Lafayette developer faces $1.5 million fine in ethics case

The state Board of Ethics and a Lafayette developer faced off Thursday in a hearing on whether he should face $1.5 million in fines on allegations of contracting with a public agency while still serving as chairman of its board.

Greg Gachassin is accused of signing two $500,000 consulting contracts for low-income housing developments while serving as chairman of the Lafayette Public Trust Housing Authority, which helped finance both developments.

The LPTFA is a self-supporting public authority that makes money through investments, mortgage financing and loans, then uses the proceeds to support public projects.

The Thursday hearing before a three-member Ethics Adjudicatory Board was on a request by Ethics Board attorneys to fine Gachassin $1.5 million without further hearings and on a counter-request by Gachassin’s attorney, Gray Sexton, to dismiss the case, or at least part of it.

The Adjudicatory Board made no decision Thursday, taking the case under advisement.

At issue in much of a hearing was whether the LPTFA is considered a public agency and whether Gachassin, as its chairman, was a public servant subject to state ethics laws that would bar him from using his position to enrich himself.

Sexton argued the LPTFA, whose members serve without pay, is not a public body but rather a private trust engaging in public projects and LPTFA members have no obligation to comply with the state ethics code.

Ethics Board attorney Michael Dupree said the LPTFA members are appointed by a government agency — the Lafayette City-Parish Council — and state law stipulates all public trusts shall adhere to the “Code of Ethics.”

Sexton questioned the precision of the wording, noting the law did not specifically state the formal name of the ethics code: “the Louisiana Code of Governmental Ethics.”

“There are a lot of codes of ethics floating around,” Sexton said.

Dupree said the language seems clear, considering its context.

“What other ethics code are they talking about?” he asked.

The two $500,000 consulting contracts at the heart of the ethics case were dated Nov. 1, 2009, a few weeks before Gachassin stepped down from the LPTFA.

One of the contracts was for the Cypress Trails, a low-income housing development being overseen by the LPTFA.

The other was for Villa Gardens, a low-income development by the Lafayette Housing Authority that had received a loan from LPTFA, money that Ethics Board attorneys allege helped pay Gachassin’s consulting contract.

Sexton said the contract for the consulting work was not actually signed until after Gachassin had stepped down from the LPTFA.

He did not offer the Adjudicatory Board a specific alternative date for the contract or an explanation for why the Nov. 1 date was on the contract, other than to say that someone must have written the wrong date.

Ethics Board attorney Suzanne Mooney said even if the contract date is in doubt, Gachassin still would be in violation of state ethics laws because, as chairman of the LPTFA, he would have been prohibited from contracting with the public agency for two years after he stepped down.

“It doesn’t matter whether he signs the contract Nov. 1 or Dec. 2, he still violates the ethics code,” she said.

The $1.5 million in fines Gachassin faces is an unusually high amount for an ethics violation.

Dupree said the ethics code allows for a penalty of the amount of money gained by the alleged ethics violation, $1 million in contract payments, plus an additional penalty of half that, about another $500,000.

Sexton argued the ethics code caps the penalty at $10,000.

The ethics code states in one section that penalties are capped at $10,000 but it states in another section that the penalty can be the amount of the payment plus half of that amount if a person violated the ethics code “to his economic advantage.”

Sexton and Dupree also argued over competing interpretations of other portions of the ethics code that address how many members of the Ethics Board must be present for the body to pursue charges against someone.

Seven members were present in the vote to pursue ethics charges against Gachassin.

Sexton, citing one section of the ethics code, argued nine members must be present before the board votes on charges, and Dupree, citing a different section, said six members are sufficient.