October 11, 2002 Friday
SECTION: METRO; Pg. 6
LENGTH: 617 words
HEADLINE: Our own Billy Carter
When Ray Nagin took over as mayor, his plan wasn't merely to give a different group of political hacks a chance at the trough. He promised to clean up city government and to run it in a businesslike manner.
Now his own brother-in-law, Cedric Smith, has provided a vivid illustration of the problems that the new administration has to fix.Apparently without Mayor Nagin's knowledge, Mr. Smith bought a majority share of Metro New Orleans Transit, which holds a $746,000-a-year contract to help the Regional Transit Authority with contract negotiations, finance, legal advice and oversight of capital improvements. Never mind that Mr. Smith has no experience running a public transit system.
After learning of the deal from a Times-Picayune reporter Wednesday, Mayor Nagin was appropriately outraged. He said that the "contract, one way or another, is history."
That reaction is encouraging. But the real test of Mayor Nagin's mettle is whether he moves quickly to get New Orleans out of the Metro contract -- which was appalling long before Mr. Smith got involved.
If there were an award for sleaziest political deal in New Orleans, Metro's contract with the RTA would be a leading nominee. The services included are basic management duties that the RTA's management staff should be able to handle.
Yet the contract, which has been in place since former Mayor Sidney Barthelemy's administration, keeps getting fatter and fatter. The company's fees grew from less than $160,000 a year in 1995 to about $450,000 a year, before the RTA board renewed the contract last fall for five years at an annual price of $746,000. It can't be a coincidence that when the board, appointed by then Mayor Marc Morial, approved that contract extension, Metro was owned by Glenn Haydel -- the then-mayor's uncle -- and two partners.
What's especially obscene is that, with each change of administrations, a new politically connected buyer steps forward. Mr. Haydel and his partners bought the company from associates of Mr. Barthelemy after Mr. Morial took office. After buying out his partners this year, Mr. Haydel has now sold control to Mr. Smith. Plane tickets may not be transferable, but the right to help yourself to the RTA's money certainly is.
Mr. Smith says he wasn't required to inform the mayor that he had bought control of Metro. And while Mayor Nagin says he was shocked to learn of the deal, he and his advisers clearly worried about Mr. Smith. Before taking office, Mr. Nagin sent Mr. Smith a letter telling him not to try to make money or gain favors from his relationship with the new mayor. Nagin staffers have dubbed Mr. Smith "our own Billy Carter," after President Carter's embarrassing brother.
Mayor Nagin says his brother-in-law did raise the possibility of buying into Metro in April. He also says he told Mr. Smith that doing so would be a bad idea and that the city would likely try to get out of the deal.
Under the terms of the contract, getting rid of Metro without cause could cost the city $500,000. But it might not take much effort to identify a cause: that the contract isn't needed and that the authority isn't getting its money's worth. It's impossible to believe that a company now controlled by someone with zero experience in public transit could provide $746,000 worth of benefits to the RTA every year.
In July, Mayor Nagin authorized the arrest of his cousin in a taxi corruption sweep. He should show the same willingness to put the public interest before family concerns in the Metro case. Getting out of the contract was worth exploring before. Doing so -- at the lowest possible cost to the city -- is imperative now.
LOAD-DATE: October 11, 2002
Seems to be an editorial, but not listed as such on LexisNexis