NEW ORLEANS - The practice of New Orleans criminal and civil court judges buying themselves supplemental insurance with court funds was slammed by the Legislative Auditor Monday. The twin audits follow a nearly year-long investigation that was sparked by a series of Eyewitness Investigates stories that aired in mid-2011.
The audit states that more than $800,000 in extra insurance has been purchased since 2009 by the two courts, all in violation of state law. While the decades-old practice was stopped after Eyewitness Investigates exposed the perks, the judges nevertheless issued a lengthy defense that was published along with the audit’s findings.
The report also takes the judges to task for overspending on travel and failing to document work hours of court employees, but the bulk of the audit was devoted to the controversial insurance perks.
Through public records requests, Eyewitness Investigates documented that the two courts spent nearly $2 million on extra insurance benefits since 2006. The courts paid for the insurance using judicial expenses funds, which come primarily from fines levied against defendants or, in the case of civil court, fees collected from plaintiffs.
The legislative audit found that in 2010 alone, the judges of criminal court held 249 different insurance policies beyond what is provided by state law. The cost was $637,367, and included coverage for health, dental, cancer, critical illness, heart care, long-term care, vision and professional liability. The audit states that 22 of those policies were purchased for judges’ spouses and another 19 for family members.
Rafael Goyeneche of the Metropolitan Crime Commission formally requested the audits after Eyewitness News revealed the longstanding practice. He said that in addition to detailing the full extent of the perks, the audits underscores how much money could have been going toward sorely needed court programs.
“We're talking about millions of dollars of public funds that have been misspent at a time when the judges are complaining that there aren't sufficient resources," Goyeneche said.
The 13 criminal court judges also bought life insurance policies in which spouses or other family members were named as beneficiaries. The audit points out that when the policies were cancelled, $65,711 in cash value from the policies was paid to the judges and their beneficiaries, who in turn reimbursed the money to the court.
"The (Criminal Court) judges had on average between 15 and 18 policies per judge at a cost of ranging from $7,200 a year to over $14,000 a year,” Goyeneche said. “That should infuriate the public."
In civil court, the 18 judges spent $191,073 on supplemental insurance since 2009, but did not find any purchases for family members.
Legislative Auditor Daryl Purpera said the purchases are strictly prohibited by state law. Purpera noted that a previous opinion by the Attorney General upheld that position.
“As a result of these payments, it appears that the judges received benefits in violation of (state law) and expended funds in violation of the Louisiana Constitution which prohibits the donation of public assets,” the audit states.
The audit goes on to quote the state law, which “unequivocally mandates” the following: ‘No judge whose salary is provided for herein shall receive services as a judge, directly or indirectly, any additional salary, emolument, or benefit from the state.’ ”
Legal experts say the insurance purchases also appear to violate a prohibition-era United States Supreme Court decision – Tumey v. Ohio – that essentially prohibits judges from collecting fines to enhance their own pay and benefits.
Despite getting rid of the perks, the judges of both courts strongly defended the purchases. In nearly identical written responses to the audits, both courts state that the insurance is proper and, furthermore, the money used to buy is not state money, but self-generated money.
Neither court would answer questions or comment beyond their officials responses to the audit.
In response to the audits, the courts state that they obtained two independent legal opinions supporting their position. They also stated, “The Supreme Court through its silence and tacit approval for nearly two decades concludes that (state law) does not proscribe this practice of providing insurance benefits to District Court judges.”
Goyeneche said the judges’ responses make a bad situation worse.
"I find their response to be offensive, condescending and void of all logic and reality. That is the scary part of this," Goyeneche said.
"If they really believe they were really justified in doing it, why did they cancel all of the insurances? Why did they repay the cash value back into the court registry? Their opinion should just state ‘I'm sorry, we apologize to the public for what we've done.’ "
The auditors disagreed so strongly with the judges’ interpretation, the report includes a rare rebuttal from Purpera. The auditors state that the mere fact that the Judicial Expense Funds are subject to audit contradicts the courts’ position that the funds are not public.
“The Legislative Auditor does not audit non-public funds,” the rebuttal states.
“It would appear to be a tremendous conflict of interest,” the audit states, “for judges to be able to assess fines and fees that they may then use for their own personal benefit.”