In The News › It’s tough to break ethics law

Aug 5, 2007

Source: Times-Picayune

It’s tough to break ethics law

It’s tough to break ethics law
Sunday, August 05, 2007
James Gill

They’ve found a “puzzling loophole” in Louisiana ‘s ethics laws, a headline announced a few days ago.

That’s not such a great trick. Louisiana ‘s ethics laws consist almost entirely of puzzling loopholes, allowing public officials to profit from deals that a child could see are rotten.

Unfortunately no child was available to note that something funny was going on when New Orleans Industrial Development Board president Jimmie Thorns copped a cool half million from the Housing Authority of New Orleans.

Instead, learned counsel consulted the statutes, conferred with state Ethics Board staff and pronounced the arrangement perfectly legal. The funny thing is that they were right.

Thorns said he would never have accepted the HANO moolah if anyone had “raised a concern,” but that’s not going to happen so long as the question is framed as a strictly legal one.

Finding a flaw in state law is an easy game for grown-ups, but it does not diminish a conflict of interest that must have been obvious to Thorns, HANO and the IDB from Jump Street.

HANO hired Thorns for what is described as appraisal and property insurance analysis. No doubt Thorns has been appraising and analyzing with great diligence, but it is unlikely that HANO would find fault with his performance in any case.

Thorns also happens to be chairman of the New Orleans Industrial Development Board, which has the authority to hand out massive tax breaks. Among the supplicants for such favors right now is HANO, which plans massive redevelopment in partnership with private corporations.

We can be reasonably confident that HANO will pay Thorns’ bill promptly.

When HANO perceived a need for appraisal and property insurance analysis, Thorns obviously sensed it might be improper for him to bid for the contract, for he sought advice from the IDB attorney.

That worthy gave the go-ahead after Ethics Board attorneys opined that the law, though it forbids public officials to take money from persons or corporations within their jurisdiction, exempts government agencies. Thus HANO was free to shovel public money Thorns’ way, while applying for tax abatements that will benefit its private-developer partners.

HANO received four proposals and was not bound to accept the cheapest, this being a “professional service” contract. Thorns’ proposal happened to be the cheapest, however, as well as the best, HANO said. We had to take HANO’s word for that, the paper reporting that “officials said they could not immediately provide copies of the proposals submitted.”

Perhaps HANO should award another contract to someone who can organize its filing system.

But then $500,000 is chump change in the housing business post Katrina, with HANO looking to build low- and mixed-income houses and apartments on the sites of the old projects. HANO has 19 tax-abatement applications pending before the IDB.

Huge amounts of money are sloshing around the housing racket, and some people are going to get rich. In a report entitled “Seeking Subsidies on Top of Subsidies,” the Bureau of Governmental Research notes that the feds have allocated $1.7 billion in low-income housing tax credits in the Gulf Opportunity Zone, and the state Office of Community Development has provided $41 million in low- or no-interest loans. This is in addition to the various state and federal subsidies in effect before the storm.

It is not enough, however, for developers in New Orleans also turn to the IDB, which waives taxes and issues revenue bonds to finance redevelopment. IDB, according to BGR, is a little slapdash in handing out the money and may be subsidizing projects that could succeed without the help, thus further impoverishing hard-up local government.

Still, it could be worse. Imagine if someone were to break the ethics laws.

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James Gill is a staff writer. He can be reached at (504) 826-3318 or at

Aug 5, 2007

Source: Times-Picayune

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