'Insider trading' allegations over who got lucrative work deals at Southern University
BATON ROUGE- For the past several months the WBRZ Investigative Unit has been digging into questionable contracts at Southern University for work around campus. What was uncovered shows a pattern of cronyism and nepotism when the university awarded contracts without following their own procurement procedures.
"If it smells like a fish, it may very well be a fish, and there's a smell here," Tulane Law Professor Joel Friedman said.
Among some of the issues the WBRZ Investigative Unit found: $250,000 in contracts awarded to friends of hiring officials, $130,000 in contracts to family members and work awarded for Hurricane Gustav repairs ten years after the hurricane.
"It's hard for me to imagine that the work that the contract says was done was done ten years after Gustav," Friedman said. "We have a lot of experience here with hurricanes, including Katrina, and we know how long it takes to repair the work. It doesn't take ten years to let the contract out."
CONTRACTS GIVEN TO THE WIFE OF A SOUTHERN EMPLOYEE
The WBRZ Investigative Unit obtained contracts that show over $130,000 worth of work was doled out to the wife of Southern University employee Eric Davis. Davis is a master painter, but ironically his wife, who owns Fil's Signature Cleaning, was awarded multiple contracts to paint buildings on Southern's campus.
The contracts show the business address for Fil's Cleaning shares the same address in Baton Rouge as Eric Davis.
State ethics laws prohibit any public employee's immediate family, which includes spouses, from being awarded a contract from the public servant's agency.
In this case, Southern is governed by state ethics laws.
"We've seen several contracts given to a company owned by the wife of a Southern University employee," Friedman said. "That is specifically prohibited by state law and has happened on more than one occasion."
SOUTHERN CLAIMS IT FOLLOWED ALL PROTOCOLS, REFUSES INTERVIEW
Southern University told WBRZ it followed all procurement protocols for the contracts.
However, the guidelines for public works projects clearly indicate it should get three sealed bids for work over $25,000.
In many cases Southern received written quotes instead of sealed bids. Sealed bids are received, opened, and decided at the same time, unlike quotes that are submitted separately by each potential vendor.
"It smacks of insider trading, preferential treatment for friends, relatives...and the relatives part is prohibited by law, they've got to stop doing that," Friedman said.
STATE IS LOOKING INTO THIS
Following the in-depth investigation, WBRZ contacted the State Office of Risk Management.
A spokesperson said they are now looking into the way contracts were awarded for Hurricane Gustav repairs some ten years after the storm.