(From Citizens for a New Louisiana) — A day after Louisiana State Treasurer John Fleming issued a press release opposing HB836, we published an article – Parental Rights and the Bond Commission? concerning our skepticism of the same bill. There, we outlined the vital role of the Louisiana Bond Commission and the current litigation between the City of Ville Platte and SP Ville Platte WWTP, LLC, which appears to be a shell company for Sustainability Partners, LLC. While Fleming focused on the clear unconstitutionality of the proposed bill, we took a different approach. We pointed out the absolute necessity of oversight involving political subdivisions incurring debt on behalf of the State of Louisiana.
Liberal Tactics Invade the Right
It has long been a tactic of the Left to change the direction of government and institutions by redefining words to serve their purpose better. Most of us remember the defense of Democrat President Bill Clinton amidst the Monica Lewinski scandal. He stated: “It depends on what the meaning of the word ‘is’ is.” Today, illegal aliens are called “migrants,” taxes are referred to as “revenue enhancements,” welfare as “entitlements,” etc. The term ‘racism’ has become another victim of redefinition. It no longer concerns itself with its root, “race,” but now also includes color, creed, religion, and just about any other item opposed by the liberal Left. By their loose definition of the term, you may be a racist if you have read this far in the article.
Right here in Louisiana, we find Republican Representative Jack McFarland‘s HB836, which intends to redefine the terms “debt” and “evidence of debt” to exclude particular agreements that some have referred to as “predatory lending” practices. These “public-private partnerships” create a long-term obligation (to repay). The Louisiana State Constitution, Article VII, Section 8 states:
No bonds or other obligations shall be issued or sold by the state, directly or through any state board, agency, or commission, or by any political subdivision of the state, unless prior written approval of the bond commission is obtained.
While the proponents of this bill argue over the meaning of debt, former State Senator Eric LaFleur said, “We can disguise this all we want to, but clearly this is a financial obligation, and that’s the same thing as a loan.”
Turning Logic on Its Head
On May 13, 2024, HB836 was brought before the Senate Revenue and Fiscal Affairs Committee. Senator Jay Morris (R 9/10) pointed out that saying an obligation to pay money is not debt is turning logic on its head. Morris asserted that this was a problematic attempt to get around the Constitution. We and many others agree with Senator Morris. Morris also pointed out how the amendments to the bill violated the separation of powers by giving the Attorney General purview over something that the Judicial branch should consider.
One of the bill’s proponents, Jennifer Vidrine, has appeared multiple times to testify in committee. Vidrine served as Mayor of Ville Platte for three terms before being defeated by Ryan William in 2022. As mayor, Vidrine obligated Ville Platte into a cooperative endeavor agreement with Sustainability Partners, LLC, on June 21, 2022. That agreement is now subject to litigation. She committed the entire city to this thirty-year obligation just one month before she qualified for re-election on July 20, 2022.
While 30 years is less than Iberia Sheriff Tommy Romero’s forever tax, it’s still an incredibly long time for a short-timer to obligate her city.
Paid Actors?
Vidrine and Sustainability Partners, LLC members appeared before the House Ways and Means Committee to support this bill. She and her old friends (the members of Sustainability Partners, LLC) returned to support the bill again before the Senate Revenue and Fiscal Affairs Committee. If passed, it will moot the lawsuit that her replacement (the new mayor of Ville Platte) has filed in an attempt to get out of this terrible bargain.
“Once is happenstance. Twice is coincidence. Three times is enemy action.” – Ian Fleming, Goldfinger.
Senator Morris asked Vidrine three questions: 1) Did Sustainability Partners ever pay her?; 2) Was she ever on the payroll for Sustainability Partners?; and 3) Has she ever received reimbursement from Sustainability Partners? Vidrine answered NO to all three questions. Morris’ instincts were correct when he framed those three questions, but the answers to his questions didn’t entirely reveal what he suspected.
According to Vidrine’s campaign finance report filed on October 31, 2022, she received $9,000 leading up to the 2022 primary election for Mayor of Ville Platte. That $9,000 resulted from nine separate payments between October 3, 2022, and October 5, 2022. The proximity of these campaign donations to the contract signing with Sustainability Partners in September could easily lead to speculation.
Those Payments Came From:
- Samuel Jason Hewitt (A member of Sustainability Partners who testified in favor of the bill in the Senate Revenue and Fiscal Affairs Committee)
- Brilliant Efficiencies, LLC (A company with a single registered member – Samuel Jason Hewitt)
- Eric Street (A member of Sustainability Partners)
- Deidre Street (Spouse of Eric Street)
- Louisiana Power Group. Inc. (A company with a single registered member – Ronald R.E. Hebert, who filed a green card in support of the bill)
- Louisiana Power Services, LLC (A company with a single registered member – Ronald R.E. Hebert)
- Red Stick Contractors, Inc. (A company with a single registered member – Ronald R.E. Hebert)
- Tullier Services, LLC (A municipal and utilities contractor with a single registered member – William Tullier)
- William Tullier
There have also been echoes of an expensive soiree (rumored to cost upwards of $50,000) thrown for the mayor by the Louisiana Municipal Association. It’s possible that this event was their annual meeting, where Vidrine passed the gavel to her successor. However, as of this writing, we have not received a return call from the Louisiana Municipal Association.
Bond Commission Update
In our original article, Parental Rights and the Bond Commission?, we mentioned that the purpose of HB836 is to allow financially strapped municipalities to fund projects while avoiding bond commission oversight. This week, the City of Ville Platte’s new mayor appeared before the bond commission. He wanted to re-institute the new bond request that had been started but canceled by his predecessor, former mayor Jennifer Vidrine.
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Even though Ville Platte is still negotiating in court, the bond commission approved their 30-year revenue bond request for $20 million. The money will be used to retire the earlier debt and repair their dilapidated sewerage system. This type of bond does not have to go before voters, as it’s being repaid with monies collected through water and sewerage rates paid by system users.
Senator Eric LaFleur
During the hearing, former State Senator Eric LaFleur (mentioned earlier) made a strong appearance. He is the bond counsel and an attorney for the City of Ville Platte. During testimony, LaFleur said none of the city’s numerous consultants agreed with the mayor’s decision to engage Sustainability Partners. In fact, LaFleur said the clerk (Dirk Deville) resigned after the mayor decided to proceed. Additional members LaFleur mentioned were the Bond Counsel, Municipal Advisor, Outside CPA, former city CAO, and CFO, all of whom recommended against the transaction.
One of the presenters said that the math on that “SP Transaction” with Ville Platte would cost the city nearly $8 million more than working through the bond commission. The reason it’s more expensive is that a private equity firm is expected to generate a return at a much higher rate than standard low-risk investments. Eric LaFleur said:
The transaction that [Ville Platte] entered into, no one in their right mind would have done that because it’s so ridiculous. The fact that it’s a municipality – a public entity – and that the presentation of that financing transition was certainly less than candid… If you’d had just gone through the basics no one on that council would have ever dreamed of leaving where they were to go where they are today.
Security and Exchange Commission (SEC) Stepping In?
Treasurer Fleming often referred to this financing mechanism as similar to “predatory lending.” He also mentioned that the Security and Exchange Commission (SEC) appears to be looking into this matter allegedly because Sustainable Partners gave investment advice, which they are not legally allowed to do. Fleming provided more detail when asked about the SEC in the Senate committee hearing. He said:
It has to do with giving financial advice and being certified and able to do that. Being a fiduciary and whatever those responsibilities are. There are lawyers who believe that the people who were giving that advice were not qualified to give that advice, and may have actually been doing it out of their own personal interest rather than the client’s.
At some point, Eric LaFleur noted, “If they (Sustainability Partners) gave legal advice, it was pretty crappy advice.”
This Is Why We Have a Bond Commission
Representative Jack McFarland suggested that this method of financing failing without bond commission oversight is no different from bonds failing with bond commission approval. The point is valid: failure is failure. However, in our opinion, the difference is that when Louisiana is expected to assume bad debt, at least that debt was reviewed and approved by the state’s bond commission.
If this bill passes, allowing a municipality to dodge the bond commission, what happens if they default? Would the state (you as the taxpayer) still be obligated to assume the debt?
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