Beset by ethics woes that he used his position on a public board to line his pockets, Lafayette real estate developer Greg Gachassin will ask an Ethics Adjudicatory Board for summary judgment in the nearly 3-year-old case when the panel of administrative law judges convenes Thursday in Baton Rouge at 1 p.m.
The Louisiana Board of Ethics, which believes it has established that the developer abused his position as a former board member and chairman of the Lafayette Public Trust Financing Authority, will itself argue for summary judgment when it asks the three-member panel to levy what may be a record-breaking fine for violations of the state’s Code of Ethics.
When the EAB, which is comprised of three administrative law judges, decided May 7 that the case — in which Gachassin and his Cartesian Company face multiple violations of the state’s Code of Ethics — should proceed to an administrative hearing (the equivalent of a civil trial in a district court), they ruled that the legal device of summary judgment was not available to either party under the Code.
But a December decision by the First Circuit Court of Appeal in an unrelated ethics case made it clear the EAB was wrong on the issue of summary judgment. In Bob Ellis v. The Louisiana Board of Ethics, the appeal court ruled that the EAB is authorized to decide matters on summary judgment — meaning one side has shown that all factual issues are resolved and there is no need for full-blown trial on the merits.
So instead of holding an administrative hearing, the EAB will hear motions for summary judgment Thursday.
ABiz reported in September that the two sides had failed to reach a settlement after Gachassin indicated in earlier court documents that he would attempt to settle the matter.
The state’s 2012 charges against Gachassin and his company stem from its investigation and findings that the local developer received lucrative work from the LPTFA while he was serving as an appointed member of its board of trustees from November 2003 to November 2009 and had also laid the foundation for future work after leaving the board (much of which was reported by The Independent in its 2011 cover story, “How Gachassin Games the System”). State ethics laws prohibit an appointed board member from doing business with an entity under its jurisdiction, a prohibition that extends such dealings for two years after the board member leaves the public board.
The Ethics Board is seeking the maximum penalty for Gachassin’s and his company’s alleged violations.
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 provided the bulk of the projects’ funding.
“[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 administrative law judges at a March 2014 hearing. 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 Ethics Board also says it’s entitled to seek $10,000 for each time Gachassin violated the code — an amount that could climb into the hundreds of thousands. The 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 LPTFA (inexplicably, the court documents do not indicate the board is seeking to do so).
Should the state recover anything close to the amount it is seeking, 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.
Gachassin’s attorney, former longtime Ethics Administrator Gray Sexton of Baton Rouge, argued at the March 2014 hearing that his client was improperly charged because only seven of the Ethics Board’s 11 members voted, rather than nine — which both sides concur is only required if the board agrees to meet “en banc.” But Dupree pointed to a section in the Ethics Code stating that six board members constitute a quorum when there is no agreement to meet en banc.
Another argument Dupree effectively shot down involved Sexton’s claim that the LPTFA is a private trust. The Ethics Board attorney argued that the trust was created in 1979 by a city of Lafayette ordinance and that its original documents state that it is subject to public records laws, open-meetings laws and the Code of Ethics. Dupree also pointed to numerous instances in which the word “public” is used in the original documents (its Trust Indenture authorizes it to pursue a wide variety of purposes deemed “to be essential public functions conducted in the public interest”) and noted that it also is governed by Louisiana’s Public Trust Law (Title 9).
“The trust documents tell you what we are doing is in the public interest,” Dupree said. “Mr. Gachassin [was] indeed a public servant.”
Find links to previous reporting on this matter here.