|How much are Mose Jefferson's buildings worth?|
Posted by Gordon Russell, Staff writer July 07,
Categories: Breaking News - NOLA.com
STAFF PHOTO BY MATT ROSE 3311-13 S. Saratoga. This eight-unit complex in Central City has long served as the headquarters of the Progressive Democrats, the Jeffersons' political organization. The city was paying BEP Consulting, a corporation whose only member is Mose Jefferson, $1,800 a month to rent an 840-square-foot unit that served as former City Councilwoman Renee Gill Pratt's 'satellite office.' Councilwoman Stacy Head, who defeated Gill Pratt in the May 20 election, canceled the lease. The nonprofit for which Gill Pratt now works, Care Unlimited, continues to rent the office. BEP Consulting paid just $10,000 for the property.
It suited Mose Jefferson just fine when the taxpayer-financed nonprofit he controlled sold a Central City office complex and political stronghold to a friend for a mere $10,000.
That's all he paid for the building when he bought it a couple of years later. It was a fair price, Jefferson said, even though it brought in more than twice that annually in rent for just one of the complex's eight units -- the one leased with taxpayer money by his longtime companion, then-City Councilwoman Renee Gill Pratt.
But when it came to collecting insurance due to damage from Hurricane Katrina, Jefferson claimed the building was worth substantially more. A lawsuit he and a business associate filed last summer against their insurer show that Jefferson had insured the 3313 S. Saratoga St. complex for almost 40 times what he paid for it, according to the suit.
The suit also raises questions about claims by members of the Jefferson family that none of them has any stake in a large, dilapidated apartment complex nearby. The second building, at 2712-16 Loyola Ave., made news after Assessor Betty Jefferson, sister to Mose and U.S. Rep. William Jefferson, slashed the assessed value to $45,000 shortly after she took office in 1998. That was less than one-seventh the amount William Jefferson paid for the 27-unit complex in 1984. Meanwhile, the building was insured for $268,800, according to the lawsuit.
The lawsuit resembles thousands of other claims filed by New Orleanians unhappy with their post-Katrina insurance payouts. It is notable only in that it differs with earlier claims by members of the Jefferson family that the two buildings had little value.
If the lawsuit raises more questions about some of the Jefferson family's business dealings, it appears to have marginal relevance to the federal probe that resulted in Mose Jefferson's summons to appear before a grand jury two weeks ago -- or to the legal troubles of the congressman, who was indicted by a federal grand jury in June.
The congressman is accused of taking bribes in exchange for using his influence to help companies seeking to do business in Africa. Mose Jefferson, his longtime political strategist, has also been identified as the businessman who paid an estimated $140,000 in bribes to former Orleans Parish School Board President Ellenese Brooks-Simms.
The bribes were paid through various intermediaries, including a company that briefly owned the complex on South Saratoga Street, according to a source close to the investigation.
Brooks-Simms admitted to taking the payoffs in a June 20 plea deal. Mose Jefferson has not been charged with a crime, and his attorney, Ike Spears, has said Jefferson didn't pay any bribes.
Gill Pratt, who during a decade as a state legislator steered millions of dollars to two nonprofits connected to the Jefferson family, also was summoned to the grand jury June 27. The FBI said last summer that it was opening an investigation into the nonprofits' use of taxpayer money and charitable donations.
The lawsuit says the two buildings were insured for a total of $654,400, more than six times what the insurer, Markel International, paid out as a result of Katrina-related damage. It was filed by Steven Gill, Gill Pratt's nephew, on behalf of three entities: Mose Jefferson Manor Inc., Statewide Inc. and Eddy Oliver, a lieutenant in the Jeffersons' political organization.
In a phone interview, Gill said his clients are Mose Jefferson and Oliver.
Gill said he was "not at liberty to discuss any pending lawsuit," but he said there is an unfair focus by the news media on Mose Jefferson's business dealings.
"Why don't you go and report on some responsible journalism?" Gill said. "There's nothing corrupt about someone making an insurance claim."
Oliver and Statewide Inc. are the insured parties for 3313 S. Saratoga St., while Mose Jefferson Manor is the insured party for the larger complex at 2712-16 Loyola Ave., according to court filings. The case, filed in Civil District Court, has been transferred to federal court.
Louisiana's secretary of state does not list a corporation called Mose Jefferson Manor Inc. in its online database. Statewide Inc. is the name of a defunct organization affiliated with Mose Jefferson that sold school uniforms to city schoolchildren in the late 1980s and early 1990s.
Oliver is a New Orleans school principal and a board member of the Jeffersons' political organization, the Progressive Democrats. He also is listed as an officer in a defunct corporation, Southwind Inc., that briefly owned the building at 3313 S. Saratoga St., the Progressive Democrats' unofficial headquarters.
Southwind also served, on several occasions, as an intermediary through which Mose Jefferson paid bribes to Brooks-Simms, according to a source close to the case.
Notably, the plaintiffs in the case do not include Bobby Higginbotham, whom William Jefferson identified in 2004 as the real owner of 2712-16 Loyola. The congressman said he had allowed Higginbotham to assume ownership because he had fallen behind on loan payments years earlier. Jefferson bought the complex in 1984, before the oil bust and a change in real estate laws caused the market to tank.
However, in 2004 the city tax roll still listed the Loyola property as belonging to William Jefferson, and city officials said tax notices were mailed annually to his house. In addition, the building's water bill was in the name of Betty Jefferson, and an application for exemption for a city sanitation fee was filled out by Mose Jefferson in 2004. In the space for "owner," he wrote "William/Betty/Mose Jefferson."
The congressman produced a 1993 record showing he had transferred his interest to Higginbotham, a longtime friend and political donor. William Jefferson filed an act of correction in 2004, and the tax roll now lists Higginbotham as the owner.
Higginbotham's name appears nowhere in the suit.
Betty Jefferson slashed the assessment on the 27-unit complex to $45,000 shortly after she was elected in 1998, a decision she chalked up to the building's poor condition. The building, which received damage from Katrina, is now assessed at $90,000, records show.
It was insured for $268,800 at the time of the hurricane, according to the lawsuit.
Property records indicate that 3313 S. Saratoga St. is now owned by B.E.P. Consulting, whose only listed member is Mose Jefferson. The company figured indirectly in the 16-count indictment against William Jefferson handed down by a federal grand jury last month: The indictment alleges that the congressman directed businessmen seeking his help in Africa to sign deals with B.E.P.
Mose Jefferson's interest in the building puts it right back where it was 15 years ago, when a nonprofit he presided over -- one subsidized for years with taxpayer money -- bought the eight-unit complex for $10,000.
Orleans Metropolitan Housing bought the complex in 1992 from the federal Resolution Trust Co., which sold off properties once owned by failed thrifts, often at deep discounts.
A decade later, Orleans Metropolitan sold the building for the same amount to Southwind Inc. Several permutations of that corporation are listed in state records: Some list Oliver as an officer; others name Brenda Foster, another Jefferson sibling.
B.E.P. Consulting then bought the building from Southwind for $10,000 in November 2005, according to court records. At the time, Gill Pratt rented an office in the building for $1,800 a month in taxpayer money. Foster signed as lessor.
The building is insured for $385,600, according to the suit.
While it's possible both buildings were overinsured, it's atypical for property owners to insure buildings for more than they're worth because premiums are based on possible payouts.
Mose Jefferson's niece, state Rep. Jalila Jefferson-Bullock, also kept an office in the Saratoga Street building at taxpayer expense, as did Care Unlimited, a nonprofit with connections to the Jefferson family that hired Gill Pratt after she was defeated in a 2006 re-election bid. That nonprofit also provided Gill Pratt a $30,000 sport utility vehicle that had been donated to the city for hurricane relief. In one of her final acts on the council, Gill Pratt had persuaded Mayor Ray Nagin's administration to give it to the nonprofit.
Gill Pratt returned the vehicle after a public outrcy.
Gordon Russell can be reached at email@example.com or (504) 826-3347.