Lee Zurik Investigation: For DA’s son, campaign finance is a family affair

Steven Reed (left) with St. Tammany DA Walter Reed at a 2010 event (source: Facebook).
Steven Reed (left) with St. Tammany DA Walter Reed at a 2010 event (source: Facebook).
Supporters of Walter Reed's dance at his 2012 campaign fundraiser (source: Facebook).
Supporters of Walter Reed's dance at his 2012 campaign fundraiser (source: Facebook).
The balloon walkthrough at Walter Reed's 2012 campaign fundraiser (source: Facebook).
The balloon walkthrough at Walter Reed's 2012 campaign fundraiser (source: Facebook).

How would you like to be paid $12 to serve someone two drinks, another 12 dollars to serve someone else a couple of drinks, and get that money again and again, for each person you serve?

That's the apparent purpose of payments from a long-time elected official to his son.

At the entrance to the event at the Castine Center in Mandeville, a 10-foot-tall balloon walkthrough made a statement. Inside, there were spiral shooting star columns and dozens of tables with poppers and centerpieces. Hundreds of supporters gathered there for good food and a good band, America.

But it's the bar, the "beverages and liquor," that have us asking questions.

"If you can't help your family and friends, what's the use to being in politics, right?" jokes C.B. Forgotston, a former legislative staffer and long-time political observer. "That's what Edwin Edwards used to say."

In September 2012, longtime St. Tammany Parish District Attorney Walter Reed held that fundraiser. And according to campaign documents, he hired his son Steven's company to buy alcohol for his supporters.

"I guess that's one way to keep your son employed, one way to keep your family employed," remarks Ed Chervenak, a political scientist at the University of New Orleans, "to use your campaign finance money to help their business."

Campaign reports show Reed paid his son's company, Liquid Bread, almost $30,000.

"There's no way to prove or disprove that he got the value for the dollars he paid," says Forgotston. "In fact, I would be willing to bet that there was no scrutiny of the invoices."

Reed's campaign also paid the Lake House $35,000 for catering, Martin Wine Cellar $4,700, Covington Supermarket $1,100 and the Triple Nickel Grill $427. All totaled, $70,000 on booze and food.

Steven Reed's company, Liquid Bread, charged $12 a person for beverages and liquor. The state's Department of Health and Hospitals says, if Liquid Bread "purchased" the alcohol and stored it at a "facility" before "then transporting it to the function to serve," they would have needed a DHH-issued catering license.

But DHH says in a written statement, "There is not currently a catering license registered under the name Steven Reed or under the company name of Liquid Bread."

"That really calls into question where that money going," says Chervenak. "What's it really for? Liquid Bread… what are they? What are they doing? And if they're not a caterer, why is his campaign finance account saying he's paying for catering?"

Monday, Steven Reed told us on Facebook, "My company, Liquid Bread LLC., does not require a 'catering' license. I do not provide any type of food for campaign and fundraising events, only bar setup service."

Again, according to the state, he would need a license if he bought alcohol, stored it, and then transported it to the event. Neither the invoice nor Reed's message to us made it clear if he did have a license.

Liquid Bread registered with the secretary of state's office in July 2010, about 14 months before Reed's campaign made the first payment to the catering firm.

Steven Reed's LinkedIn and Facebook pages make no mention of Liquid Bread.

FOX 8 News and NOLA.com found record of the business relationship between Walter Reed's campaign and Steven Reed's company in the course of our "Louisiana Purchased" joint investigation of campaign finance.

Since 2006, Reed's campaign has written 21 different checks to his son's companies, totaling $94,620.34. Liquid Bread received $36,498.05; a production company owned by Steven Reed, Globop, was paid the rest. Steven Reed describes it on Facebook as "a company that designs and produces interactive multi-media events."

Last year, 2013, Walter Reed's campaign paid Steven Reed's businesses $9,022. That happens to be more than the campaign raised from contributors. The campaign only reported $8312.15 in contributions. So the district attorney paid his son more campaign money last year than he raised.

Louisiana's campaign laws allow candidates to pay immediate family members for services as long as the "services are related to the payment" and the "value of the services must be commensurate with the consideration provided."

FOX 8 obtained the invoice that Liquid Bread submitted to the Reed campaign for that 2012 fundraiser.

It's a vague invoice with a handwritten notation that it was "ok per Walter."

"This is pathetic," says Forgotston. "I wish I could turn these kind of invoices in to my clients. So who's going to check it? 'Daddy, here's my invoice,' you know, 'give me my allowance.'"

Reed declined our request for an on-camera interview, but through a spokesman he gave us this statement:

"All contributions from my supporters and expenses described on the financial reports to the state are related to continuing my public service as district attorney for the 22nd Judicial District. I appreciate the confidence my supporters have placed in me."

Even though that invoice included the words "liquor" and "beverages," Steven Reed now tells us he didn't purchase any alcohol for the 2012 campaign event. Late Tuesday, Read messaged us that his company "was hired to provide the bar setups and services, not the alcohol itself."

So, Steven Reed's company was paid $12 per person to set up a bar and act as a bartender – and that price did not include any alcohol.

If that's true, it means Reed would not need a catering license. But it raises anew the question of whether the value of his services was commensurate with the consideration provided - as state law requires.

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