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 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

Leaving so soon?

The City of New Orleans has issued a new RFP for legal services in the BP case:

2013-03-07 CNO Request for Legal Services BP

I am assuming this means that the current law firms, the ones I referred to as the JV attorneys in Part 2, Herman, Herman, Katz and Cotlar,  Fayard and Honeycutt,  Domengeaux, Wright, Roy &amp, Edwards Leger & Shaw are being let go.

It could also mean the City is seeking additional counsel on the matter but I seriously doubt that is the case.

This is an interesting turn of events.  If you read Part 2 of the Wisner chronicles, I brought up numerous potential conflicts of interest with these law firms serving as counsel for the Wisner property in their case against BP while simultaneously serving as counsel for the City of New Orleans as well as serving on the BP PSC (Plaintiff Steering Committee).  

Basically they have all the bases covered.  It's like they hit the lottery in litigating anything of significance against BP.   

Although, remember, that Leger & Shaw are not on the PSC.  It would be interesting if Leger & Shaw reapply under the new RFP and land the job, huh?  But Leger & Shaw may have another conflict of interest with Wisner interests if you take into account that they are representing LaFourche Parish in its case against BP.

Interesting times.  

My main question now is who will serve as counsel for the Wisner Trust?  These lawyers were originally moved into their position as Wisner counsel without an RFP.  If you read Part 2, you know the back room politics which took place in order for these lawyers to be placed as Wisner's counsel.

These lawyers were put into place as Wisner's council after they were already representing the City of New Orleans' interests.

This current RFP says it was released on March 7th and the deadline for submissions is March 18th.  Not a lot of time but this will have a significant impact on the Wisner Trust as it could be left in the lurch regarding legal representation against BP.  In fact, this continuous counsel shuffle could be considered a breach of fiduciary duty on the part of the Mayor as a trustee to the Committee.

This is conjecture, but it would appear to me that the conflicts of interest named in Part 2 may have led to the JV lawyers' exit....if, indeed, that is what is happening.  As stated, these lawyers also serve on the PSC and the law firms involved are asking for 600 million for their services in the BP case.  Their involvement with the City/Wisner case may be posing some serious problems for them and I suspect they may have just decided it is better to walk away from those interests in order to protect their financial interests as PSC attorneys.

By the way...are these PSC attorneys considered "Class Action" attorneys?  I think it's important that we figure that one out.

I am currently pursuing a separate story about the PSC attorneys and I have filed a FOIA request with the Deepwater Horizons Claims Center which I believe is being rejected but I have yet to receive the explanation for that rejection in the mail.  I hope to know more about that tomorrow but I would like to send out a plea for help, here on AZ, if there are any attorneys or freedom of information advocacy groups out there that could help me obtain the information I'm seeking.  I'm pretty much on my own here and I would like to file an appeal if I am rejected.  I would appreciate any help I can get.

Let's keep digging, zombies...there are bodies in these graves.   

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 Trust - Battle for the Bayou - Committee Meeting, Feb 18, 2013

Last Tuesday, I attended a committee meeting for the Wisner Trust.  This was a particularly interesting meeting for me because the Committee had invited Executive Director of Port Fourchon, Chett Chiasson, to deliver a presentation on the Port's future plans and how the Wisner land affects them.

I have uploaded the entire Chiasson presentation at the bottom of this post if you are so inclined to watch it.  It's fascinating stuff and it will give you a good idea of just how important the Port is to the state as well as to the country itself.

For those who don't have the 42 minutes to spare, I have edited what I thought was the most interesting exchange from the presentation in the following video.  One of the heirs, Stephen Green (not a Committee member), asked Chiasson what they would like to see happen with the Wisner land after the agreement expires in 2014:

The Wisner Trust - Committee Meeting, Feb, 18, 2013 - Chett Chiasson Comments on Port Fourchon's intent for the Wisner Land from Jason Berry on Vimeo.

Mayor Landrieu's appointee and Committee Chair, Michael Sherman, gave a closing response to Chiasson from the City:

The Wisner Trust - Committee Meeting, Feb, 18, 2013 - Closing remarks by Michael Sherman to Chett Chiason from Jason Berry on Vimeo.

This was a really interesting dialogue from Chiasson.  You can tell he's walking on eggshells here and he didn't want to say anything that would upset either side of the table but he did give a big clue as to the Port's intentions if the trust dissolves and the land goes up for sale.  He essentially stated that the land is simply too important for it to fall into the hands of a private landowner or worse multiple landowners.

This makes sense, think about it...a private landowner could not only potentially put the Loop and Fourchon at risk, they could hold the Port hostage every time the lease agreement comes up.  It would be a nightmare scenario for the Port.

But the real juicy part that I want to point out is that Chaisson stated that the only reason the Wisner land has any real value to it is because of the Port itself.  He then went on to say that if it went up for sale the Port would most likely be forced to act but...and this is a really big but....they would not expect to purchase the land at market value because the Port is the only real catalyst that drives the value of the land in the first place.

What does that mean?  I'm not exactly sure but I have a hunch.  I think he was suggesting the State of Louisiana may be forced to exercise eminent domain over the property if the City of New Orleans is intent on carving it up and selling it.  That could get interesting...especially if Mayor Landrieu makes a run at the Governor's office.  If eminent domain is invoked, it most likely would make the sale of the land a losing proposition to all the parties involved.

In Part 1.5, Ryan Berni stated that the City was exploring its options on what their intent for the land is and they would make no decision until they got a valuation on the land.  But that valuation may be useless if the State invokes eminent domain.

Another issue came up in the meeting which draws into question the City's true intent for the property.  I didn't understand what this question was when it was posed in the Committee meeting but I later had a discussion with one of the heirs, Mark Peneguy, outside the meeting room and it was explained to me.  The Committee appointee for the Wisner heirs asked Michael Sherman if he had been talking to Chett Chiasson and a Mr. Chouest about their interest in purchasing the land after the trust expires in 2014.  I was later told the Mr. Chouest being referred to was Laney Chouest, son of ship building magnate, Edison Chouest, and proprietor of NOLA Motorsports Park in Avondale.

Here is the exchange:

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

I called Mr. Chouest to ask him if the conversation had taken place but he didn't return my call.  Michael Sherman denied that he even knew Mr. Chouest so I haven't been able to confirm that this conversation took place.

However, if true, this is pretty disturbing.  If the chair of the Committee is already shopping the property it would imply the City is intent on its sale.  The timing of Chiasson's presentation and comments is also interesting because it may take the wind out of the sails of the Mayor's designs to sell the land.  I don't know, I'm speculating here.

Also, Sherman's claim that he doesn't even know Mr. Chouest is a head scratcher.  If you haven't been following Kevin's line of investigation that he is posting in the comment section of Part 2....you should check it out.  His posts deserve a blog unto itself.   He has posed a series of questions to Mr. Sherman that need to be answered about potential conflicts of interest he may have in regards to real estate investments vis-a-vis his position on the Wisner Committee.  Kevin has confirmed that Sherman had some dealings in a large plot of land located adjacent to Wisner property called Churchill Farms (Slabbed has blogged extensively on Churchill Farms).  In fact, it appears that Churchill Farms made a $3,096,032 real estate transaction with Motor Realty, LLC which turns out to be Laney Chouest's company.

Another interesting exchange took place in the meeting regarding the funds that have been deposited in the City's account from the Trust.  Originally, the agenda for the meeting had this item listed as a topic for discussion but it was removed by Michael Sherman before the meeting started without the knowledge of the other Committee members.  This is the conversation that ensued:

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

I will address the City's portion of the funding in Part 3, I'm still trying to acquire some information I need to publish.

Here is the full presentation Chiasson made to the Committee:

The Wisner Trust - Committee Meeting, Feb, 18, 2013 - Full Presentation to Committee from Chett Chiasson from Jason Berry on Vimeo.
    

The Wisner Fund - Battle for the Bayou - Part 1.5

Yesterday, I had the opportunity to speak with two members of Mayor Landrieu’s administration on the issue of the Wisner trust.  Director of Communications for the Mayor, Ryan Berni, and Mike Sherman, Director of Intergovernmental Affairs, Counsel to the Mayor and Wisner trust appointee.  They were kind enough to sit down with me and go over the city’s stance on the Wisner trust issues.  

Admittedly, I published part one without reaching out to the Mayor’s office for comment.  It’s not that I am lazy, it’s just that my attempts to get commentary from them on previous issues led me to believe that it would be futile for me to even try on this issue.   

I was wrong....so I'm now publishing an interjection...version 1.5.    

Mea culpa...I appreciate these gentlemen taking the time out of their busy schedules to speak with me about the Wisner issue.  And with their input, I hope I can provide some clarity and balance to AZ readers with this post.

The mayor’s thesis

Transparency....it’s the prime directive of the current administration as delineated to me by Mr. Berni and Mr. Sherman in our meeting.  They were very passionate to inform me that this administration believes the Wisner fund is a public entity and should therefore operate completely “above board” and in the public eye.  That includes the Advisory Committee meetings, expenditures and subsequent accounting, as well as any public records requests submitted to the city regarding the Wisner Trust.  

It was explained to me that they believe the trust has traditionally operated under a veil of secrecy and it is the mission of the current administration to lift this veil and shine a light on the Wisner funds.

With that development, I delayed part 2 and I am now publishing 1.5.  Forgive my incompetence. 

Let’s take a look at the bullet points Mr. Berni and Mr Sherman gave me to reiterate their thesis.

Nepotism?  

Berni and Sherman identified some specific instances in the history of the Wisner Trust that they believe show a clear case of nepotism.  Specifically, they pointed out that the brother of former Treasurer/Secretary, Cathy Norman, was contracted by the Advisory Committee for services in the wake of the BP oil spill.

From 2010 through 2012, Norman’s brother, Don Norman of Norman Wildlife Consulting, was hired to be an on site environmental liaison for the Wisner land in order to monitor wildlife populations and survey BP’s clean up efforts after the spill.  Norman Wildlife, Inc. is located in Shoreline, Washington but apparently Mr. Norman was traveling back to the area to perform the duties.

The administration was able to produce invoices paid to Don Norman that totaled over $100k over a three year period.

In response to the nepotism claim, a source close to the Wisner Trust provided me with the minutes from an August 2010 committee meeting showing a unanimous vote to bring Norman Consulting onboard.  The minutes also reflects that the Advisory Committee was having an issue finding other qualified candidates and there was a general consensus among all the board members that Don Norman would be best suited to handle the job.  One of the qualifiers in the arrangement was that Norman had also worked on the property prior to 2010 and had a detailed knowledge of the property.

(I am trying to get the minutes to this meeting online for download, having a few issues, hold tight...it will be there as public record)    

On face value there is certainly the appearance of nepotism but it’s important to distinguish that the heirs to the trust have always maintained they are a private entity, not public.  

This is a critical issue when considering the hiring of Don Norman.  Obviously the heirs have a special interest in the land, financially and emotionally.  They consider the property to be private and the money generated off it to be, essentially, a gift to the public domain.  The heirs consider themselves and the Committee to be the filter, if you will, of the proceeds that go to the city.  

It’s also important to note that Mrs. Norman had no authority or voting power on the Advisory Council in regards to the vote to hire Don Norman.  By definition, that excludes the nepotism charges but clearly the Wisner trust and the land has been treated as a guarded asset by the heirs.  The people entrusted to manage the land and the trust have traditionally had close ties to the folks who have a vested interest.  

This is one of those cavernous grey areas of social structure.  We must seek legal opinion in order to define the memes “public” and “private”.  

Following the nepotsim train of thought, Berni and Sherman also pointed out that the Treasurer/Secretary prior to Cathy Norman was Richard A. Peneguy, a Wisner family member and heir to the property.  

This is true.   

Here is a list of the people who have served as the Treasurer/Secretary from 1951 up to the present “Interim Treasurer/Secretary” who replaced Cathy Norman last week:

1.  Richard A. Peneguy 1951 until February 26, 1990, his date of death 

2.  Jerome P. Dickhaus took over in June 1990, after being placed therein by Sidney Barthelemy, with the approval of the Committee. Dickhaus died in 1992 

3.  Andre "Mac" Charitat occupied the office, on behalf of Mayor Barthelemy, but was not “officially appointed” as the "interim" secretary-treasurer.  A nationwide search was the conducted to find a qualified person to fill the spot 

4.   C. Cathy Norman, served from some time in late 1992 until her resignation effective January 26, 2013.  Cathy was selected from over 100 applications 

5.   L. Amanda Phillips is currently serving the Wisner trust as interim Treasurer/Secretary.  She was appointed in a special meeting on January 25, 2013, effective upon Cathy Norman’s departure.  It should be noted that the Advisory Committee hired Phillips, not the mayor.

The concern from Mr. Berni and Mr. Sherman is that Richard Peneguy was another instance of nepotism.

From the heirs point of view, they stressed that Richard devoted his life to the maintenance and well being of the land....he was passionate about the land's health.  I am not sure how Richard Peneguy was appointed to the Treasury/Secretary position but Cathy Norman was officially appointed to the position by the Advisory Committee after a submission for resumes.  

Is the mayor actually required to seek approval from the Advisory Committee?     

Another point that Sherman and Berni pointed out is that they do not believe the mayor is required to seek the approval of the Advisory Committee in how the city’s portion of the money is spent.  They provided me with two legal opinions on the matter that were obtained by previous mayors, Marc Morial and Sydney Barthelemy:

Legal opinions on Mayor’s obligation to the Wisner Advisory Committee

They also pointed out that in the original 1929 Agreement of Compromise, the language regarding the mayor’s requirement to get the Advisory Committee’s approval before spending the City’s share of the money does not state the mayor MUST act with the consent of the majority of the Advisory Committee.  It states that he MAY act:

“ ....The right of appointment herein given may be exercised by the heirs, trustee, successors, or assigns of said parties; 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 with the consent of the majority of said Commissioners, and such action, so authorized, shall be binding on all parties hereto.”

I’ll refrain from playing armchair attorney on this and let the professionals ascertain whether or not the Mayor must obtain the majority consent of the committee before he allocates the City’s portion of the money.  

I’m a blogger, I can’t offer legal opinions but I can certainly offer semantic opinions.  We can discuss this further in the comment section. 

Tax status 

The City also points out that the Wisner fund does not pay taxes to Lafourche Parish because the Wisner land is considered to be a public entity and is therefore tax exempt.  They state that if the land is truly a private entity, the heirs should be required to pay taxes on their proceeds from the trust.  

I don’t want to speculate too much on this issue, I would just ask you to first read this 1949 opinion from then Louisiana Attorney General, John L. Madden:

“The Commission would be inclined to the opinion that the interest of the last named parties in the property should be assessed even if we adopted the view that their respective interests were merely held in trust.  However, the Commission is of the opinion that neither the Salvation Army nor the Widow and the Heirs of Wisner have a taxable interest in said property.  The title to all of the property, under the Agreement of compromise is vested in the City of New Orleans.  The City of New Orleans is obligated only to pay to the parties to the compromise agreement a certain proportion of the revenues derived from the property.  As the Commission sees it, the Wisner Heirs and the Salvation Army agreed in effect that in consideration of the Trustee paying them a certain percentage of the revenues they would surrender any right whatsoever held by them in the property. 

“In view of the fact that the Widow and Heirs of Wisner voluntarily surrendered whatever color of title they  may have had in this property to these public and quasi-public agencies, the Parish of Lafourche is without interest in the matter.

“...The Commission further declares the Wisner lands as described in the judgment referred to above exempt from future assessment, as long as same are held by the City of New Orleans under the terms and conditions of said judgment.”

Having subscribed fully to the ruling made by the Louisiana Tax Commission, and for the reasons set forth in its ruling, we advise you that, in our opinion, the lands aforesaid are not subject to ad valorem taxation in Lafourche Parish, Louisiana.”

Now keep in mind this is merely an opinion from the AG back in 1949, it is not an official mandate from the bench.  However the ruling pre-qualifies the tax exemption on the notion that the heirs surrendered all titles to the land.  (Not just titles but “colors” of titles! Whoever wrote that ruling was a spry one, fo’ true).  

 Remember this opinion because it will come into play in future litigation.

The mayor’s intent

In the previous post I spun a web of speculation on what the mayor’s intent might be with the land.  Turns out the mayor and his peeps took exception to my pontifications.  

Ryan Berni gracefully voiced their displeasure with my musings...hat tip Mr. Berni.  I admit that I was speculating on what the mayor’s intent for the Wisner property is in the last post, I don’t apologize for it...but I admit that it is pure speculation. 

Taking the previous post into account, I had the opportunity to ask the Landrieu admin. what their intent is with the land and the trust.  In 2014 the trust ends and anything can happen.

The following quote is Berni's response for what the mayor's plans are for the land and the trust:    

"The mayor has been very clear that what needs to happen is that an evaluation needs to take place of all the assets (the Advisory Committee approved an evaluation two meetings ago) and that until an evaluation takes place an informed dialogue can't take place.  When the evaluation takes place we intend to have a robust dialogue with the Advisory Committee and all the beneficiaries.  Absolutely no decision has been made on what happens in August of 2014, what has been determined is that, process-wise, that valuation must be done so that everyone can make an informed decision. "

Once the land is evaluated, I would imagine the race will officially be on to the August, 2014 expiration date. 

Summary

With that, I have addressed the majority of the grievances and viewpoints Berni and Sherman shared with me on behalf of the Mayor’s administration.  The following is my personal take on these items.     

Every one who reads this blog knows that I would martyr myself on the altar of transparency, the 1st amendment and the need for open government.  If an entity is public , I won't hesitate to try and tilt any windmill to liberate information from that entity in order to inform the public as to what is going on.  In fact, that’s exactly what led me into this story in the first place. 

But...but...in this case...Wisner....I want to point out that the money generated off this land is not a tax on the citizens of the “state”.  It is essentially a gift from a private citizen, a century ago, who gave it to the city with very specific intent.  The question of whether or not the trust is private or public is not only critical to this situation, it is pervasive. 

If the trust truly is private, as the federal income tax returns would suggest, then it’s really none of the public’s business who the Committee has hired to oversee the land and put in as treasurer/secretary or any other position.  

If the trust is a public entity, then it is absolutely in the City’s interest as to who is hired, how they were hired, and how the land itself is being maintained.

I am not a lawyer but the legal decision as to wether or not this trust is public or private will define everything about it...how it is divided, how the money is allocated, etc.

On an ethical level, the Mayor’s office is claiming that their only goal is to create greater transparency in government and open the curtains on the Wisner fund.  To the current administration’s credit, Mayor Landrieu’s office has increased the profile of the trust and even provided grant proposal guidelines on the City’s website.  This is good stuff...this is what we need....bravo!  

However, I have other concerns about what is going on with Wisner and I will air them out in Part 2.

Personal perspective 

My overall concern...I mean my personal concern....is the land itself.  I would like to see the land left intact and not screwed with in any way.  It’s not only a wildlife preserve, it’s an environmental laboratory for that region.  The bulk of the money generated off the property is pretty much written in stone, it’s simply a matter of the pipes running underneath the land. 

The way the land is preserved or exploited is up to the intent of the Advisory Committee.  I am very worried that the committee is being compromised for political gains and hence the health of the land will suffer.  

For example, LaFourche Parish wants to encourage tourism with the land by creating beach areas that would include the construction of an RV park.  They are even pushing for ATV’s and other vehicles to be allowed access to drive over the beaches.  

The Wisner land is one of the most rapidly eroding pieces of property in the country, losing an average of 46 feet of coastal retreat a year.  It lost over 100 feet in Hurricane Issac last year.  

Allowing vehicle traffic on these beaches is only going to accelerate the loss of the land and wreak havoc on nesting birds and other wildlife.  Building an RV park on the land is a ridiculous notion as it will almost certainly be wiped out in the next major storm event.  Not to mention the damage the recreational vehicles will do to the land itself. 

Trying to turn this land into a tourist area is a zero sum equation.   

Putting all my personal opinions aside, there are multiple pipelines running under the proposed beach of the Wisner property that carry a large portion of the country’s oil and gas supply.  Some of these pipelines have already been exposed from sub-terra by recent storm activity.  The combination of public access to this area with the critical subterranean infrastructure is a recipe for disaster. 

Imagine allowing people to ride their ATVs out on the beach and light a campfire next to an exposed natural gas pipeline....I’m not kidding....that is a scenario based in reality.

I hope to provide some video perspective to the story soon.  Until then....

.....part 2 is on deck.... it will be out in short order.

The Wisner Fund - Battle for the Bayou - Part 2

In the wake of the BP oil spill, it became apparent that the structured settlement process set up by the Obama administration was a woefully inadequate method of dealing with the enormous amount of damage the Macondo spill unleashed on Louisiana and the Gulf Coast. 

President Obama’s handpicked arbitrator, Kenneth Feinberg, was officially ruled  “not neutral” by Federal Judge Carl Barbier in February of 2011.  Before Barbier ever smacked that gavel, the blogosphere pointed out that Feinberg had clear conflicts of interest.  We were also the first to ask if Feinberg was working on a commission based salary...turns out he was.

The solution to reboot the claims process was to create a “Plaintiffs Steering Committee (PSC)”.   These qualified lawyers would be selected by Barbier to represent the people along the Gulf Coast who had been decimated by the ongoing effects of the BP spill.  Hence, Barbier issued a request for attorneys residing in the states affected by the spill to submit resumes to in order to win a spot on the PSC. 

The list of Babier’s appointees are contained in this pretrial order:

PSC attorney appointments

I actually obtained the resume submissions to Barbier back in December of 2010 per a public records request.  I found it interesting that at least one of the PSC appointee’s, Calvin Fayard, resume was nowhere to be found in the documents I received (we found it...see update #1 at the very bottom).  I invite everyone to take a look and see if I missed something.

PSC Resume submissions  

Any person or business filing a claim against BP is not forced to join the PSC process.  They still have the right to file claims independently against BP and for entities that were affected most heavily by the spill, that would seem to be the logical path.  

Also, public entities are not allowed to join the PSC structured settlement, they must arbitrate independently of the Plaintiff Steering Committee process.

Three of these PSC attorneys were also lucky enough to be chosen by the City of New Orleans to represent the City’s case against BP for damages from the oil spill.  The City hired a team of 4 law firms in total to represent them in their case against BP.   

In this post, I will refer to these attorneys as the “joint venture” attorneys or JV attorneys.  

Who are the JV attorneys?  

The three law firms currently representing the city that also have members on the PSC are:   Herman, Herman, Katz and Cotlar;  Fayard and Honeycutt;  Domengeaux, Wright, Roy & Edwards.  

Also, the firm Leger & Shaw is part of the JV attorney team but they do not have a member of their firm serving on the PSC. 

The JV attorneys were officially hired by the City of New Orleans on December 21, 2011.

No conflict here.  Wait...there's a conflict here!

In July of 2010, The Wisner Trust Advisory Committee hired the law firm, Waltzer and Wiygul, to represent the trustees’ claims against BP for the damage caused by the oil spill.  

No RFP (Request for Proposal) was used to hire Waltzer & Wiygul.  At the time Waltzer and Wiygul was hired, the committee members considered the trust to be a private entity, not public.  

In fact, the heirs to the property still consider the entity to be private. 

Last spring, around March and April of 2012, it became very clear that the mayor’s office was intent on removing Waltzer and Wiygul as the Wisner counsel for the BP case and replacing them with the JV lawyers that had been hired to represent the city.    

As council for the Wisner trust, W & W would have little hesitation in taking Wisner’s case against BP to trial instead of simply seeking a quick settlement. The firm has a rich background dealing with environmental issues, in fact, they represent the local branch of the Sierra Club. While a lengthy trial process may be what’s best for the Wisner property to get proper compensation, it may not be the most attractive scenario for the City of New Orleans interests in its litigation process with BP.

In fact, one entity could be used as a bargaining chip to benefit the other.

The mayor’s office claimed that there was a conflict of interest between the City of New Orleans and Waltzer and Wiygul because the firm was representing a company who had a lawsuit against the city in the closure of the Old Gentilly Landfill.

However, in a an email dated July 7, 2010, previous to the mayor's office claim of conflict, then city attorney, now federal judge, Nannette Jolivette Brown, officially waived any potential conflict in the matter on behalf of the City.

Coincidentally, Brown also served as the New Orleans sanitation director under the Morial administration from 1994 to 1996, overseeing the closure of the Old Gentilly landfill.   

Small world, huh? 

How many lawyers does it take to screw in a light bulb?

Initially, there was an effort to have the JV (PSC) attorneys work with Waltzer and Wiygul to deal with the BP case.  Even though the JV attorneys had not officially been brought on board for Wisner, the lines started to become blurred on their involvement with the process.  

So much so, that on June 8, 2012 then Treasurer/Secretary, Cathy Norman, issued a letter to one of the JV attorneys, Steve Herman, asking him to define what role the JV attorneys believed they were playing on behalf of the trust.  The JV attorneys had not officially been hired by a majority vote of the Advisory Committee, yet instances were occurring where they seemed to be arbitrating on behalf of the Wisner trust in their case against BP (more on this in a minute).

Fate or fait accompli?   

The issue was becoming increasingly contentious but the majority of the committee members were intent on keeping Waltzer and Wiygul on as the trust’s council for the BP litigation.  

Then a fortuitous turn of events took place that would turn the tide towards the agenda of the Mayor’s administration. 

It started with  the Tulane appointee to the committee, Dr. Sandra Robinson, abruptly resigning her post in October of 2011.  Robinson was then replaced by Tulane with a new appointee, Anthony P. Lorino, who attended his first meeting in January, 2012 along with newly appointed committee member for the mayor, Michael Sherman.

Dr. Everett Williams was the committee appointee for LSU but due to personal issues beginning in the Fall of 2011, he was unable to attend the meetings so his alternate Stacy Gerhold-Marvin began to attend the meetings in his stead.  Gerhold-Marvin took a very active role in her duties, even traveling down to the land to see it firsthand.

In spite of her dedicated involvement, Gerhold-Marvin was abruptly removed from her role as the alternate for LSU less than 24 hours before a scheduled meeting in June of 2012.  

Upon her removal by Interim CEO of the LSU Health Care Services Division, Dr. Roxane Townsend, the committee seat was filled by former LSUHC Vice-Chancellor for Clinical Affairs, Ron Gardner, with Dr. Everett Williams being moved to the alternate position.

Secretary Treasurer and Land Manger of the Wisner Trust, Cathy Normand, spoke with Dr. Townsend about the sudden removal of Gerhold-Marvin . Townsend told Norman that Michael Sherman had called her and told her that Gerhold-Marvin was being “disrespectful and disruptive” in the committee meetings.  (I have tried to contact Dr. Townsend to confirm the phone call took place and find out what the exact impetus for Gerhold-Marvin’s removal was but I have so far been unsuccessful.)  

It’s worth noting that there were no previous complaints by any of the other committee members that Gerhold-Marvin was being disruptive in the meetings.  However, she did not agree with the Mayor’s intent to remove Waltzer and Wiygul and this reportedly led to some heated discussions in the committee meetings.  

I asked Michael Sherman if he contacted Roxane Townsend and lobbied her to remove Gerhold-Marvin from her role with the committee.  He confirmed that he did call Townsend about the LSU appointee position but he said his concern was that Gerhold-Marvin was not an employee of “LSU proper” and he felt the committee needed a new representative to fill the position.  I asked him if he told Townsend that Gerhold-Marvin was being “disruptive and disrespectful” in the meetings but he declined to comment about the matter on the record.

The stars align

 In the July  31, 2012 regular meeting of the committee a motion was made by Michael Sherman to fire Waltzer and Wiygul and replace them with the JV attorneys that were already representing the city in the BP litigation.  Gardner seconded the motion and it was subsequently passed in a 3 to 2 vote with Sherman, Gardner and Lorino voting yea, and the dissenting votes coming from Wisner heir appointee, Michael Peneguy, and Salvation Army appointee (alternate), Ed Buddy.

The way the meeting transpired is interesting.  I was told by an attendee of the meeting that Sherman called a short recess immediately before  the motion to remove W & W was introduced.  Sherman, Lorino and Gardner then “huddled” in the hallway outside with Gardner eventually breaking away from the group to take phone call.  When the meeting was reconvened, Sherman immediately made the motion to fire W & W with Gardner seconding it and the vote was cast. 

Interestingly enough, all of the JV attorneys that were being proposed for the job showed up at this meeting, 

Public:  To be or not to be... 

At this point I want to remind readers that in my previous post, where I laid out my discussion with Ryan Berni and Michael Sherman, they were stressing to me that their primary goal with the Wisner Trust is to create a greater level of transparency as they view the trust to be a public entity.  In our discussion, I asked Sherman if he believed he was behaving as if the entity was public and if he was following the guidelines of Louisiana’s Open Meetings Law.  He responded that he believed he was.

My original concern was that it appears he was influencing committee member's decisions regarding the trust, outside of the official meetings.  I was under the impression that the Open Meetings Law prohibited him from contacting other committee members outside of the meetings but I misunderstood the law when I originally posed this question to him in our meeting.  

What the law actually states is that he can contact other members of the committee individually but he cannot create a quorum of the committee outside of the official meetings to discuss Wisner issues.  This is known as a “roving quorum” and the Open Meetings Law strictly forbids it.  

So Sherman was correct in that he had not violated the Open Meetings Law by contacting other members of the committee outside of the meetings

However,  in the particular instance of the “huddle” that took place in the hallway during the recess from the committee meeting....if Lorino, Gardner and Sherman were discussing their intent to issue a motion to remove Waltzer and Wiygul and replace them with the JV attorneys, the three of these men conspiring together, outside of the meeting, would constitute a roving quorum.

  

One ring to litigate them all

With the 3 to 2 vote, some of these JV attorneys are not only serving on the Plaintiff Steering Committee, as well as representing the City in litigation against BP for the oil spill, they are now representing the Wisner Trust to boot.  This begs the question, “Does hiring these lawyers (without an RFP mind you) to represent the Wisner Trust litigation against BP constitute a conflict of interest?”

There are numerous issues that would call a conflict of interest into play but the fact that some of the lawyers are on the PSC and representing the city simultaneously raises questions of conflict unto itself.  Now they have been hired to represent one of the most critical plaintiffs in the entire realm of the BP oil spill litigation, the Wisner Land Trust.  

What is in the best interest of the City is not necessarily in the best interest of the Wisner Trust and it’s hard to imagine that the JV lawyers could separate those interests when bargaining with BP.  

One would think there is a shortage of law firms in South Louisiana.

Previous to the special Advisory Committee meeting that resulted in the removal of Waltzer and Wiygul,  Joel Waltzer was asked by the JV attroneys to attend an informal meeting with Soren Giselson (Herman, Herman, Katz and Cotlar) and Caroline Fayard (Fayard and Honeycutt) to discuss a possible joint venture between the JV attorneys and Waltzer & Wiygul.  Waltzer asked Cathy Norman to attend the meeting along with him. 

In that meeting, held on July 15, 2012, Fayard told Norman that all the city has to do is get the votes on the committee and they could put whoever they want in as counsel.  She also stated that  the trust would “Live by the by-laws and die by the by-laws.”   

Two weeks later, Sherman made the motion in the scheduled July meeting to remove Waltzer and Wiygul. 

This document is Norman’s account of the meeting with Fayard and Giselson.

Back to the conflict of interest thing

Cathy Norman asked the Louisiana State Bar Association for a legal opinion on whether or not the city’s choice of JV attorneys could have potential conflicts of interest in their multiple roles.  LSBA attorney, Eric Barefield, replied by saying a possible conflict could exist.  His summary:

Based on the limited account of the facts presented, we believe there is a concurrent conflict of interest present and , although Rule 1.7(b) may allow what the trustee has proposed, we believe you should be mindful of the risks and fully explain to all involved persons the potential for problems in this situation.  Prudence may suggest that you consider the benefits against the potential risk and the option to avoid the conflict altogether by not using the lawyer for the city, or if needed, finding another, completely different, distinct lawyer to serve as co-counsel for the trust and its beneficiaries. 

The JV attorneys responded to that opinion with their own opinion from attorney Basile Uddo which stated that there was no clear conflict of interest.

Coincidentally, Basile Uddo also serves on the Plaintiff Steering Committee ethics counsel.  

The final decision came down to Federal Judge, Carl Barbier...the same judge overseeing the BP case and the same judge who originally chose the attorneys that comprise the PSC.  He concluded that “..at this time there is no conflict of interest” clearing the way for this group of JV lawyers to represent both the Wisner Trust and the City of New Orleans in their respective cases against BP.

(PLEASE SEE UPDATE 2 BELOW)

At what time do we recognize a conflict of interest?

Even before the motion was made to fire Waltzer and Wiygul, it seems the JV attorneys had taken it upon themselves to arbitrate on behalf of the Wisner Fund.  

In the letter Cathy Norman drafted to the City's JV attorney, Steve Herman, on June 8, 2012,  she asked him to define what role, if any, he believed he was serving on behalf of the Wisner Donation in the pending BP litigation.  Herman responded two days later (response is in the above link).  

In that response Herman states, "'...we' ( I assume he is referring to his own law firm) have not been asked to become involved in the operation or management of the Wisner Donation."

Perhaps not being asked to become involved and becoming involved are two separate matters?

Three days later, Herman went so far as to inform BP counsel, via email, of decisions that were made in an executive session of the Wisner Trust Advisory Committee.  This information was privileged and Herman may have violated attorney-client privilege laws by sharing it with BP lawyer, Mark E. Holstein, in a an email transmission at 1:56 PM on June 08, 2012:

Cathy Norman recognized the ethical breach and immediately informed the Committee members at 4:37 PM, June 8, 2012:

Robert Wiygul followed with a warning to the JV lawyers that the information was confidential:

Steve Herman then responded with an apology stating that he wasn’t aware the executive sessions were privileged information: 

Even accepting Herman’s explanation that he wasn’t aware the information was privileged, why would he be sharing a plaintiff’s private deliberations with the defendant, BP?  Especially if three days earlier he stated that he had not been asked to become involved with the Wisner Trust issues.  It not only causes concern for the ethical actions of Herman's counsel in the Wisner case, it brings into question his interactions with BP as a member of the Plaintiff Steering Committee and his role as an attorney for the City.  

Amazingly, at 8:07 PM, June 12, 2012, Steve Herman again made contact with a BP attorney, Nathan Block, regarding Wisner matters and cc’d Michael Sherman on the exchange:

Cathy Norman then forwarded this email exchange to the entire Advisory Committee to inform them of Herman's actions:

So before Herman's firm had been officially instated as Wisner attorneys and even after he had personally been asked not to inform BP attorneys of Wisner’s actions, Herman again forwarded Wisner information to BP lawyers.

This exchange of privileged information also brings up the question as to how Herman was obtaining the information in the first place.    

I asked Michael Sherman if he was informing Steve Herman of decisions being made in the executive meetings of the Advisory Committee and he declined to comment stating it is a matter of litigation and that he was restricted from commenting.  

Sherman did point out that all the Advisory Committee members have the right to have their own attorneys present at the meetings and they have the right to share information that has transpired in the meetings with their attorneys.  

However, in this case, I am not sure that Herman or any of the other JV attorneys were officially representing Michael Sherman in his capacity as a City employee or as the Mayor’s appointee to the Wisner board.  I would assume a city attorney should be providing that service, not Steve Herman who was serving as an independent contractor for the city with the specific purpose of litigating the City’s economic case against BP.  

If Steve Herman was serving as Sherman's council in his role on the Wisner Trust Advisory Committee, was he billing the city for these services independently of his role as JV attorney trying the BP case?  

Regardless, the information that Herman had about the Wisner actions in the executive meeting was privileged and should never have been shared with the defendant, BP.  

I asked Michael Sherman if he was aware that Steve Herman had provided BP with this privileged information from the executive meeting and he once again declined to comment due to pending litigation.

It appears a plaintiff’s privileged information has been traded by an attorney acting as the plaintiff’s counsel (even though he officially wasn’t) to the defense attorneys in what is quite possibly the largest civil case in American history.  The implications of this issue are staggering....so staggering....I don’t even want to speculate on the repercussions.   

Transparency?

I’ve piled a lot of information into this post and I don’t want to overdo it but there is one last item I want to bring up here in Part 2.  

Ryan Berni and Michael Sherman stressed to me that the goal of the Mayor’s administration with the Wisner trust is to increase transparency because they believe the trust is a public entity.  As I pointed out in 1.5, this administration has made significant efforts to inform the public of the fund.

Berni also stressed to me that the administration was intent on fulfilling public records requests.  I then presented him with this public records request submitted by the law firm, Simon, Peragine, Smith & Redfearn, at the request of the Wisner Trust Advisory Committee that has gone unfulfilled since February of 2011.  The city responded to Peragine that they had received the request but they never actually fulfilled it.

    

Ryan said he was unaware of this particular request but that he would look into it.  Sherman was not serving on the Advisory Committee at the time the request was made, but he was made aware of the issue by Advisory Committee members in official meetings.  

I also told Mr. Berni that I have spoken to other journalists who have filled multiple public records requests with the City that have gone unanswered.  He told me he would look into it and stressed that this administration had made great strides in fulfilling PRR’s in comparison to the previous administration but that they still face manpower challenges in fulfilling all of them. 

Along those lines, I have requested information from Mr. Berni that will show where the 2.4 million dollars in funds mentioned in Part 1 went when the City received it from the Wisner account.  We will address that in Part 3 but it may take some time for me to get that information. 

....and....it's Carnival time so don't expect much out of me til we hit lent.   

Update 1:  I was sent Calvin Fayard's application in email...it is here.  But, I can't find Roy's either...anon, were you able to find Roy's application?

Update 2:  I am being told, per email, that the JV attorneys never presented Judge Barbier with the Louisiana State Bar Associations legal opinion. They only provided him with the opinion presented by Basille Uddo.  So Barbier may have issued his opinion without seeing the LSBA's original opinion.  I am going to try and confirm this but in the meantime, check out the first comment by Kevin in the comment section.