Lee Zurik Investigation: 'Dirty Deeds' part 5 - FOX 8 WVUE New Orleans News, Weather, Sports

Lee Zurik Investigation: Lawmakers seek to clean up 'Dirty Deeds'

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The statute of Huey Long stands steps away from the State Capitol he built in the 1930's.

Inside the walls Tuesday, lawmakers drafted a resolution, trying to stop a scheme Huey Long started, about the same time he convinced the public and the Legislature to fund the construction of this building.

"It's a surprise to everybody here in the Legislature," says Rep. Nick Lorusso of New Orleans.

Lawmakers just learned in the past few days that lucrative oil leases awarded in the 1930's have sent hundreds of millions of dollars to descendants of three former governors – Long, James Noe and O.K. Allen from a questionable deal they hatched. As governors, they awarded oil leases, and then royalties from the leases were assigned to the Win or Lose Corporation -- a company the three governors had stakes in.

"You read about the Huey Long days and the methods, their business practices," says Rep. Patrick Connick of Marrero. "It was bad. It's a history that's embedded in Louisiana still, today."

"It's something from old Louisiana, as I like to call it, back in the 1930's, something that slipped underneath the radar," says Lorusso.

State Representative Pat Connick drafted the resolution, along with Nick Lorusso and Robert Billiot. It's a resolution "to authorize and request the Attorney General to investigate mineral lease contracts with the Win or Lose Corporation."

Rebidding just one of those leases, State Lease 340, could generate an extra $20 million to $30 million a year for Louisiana. That's a significant amount of money for lawmakers and the governor, enough to fill some serious budget holes.

"We're cutting health care, we're cutting education," says Rep. Austin Badon of New Orleans. "20 million dollars… we could fund the school system better, we could put more money into classrooms, do some pay raises."

In today's dollars, the Win or Lose Corporation and the descendants have been paid more than $1 billion since 1940. And right now, more than half of the royalty owners live out of state -- money from Louisiana leases flowing to at least 21 different states.

"That sweet deal is not good for the state of Louisiana," says Badon, "and they are reaping the benefits off the backs of the people of Louisiana.

The La. House of Representatives will take up this resolution in the next two weeks.

"It's something that we need to fix," insists Lorusso. "And look, it's something we discover on our watch, it's our responsibility to solve the problem and fix it."

Ultimately it will be in the hands of Louisiana's attorney general, who will decide whether Louisiana can and will try to fix the kind of deal that one lawmaker says helped hold Louisiana back for years.

"The attorney general needs to come in, find some kind of legal mechanism to stop these leases from paying out," Badon says.

We have requested an interview with Attorney General Buddy Caldwell, and we await a response from his office.

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