NEW ORLEANS - For 99 years, the Wisner Donation has provided millions of dollars to the City of New Orleans for worthwhile non-profit ventures, focusing on education and the arts. But because of recent strife between the family heirs of the trust and the city administration, the benevolence may not make it to the century mark.
A lawsuit filed last week by the heirs seeks to replace Mayor Mitch Landrieu as the trustee, claiming conflicts of interest, illegal meddling, and heavy-handed politics.
In a statement summarizing the suit, the heirs wrote, “Since assuming office, Mayor Landrieu has interfered with the conduct of the Advisory Committee's business and, contrary to the 1930 judgment, has breached his fiduciary duty."
The litigation follows an earlier legal filing by the city to get a legal ruling on whether to make the business of the Wisner committee public rather than private.
Under the donation, income from oil-rich land holdings in several coastal parishes is divided between the heirs, the city, and three smaller beneficiaries: Tulane University, LSU-Charity Hospital and the Salvation Army. A representative of each beneficiary serves on the advisory committee.
The outcome of the dueling lawsuits won't be known for some time, but it has already cost the trust its secretary-treasurer and land manager Cathy Norman, who has overseen the trust for 20 years.
Norman attended her last committee meeting Tuesday, a special session to lay the groundwork to search for her replacement. In her resignation letter, Norman wrote that she “can no longer work under the difficult and stressful conditions that now exist as a result of legal confusion and internal governance issues."
In their lawsuit, filed Friday, the heirs claim that Landrieu’s actions led to Norman’s “wrongful constructive termination.” The suit also claims that the mayor awarded grants without the committee’s input, and created a conflict of interest by inserting his choice of attorneys into the BP oil spill litigation. Those reasons, along with “demonstrated hostility and disobedience of the Trust’s terms,” warrant “removal and replacement” of Landrieu as trustee, the lawsuit claims.
At Tuesday’s meeting, committee member Ed Buddy, representing the Salvation Army, wondered aloud if the hiring process should even go forward given the legal uncertainties. "The whole complexion of the litigation could change,” Buddy said. “We're going down a road and spending a lot of time and also requesting resumes on a job that, A) might not be there, and plus it's more difficult because this thing ends in 2014."
The tension at the meeting was obvious. On several occasions, the committee chairman, Mike Sherman, the city’s director of intergovernmental relations, cut off other committee members as they tried to speak about the litigation and whether to keep Norman on board as a contractor during the search for a replacement.
Ultimately, the biggest losers in this fight could be the longtime grant recipients. The lawsuit by the heirs seeks an injunction to halt the grant process until changes are made.
Among the non-profits that could lose funding are the Louisiana Philharmonic Orchestra, the New Orleans Ballet Association, the New Orleans Museum of Art, Marsalis Center for Music, New Orleans Opera Association and Louisiana Children’s Museum.
At the opening of Tuesday’s meeting, Sherman noted that 2012 was the most profitable years in the history of the trust, allowing the city to top $2.4 million in grants awarded since Landrieu took office.
Through a spokesman, the city said it has not yet been served with the lawsuit by the heirs, but defended its position. “For decades, the Trust has operated in relative secrecy,” spokesman Ryan Berni wrote in a statement. “Our administration has worked to bring public transparency and accountability to the operations of the Wisner Donation and to the Donation Advisory Committee to the Trustee.”