Cover Story

Pay to Play?

by Jeremy Alford

Hundreds of Gov. Bobby Jindal’s top donors are reaping the benefits of state contracts and choice political appointments. The first person ever to benefit from economic development aid under Gov. Bobby Jindal’s administration was Gary Chouest, owner of Edison Chouest Offshore and C-Logistics in Lafourche Parish. The announcement came last year during Jindal’s second special session. During the governor’s opening remarks, he identified a group of “real people,” including Chouest, and asked them to stand.

The bayou mogul obliged and gave a nod to the new Republican governor. Chouest was a happy man that day, sporting a smile ear to ear. Who could blame him? After all, Jindal had just announced that the state was prepared to invest $10 million into the Port of Terrebonne to accommodate LaShip, an Edison Chouest subsidiary.

That’s big bucks, even for a man like Chouest. Luckily for Jindal, Chouest believes in investing in politicians with whom he agrees. Over the past two years, Chouest’s businesses and closest family members have given Jindal’s campaign at least 18 donations totaling $85,000.

Did that money help Jindal make his decision to back the LaShip project?

Kyle Plotkin, Jindal’s press secretary, calls that a ridiculous notion. “Contributors to Gov. Jindal support his agenda for reforming Louisiana and moving our state forward, not the other way around,” Plotkin says. “In fact, the governor has more than 21,000 contributors representing all different types of people and organizations.”

Still, Jindal has made such an issue of his own ethical purity that when he does what other governors have routinely done — reward campaign contributors with state work or appointments — it raises eyebrows. And make no mistake: Jindal has used the power of his office to reward friends as much as any of his predecessors.

Based on a review of Jindal’s 2007 and 2008 campaign finance reports and the state’s vendor payment list for the current fiscal year alone, the governor’s critics could easily claim that campaign contributions play a significant role in helping companies land state work and/or assistance. Since Jindal took office in January 2008, the state has awarded tens of millions of dollars of work and incentives to various Jindal donors.

The governor’s campaign donations were also cross-checked against the more than 1,750 appointments Jindal has announced since taking office in January 2008. In all, there are more than 200 contributors who were eventually appointed to the state’s most influential boards and commissions. To say Jindal has placed those appointments on a fast track would be an understatement: Jindal appointed more people — 1,478 individuals — to public positions during his first year in office than former Gov. Kathleen Blanco, a Democrat, did after two legislative sessions in 2004 and 2005.

Moreover, the donors Jindal appointed to key positions can be traced back to more than $784,000 in contributions to the governor’s campaign kitty in 2007 and 2008, according to financial records on file with the Louisiana Ethics Board. During those two years, Jindal received some 23,000 individual donations.

Spokesman Plotkin again dismisses any connection between the money and Jindal’s decision-making process. “Gov. Jindal won 60 out of 64 parishes in his election as governor and is proud to have a broad variety of supporters from all across the state,” Plotkin writes in an e-mail. “Those who contribute to the governor’s campaign are supporting his agenda to reform the state, plain and simple. Appointments to boards and commissions are based strictly on an individual’s experience, recommendations and suitability for the position.”

Jindal’s go-to list, however, has fallen under scrutiny recently, and lawmakers are considering taking action during the ongoing regular session. He has a sound defense — after all, the governor would be crazy to appoint opponents and critics to state boards and commissions where they could wreak havoc by undermining his policies. Former governors dating back generations have also done the same thing as Jindal. Nonetheless, what Jindal says about his ethical “gold standard” and what he does have clearly become two very different philosophies.

Gov. Bobby Jindal

Photo by Robin May

Just like other areas of the state, the Lafayette region is well represented on Jindal’s go-to list of donors. For instance, if you’re looking for an unapologetic, in-your-face archetype of a corporate donor, look no further than Richard Zuschlag, CEO of Acadian Ambulance. Through personal donations, his business, his family and the Acadian Ambulance Employee Political Action Committee, Zuschlag has provided Jindal with more than $26,000 in donations during the past two years. As for what the company has gotten from the state, the figure amounts to more than $923,000 during this fiscal year alone.

Zuschlag puts it all on the table — one of his hallmarks — about how the game is played. “We’ve created an unofficial monopoly by going directly to government and telling them what we need and what ordinances need to be on the books,” he told this reporter during an interview published in a Baton Rouge-based publication last year. “Local, state and federal politics are extremely important to us. We want to be close to those in power... And we do work hard to convince our employees to give to the company PAC.”

Zuschlag isn’t alone in this approach:

• Mart Hudson of the Lafayette-based Oats and Hudson law firm donated $5,000 to Jindal’s campaign. During this fiscal year, his firm received more than $845,000 in vendor payments from the state.

• Wink Inc., a New Orleans engineering firm, donated $2,000 to the governor in 2008 and is now sitting on current fiscal-year earnings of $3.8 million from Jindal’s executive department.

• Dallas Hixson of Alexandria donated $5,500 to Jindal’s campaign. Hixson Autoplex has since picked up $595,000 in state vendor payments, including $29,000 in purchases from the executive department.

• Paul Dickson of Shreveport has contributed a total of $35,000 through various means, while his business, Morris and Dickson Company, got $17.2 million in state work, including a small portion from the executive department.

• Grace and Hebert Architects of Baton Rouge has contributed $10,000 within the past two years and received more than $2.7 million from Louisiana’s treasury, mostly, again, from the executive branch.

These and other examples don’t surprise Massie Ritsch, communications director for the Center for Responsive Politics, a group that tracks political money on the federal level. Ritsch says such donations have practically become the “cost of doing business.” He adds that peeling back the layers of bureaucracy by examining donations to public officials and investigating how they impact policy can help reverse that trend, but stopping it won’t be easy. “Citizens rightfully expect that government can’t be bought, but money is a factor in policy decisions, and that can result in government waste, inefficiency, incompetence and even corruption,” Ritsch says.

As for Jindal, he’s personally been hitting the road to create other examples worth exploring. In February, Jindal traveled to Houma to show his support for Performance Energy Services, which is applying for aid from the state to expand its operations. During the past two years, the company has donated $10,000 to the governor’s campaign. Jindal also grabbed headlines recently for attempting to find a buyer for the fledgling Pilgrim’s Pride processing plant in north Louisiana, and he’s now promoting the idea of using $50 million in state money to help California-based Foster Farms make the purchase (he wants the state to cover half the $80 million sale price, and kick in another $10 million for improvements to the plant site). That has to be comforting to Pilgrim’s Pride, whose founder, Lonnie “Bo” Pilgrim, gave Jindal’s campaign $2,500 in 2007.

But Bob Mann, formerly a top staffer to Blanco and U.S. Sen. John Breaux, both Democrats, says understanding how corporate donations flow into campaigns can be complex. Without knowing what’s going on behind the corporate veil or the political curtain, it’s difficult to ascertain who’s doing the asking. “There are certain types of businesses that are regulated, or need government help in some sort of way, that are going to be naturally inclined to be politically active,” says Mann, now a mass communications professor at LSU. “Then there are those that aren’t in your face, which means you have to go out and cultivate them if you want their donations.”

Last October, Bill Fenstermaker donated $5,000 to Jindal’s campaign. Roughly one month later, he was appointed by Jindal to the I-49 South Feasibility and Funding Task Force. According to projects detailed on the Web site of C.H. Fenstermaker  & Associates, of which Bill Fenstermaker is chairman, the company has been contracted in the past by the Louisiana Department of Transportation and Development to do a variety of I-49-related work.

Fenstermaker says he made the $5,000 donation to support good government and doesn’t believe there’s a conflict of interest with his business and the task force, which he was originally appointed to by former Gov. Mike Foster. “Those are portions of the project we were awarded before I was on the task force, and you couldn’t eat based on what we got,” he says. “I do very little work with DOTD. I’m not what you would call a political insider.”

As for his company pursuing I-49 work in the future, Fenstermaker left that open. “I would think that it would be bad for me to tell my engineering group not to put in a proposal for the [requests for proposals] process, but I doubt we have the size to prime a contract like that,” he says. “But we could be part of a team, although it would be a slim chance that we would be selected. The task force has nothing to do with selecting the contractor. We didn’t even meet under Blanco.” Chaired by Lafayette City-Parish President Joey Durel, Jindal’s new I-49 South Task Force met for the first time April 13.

While Fenstermaker’s appointment to the I-49 task force presents potential conflicts of interest worth asking about, the dates of his donation and subsequent appointment are also remarkably congruent. In fact, several of Jindal’s appointments were doled out in close proximity to major donations. A few examples:

• Roland Toups of Baton Rouge gave Jindal $5,000 just two months before he was appointed to the Board of Regents in December last year.

• Fellow Baton Rouge native Todd Graves, owner of the fast-food chain Raising Cane’s, gave Jindal another $5,000 just a few weeks after being appointed to the Small Business Entrepreneurship Committee in August.

• Jacob Giardina of Thibodaux gave the governor’s campaign a maximum $5,000 donation on Dec. 31, roughly one month after being appointed to the Bayou Lafourche Freshwater District Board of Directors.

In all, there are now some 76 state boards and commissions with at least one representative from Jindal’s ever-expanding donor list. One of the top money panels seems to be the University of Louisiana System Board of Supervisors, from which four appointees can be credited with giving Jindal’s campaign more than $63,000 over the past two years. Paul Dickson of Shreveport is linked to $35,000 in contributions via his business and a group of donors sharing his last name and address.

Individual donors are prohibited from giving gubernatorial candidates more than $5,000 each election “cycle,” but there are ways to skirt the legal limits. For example, a husband and wife can each give the limit, and each business they own can likewise give the maximum without violating the law.

When faced with stricter financial reporting requirements adopted last year — a product of Jindal’s special session on ethics reform — Dickson stepped down from the UL System Board of Supervisors. Dickson did not return calls for an interview for this story. Jindal, though, didn’t miss a beat after Dickson’s resignation. The governor replaced him with Ed Crawford III, also of Shreveport, a $10,000 donor to the Jindal campaign.

While there’s no evidence Jindal actually sold seats on boards and commissions, the apparent correlation between major donors and top appointees shouldn’t be taken lightly, says Jim Brandt, president of the Public Affairs Research Council of Louisiana, a Baton Rouge-based good government group. “I think this is a continuation of past practices,” Brandt says. “It shows that there really isn’t a new day in Louisiana. You pay to play — that’s always been the perception, if not the reality. I think this is the kind of information that should be disclosed.”

It’s important to note that in many cases state law requires the governor to select appointees only from a list of nominations submitted by a particular group, such as lawmakers, college officials or local business associations.

However, the panels that have brought in the most campaign dough for Jindal are almost — but not totally — appointed personally by the governor. Those include the UL System Board of Supervisors ($63,000 donated by members), the Board of Commerce and Industry ($49,000), the Louisiana Workforce Investment Council ($48,000), the Superdome Commission ($45,000) and the Mineral Board ($35,000).

On the matter of appointments, Jindal had a difficult decision to make — follow the pack or break new ground. He had the chance to do the latter, but balked. Last year, Rep. Neil Abramson, a New Orleans Democrat, pushed legislation that would have forced elected officials to publicly report the names of campaign contributors they subsequently hire or appoint.

During those early days of Jindal’s new administration — his political honeymoon — many assumed the governor would support Abramson’s bill. Key administration officials kept in contact with him over a five-month period and helped draft the language. Both the House and Senate passed the measure handily. Jindal vetoed the bill, however, on July 10, 2008, when the regular session ended. Abramson still remembers it as a “dark day for our efforts at true ethics reform.”

Rep. Sam Jones of Franklin, a Democrat who pushed similar legislation last year, says the time has come for a change, and other lawmakers are on his side. Abramson’s bill is back up for debate during the ongoing session (it was scheduled to be heard last week), and it’s already received a handful of endorsements.

For the Legislature and Jindal, it may be the last, viable opportunity to separate Louisiana government from its fabled and flawed past. “Edwin Edwards used to sell seats for $50,000 each, sometimes selling one seat twice, and he always admitted it,” Jones says. “What’s the difference between then and now? Really, I don’t see a difference.”

Hey, Big Spender!

Gov. Bobby Jindal spent nearly $725,000 from his campaign account last year — a figure that jumps off the page when put in perspective. Jindal spent more than three times what Blanco spent in her first 12 months and 10 times more than Lt. Gov. Mitch Landrieu raised in 2008. (Landrieu raised $70,000 in campaign contributions last year; Blanco spent $225,000 during her first year.)

While getting and spending all that money boosts Jindal’s political capital, his aggressive fundraising efforts have also drawn criticism. Columnists and bloggers wonder if he is spending too much time on the road campaigning and not enough back home working on Louisiana’s mounting challenges. Since January, the governor has taken fundraising junkets to Arizona, Arkansas, Massachusetts, California, Connecticut, Florida, Mississippi, New York, North Carolina and Texas — sometimes attending multiple fundraising events per trip.

Seen in that light, it’s no surprise that Jindal ponied up more than $354,000 last year just on events, fundraising and (sometimes luxury) travel. While Jindal has been known to fly coach at times, his campaign doled out nearly $28,000 to Blue Star Jets of New York, among the ritziest private-jet brokerage companies in the nation.

The occasional sponsors of Jindal’s travels also speak volumes about his commitment to campaign money and, critics say, his lack of commitment to campaign finance reform. Shortly after being inaugurated in January 2008, Jindal traveled to California on the dime of Koch Industries (the governor has since reimbursed the corporation for its gift) to discuss his ideas about the free-market system, according to reports. Even if it was just a policy speech, Jindal brought some big guns with him, including fundraiser Allee Bautsch of the Baton Rouge-based Bautsch Group. Last year, the firm received $46,000 in fundraising-related payments and reimbursements from Jindal’s campaign.

Another signature expense from Jindal’s 2008 campaign finance report is the dough he dropped on his campaign organization. Even though he doesn’t face re-election until 2011 and has no opponent to speak of, the governor spent nearly $275,000 last year on interns, printing, payroll, office expenses, subscriptions, campaign materials and consulting. His campaign uses top-notch technology, such as PhoneTag and Simulscribe, which transforms phone messages into text. He’s also relying on some of the best consultants in the country, like the D.C. legal and lobbying firm of Patton Boggs, which the campaign paid some $9,600 last year. (Coincidentally, firm co-founder Tommy Boggs is the son of the late New Orleans Congressman Hale Boggs and wife Lindy, who became a congresswoman after Hale Boggs died in a plane crash in Alaska in 1972; both are Democratic icons.)

Additionally, for a guy who cut commercials last year asking Louisiana residents to “Buy Louisiana,” Jindal isn’t shy about spending money outside the state. More than $34,000 last year went toward “campaign collateral” from the Maryland-based GOP Shoppe. Campaign collateral is a fancy term for the hands-on materials politicians need to get out their message and develop a brand, such as a logo, letterhead and brochures — all items that a Louisiana-based company, printer or designer could have handled.

Jindal likewise cut checks totaling more than $24,000 to Virginia-based iWeb Strategies, which also designed the Web site of the Supriya Jindal Foundation for Louisiana’s Children. Again, Louisiana talent could have performed this task, but iWeb’s founders, Blaise Hazelwood and Brian Lyle, have deep roots in national Republican politics.

In fact, of Jindal’s 670 expenditures from last year, only 219 went to parties in Louisiana. Some were seemingly local companies with out-of-state addresses (Cox, AT&T), others were unavoidable (Delta Airlines, Walmart, Chili’s Restaurant), and a few expenditures could have gone to local businesses ($106,000 in mailing expenses to Olsen and Shuvalov of Texas).

All of which raises the big question: Why is Jindal raising and spending so much money? For starters, any potential presidential contender must prove he can raise huge amounts of cash, which Jindal clearly has shown (although he plays it coy when asked about his presidential ambitions). On a more fundamental level, money is power. Jindal can legally use his campaign account to help Louisiana candidates he likes, hurt those who cross him and scare away many who might want his job.

The one comparison Jindal probably wants to avoid is how much money the average Louisiana family took in and spent last year. That’s when the governor’s fundraising trips really come into focus. If voters ever get a case of bank-account envy, it’ll take a great deal more than $725,000 to resurrect the conservative, neo-populist image Jindal so carefully crafted during his 2007 campaign for governor.