La. agency reports on spending in St. John

Published 12:00 am Wednesday, April 28, 2010



LAPLACE – A legislative audit of certain financial transactions within the St. John the Baptist Parish administration has revealed that former Parish President Bill Hubbard spent thousands of parish dollars on meals and fuel, might have violated the state’s bid law and might have given preferential treatment to a politically connected insurance firm.

Acting Parish President Pat McTopy said Monday his administration called for the legislative audit in the weeks following Hubbard’s resignation. Hubbard resigned in September and pleaded guilty to taking $20,000 in bribes from three parish contractors, which he used to purchase a car for his girlfriend. Sentencing for Hubbard is set for June 29.

McTopy said the auditors spent most of November and December with the parish’s finance department examining and obtaining documents resulting in the report.

“They were given complete access to any document they had asked for,” McTopy said. “The issues raised in the report are being addressed or have been addressed by us already.”

The auditors report, issued last week, states the parish may have violated Louisiana bid law by purchasing $158,000 in parts and materials from Parson and Sanderson, Inc., without obtaining competitive bids for the parts. The Harahan firm has been identified by sources as one of the firms involved in the bribery scheme that led to Hubbard’s resignation.

The parish employed Parson and Sanderson in November 2008 through a request for proposals to conduct general pump repair in the parish. The parish purchased an assortment of parts from the firm, including two types of parts totaling more than $20,000 a piece. Louisiana bid law at the time required that all materials and supplies exceeding $20,000 be advertised for public bid. The audit recommended the parish identify certain parts used on a regular basis and ensure those items are bid according to Louisiana law.

The audit also maintains allegations that certain expenditures of more than $13,700 on Hubbard’s parish credit cards were not properly documented and itemized.

A review of credit card statements by the auditor showed that between September 2008 and January 2009 the card had been used for meal purchases of $1,000 and $2,000. The purchases did not include documentation of public purpose and also did not list names of people in attendance at the meals.

The report indicates that Hubbard told auditors parish employees and others attended the meals, one in Baton Rouge and one in Las Vegas, for economic development reasons and that he typically wrote the names of attendees of the meals on the back of the receipts. Auditors could not find any documentation of names on receipts submitted to the parish Finance Department.

The audit also revealed that Hubbard used his parish credit card to purchase more than $4,100 in gasoline for his personal vehicle, despite receiving $16,583 in car and mileage allowances during his tenure. The auditors could not determine if the purchase were a duplication of benefits because Hubbard failed to document receipts and log mileage.

The report also examines the parish’s dealings with Lagniappe Industries, an insurance firm owned by former Jefferson Parish Chief Administrative officer Tim Whitmer and his wife Dawn.

The auditors determined that in 2008, while St. John Parish was seeking bids for employee dental coverage, Lagniappe was allowed to lower its bid while the other finalist for the contract, LaPlace broker Natalie Tatje, was not given a chance to also do so. At the time of the bidding process Hubbard’s company, Hubbard Enterprises, was contracted to do maintenance work in Jefferson Parish.

Both agents represented The Guardian Life Insurance Co. of America and had identical pricing for the policies, according to the report. The firms were among 14 who submitted bids in September 2008 through the parish’s insurance consultant, Scott Fontenot, of Fontenot and Associates LLC.

The report states that on Oct. 2, 2008, St. John Director of Human Resources Stacey Cador received an e-mail from Fontenot that stated Lagniappe had submitted a price change after Fontenot called Dawn Whitmer and Guardian requesting a better price after the Sept. 18 deadline for submissions.

Dawn Whitmer requested a price reduction through Guardian from $15.99 per month to $14.99 per month per policy. Tatje told the auditors she was not offered the same opportunity to lower her price and added she was not aware that Lagniappe was given the opportunity. Tatje eventually withdrew her proposal but told auditors it was unrelated to the revised quote from Lagniappe.

The report alleged that Fontenot might have been operating outside the scope of his contract to analyze the proposals. Fontenot did not offer any comment to the auditors, according to the report.

The St. John Parish Council removed Dawn Whitmer as the agent of record on Oct. 13, 2009, after Hubbard’s resignation.

McTopy said he knew Fontenot was assisting the parish with the insurance contract but did not know of his involvement in the price reduction for Lagniappe.

McTopy said his administration offered full cooperation to the auditors and that he has already begun to implement changes to prevent similar actions. The parish has already tightened policies for credit card usage, vehicle tracking and reimbursement of expenses.

“Each parish vehicle, including the parish president’s, are identified by numerous parish decals and all are equipped with GPS trackers,” McTopy said. “Parish workers who use vehicles are also required to keep daily mileage logs.”

Regarding parish credit card use, McTopy said the parish now has two credit cards – one for the economic development department and one for the parish council. He said the parish president is no longer issued one. He also said he will be proposing a new reimbursement policy to the parish council that requires statements of public purpose when purchases are involved.