Lee Zurik Investigation: Living large in Harahan
Would you ever build a house on land you didn't own?
Or would you purchase property for a friend, taking on all legal risks, for little to nothing in return?
They're not hypothetical scenarios, as it turns out. Some people involved are on the radar of the FBI, which subpoenaed a local parish last week for stacks of documents.
The main target of that probe is a businessman named Phil Ramon.
Driving down this Colonial Club Drive in Harahan, it's hard to miss the biggest house on the block.
"Living in a house on a golf course, probably in excess of a million dollars, I'd say that's the American dream that we all strive for," says Dominic Weilbacher, a former councilman in Kenner.
Once construction on this Harahan house wraps up, former City of Kenner Chief Administrative Officer Phil Ramon will be living that dream.
The 6,385-sq. foot house, with a three-car garage and spacious second-floor porch, grabbed our attention over the summer. Here's why: The permits and construction documents showed the house belonged to Phil Ramon, but the land didn't.
"My personal experience with these guys is that there's really nothing that you could say would be unexpected," says Weilbacher. "Just when you think you've seen it all, they'll come up with a new twist or a new trick that will just make you go 'hmmm....'"
That's the reaction of this former elected official after we showed him the documents.
When we started looking into the house, Ramon didn't own the land but a company, Boston Properties, did. One of the directors of that company is an attorney named Mike Gaffney.
Weilbacher offers his speculation about why such an arrangement would be made. "I think it's the inability for the regular person to follow the money trail," he says.
Weilbacher had dealings with Ramon and Gaffney in Kenner. Ramon served as the city's CAO, while Gaffney was a contracted attorney. Shortly after Katrina, Weilbacher criticized them both after Kenner contracted with Gaffney's brother to buy $700,000 worth of trailers.
"I think the trailers might have been going for anywhere from 12- to 14-thousand dollars, and we saw invoices in the neighborhood of 20- to 25-thousand dollars," recalls Weilbacher. "And their response was, well, we were in desperate need of the trailers and we were willing to pay whatever it took to get them."
After Ramon and Gaffney exited Kenner, they started working in Plaquemines Parish, Gaffney as a contracted attorney for the parish and Ramon as a supervisor for All South Consulting Engineers, a company that's made tens of millions from the parish.
"These guys are excellent generals in the field in terms of figuring out how to make government work for them," says Weilbacher.
That brings us back to the house. Ramon and his employer, All South, approved Gaffney's invoices in Plaquemines Parish. At the same time, Ramon and Gaffney had an arrangement through Boston Properties in which Ramon built the house and Gaffney's company purchased the land for $227,000.
It's a questionable arrangement that raises ethical questions, but an arrangement Weilbacher says he's seen frequently in government.
"That's something that has also become pretty much the norm, to have these entities that have provided services to the municipalities to do a favor for those local officials, under the guise that they would do it for anybody," Weilbacher contends. "But as you know and I know, we don't receive services as a residential property owner from individuals or corporations like this."
Loyola CPA Patrick Lynch calls the arrangement strange and uncommon.
"The economics really doesn't make sense," Lynch tells us. "Why would you build a house at a pretty good amount of money on property you don't own?"
Gaffney told us by phone that he suggested to Ramon to buy the lot in a company's name while doing construction for protection, in case someone got hurt on the job. So Gaffney bought it in his company's name, taking on the risk he warned Ramon about.
We wanted to know why Ramon wouldn't put it in his own company's name. Gaffney couldn't answer that question. But Gaffney says Ramon gave Boston Properties the $227,000 to buy the lot.
Gaffney told us by phone in July the property was to be transferred whenever Ramon wanted it. It just so happens the house was transferred back to Ramon for $10, a few days after our phone call.
We also have questions about the engineer that Phil Ramon used on his house in Harahan.
City records show Stuart Consulting worked as an engineer on the house. Stuart also happens to be a vendor in Plaquemines Parish, the same parish where Ramon's company, All South, has a lucrative contract.
Stuart Consulting doesn't regularly work on residential construction but he did for Ramon, and the owner of Stuart confirmed that he didn't charge for the work.
So while All South oversaw all FEMA-related work in Plaquemines, a supervisor for All South -- Phil Ramon -- received free engineering work on his home from Stuart Consulting, a company doing FEMA-related work in Plaquemines.
Loyola law professor Dane Ciolino says that could be in violation of the state ethics law.
"A public official cannot accept a gift or a gratuity from a contractor," Ciolino tells us. "The reasons are obvious. You wouldn't want the mayor of some small town accepting free lawn cutting services from some company that wanted to do landscaping for the city. The potential for abuse in those circumstances is fairly obvious."
The owner of Stuart Consulting told us he knew Phil Ramon prior to his work in Plaquemines, and Ramon never became involved in their work in Plaquemines.
The FBI has its sights on Ramon, sending a subpoena to Plaquemines Parish for all records related to him. It's unclear if the FBI is looking into Ramon's Harahan house.
Weilbacher says it's a complicated scenario but it all smells -- people who have made plenty of public money with personal transactions that raise questions about the overlap of their public and private business that has a government contractor living that dream, in a 63-hundred square foot house.
"I think that's definitely the angle that they would like to take," says Weilbacher, "Make it really complicated, make the public just figure, 'It's way to in depth for me to understand and it's just the TV people or the politicians who are trying to get at these guys. They're really good people at the end of the day and you're just trying to make a news story out of the situation.' But my take has been, it's my money, it's our money as public taxpayers, and that's important to me."
The owner of Stuart Consulting says he has gotten no preferential treatment in Plaquemines. In fact, he says the parish owes him a lot of money.
We know Stuart didn't charge Ramon for the work to the house but we don't know if Gaffney charged Ramon a fee for purchasing the house in his company's name. If he didn't, that could also raise some ethical questions.