Lee Zurik Investigation: Walter Reed won’t run for re-election as DA

A file image of Walter Reed
A file image of Walter Reed

Walter Reed, the long-time district attorney for St. Tammany and Washington Parishes, will not run for re-election this year, according to his recently-hired campaign committee spokesman.

Reed would have faced at least three challengers in the November election. The last time he's had any competition at the polls was 1996. He has served as DA since 1984.

FOX 8 received a lengthy statement from Reed by way of his campaign spokesman, Morgan Stewart. In the statement, Reed cited recent news reports that "cast me, my dedicated staff, friends and even my family in a different and harsher light."

FOX 8 News and NOLA.com/The Times-Picayune have raised serious concerns about Reed's campaign spending and his work outside the DA's office as part of our "Louisiana Purchased" joint investigation of campaign finance.

Our look into Walter Reed began early this year, when we noticed large sums of money going from his campaign to companies owned by his son, Steven Reed. That included a $29,400 payment to a company called Liquid Bread. Walter Reed's campaign paid his son's company for providing bar services at a campaign fundraiser.

Steven Reed told us he didn't provide the alcohol, and event documents show that employees in Reed's office tended bar at the fundraiser.

"So what is Steven Reed doing for this $29,000, I guess, is the big question," noted UNO political scientist Ed Chervenak.

Walter Reed also paid his son Steven's production company $14,300 to produce a 60-second video for the campaign.

When we asked video producer Bess Carrick to watch the video and estimate its approximate cost to produce, she told us, "I would guess between $500 and $750. And the reason I say it's that high is because, I think, that might have been a professional voice at the end. And if so, those run at about $275 a pop."

Carrick criticized the video's lighting, its overall production values and the lack of creativity. And when we told her how much Reed spent on it, she was shocked.

"That's very interesting," Carrick said. "Yes, that's surprising to me."

From there, we uncovered a lucrative arrangement Walter Reed had with St. Tammany Parish Hospital. According to Reed's state financial disclosure filing, the hospital paid him $30,000 a year for legal work. But the hospital had no invoices, no contract nothing that spelled out the deal or justified Reed's payments.

"For the publicly-funded hospital to engage in a non-written agreement of a retainer for an attorney - without requiring any documentation as to what that attorney is doing - is a tremendous disservice to the public who is supporting that hospital," said Tulane law professor Joel Friedman. "If I were a member of the board, I would be demanding an accounting from the council. But they're not."

Reed insists the deal was with him personally, not his office. But the hospital said the deal was with the DA's office, and not Reed.

"There's a discrepancy and a disparity there," noted Rafael Goyeneche, who leads the Metropolitan Crime Commission. "So, [are] his financial reports that he's submitting to the state, and notarizing and certifying as accurate, true? Or is the hospital right about that?"

When Reed didn't attend meetings, he sent an assistant district attorney from his office, Leo Hemelt.

"If Mr. Reed is doing this consulting work and legal work as a private attorney, how can he staff it in his absence with an assistant district attorney that he is paying a salary for?" asked Goyeneche. "So you may be dealing with a situation akin to Peter Galvan, where Peter Galvan as the coroner was collecting fees for himself personally and, instead of him providing medical services, he had one of his coroner's office employees, going and doing the work that he was being paid to do."

And we uncovered canceled checks that raise even more questions. Up until March 2007, those canceled checks from the hospital to Reed were endorsed on the back with a stamp: "Walter Reed/District Attorney." After that March 2007, they were stamped "for deposit only" - and one was signed. The name on the endorsement was Walter Reed.

"What these checks demonstrate is a visual shift in the way these checks were being deposited into accounts," said Goyeneche.

The MCC president told us, if those checks were at one time deposited into the DA's account, it backs up the hospital's statement that the agreement was with the DA's office, not Walter Reed personally.

We've sent several requests for clarification to Reed; he has not responded.

"Maybe there's not a plausible explanation," Goyeneche suggested. "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."

Walter Reed's brother also did work at St. Tammany Parish Hospital. Richard Reed resigned his position shortly after our stories on Walter Reed's dealings with the hospital began. Reed worked as a clerk in the mail room. And we uncovered emails that raise questions about his employment.

Reed was working 40 hours a week. But according to the emails, the "real need is 20 [hours per week]." When emailing about the new opening created with Richard Reed's resignation, hospital vice president Jean Holman wrote, "I would recommend that we make it a 40 hour position just to show that Richard's position was needed."

Another email includes notes from a meeting that show a hospital administrator told another employee this about Richard Reed: "I know that there is nothing for him to do, but put him on the receiving dock. Anything. Put him anywhere. Pushing a cart. Licking stamps. Birdwatching."

The FBI has launched its own investigation of Walter Reed. We know they're looking into his campaign spending and his deal with St. Tammany Parish Hospital.

In late May, Reed resigned his side job from St. Tammany Parish Hospital. Since our stories began, the DA Reed has refused to do an interview on camera.

Copyright 2014 WVUE. All rights reserved.