NEW ORLEANS — State auditors have opened a wide-ranging investigation of the agency overseeing east bank flood protection, and one focus of the probe will be a $51,500 payment of taxpayer funds to an allegedly fictitious business that was exposed last October by WWL-TV.
The Louisiana Legislative Auditor’s investigative chief, Roger Harris, confirmed the state has opened an investigation of the Southeast Louisiana Flood Protection Authority-East.
The authority’s board president, Mark Morgan, met with state officials this month and confirmed they will probe, among other things, off-duty details carried out by the small levee district police force and the agency’s handling of a $51,500 payment to an unidentified person who allegedly impersonated a board member in an email. The legislative watchdog will also delve into human-resources issues, including complaints about inequitable compensation among some employees.
Morgan said the legislative auditor has launched two inquiries. The first, a performance audit, will focus on human resources and issues around the agency’s consolidation of the three levee boards. The second, an investigative audit, could be more expansive in scope and will examine how the $51,500 payment was erroneously sent out, Morgan said.
“We were scammed and we didn’t have the proper controls in place to minimize the possibility of that happening,” Morgan said. “People get scammed all the time, you just got to make sure you have controls in place to make sure it gets approved or double-checked by somebody else.”
The agency’s newly appointed regional director, Kelli Chandler, could be at the center of at least one of the investigations.
As finance director, Chandler approved a wire transfer to someone posing as former board member Joe Hassinger in 2017. Levee board officials later said that the payee was “spoofing” Hassinger, who didn’t receive the money. No one ever investigated the payment to the fictitious company, listed as James Diva Creationz.
Morgan characterized the incident as an IT vulnerability since email records suggest the scammer used Hassinger’s email address at one point. But there were also reasons officials might have flagged the request for money. Some messages came from a Comcast email address Hassinger did not use/ And the fake company had never done business with the Levee Board.
Nonetheless, Chandler sent the money to a Bank of America account in Georgia. The transaction was made public some four years later in a report by WWL-TV.
The revelations about the phony payment came as WWL-TV reported that Chandler had also been involved in a drunk-driving incident in Georgia one year after starting a job with the Levee Board.
The revelations have divided board members at times. Chandler was handpicked to lead the agency after former chief administrative officer Derek Boese left for a job in San Antonio last year. Some board members have questioned whether board member Herb Miller, who selected her for the job, made the right decision.
As finance chief, Chandler was known as a good accountant who was lacking in some social graces, former employees say.
She was accused of sexual misconduct and employment discrimination by a subordinate, which led to an external investigation, records show. Although the lawyer hired to weigh the complaint found no merit in the allegations, she did not dispute that Chandler had acted inappropriately in the workplace by oversharing.
“These stories are akin to sexual jokes and sexual innuendos in the workplace and must cease immediately,” lawyer Deborah Love wrote in her report. “Sharing this kind of personal information at work is inappropriate and may be described as offensive by some employees.”
Complaints from employees are partly what inspired the Legislative Auditor’s review. Last year, state Sen. Jimmie Harris complained during a confirmation hearing for three Levee Board members that he’d heard multiple complaints about alleged mistreatment.
Harris said other grievances included supervisors in the Levee Board’s police department who said they are paid less than their subordinates; employees who claimed they didn’t receive overtime pay when their manager did; and a sexual harassment complaint that was allegedly “swept under the rug.”
“I have received more phone calls, more emails in reference to how people are being treated at the Flood Authority than I should,” Harris said during the confirmation hearing for board members Clay Cosse, Richard Duplantier and Roy Arrigo.
“I need a commitment from the three of you all at this table that it will be rectified because if it’s not rectified by you all we will do it next year — and this is coming from the governor, the (Senate) president and the (house) speaker.”