Zurik: Why Walter Reed may be looking forward to retirement - FOX 8, WVUE, fox8live.com, weather, app, news, saints

Lee Zurik Investigation: Why Walter Reed may be looking forward to retirement


If you work full-time hours and get company benefits, then one of those benefits is likely a retirement savings account – a 401(k), for instance, in which you contribute some money from each paycheck and your employer matches at least some of it.

How many retirement accounts are enough?

"It depends on who you are talking about," says Rafael Goyeneche, president of the Metropolitan Crime Commission. "And we're talking about the Boss Hogg of St. Tammany Parish right now, the current DA. And obviously one is not enough."

In one year, St. Tammany and Washington Parish taxpayers contributed $55,818 to not one, but two retirement systems for one person. The beneficiary is their district attorney, a public servant, Walter Reed.

"What we're finding out is more about self-service than it was public service," says Goyeneche.

About one-third - $18,232 - of that money went into the state's Louisiana District Attorney Retirement Fund; every DA in the state takes part in it. But Walter Reed seems to be an anomaly in the state.

"I was not even aware that Mr. Reed had a 401 plan until recently," says Pete Adams, director of the La. District Attorney's Retirement System.

Reed created a second retirement plan in his office. But this one's different. If you have a retirement plan at work, it probably operates like this: You, the employee, put up money and your boss, the employer, puts up some money too.

But for this second retirement plan - a 401(a) supplemental executive retirement plan - Walter Reed contributed nothing. The DA's office – not the man, the public institution - contributed 20 percent of participants' salaries every year. It was not an employer match, but rather a straight contribution to the plan, using your tax dollars.

We asked Goyeneche, a long-time watchdog of local government, whether it's legal for an elected official such as Reed to essentially create a separate pension program for himself. "I've posed that question to some people in government that are in the process of researching it right now," he tells us. "Logic would say that it couldn't and shouldn't be done. But I don't know if our laws… I don't know if anyone ever contemplated anybody taking advantage of the loopholes."

For Walter Reed, this is a significant amount of money. Records show his office was scheduled in 2012 to sink an additional $44,529 into this second retirement plan. Goyeneche calls it "an additional 20 percent windfall."

Reed retirement plans pie chart

Reed offered this plan to 10 employees in his office of about 100. In a statement, he told us this extra retirement program was "established and instituted for the purpose of attracting and retaining quality and talented employees."

"But instead of offering this plan to them as a tool to recruit and retain qualified trial attorneys, it's people like his driver, his secretary and a handful of other people," notes Goyeneche. "We're talking about, of the 10 or 11 people [using the plan], four of them are attorneys. The rest are clerical people in that office that are paid generous salaries of 80-plus thousand up to 200 thousand."

Generally speaking, trial lawyers are paid lower salaries then they could make in the private sector. But we found that there are no trial lawyers in Reed's office who are getting this extra incentive to retain quality employees.

Goyeneche says that makes Reed's explanation even less persuasive. "What this really is about is rewarding people that he thinks are loyal to him," he tells us. "Maybe he's buying their silence, maybe he's buying their loyalty. But this is not a recruitment and retention tool for his most valuable assets. His most valuable assets, in his office or any prosecutorial office, are prosecutors that try the cases."

"The idea, I suppose, is that he wants to retain these select employees," says Adams, "a select employee retirement plan."

It's a "select employee" plan that Reed is also giving himself. And technically he's not an employee but an elected official.

"Again, the only way that you can make sense of it is if you call it what it is – it's just greed, and this is a sense of entitlement," Goyeneche tells us. "And his explanation is that he's trying to recruit and retain people. Well, he offered himself up as a public servant to the people of St. Tammany Parish, and they voted him in that [office]. He could have walked away anytime he wanted to. He never told the people, ‘Vote for me and I'll only be your DA if I get a second pension system, and I'm permitted to pay myself an additional $40,000 a year into that pension system.' So again, what he's saying and what he's doing don't add up."

But there's more. To calculate the office or taxpayer contribution for Walter Reed's 401(a), the DA's office used these salaries: $192,922 in 2011, and $222,643 in 2012.

But that's different than what Reed reported to the La. Ethics Board as his annual income. In 2011, he reported $180,000; in 2012, $184,000. Combining both years, that's a $51,000 difference.

Reed salary reports

So in 2012, the monthly contribution was actually 24.2 percent, not 20 percent.

"When you look at some of the public documents and look at some of the documents that you can get through online sources and through public records requests, the more you look at the paperwork and the documents, the more questions you have," says the MCC chief. "None of these numbers reconcile to one another. So it makes you wonder if these documents are in fact accurate. And who's responsible for authoring these documents? The very person that's the subject of a federal investigation right now, the DA, Walter Reed."

This extra retirement plan is never even referenced in the office's yearly audit that's submitted to the state. But it has cost taxpayers in St. Tammany and Washington Parishes plenty - about $230,000 a year for a handful of participants.

"I think that it is a crime in the court of public opinion," Goyeneche tells us.

And for Walter Reed, two retirement systems could mean a post-political life that's even more lucrative. Reed will get his full salary when he retires as long as he's alive. This extra plan means even more money. "Basically [it] means that he's receiving more than 100 percent of his current salary for the rest of his life," Goyeneche says.

It is extra cash for a DA who's found a way to give himself an extra retirement plan funded with public – taxpayer - dollars.

"He had to create a new vehicle to funnel [himself] even more money using the assets of his office," says Goyeneche.

Records show the program was initiated in 2006 and was canceled sometime in 2012, Reed says, because of budgetary problems. At that time, all the participants in the program were allowed to roll over the money into their own account.

We asked Reed for his comments on this report. His campaign spokesman, Morgan Stewart, responded with this statement:

What Mr. Reed reported as taxable income in his Financial Disclosure Forms match what his W2¹s and 1099's say. We also know some of the data provided regarding the District Attorney¹s Retirement System has some apparent coding errors, and we expect the AXA program, which uses that same data, also has coding errors, and we are investigating both.

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