A former city official who helped create the Lafayette Neighborhoods Economic Development Corporation says there is no question: the suspect loan the agency provided mayoral assistant Marcus Bruno merits official scrutiny by local government officials.
“It’s really incumbent on the administration to go to LNEDC and say, ‘Give us this information on this loan.’ In fact, I would want to look at every other loan that they’ve been making in the last couple of years just to make sure they haven’t done this again with somebody else,” says Phil Lank, who served as Lafayette’s first community development director and helped create LNEDC.
And it appears that council members agree. At least three members are weighing whether to exercise their right to investigate the loan and circumstances surrounding it and how to go about that process in a fair manner. A majority vote of five would be required to move an investigation forward.
A weekend story by The Acadiana Advocate raised the specter of conflict of interest and influence peddling over Bruno’s successful effort to secure a $35,000 small business loan from LNEDC in 2016. The nonprofit LNEDC was created in 1982 to help moderate- and low-income residents.
Sunday afternoon, Mayor-President Joel Robideaux, who refused repeated attempts to be interviewed for The Advocate story, issued a terse but strong defense of Bruno and the loan:
Marcus Bruno and his wife applied for and received a minority small business loan. To secure the loan, they mortgaged their home. The lender, Lafayette Neighborhoods’ Economic Development Corp., is a well-known, minority small business loan organization that is separate from Lafayette Consolidated Government.
“I am deeply disappointed in the misleading headline and story,” stated Mayor-President Joel Robideaux. The truth of the matter is that my aide, Marcus, and his wife are minority small business owners who received a small business loan. He and his wife secured the loan with a mortgage on their home and the payments on that loan are current. To suggest that this is anything other than a properly issued loan is a serious distortion of the facts.
The Advocate’s Ben Myers reported that the U.S. Department of Housing and Urban Development, which provides the money through its Community Development Block Grant Program, would not tell him whether the loan to Bruno was proper. Bruno himself refused to tell Myers what his company, LA Consultants, located at 618 Jefferson Blvd., does and what the loan proceeds were used for. Founded in 2005, the company is owned by Marcus and his wife, Traci.
Phil Lank, Lafayette’s first community development director, 1977 to 1992, who went on to serve as a longtime economic development consultant to the Rebuild Lafayette North Committee, is appalled at Robideaux’s response. “I don’t understand why he has such a defensive posture. The guy is a CPA. He should understand when you do business with the feds they’ve got strings attached, you’ve got rules and regulations to follow.”
A full investigation into the matter is needed, insists Lank.
Donald Fuselier, a former city prosecutor and former assistant city attorney who once served on the board of the Lafayette Housing Authority, understands Lank’s particular frustration at this perceived abuse of the program. “Don’t get me wrong, Phil did all that he could for the entire community, but his focus was on the northside, developing programs on the northside,” Fuselier says.
Long a controversial figure, Bruno started his career as a Lafayette police officer, did a stint with the Public Service Commission, and returned to city-parish government in 1996, according to a 2016 story in The Advocate. It didn’t take long for Bruno to begin facing abuse of power accusations in his role as administrator of local government’s Criminal Justice Support Services. Amid numerous complaints about him, the Durel administration eliminated his department in 2009 under the guise of a reorganization. Bruno left local government (unbeknownst to the Durel administration, the full-time LCG employee had also purportedly been working 25 hours a week as a security “expert” for the Lafayette Housing Authority), re-emerging to support Joel Robideaux in his 2015 bid for mayor-president.
Bruno worked on Robideaux’s campaign and was rewarded with an $85,000 job, initially called “government and constituent relations officer” and, now, assistant for governmental affairs — a position created specifically for him.
“[Bruno] works for the mayor’s office. If you look at the rules and regulations, there is prescription for dealing with such a situation to get a waiver for a conflict of interest,” Lank says. “You have to get, first of all, approval by the city, and the city has to agree that it’s acceptable and appropriate. And the city in turn, as the grantor agency to LNEDC, has to go to HUD and elicit an ultimate determination [on] the conflict of interest. None of that was done.”
After obtaining the loan, Bruno exerted influence over LNEDC, advising the organization on rewrites to its bylaws and making recommendations about who should serve on its board, according to The Advocate. “I can’t think of a bigger conflict of interest than the mayor’s assistant getting a loan from an agency that the mayor has direct oversight of,” Lank says.
HUD dictates that city-parish government is responsible for ensuring block grants used for private business loans result in a “public benefit.” According to LNEDC’s website, that means those receiving loans must either create or retain one full-time job for every $25,000 of block grant funding (HUD regs indicate that amount to be $35,000), or provide goods and services to low- and moderate-income people. Applicants must also show evidence of experience and knowledge to operate the business successfully, provide a minimum equity injection and secure the loan with sufficient collateral to ensure repayment.
HUD requires LNEDC to provide loan documentation to city-parish government, which would make those records subject to the state’s public records law.
City-parish government could not supply any paperwork to The Advocate attesting to whether Bruno’s loan met the aforementioned requirements. The law firm of Oats and Marino told The Advocate city-parish does “not possess any other records responsive to The Advocate’s request.”
To understand the untenable situation the LNEDC put itself in, just imagine, for instance, LNEDC’s board having to foreclose on a loan to the mayor’s assistant and his wife. Court records show the couple has had financial difficulties in the past, and The Advocate reported that three loan payments were missed, though Robideaux says in his statement the loan is current. The board could be in a position to seize the asset the Brunos mortgaged to receive the loan, in this case their home, if there wasn’t adequate equity in the asset.
The most recent audit of the LNEDC, ending April 30, 2018, revealed various weaknesses in its internal controls and makes specific note of it not having required documentation for a number of loans.
Bruno’s checkered past did not go unnoticed on the campaign trail. Robideaux was repeatedly warned about his closeness to Bruno, according to people associated with the campaign. One major Robideaux backer, who asked not to be identified, recalls a local businessman refusing to contribute to the campaign solely because of Bruno’s involvement. Robideaux, in an effort to secure the black vote, was apparently willing to overlook Bruno’s past.
Bruno did not return a phone call and email seeking comment for this story.
In issuing an immediate defense of Bruno and the loan, Robideaux sent the message that he is now willing to turn a blind eye to Bruno’s alleged conflicts.
Council members, however, are contemplating launching their own inquiry — the charter gives the council investigative powers, allowing it to subpoena witnesses, administer oaths, take testimony and require the production of evidence. “I’m open to discussion,” Councilman Bruce Conque says, adding that he is “reviewing options.” Council members Jay Castille and Liz Hebert expressed similar postures.
Other council members contacted for this story either did not respond or declined to comment.
Whether the council acts, this matter is not likely to die any time soon. Separate formal complaints have been lodged against Bruno with HUD’s Office of Inspector General and the Louisiana Board of Ethics by a Lafayette resident, who confirmed the submissions on condition of anonymity. A message left with Marta Metelko in HUD’s OIG was not immediately returned.
“The other thing that needs to be questioned is the appropriateness of the applicant for the loan to begin with,” Lank says. “My knowledge and experience with consultants is they don’t work on job creation. They’re pretty much lone wolves.”