Zurik: Industry cries foul as river pilots use their clout

Zurik: Industry cries foul as river pilots use their clout
Updated: May. 23, 2018 at 10:16 PM CDT
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NEW ORLEANS (WVUE) - We've uncovered a letter that likely has never been seen by the general public - one that impacts a handful of well-connected Louisianans earning more than half a million dollars a year.

"This is news to me," says Greg Bowser, president of the Louisiana Chemical Association. "Something's wrong."

Someone sent this letter sent to the governor, arguably the most powerful person in the state. But to understand its significance, we need to present a back story that involves money, political influence and one of the state's most valuable natural resources - the Mississippi River.

This investigation centers on the occupation of river pilot.

In maritime law, a river pilot is someone who takes control of a seagoing vessel as it moves through the river. It's a difficult trade and a very lucrative occupation - but how does one get a river pilot job?

"I've asked people that and they say you almost have to be born into it," Bowser recalls. "You have to be a family member. "

Three river pilot groups help guide ships up and down the Mississippi River:

  • The Bar Pilots, from outside the mouth of the river to Pilottown;
  • The Crescent River Pilots, from Pilottown to the city;
  • And the New Orleans Baton Rouge Steamship Pilots, or NOBRA, from New Orleans to Baton Rouge.

Last year the average Bar Pilot made $586,000, Crescent Pilots an average $595,000 and NOBRA pilots $633,000.

"That's a lot of money, half a million dollars a year for what they do," Bowser notes.

A little-known state board, the Pilotage Fee Commission, sets those salaries.  Every few years it approves what's called the "target compensation", the amount of money each pilot should make every year. Every year since 2013, when data for all three pilot groups were first made available to the public, the pilots' average compensation has always exceeded the target pay.

For example, in 2017, the commission set the target compensation for the NOBRA pilots at $455,000. Again, the actual compensation, averaged $633,000 - $178,000 more than the target compensation.

The river pilots are also able to earn additional money through a transportation tariff, traveling to and from work. Records show that can top $40,000 a year, additional money going to the pilots. Essentially, the pilots are paid even to drive to work.

Last year the Crescent Pilots sought an increase in the transportation tariff.  Before handing over more money, the businesses that do work on the river wanted proof of why the pilots needed the increase. They wanted to examine all expenses.

But the Pilotage Fee Commission, that little-known state board, said no and voted in favor of the pilot group.

"They block you from even trying to get in to ask the questions," Bowser tells us.

His Louisiana Chemical Association sued over the issue, and a Baton Rouge district judge recently ruled that the commission was wrong in its decision.  Judge Timothy Kelley asked, "Was that an abuse of [the commission's] discretion? I think that it was... They are basically deciding something without having all the knowledge they need to decide the situation. To refuse to accept that evidence or allow that evidence would be an abuse of the discretion of the commission."

The Pilotage Fee Commission is made up of four river pilots, four representatives from industries that use and three at-large or independents. These at-large members are appointed by the governor.

"They're the key on the board," Bowser says. "They're the swing votes, if you will."

State law says these independents need to be neutral parties; they cannot be connected to the river pilots or the industries those pilots serve. They essentially decide where each vote before the board goes, who wins, who loses, who makes money, who pays up. But they're not supposed to be tied to either industry or river pilots.

Governor John Bel Edwards appointed attorney Bruce Mohon, businessman Danny Kingston and a retired clerk of New Orleans Traffic Court, Noel Cassanova, to the board.

Remember that vote on the transportation fee that drew such criticism from the Baton Rouge judge? In that case, all three of these independents voted in favor of the river pilots.

Bowser says, "I think there's been a big difference" since Edwards' appointments joined the board.

We've spent several months investigating this commission; we've spoken to many sources connected to the businesses and the river pilots. When we asked one source - who asked for anonymity - about the current commission, that person told us, "It's fixed." Another told us, "The Pilotage Fee Commission has been corrupted... It's a lock for the pilots because the system has been manipulated."

And that brings us back to Bowers' surprised reaction to the letter we uncovered.

The letter, sent to Governor Edwards, recommended three individuals to serve as the at-large members of the Pilotage Fee Commission. The letter included their resumes and said, "You will find they would bring experience and diversity to the fee commission that will be very useful and efficient." And later, the governor picked all three members to serve on the commission.

The author of the letter was Capt. Stephen Hathorn, the president of the NOBRA pilot group.

"You would think that you would not want to pick someone that they're... recommending, because I don't think they would recommend somebody who would be opposed to what the Steamship Pilots Association wants," Bowser tells us.

Shortly after the governor appointed one of the recommended commission members, Lenora Cousin, she quickly resigned from the commission; Cassanova filled her spot.

But consider the timeline: The river pilots wrote the letter on March 16 of 2016. Two weeks later, the governor's director of boards and commissions sent the three an email, asking them to fill out an application.

The governor's office sent Bruce Mohon his email at 12:15; just 33 minutes later, he emailed back his four-page application. And a week later, the governor appointed Mohon to the commission.

We found opportunity to ask Gov. Edwards directly how impartial his appointees can be when they were recommended by the one of the pilot groups.

"The recommendations are going to come either from pilot or from commercial enterprises," Edwards tells us.  "Either way the recommendations shouldn't taint the impartiality."

But several sources connected to the commission tell us that prior at-large board members had no connections to or recommendations from the pilot groups or business industries.

"To my knowledge, there's no industry group that recommended people, that even were asked to recommend folks to be appointed as independents," Bowser says.  "It was only one side that got to... have some input on who the independents were."

By the way, eight months after writing the governor a letter, Stephen Hathorn - the president of the NOBRA pilots - donated $1,000 to the governor's campaign fund.

The governor says he's seen no proof of wrongdoing. "Unless and until there is a credible allegation that these individuals lack impartiality, this is an academic discussion," he tells us.

When we tell him we have people on the record, saying the at-large members do lack impartiality, he responds, "I'd like for them to come see me."

State law prohibits any ex parte communication between Pilotage Fee Commission members and interested parties. When our camera showed up to the last board meeting, we found one of the "independent" commission members, Noel Cassanova, meeting outside the board room with Stephen Hathorn and former state senator Francis Heitmeier, who is now a lobbyist for the NOBRA river pilots.

If they were talking board business, this meeting was likely illegal.

When they spotted our camera, the meeting ended. Nonetheless, it raises more questions about the actions of a pilot group and the impartiality of a board that may be giving a new definition of the word "independent".

Bowser, representing a group whose industries are directly served by the pilots, says these at-large commissioners are clearly on the pilots' side of things - and the letter to the governor explains why.

"I was not aware of that document that you have there," he tells us. "I was not aware of that. So, it makes sense."

The Crescent River Pilots had no comment. The NOBRA pilots wouldn't do an on-camera interview - but Stephen Hathorn did tell us by email, "The Governor's Appointments to the Commission have the highest ethical standards."

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