Ethics Board clears Bruno, finds loan not under supervision of mayor’s office

The Louisiana Board of Ethics says mayoral aide Marcus Bruno, at left with Robideaux, did not violate the state's ethics code because the small business loan he received in 2016 was not under the supervision of his boss.

The gist: Mayoral aide Marcus Bruno did not violate the state ethics code, the Louisiana Board of Ethics determined, when he applied for and was awarded a small business loan from a local nonprofit in late 2016. Ethics found that the loan was not under the supervision or jurisdiction of the mayor’s office. 

Get caught up, quickly. In November 2016, Mayor-President Joel Robideaux’s assistant for governmental affairs received a $35,000 loan from the Lafayette Neighborhoods Economic Development Corporation for a company he owns with his wife, Traci. LNEDC is a local nonprofit created in 1982 to help moderate- to low-income residents and business owners.

LNEDC’s revolving loan fund program gets U.S. Housing and Urban Development block grant monies via LCG’s Community Development Department, and Bruno has exerted influence over the nonprofit. After receiving the loan, Bruno lobbied for the council to approve an additional $150,000 in grant funding for its small business loan program and recommended individuals to serve on its board. 

The controversial loan was brought to light in February by The Acadiana Advocate in a story questioning whether the loan ran afoul of conflict of interest regulations given Bruno’s role with local government and close ties to LNEDC. 

Under pressure from council members who inquired about the appropriateness of the loan, the administration asked the Louisiana Board of Ethics and HUD to investigate. 

The Board of Ethics conducted a confidential investigation and on Aug. 16 informed Bruno that he’d been cleared. “The Board concluded, and instructed me to inform you, that the investigation found no evidence of a violation of the Code, as the small business loan was not under the supervision or jurisdiction of your agency, the Office of the Mayor for Lafayette Consolidated Government,” wrote David Bordelon, a staff attorney for the board, in a letter obtained by The Current. “Accordingly, the board has instructed me to close the file.”

The Current reported in late June that Bruno paid off the loan seven years early, after he was unable to establish that the loan to his company, LA Consultants, met HUD requirements for job creation or retention; he also failed to provide LNEDC with documentation that was missing from the application. Those problems with the loan itself were revealed in an internal review conducted by LCG’s Community Development Department. That compliance review concluded the Brunos were likely in default on the loan

Mortgage records show the Brunos borrowed money to pay back the LNEDC loan in early June and agreed to make 17 quarterly payments of $2,500 at 12 percent annual interest. The interest rate on the LNEDC loan was 6.5 percent.

Councilman Jay Castille, who has hammered the Bruno issue in council meetings, disagrees with the Board of Ethics’ decision. “Mr. Bruno has a lot of latitude and was able to work with the [LNEDC] board on putting in new policies and having influence on picking board members. The board may not be under Mr. Bruno’s supervision, but he was able to influence them,” Castille tells me.  “[That’s] all documented information. Politics at its worst.”

What’s next? HUD has yet to weigh in on whether the loan is in conflict with any federal regulations. HUD regs prohibit government employees from receiving federal block grant dollars if they are “in a position to participate in a decision-making process or gain inside information.”