EAB fines Gachassin record $1.6 million

by Leslie Turk

Records show that the largest fine/penalty ever handed down, $650,000, was in 2001 against attorneys involved in tobacco litigation.

Greg Gachassin

It’s been a long, five-year wait for retired banker Buddy Webb, one of at least two people — then-state Rep. Rickey Hardy was another — who filed an ethics complaint against Lafayette developer Greg Gachassin’s self-dealing while Gachassin chaired the Lafayette Public Trust Financing Authority’s board of trustees.

Webb and Hardy filed the complaints shortly after Gachassin’s ethical dilemma was first exposed by The Independent in the 2011 cover story, “How Gachassin Games the System.”

Webb believes justice was served on Wednesday, when the Ethics Adjudicatory Board slapped Gachassin with $1.6 million in penalties and fines, the largest in the state’s history. Ethics records show that the most substantial fine ever handed down before this case was for $650,000 in 2001 against attorneys involved in tobacco litigation.

The Gachassin decision comes four years after the Louisiana Board of Ethics voted to charge him with multiple violations of the state’s Code of Ethics. The board’s 2012 charges against Gachassin and his Cartesian Company stemmed from its investigation — prompted by Webb and Hardy's formal complaints — of lucrative work the development consultant received from the LPTFA while he was serving as a volunteer member of its board of trustees from November 2003 to November 2009 and again after resigning his position as chairman of the board on Nov. 17, 2009. The Louisiana Code of Ethics prohibits an appointed board member from doing business with an entity under its jurisdiction or from participating in transactions involving that entity for personal economic gain. The prohibition extends such dealings for two years after the board member leaves the public board.

The LPTFA is a public trust created by state law to support the city of Lafayette through what has grown into a range of finance-related programs and community involvement efforts. All public trusts are subject to the ethics code.

At a hearing on the charges in Baton Rouge in April, the Board of Ethics sought the maximum penalty for Gachassin’s and his company’s alleged violations — his ill-gotten gains plus one-half of that economic advantage — and also asked for fines for each provision of the code that was violated. In Wednesday’s decision, the EAB, a trio of administrative law judges, gave the Board of Ethics almost everything it was asking for.

The charges 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, on Nov. 1, 2009, 16 days before he resigned as chairman, Gachassin and his Cartesian Company signed $500,000 consulting contracts with partnerships associated with those projects, which were backed financially and/or initiated by the LPTFA. Low-income housing tax credits awarded by the Louisiana Housing Corporation provided the bulk of the projects’ funding.

Ethics Board attorneys Suzanne Mooney and Michael Dupree (who now works for the AG’s office) leaving a May 2014 administrative hearing in the Gachassin case.
Photo by Robin May

“In Louisiana, so many people have abused their positions on nonprofit boards for the advancement of their own financial goals,” Webb tells The IND. “I applaud the Board of Ethics for sending a strong message that our ethics laws exist for a reason, and that’s not to line the pockets of someone who’s supposed to be helping poor people find housing. Honestly, for while I didn’t think anything was going to be done. My compliments to the work of the ethics attorneys, especially Sue Mooney and Mike Dupree [the latter worked on the case until earlier this year when he joined the attorney general’s office].”

In its 44-page ruling, the EAB — which noted that the ethics code seeks to prevent not only actual conflicts of interest, but also situations that tend to create the perception of conflicts of interest — wrote:

Gachassin and his wholly owned corporation, Cartesian, violated the Code of Governmental Ethics (Code of Ethics) when Cartesian contracted with an agency of the [LPTFA] while Gachassin was the Chairman of the LPTFA. Gachassin also violated the Ethics Code when he participated in discussions and voted on matters before the LPTFA in which he had a personal substantial economic interest. Gachassin also violated the Ethics Code when he assisted Cartesian for compensation in matters before the LPTFA in the two-year period following his resignation from the LPTFA.

Gachassin, who was represented in the case by attorney Gray Sexton, who served 40 years as the Board of Ethics' chief administrator before going into private practice, is likely to appeal the case.

Read the decision here.