NEW ORLEANS — In his first interview since the Sewerage and Water Board was raided by the FBI last month, Executive Director Ghassan Korban said he wasn’t aware of the “enormity of the offense” in the agency’s Plumbing Department until WWL-TV sent documents and photographs in late October showing top officials in that office apparently engaging in a web of self-dealing.
He said he saw emails from city permitting officials in January 2021, warning the Sewerage and Water Board that the head of the Plumbing Department, Jay Arnold, was getting hundreds of private gas-installation permits during Sewerage and Water Board business hours.
But when Korban finally suspended Arnold and plumbing inspector Vernon Marcotte in November for “conduct (that) may constitute violations of the Louisiana Code of Ethics and/or payroll fraud,” he wrote that he learned about the potential violations Oct. 29, a few days after WWL-TV sent Korban a list of Arnold and Marcotte’s gas permits and photographs showing them at private gas jobs during the work day.
“No excuse whatsoever,” Korban said. “Had I known what I know today, I certainly would have acted differently at the time (in January). I just didn’t. You can question me all day long. I don’t have a good answer as to why I didn’t act more forcefully.”
The morning after WWL-TV’s story laid out the network of inspectors and contractors using each other’s licenses and then inspecting each other’s work for government agencies, the FBI seized all open plumbing permits from filing cabinets at the Sewerage and Water Board offices in the Warehouse District.
Federal agents had to move in to get the records because they exist on handwritten paper forms and index cards only. There’s no computerized record-keeping in the Plumbing Department, not even a database of which records exist.
The Louisiana State Licensing Board for Contractors, which is looking into alleged permit violations by Arnold and other contractors, sent a letter in January stating that Arnold's Plumbing Department was being "obstructionist" to its investigators’ efforts to root out fraud.
City emails show the Safety and Permits Department at City Hall had a copy of that letter and discussed it. Former chief building official Zach Smith told Safety and Permits Director Tammie Jackson that the State Licensing Board was working with the Sewerage and Water Board to address the problems.
City spokesman Beau Tidwell also later said the city staff had “flagged” the state letter for the Sewerage and Water Board.
But Korban said he never saw a copy of the letter until WWL-TV asked him about it in October.
Brad Hassert, head of the State Licensing Board’s Investigations Division, said he sent the letter to Smith and expected it to be forwarded to the Sewerage and Water Board.
Hassert also said more emails were sent to the Sewerage and Water Board in July directly informing the agency that one of its employees was under investigation. A state investigator sent two emails to a Sewerage and Water Board attorney seeking an interview with the unnamed employee. It appears that interview was not granted.
Hassert said his investigators also have been repeatedly denied access to public plumbing inspection records while Arnold was running the department.
“We haven't been able to access anything,” he said. “We've been told to submit public records requests for same.”
He said the state has been telling local officials for years that the handwritten plumbing records make it harder to prevent fraud, he said.
“It's 2021 and the permit applications, inspections, etc., are all kept on a file card system that we've never been able to get any documents from,” Hassert said.
Korban said nobody told him that state investigators were having such problems while Arnold was running the Plumbing Department.
Now that Arnold is suspended without pay, Korban said the Plumbing Department has been moved under the agency’s Customer Service division, with the hopes of making it more responsive to the public when they are seeking permits and inspections to get their construction and repair projects done right.
WWL-TV was able to review about 120 of those permits or inspection reports for plumbing projects by Hermanos Rivera, a company whose plumbing license was held by Buddy Fraiche, while Fraiche also worked as a city gas and mechanical inspector.
The station found Fraiche got all of those plumbing permits approved by Arnold and his staff at the Sewerage and Water Board. Then, on some of those jobs, Fraiche inspected and approved the gas line installation permits held by Arnold or Marcotte. Fraiche was forced to resign last month after WWL-TV’s stories, and the State Licensing Board for Contractors revoked his and Hermanos Rivera’s plumbing licenses at a hearing in Baton Rouge.
The city suspended Arnold’s gasfitter’s license on Nov. 9, but some time over the next two weeks someone used Arnold’s login to the city’s permitting database to improperly change 82 of his permits into another plumber’s name. The action caused problems for property owners trying to complete home construction projects, but a City Hall spokesman said the actual permits and inspection records were not changed.
The city said it has now limited what information a contractor can revise in the city’s OneStop permit database.