Zurik: Reed's medical reimbursements a "can of worms" - FOX 8, WVUE, fox8live.com, weather, app, news, saints

Lee Zurik Investigation: Reed's medical reimbursements a "can of worms"

File image of Walter Reed File image of Walter Reed

If you have health insurance, you probably have a health insurance ID card. And when you use that card - during a doctor's appointment, for instance - you likely have to make a co-pay. For us at FOX 8, the co-pay for a regular office visit is $40.

Employees in the St. Tammany Parish district attorney's office have similar cards. But for a select group there, the co-pays don't appear to be coming out of their own pocket.

"This is a whole can of worms that he's opened up here," warns Rafael Goyeneche, president of the Metropolitan Crime Commission. "This isn't an insurance product. This is just an added perk that's being paid for with public dollars… This is public dollars that's being used to provide special benefits to a very select group of office employees, including the DA."

Seven employees in the DA's office have been getting their medical payments reimbursed out of the office's general fund. In the last three years, it has cost taxpayers $27,485.23.

Those reimbursements don't just include co-pays. They also include medications from a pharmacy. Envision yourself going to the doctor's office, paying your co-pay, then going to the pharmacy, filling a prescription and bringing both receipts to your boss - and having him write you a reimbursement check.

"They're calling this ‘reimbursements,'" Goyeneche says. "But this isn't for official district attorney's office duties. This is an additional benefit that's being provided to this small group of individuals."

District Attorney Walter Reed has reimbursed himself the most over the past three years - $11,864.57. In 2013 alone, the office's general fund wrote Reed a $7073.55 for medical reimbursements.

In response to a public records request, Reed's office handed over an itemized account of his reimbursements from each year. In 2011, taxpayer money reimbursed Reed for 77 different prescriptions, including Tamiflu, Nexium and Cialis. In 2012, the itemized list shows Reed's payments to doctors. It includes two highlighted columns, co-pay and member responsibility, and instructs the office to "add both of these columns" to the total reimbursement.

"No pun intended, these are symptoms not of medical issues but of integrity issues with Mr. Reed," says Goyeneche.

We were only able to look at these medical payment records as far back as 2011; the DA's office told us they normally shred such records that are more than three years old.  

Reed told us by email that no reimbursement policy exists, meaning there are no written guidelines on who can take part and how that's determined. Reed told us he "determines participants."

"If there is no written policy, if this is just a practice, what's the criteria for paying for the co-pays and the reimbursements that any other employee, whether in the public or private sector… they have health insurance," Goyeneche observes. "Every insurance policy for health that I've seen has a co-pay and deductibles."

Reed told us by email that the medical reimbursement program was "established and instituted for the purpose of attracting and retaining quality and talented employees." But remember, Walter Reed is technically not an employee but an elected official - and he also decided to give the benefit to himself.

In addition to Reed, records show five active employees receive this benefit: Reed's top assistant, his office manager, one of two division directors, an administrative officer and an administrative assistant.

The MCC chief says the IRS may consider these reimbursements additional income. "I don't care what you call it," he says. "A reimbursement - this is additional income that these employees have received. And, as such, they have to declare it and they have to pay taxes on it."

To be clear, we don't have access to these employees' tax documents so we don't know if they are or are not paying taxes on these reimbursements. We did email Reed to ask him if he paid taxes on his medical reimbursements. He never responded.

Goyeneche expects the FBI to take a look at this practice as they continue their investigation of Reed. "This is an indication of a sense of entitlement that could easily spill over into, and may be the subject of, what we now know is a federal investigation into the St. Tammany district attorney's office," he says.

The questions could go beyond income taxes, says Goyeneche.  "The Louisiana state constitution does not allow for public assets to be donated," he tells us. "You just can't give away public funds. And without a written policy, it appears this is just a gift. And that's what I'm saying, that if they don't have it in writing, at the very least explain the practice and the reasoning behind getting this. And absent some justifiable practice and reason for doing it, that may be sloppy record keeping. In any event, however you want to turn this, whether it's sloppy or intentional, there's still tax consequences. And they may very well be a violation of the state constitution."

We found an attorney general opinion from 2006 that said an Allen Parish police jury may not pay and/or reimburse a police juror for medical expenses. The opinion said there must be some type of "legal obligation" to do so, and there must be "some uniformity with the same type of benefits accorded" to "other employees."

But in the St. Tammany district attorney's office, only a handful of the nearly 100 employees receive this benefit. So does the head of the office, long-time DA Walter Reed.

It's a possible violation that appears to have allowed taxpayer dollars - public dollars - to be used to reimburse an elected official for expenses that most people must pay out of their own pocket.

"At the very least, his income is north of $300,000 per year," Goyeneche notes. "And here he is, using taxpayer money to pay himself an additional $4,000 because he doesn't want to be like everybody else and have to reach into his own pocket to pay for his prescription medications and his co-pays. That's the arrogance, that's the sense of entitlement."

Reed told us the program ended last year.

We contacted a handful of other DA offices in the area. Five responded: Orleans, Jefferson, Plaquemines, Terrebonne and Tangipahoa Parishes do not reimburse anyone for co-pays or medication.

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