LCG lawyer, councilman at odds over Bruno loan

Councilman Jay Castille Photo by Travis Gauthier

The gist: Despite the conclusions of an internal monitoring review that found numerous deficiencies in a taxpayer-funded federal loan to mayoral aide Marcus Bruno — findings that prompted Bruno to repay the loan seven years early — an assistant city-parish attorney is trying to make the case that the verdict is still out on any wrongdoing.

“That has not been determined yet,” attorney Steve Oats said to Councilman Jay Castille at last Tuesday’s council meeting, after Castille’s comment that Bruno hadn’t followed the rules. 

“Yes, it’s been determined,” Castille insisted, refusing to grant Mayor-President Joel Robideaux’s request that the loan matter not be discussed at last week’s council. “He did not follow the policies and procedures that were set forth. It doesn’t take a genius to figure it out. You just gotta read it,” Castille added, referencing the troubling conclusions of a loan monitoring report released by LCG’s Community Development Department.

Even the nonprofit that awarded the loan acknowledges it was out of compliance and that policies weren’t followed; it is now pledging to put new safeguards in place.  

Get caught up, quickly. In November 2016, Joel Robideaux’s assistant for governmental affairs received a $35,000 loan from the nonprofit Lafayette Neighborhoods Economic Development Corporation for LA Consultants, a company he owns with his wife, Traci. LNEDC’s revolving loan fund program gets U.S. Housing and Urban Development block grant monies via LCG’s Community Development Department. Bruno has close ties to the local economic development group, and within months of receiving the 10-year loan for his personal business lobbied the council to approve another $150,000 in grants to the organization. LNEDC received its first round of grant funds in 1983 and hadn’t received any funding from the council since 2001. 

The Acadiana Advocate revealed the problematic disbursement of federal taxpayer monies in early February. The main question reporter Ben Myers’s story raised is whether Bruno’s loan ran afoul of conflict of interest regulations given his role with LCG.

Robideaux immediately pounced on the newspaper in defending his aide, a controversial figure who had worked on Robideaux’s campaign in 2015. “To suggest that this is anything other than a properly issued loan is a serious distortion of the facts,” Robideaux said in a statement the day after The Advocate story was published. The mayor-president followed up his vigorous defense with an internal report a couple of weeks later, authored by Oats, that purported to exonerate Bruno of ethical wrongdoing. After announcing that Oats’ internal legal review had cleared Bruno, Robideaux continued to justify the loan: “I think everything that was required was done. It was all above board. It meets all the regulations, all the rules,” the mayor-president said. 

However, another LCG internal review identified various deficiencies in the loan application and found a number of policy and procedure violations. That monitoring review, which was conducted under immense council pressure by LCG’s Community Development Department in March, concluded the loan should not have been made.

The review noted the loan application “was remarkable for the amount of documentation that was absent,especially when compared with previous LNEDC loans, and found it to be virtually impossible for the loan to have provided a “public benefit” of job creation or job retention for low- to moderate-income people, as required by HUD. 

The monitoring review suggested three courses of action to remedy the matter: modify the loan, call in the loan — which would force the company to repay the loan on an accelerated time frame and/or increase the interest rate — or pursue legal action to seize the house and property at 102 Marsh Drive that the couple pledged as collateral. 

At 4 p.m. last Tuesday, just 1.5 hours before the regular meeting got underway, the council was notified by Community Development Director Shaneá Nelson that she’d received an update from LNEDC. “The nature of the update references loan recipient payments, which can potentially bring up an issue of privacy on the part of the loan recipient,” she wrote in explaining the request to not discuss the matter publicly (which she later told the council came directly from Robideaux). She included a copy of the letter from LNEDC notifying her that the loan (estimated to have a $28,000 balance) had been paid in full. 

Unaware at the time that the loan payout was the reason Robideaux didn’t want the matter discussed publicly, the privacy request was a head-scratcher for those in attendance. Answers, however, came Monday when The Acadiana Advocate revealed that Bruno had secured another $35,000 loan to pay off the balance of the LNEDC loan, again mortgaging his home. (It’s worth noting that Bruno’s loan application did not include the required rejection letter from a traditional lending institution.)

Mortgage records show the Brunos borrowed the money from Maria Pham 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.

Nathan Thornton, LNEDC’s loan administrator, tells me the loan was paid off after the organization presented Community Development’s findings to Bruno, requesting missing documentation in the application, how the proceeds were spent and proof that the loan had met the program’s requirements. “He had some of the information but not enough,” Thornton tells me. 

“After reviewing their current business operation and future growth opportunities, the loan recipients decided that the most beneficial option for compliance would be to pay off the loan,” LNEDC Chairman Regis Allison wrote to Nelson on June 18.

It remains unclear what Bruno’s company does (LA Consultants’ website was not active today) and what the loan proceeds were used for.

Councilman Castille suggested that LCG look into bringing the loan program in-house, which Nelson said could be considered if LNEDC does not make Community Development’s suggested policy and procedure changes. “It’s a good program,” Castille said. “It does good things.”

Thornton, who rejoined the organization early this year to clean up the loan portfolio, indicated those changes would come. “There’s a whole lot of processes that need to be changed,” he tells me. Thornton, however, stresses that the program would continue without additional funding from LCG because of its revolving structure. 

Castille got assurances at Tuesday’s meeting that investigations by the Louisiana Board of Ethics and HUD’s Office of Inspector General would continue. 

Assistant City-Parish attorney Steve Oats

“I’m not letting that dog lie,” Castille told Oats in what at times was a heated exchange. “For an employee to do what happened, get that loan, is wrong.”

After Oats reiterated that wrongdoing hadn’t been proven, the councilman’s patience wore thin. “Mr. Oats I’m done. You can sit down. I don’t need you anymore.”