Lee Zurik Investigation: Hospital checks to Reed raise serious questions

We have new questions about the deal the St. Tammany Parish district attorney had with a public hospital. Walter Reed had a side job as their attorney. St. Tammany Parish Hospital said the deal was with the DA's office, but Reed said it was with him personally - and he kept the money.

Now we have copies of some of the actual checks. They have a local crime watchdog saying the DA needs to answer some questions.

One check has a stamp; another has a signature.

"This could add to whatever case, if any case is being made against Walter Reed, doing something improper, taking money improperly," says FOX 8 legal analyst Joe Raspanti. "Whether or not this is the smoking gun that was needed to go forward, we'll see."

We requested a series of canceled checks from St. Tammany Parish Hospital to take a look at the front and back, for any clarity into Walter Reed's agreement with the hospital.

"What these checks demonstrate is a visual shift in the way these checks were being deposited into accounts," notes Rafael Goyeneche, president of the Metropolitan Crime Commission.

From 2004 until February 2007, the checks we received all have the same endorsement on the back: a stamp for deposit by Walter P. Reed, district attorney. But after that, the checks were either stamped "for deposit only" or signed with the name Walter Reed.

"Based on the information you've amassed here, it indicates that for years, or at least for a period of time, there was a stamp used indicating these checks were going into a business account for Walter Reed, the district attorney," says Goyeneche. "And at some point in time the backs or the endorsement area of the checks shift from the stamp that is used for official office purposes to a handwritten endorsement, signed by someone, that it looks as though… 'Walter Reed/deposit only,' which would be indicative of deposit in a personal account as opposed to a district attorney's office account. And that would be consistent with Walter Reed's explanation that the hospital was paying him personally. Yet it is inconsistent with the hospital's claim that they were paying him in his capacity as the DA to represent them."

We sent Reed a lengthy email, explaining our findings and asking him if he had any "document, proof, or explanation that shows these checks from St. Tammany Parish Hospital were not deposited in any DA account." An electronic receipt shows Reed opened our email; he never responded.

So we sent another email, again asking that, "if these checks prior to March 2007 were not deposited in any account belonging to the district attorney's office... please let us know." Again, he opened the email. Three weeks later, we haven't gotten a response.

Goyeneche tells us, "Maybe there's not a plausible explanation, maybe the explanation could possibly incriminate him. But I believe that at some point in time, the public will eventually know how these funds were being deposited and how they were being used. We may just have to wait for someone with a position of authority to clarify this for the public."

None of the checks has any identifiable account number on the back. When we asked the DA's office for account records, they said that anything prior to 2011 is not available - it's been shredded. So we're unable to confirm where this money went prior to 2008.

Remember, the hospital told us by email that they considered this deal to be with the DA's office. In fact, the checks were sent to the public office in Covington at 701 North Columbia Street.

Walter Reed told us the agreement was with him personally. And since 2008, he's claimed the money personally on his state financial disclosure report.

"There's a basic disagreement as to who the checks were supposed to be made," says our legal analyst. "The hospital says it was supposed to go to the DA's office. And Mr. Reed said it was him as a private attorney. That's a basic disagreement there. The checks seem to show that, at some point, there could have been a change in to where he was depositing the money he was receiving."

The head of the MCC says, if the checks did at one time go into the DA's account, it backs up the hospital's story and could spell problems for Reed. Goyeneche says federal investigators will likely be asking the same questions - we've already confirmed their investigation into Reed has widened to this questionable deal with the local public hospital.

"The only person that can answer that is the sitting DA in St. Tammany Parish," Goyeneche says. "And I believe that he owes an explanation to the public, and your station is asking the questions that I believe the public is entitled to know about this. And if he doesn't answer your questions, eventually the authorities may come to him and ask him to clarify this situation."

The check endorsements do not indicate whether the money was deposited into the DA account, Reed's personal account or somewhere else.

FOX 8 News and NOLA.com/The Times-Picayune requested review of the hospital checks as part of our "Louisiana Purchased" joint investigation of campaign finance.  Shortly after we broadcast our first story on the DA's hospital arrangement, Reed resigned his side job with the hospital.

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