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

Lee Zurik Investigation: 'Dirty Deeds' may finally get legal scrutiny they deserve

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"Could you get the Attorney General to act upon this, so that the sins of the past can be shown, can be healed?"

Seconds after West Bank resident and researcher Norman Billiot made that comment to the State Mineral Board, a Mineral Board member from Shreveport asked the only question from that part of the meeting: "Has the AG ever looked into this before?"

The answer is yes, and no.

The yes comes in the early 1940's. A memo by state employee Edward Gay, Jr. concludes that State Lease 318 "was obtained through a conspiracy to defraud the state of Louisiana." It was one of the many leases where governors awarded a lease, then profited from it through the Win or Lose Corporation.

Another memo by state employee C.C. Wood came to the same conclusion: "A conspiracy was effected between [W.T.] Burton and James A. Noe."

"It's shocking to me that in the 40's, someone would issue an opinion that says the lease was illegally obtained," said former journalist Bob Barton. "Since the 40's… now what are we talking about, 70 years? Nothing else has happened."

We never found any other document addressing the alleged conspiracy in that state lease. But in another, Edward Gladney, a special assistant for the Attorney General, did write, "We are not aware of any charge of fraud in the granting of this lease."

That's no surprise to LSU historian Alecia Long (no relation to Huey Long's family). She says state investigations into Win or Lose did not go too far during the time, even when anti-Long governors were in power.

"There was so much intimidation around the state that it was difficult to bring people like Long or his cronies to trial, because people, juries in Louisiana wouldn't find those people guilty," Long told us.

Also keep in mind that, in 1939 and 1940, Huey Long's brother Earl was governor of Louisiana, and he had an ally in the Attorney General's office from 1956 to 1972, Jack Gremillion.

Fast forward to the 1970's, when businessman Louie Roussel filed suit against James Noe. Roussel said Noe fraudulently acquired royalty interests in state mineral leases in violation of Noe's fiduciary duties.

Roussel said he dropped the case because he did not want to sue his friends, Seymour Weiss and Earle Christenberry, also members of Win or Lose. In fact, Roussel said he got the information that he used in the lawsuit from Seymour Weiss.

In his biography Roussel said, "I went to see Billy Guste, the attorney general at the time, to see what he thought about the case. He didn't want to tangle with Russell Long because he was too powerful. He thought I ought to stay out of it."

Guste apparently stayed out of it too. Russell Long is Huey's son and was a U.S. senator at the time. A St. Mary Parish judge eventually ruled against Roussel in the lawsuit.

The state had another chance to go after Win or Lose in the 1990's, when the state sued Texaco for underpaying royalties.

"We tried to bring it to people's attention in the 90's, and it really didn't get anywhere," said Barton, who wrote for a weekly newspaper in Bossier City. At that time, he wanted Attorney General Richard Ieyoub to look into the Win or Lose Corporation.

"What we had hoped at that point in time is that the state would look at how the contract was initiated, how the corporation was formed, and what assets that corporation gathered," Barton told FOX 8. "That really didn't happen. They really turned kind of a blind eye to what had happened in the 30's, and just looked at the contract, per se, at that point in time."

At the same time, records show Ieyoub received campaign contributions from some of the descendants: James Noe Jr., the law firm Russell Long formed, William B. Lawton and William Shaddock, to name a few.

"I think that's a conflict of interest, for him to have done that," Barton said.

In Barton's newspaper columns from the 1990's, he wrote, "Why didn't the attorney general include Win or Lose in the lawsuit… Were Louisiana politicians afraid of Win or Lose and afraid to question an agreement that was making many of them rich?"

"They weren't looking into what the Win or Lose corporation was getting," Barton said.

Barton says one attorney for the state said they could have sued Win or Lose, but that "suing Win or Lose would have kept the issue tied up in the court for several more years."

Barton points out the lawsuit between Texaco and the state was handled by federal judge John Parker, who received his appointment from Senator Russell Long.

"I don't know if people were scared or just… it's just been around so long. I think it's just a part of the way of life, and it's established, and it just continues to perpetuate itself," said Barton.

Attorneys say any court fight by the state now would not be easy. The deals took place in the 1930's and some of the legal grounds the state could have to sue have been prescribed – in other words, the legal time has passed where the state can sue. And one attorney adds the actions of Guste and Ieyoub would not help the state's case now.

No attorney general has decided to sue the founders or descendants of Win or Lose. A state suit has never gone to a judge and jury. That's why Tulane's Mark Davis says he thinks the best next step is for the current Attorney General, Buddy Caldwell, to investigate.

As we've pointed out before, if a governor today pulled off a deal like this, he would likely go to jail. So if something is illegal now, why doesn't the state have a way to reclaim the people's property, the people's money?

"If you have possible grounds for revisiting this -- was state property effectively given away, were there questionable practices that could allow you to undo this lease – all that could be there," Davis said. "But if you are unwilling to look at it, it never comes up."

We reached out to former Attorney General Richard Ieyoub, but we never heard from him.

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The Attorney General's office said Wednesday, May 16, that it's preparing to proceed as requested, by the State Mineral Board and a House resolution, and investigate the series of questionable oil leases from the 1930's. 

AG Buddy Caldwell's office is asking for new funding, though, to conduct a "thorough and complete investigation" -- about $500,000.  The money would help hire outside specialized legal counsel and experts to see if the state can cancel these leases, dating back to the Huey Long era.

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