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, reprintedfrom 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.

Deeley adds: “There’s no description of how they tracked the use of the grants they made. This is unheard of. There are no minutes. There is no written conflict of interest policy, and no way laid out to report a possible conflict ... There are no publicly available documents. Those are eyebrow raising, in any organization ever.”

Both Owens and Deeley also said they couldn’t make sense of the figures in the returns. “The returns are full of what seem to be inexplicable errors and characterizations of revenue,” Owens says. “For example, in the 2016 return, there’s $369,000 in program service revenue. Program service revenue is revenue for services. A hospital has program service revenue from providing medical care. A school or university would have program service revenue from tuition. It’s a fee-for-service thing, not a contribution. But there really isn’t anything described in the return that would suggest they’re selling any goods or services to the public.”

He adds: “I think what it shows is that the accountant who prepared these returns is sort of floundering. She’s not sitting there going through the books and records, adding things up and calculating, because my guess is that there are no records.” He adds, half-jokingly, “Why weren’t they at least consistent in fabricating numbers?”

DeRosier waves away such criticism. “We gave all the documentation to the accountant,” he says. “They ask for it, they prepare a tax return, and we’re done. I can’t comment on what some IRS agent has to say about it.” (When reached by phone, Donna Williams, the accountant who prepared the 990s, asked that I send her questions over email. I did so, but she then did not respond to those questions.)

Under Louisiana law, every district attorney’s office must undergo an annual audit organized by the Louisiana Legislative Auditor, a state agency. (This is different from the audits DeRosier says he ordered for his nonprofit.) But despite the fact that the gift-card program has been in place since at least 2011, the annual public audits of DeRosier’s office have never assessed how much revenue the gift cards brought in to the office. The audits have never criticized the office for failing to include the gift cards in its annual financial reports. In fact, none of the public audits mention the gift cards at all.

Since DeRosier was elected, the public audit of his office has always been conducted by Langley, Williams & Co. of Lake Charles. The founding partner of that firm is Lester Langley Jr.

Langley has a long history with DeRosier. He was the treasurer for DeRosier’s first campaign, and over three elections dating back to 2005, Langley, his wife and his businesses have donated at least $29,500 to DeRosier’s campaigns, according to campaign finance disclosures. Over the same period, Langley’s firm was also paid more than $30,000 by DeRosier’s campaign for accounting services.

In an email response to my questions, Langley said he resigned as campaign treasurer once DeRosier was elected. This is true. But he also writes, ‘After Mr. DeRosier was elected, we resigned as the campaign bookkeepers in January 2006, at the same time I resigned as treasurer.” According to campaign finance records, between 2007 and 2010, DeRosier’s campaign made eight payments to Langley’s firm totaling over $18,000 for services that included “bookkeeping,” “campaign reporting” and “financial disclosure reporting.”

Langley’s son Nicholas is a partner at the accounting firm. He was also on the original board of directors for DeRosier’s nonprofit. Over email, the elder Langley said his son was offered a position on the board but “immediately declined to accept the position due to concerns of independence.”

That would have been in late 2015. But Langley was listed as a member of the board on the foundation’s 2016 tax returns, which were filed in November 2017. In fact, in March 2018, DeRosier’s secretary sent an email under the subject “Foundation Board Meeting.” In the body she wrote, “Just a reminder . . . We need to have a meeting so Nic Langley can be removed from the board.”

DeRosier and Langley both point out that Langley’s firm also conducted the audits for DeRosier’s predecessor, Rick Bryant. “He’s just very active in the community and in politics,” DeRosier says.

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.