Acadiana Business

Gachassin's attorney says he'll beat ethics charges

by Leslie Turk

BR lawyer Gray Sexton is putting his four decades of experience as chief lawyer for the Louisiana Board of Ethics to work for Lafayette developer Greg Gachassin.
Baton Rouge lawyer Gray Sexton, who served four decades as the chief administrator for the Louisiana Board of Ethics before putting his expertise to work defending those accused of ethics violations, tells ABiz Lafayette developer Greg Gachassin and his Cartesian Co. will beat ethics charges filed against them.

As ABiz reported earlier Tuesday, on June 14 the Louisiana Board of Ethics voted to charge Gachassin with violating the state's Code of Governmental Ethics while he was chairman of the Lafayette Public Trust Financing Authority's board of trustees and again after he resigned from the LPTFA board. "There is a post-employment charge, and then there is a participation charge," Sexton says. "We have a number of threshold defenses that we believe will result in a dismissal of these charges."

"The [ethics] board files charges. It's like a lawsuit in a way," says Ethics Administrator Kathleen Allen. "The Ethics Adjudicatory Board will sit as judge to hear the case. We'll conduct it like a trial is conducted. We'll go through all the discoveries preparing for that."

Sexton estimates that within the next four to six months the EAB, a three-member panel of administrative law judges, will hold a hearing on the charges to determine whether there is a violation of the ethics code. Should the judges rule against Gachassin's Cartesian Co., they will assess a penalty based on the Ethics Board's recommendation.

Allen says any potential penalty recommendations will come during the public hearing. The Board of Ethics initiated the investigation last year after then-state Rep. Rickey Hardy filed a complaint. ABiz has since learned that multiple complaints against Gachassin were filed with the Ethics Board.

gachassin_2The Ethics Board has the authority to censure Gachassin and to impose a fine of not more than $10,000 per violation. It can place restrictions on him, such as prohibiting him from entering into any business relationships with LPTFA, and may rescind any of his contracts if an ethics violation influenced the contract. The board has the authority to levy penalties if he violated the code to his economic advantage; penalties can include the amount of the economic advantage plus one half. The board also is can order the forfeiture of any payments already made in violation of the code.

In much the same fashion ABiz's sister publication The Independent did in its April 2011 cover story, "How Gachassin Games the System," the Ethics Board spells out how the local developer laid the foundation for lucrative work with the LPTFA while he was serving as an appointed board member from November 2003 to November 2009. In what appears to compound the ethical dilemma, Gachassin chaired the board from April 2007 until his resignation on Nov. 17, 2009. His alleged violations involved Villa Gardens, a single-family low-income development on Patterson Street, and Cypress Trails, a low-income apartment complex on Sophie Street in north Lafayette. In both cases, Gachassin's Cartesian Co. signed $500,000 consulting contracts with partnerships associated with those projects, which were backed financially and/or initiated by the LPTFA, a public trust organized in 1979 under the laws of the state that holds millions for the benefit of the city of Lafayette. Its primary focus has traditionally been to provide low-income housing. Gachassin has a similar contract with the new Joie de Vivre downtown development, which LPTFA also is now spearheading. All three were partially financed through federal low-income housing tax credits awarded by the Louisiana Housing Finance Agency; Gachassin also previously served on that entity's board.

The Ethics Board accuses Gachassin and his Cartesian Co. of violating two sections of the Louisiana Code of Governmental Ethics - the first addresses prohibited contractual agreements between appointed commissioners and the agency they serve: Other than a legislator, no appointed member of any board or commission, member of his immediate family, or legal entity in which he has a substantial economic interest shall bid on or enter into or be in any way interested in any contract, subcontract, or other transaction which is under the supervision or jurisdiction of the agency of such appointed member.

The other deals with a two-year restriction for doing business with that agency after the board service ends: No former member of a board or commission shall, for a period of two years following the termination of his public service on such board or commission, contract with, be employed in any capacity by, or be appointed to any position by that board or commission.

Detailing its reasons for determining that charges should be filed, the Ethics Board notes that Gachassin signed both consulting agreements as president of The Cartesian Co. while he was still chairman of the LPTFA (and before The Cartesian Co. even incorporated and listed Gachassin as president and director). The Secretary of State's records show that the company registered Nov. 10, the same day the Ethics Board says Cartesian received payments for consulting services on Villa Gardens. Gachassin did not resign as chairman until seven days later.

To do the deals, LPTFA formed affiliate non-profit entities that served as general partners in limited partnerships that owned and developed the tax-credit projects. It appears that Gachassin's contracts were with those non-profits or partnerships, which might be part of his defense.

"The charges are not well-founded," Sexton says. "The facts upon which the charges are based are in error. The allegations of participation absolutely are not supportable and the post-employment allegations likewise involve an impermissible merging of several different LLCs and quasi-governmental agencies in a manner that's simply not permissible under the ethics code." The attorney says he does not believe any of the relationships Gachassin entered into were improper. "There are several different aspects of the facts that are alleged and the notices of charges that we believe are not accurate, and we intend to challenge those. We're confident that ultimately a ruling will be made that is consistent with our position and inconsistent with the board's."