Gusman questioned in court on spending

Orleans Parish Sheriff Marlin Gusman
Orleans Parish Sheriff Marlin Gusman

Orleans Parish Sheriff Marlin Gusman returned to the federal witness stand Monday for another grilling. But this time, it wasn’t about his allegedly shoddy handling of the 2,400 inmates under his watch, but the tens of millions of dollars that flow through his various coffers annually.

Salacious inmate videos, viewed in court the last time Gusman fell under questioning, in early April, were replaced by spreadsheets and balance sheets as an attorney for the city peppered the sheriff with questions over how he has spent, or misspent, taxpayer money that could have gone toward inmate care.

“The sheriff’s accounting practices are reminiscent of ‘The Wizard of Oz,’ ” said Harry Rosenberg, a former U.S. attorney who is representing the city. “The Wizard, beyond the curtain, nobody knows what an illusionist he is. The sheriff hides behind general categories of revenue and general categories of expenses. It’s virtually impossible to identify every item with the openness that the public and that Your Honor expects in this city.”

Gusman insisted, as he has repeatedly, that his office is transparent about his finances, presenting the city annually with a breakdown of spending and revenue. He said the documents the city largely relied on in court Monday — audits provided to the state legislative auditor — tell a misleading slice of the story.

Among the questionable spending that caught the attention of U.S. District Judge Lance Africk, as he ponders the price tag for widespread jail reforms that he approved only two weeks ago, was the flat-fee tab for the very lawyers who represented Gusman in court.

According to figures that Rosenberg flashed on a screen in the courtroom, Gusman pays about $68,000 every two weeks to the law firm Usry, Weeks and Matthews — no questions asked.

In all, in 2011, the Sheriff’s Office spent some $2 million on legal fees. Most of it went to Usry, Weeks and Matthews, under a deal that Gusman said he inherited from prior Sheriff Charles Foti, who left the office nine years ago.

Gusman admitted that he has never taken a look to see if the firm is worth the money, which adds up to more than $1.7 million a year.

“Have you ever thought of, or asked for, billing records to keep track of their time, how many hours they’ve spent to justify that fee?” Africk asked.

“No, I have not,” Gusman replied.

According to Gusman, the firm has six lawyers who work on Sheriff’s Office matters, including two full-time. Another firm, Hurndon and Gaffney, was paid more than $280,000 that year to review FEMA rules and regulations.

Another source of friction was a soon-to-open, $80 million jail kitchen facility that has a far-larger capacity than the needs of a shrinking Orleans jail population. The new kitchen building, which Gusman said is close to opening, can serve 25,000 to 30,000 meals a day — more with double shifts.

It comes equipped with a candy-maker and a donut-maker.

“They said that was one of the nutritious snacks they can give to the inmates as part of their breakfast,” Gusman said. “Whether or not we could use it to resell to the commissary, that’s something we’ll take a look at.”

Gusman did say he had had discussions with local schools officials about potentially serving children’s meals. He said he had not penciled that into revenue projections, however.

Gusman said he expected a reduction in kitchen costs from the new facility, thanks to the ability to close older kitchens.

Those were just a few of the spending questions the city lobbed at Gusman over six hours of testimony on Monday, as Mayor Mitch Landrieu’s administration sought to cast Gusman as a woeful manager who should be able to cover the cost of the jail reforms outlined in the consent decree that Gusman, inmate advocates and the U.S. Department of Justice sealed in November.

Under state law, the city must fund inmate care. Africk is trying to determine just what that care specifically should cost, and how much Gusman’s office can kick into the pot from various criminal and civil revenue sources.

In the first 10 months of 2011, Gusman’s office received about $20 million in revenue from the city for medical costs and for the $22.39 per-diem inmate cost that the city is required to pay under a currently enforced consent decree that dates back decades. The city also pays several other costs for deputies and the Sheriff’s Office that raise its total annual tab to more than $30 million, before any added reform costs.

Gusman’s office receives about another $10 million for several hundred state inmates, along with millions more in revenues from the civil side of the operation — foreclosure sales and process serving, among other tasks. Landrieu, in public and in various caustic legal filings, says that should be plenty.

A new jail is expected to open by January. That could change the financial picture dramatically, and Africk said he’s most concerned now with funding through the end of the year.

Among other budget items that the city criticized were motorcycle and horse units, and the recent purchase of several crew cabs and take-home vehicles for deputies.

Gusman also decided early this year to pay off a $17 million state post-Katrina loan from a law enforcement district fund that he controls, instead of spacing out payments over more than a decade.

Rosenberg said the move suggested Gusman was trying “to look like you had nothing in the bank” with a battle brewing over the jail fixes. Gusman insisted that paying off the loan made sense, and that the money from the district can only go toward capital projects.

The meat of the expected hearing was delayed, however, after Gusman’s office failed — until Monday morning — to turn over projected revenue and expenditure figures for this year. Africk demanded that the sheriff come forward with supporting documentation and set a July 24 hearing date over that issue. He also grew peeved at the city’s dwelling on 2010 and 2011 audit numbers. The 2012 audit is not due out until next week.

“What’s spent is spent. What I’m trying to figure out is what we need ’ til the end of the year,” Africk said. “Honestly, having these numbers here — I may be missing something, but it does not appear to be very helpful.”

The hearing continues today with more testimony from sheriff’s officials.

“The sheriff has the burden of proof” to prove it needs more money, Africk said. “At the end of the day, what I’m trying to do with this is move as expeditiously as I can.”

Another hearing is set for early August, after which Africk said he plans to issue his ruling on who will pay how much for the reform plan.