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BATON ROUGE - As investigations continue involving potential criminal activity by a state conservation official, that official is now represented by a lawyer and the company whose contract sparked the investigation is speaking through a crisis management firm.
Johnny Adams, assistant commissioner of conservation for the Dept. of Energy and Natural Resources, has been suspended with pay since the Investigative Unit revealed that authorities had searched his bank records in an investigation of potential criminal malfeasance.
A search warrant filed last week says that Adams and his wife, Metro Council member Laurie Adams, paid $780,000 cash for a house last year, shortly after a company with a contract through his department to provide financial backing for oil drillers withdrew the same amount from its own account.
John McLindon is representing Johnny Adams.
“There is a lot of misinformation out there and we will set the record straight in due time,” he wrote in an email about the investigation.
He wouldn't answer any further questions.
"That's all I'm saying," he said.
The Louisiana Oilfield Restoration Association, which has a contract with the Dept. of Energy and Natural Resources, is also the subject of an audit. LORA collects fees from oil companies to provide financial securities for their work. If the oil company fails, LORA would be responsible for plugging the wells for which it had collected the fees.
Monique Edwards, then the commissioner of conservation, sent LORA President Van Mayhall III a letter in February claiming the company was not meeting the terms of the contract.
Department spokesman Patrick Courreges said Edwards reviewed the work of Richard Ieyoub, the previous commissioner, when she took over.
“It really kind of got started with Commissioner Edwards when Commissioner Ieyoub passed away. She had questions about the arrangement and asked auditors to come in," Courreges said. "That’s when they started looking into it… to the point of sending the non-compliance letter.”
The letter said LORA violated the agreement by failing to "plug orphan wells as designated by the Office of Conservation, and not providing financial security or plugging wells for which you have provided financial security and the Office has made you aware of for the 2023 calendar year."
Courreges said a law passed after the agreement was signed that required such contracts to include a provision giving auditors access to financial records. Courreges said LORA never signed a revised agreement that included the new access requirement.
"You want to be able to make sure that if you're having an agreement with someone, they're living up to their end of it." Courreges said. "That's kind of where we are right now with investigating what has happened, waiting on what the audit report shows and figuring what the next steps are from there."
In an e-mail released by DNR, Mayhall responded claiming LORA was not out of compliance because the cooperative endeavor agreement was signed before the law passed.
"LORA wants to cooperate fully with the OOC and the Auditor," Mayhall wrote.
Courreges said Louisiana has about 4,700 orphan wells. Of 175 that fell under LORA's watch and financial responsibility, 40 were plugged overall.
Not plugging orphan wells can lead to problems, he said.
“You got the potential for oil spills, gas leaks, things like that," Courreges said.
Costs for plugging the wells varies widely depending on location, depth and condition. It can run from about $30,000 to more than $1 million, according to the department.
The search warrant said LORA withdrew $780,000 from an investment account on April 4, 2023, and deposited the same amount into its operating account. Ten days later, LORA Treasurer Andrew Berthelot withdrew $780,000 from that operating account with a counter check.
Two weeks later, Johnny and Laurie Adams bought a $780,000 home in a cash sale.
David LaPlante, of Harris, DeVille and Associates, a Baton Rouge public relations firm that says it helps clients "manage complex, controversial issues," issued a statement on LORA's behalf Wednesday.
"LORA is a private company that operates in compliance with the terms of its Cooperative Agreement with the LDENR’s Office of Conservation. The concept of LORA was created by the Office of Conservation to help plug orphan oil and gas wells using private industry dollars and not state or public funds. LORA has plugged orphan wells every year since it began plugging operations in 2022, and to date has plugged more than 120 orphan wells in total. Many Louisiana oil and gas operators depend upon LORA for affordable financial security."
LaPlante said he had no information on the company's handling of the $780,000.
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