Levee Chief Resigns Amid Nepotism Claims

The president of the Orleans Levee Board, who played a key role in decisions about the construction of levees that failed during Hurricane Katrina, resigned Thursday amid allegations that he awarded contracts to relatives after the storm struck and collected $97,000 in questionable back pay in the weeks before the storm hit.

James P. Huey, who had served as the board’s president for nine years, submitted his resignation to Gov. Kathleen Babineaux Blanco on Wednesday after calls for an investigation into the contracts and back pay issue.

Dan S. Foley, a New Orleans lawyer who was appointed to the levee board by Blanco, said Huey had conveyed his resignation to board officials and in a letter faxed to the governor. Although the resignation was apparently Huey’s decision, Foley said: “I believe the governor asked him to resign.”

Huey was the only member of the Orleans Levee Board who was involved in awarding contracts for the design and construction of the 17th Street and London Avenue levees, both of which were breached during the hurricane that led to flooding in major portions of the city.

Investigators for the National Science Foundation, which has sponsored a probe of the levee failures, say design defects occurred on both of those levees.

The New Orleans flooding after Katrina was blamed for most of about 1,000 deaths in Louisiana.

Huey, 55, could not be reached for comment, but he defended his actions as in the best interests of the levee district in his letter to Blanco and in comments published in the New Orleans Times-Picayune.

Foley confirmed that Huey’s resignation was the result of two “pending matters” that emerged in recent days involving the contracts to family members and the back pay.

Huey had indicated his intention over the summer to pursue retroactive pay of about $1,000 a month -- which he said he was owed under a state law that allowed levee board presidents to collect a salary instead of per diem expenses, Foley said Thursday.

Foley said that he had previously thought Huey had done “a good job” in his nine-year stint as a levee official.

But when Huey informed Foley of his intent to press for the retroactive pay, Foley said he would first insist on a formal opinion from the state attorney general authorizing the back pay.

“Otherwise, I said, I would not vote for it,” Foley recalled.

Foley said he was stunned last week when he learned that Huey had apparently received the back pay using an opinion issued by a lawyer working under contract with the Orleans Levee Board. “I thought that was a conflict of interest because it was a levee employee,” Foley said. “I was very upset about it.”

The Times-Picayune reported that in a July 8 memo, Huey instructed levee district managing director Max Hearn to initiate a regular monthly salary payment of $1,000 retroactively, deduct all per-diem payments he had received and halt the per-diem pay.

After the Aug. 19 hurricane left about 80% of the city flooded, Huey approved a business deal with members of his wife’s family, according to former levee board members familiar with the arrangement.

He leased office space from a member of his wife’s family and also gave her family exclusive rights to oversee the salvage of boats damaged by the hurricane at two marinas owned by the levee district.

Foley said he had learned that the levee district had been sued by a marine insurer of sailboats over the salvage arrangement. The arrangement, Foley said, had been made “without the board’s approval.”

“The whole thing stunk,” Foley said. He said he asked state Sen. Edwin Murray about the situation and Murray agreed to press for a legislative audit. “I saw it as a breach of ethics,” Foley said.

Foley said the state inspector general’s office also had launched an investigation of Huey’s actions. That probe, Foley said, is “still ongoing.”

Foley said he had asked levee board officials to place the issue of Huey’s actions on the agenda for a special levee district meeting. But he was distressed to discover that “somehow, it got taken off the agenda.” He added: “I plan to make sure we take up those matters.”

Huey was appointed president of the board by former Louisiana Gov. Edwin Edwards, who is now serving time in prison on corruption charges.

J. Darrel Saizan Jr., chairman of the levee district’s Planning, Engineering and Construction Committee, said that other board members did not deserve to be targeted for recent criticism over Huey’s tenure.

“Nobody on this current board has been trying to line their own pockets,” Saizan said.

He added that he and several of the board members had suffered extensive damage to their own residences when the city flooded.

“None of us would sit up there and do something unconscionable,” Saizan said.