of money or property, and dedicated it to some charitable, benevolent or eleemosynary user or purpose, whether such dedication appears in an act of charter, articles of incorporation, declaration of trust or otherwise, and have not expressly reserved in such dedication the right to dissolve, abolish or destroy the trust or dedication thus made, the said trust and dedication of funds or property for such purpose, as declared, shall remain and continue forever so long as there is a competent person or institution to administer, direct, carry out, or execute the trust, dedication, etc. 

The Wisner Trust did not, "...expressly reserve in such dedication the right to dissolve, abolish or destroy...", itself, as Lund argued in the hearing.

1915 through 1920's -  Trusted friend of Edward Wisner, co-executor of the Wisner estate and legal counsel to the widowed Mary Jane Wisner, Wear F. Milling, flips his loyalty to the Wisner family after Ed's death and begins a series of underhanded scams along with a businessman from Chicago, Charles T. Knapp, to rob the Wisner ladies of their estate and inheritance.  The assets obtained through this land and estate theft are eventually dumped into a company called the Louisiana Land and Exploration Company.  The wealth accrued by this company from the Wisner assets becomes enormous after the discovery of oil and gas in Southern Louisiana and will go on to shape the political landscape of the city and the state in profound ways.  This information isn't directly related to the evolution of the Trust itself but it is a critical part of the story in understanding the plight and motivation of Mary Jane Wisner in the wake of her husband's death.

1928 - By this time, Mary, Rowena and Elizabeth have been almost completely fleeced by Milling and company.  New, more honest, legal counsel approaches Mary Jane and makes the case that she never approved the creation of the Trust and could therefore nullify it and reclaim the Trust's assets.  The Wisner ladies file suit in Orleans Civil District Court.

1929 - An Agreement of Compromise and Satisfaction is reached by all parties in the Trust dividing beneficiaries in division with the following percentages in ownership:

City of New Orleans - 34.8 %

Tulane University - 12%

Charity Hospital - 12%

The Salvation Army 1.2%

Heirs - 40%

1930 - There is a judgement executed by the Orleans Civil District Court incorporating the Compromise Agreement.

The City argument is primarily based on an item in paragraph two of the Compromise Agreement which states, "...to the extent in the aggregate for the three of Forty Per Cent (40%) of the rights, interests, revenues and profits heretofore derived from the said estate and of the proceeds of the trust estate when and if sold..."  According to the City, this creates a "right of segregation" with the Trust.  In other words the City maintains that the heirs and apparently the other beneficiaries are only entitled to the income of the underlying assets of the Trust and not the assets themselves.

But they seem to be ignoring paragraph four in the Agreement which changes the right of segregation to an "ownership in division", "...hereby release, abandon and forego the right of segregation conferred upon them by the terms of said act of donation, and agree that said donated property shall be held in division and administered by the Trustee during the trust period as a whole...".  That demand should legally make all the beneficiaries owners of the actual property and underlying assets, not just the income.

Aside from the battle over the interpretation of the Compromise Agreement's text, the City put forth other arguments regarding common practices in the state.

In closing comments, the City's lead attorney on Wisner litigation, Adam Swensek, also made the argument that because the Trust contains a private beneficiary, it's a mixed trust and the state has never ruled that mixed trusts could be held in perpetuity.  Sighting some cases to support that claim, he also focused on the comments of Wisner heir and appointee to the Advisory Committee, Michael Peneguy, who testified that the heirs had been actively trying to negotiate an extension of the Trust with the City and other beneficiaries since Peneguy took his position on the Advisory Committee in 1984.

Apparently the argument was that since the heirs had been unable to successfully negotiate a compromise to extend the Trust...it must not be perpetual.  There have been five mayors since 1984, Dutch Morial, Sidney Barthelemy, Marc Morial, Ray Nagin, and now Mitch Landrieu so I suppose they were suggesting that because none of these men were willing to extend the Trust while in office, that negates the validity of perpetuity.  I'm not sure how political opinion on the part of these past mayors has anything to do with the letter of the law but that appeared to be the City's argument, nonetheless.

Prediction:  The judge will rule the Trust is perpetual and the heirs have standing.  I don't see how it could go any other way, even though I'm not a lawyer and have no "#standing" to make that assessment.  There simply didn't seem to be any real legal basis to justify the City's argument.

Noteworthy:  A lawyer for LSU stood up after both parties made their closing arguments and very poignantly restated the organization's opinion that they believe the Trust to be perpetual.  He was careful to note that the issue of perpetuity is the only item being addressed that the school is taking an opinion on and urged Judge Zeno to make an expeditious decision on the matter.

Private or Public?

On the second item, the Trust's status as a private or public entity, the argument really boiled down to how the Trust has operated historically.  The City argues that because the Trust has never paid a land tax in Lafourche, St. John and Jefferson Parishes, that it must be considered a public entity.  The heirs argue that the Trust has filed a tax return every year since its inception and is viewed by the IRS as a private entity, not public.

The City also referred to two Louisiana Attorney General opinions from 1949 and 1980 in which they referred to the Trust as a public entity.  Both opinions were in respect to paying property tax because the LaFourche Parish assessor wanted to add the Wisner property to the parish's tax rolls.  While it provides some background on the matter, the court is in no way bound by an Attorney General's opinion.

It's also important to note that although the Trust doesn't pay land taxes the heirs do pay taxes on the income they receive from the Trust.

The argument is also interesting because Tulane University, one of the beneficiaries, is a private entity that doesn't pay property taxes here in Orleans Parish.  If the City is truly concerned about Orleans and neighboring Parishes missing out on property taxes from a private entity it seems like they should be taking Tulane to court as well.

While the private/public issue was the least debated item of the day, it has some pretty large implications for the future of the Trust.

Prediction: This is a tough one...but I think it will be ruled as a public entity and will therefore be subject to public records requests, open meeting laws, etc.  That's just a hunch....I'm not a lawyer.

I'm actually OK with that decision because this Trust affects so many aspects of the City.

Trust buster or champion of transparency?

So that brings us to item three and what I thought was by far the most serious and debated item in the hearing, whether or not Mayor Landrieu has breached his fiduciary duty as Trustee of the Advisory Committee.

As Andrew Vanacore pointed out in his story in the Advocate, witness and former Secretary-Treasurer for the Advisory Committee, Cathy Norman, testified under the questioning of Lund that the Mayor immediately began to create a hostile environment with the Advisory Committee upon taking office.  I don't need to dredge all that back up in this post, but I have plenty of examples of that just go back through the blog and you'll witness a taste of the horror in 720p.

All and all, Norman's testimony was rather uneventful on both sides but during her testimony it was noted that the City completely changed their methods of accounting from the previous administration and that they stopped running the applications for the City's Wisner grants through the Advisory Committee.  In fact, for a period of time the City stopped providing the Advisory Committee with accounting reports, altogether.

Swensek kept making a point to note that none of the other beneficiaries were required to consult with the Advisory Committee on how they spent their share of the Trust's income.  He even asked Michael Peneguy, on the stand, how much of their proceeds from the Trust he and the other heirs spent on charity.  That has absolutely no bearing on the case but hay was made of it.

Later on during the closing statements, Judge Zeno asked Lund why he thought the Trust specified that the City was the only beneficiary who must consult with the Advisory Committee before deciding how their share of the Wisner funds should be spent.  Lund noted that he could only speculate, but, "The obvious answer is politics!"  He went on to muse that the authors of the Compromise Agreement may have been concerned that the money would be misappropriated by the City if there was not some body of oversight to make sure the funds were being used for their intended purpose.

Lund also pointed out that regardless of the motivation of the authors, the Agreement of Compromise clearly states that "...the Mayor of the City of New Orleans, with the approval of the Commission Council (or its successor body), may act as such Trustee up on the advice and the with the consent of the majority of said Commissioners (the Advisory Committee members)...".   The City, on the other hand, has focused on the "may" part of that sentence to maintain that the Mayor is not legally bound to seek the Advisory Committee's approval.

But here's the problem, the Mayor acted on that assumption without it being officially clarified.  He even went so far as to set up a completely independent committee to assess applicants for the City's Wisner grants.  During the testimony of Erica Beck, Executive Counsel to the Mayor and current appointee on behalf of the Mayor to the Advisory Committee, it was revealed that the Mayor's newly created committee was originally composed entirely of employees of the Mayor's Office.  Later NORD Director, Vic Richard, was added to the Mayor's Wisner Committee who is not an employee of the Mayor's Office but he, too, was appointed to his job by the Mayor, himself.

Lund also asked Beck about donations from the City's Wisner fund that may have been made to the Mayor's NOLA FOR LIFE program.  Beck confirmed that 500k had been allocated to the program from Wisner but the money had not yet been disbursed.  Lund pointed out that in this situation, you have an oversight committee created by the Mayor designed to supersede the existing Advisory Committee, stacked with people who are not only loyalists to the Mayor but owe him their jobs, that voted to give 500k to an entity that the Mayor himself created when he took office.

That's kind of like Snow White creating a committee to decide who the fairest maiden in the land is and appointing the seven dwarves.  I have no idea where that metaphor came from.  I've been on the wagon for a while so forgive me, I have some crazy things running through my head.

The ethical argument here is whether or not the Mayor bypassed the legal check and balance system that had been established by the Compromise Agreement in order to spend the money the way he wanted.

The conversation became much more interesting to me when City Attorney, Sharonda Williams, argued in closing statements that the Mayor already had a check and balance system in place which was the existing branches of City government, the Mayor's Office vis-a-vis City Council.  She pointed out that the New Orleans City Code gives City Council oversight and control over the City's portion of the Wisner funds.

This is true....it's absolutely true although I don't have that portion of the City Code readily available to post.  I have read it and may have even posted it previously....I will get back to you with that.

When she said this, I nearly bust out laughing and I'm sure Judge Zeno would not have hesitated to throw me out of the courtroom or worse had I lost composure...luckily I didn't.  I have good reason to believe that City Council members have repeatedly asked the Mayor's Office for accounting statements and information regarding the City's actions with the money from the Trust and have received nothing....nada....just like the requests from the Advisory Committee.

In fact, Judge Zeno even asked Williams if City Council had made any inquiries to the Mayor's office regarding the Trust.  Sharonda furtively deflected the line of questioning saying she wasn't sure and that she would have to check on it.  I find it hard to believe one of the two city attorneys appointed to the Wisner litigation doesn't know if City Council is making inquiries into the operations and accounting of the City's portion of the Wisner funds.  That's a hard pill to swallow.

Prediction: I think Judge Zeno will rule in favor of the City on this matter and allow Mitch to keep the puppet board he's created to oversee the grant process and how the money is spent.  If he were to rule in favor of the heirs and have the Mayor removed as Trustee, it would open the door for all kinds of political nastiness and possibly even criminal nastiness.  I don't see that happening, even though I think it should.

Subverting the process of democracy should have consequences, methinks.

I'm going to stop here but I have a number of other observations I want to share later.

Ashe'

         

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.