FBI investigating donated cars
FBI starts probe of donated autos
Friday, July 07, 2006
By Gordon Russell
When carmaker DaimlerChrysler AG donated 40 trucks and sport utility vehicles to Katrina-crushed governments in southeastern Louisiana last September, company officials never imagined some of them would wind up in the hands of private nonprofits.
In fact, the company said Thursday that it made clear to the cities and parishes that received the gifts -- collectively valued at more than $1 million -- that they were for the exclusive use of public agencies or government units, such as police and fire departments. Dave Elshoff, a DaimlerChrysler spokesman, said those instructions were delivered, both verbally and in writing, to then New Orleans City Councilwoman Renee Gill Pratt, who signed for 20 of the cars when they were delivered to Baton Rouge.
Yet eight months later, Gill Pratt would arrange for the donation of four cars to two nonprofits to which she has close ties -- donations that on Thursday, four days after they were disclosed, led City Council members to call for the cars to be returned to the city and the local head of the FBI to announce a criminal probe of the matter.
Jim Bernazzani, special agent in charge of the FBI's New Orleans office, called Gill Pratt's dealings "a significant anomaly on the normal way to do business."
"We have the predicate to look. We're going to ask very tough questions, and we expect to get answers," he said.
Indications of the probe come as city documents and interviews show that Gill Pratt was not the only one to send cars to private nonprofits. Former City Council members Jay Batt, Jacquelyn Brechtel Clarkson and Eddie Sapir also designated donations of a combined six vehicles to private nonprofits, among them two closely connected to Sapir. Not all the cars were delivered or legally transferred, but all are being asked to be returned now.
The other council members who received cars, Council President Oliver Thomas and members Cynthia Hedge-Morrell and Cynthia Willard-Lewis, did not detail what their combined six vehicles have been used for in recent months. But all three said in a statement that on Thursday they gave up the keys to the city.
Weeks after the charities received the cars, Gill Pratt was bounced from office -- and quickly hired by one of the two nonprofits, Care Unlimited. A perk of the new job: the $30,000 Dodge Durango that she had steered to the charity weeks earlier.
She was chosen to receive the cars on behalf of the city by embattled U.S. Rep. William Jefferson, D-New Orleans, Gill Pratt's political mentor and the subject of a wide-ranging federal investigation involving bribery allegations. DaimlerChrysler had used Jefferson and fellow U.S. Rep. Bobby Jindal, R-Kenner, as liaisons for the donations, allowing each congressman to steer a total of 20 vehicles to public agencies each representative determined most in need. Jindal received similar directions about how the cars were to be used, the company said.
The vehicles Jindal handled, including 20 Dodges and another 15 donated by Ford Motor Co., all appear to have been assigned to government agencies, though some are being used by specific employees, according to the agencies that received them.
DaimlerChrysler officials said they thought they made their goals clear enough to Gill Pratt. But City Council members -- each of whom was given use of two cars shortly after the storm -- said they were all told to pick out a charity to receive the cars instead of sending them to the city's fleet. They did not say if those instructions came from Gill Pratt.
"We issued manufacturer certificates of origin and intentionally titled these to the city and to government agencies for their public service," Elshoff said in an e-mail. "I'm sure we could have easily identified nonprofits if that was our intention. In fact, we donated $50,000 to the Baton Rouge Food Bank that same day (the trucks were donated). If we wanted to give (the food bank) a truck, we would have."
Gill Pratt did not return phone messages Thursday. She has defended her donations and has said the fact that she ended up using one of the donated cars once out of office was just a coincidence.
"My intention when I donated the car was to be re-elected," she said last week. "But sometimes God puts things in places for you."
Gill Pratt's actions have caused a public uproar since they were detailed in a story in The Times-Picayune Sunday that also laid out other transactions that suggested she often benefited groups with which she had close personal ties -- among them, her rental of a "satellite office" from a political and personal ally at an eyebrow-raising price, and her steering of millions of dollars in public money to two nonprofits to which she has long and close ties, including her current employer.
Responding to the outcry on Thursday, Thomas called on all former council members and any nonprofit groups to which they turned over donated vehicles to return the vehicles to the city.
Thomas said the two vehicles he received and the four assigned to Hedge-Morrell and Willard-Lewis have been turned over to the city's equipment maintenance division and are available for regular city use. He said council members and their staff used the vehicles after the storm for "field operations, emergency rescue and food donation operations" but did not say how they have been used in recent months.
Despite repeated inquiries from The Times-Picayune in recent weeks, officials in the Nagin administration, who are responsible for the city's car fleet, have been unable to fully account for the use of the donated vehicles.
The council on Thursday also voted 7-0 to ask the city attorney's office to "review the issues involved in Hurricane Katrina-related donations of motor vehicles and the subsequent disposition of those motor vehicles, and the council's disposition of city-controlled funds."
The resolution asked City Attorney Penya Moses-Fields, whose office approved the vehicle transfers to the nonprofits designated by Gill Pratt, to report back to the council at its July 20 meeting.
In the case of Gill Pratt's donations, the city attorney's office prepared cooperative endeavor agreements with Care Unlimited and Orleans Metropolitan Housing. The president of the second group is Mose Jefferson, brother of Bill Jefferson. The agreements were all signed by Mayor Ray Nagin.
However, no council ordinances regarding those agreements were passed, and some lawyers familiar with case law in similar episodes say they believe the transfers may be invalid as a result.
"The city has liberty to enter into cooperative agreements as it sees fit," Moses-Fields said. "I don't know the basis of that. I think this meets form and legality. But I would certainly like to look at whatever they have."
Thomas said that after the legal questions are resolved, some of the vehicles might be returned to the nonprofit groups that have been using them.
Thomas said he has asked Hedge-Morrell, chairwoman of the council's Budget Committee, to consider creating a subcommittee to look at all city contracts and all money and other donations the city receives. He said the city is in line to get billions of dollars in federal money for reconstruction projects and must let the nation know the money will be spent wisely and honestly.
The city's review, however, will not be the only scrutiny on the deals.
Bernazzani, the FBI's head in New Orleans, said the agency will also probe Gill Pratt's transactions. While the FBI typically remains silent about investigations, he said the agency occasionally comments on cases that have attracted public interest. But he said the public should not take that as a sign that crimes were committed.
"Being incredibly selfish," he said, referring to Gill Pratt, "is not a criminal act unto itself. We have no preconceived notion of criminal activity. We're launching a probe designed to surface facts. We will follow those facts and wherever they go will dictate our action. In the event they surface criminal activity, we will present our findings to prosecutors."
Council got 16 cars
Melanie Roussell, Rep. Bill Jefferson's spokeswoman, said the congressman also understood that the vehicles would ultimately go to nonprofits, but she said the congressman could not recall who told him that.
Roussell said she did not know precisely why Gill Pratt got control of four vehicles, compared with two apiece for the other six members of the council, but said she supposed it was because she agreed to serve as the liaison for the vehicle transfers.
Of the 20 vehicles allotted to Jefferson and Gill Pratt, 16 went to the City Council. The Jefferson Parish municipalities of Gretna, Kenner, Jean Lafitte and Westwego each received one of the remaining four vehicles.
Officials from Kenner and Jean Lafitte said those trucks are being used by city employees, while the truck that went to Gretna has been used on an off-and-on basis by a charity. It is stationed with the city's Public Works Department, Mayor Ronnie Harris said.
The city of Gretna also received three Fords from Jindal's office, all of which are being used by department heads, Harris said.
The Kenner truck, now being used by new Mayor Ed Muniz's chief of staff, Mike Yenni, will be retrofitted in the near future to be used as an emergency vehicle, Yenni said. "That's what they were donated for," Yenni said.
The 35 cars handled by Jindal's office went to 19 agencies in seven parishes, including St. Tammany, Jefferson, St. Bernard and Plaquemines.
Most of the agencies reached Thursday said none of the cars is being donated to other entities and most are assigned to their fleet for government functions, though others are being used by specific officials.
Most notably in St. Tammany, Parish President Kevin Davis has been using a black, 2006 Dodge 1500 donated by DaimlerChrysler, said Parish spokeswoman Suzanne Parsons-Stymiest. She said the vehicle is assigned to Davis' office and not to the parish president himself.
6 cars transferred
While New Orleans council members were expecting to give away all 16 of the vehicles allotted to them, only six were ever fully transferred, the city said, including the four cars assigned to Gill Pratt. Batt was the only other member of the council to complete a successful transfer: He directed one vehicle to the Lakeview Crime Prevention District and the other to the Audubon Nature Institute. Because both are "quasi-public" agencies, the titles remain in the name of the city, while the agencies have permission to use the cars.
The hangups in transferring the cars appear generally to be due to a bottleneck in the city attorney's office in getting the legal paperwork done.
Batt, for instance, said he announced his donation of to the Lakeview crime district in November, but the paperwork took almost six months, during which time the car, frustratingly, went unused.
But apart from Gill Pratt, it seems that only former Councilman Eddie Sapir sought to donate a car each to two groups with whom he had close personal ties: Friends of NORD and Victims and Citizens Against Crime, though neither donation has been completed yet.
Friends of NORD's executive director is Nancy Broadhurst, who is married to lawyer and Sapir political confidant Bill Broadhurst. In preparation for using the car in her official capacity, Nancy Broadhurst took out insurance on the car, her husband said, but she has been unable to drive it because the city never transferred the title.
Bill Broadhurst said he would have no problem if city officials decide to take the car back.
"If they say 'no, these go to the city,' Eddie will retract the donations," he said. "He's not trying to go find places to put trucks. That's not something he's worried about. He'll revoke the donations if they ask him to."
Former Councilwoman Clarkson was apparently the first council member to give her cars way. But though she did so in the first weeks after the storm, the paperwork never followed, and the vehicles she sent to two churches in her district have been idle as a result.
She gave one each to St. Paul Lutheran Church in Faubourg Marigny and Greater St. Mary Baptist Church in Algiers, each of which was operating food-distribution centers after the storm. Pastor J. Nelson Brown of Greater St. Mary said that he had been pulled over in the donated truck recently because it lacked a valid license plate.
Police recognized him, he said, but told him not to use the truck until the ownership issues were straightened out, and it has since been parked at the church.
The six vehicles that were assigned, two apiece, to Thomas, Hedge-Morrell and Willard-Lewis have never been donated to nonprofits.
Thomas said Thursday that he had planned to donate one to the Harmony Center, and perhaps another to the Council on Aging, a charity he said Hedge-Morrell was also considering. An aide for Willard-Lewis would not say which charity she had been planning to give her cars to.
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Staff writers Bruce Eggler, Meghan Gordon, Bruce Hamilton, Michelle Hunter, Kate Moran, Dennis Persica and Mary Swerczek contributed to this story. Gordon Russell can be reached at firstname.lastname@example.org or at (504) 826-3347.