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Fighting corruption is hard going in New Orleans

NEW ORLEANS (Reuters) - Ask the man assigned to combat corruption and bureaucracy in New Orleans how the fight is going and he will tell you about his telephone problems.

The Treme area of New Orleans lies under several feet of water after Hurricane Katrina hit in this file photo from August 29, 2005. In 2005 the U.S. Justice Department formed the Hurricane Katrina Fraud Task Force to combat fraud associated with billions of dollars in government aid allocated for victims of hurricanes Katrina, Rita and Wilma along the U.S. Gulf Coast. In a Sept 2007 report, the task force said it charged 188 people in Louisana with fraud or corruption since Sept 2005. To match feature NEWORLEANS/CORRUPTION REUTERS/Rick Wilking/files

“I started last September and they only switched my phone lines on two weeks ago,” said Robert Cerasoli, New Orleans’ first-ever Inspector General in a recent interview. “Everything has been a battle since, everything has been a fight.”

Cerasoli was appointed by an independent ethics review board last year to root out graft -- in particular as billions of dollars in government aid have flowed into the city following Hurricane Katrina -- in a city that has a reputation for corruption spanning many decades.

Office computers were delivered last month but have not yet been hooked up to a secure network. Cerasoli, a former Inspector General for Massachusetts, said he has only 13 staff instead of the 30 he was promised by city hall.

“We really must get up to 37, but with the hurdles of civil service, the difficulty with getting people through the background checks, and just finding qualified applicants, the process has been much slower than expected,” he said.

Cerasoli said either inefficiency or a desire to block his every move has lead to endless problems with the city’s bureaucracy.

“This is Louisiana,” Cerasoli said with a shrug.

Father Kevin Wildes, president of Loyola University in New Orleans and head of the ethics review board that appointed Cerasoli, said the obstacles the Inspector General has faced show New Orleans’ administration is at worst terribly corrupt and at best woefully inefficient.

“Either way, something has to change,” he said.

Even before Hurricane Katrina and the levee breaches in 2005 that devastated New Orleans, the city and Louisiana had earned a reputation as being fertile ground for corruption.

“Half of Louisiana is under water and the other half is under indictment,” Billy Tauzin, who represented a Louisiana district in the U.S. House of Representatives from 1980 to 2005, once famously said of his state.

“Over the course of many decades Louisiana and New Orleans have earned a reputation as being exceptionally tolerant of corruption,” said Jim Letten, U.S. Attorney for the Eastern District of Louisiana. “This fueled the demise of the local economy as it drove many companies away and kept them away.”

Since his appointment by President George W. Bush in 2001, Letten has indicted 213 state and local officials and private individuals and, he said, convicted “almost 100 percent.”

Those found guilty include former New Orleans city council member Oliver Thomas for bribery and kickbacks in 2007.

Letten says corruption has contributed to declining city education and health standards, rising crime, and a “brain drain” that saw the city’s population decline to 450,000 in 2005 before Katrina from more than 600,000 in the 1960s.

Local entrepreneurs agreed corruption hurts investments and the economy, which is overly dependent on tourism.

“The assumption has been that if you want to do business here you need to set aside extra money to grease the wheels,” said Mike Mitternight, a former chairman of the Louisiana Association of Business and Industry and owner of an air conditioning company in the New Orleans suburb of Metairie.

“That added cost scares some folks away,” he said.


In 2005, the U.S. Justice Department formed the Hurricane Katrina Fraud Task Force to combat fraud associated with billions of dollars in government aid allocated for victims of hurricanes Katrina, Rita and Wilma along the U.S. Gulf Coast.

In a Sept 2007 report, the task force said it had charged 188 people in Louisiana with fraud or corruption since Sept 2005.

Voter anger over corruption brought the issue to the top of Louisiana’s political agenda last year. In a Louisiana State University survey in May 2007, 69 percent of respondents statewide said Louisiana needed stronger ethics laws.

When recovery efforts after Katrina exposed both corruption and inefficiency, the city responded by creating the office of Inspector General and hired Cerasoli in September 2007.

The office of Mayor Ray Nagin said the Inspector General’s problems were part of a city-wide lack of funds and staff rather than any effort to thwart its mission.

“We have some issues with corruption and bureaucracy, but no more than any other urban environment,” Dr. Brenda Hatfield, chief administrative officer for New Orleans Mayor Ray Nagin, said, adding the city had been forced to halve its pre-Katrina workforce so creating a new office posed funding challenges.

Meanwhile, the state has passed an ethics reform bill that mandates financial disclosures for most state and local officials and forces lobbyists to report spending aimed at public officials.

“We have promised an end to corruption and incompetence in state government. Make no mistake about it. This is a massive first step,” said Gov. Bobby Jindal, a Republican, said after signing the law in February.

The bill has been well received by observers.

In 2006 the Washington-based nonprofit Center for Public Integrity ranked Louisiana 44th out of the 50 U.S. states for public integrity, with just 43 points out of a possible 100. The center said the new reform bill would give Louisiana 99 points out of 100.

“This would rank Louisiana among the top U.S. states for public disclosure rules and enforcement of those rules,” center spokesman Steve Carpinelli said.

But back on the ground, setting up the Inspector General’s office in New Orleans remains a struggle. Though part of the city’s charter since 1995, it was not until after the hurricane in 2005 that the office was formalized.

Hurricane Katrina laid bare the problems associated with the city’s excessive bureaucracy and its environment of corruption, and showed something had to be done, said Loyola University’s Wildes. “People get so frustrated with the system here that it’s no wonder they opt to pay their around it.”

(For a story about post-Katrina recovery in New Orleans, click on)

Reporting by Nick Carey; Editing by Peter Bohan and Eddie Evans