CHUTZ, J.
Appellants, Greg Gachassin and the Cartesian Company, Inc. (Cartesian), appeal a decision of the Ethics Adjudicatory Board (EAB) finding they violated several provisions of the Louisiana Code of Governmental Ethics (Ethics Code) and imposing fines and penalties.
Cartesian is a domestic corporation incorporated in Louisiana on November 6, 2009.
The LPTFA is a public trust created pursuant to La. R.S. 9:2341 "for the use and benefit of the City of Lafayette ... to provide funds for the furtherance and accomplishment of any public function and purpose of the City," including housing.
The Cypress Trails Project was an affordable housing development located in Lafayette, Louisiana. On October 30, 2009, the Cypress Trails Corporation (Cypress Trails Inc.) was incorporated to serve as an instrumentality of the LPTFA in promoting and advancing "decent, safe and sanitary housing for persons of low income and particularly the elderly or handicapped in the City of Lafayette and Lafayette Parish." According to Richard Becker, general counsel for the LPTFA, Cypress Trails Inc. was created as an instrumentality of the LPTFA to implement the Cypress Trails Project. The Board of Commissioners of Cypress Trails Inc. is composed of the same individuals who serve on the LPTFA's Board of Trustees. Mr. Gachassin served as Cypress Trails Inc.'s first Executive Director.
On November 1, 2009, a partnership known as the Cypress Trails Limited Partnership (Cypress Trails LP) was created between Cypress Trails Inc., as general partner, the Housing Authority of the City of Lafayette (LHA), as special limited partner, and Mr. Becker, as limited partner.
Villa Gardens was an affordable housing project located in Lafayette, Louisiana, which was a project of the LHA. In 2006, the LHA requested a loan from the LPTFA in order to purchase the property ultimately used as the site of the Villa Gardens development. Mr. Gachassin's proposal that the $425,000.00 loan be made at an interest rate of three percent per annum was unanimously approved by the LPTFA.
On November 1, 2009, a partnership known as the Villa Gardens Limited Partnership (Villa Gardens LP) was created between Villa Gardens Housing Corporation (Villa Gardens Inc.), an instrumentality of the LHA, as general partner, and Walter Guillory, as limited partner. As general partner, Villa Gardens Inc. was responsible for managing the affairs of Villa Gardens LP. The stated purpose of the Villa Gardens LP was to acquire property in Lafayette Parish to develop, build, own, and operate the Villa Gardens Project in order to provide affordable housing.
By a written contract dated November 1, 2009, Cartesian entered into a "Project Consultant Agreement" with Cypress Trails LP to oversee the development and construction of the Cypress Trails housing project for a fee of $500,000.00. Mr. Gachassin signed the consultant agreement as "President" of Cartesian, despite the fact that Cartesian's existence as a legal entity was not effective until November 6, 2009. The consultant agreement also was signed by John Arceneaux, a LPTFA trustee, who signed in the capacity of an authorized representative of Cypress Trails Inc., the general partner in Cypress Trails LP. Over the course of the next several years, Cartesian fulfilled the terms of the consultant agreement and received full payment of $500,000.00.
By a written contract dated November 1, 2009, Cartesian also entered into a "Project Consultant Agreement" with Villa Gardens LP to oversee the development and construction of the Villa Gardens housing project for a fee of $500,000.00. Mr. Gachassin signed the consultant agreement as "President" of Cartesian, despite the fact that Cartesian's existence as a legal entity was not effective until November 6, 2009. As with the Cypress Trails consultant agreement, Cartesian fulfilled the terms of the agreement and received full payment of $500,000.00.
At a November 4, 2009 meeting of the LPTFA Board of Trustees, Mr. Gachassin, in his capacity as chairman of the board, presented an update and overview of the strategy for the Cypress Trails Project and participated in various discussions regarding the project, including its funding, tax credit allocation, design aspects, and the goal of beginning construction by February 2010. Mr. Gachassin also instructed Mr. Becker to prepare a resolution to authorize and empower the officers of the LPTFA and its counsel "to do all things and take all actions necessary or advisable to cause the LPTFA tax credit affordable housing project Cypress Trails to proceed to closing." This resolution granted authority to the specified officers and general counsel to hire a project consultant for the Cypress Trails Project without obtaining further approval by the LPTA Board of Trustees. The Board of Trustees voted unanimously to proceed with the Cypress Trails Project and to adopt the resolution prepared by Mr. Becker. The meeting minutes do not reflect that Mr. Gachassin recused himself from that vote.
Additionally, at the same meeting, the trustees discussed the LPTFA's 2006 loan to the LHA in light of the tightening of the credit market and the role of the loan in the LHA's completion of the Villa Gardens Project. A motion was made and unanimously approved by the Board of Trustees "to recast the existing loan ... to the [LHA] to a long term, no interest, cash flow loan to be repaid to the LPTFA by the [LHA] out of the cash flow from the Villa Gardens [P]roject." The meeting minutes do not reflect a recusal by Mr. Gachassin from that vote.
Mr. Gachassin resigned from the LPTFA board on November 17, 2009. Within two weeks of his resignation, he appeared before the LPTFA board on December 2, 2009, as a representative of Cartesian to provide an update on and discuss various issues related to the Cypress Trails Project. He made similar appearances before the board to provide updates on the Cypress Trails Project on May 11, 2010, and September 2, 2010.
On June 15, 2012, the Louisiana Board of Ethics (BOE) issued charges against
An evidentiary hearing was held before the EAB on April 18 and 19, 2016. On August 3, 2016, the EAB rendered a decision concluding Mr. Gachassin violated La. R.S. 42:1112(A), (B), and (D), 42:1113(B), and 42:1121(A)(1), a total of five violations, and Cartesian violated 42:1113(B). In rendering its decision, the EAB concluded the project consultant agreements with Cypress Trails LP and Villa Gardens LP were executed on November 1, 2009, while Mr. Gachassin was chairman of the LPTFA. This factual finding formed the basis of the EAB's additional conclusion that Mr. Gachassin and Cartesian each had a substantial economic interest in the Cypress Trails and Villa Gardens Projects at the time of the LPTFA meeting on November 4, 2009. Accordingly, the EAB found Mr. Gachassin violated La. R.S. 42:1112(A), (B), and (D) by failing to recuse himself and voting to move forward with the Cypress Trails Project and to recast the loan associated with the Villa Gardens Project, as well as participating in discussions regarding those matters at the LPTFA meeting. The EAB further concluded Mr. Gachassin violated the prohibition of La. R.S. 42:1113(B) that he not be "in any way interested" in the project consultant contract between Cartesian and Cypress Trails LP, which he signed on Cartesian's behalf on November 1, 2009, while he was still serving as the LPTFA chairman. The EAB also found Mr. Gachassin violated La. R.S. 42:1121(A)(1) by assisting Cartesian for compensation with various transactions involving the LPTFA within two years of his resignation as chairman of the LPTFA. Finally, the EAB concluded Cartesian violated the prohibition of La. R.S. 42:1113(B) that it not be "in any way interested" in transactions under the supervision of the LPTFA by honoring the project consultant agreement between Cartesian and Cypress Trails LP and providing services in fulfillment of the agreement.
For each of the five Ethics Code violations the EAB found Mr. Gachassin committed, it imposed a $10,000.00 fine, for a total of $50,000.00. The EAB imposed a single fine of $10,000.00 upon Cartesian. Additionally, based on its conclusion pursuant to La. R.S. 42:1155 that Mr. Gachassin and Cartesian violated the Ethics Code to their "economic advantage," the EAB imposed a penalty on appellants of $1.5 million, in solido. Mr. Gachassin and Cartesian now appeal the decision of the EAB.
1. The EAB erred as a matter of law in concluding that Cartesian and Gachassin had a "substantial economic interest" in certain transactions involving the LPTFA when Mr. Gachassin voted on those transactions.
2. The EAB erred as a matter of law in concluding that the Cypress Trails Contract was entered into while Mr. Gachassin was a trustee for the LPTFA.
3. The EAB erred as a matter of law in concluding that the Cypress Trails project was under the "supervision or jurisdiction" of the LPTFA.
4. The EAB erred as a matter of law in concluding that Mr. Gachassin assisted Cartesian and not Cypress Trails, in transactions involving the LPTFA within two years of Mr. Gachassin resigning from the LPTFA.
5. The EAB erred as a matter of law in concluding there were any transactions involving the LPTFA and Villa Gardens within two years of Mr. Gachassin resigning from the LPTFA.
6. The EAB erred as a matter of law in concluding that Cartesian and Mr. Gachassin violated the Ethics Code to their "economic advantage," and by not applying the "rule of lenity" in favor of Cartesian and Mr. Gachassin.
7. The EAB erred in assessing a $30,000.00 fine on Mr. Gachassin for allegedly violating three subparts of one provision of the Ethics Code.
8. The EAB erred as a matter of law in assessing a penalty of $1.5 million on Cartesian and Mr. Gachassin, in solido.
9. The EAB's imposition of a $1.5 million penalty violates the Excessive Fines Clause of the United States Constitution.
Judicial review of decisions of the EAB is governed by the Louisiana Administrative Procedure Act (APA) and is confined to the record developed in the administrative proceedings.
The reviewing court owes no deference to the EAB's legal findings, since questions of law are reviewed de novo.
Appellants contend the EAB legally erred in finding the consultant agreements between Cartesian and Cypress Trails LP and Villa Gardens LP were executed on November 1, 2009, while Mr. Gachassin was serving as a trustee and the chairman of the LPTFA. They argue the consultant agreements were executed after Mr. Gachassin's resignation, sometime in December 2009 or January 2010. Based on the alleged error by the EAB in determining the date of the consultant agreement, appellants contend the EAB also erred in concluding: (1) the consultant agreements were entered into while Mr. Gachassin was a LPTFA trustee; and (2) Mr. Gachassin and Cartesian each had a substantial economic interest in the Cypress Trails and Villa Gardens Projects when Mr. Gachassin discussed and voted on matters relating to those projects at the November 4, 2009 LPTFA meeting.
At the EAB hearing, Mr. Gachassin testified the project consultant agreements were executed after his resignation from the LPTFA. He asserted the Villa Gardens agreement was signed sometime in December 2009 and the Cypress Trails agreement was signed sometime in late December 2009 or early January 2010. Mr. Arceneaux, who succeeded Mr. Gachassin as chairman of the LPTFA, testified he negotiated the Cypress Trails consultant agreement with Cartesian and signed that agreement on behalf of Cypress Trails LP as the representative of its general partner, Cypress Trails Inc. He could not recall the date on which the agreement was signed, but testified it was "definitely" sometime after Mr. Gachassin resigned from the LPTFA. Mr. Arceneaux further indicated he was unaware at the time of the November 4, 2009 meeting that Cartesian would turn out to be the project consultant for the Cypress Trails Project.
Mr. Becker similarly testified he did not know at the time of the November 4, 2009 meeting that Cartesian would eventually become the Cypress Trails project consultant. He was not present when the project consultant agreements were executed, but testified he had no reason to doubt Mr. Arceneaux's recollections on the matter.
On appeal, appellants argue the BOE failed to refute the testimony of these witnesses that the consultant agreements were executed after Mr. Gachassin's resignation. They contend the conflict between the November 1, 2009 date written on the consultant agreements and the testimony of Mr. Gachassin, Mr. Arceneaux, and Mr. Becker regarding different dates creates uncertainty as to when the consultant agreements were executed.
We find no merit in appellants' contentions. We initially observe that, contrary to appellants' categorization, the issue as to
In arguing there was no evidence refuting the testimony that the consultant agreements were executed after Mr. Gachassin's resignation, appellants ignore the dates written on the consultant agreements. The Cypress Trails consultant agreement contains the following unambiguous language on its first and last pages, respectively:
(Emphasis added.)
The Villa Gardens consultant agreement contains identical language, with the exception that "Cypress Trails Limited Partnership" is replaced with "Villa Gardens Limited Partnership." The BOB argues this language constitutes the "best evidence" of the date on which the consultant agreements were executed.
At the EAB hearing, Mr. Gachassin testified he did not know who wrote the November 1, 2009 dates on the consultant agreements. Nor was any other evidence presented on this point. Neither at the EAB hearing nor on appeal do appellants offer any reason why the consultant agreements stated they were executed on November 1, 2009, if they were actually executed sometime after Mr. Gachassin's November 17, 2009 resignation.
Additionally, the BOE presented other evidence supporting a November 1, 2009 execution date. For instance, it presented evidence that Mr. Gachassin ordered ten sets of digital prints from Ridgeway's, a printing services company on November 2, 2009. An invoice from Ridgeway's bearing that date reveals Mr. Gachassin had the digital prints billed to The Lauren Group, LLC (Lauren Group), a company he wholly owned, and shipped to "Villa Gardens", "ATTN: GREG GACHASSIN," at the Lauren Group's address. Moreover, on June 29, 2010, Cartesian submitted an invoice to Villa Gardens LP requesting reimbursement for various amounts paid to Ridgeway's for "plans and printing" in accordance with several attached invoices. The invoice for the digital prints Mr. Gachassin ordered on November 2, 2009 was among the invoices attached. At the EAB hearing, Mr. Gachassin denied any knowledge of the invoice, failing to explain why he would have ordered items related to and subsequently billed to the Villa Gardens LP on November 2, 2009, if he had no connection or interest in that project on that date.
Additionally, within days of Mr. Gachassin's resignation, Cartesian submitted invoices dated November 19, 2009, to Cypress Trails LP and Villa Gardens LP requesting initial payments of $50,000.00 for professional consultation and project management services related to the Cypress Trails and Villa Gardens projects. Mr. Gachassin claimed the invoices were draft invoices included in the drafts of the
Further, on December 2, 2009, approximately two weeks following his resignation, Mr. Gachassin appeared before the LPTFA board as a representative of Cartesian to provide an update and discuss various issues related to the Cypress Trails Project, even though appellants claim the Cypress Trails consultant agreement was not executed until late December 2009 or January 2010. Finally, subsequent amendments to both the Cypress Trails and Villa Gardens consultant agreements reference November 1, 2009 as the date of the original consultant agreements.
In order to resolve the conflict between the November 1, 2009 date written on the consultant agreement and the contrary testimony presented by appellants, it was necessary for the EAB to weigh conflicting evidence and make credibility determinations. Because the EAB had the opportunity to observe the witnesses' demeanor first-hand, this court must give due regard to these credibility determinations in reviewing the EAB's factual findings. La. R.S. 49:964(G)(6);
In finding the consultant agreements were executed on November 1, 2009, the EAB specifically rejected Mr. Gachassin's testimony, categorizing it as "unpersuasive." The rejection of Mr. Gachassin's testimony is particularly significant with regard to the Villa Gardens consultant agreement since he was the only witness who testified that agreement was executed after his resignation. Thus, when the EAB rejected Mr. Gachassin's testimony, there was no other evidence supporting appellants' claim that the Villa Gardens consultant agreement was executed on a date other than the November 1, 2009 date written thereon.
In addition to the rejection of Mr. Gachassin's testimony, it is obvious the EAB also rejected Mr. Arceneaux's testimony that the Cypress Trails consultant agreement was executed sometime in December 2009 since it concluded both consultant agreements were executed on November 1, 2009. As to Mr. Becker, his testimony that he had no reason to doubt Mr. Arceneaux's recollection was of little, if any, probative value. Responsibility for weighing and assessing Mr. Arceneaux's recollections was a matter within the purview of the EAB. Moreover, Mr. Becker was not present when the consultant agreements were executed and claimed no knowledge regarding those events.
In addition to its credibility determinations, the EAB's conclusion that the consultant agreements were executed on November 1, 2009 was supported by the circumstances previously discussed regarding the November 2, 2009 Ridgeway's invoice, the November 19, 2009 invoices from Cartesian to Cypress Trails LP and Villa Gardens LP, Mr. Gachassin's December 2, 2009 appearance before the LPTFA board, and the amendments to the consultant agreements referencing November 1, 2009 as the date of the original agreements. Therefore, based on our review of the record, and giving due regard to the EAB's credibility determinations, we find the EAB's conclusion that the consultant agreements were each executed on November 1, 2009, while Mr. Gachassin was a LPTFA trustee, was neither arbitrary, capacious, or unsupported by the record.
Consequently, we also reject appellants' contention that Mr. Gachassin did
However, the record does not support the EAB's conclusion that Mr. Gachassin also violated La. R.S. 42:1112(B), which provides, in pertinent part:
[Emphasis added.]
The EAB found Mr. Gachassin violated La. R.S. 42:1112(B) because as an officer, employee, and sole owner of Cartesian he knew Cartesian had a substantial economic interest in the matters he discussed and the votes he cast at the November 4, 2009 meeting due to the consultant agreements previously executed on November 1, 2009. The problem with this conclusion is the fact that Cartesian did not exist as a legal entity on November 4, 2009. As previously noted, Cartesian's corporate existence did not begin until November 6, 2009. At the time Mr. Gachassin participated in the discussions at issue and cast his votes, it was impossible for Cartesian to have had a substantial economic interest in those transactions. Therefore, the portion of the EAB's decision finding Mr. Gachassin violated La. R.S. 42:1112(B) must be reversed.
Under La. R.S. 42:1113(B), Mr. Gachassin, as an appointed member of the LPTFA, and Cartesian, because it was wholly owned by Mr. Gachassin, were prohibited from entering into or being "
The common meaning of "supervision" is "[t]he series of acts involved in managing, directing, or overseeing persons or projects."
The EAB concluded the Cypress Trails Project was under the "supervision or jurisdiction" of the LPTFA, for the following reasons:
In arguing the LPTFA lacked "supervision or jurisdiction" over the Cypress Trails Project appellants rely on the testimony of Mr. Arceneaux and Mr. Becker regarding the resolution adopted at the November 4, 2009 LPTFA meeting. Both men responded affirmatively when asked if it was their understanding that the resolution transferred responsibility for the Cypress Trails Project from the LPTFA to Cypress Trails Inc. and Cypress Trails LP, making it unnecessary for the LPTFA to consider matters related to the project. Appellants further contend the EAB improperly disregarded the fact that the LPTFA, Cypress Trails Inc., and Cypress Trails LP were each separate and distinct legal entities in concluding the Cypress Trails Project was under the "supervision or jurisdiction" of the LPTFA.
An examination of the November 4, 2009 resolution does not support appellants' contentions. The resolution provides:
Contrary to the testimony of Mr. Arceneaux and Mr. Becker, nothing in the resolution transferred authority for the Cypress Trails Project away from the LPTFA to other legal entities. It merely authorized certain individuals, including Mr. Gachassin as board chairman, to act on behalf of the LPTFA with respect to "the LPTFA's tax credit affordable housing project" (i.e., the Cypress Trails Project) without the necessity of obtaining further board approval. Among other actions, the resolution authorized the specified individuals to engage professionals, consultants, a development manager, and to create legal entities to become participants in the development entity for the Cypress Trails Project. Moreover, since there was nothing in the resolution indicating it was irrevocable, the LPTFA could have passed another resolution at any time revoking the authority granted to the specified individuals by the November 4, 2009 resolution.
Cypress Trails Inc., which was created specifically to act as an instrumentality of the LPTFA, and Cypress Trails LP were legal entities created by the LPTFA to implement the Cypress Trails Project. Cypress Trails Inc. was responsible for managing the affairs of Cypress Trails LP. Its articles of incorporation provide, in pertinent part, that Cypress Trails Inc. was "[t]o conduct its business and affairs so as to vest in the LPTFA ... all right, title and interest ... in or to all of its properties and assets free of all encumbrances... which have been created subsequent to the acquisition of such property by the Corporation."
As stated in the November 4, 2009 resolution, Cypress Trails was a project of the LPTFA. Neither the resolution nor the fact that Cypress Trails Inc. had responsibility for managing the affairs of Cypress Trails LP divested the LPTFA of its supervision
Appellants raise the additional argument that the phrase in La. R.S. 42:1113(B) prohibiting appointed board members and legal entities in which they have a substantial economic interest from being "in any way interested" in contracts or transactions under the supervision or jurisdiction of the appointed member's agency is unconstitutionally overbroad, general, and vague. They note the Ethics Code does not define the phrase "in any way interested," and contend it fails to adequately inform purported violators of the conduct prohibited.
We decline to address this argument, finding it is not in a proper posture for this court's review. While there is no single procedure for attacking the constitutionality of a statute, a party making such a challenge must first raise the issue of unconstitutionally in the district court.
In this case, appellants improperly raised the issue of the constitutionality of La. R.S. 42:1113(B) in a memorandum it filed in opposition to the BOE's motion for summary judgment. Even if appellants had raised the issue in a pleading, the EAB lacked authority to consider the constitutionality of La. R.S. 42:1113(B).
In making the argument that an appeal was the only available method for them to challenge the constitutionality of La. R.S. 42:1113(B), appellants appear to misinterpret this court's holding in
Appellants contend the EAB erred in concluding Mr. Gachassin assisted Cartesian rather than Cypress Trails LP in transactions involving the LPTFA that occurred within two years of his resignation. They argue Mr. Gachassin merely conducted Cartesian's business in the period following his resignation and "was not... as a matter of law, assisting Cartesian." They assert Cartesian could not have fulfilled its contractual obligations without Mr. Gachassin, since he was Cartesian's sole shareholder, director, president, and employee.
Louisiana Revised Statutes 42:1121(A)(1) provides:
The Ethics Code defines "assist" as meaning "to act in such a way as to help, advise, furnish information to, or aid a person with the intent to assist such person." La. R.S. 42:1102(4). Moreover, "person" is defined in the Ethics Code as "an individual or legal entity other than a governmental entity, or an agency thereof." La. R.S. 42:1102(16). Because they are distinct legal entities, corporations such as Cartesian are considered "persons" under the Ethics Code.
The EAB explained its conclusion that Mr. Gachassin assisted Cartesian in violation of La. R.S. 42:1121(A)(1) as follows:
The EAB's conclusions are supported by the record and are neither arbitrary nor capricious. For purposes of La. R.S. 42:1121(A)(1), appellants' argument that Mr. Gachassin merely "conducted" Cartesian's business rather than "assisting" Cartesian is a distinction without a difference. Within two years of his resignation from the LPTFA, Mr. Gachassin received
In its decision, the EAB also found Mr. Gachassin assisted Cartesian for compensation within two years of his resignation from the LPTFA by renegotiating the Villa Gardens consultant agreement during this period. Appellants argue the EAB erred in finding the renegotiation of this consultant agreement violated La. R.S. 42:1121(A) because the Villa Gardens Project did not involve Mr. Gachassin's former agency, the LPTFA, and there was no evidence the LPTFA was in any way involved in the amendments to the Villa Gardens consultant agreement.
We conclude it is unnecessary to reach this issue since the EAB found only one violation of La. R.S. 42:1121(A) by Mr. Gachassin. The EAB based its finding on Mr. Gachassin's actions in the two-year period following his resignation with respect to both the Cypress Trails and Villa Gardens projects. As discussed in the preceding assignment of error, the record clearly establishes Mr. Gachassin's actions regarding the Cypress Trails Project violated this provision. Therefore, the EAB's finding of a La. R.S. 42:1121(A) violation must be affirmed, regardless of whether or not Mr. Gachassin also violated this provision with respect to the Villa Gardens Project.
Appellants contend the EAB erred in finding they violated the Ethics Code to their "economic advantage" so as to authorize the EAB's imposition of a $1.5 million penalty under La. R.S. 42:1155(A). First, they argue they did not derive any economic advantage whatsoever as a result of the consultant agreements because, on a comparative basis, Cartesian received less payment than others would have received on the same type of project and probably less than Cartesian could have received if it had undertaken other opportunities available to it. Second, appellants contend the EAB legally erred in interpreting "economic advantage" to mean the price of the project consultant agreements. Appellants argue the EAB was required under the rule of lenity to interpret the phrase in the manner most lenient to them. They maintain the most reasonable and lenient interpretation is to construe "economic advantage" to mean the net profit obtained by the violator.
Louisiana Revised Statutes 42:1155(A) provides, in pertinent part:
The starting point in the interpretation of any statute is the language of the statute itself.
Additionally, this court has held the provisions of the Ethics Code must be strictly construed.
In its decision, the EAB concluded the phrase "economic advantage" was susceptible of more than one reasonable interpretation, and the rule of lenity required application of the interpretation most lenient to the appellants. In concluding the most lenient interpretation was to construe "economic advantage" to mean the price of the project consultant agreements, the EAB opined:
[Footnotes omitted.]
We agree with the EAB's conclusion that the phrase "economic advantage" is susceptible to more than one reasonable interpretation, which renders it ambiguous.
We reject as unreasonable appellants' contention that "economic advantage" should be construed to mean "net profit." To accept this contention would allow indirect expenses incurred by Cartesian in operating its business to be deducted in calculating the "economic advantage" appellants received as of result of their violations. By deducting such indirect expenses from the $1 million in payments Cartesian received Mr. Theriot arrived at the conclusion that Cartesian made a combined profit of only $168,000.00 from the two consultant agreements.
The word "advantage" is commonly used to mean "[a]ny benefit or gain."
Because the EAB erred in its legal interpretation of La. R.S. 42:1155(A), the $1.5 million penalty imposed on appellants must be vacated. Since the imposition of a penalty under this provision falls within the discretion of the EAB, we will remand this matter to allow the EAB to exercise its discretion in imposing a new penalty. Upon remand, the EAB is to reconsider the penalty to be imposed in light of the interpretation of "economic advantage" set forth in this opinion and the evidence in the record.
Appellants contend the EAB erred in assessing $30,000.00 in fines on Mr. Gachassin for violating La. R.S. 42:1112. Specifically, appellants argue the EAB lacked authority to impose three $10,000.00 fines on Mr. Gachassin for violating three separate subparts of La. R.S. 42:1112. In making this argument, appellants emphasize that the violations found by the EAB of La. R.S. 42:1112(A), (B), and (D) all arose from "the same occurrence when Mr. Gachassin participated in votes before the LPTFA" on November 4, 2009. Under such circumstances, appellants argue the maximum fine authorized by La. R.S. 42:1153(A)
The EAB found Mr. Gachassin violated La. R.S. 42:1112(A), (B), and (D) by participating in transactions before the LPTFA in which he had substantial economic interests. His participation consisted of discussing, failing to recuse himself, and voting on the resolution to move forward with the Cypress Trails Project and the motion to recast the loan made to the LHA that was associated with the Villa Gardens Project. The EAB imposed a separate $10,000.00 fine for each violation.
Initially, we note the fine imposed on Mr. Gachassin for the violation of La. R.S. 42:1112(B) must be eliminated since we have previously concluded the record does not support this violation. Moreover, we find merit in appellants' argument that the EAB erred in imposing more than one fine for the other violations of La. R.S. 42:1112 considering that the same discussions and votes formed the basis for each of the two remaining violations of this provision. The EAB could have chosen to impose a penalty under either La. R.S. 42:1112(A) or (D) since Mr. Gachassin's conduct violated each of those subsections. However, given that the two violations arose from the same conduct
For these reasons, we reverse the portion of the EAB decision finding Greg Gachassin violated La. R.S. 42:1112(B). Further, we amend the decision of the EAB to reduce the $30,000.00 in fines imposed on Greg Gachassin for violating La. R.S. 42:1112 to $10,000.00, and affirm the two $10,000.00 fines imposed on Mr. Gachassin for violating La. R.S. 42:1113(B) and 42:1121(A), respectively, as well as the $10,000.00 fine imposed on Cartesian for violating La. R.S. 42:1113(B). We also vacate the portion of the EAB decision imposing a penalty of $1.5 million on Greg Gachassin and Cartesian. This matter is remanded to the EAB for reconsideration of an appropriate penalty to be imposed under La. R.S. 42:1155 in light of the views expressed in this opinion. The judgment of the EAB is affirmed in all other respects. The costs of this appeal, totaling $6,086.00, are to be paid one-half by appellants, Greg Gachassin and Cartesian, and one-half by appellee, the Board of Ethics, in the amount of $3,043.00 each.
MRT — concurs by WRC
