Lee Zurik Investigation: RTA chair calls Zurik ‘dishonorable’, ducks spending questions

Published: Mar. 1, 2012 at 1:09 AM CST|Updated: Mar. 30, 2012 at 4:48 PM CDT
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New Orleans -- Regional Transit Authority Board Chairwoman Barbara Major won't answer our questions. And we have many, after spending the past few months trying to get copies of their records of a 2010 bond deal worth $75 million that helped fund streetcar expansion.

The scarcity of the records has us asking how the RTA chose the attorneys and financial advisor to do the work.

The RTA chose a San Francisco financial advisor, Calvin Grigsby, to work on the bond deal -- they paid his firm about $42,000.

Grigsby has a questionable past. Federal grand juries in Florida have indicted Grigsby twice on public corruption charges.

In one instance, Grigsby was acquitted. In the other, a federal judge threw out the charges of conspiracy, embezzlement, fraud and theft of funds. But in court records, the judge acknowledged, "The government presented substantial evidence of greed and public corruption."

The RTA has no documentation of why or how they chose Grigsby's firm to do the work.

"Asking fundamental questions about whether there have been prior legal problems, whether they be criminal or civil, is something very, very basic," says Rafael Goyeneche, head of the Metropolitan Crime Commission. "And if there are some red flags in an individual's past, then I think this agency needs to explain why they chose to ignore those red flags. And more importantly, did they even pose these questions?"

In response to the indictments, Grigsby told us by email, "The charges were so egregiously false and/or based on fabricated evidence."

Grigsby also said the RTA did not alert him to any upcoming bond deal. He wrote, "We did not have any idea there was a bond deal when we submitted our proposal to be an underwriter financial advisor. We submit literally hundreds of proposals."

We found one connection Grigsby has to Louisiana: He has an office in Shreveport and does work for the city. This year, the Shreveport City Council launched its own audit of Grigsby. Some councilmembers allege overpayments to Grigsby's firm.

But there's more.

A YouTube video shows of Sherricka Fields, who runs Grigsby's Shreveport office.  She did most of the work on the RTA deal. But at the same time she was giving financial advice to the RTA, she was still in school, completing her MBA at LSU-Shreveport.

We've been trying to find out how the RTA chose Calvin Grigsby's firm. The only connection between the RTA and Grigsby we could find was an invitation to a 2009 fundraiser for a Florida congresswoman. The event took place at the Ritz Carlton on Canal, at the home of Steward Juneau.

The hosts included then-New Orleans Mayor Ray Nagin, RTA CEO Justin Augustine, RTA CFO Ronald Baptiste, former RTA Board Chairman Cesar Burgos, RTA General Counsel Sundiata Haley and Calvin Grigsby, the San Francisco-based financial advisor. Months after this fundraiser, the RTA gave Grigsby's company the financial advising work.

But what hasn't been made clear is why Grigsby's proposal was the only one received.

In a series of public records requests, we asked the RTA for a copy of all bids and proposals received for the work. They gave us the records, but the only bids and proposals included were from firms who had worked on the bond deal. So according to the RTA's records, they never considered anyone else for the work. And they never put out a request for proposals, asking attorneys and financial advisors to submit a bid.

Cameron Henry sits on the State Bond Commission. As a Jefferson Parish state representative, he also has interest in the RTA -- his parish has three of the eight seats on the board. Henry says, when you don't advertise or even consider multiple proposals, it will usually lead to questions.