Inspector General probes spending of Jefferson down payment program

The Jefferson Parish Finance Authority spent $56,000 on per diems last year, not just for board meetings, but trustees can get a per diem to attend two realtor luncheons a year aimed at drumming up business for the program.

Katie Moore talks about a probe into money the Jefferson Parish Finance Authority is spending

The Jefferson Parish Inspector General and members of its divided Board of Trustees are asking big questions about both the program and operational spending of a little-known public agency, the Jefferson Parish Finance Authority, or JPFA.

The authority is a public trust offering two types of down payment and closing cost assistance for people who want to buy a home in Jefferson Parish but don’t have money to put down.

Home buyers can get 3% to 4% of the price of the home to put down. While some get VA loans, most of the grant recipients end up closing on mortgages insured by the federal government through the Federal Housing Administration, or FHA.

Those loans allow credit-worthy people to put less money down and still buy a home.

Last year, the JPFA provided down payment grants for 146 home buyers in Jefferson Parish. That number climbs to nearly 200 when you factor in the down payment grants the authority doled out in St. Tammany, St. Charles and Calcasieu Parishes, all programs that the Jefferson Parish authority has run under its umbrella program, the Southern Mortgage Assistance Program.

But three members of the agency’s oversight board, the Board of Trustees, started asking questions last year about how much money the agency is spending on per diems for board members and fees paid to professionals who do work for the JPFA.

“Over the years, we've helped over 13,000 people buy a home in Jefferson Parish who could not have bought a home,” Terry McCarthy said about the authority’s record.

The agency’s most recent legislative audit shows McCarthy now makes $128,661 annually, an amount that’s comparable to the heads of Louisiana's other local finance authorities.

But McCarthy also gets $11,086 a year to pay for his cell phone and his vehicle.

“My appreciation is his car allowance exceeds any other car allowance in parish government. I don't know what the justification for that would be,” said District 5 Councilmember Jennifer Van Vrancken.

Records show Van Vrancken is correct, McCarthy’s vehicle and cell allowance is higher than any Jefferson Parish employee’s.

And while McCarthy is technically not a parish employee, as a point of reference, employees who received the maximum car and cell phone allowance last year got $785 a month.

 

 

McCarthy gets $923 monthly

“I have to drive to Baton Rouge often. I've got to go to St. Tammany often. I drive twice as much as anybody in Jefferson Parish,” McCarthy said.

Parish employees get paid the max car allowance to put 1,250 miles a month on their vehicles. That’s enough

mileage to make 32 trips to Covington or 16 trips to Baton Rouge every month.

McCarthy's public calendar shows he drove to meetings outside Jefferson Parish 17 times in the last two years, less than once a month.

Credit card statements show McCarthy drove to four meetings in Lake Charles, but for those trips, he rented a car.

When asked about it McCarthy said it was an allowable expense.

Unlike his employees, McCarthy is considered an executive who is exempt from civil service, and therefore, he does not have to abide by parish administrative policies.

Before her election, Councilmember Van Vrancken was Chief Administrative Officer of Jefferson Parish.

“I can only speak to what I would've done with my employees in parish government in past positions. I certainly would not have allowed someone to have a car allowance that is for their travel and then additionally renting a vehicle on top of that,” Van Vrancken said. 

 

 

Trustee per diems

A Board of Trustees oversees the Finance Authority. Those trustees meet weekly and get paid a $150 per diem for each meeting.

Last year, three newly-appointed trustees started questioning whether there was a need for the board to meet weekly, given the tens of thousands it cost the authority in per diems.

Meeting minutes from 2016 show the board meetings lasting about an average of 20 minutes each week.

“That's not always true. That's your opinion. Some meetings last a long time. Some are shorter. It depends on what's going on. Some meetings last a great deal of time. We have no control over what's on the agenda,” said Dennis DiMarco, a trustee and the Jefferson Parish Registrar of Voters.

But the trustees do control what’s on their agenda and they’re the ones who could ask the Parish Council to change the board’s meeting frequency.

“I think people would like that gig. 20 minutes, $150? Wow,” Van Vrancken said.

Even the Jefferson Parish Council doesn't meet weekly and neither does the Capitol Area Finance Authority in Baton Rouge or the Finance Authority of New Orleans.

Both of those agencies meet once a month, and the New Orleans board members don’t get paid a per diem to attend.     

The Jefferson Parish Finance Authority spent $56,000 on per diems last year, not just for board meetings, but trustees can get a per diem to attend two realtor luncheons a year aimed at drumming up business for the program.

So, the trustees can get a free lunch and $150 in compensation to attend.

“Seems like something like a luncheon would be something you'd enjoy participating in and wouldn't expect to be paid to attend. So, I think that begs some looking into as to whether that should be the case,” Van Vrancken said.

Trustee Marcy Planer did not accept the per diems to attend the real estate luncheons, and Sam Shudmak didn’t attend, arguing the luncheons, that cost thousands of dollars to host, were a waste of money.

A record of per diem payments provided by the finance authority in response to a public records request shows two of the trustees, Mitchell Boyter and Frank Muscarello, received per diems to attend both luncheons last year.


 

Registrar of Voters Dennis DiMarco as a trustee

Dennis DiMarco has received $600 in per diem payments for luncheons over the past four years and he receives a per diem every week for the Monday morning board meetings, even though he's a full-time registrar of voters.

“We've had state reps on the board. We've had elected officials. Former council members were on the board,” DiMarco said, even though most elected officials work part-time.

Over the years, Louisiana Attorneys General have issued opinions clarifying the state law prohibiting dual office holding. Those opinions have maintained people cannot get paid from two government agencies for the same work hours.

As a state registrar, DiMarco sets his own hours, without keeping track of vacation or sick leave. 

DiMarco's salary totals $161,748 from the state and Jefferson Parish as registrar, making him the second-highest paid in the state.

Jefferson Parish also pays him $8,700 a year in a cell phone and vehicle allowance even though he’s not a parish employee.

In 2016, DiMarco received $6,900 in per diems from the finance authority.

In all he was paid a total of $176,000 in public money, not including health and retirement benefits.

When asked whether he thinks it’s ok for him to get a per diem while making such a large public salary, DiMarco replied, “Sure. Just like everyone here gets a per diem. I’m not here as registrar of voters.”
 

McCarthy’s history

Terry McCarthy took the helm of the little-known board in 2009. He’s the first titled Executive Director.

The Board of Trustees didn’t conduct a search or conduct interviews to find an Executive Director, but simply

appointed McCarthy to the newly-created position.

McCarthy is a long-time friend and associate of former Jefferson Parish President Aaron Broussard.

Before he took the job at the JPFA, McCarthy was serving as Executive Assistant to Broussard’s Chief Administrative Officer, Tim Whitmer.

Both Broussard and Whitmer stepped down under the cloud of a federal corruption investigation less than a year after McCarthy moved to the finance authority.

For years, an executive assistant in parish government, who made $14,000 less than McCarthy’s starting salary, handled the business of the authority.

Despite the questions that were raised at the time of his appointment about the appearance of cronyism, McCarthy says he was hired to expand the program, which would mean an expansion of job duties, justifying the hike in pay.

During his tenure at the authority, McCarthy developed down payment assistance programs in three additional parishes: St Tammany, St Charles and Calcasieu. Those three programs yield a small percentage of the grant the JPFA funds each year.

In mid-2016, McCarthy asked the board to suspend the Calcasieu Parish down payment assistance program, saying it was only “breaking even”.

When McCarthy was hired in 2009, the General Counsel for the authority, Rob Konrad was quoted in the Times Picayune newspaper as saying the authority, “…has helped more than 11,000 families and managed more than $800 million in 30 years.”

Again, McCarthy now says the tally of families helped is up to 13,000. That would be mean the program has helped 2,000 families during McCarthy's seven-year tenure.

While the authority does not operate using taxpayer funds, it is a public trust. Money the authority raises through the issuance of past municipal bonds or through fees collected from the down payment assistance program are supposed to be used to benefit Jefferson Parish.

Monday’s scheduled meeting of the Board of Trustees fell short of a quorum, with only three of the newest members of the board in attendance. As secretary for the authority said at the meeting that had never happened before.

When asked for comment about the per diems and the spending, board Chairman Greg Faia, who cited out-of-town business for why he didn’t attend Monday’s meeting, said in an emailed statement, in part, “It is the only payment a board member receives regardless of the time and effort expended for the JPFA.  I receive calls from the staff, the executive director, the general counsel, and the professionals all week long.”

As for the frequency of meetings, Faia said he felt the board was set up to have more control over the authority than the person who was hired to run it, and that’s how the board justifies its weekly meeting schedule.
 

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