La. DA uses program to fund his foundation

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This is part 6 in a multi-part series about questionable behavior in Calcasieu Parish, reprinted from The Washington Post. The L.A.C.E. program is statewide and has been criticized and found to have many issues all across the state.

At some point after establishing the nonprofit, DeRosier made another change to the community service buyout option: Where the office previously accepted gift cards from several stores, going forward, participants could purchase cards only from Stine, a Louisiana chain of home improvement stores. There’s only one Stine in Lake Charles. Barbara Adam’s sister is the store’s general manager. (Adam was also one of the initial board members of the foundation.)

“It didn’t make much sense,” says Newman. “The whole point was supposed to be to buy clothes and toys for needy families. Stine sells lumber and hardware.”

DeRosier says the switch was part of a decision to focus on relief from natural disasters. He also said he has regularly worked with the owners of Stine on various community projects. “I could care less whether [Barbara Adam] has a sister over there or not,” he said. “That is of no significance to me.”

The office also began accepting money orders instead of gift cards. According to Newman, that change made defendants much more likely to pay up than to engage in community service.

“They had to pay enrollment fees and other charges with a money order anyway,” she says. “So if they could afford it, it was just easier for them to just go ahead and buy out their community service while they’re at it instead of going to Walmart or Sam’s Club.”

More recently, the office has shifted away from gift cards altogether — defendants now can buy up to half their community service with only a money order to DACAF. (It’s worth noting that technically, defendants always had the option of donating to a nonprofit other than DeRosier’s, but former staffers say participants in the programs were almost always encouraged by probation and diversion supervisors to donate to DACAF.)

According to Newman, after DeRosier set up the foundation, the District Attorney’s office also begin logging the gift cards and money orders into a computer. But those figures were kept separate from the office’s publicly accessible finances. And she says giftcard and money order revenue from community service buyouts still weren’t included in the office’s annual financial figures or its annual audit.

“I asked several times if I should run reports on the cards, now that we were logging them in the computer. It would have been easy to do with that software,” she says. “They always told me no. No need to balance them in. They told me to just collect them and send them to Mr. DeRosier’s secretary.”

Jenny Odom resigned in October 2015, in part due to her squeamishness about the gift cards. McKenzie Newman was fired last July. When she asked why, she says she was told that because Louisiana is an at-will employment state, the office didn’t need to provide a reason. At the time she left, she estimates that just her office — pretrial diversion — was taking in about 10 money orders per day. The most common amount of those money orders was $128, or half of the most common community service requirement (32 hours), at $8 per hour. That would mean that at a rough estimate, at least as of last year, the pretrial diversion office alone was taking in about $1,280 each business day in money orders, or more than $300,000 per year.

Bookkeeping

Though DeRosier’s office continues to keep gift-card and money order revenue out of its public financial figures, DACAF is required to file Form 990 tax returns. So far, two of the nonprofit’s 990s are publicly available, for 2016 and 2017.

I asked two experts in nonprofit tax law to look over the forms: Marcus Owens, a partner at Loeb & Loeb and the former head of the IRS exempt organizations division; and Dianna Deeley, a consultant for nonprofits with more than 25 years of experience in the nonprofit world.

Both criticized the returns as inadequate. In an email, Deeley wrote that it is unusual that the members of the DACAF board of directors neither volunteer hours nor are paid for them. And the foundation has no staff. “Everything, hours, compensation, is zero,” she writes. “So evidently, no one ever sits down and says, ‘Oh, yes, let’s spend the money we’re responsible for on X, Y, or Z, but not W.’ This does not make sense.” DeRosier confirmed in a phone call that his staff members sometimes do foundation work while on the public dime.

Radley Balko blogs and reports on criminal justice, the drug war and civil liberties for The Washington Post. He was previously a senior writer and investigative reporter at the Huffington Post, and a reporter and senior editor for Reason magazine.