In The News › Lee Zurik Investigation: ‘Playing With Fire’ prompts legislative backlash

Lee Zurik Investigation: ‘Playing With Fire’ prompts legislative backlash

FOX 8 WVUE New Orleans News, Weather, Sports

By Lee Zurik, Fox 8
May 2, 2013

Baton Rouge, La. – A board of trustees that spent public money on alcohol and pricey meals may soon lose some of its members. A Louisiana House committee passed a bill Thursday that would alter the make-up of the New Orleans Fire Fighter’s Pension & Relief Fund.

Two board members face state ethics charges following our “Playing With Fire” investigative series.

Mayor Mitch Landrieu’s chief administrative officer detailed many of the findings in our series of reports.

“There are ethics issues with regard to certain activities of the board members themselves, in terms of board members drawing salaries as CEO’s,” CAO and Deputy Mayor Andy Kopplin said, “Those salaries doubled in 2010. Very generous benefits… and again, those investigations are continuing.”

The board’s CEO, Richard Hampton, has been charged by the state’s Board of Ethics. And the inspector general is investigating questionable purchases on the public credit card.

“Few controls on credit card use… again, the legislative auditor would have a field day with this,” Kopplin said. “All but one board members have credit cards. No formal policy of approving expenses.”

Questionable investment decisions have led to the Fire Pension Board losing millions of dollars.

Kopplin told the committee, “Why is change important? Because of questionable investment decisions, because the city has little role on the board, and because board governance is unbalanced.”

The Landrieu administration urged the House Retirement Committee to hand over control of the fund to the city. Right now it’s managed by a board that’s mostly made up of current and retired firefighters.

But Representative Jeff Arnold (D-New Orleans) cautioned the committee, telling them that years ago the city controlled firefighters’ retirements.

“That is why this system was created,” Arnold said. “In 1967, they bankrupted the original firefighters system that was run by the City of New Orleans. They cannibalized it.”

This week, the non-profit group Bureau of Governmental Research came out in support of the bill that would hand over control to the city.

When Committee Vice-Chairman Kirk Talbot (R-River Ridge) asked Hampton whether both the BGR report and our own investigation was simply wrong, Hampton replied, “You used the term ‘spin doctor’… I won’t use that term, but I’ll tell you, the mayor and the administration has done a wonderful job of amassing a lot of resources to say a lot of things they were saying for them.”

With four votes for, five against, the Retirement Committee voted against handing over the fund to the city.

“We are absolutely afraid and need your legislative oversight,” said Nick Felton, a board trustee.

But the committee did make some changes. Right now, the board is comprised of five current and three retired firefighters, along with two people from the city. The bill passed Thursday reduces the number of firefighters to two current and two retired, essentially giving the city more control.

The committee also passed a bill that ups the amount of money firefighters contribute to the retirement system. Right now they give 6 percent of their salaries until they reach 20 years of service, at which point they contribute nothing. The committee’s bill would require all firefighters to contribute 10 percent — that will be phased in over the next few years.

Representatives from the New Orleans Fire Department at the meeting strongly opposed the city taking control, so the no vote for that bill was a big win for the firefighters.

The measure requires the approval of the full House and the Senate before it becomes law.

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