Gusman’s son works for law firm with lucrative contract with Sheriff’s Office

Orleans Parish Sheriff Marlin Gusman’s son works for a small New Orleans law firm run by an old pal of his father’s that also has a lucrative contract with the Sheriff’s Office.

Marlin Gusman Jr. has been working for the Hurndon & Gaffney firm, which specializes in FEMA work, for many years, said partner Mike Gaffney, who added the younger Gusman does no work related to the firm’s contract with the Sheriff’s Office.

He stressed that Marlin Gusman Jr. is not an employee of the firm, but rather a contractor who submits monthly bills, though he works out of the Hurndon & Gaffney offices.

Gaffney estimated Gusman Jr. works about 20 hours a week for the firm. He would not disclose the younger Gusman’s hourly rate, but said he “gets paid less than he would anywhere else,” describing Gusman Jr. as a financial whiz who is an asset to the firm’s operation.

Hurndon & Gaffney’s work for the sheriff involves haggling with FEMA on rebuilding projects. Its 22-page contract, which lists consulting fees ranging from $90 to $165 an hour, is described as an agreement for “program and direct and indirect management/administrative services.”

The firm was paid more than $280,000 by the Sheriff’s Office in 2012 alone, according to testimony at a June hearing in federal court about the office’s spending and who should pay for reforms at the jail required under a new federal consent decree.

The Gaffney firm won its current contract in 2011 after a request for proposals that attracted five bidders. The proposals were reviewed and ranked by a committee of four people — two Sheriff’s Office employees, Metropolitan Crime Commission President Rafael Goyeneche and former Urban League of New Orleans President Nolan Rollins. All gave Hurndon & Gaffney the highest score, although Goyeneche gave one other firm the same score overall, and he gave that firm much higher scores for expertise.

Goyeneche gave that other firm, Sulzer Group, a score of zero in the price category on the grounds that it had offered no pricing information. None of the other panelists did so.

In an interview Thursday night, Goyeneche said he thought the younger Gusman’s relationship with the Gaffney firm should have been disclosed to the panel.

“If the son is working for or with the Gaffney firm, and they’re getting compensation from the Sheriff’s Office, I think it should have been disclosed to avoid any appearance of impropriety,” he said. “I think it should have been vetted. If you’re going to err, err on the side of full disclosure.

“Had I known, I would have asked more questions about it.”

Through a spokesman, Gusman declined to comment on the arrangement.

But Ron Nabonne, who is managing Gusman’s re-election campaign, said Gusman did not have to disclose his son’s involvement with one of the bidders, nor was he required to seek the ranking panel’s advice.

Gusman did so in the interest of transparency and fairness, Nabonne said, adding that the set-up Gusman used resembled contracting-reform proposals that have been floated by the watchdog Bureau of Governmental Research over the years.

“He did not have an ethical or legal obligation to go through the process he went through,” Nabonne said.

Both of the sheriff’s employees who sat on the panel — purchasing director John Sens and chief deputy William Short — were targets of an ongoing federal probe into bid-rigging at the Sheriff’s Office. Short died several months after the contract was awarded, before the probe had borne any fruit. Sens pleaded guilty last year to rigging bids and taking kickbacks from other vendors, and he was sentenced to five years in federal prison. None of the crimes he pleaded to, or was charged with, involved the Gaffney firm.

Nabonne stressed that “two other people, who are prominent citizens” took part in the process and gave Gaffney high marks.

Gaffney insisted his friendship with the sheriff had nothing to do with his receipt of the contract in 2011, and that it was his understanding Gusman recused himself completely from the award. He did say that he and Gusman had discussed the potential ethical implications of Gusman Jr.’s employment, however.

“The sheriff asked me about it, and I said he (Marlin Jr.) doesn’t have an interest in my firm, which he doesn’t,” Gaffney said. “I said, ‘Why don’t you check with your lawyers?’ When I looked at it, the law said he had to have an equity interest (for a conflict to exist).

“The sheriff had his people look at it, and they didn’t see any problems. (Gusman Jr.) was working for me at the time. ... I didn’t think it was appropriate to fire him” because of the contract award.

“He’s done nothing wrong. I don’t think I have, and I don’t think the sheriff has either.”

Gaffney downplayed the value of the Sheriff’s Office work to his firm, saying it makes up perhaps 10 percent of his annual receipts. Hurndon & Gaffney’s website describes it as a “boutique” firm; Gaffney said only five people work in the office, just two of whom are lawyers.

“If I thought it was going to create a problem, I would have passed on this contract,” Gaffney said. “I don’t need this contract.”

Kathleen Allen, a lawyer for the state Ethics Board, declined to comment on the specifics of Gusman’s arrangement with Gaffney. But, she said, when a public official awards a contract to a company that employs his child, it can violate a provision that says that no public servant shall award a contract in which a family member has “a substantial economic interest.”

Whether a relative is considered to a have a “substantial economic interest” is a murky question, Allen said, that has less to do with how much the relative is being paid than whether his or her paycheck in some way depends on the contract.

Gaffney said his friendship with the senior Gusman goes back to their days wrestling together on the Jesuit High School team decades ago. Because of that relationship, he said, Gusman Jr. began doing some work for him when he was still in high school.

In an interview with The New Orleans Advocate, Gaffney disputed the $280,000 figure for his 2012 billings to the Sheriff’s Office, although he said he could not provide an exact figure. He estimated he billed the office in the low six figures that year.

For several years leading up to the 2011 contract, Hurndon & Gaffney had been invoicing the Sheriff’s Office around $100,000 annually, with a usual hourly rate of $165, records show. That work, which began not long after Hurricane Katrina, was not done pursuant to any bid process. Gaffney said it was FEMA rather than the sheriff that brought him in.

“Some of the FEMA people told me they were having FEMA issues with the sheriff,” he said. “They said they thought I could help, and that I might want to go over and talk to the sheriff.”

Gaffney has also done FEMA-related work for a number of other governments in the area, in particular Plaquemines Parish, where some of his dealings have attracted the attention of federal authorities. In late 2012, The Times-Picayune and WVUE-TV reported that federal investigators had subpoenaed various records from Plaquemines Parish President Billy Nungesser’s administration, including records covering Gaffney’s work there.

WVUE-TV has also reported on a possible conflict of interest in which Gaffney purchased land for a home for an employee of an engineering company who was in charge of approving Gaffney’s invoices to Plaquemines Parish.