NEW ORLEANS — The city’s Office of Inspector General announced it is embedding a full-time investigator and as many as two other watchdogs inside the city’s problematic Department of Safety and Permits, ramping up efforts to combat fraud and inefficiency.
The OIG and the State Licensing Board for Contractors have worked to root out pervasive fraud inside the city’s construction permitting system for more than a decade. They say their work has led to 19 building safety inspectors or permit officials being indicted, getting arrested, or resigning under investigation.
Those investigations have identified bribery schemes, falsified permits and inspections, and triggered several federal and state corruption cases. One of those, which sources say is continuing, has focused on the city’s largest private building inspection firm, IECI, and its owner, Randy Farrell.
Records show the former Deputy Director of Safety and Permits, Jennifer Cecil, tried to help the OIG investigate Randy Farrell, the owner of the city's largest private building inspection firm. Cecil told the OIG she caught Farrell paying for hundreds of permits using the name of a single electrician, then inspecting the work on the back end.
But sources told WWL Louisiana this spring that Farrell allegedly plied Mayor LaToya Cantrell with gifts, including Saints playoff tickets, fancy meals, and a new mobile phone, and convinced her to have Cecil fired in 2019.
Inspector General Ed Michel says the new arrangement, with his investigators working inside the Safety and Permits offices, would help prevent that from happening.
“I'm certain that now that we're going to be assigned there, that those types of actions will not be allowed,” he said. “And anyone who wants to come forward to assist us will be welcomed with open arms and there will be no instances of retaliation for individuals who are trying to help us mitigate fraud, waste, and abuse.”
Michel said now is the time to put his investigators inside the permitting office because “most of these investigations have been concluded.”
City Chief Administrative Officer Gilbert Montaño said the Cantrell administration welcomes the IG’s presence.
“We have nothing that we're trying to hide. We have nothing that we're not trying to expose if we can make the department and the agency better,” he said.
He noted that it isn’t unprecedented to have outside investigators embedded in city offices. The FBI had agents in the New Orleans Police Department’s Public Integrity Bureau in the 1990s, for example.
He hopes having an investigator inside the office will free up Safety and Permits Department leaders, like director Tammie Jackson, to focus on efficiency and process, rather than having to investigate her own staff.
Jackson sent an email to Farrell a year ago, informing him that he would be banned from performing inspections because she had learned of Cecil’s findings from 2019, as well as his 2021 conviction on tax fraud charges and his arrest that same year on charges of filing false permits in Jefferson Parish.
But Farrell’s company, IECI, was not affected by the personal ban and continues to perform most third-party safety inspections in the city.
The OIG also investigated three Safety and Permits inspectors who failed to show up for key safety inspections at the Hard Rock Hotel construction project before it tragically collapsed on Oct. 12, 2019, killing three workers. Michel produced a report to District Attorney Jason Williams recommending criminal charges. But a grand jury did not hand up charges and a four-year statute of limitations to file felony charges passed last year.
Michel said the city has been working steadily to improve its permitting and inspection processes. Montaño said the difference between the closed-off and inefficient permitting offices that used to be on the 7th floor of City Hall and the more welcoming and open offices now on the 13th floor in an office tower across Poydras Street has been “night and day.”
A report this year by Matrix Consulting Group identified ongoing weaknesses in staffing and loose permitting procedures. It stated that complaints about the office in New Orleans were much worse than those found in other cities. Michel said outside staffing firms have helped the city improve its responsiveness and speed up permitting times, but more must be done.
He and Montaño agree a lot of that work will need to improve the woeful perception of the office, one that’s caused so many contractors to work on buildings without proper permits just to avoid the long delays.
“And when there is such a stain, why would you even go near that line?” Montaño said. “And that’s what we’re hoping to change.”
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