Feeds:
Posts
Comments

Archive for the ‘Fraud’ Category

Political back scratching questions will test our ‘Nothing Gets Done’ (admittedly cynical) lesson in Louisiana civics

Posted in Attorney General, Contract, Contracts, Corruption, DOA, Elections, Ethics, Fraud, Governor's Office, Health Care, Legislature, Legislators, Lobbyist, Media, Politicians, Privatization, Public Records on August 3, 2016| 5 Comments »

quid pro quo

ˌkwid ˌprō ˈkwō/

noun

A favor or advantage granted or expected in return for something.

Unless decisive action it taken over the next few days, our theory that nothing gets done about official chicanery, shady dealings and outright corruption will have been validated at the highest levels of state government.

And lest there are those who think I’m beginning to sound like a broken record, let me assure them that I will keep pounding the keyboard as long as I am physically and mentally able to put the glare of the spotlight on them and their deeds.

At one point in 2015, someone said to me, “Once Bobby Jindal leaves office, you won’t have anything to write about.”

Not a chance.

Unfortunately, as long as politicians are intoxicated by money and power, there will be plenty to write about. And, as Johnny Mathis sang his song The Twelfth of Never, “that’s a long, long time.”

Take Kristy Nichols, for example. Someone, please. (Sorry, Henny Youngman.)

Or, just for fun, compare the strikingly similar cases of Ascension Parish President Kenny Matassa and Louisiana Attorney General Jeff Landry.

Kristy, as LouisianaVoice reported last September, jumped the Jindal ship to join Ochsner Health System as Vice President of Government and Corporate Affairs (read: lobbyist).

https://louisianavoice.com/2015/09/17/more-on-kristys-new-job-it-seems-ochsner-gets-17-6-million-for-running-chabert-hospital/

The only problem with that was that as Commissioner of Administration for Jindal, she presided over virtually every facet of state government except the legislative and judicial branches, but worked closely with those as well. State law prohibited her from lobbying the administrative and legislative branches but apparently there was nothing to prevent her from lobbying local governmental entities.

On November 5, 2015, less than two months following our story, Kimberly L. Robinson, an attorney with the Jones Walker law firm, acting on behalf of Ochsner, requested an advisory opinion on the question of whether or not Kristy could legally lobby the state.

A month later, Gov.-elect John Bel Edwards named Robinson as the new Secretary of the Department of Revenue, prompting her resignation from Jones Walker.

http://www.nola.com/politics/index.ssf/2015/12/john_bel_edwards_appoints_kimb.html

Robinson was replaced by R. Gray Sexton as counsel for Kristy.

Sexton was an obvious choice, given his years as Chief Administrator for the Louisiana Board of Ethics. His knowledge of the system was so keen that in 2007, he pulled his own end-run when he resigned and the board immediately rehired him in a new capacity which allowed him to skirt a requirement under a newly-passed ethics law that he disclose clients in his private law practice (how’s that for irony?).

http://blog.nola.com/times-picayune/2007/07/ethics_administrator_quits_the.html

But back to Kristy’s dilemma.

On December 16, Sexton submitted a request to the ethics board to withdraw the request for an advisory opinion. Then, on January 22, 2016, Sexton submitted an Application for Declaratory Opinion on behalf of Kristy. That was followed by a request to withdraw the Application for Declaratory Opinion on March 31. The board granted the request to withdraw at its April 15 meeting.

The chronology was provided to LouisianaVoice in an e-mail Tuesday (Aug. 2) from Deborah S. Grier, Executive Secretary for the Board of Ethics. Here is that email:

——– Original message ——–

From: Deborah Grier <Deborah.Grier@LA.GOV>

Date: 8/2/16 9:14 AM (GMT-06:00)

To: azspeak@cox.net

Subject: RE: Opinion on Kristy Nichols: Public Records Requests

Good morning, Mr. Aswell:

Pursuant to your public records request of July 29, 2016 regarding an opinion issued by the Board with respect to former Commission of Administration Kristy Nichols’ employment as a lobbyist by Ochsner Health System, please be advised of the following:

A request for an advisory opinion dated November 5, 2015 was submitted by Kimberly L. Robinson with the Jones Walker law firm on behalf of Ochsner Health System and Kristy Nichols.  Ms. Robinson subsequently left the private practice of law and was replaced by R. Gray Sexton as counsel for Ms. Nichols as indicated in correspondence to our office from Mr. Sexton dated December 11, 2015.  On December 16, 2015, a request to withdraw the request for an advisory opinion was submitted to our office.  The Board considered and granted the request to withdraw the request for an advisory opinion at its December 18, 2015 meeting.

 Mr. Sexton, by correspondence dated January 22, 2016, submitted to the Board an Application for Declaratory Opinion on behalf of Ms. Nichols.  A request to withdraw the Application for Declaratory Opinion was received by this office on March 31, 2016.  The Board considered and granted the request to withdraw the Application for Declaratory Opinion at its April 15, 2016 meeting.
No opinion has been rendered by the Board with respect to this issue.
Should you have any questions or need additional information, please do not hesitate to contact me.

Sincerely,
Deborah

Deborah S. Grier
Executive Secretary
Louisiana Board of Ethics

So, what does all that mean?

Could it be that Ochsner and Kristy have decided to let sleeping dogs lie? After all, if she proceeds with lobbying efforts and no one files an official complaint, then it’s no harm, no foul, right? That would certainly run true to form for Jindal’s Gold Standard of Ethics.

A quick check by LouisianaVoice, however, revealed that Kristy is not registered among any of Ochsner Health System’s 10 lobbyists. Sexton told LouisianaVoice today that Ochsner had apparently decided not to pursue the matter and it was his understanding that the company was pursuing “other plans” for Nichols. “Ochsner has a number of other lobbyists,” he said.

So if she is not a registered lobbyist, then just what is it that she does to earn her keep as Vice President of Government and Corporate Affairs?

Or was her employment simply some form of payback as we initially suggested in light of the $31 million Ochsner received in takeover of the Leonard Chabert Medical Center by Southern Regional Medical Corp. and Ochsner as part of Jindal’s haphazard state hospital privatization plan?

https://louisianavoice.com/wp-content/uploads/2015/09/terms-of-the-ochsner-deal-at-leonard-chabert-medical-center.pdf

We’d no sooner received Ms. Grier’s email on Tuesday than the Baton Rouge Advocate posted a couple of stories, also on Tuesday, that caught our eye.

The first involved a claim by Gonzales City Council candidate Wayne Lawson that Ascension Parish President Kenny Matassa and Gonzales businessman Olin Berthelot attempted to bribe him not to seek a city council seat against incumbent Neal Bourque.

The Pelican Post news website first published the report that Matassa and Berthelot had offered Lawson $1,200 and a parish job if he would withdraw from the race. The deadline to withdraw was last Friday (July 29) at noon. Lawson, after posing for a photograph with the cash, a parish job application form and candidate withdrawal forms, returned the money and documents to Berthelot’s office without completing either of the forms.

http://www.theadvocate.com/baton_rouge/news/communities/ascension/article_d9fda80a-58df-11e6-884c-d3779607197c.html

Ricky Babin, District Attorney for the 23rd Judicial District, said his office would investigate Lawson’s claims. He said the Ascension Parish Sheriff’s Office and the Louisiana Attorney General’s Office are also investigating the allegations.

The Attorney General’s Office may be in something of a quandary as it embarks on that investigation, however.

The second Baton Rouge Advocate story, by reporter Gordon Russell, conjured up the ethics complained filed against Iberia Parish Sheriff Louis Ackal.

http://www.theadvocate.com/baton_rouge/news/politics/article_6f7a7990-58e9-11e6-9cd1-a36f0eb42bbf.html

https://louisianavoice.com/wp-content/uploads/2016/03/ethics-complaint.pdf

https://louisianavoice.com/2016/03/03/between-beating-guilty-pleas-sexual-harassment-lawsuit-and-ethics-complaint-iberia-sheriff-louis-ackal-has-his-plate-full/

https://louisianavoice.com/2016/03/09/one-week-after-louisianavoice-story-feds-hand-down-three-count-indictment-of-iberia-parish-sheriff-ackal-top-deputy/

In his story, Russell said that Landry, after trailing incumbent Buddy Caldwell by two percentage points in the primary election for Attorney General last October, received the endorsement of third place finisher Geri Broussard Baloney of Garyville in St. John the Baptist Parish, who had polled 18 percent.

With her endorsement in his back pocket, Landry, a former U.S. Representative, easily won the November runoff over Caldwell (who can forget Caldwell’s concession speech?). Soon thereafter, Baloney’s daughter, Quendi Baloney, was given a $53,000-a-year job by Landry.

At the time of her hire, all would-be employees of the AG’s office were required to sign a form agreeing to background checks and were also asked, in writing, if they had any criminal record.

In her case, she did. In 1999, she was charged with 11 felony counts of credit card fraud and theft, eventually pleading guilty to three counts, according to court records from Henrico County, Virginia. She was sentenced to six years in prison, all of it suspended.

Her new job? Well, it’s in the AG’s fraud section. More irony.

But in the end, her background is of less interest, given that her conviction was 17 years ago, than the fact that she was given her job as apparent payback for her mom’s endorsement of Landry following the first primary election in October.

A spokesperson for the AG’s office, Russell wrote, did not respond to questions about whether other candidates had applied for Quendi Baloney’s job or whether Landry had hired any other convicted felons.

For her part, Quendi Baloney told The Advocate that her arrest and conviction were “devastating,” but had made her a “stronger, harder-working ethical adult…”

She forwarded to The Advocate a link to the state’s new “Ban the Box” law which prevents state agencies from asking applicants about their criminal records. That law, however, did not take effect until after she was hired.

It’s going to be more than a little interesting to see how Landry’s investigation of Matassa and Berthelot unfolds in light of the same day’s revelations about his own actions.

But we’re willing to wager that when the dust settles on the issues of Matassa, Berthelot, Nichols, Ackal (the state ethics complaint, not the federal indictment) and Baloney, we’ll still be able to say:

Nothing gets done.

Read Full Post »

In a state where graft and corruption abound, honesty and law enforcement have taken a permanent leave of absence

Posted in Boards, Campaign Contributions, Commissions, Corruption, Courts, DOA, Ethics, Fraud, Governor's Office, Jobs, Legislature, Legislators, Lobbyist, Politicians, Retirement, State Police on July 25, 2016| 12 Comments »

Call it the summer doldrums or whatever you wish. The truth is there hasn’t been much political blog activity—from any of us.

It’s not that there is a dearth of news to report; between killings by cops, killings of cops, terrorist attacks, political accusations, political promises that border on fantasy, e-mail scandals and plagiarized speeches, there’s more than enough to go around. But somehow, we’ve become inured, victims of a malady we can only identify as scandal fatigue for lack of a better term.

But LouisianaVoice, with the help of a couple of volunteer researchers, is working on a project that should generate considerable readership interest—unless, of course, readers are also victims of the summertime lethargy that seems to be at least somewhat contagious.

But we’d be less than honest if we didn’t admit we get pretty discouraged when we expose wrongdoing—some of it even criminal in nature—on the part of elected and appointed officials and nothing is done about it.

What more needs to be done, for example, than to point out the illegal use of campaign funds for such personal use as season tickets to sporting events, luxury car leases and even paying ethics violation fines and personal federal income taxes from campaign funds? Yet, nothing is done.

https://louisianavoice.com/2015/05/17/improper-spending-of-campaign-funds-appears-to-be-the-rule-rather-than-the-exception-in-louisiana-random-check-reveals/

What more needs to be done than to publish official investigative reports of a state trooper having sex in his patrol car while on duty to bring severe disciplinary action down on that officer?

https://louisianavoice.com/2015/10/04/you-couldnt-time-an-egg-with-this-guy-state-police-lt-has-sex-twice-on-duty-once-in-back-seat-of-patrol-car-still-on-job/

It took LouisianaVoice weeks and many stories before official action was finally taken against a state trooper who went home to sleep during his shift so that he could work his second job the next day before he was finally fired. And even though we revealed that his supervisor allowed this practice to go on for years, the supervisor was simply transferred—even after we published audio recordings of that same supervisor refusing to accept a citizen’s complaint after he had denied refusing the complaint.

https://louisianavoice.com/2015/09/11/gift-cards-for-tickets-payroll-chicanery-quotas-short-shifts-the-norm-in-troop-d-troopers-express-dismay-at-problems/

After we ran a story about a legislator, who made thousands of dollars by purchasing stock in a company he knew was going to be approved for a major program with the Department of Education, that legislator was re-elected.

https://louisianavoice.com/2014/03/27/senate-education-chairman-appel-purchases-discovery-stock-week-before-company-enters-into-state-techbook-agreement/

When we outed Frederick Tombar III, the $260,000 per year director of the Louisiana Housing Corporation, over his sexually explicit emails sent to two female employees, he promptly resigned only to turn up at Cornerstone Government Affairs, a consulting company headed by former Louisiana Commissioners of Administration Mark Drennan and Paul Rainwater.

https://louisianavoice.com/category/campaign-contributions/page/9/

When we ran the story of a clerk in Fourth Judicial District Court in Monroe with ties to powerful attorney and banking interests who was failing to show up for work, both the Louisiana Attorney General the Office of Inspector General punted on their investigations.

When a north Louisiana contractor sued the Louisiana Department of Transportation and Development over attempts by DOTD employees to extort payoff money from him, he won more than $20 million. Instead of paying up as it should, however, the state simply said it doesn’t have the money to pay the contractor who was forced into bankruptcy by the department’s criminal activity. Yet, no one at DOTD was fired, much less prosecuted.

http://www.thenewsstar.com/story/news/local/2015/12/04/contractor-wins-20m-suit-against-dotd/76813444/

Department of Public Safety Deputy Undersecretary Jill Boudreaux twerked the system by taking an incentive buyout for early retirement that netted her an extra $59,000. She promptly promoted herself and came back to work the next day at a salary bump. Ordered to repay the $59,000 by then Commissioner of Administration Angele Davis, she never did.

https://louisianavoice.com/2014/08/24/edmonson-not-the-first-in-dps-to-try-state-ripoff-subterfuge-undersecretary-retiresre-hires-keeps-46k-incentive-payout/

But a caseworker for the understaffed and overworked Office of Children and Family Services was arrested with all the appropriate posturing and chest-thumping by law enforcement officials—including State Police—for payroll fraud after allegedly falsifying reports on monthly in-home visits with children in foster care.

https://louisianavoice.com/2016/03/13/dcfs-funding-slashed-necessitating-driveway-visits-but-overworked-caseworker-is-arrested-for-falsifying-records/

The lesson here is obvious: if you’re politically connected, you can scarf off $59,000 with no repercussions but if you’re a lowly civil servant striving to meet impossible work demands brought about by budgetary cuts, you’re SOL. It’s not that we condone the payroll falsification, but justice should that should be administered evenly and blindly—but somehow never is.

The stories we have written about the Louisiana State Board of Dentistry and what the board does to dentists to destroy their practices and their very lives are horrific. Some of the investigative tactics and the retributions against defenseless dentists are sadistic at best and criminal at worst. Yet the board is allowed to continue its practices unchecked.

And as recently as May 2, we have the announcement from Gov. John Bel Edwards of the appointment of TERRENCE LOCKETT of Baton Rouge to the Louisiana Auctioneers Licensing Board. His appointment was made despite his being ordered in 2013 to pay $600 in penalties for his failure to file lobbying expenditure reports from March-December 2011 and his second-offense DWI in April 2014, which was reduced to a first-offense DWI.

http://gov.louisiana.gov/news/gov-edwards-announces-boards-and-commissions-appointments-5-2

By now, you’ve probably detected a trend.

It’s more than a little frustrating to see these transgressions reported, to know they are seen by those in a position to do something, and yet see these same ones in charge do nothing—or do so little as to make any discipline meaningless.

LouisianaVoice over the next few days will examine ethics fines that have gone uncollected for years, critical legislative audits of state agencies about which nothing seems to get done, and campaign contributions and lobbying activity that fortify the positions of special interests while diminishing to virtual insignificance the influence and interests of Louisiana’s citizens.

And nothing gets done.

Read Full Post »

Active trooper Doss chosen president of commission that investigates LSP wrongdoing, hears state trooper appeals

Posted in Boards, Campaign Contributions, Civil Service, Commissions, Ethics, Fraud, Governor's Office, Lobbyist, State Police, Transparency on July 15, 2016| 12 Comments »

It’s really interesting—and disappointing—to see how the very ones charged with enforcing our laws can be so condescendingly smug about getting away with actions they have to know—but can’t bring themselves to admit—are wrong from a legal, moral and ethical standpoint.

To no one’s surprise, the Louisiana State Troopers Association (LSTA) is both capitalizing on what it terms as “civil unrest” and crowing about the outcome of Thursday’s meeting of the Louisiana State Police Commission (LSPC).

But the association’s braggadocio was careful to cloak an ongoing effort for yet another pay raise (the third in just over a year) in a carefully worded, three-sentence explanation.

And the election of a new commission president could present a whole set of new problems.

To bring you up to date, the LSPC accepted the recommendation that no action be taken in any investigation of wrongdoing by state troopers responsible for (a) making the decision to actively support political candidates with campaign contributions and (b) laundering the money through the bank account of LSTA Executive Director David Young. https://louisianavoice.com/2016/07/14/expectations-of-state-police-commission-report-on-lsta-campaign-contribution-probe-dies-with-a-pitiful-whimper/

The Code of Governmental Ethics, Section VIII of R.S. 18:1505.2 (B) lists the making of contributions or loans “through or in the name of another” as a prohibited practice. http://ethics.la.gov/Pub/Laws/cfdasum.pdf

That’s pretty specific and clear-cut. And that prohibition is equally applicable to boty civil service employees and state police, even though the two answer to different boards—state employees to the State Civil Service Commission and state troopers to the LSPC.

And if the LSPC cratered to pressure from the Louisiana Sheriffs’ Association, with the office of Gov. John Bel Edwards serving as the official conduit, there are other ongoing investigations and one of those investigating agencies, the FBI, is not likely to succumb to pressure from the sheriffs or Edwards.

The State Ethics Board also has been asked to look into the contributions laundered by LSTA to a number of statewide political candidates since 2003, including Bobby Jindal and Edwards, both of whom received $10,000 from the association. Edwards has since returned his contributions to LSTA.

Here’s the text of an email from LSTA President Jay O’Quinn that went out Friday morning, the day after the LSPC unanimously accepted the recommendation of commission attorney Taylor Townsend that no action be taken on the investigation:

From: Hillary Moses <hmoses@latroopers.org>
Date: July 15, 2016 at 10:53:37 AM CDT
To: undisclosed-recipients:
Subject: A Message from LSTA President Jay O’Quinn

Members, 

During this time of civil unrest, please remain vigilant in keeping yourselves and your families safe.  I only wanted to take a few moments to inform you of a few details regarding yesterday’s Louisiana State Police Commission (LSPC) meeting.  Most of you are aware that, many months ago, certain individuals alleged that LSTA members and David Young were guilty of misconduct related to political activity.  The LSPC began an investigation into the LSTA based on these allegations and assigned attorney Taylor Townsend to conduct the investigation.  The LSTA cooperated fully, and Mr. Townsend acknowledged his appreciation of our cooperation when he released his findings in yesterday’s public meeting.  Mr. Townsend stated that the LSPC has no authority over the LSTA or its Executive Director, facts that were previously acknowledged.  Mr. Townsend further declared that no individual trooper was guilty of misconduct. The commission then voted unanimously to take no action and announced the matter closed.  

In regard to the proposed rule changes affecting the Louisiana State Police pay plan, Rodney Hyatt testified on behalf of the department.   After some debate, Rodney and TJ Doss, our representative on the Commission, successfully persuaded the Commission to table this matter until the next LSPC meeting.  This was done to allow the department time to ascertain the effects of the rule change and make any necessary adjustments to protect the pay plan.    

Lastly, by vote of the six Commission members, TJ Doss was elected as Chairman of the LSPC.  Please join me in congratulating TJ.  He has proven to have the motivation and ability to lead the LSPC.  To have the other Commission members recognize his ability and leadership is an enormous, well-deserved compliment.  Thanks to all members who took time to attend yesterday’s meeting, and thank you to those who continue to support the LSTA.  The many phone calls, messages, and words of encouragement mean more than you know.  Please feel free to share this information with members who may not have an e-mail address separate from the department. Thank you, and stay safe. 

Jay 

Way to go, guys. You pulled a fast one. It’s not enough to get away with it, but you have to top it off with bombast and swagger—just to show you can. Real class. But you might do well to remember two applicable quotes: It ain’t over ’til it’s over (Yogi Berra) and Pride goeth before a fall (Proverbs 16:18).

If you read O’Quinn’s email carefully, you may have noticed two other things worth reexamination.

The e-mail skimmed over (we think deliberately) the testimony of State Trooper Rodney Hyatt with the two sentence explanation that Hyatt and commission member Thomas J. Doss, himself a state trooper, persuaded the commission to table an unspecified matter for 30 days to allow times to ascertain effects of a new rule change and to make “any necessary adjustments to protect the pay plan.”

That unspecified matter was a pay plan, adopted last November giving troopers an automatic yearly 4 percent pay hike but rescinded last month because any rule that affects wages or hours can go into effect only upon the governor’s signature—and that signature has never been provided. https://louisianavoice.com/2016/06/06/starnes-promotion-pulled-by-edmonson-after-complaint-governor-fails-to-sign-lsp-pay-plan-rescinded-by-lspc/

It was Doss who insisted that a new rule eliminating the longevity pay plan be tabled for 30 days. His motion was a transparent effort to send signals to the LSTA to step up its lobbying efforts with the governor’s office to get Edwards’ signature on last November’s pay plan, effectively killing the substitute plan. Eight months apparently was not sufficient for Doss and Hyatt; they need another 30 days, it seems.

Even as state civil service employees have gone without pay increases for five years or longer, state police have already received pay raises over the past 18 months totaling as much as 50 percent for some troopers.

The proposed longevity pay plan, which gives automatic yearly pay raises (that other state employees have been denied) aside from any merit increases, could give the impression that state police under its present leadership are just a tad greedy.

Obviously that’s not applicable to all state police officers—just those at the top who are attempting this as a means of consolidating power by buying the loyalty of the rank and file troopers. It was no accident that Thursday’s LSPC meeting was attended by nearly two dozen troopers from headquarters.

It was also Doss who was chosen as the new President of LSPC. The only dissenting vote was cast by Calvin Braxton of Natchitoches who nominated and voted for Interim President Lloyd Grafton of Ruston.

With the killing of the LSTC money laundering investigation and the 30-day delay on adopting a substitute to the proposed longevity pay plan in order for the LSTA to gets its ducks (read: politicians) lined up, the election of Doss as the new president was the perfect trifecta for Mike Edmonson.

The commission’s Web page contains the traditional mission statement:

Our mission is to provide a separate merit system for the commissioned officers of Louisiana State Police. In accomplishing this mission, the program administers entry level law enforcement examinations and promotional examinations; process personnel actions; issue certificates of eligibles; schedule appeal hearings on disciplinary matters on a monthly basis and pay hearings when necessary. Review, develop and implement State Police Commission rules, perform investigations, review contracts, review and accept or denies performance appraisal programs, and issues general circulars and transmittals. To enable the Office of State Police to meet the staffing needs in a timely fashion by hiring and promoting the best qualified applicants. 

So now the following questions must be asked:

  • Could there be a conflict of interest in his serving as president of the commission that is charged with performing investigations of wrongdoing and ruling on appeals of disciplinary matters?
  • What will happen should State Police Superintendent Mike Edmonson come under investigation by the commission?
  • What will be Trooper Doss’s position should one of his fellow troopers—a close friend—come under investigation for some transgression?
  • How will Doss handle appeals from trooper friends disciplined by Edmonson? Will he support his friends or go against his commander?

These are serious questions that someone should put to the State Board of Ethics.

In the seven years that Doss has served as a full-time trooper, he has received pay increases totaling 36.5 percent—from $37,500 to $59,000.

But never fear. If past is indeed prologue (William Shakespeare: The Tempest), his seat on the commission is the fast track to lucrative promotions.

We have already begun a dangerous descent on a slippery slope and that slide must be reversed. Too often and for too long we have benignly looked the other way when we are confronted with unethical, immoral and illegal behavior by our public officials.

It is no longer sufficient to simply smile and say, “Well, that’s just Louisiana politics as usual.”

It may well be politics as usual, but it’s time for the citizens of this state to unite and demand one simple thing of our public officials:

Do the right thing. Not because we say so, but because it IS the right thing. Better yet, do it when no one is looking. You’ll be surprised how good it feels.

Read Full Post »

Ponzi schemer, Trump super PAC mgr. Steven Hoffenberg tied to Clinton friend and human trafficker Jeffrey Epstein

Posted in Campaign Contributions, Corruption, Ethics, Fraud, PACs, Politicians, Prison on July 6, 2016| 9 Comments »

A couple of weeks ago, LouisianaVoice revealed that convicted Ponzi scheme operator Steven Hoffenberg had established a super PAC for the benefit of Donald Trump and had pledged $50 million of his own money to the effort to raise $1 billion on behalf of the presumed Republican nominee. https://louisianavoice.com/2016/06/21/operator-of-1990s-ponzi-scheme-outed-by-ruston-newspaper-re-surfaces-quarter-century-later-as-major-trump-fund-raiser/

Many north Louisiana residents were victimized by his scam before John Hays and his Morning Paper in Ruston outed Hoffenberg for what he was—a snake oil salesman. Now he’s out of jail and his story just keeps getting curiouser and curiouser as we plunge deeper into that rabbit hole.

Hoffenberg, who bilked investors out of about $475 million, the largest Ponzi scheme on record at the time B.B.M. (before Bernie Madoff), appears to have made a strong rebound and the cast of players also has expanded to include his former high-rolling business partner, child trafficking, a “Christian” credit card scheme, movie stars, a prince, and Bill Clinton.

LouisianaVoice has since learned that though he was sentenced to 20 years’ imprisonment and ordered to make restitution, he has repaid only about $200 million to investors whose savings he wiped out. He even claimed in 1996 that he was too destitute to post $100,000 bail.

So how is it that after serving 18 years of that sentence, he (a) now has $50 million to toss at Trump and (b) why haven’t authorities ordered that money to go into a pool to repay investors?

As with most questions of a rhetorical nature, there are no clear-cut answers. There is no black or white, only varying shades of gray. Facts, accusations and outright lies become so intertwined that it becomes virtually impossible to separate one from another in trying to make sense of it all.

If you listen to Hoffenberg today, you get the idea he is doing his dead-level best to make his investors whole, a seemingly benevolent gesture to be sure. Incredibly, he still heads Towers Investors, the company through which he ran his Ponzi scheme from the late 1970s until 1993. The corporation’s Web page includes this MESSAGE:

Today, that same Web site attempts to shift the blame for the bilking of 200,000 individuals of their savings to fellow wealthy Wall Street prodigy Jeffrey Epstein who Hoffenberg now says is the one who ran the pyramid scheme through his Towers Investors company.

Typically, Hoffenberg says on his Web page that “authorities figured out what was happening” with his gigantic scam. It seems he still cannot bring himself to admit that a small town newspaper publisher was the one who “figured out” what was going on and ultimately was the one who brought the scheme crashing down, sending Hoffenberg to a federal lockup for 18 years in the process. Hays, as we pointed out in our story last month, won awards for his work on the story and was nominated for a Pulitzer Prize for investigative reporting.

So who is Jeffrey Epstein and how does he figure in the Hoffenberg-Trump-Clinton saga? A former school teacher, he worked for six years at the Wall Street banking firm Bear Stearns before launching his own financial investing firm in 1982.

The London Daily Mail on May 29, published an exclusive story that detailed the complicated partnership between Epstein and Hoffenberg, Hoffenberg’s $1 billion lawsuit that accuses Epstein of running the Ponzi scheme through Hoffenberg’s company, Towers Financial Corporation.

When Hoffenberg was first charged, prosecutors tried to offer him a reduced sentence in exchange for information about Epstein and his part in the scam but Hoffenberg refused at the time to cooperate.

Epstein, meanwhile, continued to live large. He owns a luxury townhouse in Manhattan, an $11 million mansion in Pam Beach, Florida, and a private island in the Virgin Islands. He current resides in the Virgin Islands, according to the Florida sex offenders’ registry.

Sex registry? Just when you think this story couldn’t get any more salacious, it does.

In unrelated legal action, two unidentified women are claiming they were sexually abused by Epstein in the early 2000s when they were teens. They said he made them into sex slaves and passed them on to his friends. http://www.miamiherald.com/news/local/community/broward/article5342709.html

In 2008, Epstein was accused of sending staff members to recruit underage high school girls in West Pam Beach to travel to his mansion to provide massages and sex. His legal defense team included Alan Derchowitz, Roy Black and Kenneth Starr. http://www.thedailybeast.com/articles/2011/03/25/jeffrey-epstein-how-the-billionaire-pedophile-got-off-easy.html

Starr became a household name with his report that led to the impeachment of President Bill Clinton in the Monica Lewinsky affair. Starr would then go on to become head of Baylor University but ironically was forced to step down over his handling of a sex scandal at the Baptist school that also brought down the school’s football coach. Black is best known as the attorney who defended William Kennedy Smith against rape charges in Palm Beach.

The three lawyers negotiated the deal of the century, prompting speculation that Epstein benefitted from his high-level social and political contacts. Those included actors Kevin Spacey, Chris Tucker and Woody Allen, Prince Andrew, and Bill Clinton, who used Epstein’s Boeing 727, The Lolita Express, on at least two dozen occasions. http://www.dailywire.com/news/5749/both-trump-and-clinton-went-jeffrey-epsteins-sex-amanda-prestigiacomo

Not even a prestigious publication like Newsweek could resist the temptation of covering the Epstein-Clinton-Prince Andrew connection in January 2015. http://www.newsweek.com/2015/02/06/sex-offender-who-mixes-princes-and-premiers-302877.html

Epstein’s 2008 plea agreement revealed that prosecutors suspected him of abusing up to 40 underage girls but gave him a secret plea bargain in lieu of prosecuting him. http://www.dailymail.co.uk/news/article-3364381/Notorious-billionaire-pedophile-ex-bestie-Prince-Andrew-Jeffrey-Epstein-hugs-squeezes-bum-one-young-blonde-escapes-New-York-Caribbean-holiday-beauty.html

As a sidebar to all this sleazy mess, Law Newz, an online legal news service, reported on Monday (July 4) that Trump himself is accused of sexually assaulting a 13-year-old girl in Epstein’s presence in 1994.

In the Doe v. Donald J. Trump federal civil case, a witness statement is attached to the lawsuit in which the alleged witness claims to have “personally witnessed the plaintiff being forced to perform various sexual acts with Mr. Trump and Mr. Epstein. Both Mr. Trump and Mr. Epstein were advised that she was 13 years old.”

The witness statement went on to say, “I personally witnessed four sexual encounters that the plaintiff was forced to have with Mr. Trump during this period, including the fourth of these encounters where Mr. Trump forcibly raped her despite her pleas to stop.” http://lawnewz.com/celebrity/why-isnt-anyone-paying-attention-to-the-sexual-assault-lawsuit-against-trump/

Of course, so-called witnesses can—and often do—say things under oath that are far removed from the truth. LouisianaVoice is in no position to authenticate or refute the claims but the fact that they are now part of court record gives them added significance. http://www.dailymail.co.uk/news/article-3564767/Donald-Trump-furiously-denies-woman-s-claims-raped-tycoon-billionaire-pedophile-Jeffrey-Epstein-s-sex-parties.html

Thrown into the mix of this bizarre story is Hoffenberg’s latest scheme, the “Christ Card,” a special “Christian” credit card being peddled to churches across the U.S. “The Christ Card holders have the benefit of gaining discounts in all of their purchases under the walk in grace serving out Lord Jesus Christ as customers and as our partners in faith, in our Christ Card family,” says Hoffenberg’s pitch on his Towers Investors Group Web page. http://towersinvestors.com/portfolio-view/christ-card/

Hoffenberg claims to have been converted to Christianity while serving time for cheating investors and now he’s pushing an idea that has spawned numerous scams—Christian debt. This, of course, is not say his promotion is another scam but he does have the pedigree as one who preys on others’ and as one ready, willing and able to lighten unsuspecting victims’ wallets.

He claims to have already completed the negotiation phase for the marketing of the card to more than 700,000 registered Christian churches in the U.S., according to another Web page of WHAM, Inc. http://whaminc.us/investor-questions-wham-answers

That number dwarfs the number of investor he bilked with his Ponzi scheme back in the ‘70s, ‘80s and ‘90s. In WHAM’s post of only three weeks ago, Hoffenberg was quoted as saying, “Towers Investors/ WHAM INC Steven Hoffenberg anticipate completion and delivery of the Christ Credit Card to the end users within the next 90 days. This multi-year endeavor by Steven Hoffenberg will change the entire financial picture for WHAM investors.” http://whaminc.us/

So what is WHAM, Inc. and how does it figure in all of this? Well, according to Globe Newswire’s Web posting of Feb. 8, 2016, WHAM acquired 100 percent of all stock owned by Hoffenberg’s New York Post Publishing (not to be confused with Rupert Murdoch’s New York Post, previously run briefly by Hoffenberg—got it?), Christ Credit and the trademarks of Christ Donations, Christ Faith Card com., and a few other enterprises run by Hoffenberg—including the “billions of dollars in the Jeffrey Epstein contract with Towers investor victims.” Epstein, the Globe Newswire post says, was Hoffenberg’s “best friend and former partner.” https://globenewswire.com/news-release/2016/02/08/808616/0/en/Additional-Details-Regarding-WHAM-INC-Collection-of-Jeffrey-Epstein-s-Billions-for-the-Towers-Investor-Victims.html

But given the Hoffenberg-Epstein relationship, the Epstein-Clinton ties, and the Hoffenberg-Trump connection (Hoffenberg’s latest marriage to his publishing company president was performed just outside Trump Towers where Hoffenberg maintains his offices), we can’t help be intrigued at this sordid story.

HOFFENBERG WEDDING PARTY

The Hoffenberg wedding party outside Trump Towers (from left to right: Associate Publisher of Post Publishing Flo Anthony, Post Publisher and the new Mrs. Hoffenberg, Maria Santiago, Hoffenberg, best man Steven Jude, pastor Copper Cunningham, and video photographer, identity unknown).

And given that Hoffenberg was first ratted out for swindling Louisiana residents by a north Louisiana publisher, we feel it newsworthy to monitor developments in these interconnected stories as they occur.

And whether subsequent events adversely affect any Republicans or Democrats who might be stupid enough to be caught up in this tangled web of deceit is immaterial to us. Any association with Hoffenberg or Epstein—either by Trump or the Clintons—cannot possible be in the best interests of the average American citizen.

Read Full Post »

Operator of 1990s Ponzi scheme outed by Ruston newspaper re-surfaces quarter-century later as major Trump fund-raiser

Posted in Campaign Contributions, Corruption, Courts, Crime, Elections, Ethics, Finances, Fraud, PACs, Politicians, Transparency on June 21, 2016| 14 Comments »

When it comes to financial shell games and political flim-flam, it seems that the two have a lot in common, oftentimes including the same personality mixes whose names keep cropping up. Sometimes those names can materialize like a deadly vapor in proceedings separated by a couple of decades. And somehow, those years and events mysteriously converge to affect the lives of thousands—or millions—of people.

It was in late 1990 that the late John Hays, the cantankerous publisher of the weekly Morning Paper in Ruston began writing stories that raised questions about Towers Financial Corp. and its chairman, one Steven Hoffenberg.

At first, his stories attracted little interest. On paper, as the sportswriters would say, it was a mismatch. Hays, described by NEW YORK TIMES in an April 1993 story as “a hard-drinking, chain-smoking, cowboy-booted newspaper publisher” was pitted against Hoffenberg, who briefly ran The New York Post, eventually taken over by Rupert Murdoch. Hoffenberg owned two jets, a yacht, limousines, mansions, and a Fifth Avenue office. Hays drove an old van well past its prime. It quickly shaped up as an epic battle between a small-town publisher operating on a shoestring and a sophisticated New Yorker who had, it seemed, more money than God.

But investors were getting nervous in the late 1980s and early 1990s. Some of them called Hays who had a penchant for taking on phony investment schemes. Hays, as was his wont, began making calls that piqued the interest of Securities and Exchange Commission investigators as well as state regulators. He had worked with these same regulators in other scams, so he had the credentials necessary to make them sit up and pay attention whenever he called.

Hays even managed to attract the attention of major newspapers like the WASHINGTON POST

Hoffenberg had all the right political connections. He was a business ally of former Texas Gov. John Connally and with a former co-chairman of the Republican National Committee. Other friends in high places included Victoria Reggie, daughter of powerful Crowley Judge Edmund Reggie and the future wife of Sen. Edward Kennedy, New York City Mayor Mario Cuomo, and Mickey Kantor, President Bill Clinton’s trade representative. Heavy hitters, one and all.

Some of his connections, however, tended to hang back in the murky shadows of a darker side of society. https://porkinspolicyreview.com/tag/steven-hoffenberg/

http://gawker.com/501354/exposed-the-leon-black-jeffrey-epstein-connection

http://www.mediaite.com/online/vanity-fair-editor-reportedly-removed-underage-girls-allegations-about-jeffrey-epstein-from-2003-story/

When a Shreveport brokerage firm started peddling high-yielding notes for Towers in 1990, Hays said he immediately wondered “if some fellow up in New York has such a good deal, what would inspire him to come down here to northern Louisiana and make the local people rich?”

He started making calls and writing stories—stories that obviously did not sit well with Hoffenberg.

If Hays was suspicious of Hoffenberg, the feeling was more than mutual. “He’s not a credible person,” Hoffenberg said of Hays. “He runs a newspaper that is full of lies. I have never heard from anybody that John Hays was somebody we should take seriously. I mean, he gives his newspaper away; he throws it on people’s driveways.” Twenty-five years later, one could close his eyes and almost hear Donald Trump talking about another candidate or some reporter covering his campaign.

(Oh, just as a heads-up, keep that Trump comparison in mind. He’ll come up later in this story.)

Hoffenberg was correct in that last statement. Hays did indeed toss about 25,000 free copies a week in the driveways of Lincoln, Union, Bienville, and Jackson parishes.

But Hays also became a national clearinghouse for information between state regulatory agencies. He was credited by Arkansas authorities as providing information to them that allowed them to keep Hoffenberg and Towers Financial Corp. out of that state.

But not all states. Hays began making calls to regulators and learned that Towers was selling notes in states where it had failed to meet registration requirements. Enter the feds. More stories followed.

So, who won the war of words?

Well, Hoffenberg eventually entered a guilty plea to running a $475 million Ponzi scheme, the largest on record until Bernie Madoff dwarfed Hoffenberg’s financial chicanery. In 1997, Hoffenberg was sentenced to 20 years in federal prison for defrauding thousands of investors. http://www.nytimes.com/1997/03/08/business/hoffenberg-gets-20-year-sentence-in-fraud-case.html

His nemesis who he said “runs a newspaper that is full of lies” and a man he said he never heard “from anybody that John Hays was somebody we should take seriously,” was nominated for the Pulitzer Prize.

Someone once said never start a fight with someone who buys ink by the barrel and newsprint by the boxcar. Apparently Hoffenberg wasn’t listening.

The Hoffenberg/Towers Investment saga was the subject of a lengthy abstract by Gene Murray, Ph.D., assistant professor in the Department of Mass Communication at Grambling State University. http://list.msu.edu/cgi-bin/wa?A3=ind9710a&L=AEJMC&E=7BIT&P=1328897&B=–&T=TEXT%2FPLAIN;%20charset=US-ASCII

But let’s fast forward to 2016. John Hays has been dead for a year now, the Morning Paper stopped publication several months before his death when his cancer weakened him to the point he could no longer peddle his ads or chase down a good story.

Hoffenberg couldn’t get out of jail in 1996 because, he said, he was so broke he couldn’t post the $100,000 bail. http://www.nydailynews.com/archives/money/sec-hoffenberg-pay-stay-jail-article-1.730715

Twenty years later, however, he is back in the money—and he wanted everyone to know it. It’s almost enough to make you wonder if he may have had a few dollars stashed safely offshore all that time.

The man who couldn’t make $100,000 bail a couple of decades ago has recently pledged $50 million to his super PAC set up to coordinate a marketing campaign in support of Donald Trump. http://www.washingtonexaminer.com/ponzi-schemer-steven-hoffenberg-pledges-50-million-to-help-trump/article/2593931

Hoffenberg, who professes to be a born-again Christian (funny how prison can do that; just ask Chuck Colson), is also in the business of marketing something called the Christ Credit Card to more than 700,000 registered Christian churches through Towers Financial.

http://whaminc.us/investor-questions-wham-answers

In addition to pledging $50 million of his own money to his super PAC, he also says he intends for his PAC to raise more than $1 billion in support of Trump. http://www.politico.com/story/2016/06/convicted-ponzi-schemer-ill-conduct-50-million-marketing-campaign-for-trump-224350

http://www.washingtonexaminer.com/trump-super-pac-predicts-raising-1-billion/article/2592210

So much for Trump’s claim that he is financing his own campaign—or for Hoffenberg’s earlier claims of poverty.

The announcement by Hoffenberg was the first time he has explained why he founded the Get Our Jobs Back, Inc. PAC back in April. He is listed as treasurer and custodian of records by the Federal Election Commission. http://docquery.fec.gov/cgi-bin/forms/C00616078/1070515/

Could this be déjà vu all over again? Can you imagine someone like Hoffenberg having the ear of a President Trump?

We have only a few random observations to make about this latest development, this unholy alliance between two high-rolling carnival hucksters of dubious trustworthiness:

  • Watch closely how he raises that much campaign cash.
  • Does his credit card scheme figure in the mix?
  • Old habits sometimes can be hard to break.
  • Where is John Hays when we really need him?

Read Full Post »

« Newer Posts - Older Posts »