St. Tammany Parish DA Walter Reed's agreement with a local hospital is under federal investigation. Reed had a side job with St. Tammany Parish Hospital, where he made $30,000 a year. Now we get confirmation that the federal investigation of the DA has widened to include that deal, uncovered by FOX 8 News and NOLA.com/The Times-Picayune in our "Louisiana Purchased" series.
For that side job with the hospital, Reed regularly attended the public hospital's board meetings. When he didn't go, he sent someone from the DA's office - Leo Hemelt - in his place.
Sources tell FOX 8 and NOLA.com that Hemelt, an assistant district attorney in Reed's office, received a subpoena to testify before a federal grand jury.
Legal experts say the feds could be investigating two issues here. First, if Reed kept the money but had someone from his office fill in at meetings, he could be using a public resource - in this case, a public employee - to staff his private side job.
"If Mr. Reed is doing this consulting work and legal work as a private attorney, how can he staff it in his absence with an assistant district attorney that he is paying a salary for?" Metropolitan Crime Commission head Rafael Goyeneche asked in an interview earlier this year. "So you may be dealing with a situation akin to Peter Galvan, where Peter Galvan as the coroner was collecting fees for himself personally, and instead of him providing medical services he had one of his coroner's office employees going and doing the work that he was being paid to do."
The other potential issue is this: The hospital told us by email that the agreement was with the DA's office. So, according to the hospital, the money should have been going to Reed's office. But Reed said the arrangement was with himself personally and, according to his financial disclosure form, he kept the $30,000 a year.
"There's a discrepancy and a disparity there," noted Goyeneche. "So, [are] his financial reports that he's submitting to the state, and notarizing and certifying as accurate, true? Or is the hospital right about that?"
Hemelt is expected to testify before a federal grand jury as early as this Thursday, according to our sources.
A few weeks after our story about Reed's hospital job aired, Hemelt resigned from the DA's office. We obtained his resignation letter through a public records request.
On June 3, Hemelt sent the letter to Walter Reed, writing that he "tried to contact" Reed but the number he called "is not a working number." Hemelt told Reed, "I am sorry to advise I will be leaving the district attorney's office August 1, 2014." Hemelt offered to stay on "part time" handling "public records" requests. He wrote, "I hope to hear something soon."
Our sources say Hemelt is not himself a subject of the federal investigation and he is not accused of any wrongdoing. He's been subpoenaed to testify, to help the grand jury determine whether Walter Reed violated any laws - as the feds continue their investigation into the long-time St. Tammany and Washington Parish district attorney.