An ever widening tale of political corruption involving Jefferson Parish Councilman Byron Lee has its roots in garbage: the River Birch Landfill in Waggaman, to be exact.
Lee, who was a candidate for the U.S. Congress in 2008, had been prominently mentioned as a possible Chief of Staff for the newly elected 2nd District U.S. Rep. Cedric Richmond, himself no stranger ethical questions. Despite having his license to practice law suspended for misrepresenting his address in an attempt to qualify for a New Orleans City Council seat, Richmond, a Democrat, defeated incumbent Republican Congressman Joseph Cao by 24% of the vote.
No stranger to criticism, Lee has been blasted by the media and his constituents over a series of decisions that benefited his inner circle and diverted funds from a legal settlement intended to benefit the small community of Waggaman.
In September 1997, years before Byron Lee was elected to the Jefferson Parish Council, the Council approved a request by River Birch to rezone 320 acres of land for a new landfill in Jefferson Parish provided River Birch contribute $700,000 to a community fund to improve the quality of life for those impacted by the new landfill. River Birch was required to contribute $70,000 per year for 10 years.
Members of the Waggaman community, while wary of the landfill, were excited by the prospect of road improvements, new recreational opportunities, and improved facilities that the River Birch settlement would provide. That is before Councilman Donald Jones, Lee’s predecessor on the Parish Council, determined that the funds were under his discretion and could go to improving his entire council district, not just Waggaman.
When Lee took office in 2004, he didn’t just continue the tradition of slighting his constituents in Waggaman. Lee flaunted the diversion of funds, sending the bulk of the money to the Jefferson Sports & Scholastic Foundation – a non-profit group that is run by Lee’s campaign treasurer, Lester Dunn.
Through 2009, Lee steered over $240,000 in funds from Jefferson Parish to the Foundation. In addition, Lee lobbied for $200,000 from the State Department of Education and over $324,000 from the Louisiana Family Recovery Corps, a non-profit designed to assist homeowners recover from Hurricanes Katrina and Rita.
According to its Articles of Incorporation, the Jefferson Sports & Scholastic Foundation’s intended mission is to provide athletic and academic support to the youth of Jefferson Parish.
Last week a Legislative Auditor’s Report listed the Foundation as non-compliant as it hasn’t submitted required paperwork, including financial statements, due since June of 2008. The Foundation is also “not in good standing” with the Secretary of State’s Office, has received an IRS Lien for back taxes and owes Jefferson Parish over $13,000 in fines for grass cutting and debris pickup at properties the Foundation owns and is trying to sell.
A new Legislative Auditor’s Report released Monday, alleges even more inappropriate financial behavior on the part of the Foundation.
The Auditor’s Report claims that the Foundation:
- had a pattern of widespread accounting problems
- lacked proper financial controls
- failed to file income taxes for several years
- had hundreds of thousands of dollars in payments made to vendors without any documentation
- entered into contracts with unapproved vendors
- paid for meals for a summer camp when the camp wasn’t open
In addition to the accounting problems and lack of documentation, while the Foundation was receiving Parish funds, it failed to purchase the liability insurance required by the Parish from 2004 – July, 2007.
The Report lists over $96,000 in questionable expenses including a membership at a local golf course for Lester Dunn, almost $9,000 spent on a retreat to Florida, and over $85,000 in donations to schools, school clubs and other charities. It is against state law to donate public funds granted to one non-profit to another non-profit.
The Auditor’s Report also questions over $120,000 paid to a company owned by State Representative Girod Jackson (D-Harvey) without any documentation for the work performed. The funds were for teachers in a computer tutorial program and meals at a summer camp.
Representative Jackson’s company, Diversified Ventures, could not provide the Legislative Auditor with copies of checks paid to teachers, sign-in sheets for the students, and could not provide any documentation for the amount of meals that were served, where the meals were served and how many children were served.
In addition, the Auditor’s Report alleges that Diversified Ventures billed the Foundation for buses and meals when the camp wasn’t in session and overcharged the Foundation by incorrectly calculating invoices.
Representative Jackson did not respond to a written request from the Legislative Auditor asking for a response to the charges.
Showing that it could spread the wealth, the Foundation paid Faith Academy $85,000 for meals for the summer camp program. Again, Faith Academy could provide no documentation to determine how many campers received meals.
Faith Academy is a private school that, at the time, was run by Lee’s political ally and former Jefferson Parish School Board Member Alvin Boudreaux. Mr. Boudreaux died in 2008.
The Auditor’s Report also lists another company owned by Boudreaux, One Source, that received $40,000 from the Foundation for a “mentorship program”. There was no documentation available to show how the $40,000 paid to One Source was spent.
The Auditor’s Report also states that, while the Foundation was receiving money from Jefferson Parish pushed through by Councilman Lee, the Foundation, in an apparent violation of state law, had three members of Byron Lee’s family on its payroll: the Councilman’s brother, sister, and son. Louisiana Revised Statute 42:1112 states that “No public servant, except as provided in R.S. 42:1120, shall participate in a transaction involving the governmental entity in which, to his actual knowledge, any of the following persons has a substantial economic interest: (1) Any member of his immediate family.”
Councilman Lee’s family was paid $3,785 from the Foundation.
In a letter from the law firm Spears & Spears as Councilman Lee’s official response to the Legislative Auditor, the only fact in the entire Legislative Auditor’s Report disputed by Attorney Ike Spears is regarding whether the Councilman’s family earned enough money from the Foundation to qualify as a “substantial economic interest”.
This October, the accounting firm of Pailet, Meunier and LeBlanc provided the Foundation’s Board with financial statements for the years 2004 – 2009. Pailet, Meunier and LeBlanc is the audit firm of choice for another of Lee’s political allies, Jefferson Parish Sheriff Newell Normand. The Sheriff uses the firm when he conducts sales tax audits. Sheriff Normand endorsed Councilman Lee in his Council re-election bid and also Lee’s failed Congressional bid.
As if his problems with the Jefferson Sports & Scholastic Foundation weren’t enough, Councilman Lee owes the City of New Orleans $3,576 in back property taxes for personal property and a company the Councilman owns, Maxima Group Investments, owes the City of New Orleans an additional $1,896 in back property taxes.
Another company owned by Lee with a similar name, Maxima Group Behavioral Sciences Corporation has an IRS tax lien stating that the company owes over $306,000 in back taxes.
In light of the Legislative Auditor’s Report, the Jefferson Parish Council is considering steps to eliminate non-profit groups from receiving upfront payments. Groups will be required to submit invoices to the Parish for payment.