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By Robert Burns

Special to LouisianaVoice

As many Louisiana Voice readers are aware, I am a former auctioneer and was appointed by Gov. Jindal to the Louisiana Auctioneer Licensing Board (LALB) during the early months of his first term. What I encountered was corruption both on the board itself and among auctioneers in the industry. I sent regular emails to the head of boards and commissions routinely expressing my shock and dismay. In less than two years, Jindal terminated my services, providing no other explanation other than, “things just aren’t working out.”

The next meeting after my termination, I began videotaping auctioneer meetings and have continued to do so to this day. I also have made occasional public records requests to view auctioneer files. My purpose in reviewing those files is that often times consumer complaints are filed and LALB attorney Anna Dow works with the complainant and the auctioneer to work the complaint out.  These solutions, however, are never even referenced to the board itself and even board members themselves are in the dark as to their existence.  Basically, Dow keeps the board members on a “needs to know basis,” and it was my experience as a board member that she deemed me to “need to know” very little. Hence, the only way anyone (board member or member of the public) can know of these complaints and other auctioneer issues is to examine the auctioneers’ files.

Louisiana Association of Professional Auctioneer (LAPA)’s founder and President, Rev. Freddie Lee Phillips, and I have been concerned about the sheer number of such complaints and some troubling details of these “workouts.”  Examples include:  One auctioneer, William Jones,  deceiving the LALB for eight years about his state of residency; National Auctioneer Association (NAA) Hall-of-Famer Keith Babb threatening a complainant against pursuing a complaint against him, and complainant Robert Kite alleging collusion and shill bidding entailing NAA Hall-of-Famer Marvin Henderson and NAA Past-President Joe Wilson. None of this type of information is available anywhere but in auctioneer files. Accordingly, we decided the best thing for us to do is conduct an audit of all auctioneer files. Because the LALB is a one-person office (with the individual almost never actually working in the office but rather working from home), we knew this should be a project extended out over a 2-3 year timeframe so as not to impose too great of a burden on the office.  Accordingly, I made this simple public records request of 12/4/14 for the first 10 files. Material gleaned from the files is incorporated into this indexed webpage of auctioneers having issues with the LALB.

The one-person executive director of the LALB, Sandy Edmonds, balked at the public records requests associated with the project.  Edmonds is the same one who has been cited by the Inspector General’s Office for payroll fraud and lying about it to investigators. Specifically, she reported both to the LALB and the Interior Design Board that she was “on the clock” even though she actually was on vacation. They subpoenaed her cell phone records, after which she refused to answer any more of their questions.

Edmonds is paid $32.67/hour, or $25, 480 for the LALB and $25/hour, or $32,500 for the Interior Design Board ($57,980 total). She received numerous pay raises which Legislative Auditor Daryl Purpera characterized as illegal.

In a meeting on January 3, 2013, Inspector General Lead Investigator Tom Boulton said, “There is no such thing as a performance-based employee.  It’s illegal.” Both he and Inspector General Investigator Rob Chadwick said that they found it inconceivable that the office for both boards (it’s a shared office) is almost never occupied, and both men wanted to know how much rent was being paid for an essentially-unoccupied building.

Purpera, whose office also investigated the work setup, issued this damning report, and referred the whole matter to East Baton Rouge Parish District Attorney Hillar Moore for possible prosecution of Edmonds for payroll fraud. When Vice Chairman James Sims asked what the LALB should do about the Legislative Auditor report, Board Attorney Anna Dow relayed “nothing,” and Edmonds added, “Welcome to politics,” and indicated that Jindal himself said they were not to worry about it and that the board “cannot” recover funds which Edmonds had been overpaid. Board Chairman Tessa Steinkamp said, “We have to follow the Governor.”

Why re-hash old news?  Well, at the LALB meeting of Tuesday, January 15, 2015, Board Attorney (and convicted felon) Larry S. Bankston asked the Board to deny future requests from me and to seek “legal instruction from the court.” Notice how vague he is about the timeframe of the project (i.e. he neglects to inform the board that this is a 2-3 year project.

The board did not respond to Bankston’s request for it to resist my public records requests, but in light of Edmonds’ past employment reports issued by the Inspector General’s Office and the Louisiana Legislative Auditor’s Office, we feel the public has a right to full disclosure about auctioneer problems, and clearly this is a legal requirement Edmunds has no intention of meeting.  She has even insisted that public records requests be subcontracted out to the Attorney General’s Office, which charges $50 per hour for that service.

Just another episode of typical Louisiana political chicanery.

 

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By Guest Columnist Robert Burns

Tom recently posted that Louisiana Sen. Rick Gallot may have used his influence to expedite and circumvent safety standards for a private school.  Another Louisiana Senator, Francis Thompson (D-Delhi) may have well had his son, Brant, utilize his dad’s status to obtain fair and equitable treatment from the Louisiana Auctioneer Licensing Board (LALB).  He was fully entitled to such fair and equitable treatment, but it begs the question as to why other Louisiana citizens, especially elderly widow auction victims, are given the shaft.

In early 2012, Brant Thompson allegedly consigned merchandise to auctioneer Bruce Miller.  I use the word “allegedly” because, at a May 6, 2014 hearing, LALB investigator Jim Steele, as evidenced by this 4-second video clip, said, “There’s no indication that Mr. Thompson was a consignor at this auction whatsoever.”  Nobody knows what may have happened to Mr. Thompson’s items, and auctioneer Bruce Miller died of a massive heart attack two days after his last auction.  Mr. Thompson never received a dime for his items, nor did he ever even see his merchandise again.  Understandably, Mr. Thompson got upset and justifiably filed a complaint with the LALB.  Like so many other complainants, Mr. Thompson was frustrated when he received this brief letter from LALB attorney Anna Dow dated 1/16/14 indicating that, because the LALB could not ascertain if a violation had occurred, it was “closing the investigation……No further action will be taken.”

Thompson, like many other aggrieved complainants, wasn’t happy, so he drafted this terse two-page response dated 2/3/14.  He indicated that he “takes exception” to the finding and states that “The system designed to protect me failed.”  He emphasized that he was aware auctioneers carry a bond, and he relayed that he expected that bond to cover his alleged losses.  Mr. Thompson is correct in his assessment that the LALB failed him, but it has done the same for a litany of other complainants.  Mr. Thompson, however, was shrewd enough to copy Ms. Holly Robinson, Gov. Jindal’s then-Heard of Boards and Commissions.  Obviously, Ms. Robinson would be very familiar with the fact Brant is Francis’ son.  What transpired upon Robinson’s receipt of the letter?  Who knows, but we do know this:  in lightening-fast speed, the LALB, in an unprecedented move, not only “reopened” a closed investigation, but it actually conducted a full-blown hearing (on a deceased auctioneer) on 5/6/14.  Remember Mr. Thompson’s goal of collecting on Miller’s bond.  Now, watch this brief one-minute video clip excerpt from the hearing.  Notice how Mr. Thompson is gently guided regarding the bond’s parameters (that it’s for $10,000 and has a 3-year filing period in which the LALB can file for him).  Mr. Thompson, who speaks in a smooth and cavalier manner, is spoken to in turn by LALB members and its attorney in an almost reverent-like manner.  The LALB not only filed the bond for Mr. Thompson, but in breakneck speed, he received a $3,500 check from the bonding company in early October of 2014 even though the company said the itemized list it was provided depicted ordinary household items that were “virtually worthless.”

Let’s contrast Mr. Thompson’s revered status as a Louisiana senator’s son with the tone and attitude taken with complainant Judy Fasola.  In late 2012, Ms. Fasola contracted with notoriously-problematic auctioneer Ken Buhler for the disposition of her terminally-ill, 93-year-old mother’s estate.  Ms. Fasola asserted at her hearing, which was in March of 2013, that Mr. Buhler adamantly refused to place reserves on her marque items and instead, over time, just kept defiantly selling them at pennies on the dollar (Fasola relayed she later learned Buhler sold many marque items to his own mother, mother-in-law, and other Buhler relatives) against her express desire and instructions.  When she threatened an LALB complaint, he finally returned what few items he hadn’t sold in defiance of her instructions, and Fasola relayed he did so in a fit of anger, slamming her items on her floor and breaking most items in the process.  Fasola filed an LALB complaint, and the LALB fined his father, Mac, who is not an auctioneer but was deemed the responsible party for Ken’s company, Estate Auction Services, $500 for “sloppy recordkeeping.”  Due to Ken’s license being revoked from 2005-2010 (due to massive consignor losses), the LALB insisted that Mac oversee all negotiations and communication with customers.  Ken had defied that restriction in negotiating with Ms. Fasola, but she was unaware of the LALB restrictions on Ken’s license.  Ms. Fasola, like Brant, repeatedly asked the LALB to file a bond claim for her, but the LALB has steadfastly refused to do so.  When Ms. Fasola learned of Mr. Thompson’s ease of obtaining a bond payment, she was understandably upset and requested to be heard on the matter at the 11/5/14 meeting to air her frustrations.  Let’s examine, mainly through video excerpts of the meeting, just how she got treated.

Fasola began by giving an introductory statement relaying how she, like Brant, felt the system had failed her, and she asked if she may have been treated more fairly “if I were the daughter of a Louisiana State Senator?”  LALB Vice Chairman James Sims tersely denied any knowledge that Brant was the son of a Louisiana senator until “seven days after the hearing.”  There simply is no way to adequately place in words the hostility shown toward Ms. Fasola (and me, for that matter) at the meeting, so I ask readers’ indulgence in watching a 9-minute video clip of the highlights of Ms. Fasola’s presentation, along with captions wherein Ms. Fasola catches board members, attorneys, and the executive director in one contradiction and falsehood after another (proven by video clips merged into this 9-minute video clip which I strongly encourage readers to watch).  In watching the video, it becomes apparent why I videotape these meetings because these board members flat-out misrepresent what they’ve said and done in prior meetings.

Now, in the above 9-minute video clip, considerable focus was placed on the above-mentioned restrictions on Ken Buhler’s license.  When Estate Auction Services (Mac Buhler) was fined $500 and found guilty in March of 2013, the bonding company immediately canceled its bond.  As mentioned above, Ken, pursuant to the restrictions on his license, was totally dependent upon his dad to remain in business; however, his dad could no longer operate due to lack of a bond.  How did the LALB solve Ken’s problem in that regard?  They simply convened another “hearing” on May 20, 2013 for the sole purpose of removing all restrictions on Ken’s license.  Nevertheless, as evidenced by the video clip, LALB Vice Chairman James Sims kept insisting (incorrectly, on no less that three occasions) that the restrictions were lifted prior to Fasola’s auction.  In reality, the restrictions were lifted after and as a result of Fasola’s auction.  Hence, as Fasola pointed out, Buhler was actually rewarded for his victimizing of her!  Also, although LALB Chairman Tessa Steinkamp literally blew a gasket at the 6:27 mark of the video when Fasola referenced concerns for her personal safety when dealing with Ken Buhler, Ms. Fasola had genuine reason for concern.  Even as she was dealing with him, he was arrested and criminally charged for domestic abuse against his wife (the latest court date is Monday, 11/10/14).  Additionally, Mr. Buhler was also found to have civil liability for the fraudulent use of interstate commerce instrumentalities in Federal Court in mid-2011.  The LALB was notified of that fact, but they were completely indifferent to the fact it transpired, notwithstanding the fact that his liability entailed securities fraud directly related to his auction business.

As evidenced by the preceding video clip, the LALB basically continued to tell Ms. Fasola to “go to hell” regarding its filing her bond claim for her.  Quite a contrast to the reverent tone taken with Brant Thompson, son of State Sen. Francis Thompson, huh?  What’s alarming is the sheer number of elderly victims of auctioneers.  Let me provide the following table of four such instances that readily come to mind:

Auction Victim’s Name Reason for Auction Auctioneer and Appx. Date
Ms. Linda Williams Liquidating 91-year-old mother’s belongings days before her death.  Click here to listen to an impassioned plea by Ms. Williams for the LALB to NOT reinstate Ken Buhler’s license in 2010. Ken Buhler. Months prior to his auction license being revoked in 2005.
Mr. David Swift Liquidating the belongings of his 80-something father soon after his death. Gary & Randy Hayes (business applicants like Mac Buhler), two guys who, to their credit, told the LALB at their 1/14 hearing, “We never should have been granted a license.”   They went on to relay they’d lost over $100,000 of their retirement savings and would NEVER be in the auction business again.
Ms. Judy Fasola Liquidating 93-year-old terminally-ill mother’s belongings months before her imminent death. Ken Buhler. September, 2012.
Ms. Betty Story Liquidating her belongings (and two homes) in order to move into an assisted living facility in Alexandria, LA.  LA Voice readers may recall this 9/27/14 post on what a disaster her auction was.  I’m happy to report that Ms. Story, serving as a pro se litigant (at 84 years old!!), scored a major victory in 36th JDC on 10/29/14 when Judge Martha O’Neal stopped the trial after Ms. Story presented only her second witness, with Judge O’Neal saying, “I’ve heard all I need to hear.”  When auctioneer Schmidt asked if he’d be permitted to put on his defense and call witnesses, O’Neal said, “Yes, but you’re not going to be able to undo the damage you’ve already done on this witness stand in answering my questions,” (Story had him on the witness stand under direct examination).  Click here if you’d like to watch a post-trial interview with Ms. Story.  Her LALB litigation remains ongoing. Marlo Schmidt. November   17, 2012.

 

I recently made a public records request of the LALB seeking all bond claims it has ever filed.  They could produce only two:  Mr. Thompson and Mr. Swift.  It’s interesting to note that these two claims were likely filed (beyond Thompson’s status as a Louisiana Senator’s son) because there would be no auctioneer pushback in either case.  Mr. Miller is dead, so he won’t get upset.  Gary and Randy Hayes, as evidenced by the brief video clip above, readily stated they’ll never be in the auction business again (hence no pushback from them).  In sharp contrast, Ken Buhler and Marlo Schmidt are active auctioneers who would be very upset with LALB members if claims were filed against their bonds!

I’d like to conclude this Louisiana Voice post by expressing gratitude to Tom because I’ve presented the above cases to MSM outlets in Baton Rouge.  While an Advocate reporter has expressed strong interest in publishing LALB elderly victimizations, his editors have said, “It’s a small board and nobody will read the article.”  Further, 13 months ago, Ms. Linda Williams, the first victim listed above, suggested that I contact Chris Nakamoto of Channel 2 here in Baton Rouge.  I still maintain a computer folder of numerous emails back-and-forth between Mr. Nakamoto and myself regarding a television investigative report on elderly abuse by auctioneers.  He did qualify any such potential report, however, with the fact that, like the Advocate reporter, his editors too had to give the “thumbs up.”  All I can tell Louisiana Voice readers is that, days prior to New Year’s Day of 2014, Mr. Nakamoto ceased all communication with me without even so much as a courtesy explanation of why he’d gone from responding to my emails within hours (often minutes) to suddenly no response at all.

In closing, if you or anyone you know is considering hiring an auctioneer, you owe it to yourself to visit Consumer Option # 2 on LAPA’s website, which is an alphabetical index of auctioneer issues since LAPA’s archive began in 2010 and also Consumer Option # 3 on LAPA’s website, which is guidance on conducting auctioneer due diligence.  If it’s not conducted, the results, as illustrated above, can be devastating.

Lastly, anyone knowing of an elderly person (or the caretaker of such an individual) who is considering hiring an auctioneer, please bookmark this post and forward it to them.  Why?  Because auctioneers exist out there who view such elderly prospective clients just like lambs headed for slaughter.

Regrettably, we have a Governor and his LALB appointees who are only too happy to help with hoisting the guillotine.

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By ROBERT BURNS

Everyone by now is aware that Gov. Jindal has been concerned with little else since he became Governor of Louisiana beyond self-promotion and his own political advancement to the White House.  What isn’t so obvious to most Louisiana citizens is that many of his appointees to Louisiana boards and commissions are equally ego-driven with little or no regard for the citizens they are supposed to serve and protect.  Prime examples are Gov. Jindal’s appointees to a little-known board overseeing auction regulation in Louisiana, the Louisiana Auctioneer Licensing Board (LALB).

Now, if it were only that such ego-driven appointees have included a past chairman who was “demoted” to mere member while another “consumer” member simultaneously resigned as evidence of travel voucher irregularities on the parts of both members surfaced, that would be one thing.  If just the mere fact that certain LALB members believe that they have a right to freely engage in racist roll calls, that would be one thing.  It would also be one thing that, despite the fact that LouisianaVoice readers may revel in hearing a lambasting of Gov. Jindal, it nevertheless is an act of unprofessionalism in a public meeting (anger over Jindal’s stripping of LALB per diem payments notwithstanding).  The member doing so, LALB Vice Chairman James Sims, is the same one who made the first “I’s here,” roll call response at the first link above.  Sims went further on the preceding audio clip to relay on November 5, 2012 (the day before the Presidential election) that “it ain’t gone happen” regarding Republican presidential nominee Mitt Romney (had he prevailed) appointing Gov. Jindal to a cabinet position.

It would be yet one more thing that these members felt they had the right to permit its sole employee to vacation all over the country and routinely conduct personal business while declaring herself to be “on the clock,” thus prompting Louisiana Legislative Auditor Daryl Purpera to release this damning report.  That report, in turn, was subsequently followed by this report by the Louisiana Inspector General’s Office (OIG) in which the sole employee lied to investigators about taking vacations while being “on the clock.”  The OIG likely figured there was no chance LALB members would accede to their recommendation of “appropriate disciplinary action up to and including termination,” and, in fact, OIG officials would have been right as LALB members unanimously approved a third pay raise for its executive director four months after the release of the report.  Also, two of those three pay raises transpired, as noted in Mr. Purpera’s report, during a period of salary freezes for rank-and-file Louisiana state workers.   Further proof that Jindal facilitates his LALB appointees who, in turn, facilitate irresponsible payroll practices is evidenced by board members and legal counsel relaying Jindal has said “all is fine and you cannot recover any funds.”

No, all of the preceding egregious acts entail general ego-centered individuals who feel as though they have “power from on high” vested in them through their appointments by Gov. Jindal.  Essentially, they merely entail their beliefs that they have little or no fiduciary duty regarding auctioneer licensee funds with which they have been entrusted.  While being oblivious to their fiduciary duties certainly affects auctioneers, the public, because of a lack of coverage by the media, is understandably unconcerned by the practices.  The general public’s concern is (or at least should be) heightened, however, when Gov. Jindal’s LALB appointees are so brazen and arrogant and dismissive of their core duties and function that they literally force an 84-year-old widow to file a pro se lawsuit to compensate her for the LALB’s overly-protective stances regarding auctioneers.  Such stances have routinely transpired in the six (6) years I’ve observed the LALB, very much to the detriment of the general public whom they ostensibly serve to protect.  Thus far, auction victims have just “licked their wounds” and left disappointed at what they often correctly perceived as a very corrupt industry.

That was all, however, before a lady named Ms. Betty Story entered the LALB’s den of foxes.  In a mere five-page pro se lawsuit filed in 19th JDC in Baton Rouge on August 27, 2014, Ms. Story alleges that she encountered a “nightmare” regarding her November 17, 2012 auction.  She relays that her auctioneer, Marlo Schmidt, at a time when she was 82 years old, failed to explain to her that she could place reserves on certain of her items being auctioned.  She outlined the items which she specifically wanted to set reserves upon:  a mirror ($300), an Ethan Allen wetbar ($4,000), a set of sterling silverware ($5,000), and an antique saddle ($5,000).  She further averred that Schmidt didn’t inform her that she would owe 40% of the final bid prices as commissions, in addition to a 10% buyer’s premium assessed against buyers (which itself lowers bid amounts).  Additionally, Ms. Story avers that Schmidt pleaded with her to cancel two real estate listings with ReMax (including her personal residence) so that they could be included in her auction.  In fact, Ms. Story avers that, as an incentive for her to do so, Schmidt “promised” her $42,500 for a rental home she owned and $120,000 for her personal residence.  Based on his “promises,” Ms. Story relayed she appealed to ReMax to cancel her listings, and ReMax reluctantly agreed as a favor to her for her past business. Accordingly, the two real estate properties were included in the auction with Ms. Story anticipating $162,500 minimum for the two houses based on Mr. Schmidt’s “promises.”  The only way any auctioneer can “promise” a result is if he or she is willing to buy the properties personally if the bids fail to reach that pre-set amounts at auction.

Ms. Story further averred in her lawsuit against the LALB that Schmidt went so far as to buy her rental property prior to her auction, and he advanced her $25,000 ($17,500 short of the “promised” amount) so that she could move into an assisted living facility ahead of the auction and thereby be exempt from having to pay a deposit on her room.  The subsequent auction was an unmitigated disaster, with Schmidt’s nephew ending up high bidder on the rental home.  His nephew then adamantly refused to honor his bid (likely because his nephew was a shill bidder, which is illegal in Louisiana but many auctioneers, as well as the LALB, ignore that illegality and actively encourage the practice).  In fact, LALB Vice Chairman James Sims, during the LALB hearing on the matter, said of that situation, “This board could easily think something else,” (of the fact Schmidt’s nephew dishonored his bid — clearly referencing shill bidding without saying the dirty words).  Although Ms. Story had to threaten to sue Mr. Schmidt for the balance of the $42,500 purchase price on the rental home, he did finally remit the balance for the home that he already had title to even prior to auction!  However, her personal residence auction was a flop, resulting in a “no sale” rather than the $120,000 he’d “promised” her.  Furthermore, because of the fact no reserves were set on her high-end items and Schmidt instead had Ms. Story bid (and pay commissions) on those items in order to retain possession of them, Schmidt submitted a final bill to Ms. Story for $201.11 as her “net proceeds” from the sale of her personal items!  In other words, Ms. Story’s commissions for retaining her treasured items exceeded the proceeds of the items Schmidt sold, which constituted the vast majority of her personal belongings!  So, Schmidt claimed Ms. Story owed him $201.11 for the “privilege” of having most of her personal belongings vacated from her home at what Ms. Story contended were below bargain basement prices.

As if all of the preceding events aren’t bad enough, Ms. Story had to leave the assisted living facility after only three nights because of the disastrous auction results, and she was charged $1,500 for her three-night stay.  Ms. Story filed a complaint with the LALB, and her LALB hearing transpired on September 10, 2013.  Like many other auction victims, Ms. Story naively believed the LALB would be sympathetic to her plight and work to remedy the wrong she’d endured.  Even though the LALB’s own attorney, Anna Dow, relayed there was “clear deception” and that “the auction should have been conducted in a very different manner,” and one of the board members, Darlene Jacobs-Levy, an attorney with 44 years of practicing law said, “Mr. Schmidt, you clearly owe Ms. Story more than the $1,300 you’ve offered her to settle this matter,” the LALB once again officially found auctioneer Schmidt not guilty of any auction violations.  After the hearing’s conclusion (as reflected on the video), Ms. Jacobs-Levy instructed Schmidt to “go out in the hallway and work this out with Ms. Story.” She also informed Schmidt that she felt the 40% commission he charged Ms. Story was “usurious.” Instead of “working it out with Ms. Story in the hallway,” Schmidt, with the hammer gone from over his head, proceeded straight to his vehicle and back to DeRidder and refused to have subsequent negotiations with Ms. Story.  Consequently, Ms. Story had to sue Mr. Schmidt in small claims court in DeRidder to try and recover at least some of her damages.  More importantly, however, is the fact that, by officially finding him “not guilty,” the LALB effectively blocked Ms. Story from being able to pursue Schmidt’s $10,000 bond which is a requirement for auction licensure in Louisiana.  No bonding company is going to pay a claim when the regulatory body of a state has failed to find an auctioneer guilty of an auction violation.  Hence, Ms. Story’s lawsuit seeks to recover the $10,000 from the LALB that she would have otherwise been able to recover from Mr. Schmidt’s bond had the LALB found him guilty.  Of course, to find him guilty, LALB members would need to have shelved their self-centered, steadfast resolves to stay popular among auctioneers irrespective of the consequences to victims like 84-year-old widow Betty Story.  In failing to do so, they exhibited many of the same traits of the gentleman who appointed them:  Gov. Bobby Jindal!

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“Despite the special counsel’s recommendation, I would strongly urge that as chairman, you ask the board to authorize the system attorneys to file the necessary documents to obtain a final declaratory judgment on this amendment. That judgment will provide the necessary finality to this matter.”

—State Police Superintendent Mike Edmonson, in a letter to Frank Besson, chairman of the Louisiana State Police Retirement System Board.

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State Police Superintendent Mike Edmonson did a sudden about-face, the Louisiana State Police Retirement System (LSPRS) Board was unanimous in its decision to allow board member and State Treasurer John Kennedy sue the board, and before the board could adjourn, State Sen. and 6th District Congressional candidate Dan Claitor filed his own lawsuit but Kennedy said he would go forward with his litigation anyway.

Just another day in the soap opera we know as Louisiana state government.

And it could only happen in Louisiana.

The LSPRS Board was meeting to wrestle with the problem of Act 859 which started out as Senate Bill 294 by State Sen. Jean-Paul Morrell (D-New Orleans), a bill ostensibly dealing with police officer disciplinary matters but which morphed into what retired state trooper Robert Landry described as an “underhanded, unethical, unconstitutional” amendment giving Edmonson an extra $55,000 per year in retirement income.

Special legal counsel Robert Klausner, a renowned pension system authority from Florida, advised the board that it had no legal standing to file suit in an attempt to have the new law declared unconstitutional but added almost parenthetically that any citizen of Louisiana could file suit.

“Could I file?” Kennedy asked. “I’m a taxpayer.”

Klausner said that Kennedy could indeed initiate litigation and if the board failed to defend it, legal expenses would be minimal and the matter could be settled once and for all as opposed to waiting to see if the legislature would repeal the act next year and if Gov. Bobby Jindal would sign such a bill.

While the board was tossing the issue back and forth and speculating whether or not Attorney General Buddy Caldwell would take it upon himself to defend such a suit should the board refuse to, Claitor left the meeting and apparently called his attorney to instruct him to file suit on behalf of Claitor.

Earlier, Claitor had spoken to the board, saying that passage of the Edmonson Amendment was not open or transparent. “It was an unconstitutional act because it was not published in advance, and was not germane to retirement issue. “I would ask that you exercise your fiduciary duty,” he said. Apologizing for having voted for the amendment because he was told that conference committee had addressed his earlier concerns about police disciplinary matters, he said, “I’m sorry to ask you to clean up this mess.”

The “mess” occurred when State Sen. Neil Riser, a member of the conference committee composed of three members each from the House and Senate, inserted the crucial language that gave Edmonson his financial windfall.

Basically, the amendment allowed Edmonson to revoke his decision years ago to enter into the state’s Deferred Retirement Option Plan (DROP) which froze his retirement at 100 percent of his captain’s salary of $79,000. The revocation would have allowed him to instead retire at 100 percent of his $134,000 colonel’s salary.

LSPRS actuary Charles Hall told the board that the upfront cost of fully funding the benefits at their present, or discounted, value would be a $359,000 investment to cover the increased benefits for Edmonson and a Houma trooper who also happened to qualify under language of the amendment. That amount is $59,000 more than the original $300,000 estimated cost provided three days after the amendment’s passage. Kennedy pointed out that the actual cost would be in excess of a million dollars and he asked Hall to provide him with a computation of those figures.

Hall said he received a request to “call a trooper to discuss a bill” on the Friday before the Monday, June 2 adjournment of the legislature.

He said it became clear in his conversation with the state trooper that “they wanted to introduce an amendment to enhance (Edmonson’s) benefits.”

After a few routine questions, Kennedy asked Hall if he knew the name of the trooper whom he was asked to call and to whom he subsequently talked.

“Charles Dupuy,” Hall answered.

Dupuy is Edmonson’s Chief of Staff who has benefitted from a 52 percent increase, from $80,500 to $122,200, since Edmonson’s appointment as State Police Superintendent by Gov. Bobby Jindal in January of 2008. Dupuy’s wife, Kelly Dupuy, also has received increases in salary, from $65,000 to $80,600.

It was the first time that anyone has officially identified Dupuy as the source of the Edmonson Amendment.

Dupuy, a member of the LSPRS Board, was not in attendance at Thursday’s board meeting.

Riser, who first denied any involvement with introducing the amendment during the conference committee meeting in June but later admitted his complicity but said he did not realize it would benefit only two people.

Hall, however, in speaking to the board on Thursday cast doubt on that part of Riser’s story as well when he said it was believed that the amendment would affect only one person—Edmonson.

“This act has hurt the reputation of the state,” Kennedy said. “Someone pushed hard for this law. If I sue and the attorney general decides to defend it, I will begin taking depositions. I will send out subpoenas and we will find out who was behind this.”

Kennedy said he would foot the cost of the litigation which he said would be minimal provided the attorney general does not opt to defend the law.

The board, which had been seen as heavily stacked with Edmonson and Jindal loyalists, had been expected to display reluctance to go against the two. Instead, board members were unanimous in authorizing Kennedy to proceed with personal litigation in his “individual capacity.”

But even as Kennedy was making his offer, Claitor was already setting in motion his own litigation which he obviously had instructed Baton Rouge attorney Jack Whitehead to prepare and to stand by to file with the 19th JDC clerk’s office.

In fact, Whitehead even prepared a press release to accompany Claitor’s lawsuit, making it obvious that Claitor had planned the move well in advance of the board meeting.

Claitor, in his petition, asked the court to find Act 859 unconstitutional on four grounds:

  • Act 859 failed to meet the “one object” requirement of the Louisiana State Constitution;
  • The act did not meet the germaneness requirement of the state constitution;
  • No public notice was provided as required by the constitution for retirement-related legislation and the bill itself never indicated proper notice was given, also in violation of the constitution;
  • The source of funding for the increased benefit is the LSPRS “Employment Experience Account,” which is reserved as the source of future cost of living benefits and payments toward the system’s unfunded accrued liability.

To read the full text of Claitor’s litigation, click here: Press Release Letter & Petition

Baton Rouge Judge Janice Clark issued a temporary restraining order until she can hold a hearing on Sept. 16. To read her order, click here: CLAITOR VS LSP

The real kicker came when a two-page letter from Edmonson to the board was read. In that letter, Edmonson said he fully supports assertions “from legislators and others that the bill should be repealed.”

Then, addressing board Chairman Frank Besson, Edmonson said, “Despite the special counsel’s (Klausner) recommendation, I would strongly urge that as chairman, you ask the board to authorize the system attorneys to file the necessary documents to obtain a final declaratory judgment on this amendment. That judgment will provide the necessary finality to this matter.”

That represents a complete 180 from Edmonson’s earlier admission that a “staffer” had originally approached him about the prospects of the amendment’s benefitting him and his instructions to proceed.

It was a move of necessity brought on by a groundswell of sentiment against the amendment by retired state troopers which forced Edmonson to have a change of heart in an effort to save face and to avoid further embarrassment to his boss, Gov. Jindal. Because make no mistake, he wanted that money and Dupuy, no matter what anyone says to the contrary, did not take this upon himself as a solo act. It’s pretty obvious that Dupuy initiated the amendment at the direction of his boss who in turn had the blessings from the Fourth Floor and Riser was simply the instrument by which the amendment was inserted. That makes Jindal, Riser, Edmonson and Dupuy all complicit in a devious little scheme to reward Edmonson at the expense of every other state employee, including state troopers and retirees across the board.

That’s the way this governor and his band of sycophants work.

To read Edmonson’s letter, click here: EDMONSON LETTER

Kennedy, when told after the meeting adjourned of Claitor’s lawsuit, said, “That’s great. I’m glad. But I’m still moving forward with my own lawsuit. This is a bad law and it must be addressed.”

 

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