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Lee Zurik Investigation: Hospital documents directly contradict Reed

File photo of Walter Reed File photo of Walter Reed

St. Tammany Parish Hospital has handed over records to us that spell out its working arrangement with the district attorney's office - a $30,000-a-year arrangement.

It's an important development in our Louisiana Purchased investigation, reported in partnership with NOLA.com/The Times-Picayune. The records show the arrangement was with the district attorney's office as a public institution - but Walter Reed has been depositing that money into his own checking account.

For months, we've been asking questions about checks written by STPH to the district attorney. The hospital continues to maintain that the money was supposed to go to the DA's office. Reed says it was intended for him as a private attorney.  

Late Friday evening, the hospital spelled out the arrangement in greater detail for the first time, providing documentation that you can review at this link.

They told us that board resolutions beginning in 1992 spelled out the deal with the DA's office. In a statement, the hospital told us, "Beginning 2009, our board began to approve engagement and fees for all attorneys on an annual basis. The district attorney's office was approved as one of the legal counsels in 2009, and each subsequent year, on a retainer basis, at the same rate of $2,500 a month."

"It is a written record of the contractual relationship between St. Tammany Parish Hospital and with the St. Tammany DA's office and Walter Reed, and not retaining him personally," says Rafael Goyeneche, who heads the Metropolitan Crime Commission, a non-profit watchdog group. "So, it appears that if Mr. Reed is reporting the income from the hospital personally, then that's either salary that he elected to pay to himself as the DA, or he has taken funds that were directed for the DA's office and simply deemed them to be personal legal fees."

The board provided us with several copies of the resolutions. One shows the "St. Tammany Parish District Attorney's office shall have a representative at all meetings of the board of commissioners, and Walter Reed, district attorney, shall be such representative to attend such meetings as he is able to attend."

"But we have a little bit more information," says Goyeneche, "and rather than this being a swearing match between the hospital and Mr. Reed, now there [are] written resolutions that go back for apparently 15 years that memorialize and substantiate and confirm the hospital's position - that the money is what they paid for a legal representation, wrote to the DA's office and not to Mr. Reed personally.

This is a significant development because the hospital is showing us documents that spell out the arrangement with the DA's office, even though Reed has been keeping the money himself.

"How Mr. Reed later declared that as personal income - as opposed to salary paid or earned as a result of him being the DA - that's something between him and the authorities at this point in time," Goyeneche observes.

This month, we uncovered checks that seem to show the money from the hospital used to be deposited into the DA's checking account. The cancelled checks have a district attorney stamp on the back.

But that shifted in 2007, when the checks had either "for deposit only" or a signature that appears to be the name "Walter Reed." From 2008 on, Walter Reed has been claiming this money as personal income on his state financial disclosure form, even though hospital documents released Friday night show the money was intended for Reed's office - not his personal checking account.

Goyeneche says, "I think that this is something that unquestionably was in Mr. Reed's consideration and thought process when he announced that he was no longer going to seek reelection as the DA.

Reed's campaign spokesman, Morgan Stewart, released this statement late Friday night in response to our questions about the hospital documents:

In the mid 90s, the then chairman of the St. Tammany Parish Hospital board Paul Cortes approached Walter Reed and suggested that the board wanted Mr. Reed to personally perform legal representation services, instead of the personnel being provided at that time from the District Attorney's office. Walter Reed's understanding of that arrangement was based on those conversations. The new board's view that Mr. Reed's participation was in his official capacity as District Attorney created an obvious misunderstanding and distraction to the hospital management. When this misunderstanding became apparent, it became the sole reason why Mr. Reed withdrew from the arrangement. He did not resign due to misconduct of any kind.

The fact is, trying to recreate documentation from two decades ago is very difficult. As such, over the last few weeks, we also requested these documents that the hospital decided to release tonight. That one of these key "resolutions" was in a lawyer's file outside of the hospital records department calls into question the completeness of the documentation from the hospital.

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