In July 2012, “Kenneth” was arrested in Calcasieu Parish, La., for possession of drug paraphernalia. But rather than take the case to court, the district attorney’s office offered him a deal: He could pay $600, attend a 12-step addiction program, submit to and pass regular drug tests, attend a self-esteem workshop called CADET and perform 80 hours of community service. Complete all of that, and the state would drop the charge. He agreed.
Kenneth — who because of the drug charge asked that his real name not be published — is one of thousands of people in the parish to participate in the program, known as pretrial diversion. He says his case manager was helpful. “When I had to meet with him, he’d get up early and meet with me at 7 a.m. so I wouldn’t be late for work. I appreciated that,” Kenneth says.
But as he neared the end of the diversion program, he still hadn’t completed his community service. So he was made an offer: Instead of the 80 hours of service he’d been assigned, Kenneth could go to Walmart, purchase $8 worth of gift cards for each hour of service, and donate those cards to the DA’s office.
By that time, Kenneth had a bit more money in the bank, though $640 was still more than a month and a half of his rent. But he also estimates that with his job and other obligations, it would have taken him a couple of years to complete all 80 hours of service. He bought the cards and brought them to the DA’s office. A receptionist made photocopies and put them in his case file. Three days later, he received the official letter — he had completed diversion, and the charge against him would be dropped.
According to documents obtained by The Post as well as interviews with several former employees of Calcasieu Parish DA John DeRosier, since at least 2011, DeRosier’s office has allowed and encouraged thousands of people accused of crimes to buy their way out of community service by purchasing gift cards and money orders. For the first several years, participants were told to donate the gift cards and money orders to the DA’s office. But in October 2015, DeRosier set up a nonprofit foundation, the District Attorney’s Community Assistance Foundation (DACAF), to collect and distribute the gift cards and money orders. The nonprofit is run out of the DA’s office, and staff members, including DeRosier’s secretary, often do foundation work while on public time. DeRosier himself confirmed these particular details in a phone call.
Because the gift cards weren’t logged or tracked at all until the nonprofit was established in late 2015, it’s impossible to say exactly how much money the office generated through the program, but according to recent tax receipts from the nonprofit and former staff members who agreed to be interviewed, the figure is at least several hundred thousand dollars.
Legal ethicists consulted for this article say even the stated purpose of the program is problematic, and possibly illegal. The most common way DeRosier’s office has used the gift cards is to purchase toys and clothing, which DeRosier and his staff then distribute throughout the parish, often at Christmas while riding in a firetruck. At times, local media have been invited to publicize the giveaways. DeRosier also visits churches or city halls to hand out gifts, or to distribute the gift cards themselves. He has donated to law enforcement groups, cultural organizations and dozens of other nonprofits.
According to three former staffers, gift cards have also sometimes been sent to DeRosier’s friends and supporters of his campaign. Ex-employees also allege that some in the office used the cards on themselves, purchasing gifts for their own grandchildren and other relatives. One former staff member called it a “slush fund” — a pile of money DeRosier uses to build up his public image and unofficially campaign for reelection.
The office’s record-keeping also appears to have been inadequate at times. Prior to the formation of the foundation, there appears to have been no effort to track the gift cards at all. But even after the foundation was started, tax specialists consulted for this article say the nonprofit’s tax returns are cryptic, vague and confusing, and lack supporting documentation.
In Louisiana, district attorney’s offices are required to undergo an annual public audit of their finances. The public audits of DeRosier’s office never mention the gift card program, nor is there any line item for gift-card revenue. The firm that had performed the public audit of DeRosier’s office each year of his tenure as DA also has significant conflicts of interest: The head of the firm was once DeRosier’s campaign treasurer and has donated tens of thousands of dollars to DeRosier’s campaign. The firm has also been paid tens of thousands of dollars by DeRosier’s campaign for accounting services.
The king of revenue
John DeRosier, 72, was first elected Calcasieu district attorney in a 2005 special election, then reelected in 2008 and 2014.
A registered Democrat, DeRosier has positioned himself as one of the toughest prosecutors in one of the most carceral states in the country. He has opposed moves to end life without parole for juveniles, and has been openly critical of the historic criminal-justice reform the state’s governor signed into law in 2017. DeRosier attracted some national attention when he testified against a 2018 ballot initiative to amend the state constitution to require a unanimous jury verdict to secure a felony conviction. In testimony before the state legislature, DeRosier acknowledged that the non-unanimous law was rooted in racism and Jim Crow, but dismissed that history — some say rather cavalierly — by telling a legislative committee, “It is what it is.” The remark drew an immediate rebuke from several black Louisiana lawmakers. The amendment eventually passed by nearly 30 points.
As I reported in 2017, when two Caddo Parish prosecutors were fired for falsifying a federal form to obtain automatic rifles from the U.S. military, several DAs around the state hired the two men on as freelance prosecutors. DeRosier was one of them.
DeRosier has been particularly effective at generating revenue for his office. According to public audits, during his tenure annual revenue to the Calcasieu Parish DA’s office jumped from $1.3 million in 2006 to $6.4 million in 2017. Annual expenditures jumped from $1.3 million to $5 million. Nearly all of the excess revenue has come from the fines and fees associated with programs such as diversion. This revenue has jumped an astonishing 30-fold, from just $182,000 during DeRosier’s first year in office to $5.9 million in 2017.
Much of that increase has come from a controversial traffic-ticket program called Local Agency Compensated Enforcement, or LACE. Under LACE, DeRosier and a handful of other district attorneys pay overtime to state troopers — and in some cases, local police — to stop motorists for traffic violations. The motorists are then given a choice: They can either take a ticket, or they can promise to make a direct payment to the local district attorney’s office, and the ticket is dismissed. Since the program began, regular tickets issued during on-duty hours have dropped dramatically across Louisiana. LACE tickets written while cops work overtime have more than compensated for the decline. The DAs call the program “pretrial diversion” for traffic offenses.
In Louisiana, more than half the funding for the state’s perpetually under-funded public defenders comes from traffic fines. For every traffic ticket that goes through the courts, the local public defender gets $45. For every ticket issued through LACE, the public defender gets nothing — unless the local DA agrees to share.
According to Harry Fontenot, the chief public defender in Calcasieu Parish, as LACE poured millions into DeRosier’s office, funding for his own office dropped by 40 percent. It’s worth pointing out here that while Louisiana’s prosecutors get health insurance, a retirement package and a full range of benefits from the state, public defenders are considered contract employees and get no state benefits.
According to documents obtained by The Post as well as interviews with several former employees of Calcasieu Parish DA John DeRosier, since at least 2011, DeRosier’s office has allowed and encouraged thousands of people accused of crimes to buy their way out of community service by purchasing gift cards and money orders.“I’m already operating with a skeleton staff,” Fontenot says. “My people work hard. They work long hours and take on a lot of cases — way more than they should need to. A couple years ago, a local business donated a dozen turkeys to my office for the holidays. We had to give them back, because we aren’t allowed to accept any gift worth more than $50.”
The numbers back Fontenot up. The Lens reported in 2017 that from 2011 to 2012, the number of conventional traffic tickets in the parish dropped by 42 percent, while from 2014 to 2016 the number of tickets issued through LACE nearly tripled.
There was a brief public backlash when LACE was first exposed, including allegations of fraud against several state troopers and other officers participating in the program. The Southern Poverty Law Center has filed an ethics complaint against DeRosier and three other district attorneys. Even the chief justice of the Louisiana Supreme Court has been critical of the program.
Despite all of that, LACE was up and running again as of early last year, although some DAs have stopped participating. DeRosier did agree to start sharing some money from the program with Fontenot’s office, though a judge in another part of the state recently struck down a similar arrangement, making the sensible point that the salary of the attorney representing a defendant shouldn’t be dependent on the office of the person prosecuting that defendant. Fontenot says his office wasn’t getting much from DeRosier —about $3,000 to $5,000 per year. According to Fontenot, shortly after I began making phone calls for this story, DeRosier canceled the revenue-sharing arrangement.
At about the same time that DeRosier was ramping up his participation in LACE, he was also implementing his gift-card program. For all its considerable problems, LACE at least was done in the open, and the tickets were largely accounted for. It has also been widely reported in the media. The same can’t be said for the gift cards.
‘There were gift cards everywhere’
It isn’t clear exactly when DeRosier’s office began to offer an option to buy out community service, but according to Jenny Odom and McKenzie Marceaux Newman, two secretaries who previously worked in the office, it dates back to at least 2011. Odom started working for DeRosier in March 2012 as a secretary for the misdemeanor probation section. Newman started in June 2011 as a student worker, but by 2015 was head secretary for the pretrial diversion office.
The option was available to any defendant admitted to one of two programs: pretrial diversion or supervised misdemeanor probation. Both the pretrial diversion and misdemeanor probation offices are run by Barbara Adam, a longtime employee in the DA’s office dating back to the tenure of DeRosier’s predecessor, Rick Bryant.
Pretrial diversion was instituted in Calcasieu Parish in 1991. As with similar diversion programs across the country, defendants arrested for minor crimes such as shoplifting, simple battery, marijuana possession, driving under the influence and other infractions could avoid criminal charges if they completed a program that might include a ropes course, counseling, attending church services or submitting to drug testing. Participants were charged $50 per month, and the program also typically included community service. When DeRosier took office, he set the enrollment fee for diversion at $600, payable upfront or in installments.
Supervised misdemeanor probation — the other program for which Calcasieu Parish offers the gift-card option — is a sentence imposed by a judge, usually for similarly low-level crimes. But unlike diversion, it isn’t voluntary, and it’s imposed after someone has been convicted. But the requirements are often similar — drug testing, substance abuse treatment and usually community service, either in addition to court costs and fines, or sometimes in lieu of them.
Under either program, a defendant could buy out his or her community service obligation by purchasing gift cards and donating them to the DA’s office. They could get the cards from stores such as Walmart, Sam’s Club and Toys R Us. The policy was later changed to allow defendants to buy out up to half their community service. The price also dropped, from $10 per hour of service to $8.
DeRosier insists he has never allowed anyone to buy out more than half of his or her community service. But Newman, Odom and two other former employees of the office say that isn’t true. And Kenneth’s file, which he shared with me, indicates he was allowed to buy out all 80 of the hours he was assigned.
(Matt Rota for The Washington Post)The most common way DeRosier’s office has used the gift cards is to purchase toys and clothing, which DeRosier and his staff then distribute throughout the parish, often at Christmas while riding in a firetruck.
DeRosier has subsequently used the gift cards in a number of ways. The most visible uses are the toy and gift drives his office runs around Christmas. Handpicked staff members are given a shopping list that includes items such as toys, bicycles and clothing. A supervisor then pays for the items with gift cards or with a check or debit card from the foundation. DeRosier and his staff then ride around the parish in a firetruck and distribute the items at churches, city halls and other community gathering spots. According to three former staff members, DeRosier has also sent gift cards to friendly journalists, community leaders and supporters of his campaign, typically on special occasions or after the death of a relative.
“When he would deliver these toys, he was shaking these people’s hands, handing out toys and cards. It was a feather in his cap,” Odom says. In a phone interview, DeRosier says as far as he knows, the cards were never given to individuals for personal use. They were either donated to another foundation, used for toy drives or used to purchase items for hurricane and flood relief.
According to Odom, Newman and two other former employees of the office, when participants in either program opted to purchase gift cards, they’d bring the cards to the office and give them to a receptionist. The receptionist then entered the amount of the card into a receipt book. They’d give one copy of the receipt to the defendant, and one to staffers overseeing the case. The receptionist would also make a copy of the gift cards themselves for the defendant’s file.
According to these former employees, the receipt books were used only to verify which defendants had paid. “There was no accounting or verification of the amount that we took in each day,” said Odom. “That seemed like a big problem to me.”
One of Newman’s responsibilities was to run reports on the enrollment fees and monthly payments required of people accepted into diversion. “I would run reports on a daily basis showing all that we took in,” she says. “And then I’d have to make sure that I had the money orders that matched those pretrial fees. The deposits and money orders would go directly to our payroll and accounting.”
At the end of the year, these figures are tabulated and recorded in the publicly available annual financial reports for the DA’s office. But gift-card revenue was not included in those numbers. “They specifically instructed me not do anything with the gift cards for the community service,” Newman says. “I was told to leave those out.”
Perhaps because there was no effort to log and track the cards, Newman and Odom say the office was sloppy in handling them. “One time, one of the receptionists quit, and we had to clean out her desk,” Odom says. “We moved her desk, and there were gift cards everywhere. Piles of them behind her desk. When we moved the copier, there were more gift cards. Just dozens of them that no one had noticed.”
Odom also saw staff using the gift cards for themselves, or for relatives. She says she first saw it before her first Christmas at the office in 2012. “At one point, [Barbara Adam] had her secretary load up a box of toys and put them in a separate room. I found out later that each box was for one of the probation officers to give to their grandchildren. I was like, I thought these were for needy families. Why are all these people in the office getting the toys? And then every year, it just got worse and more out of hand.”
Odom says one year Adam herself gave Odom a gift card and asked her to buy matching hat-and-glove sets, one each for a boy and a girl. “I went and got them and brought back the receipt. And then I watched her put them in a box, address it and send it to her grandkids in Texas.”
Odom says she tried to voice her concerns about what she had seen. “I was complaining. And I was complaining. And I was complaining. I told them, ‘I can’t do this anymore. This is the district attorney’s office. This is not the reason why we have this money. It’s supposed to go to needy families. It’s being abused.’ They wouldn’t listen.”
The final straw for Odom came in October 2015. “I was at my desk and Mr. DeRosier came in and he says, ‘I need $5,000 in cards — in gift cards.' He wanted them in $1,000 denominations. One of the other secretaries said, ‘Oh, okay, I’ll check and see if we have that much.’ But then he repeated it in this tone that was like, ‘I’m not asking you, I’m telling you.’ And then he walked out of the office. When he left, two secretaries were discussing whether they even had that much on hand — and what they should tell them if they didn’t.”
The whole scene made her uncomfortable. “If he got the $5,000, there would have been no accounting for any of it. Again you have to understand, there was no way of knowing how much money was coming in and going out on these cards. They weren’t logged. No one tallied them up at the end of the day. Did we take in $20,000 and spend $2,000? What happened to the money left over? No one knew.”
That month, Odom and her husband wrote a letter to DeRosier laying out her objections to the gift cards. According to Odom, her husband later spoke on the phone about it with DeRosier.
When I asked DeRosier about the allegation that staff members used gift cards for themselves or their families, he replied, “That not only would surprise me, that would shock me.” But Odom and her husband made precisely that accusation to DeRosier.
In fact, it was shortly after Odom and her husband complained that DeRosier create DACAF. The main purpose of the organization is to collect and distribute the gift cards and money orders. It’s run out of the DA’s office, the address and phone number on its articles of incorporation are those of DeRosier’s office, and those articles list DeRosier as president of the foundation’s board. At the time it was formed, the majority of the board members were also full-time employees of the office.
According to the former staffers interviewed for this article, after Odom complained, DeRosier also ordered an audit of the gift cards. When I recently asked for a copy of the audit in a public records request, the public records custodian told me that no such audit exists. When I asked for records from the foundation, the custodian replied that the foundation is not part of the DA’s office, and therefore not subject to public records laws.
At some point after establishing the nonprofit, DeRosier made another change to the community service buyout option: Where the office previously accepted gift cards from several stores, going forward, participants could purchase cards only from Stine, a Louisiana chain of home improvement stores. There’s only one Stine in Lake Charles. Barbara Adam’s sister is the store’s general manager. (Adam was also one of the initial board members of the foundation.)
“It didn’t make much sense,” says Newman. “The whole point was supposed to be to buy clothes and toys for needy families. Stine sells lumber and hardware.”
DeRosier says the switch was part of a decision to focus on relief from natural disasters. He also said he has regularly worked with the owners of Stine on various community projects. “I could care less whether [Barbara Adam] has a sister over there or not,” he said. “That is of no significance to me.”
The office also began accepting money orders instead of gift cards. According to Newman, that change made defendants much more likely to pay up than to engage in community service.
“They had to pay enrollment fees and other charges with a money order anyway,” she says. “So if they could afford it, it was just easier for them to just go ahead and buy out their community service while they’re at it instead of going to Walmart or Sam’s Club.”
More recently, the office has shifted away from gift cards altogether — defendants now can buy up to half their community service with only a money order to DACAF. (It’s worth noting that technically, defendants always had the option of donating to a nonprofit other than DeRosier’s, but former staffers say participants in the programs were almost always encouraged by probation and diversion supervisors to donate to DACAF.)
According to Newman, after DeRosier set up the foundation, the District Attorney’s office also begin logging the gift cards and money orders into a computer. But those figures were kept separate from the office’s publicly accessible finances. And she says gift-card and money order revenue from community service buyouts still weren’t included in the office’s annual financial figures or its annual audit.
“I asked several times if I should run reports on the cards, now that we were logging them in the computer. It would have been easy to do with that software,” she says. “They always told me no. No need to balance them in. They told me to just collect them and send them to Mr. DeRosier’s secretary.”
Jenny Odom resigned in October 2015, in part due to her squeamishness about the gift cards. McKenzie Newman was fired last July. When she asked why, she says she was told that because Louisiana is an at-will employment state, the office didn’t need to provide a reason. At the time she left, she estimates that just her office — pretrial diversion — was taking in about 10 money orders per day. The most common amount of those money orders was $128, or half of the most common community service requirement (32 hours), at $8 per hour. That would mean that at a rough estimate, at least as of last year, the pretrial diversion office alone was taking in about $1,280 each business day in money orders, or more than $300,000 per year.
Bookkeeping
Though DeRosier’s office continues to keep gift-card and money order revenue out of its public financial figures, DACAF is required to file Form 990 tax returns. So far, two of the nonprofit’s 990s are publicly available, for 2016 and 2017.
I asked two experts in nonprofit tax law to look over the forms: Marcus Owens, a partner at Loeb & Loeb and the former head of the IRS exempt organizations division; and Dianna Deeley, a consultant for nonprofits with more than 25 years of experience in the nonprofit world.
Both criticized the returns as inadequate. In an email, Deeley wrote that it is unusual that the members of the DACAF board of directors neither volunteer hours nor are paid for them. And the foundation has no staff. “Everything, hours, compensation, is zero,” she writes. “So evidently, no one ever sits down and says, ‘Oh, yes, let’s spend the money we’re responsible for on X, Y, or Z, but not W.’ This does not make sense.” DeRosier confirmed in a phone call that his staff members sometimes do foundation work while on the public dime.
(Matt Rota for The Washington Post)The final straw for Odom came in October 2015. “I was at my desk and Mr. DeRosier came in and he says, ‘I need $5,000 in cards — in gift cards.’ He wanted them in $1,000 denominations.
Deeley adds: “There’s no description of how they tracked the use of the grants they made. This is unheard of. There are no minutes. There is no written conflict of interest policy, and no way laid out to report a possible conflict ... There are no publicly available documents. Those are eyebrow raising, in any organization ever.”
Both Owens and Deeley also said they couldn’t make sense of the figures in the returns. “The returns are full of what seem to be inexplicable errors and characterizations of revenue,” Owens says. “For example, in the 2016 return, there’s $369,000 in program service revenue. Program service revenue is revenue for services. A hospital has program service revenue from providing medical care. A school or university would have program service revenue from tuition. It’s a fee-for-service thing, not a contribution. But there really isn’t anything described in the return that would suggest they’re selling any goods or services to the public.”
He adds: “I think what it shows is that the accountant who prepared these returns is sort of floundering. She’s not sitting there going through the books and records, adding things up and calculating, because my guess is that there are no records.” He adds, half-jokingly, “Why weren’t they at least consistent in fabricating numbers?”
DeRosier waves away such criticism. “We gave all the documentation to the accountant,” he says. “They ask for it, they prepare a tax return, and we’re done. I can’t comment on what some IRS agent has to say about it.” (When reached by phone, Donna Williams, the accountant who prepared the 990s, asked that I send her questions over email. I did so, but she then did not respond to those questions.)
Under Louisiana law, every district attorney’s office must undergo an annual audit organized by the Louisiana Legislative Auditor, a state agency. (This is different from the audits DeRosier says he ordered for his nonprofit.) But despite the fact that the gift-card program has been in place since at least 2011, the annual public audits of DeRosier’s office have never assessed how much revenue the gift cards brought in to the office. The audits have never criticized the office for failing to include the gift cards in its annual financial reports. In fact, none of the public audits mention the gift cards at all.
Since DeRosier was elected, the public audit of his office has always been conducted by Langley, Williams & Co. of Lake Charles. The founding partner of that firm is Lester Langley Jr.
Langley has a long history with DeRosier. He was the treasurer for DeRosier’s first campaign, and over three elections dating back to 2005, Langley, his wife and his businesses have donated at least $29,500 to DeRosier’s campaigns, according to campaign finance disclosures. Over the same period, Langley’s firm was also paid more than $30,000 by DeRosier’s campaign for accounting services.
In an email response to my questions, Langley said he resigned as campaign treasurer once DeRosier was elected. This is true. But he also writes, “After Mr. DeRosier was elected, we resigned as the campaign bookkeepers in January 2006, at the same time I resigned as treasurer.” According to campaign finance records, between 2007 and 2010, DeRosier’s campaign made eight payments to Langley’s firm totaling over $18,000 for services that included “bookkeeping,” “campaign reporting” and “financial disclosure reporting.”
Langley’s son Nicholas is a partner at the accounting firm. He was also on the original board of directors for DeRosier’s nonprofit. Over email, the elder Langley said his son was offered a position on the board but “immediately declined to accept the position due to concerns of independence.”
That would have been in late 2015. But Langley was listed as a member of the board on the foundation’s 2016 tax returns, which were filed in November 2017. In fact, in March 2018, DeRosier’s secretary sent an email under the subject “Foundation Board Meeting.” In the body she wrote, “Just a reminder . . . We need to have a meeting so Nic Langley can be removed from the board.”
DeRosier and Langley both point out that Langley’s firm also conducted the audits for DeRosier’s predecessor, Rick Bryant. “He’s just very active in the community and in politics,” DeRosier says.
But Langley doesn’t appear to have the connections to Bryant that he has with DeRosier. A search of campaign finance records reveals no donations by Langley to Bryant’s campaign, and no expenditures by Bryant’s campaign to Langley’s firm.
I asked DeRosier if given all of this, Langley should be doing the public audit for his office. He replied, “I don’t see a conflict.” Langley also said he sees no conflict.
The DA’s defense
In our phone call, DeRosier said he was certain that judges in Calcasieu Parish are aware of what he is doing. “I’m assuming that only because it’s not a secret,” he said. Under Louisiana legal ethics guidelines, judges are strongly discouraged from speaking to the media. But several people I spoke with, including two former Louisiana prosecutors and two current public defenders, say they’d be shocked if judges had approved of the option to buy out community service, especially for misdemeanor probation.
“Misdemeanor probation is a court-ordered sentence,” one former Calcasieu Parish prosecutor said. “A district attorney cannot unilaterally alter the community service portion of that sentence in exchange for a donation to his slush fund. When the judges hear about this, they’ll be livid.”
DeRosier also told me that he ran the idea for his nonprofit by Louisiana Inspector General Stephen Street, implying that Street gave approval for the idea. “I visited with the legislative auditor and the bar association, and both referred me to the state inspector general,” DeRosier said. “We went and met with him and explained the whole program to him. That’s about the time I formed the foundation.”
But in an email, Street was emphatic that this was not the case. “OIG has no legal authority to approve or disapprove of the non-profit activities described,” he wrote. ”I have not reviewed, nor am I familiar with the specifics of this foundation or its activities, and therefore did not give any permission, approval or disapproval for its establishment, funding and operations.”
DeRosier also repeatedly told me he wanted to be completely open and transparent, and said I was welcome to return to Lake Charles to view any documents I wished. But when I asked for a couple of specific documents, the conversation could get confusing.
For example, according to Jenny Odom, McKenzie Newman and two other former employees of the DA’s office, there should be boxes of receipt books in which defendants’ gift cards and money orders were recorded, dating back at least to 2011. But when I made a public records request for a copy of these books, DeRosier’s public records custodian wrote, “no such item exists.”
“Multiple receipt books definitely existed as of July 17, the day I left,” Newman says.” I personally helped pack some into boxes. I remember at least three boxes, and there must have been 100 or so receipt books in each box. If those books no longer exist, it’s because they got rid of them after they received your request.”
Odom agreed. “There should be receipt books,” she says. “Lots of them. They’re either lying to you, or they’ve done something with them.”
Carla Sigler, a former high-ranking prosecutor under DeRosier and a former board member of DACAF, also agrees with Odom and Newman. “I have personally seen a red receipt book used to log in gift cards and I believe all gift cards were supposed to be logged into it,” she says.
When I asked DeRosier about the receipt books, he first said I was free to come down and look through them. But a few seconds later, he added, “Right now we don’t know where they are. They may be in our closed files somewhere in a warehouse.” Russ Haman, DeRosier’s office manager at the time and the director of DACAF, then added that the receipt books “could be in three or four different ones.”
When I asked DeRosier how buyout revenue was tracked after he formed the foundation, it was again difficult to get a clear answer from him. He again said revenue was calculated by the firm that did the audits he ordered for the foundation. But when I asked for copies of those audits, he suggested that the only written product to result from those audits were the foundation’s basic tax returns.
That, too, is odd. According to a spreadsheet of DACAF disbursements provided by DeRosier’s current secretary, the foundation paid accountant Donna Williams to prepare the tax forms. And it’s Williams’s signature on the tax forms. (Williams is not affiliated with Langley, Williams & Co.)
But in January 2018, the foundation also paid Langley, Williams & Co. $2,667 for what the list calls a “gift card audit.” Eight months later, the foundation paid the firm another $3,900 for an “annual audit.”
When I asked whether I could see the “audits” the foundation paid Langley’s firm to conduct, DeRosier suggested that he had paid Langley’s firm thousands of dollars for an audit that produced no written document. “I don’t know if they furnished us with a long form audit, or whether they just said you have X amount of dollars in gift cards,” he said. “I don’t know to what extent that it is in writing.”
Deeley says that as far as she knows, there’s no such thing as a verbal or oral audit. “I have never, ever heard of that. Not in all of my years in this field. To pay a CPA to conduct an audit but then to ask for no written record of that audit — well, it’s incredibly strange. Really strange. It’s just weird.”
Over email, Langley wrote that his firm did look into the gift-card revenue prior to the establishment of the foundation, but didn’t include that revenue in the public audits of DeRosier’s office because the “program was not deemed to be material to the overall audit and the financial statements.” This seems odd, given that the office was reportedly taking in hundreds of thousands of dollars in gift cards.
After the nonprofit was established, Langley writes that his firm provided “a detailed inventory of the credit cards and the outstanding balances remaining on the cards that were being placed under the control of the foundation.” He added, “we assisted them with establishing accounting records for the foundation that would account for the revenues and expenditures of the foundation.”
But when I asked if there were any written reports documenting any of this, he replied, “We have never conducted an audit of the foundation since the Louisiana Legislative Auditor does not require an audit to be performed due the low level of revenue generated annually.”
Again, according to multiple former staffers, the community service buyout option was bringing in hundreds of thousands of dollars.
After our call, DeRosier’s secretary did send me the expenditures spreadsheet, which he said included every disbursement the nonprofit has made since its inception in October 2015. The spreadsheet lists hundreds of disbursements from late 2015 through 2019. Some were made with gift cards, some with a check, and others with a debit card. The document includes donations to charities and nonprofits, as well as large purchases made by DeRosier’s staff from stores like Walmart, Target and Stine. Most of those larger purchases, donations, and expenditures are labeled as toy drives, Thanksgiving dinners for the needy, or disaster relief.
I did ask for five receipts from times when DeRosier or his staff bought items for toy drives or disaster relief. DeRosier’s office sent them, and they check out. I also picked three foundations from the spreadsheet and contacted them to verify that the foundation had indeed given money. Those checked out as well.
But Deeley still says the expenditures spreadsheet is confusing and incomplete. “They didn’t break things out at all,” she says. “I ran out of patience to try to create rational giving categories. It’s a terrible mess.”
Moreover, a record of disbursements goes only so far in ensuring integrity if it can’t be checked against some documentation of revenue. The spreadsheet does provide lump sums for gift-card revenue for the years 2016 through 2019, but there’s no indication of what, if any, documentation supports those sums. And more importantly, the spreadsheet does not include revenue from money orders – a significant omission, since the spreadsheet covers the period in which DeRosier’s office began phasing out gift cards and encouraging the use of money orders instead. In fact, according to Newman, by 2017 the vast majority of participants in the program were doing so with a money order.
Despite all of this, in our phone call DeRosier continued to insist that the revenue his office generated from community service buyouts was well documented. I relayed to him what Newman had said — that she was specifically told to not run computer reports on that revenue, and asked him to explain how revenue was tracked. He replied: “My appreciation of the way it was accounted for was within each individual file. That’s all I can say.”
In other words, the only way to determine how much revenue the office has been bringing in from community service buyouts is to look in the individual case file of each person who purchased a gift card or money order, find the receipt for that purchase, and then add up all the receipts. This would require sorting through thousands of files. And for pretrial diversion, the files are kept for only three years.
“That is just absurd,” Deeley says. “Just terrible accounting. That isn’t how you track revenue.”
There are also other problems with the spreadsheet of disbursements DeRosier provided. For example, the expenditures listed in the spreadsheet don’t match the expenditure figures on the foundation’s tax returns. The sum of the expenditures is also far short of what former staffers estimated the office took in from gift cards and money orders each year. Recall that according to Newman’s estimation of a typical day, the diversion office alone was taking in roughly $300,000 per year in community service buyouts. Another former staffer says Russ Haman once claimed it contained at least $200,000. Yet annual total expenditures in the spreadsheet range from just $24,000 in 2018 to $135,000 in 2016.
Even if every disbursement by the nonprofit were well-documented and closely audited, it would still amount to a pool of publicly-derived funds that DeRosier can direct as he sees fit, with little oversight or accountability. “Even if there’s no corruption, even if you like the way he’s spending the money, this is deeply problematic,” says Erin Murphy, who teaches ethics at New York University School of Law. “If you want to take money from people in these programs and spend it on, say, needy families, or children with cystic fibrosis, then do it publicly, within the organizational structures that exist. Here, the DA is funding his own pet causes with public money, but without any input from the public. How do we know he isn’t picking causes that benefit him personally or politically?”
To give just a few examples, DACAF has donated to a pit bull rescue foundation, to Xavier University and to the McNeese State University football and rodeo teams. It has given to the hunters’ conservation group Ducks Unlimited and to the Cajun French Music Association. He donated door prize money for meetings of his own misdemeanor probation officers and has donated thousands of dollars for various law enforcement conferences, including the Louisiana State Troopers convention, and a conference of state police chiefs.
Perhaps more controversially, the foundation has also given tens of thousands of dollars to churches and other religious organizations, some for explicitly religious activities. It gave $3,000 to support one church’s overseas missionary program, $2,000 to sponsor another church’s golf tournament fundraisers and $500 for a “prayer breakfast.” Since the nonprofit’s founding in late 2015, it has donated more than $21,000 to the Diocese of Lake Charles alone, including $2,000 toward a new sound system for one church, $663 for a freezer in another and $5,000 for “community services.” In 2016, the foundation gave $2,000 to support a Baptist tent revival.
Unequal justice
Pretrial diversion programs are commonly touted as part of a criminal-justice reform agenda, and on its face, the idea seems sound. But as is often the case with reform, the devil can be in the details. Diversion programs vary widely across the country, within states and sometimes even within the same jurisdiction. In some places, diversion programs are free. In others, they can cost thousands of dollars. In many places, enrolling in a diversion program means forfeiting your right to a trial — if you can’t make the payments, you’re automatically convicted of the original crime.
Louisiana isn’t the only place where prosecutors have been accused of using diversion to swell office coffers. A recent lawsuit alleges that the office of Maricopa County, Ariz., DA Bill Montgomery generated $15 million in revenue over six years by sending diversion participants to a drug rehab clinic that charged patients $1,000, then sent $650 back to Montgomery’s office. Personal enrichment also isn’t an uncommon allegation. A 2016 investigation of diversion programs by the New York Times and ProPublica found several prosecutors accused of using diversion funds on themselves. The proliferation of diversion programs has also given rise to a cottage industry — for-profit diversion programs run by private companies.
More than 25 years ago, the Louisiana attorney general wrote an opinion stating that DAs could collect fees from diversion programs, but they could charge a participant only what it cost to put him or her through the program. Any other use of the fees, the opinion stated, “would be payments for the dismissals of prosecutions,” and that, of course, would be illegal.
Louisiana prosecutors have largely ignored that opinion. Because diversion programs tend to be run entirely by DA’s offices with no oversight from the courts or outside agencies, there have been myriad problems with accounting, transparency and allegations of grift. In July, Politico published an extensive report on how DAs across the state have gained millions in revenue from diversion — typically at the expense of the courts, police departments and public defenders. In 2016, the Louisiana Legislative Auditor attempted to publish an assessment of the finances of DA’s offices. Instead, the report concluded such an assessment was nearly impossible because so many offices had been inadequate in reporting revenue.
DeRosier’s gift card/money order option takes all of this a step further. He not only substitutes court fees that fund various agencies with an enrollment fee that goes to his office, but he expands his office’s revenues by allowing defendants to buy out community service. With misdemeanor probation, Louisiana judges will sometimes waive court fees for poorer defendants and substitute community service. By letting those same defendants then buy out that community service, DeRosier secures even more funds for the D.A.’s office and its foundation.
One former prosecutor in Calcasieu Parish believes there’s a big incentive problem at play here. “Not every crime deserves community service,” he says. “But when your personal foundation benefits financially from community service, there’s a strong incentive to require it when it isn’t necessary.”
Some former staffers also argue that the program benefits wealthier defendants who can afford to buy out their community service. DeRosier disputes this. “You’d be surprised,” he says. “That’s probably totally inaccurate ... It’s not a whole lot of money.”
Since I started looking into the gift-card program, Carla Sigler has resigned from the board of DeRosier’s nonprofit. She was the attorney who filed the foundation’s articles of incorporation for DeRosier. “I was recently informed by credible sources that there is and has been internal theft of the gift cards, toys, and money collected for and by the District Attorney Community Assistance Foundation,” she writes in an email. “Shortly thereafter, I resigned as agent for service of process for the foundation, and as its secretary.” Sigler had already resigned from her position as an ADA in the office.
A week after I made my document request, the public records custodian either resigned or was removed from that position. A couple of weeks later, Russ Haman gave notice of his resignation as DeRosier’s office manager. Haman is also director of the nonprofit; it isn’t clear whether he resigned from that position as well.
The gift cards that Kenneth bought for the DA’s office in lieu of community service ended up in some odd places. In November 2014, four months after he purchased them, the three $200 cards he bought were redeemed at the Walmart in Sulphur, a town in Calcasieu Parish. But whoever redeemed them didn’t spend them. Instead, the three $200 cards were exchanged for six $100 cards. Two of those cards were then used two weeks later at a Walmart in The Woodlands, Tex., 143 miles away. Another was used in West Orange, Tex., 28 miles away. The other three were used in Lake Charles and Sulphur.
More interesting is what happened to the $40 card. More than four years after it was purchased, the card was used in the small town of Eunice, La. Whoever used it bought, among other things, denture cream, two knives, over-the-counter heartburn medication, rice, vanilla wafers, bread, coffee products and K-Y lubricant.
Regardless of who used the card, that doesn’t seem like a shopping list consistent with the stated purpose of the program. When I told Kenneth how the cards he bought had been used, he was upset. “I mean, damn. They told me it was going to go for something like Toys for Tots,” he says. “You know, bicycles for kids and stuff. Now you tell me some son of a b---h used my money to buy knives and cookies and K-Y? That’s some real bulls--t right there. If I had known that, I would have picked up trash instead.”
Read more by Radley Balko:
An Alabama man has been on death row for 21 years. He is almost certainly innocent.
How two overworked public defenders and six judges left a New Orleans man with a life sentence
Atatiana Jefferson was a victim of law-and-order rhetoric
We need to fix forensics. But how?
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