Gachassin ethics case heads to ‘trial'

by Leslie Turk

Lafayette developer Greg Gachassin's motion to dismiss and motion for partial summary judgment were denied and dismissed, respectively, by a three-member panel of the Ethics Adjudicatory Board. In a order signed May 7, the board also dismissed the state's motion for summary judgment, saying the legal device is not available to either party under the Code of Ethics or the Administrative Procedure Act.

The EAB's decision means the case, in which Gachassin and his Cartesian Company are charged with multiple violations of the state's Code of Ethics while he was chairman of the Lafayette Public Trust Financing Authority, will head to an administrative hearing (which generally works like a trial in court). "The panel will likely schedule a telephone status conference to determine a hearing date," Monika Wright, an attorney with the Division of Administrative Law, tells The IND.

The Ethics Board is seeking to recover the maximum penalty for Gachassin and his company's alleged violations.

"[Gachassin] drove the bus and made sure there was plenty of room in the back to put the cash," Board of Ethics attorney Michael Dupree told the trio of administrative law judges at a hearing on the motions March 13. That cash amounted to $1 million, which the Ethics Board is seeking to recover in penalties, plus one-half, for a total of $1.5 million. In court filings the board also says it's entitled to seek $10,000 each time Gachassin violated the code - an amount that could climb into the hundreds of thousands. The Ethics Board also has the authority to impose restrictions on Gachassin to prohibit him from entering into business relationships with his former agency, which in this case is the Lafayette Public Trust Financing Agency (inexplicably, the court documents do not indicate the board is seeking to do so).

Should the state recover anything close to that amount, the case would be precedent-setting. Ethics records show that the largest fine ever handed down, $650,000, was in 2001 against attorneys involved in tobacco litigation.

Most important in the EAB's ruling is that it found Gachassin was properly charged by a six-member quorum of the state's Ethics Board and that he was indeed a public official in his capacity as chairman of the LPTFA.

In its April 2011 cover story "How Gachassin Games the System," The IND spelled out how the local developer laid the foundation for lucrative work with the LPTFA while he was serving as an appointed member of its board of trustees from November 2003 to November 2009. State ethics laws prohibit an appointed board member, or a legal entity in which he has a substantial economic interest, from bidding on, entering into, or being in any way interested in a contract, subcontract or transaction that is under the supervision or jurisdiction of the agency or public servant. The prohibition extends to the public servant and his dealings with the public board for a period of two years (the Lafayette City-Parish Council appoints LPTFA trustees).

Ethics Board attorneys Suzanne Mooney and Michael Dupree will have to present their case against Lafayette developer Greg Gachassin in an administrative hearing, which is similar to a trial in court.
Photo by Robin May

Gachassin's alleged violations involved Villa Gardens, a single-family development on Patterson Street, and Cypress Trails, an apartment complex on Sophie Street in north Lafayette that serves the elderly population. In both cases, Gachassin's Cartesian Company 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. Low-income housing tax credits awarded by the Louisiana Housing Corporation (formerly the Louisiana Housing Finance Agency) provided the bulk of the projects' funding.

The Ethics Board says in court documents that Gachassin was "instrumental" in creating both the Villa Gardens and Cypress Trails low-income housing developments, noting minutes from LPTFA's meetings reveal that he used his position as a trustee to assist in the "conceptualization, planning, creating, execution of, and funding" for the projects. The ethics investigation found that on Nov. 1, 2009, Gachassin, as president and owner of The Cartesian Company, entered into consulting contracts with both the Cypress Trails Limited Partnership and Villa Gardens Limited Partnership.

Three days after executing the contracts, on Nov. 4, 2009, Gachassin, then chairman of LPTFA, voted for the public trust to move forward on the projects. He also voted to "recast" the $460,000 loan from LPTFA to the Lafayette Housing Authority for Villa Gardens, meaning what was supposed to be a loan with 3 percent interest was restructured to a long-term, no interest loan to be repaid from Villa Gardens' cash flow.

Thirteen days later, on Nov. 17, Gachassin resigned from the LPTFA board. And just two days after that he collected his first $50,000 payment from Villa Gardens. In the two years following his departure from the public board, he appeared before the board three times to update it on the progress of Cypress Trails. Again, the Ethics Board argues that each appearance before the LPTFA board constitutes a violation, as does each submission to both projects for payment and each renegotiation of his contracts on the Villa Gardens and Cypress Trails projects (which were numerous). All of this was done during the two-year prohibition.

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