Walter Reed collected $52K in Causeway legal fees despite doing no work, OIG reports

An inspector general report says Ex-St. Tammany DA Walter Reed collected tens of thousands in fees for doing little work other than apparently steering contracts towards a firm that was paying him.

BATON ROUGE, La. — Days after his sentencing for a public corruption conviction, a criminal investigation by the Louisiana Inspector General reveals former St Tammany Parish District Attorney Walter Reed received payments from a Metairie law firm for doing no work, other than helping them land legal contracts with the Causeway Commission.

Walter Reed listed income from the Commission on his financial disclosures from 2008 to the time he left office in 2014. But investigators for Inspector General Stephen Street found the Causeway Commission never directly paid Reed.

RELATED: Former Northshore DA Walter Reed, son sentenced

Instead, invoices obtained by the IG show attorney J. William Becknell II and the Becknell Law Firm paid Reed as much as 30% of work the law firm conducted for the Causeway Commission over a six-year period. In all, the invoices show Reed was paid more than $52,000 since 2008.

The revelation comes in an investigative report released Monday by the Inspector General that resulted from questions raised by the Metropolitan Crime Commission.

“Just like commuters were paying a toll to cross the bridge, Walter Reed was collecting a toll on all the legal work from the Northshore general counsel for the Causeway,” said Metro Crime Commission President Rafael Goyeneche.

The IG found Causeway Commission Executive Director Carlton Doufrechou had no knowledge of the payment arrangement with Reed. According to the report, members of the commission told Street’s investigators they were “…unaware of any billings or records relating to legal services or other work performed by Reed.”

Starting in 2001, the Causeway Commission’s legal work was split between a Northshore counsel and a South shore counsel.

An assistant district attorney under Reed, Stephen Mogabgab, provided all the Northshore work from 2001 until the time of his death in 2007. At that point, the commission entered a contract with Becknell.

In 2008, Reed’s financial disclosures submitted to the Louisiana Board of Ethics began to reflect payments from the Causeway Commission. In ’08, Reed listed $2,642 in income for Causeway legal work.

But in 2013, Reed lists no income from Becknell or the Causeway on his financial disclosure, even though an IRS income statement issued to Reed by the Becknell firm indicated he took in $9,297.87. Reed has yet to submit his 2014 financial disclosure to the ethics board, but another IRS 1099 form shows Becknell paid him $6,324.25 that year.

Five attorneys from Becknell’s firm billed for Causeway legal work: Becknell himself, his daughter Allison Becknell, his son John William Becknell III, Covington attorney Brian Meissner and Michael J. Power, who is now the Jefferson Parish Attorney.

Jefferson Parish President Mike Yenni appointed Power Jefferson Parish Attorney in January 2016 when Yenni took office.

The report says Allison Becknell, Meissner and Power retained high-profile defense attorney Steve London to represent them during the IG investigation. All four declined IG requests for interviews.

It was unclear in the report whether Becknell’s son was interviewed.

MORE | IG Report: Ex-DA was paid to land contracts for law firm

J. William Becknell II’s attorney, Kyle Schonekas told our partners at the New Orleans Advocate Sunday, "All I can tell you is the matter was thoroughly explored by the U.S. Attorney's Office and the FBI, and they chose not to bring charges against Mr. Becknell or anyone else.”

The IG report says Becknell was interviewed by FBI agents in June 2014, two months after a federal grand jury handed up a sweeping public corruption indictment against Reed. At the time of his interview with federal investigators, Becknell told them former Executive Director of the Causeway Commission, Robert Lambert, knew about the arrangement with Reed, but Dufrechou did not.

Dufrechou met with Becknell and then-commission chairman Michael Lorino in 2014 after the Metro Crime Commission informed Dufrechou Reed was claiming income for Causeway legal work, according to the report.

Becknell indicated to get legal work from the Causeway, Lambert, the former Executive Director, told Becknell he had to get Reed’s blessing.

“Becknell told Dufrechou and Lorino ‘this is the way it was always done.’ Lorino asked Becknell directly if Reed did any work for the money he was paid and Becknell replied ‘No’,” the IG report states.

At that meeting, Becknell admitted to Causeway leaders that Reed did no work for his 30% cut. At some point, Becknell told investigators he reduced Reed’s portion of the fees to 20%.
“Upon learning of Becknell’s payments to Reed in spite of Reed’s doing no work, the Causeway Commission terminated Becknell’s contract and cooperated fully with OIG’s investigation,” the report reads.

The South shore attorney for the commission was Burgess McCranie from 2001 to 2014.

In 2005, McCranie’s Metairie law firm, McCranie Sistrunk announced Reed would serve in a ceremonial “of counsel” capacity to the firm, however, McCranie told IG investigators when he was still a part of the firm, he did not know of any such arrangement with Reed.

According to the report, McCranie told investigators he sold his interest in the firm when he reached age 65.

In 2014, Michael Sistrunk, McCranie’s law partner, confirmed Reed’s relationship with the firm to the New Orleans Advocate, after reports Reed had recused his office from prosecuting a negligent homicide case because McCranie Sistrunk was representing the victims in the companion civil case.

Despite the relationship between Reed and the firm, IG Street found no evidence of payments from McCranie Sistrunk to Reed tied to Causeway legal work.

A letter to Governor John Bel Edwards, included with the report, says the results of the investigation were submitted to the US Attorney for the Eastern District of Louisiana and to the Louisiana Attorney General’s Criminal Division for consideration.

Current St Tammany Parish District Attorney Warren Montgomery recused his office from prosecution of the case in June 2015.

Reporter Sara Pagones with the New Orleans Advocate contributed to this report.

© 2017 WWL-TV


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