Robert Burns of Baton Rouge, a former fraud investigator, has agreed to join LouisianaVoice as an underpaid (read: gratis) researcher and contributing writer. His initial series of stories will chronicle his experiences as a member of the Louisiana Auctioneer Licensing Board.
By Robert Burns
Following up on Tom Aswell’s recent posts regarding the Louisiana State Board of Dentistry, there is another State Board with an extensive history of questionable activity: The Louisiana Auctioneer Licensing Board (LALB). The board is comprised of five auctioneers and two at-large “consumer” members. The board’s actions include turning a blind eye to an illegal practice called “shill bidding,” ignoring the apparent victimization of elderly auction clients, racism and possible travel voucher and payroll fraud.
In early 2008, Gov. Bobby Jindal appointed me and a very good friend, Rev. Freddie Phillips (Louisiana’s first and only African American auctioneer) to the LALB. Rev. Phillips and I each endured relatively short, tumultuous tenures on the LALB due to our observations of abuse and the fact that we did not (and do not) hold back in voicing our displeasure with that abuse.
In fact, sensing that Louisiana’s then-only auctioneer trade association, the Louisiana Auctioneer’s Association (LAA), seemed to openly encourage these practices (particularly shill bidding), Rev. Phillips decided to form a second association, the Louisiana Association of Professional Auctioneers (LAPA). Although he invited any auctioneer willing to adhere to LAPA’s strict code of ethics to join only two others, myself and auctioneer JonEric Kramer, did so. Other auctioneers, and especially LALB Members, became furious that LAPA’s website, Rev. Phillips’ brainchild, so readily exposes widespread unethical activity within the auction industry.
My post for today focuses on the issue dearest to me: shill bidding.
LAPA’s first tenet is vigorous opposition to shill bidding, an illegal auction practice in which plants are placed in the audience by the auctioneer or seller for the sole purpose of driving up the bid with no intention to buy the property. The practice is illegal unless it is divulged to the auction bidders; however, the practice is pandemic in Louisiana’s auction industry. In my opinion, shill bidding is literally destroying the auction industry. The entire auction process hinges on the public being able to rely upon that process for market transparency. When shills are introduced, the transparency is destroyed and the public rapidly becomes cynical and justifiably distrustful of auctioneers.
The issue of shill bidding came to a boil in 2010 when then-Rep. Damon Baldone (D-Houma) asserted that auctioneer Barbara Bonnette, an Alexandria-based auctioneer, tried to artificially inflate his $675,000 bid on an historic home in Thibodaux by falsely representing that a $700,000 bid had arisen when, in reality, it had not. Rep. Baldone was furious over the attempt to “steal” $55,000 from him (by advancing his bid to $725,000, from $675,000, plus a 10% buyer’s premium associated with that advancement). As a result, during the 2010 legislative session, he introduced a bill (HB 1439) to make shill bidding a crime and declare it “theft by nonviolent means.” That’s when all hell broke loose in the Louisiana auction industry. I testified in favor of Baldone’s bill, and overnight became the most hated auctioneer in Louisiana. LAPA has a webpage to explain shill bidding, and another to publicize statements made by auctioneers in public forums about shill bidding. Those public statements include prominent Livingston-based equipment auctioneer Marvin Henderson testifying in strong opposition to the bill, State Rep. John E. “Johnny” Guinn, R\-Jennings (who is himself a Louisiana-licensed auctioneer) stating publicly to the LALB that he was “embarrassed” by my testimony, the formal reading into the House records of the nineteen (19) auctioneers testifying or stating vigorous opposition to the bill, auctioneer Joe Massey relaying he felt I had “stabbed auctioneers in the back,” auctioneer Marvin Henderson trivializing my auction career. All of this furor over my steadfast resolve that auctioneers ought to obey the laws prohibiting shill bidding (or fully disclosing it to conform with the law). So, I found myself as a sitting member of the LALB, an agency for which the stated purpose is to “protect the public” (which is precisely what shill bidding laws are designed to do), and I became public enemy number one among Louisiana auctioneers for adhering to the very Oath I took when becoming an LALB Member!
My testimony led to immediate actions by LALB Members and the auctioneer community to have me removed from the LALB. First, then-LALB Chairman James Kenneth Comer sought to have ethics charges brought against me for my testimony. Ironically, in the weeks leading up to my testimony, LALB Executive Director Sandy Edmonds was actively recruiting auctioneers via phone, including me, to testify against the bill (she was doing so at the behest of then-Chairman Comer). Rev. Phillips received a similar phone call, and I confirmed that prominent Kenner-based real estate auctioneer Dave Gilmore had also gotten such a call. So, Chairman Comer, through Ms. Edmonds, was actively recruiting auctioneers to testify against the bill, a practice which is clearly an ethical violation (to recruit either for or against), yet he would seek to have ethics charges against me for my testimony in favor of the bill. The Ethics Board quickly relayed that I had in no way committed an ethics violation as I was “expressing (my) opinion regarding shill bidding and not those of the LALB.”
Immediately after my testimony in favor of Baldone’s bill, I was approached by several auctioneers in the hallway. One of the auctioneers, State Rep. John E. “Johnny” Guinn (R-Jennings), used profanity in berating me over my testimony. The incident got so bad that I filed a police report with Capitol Police. The officer who took my report relayed that he personally delivered it to then-House Speaker Jim Tucker. The officer relayed to me that Speaker Tucker was furious over Guinn’s conduct. Speaker Tucker, in turn, delivered the police report to Jindal’s office, and that was the last I ever heard of it. However, I have strong reason to believe that my filing clearly infuriated Guinn as evidenced by Guinn mailing this letter to Gov. Jindal seeking my removal from the LALB. Nine days later, Jindal complied and sought my resignation. His “Special Assistant,” Jonathan Ringo (who now is an associate attorney with Jimmy Faircloth’s firm), upon my asking him why my resignation was being sought, said only that “things just aren’t working out.” When I refused to resign, Gov. Jindal terminated my services effective September 10, 2010.
As I’ll demonstrate in my next installment, my shill bidding testimony was likely not the only reason Jindal removed me from the LALB. I was complaining bitterly to his office regarding my observation of blatant racism on the LALB regarding Rev. Phillips.