Wednesday, April 4, 2007

Chutzpah on wheels -- Times Picayune Editorial, Nov. 13, 2002

November 13, 2002 Wednesday

LENGTH: 521 words

HEADLINE: Chutzpah on wheels

Glenn Haydel wants his patronage back.

Early in Marc Morial's mayoral administration, Mr. Haydel, who is Mr. Morial's uncle, and two partners bought control of Metro New Orleans Transit Inc. -- and a lucrative management contract with the Regional Transit Authority -- from allies of former mayor Sidney Barthelemy. Subsequently, the management contract ballooned to $746,000 a year, and the firm and its subcontractors took in nearly $7 million from the RTA.

After buying out his partners earlier this year, Mr. Haydel sold a majority interest in Metro New Orleans Transit to Mayor Nagin's brother-in-law, Cedric Smith, after the new administration took office. But Mayor Nagin was outraged when he learned of the deal and said that the contract would be "history."

Now Mr. Haydel is accusing Mr. Smith of gaining control of the transit management company through "fraud, misrepresentations and duress" and is suing to dissolve the sale.

In truth, Mr. Haydel has no good reason to complain, and going to court to keep control of a fat patronage contract takes a lot of gall.

The suit alleges that Mr. Smith repeatedly said the RTA management contract would be in danger from the incoming Nagin administration unless Mr. Smith became majority owner of the company. Mr. Haydel presumably was in no position to complain about the incursion of politics into public contracting, since his company has benefited handsomely from such patronage over the years.

What Mr. Haydel didn't know at the time, the suit suggests, was that Mr. Smith didn't have the influence he was peddling or that the new mayor hadn't blessed the Metro deal. Mr. Haydel apparently had no idea that Nagin administration staffers sometimes refer to Mr. Smith as "our own Billy Carter."

It is impossible to feel bad for Mr. Haydel. For one thing, he admits to selling 70 percent of a lucrative business for a mere $700. If this is Mr. Haydel's notion of sound financial judgment, and his company has a contract to help manage the RTA, it's no wonder the authority has been in such parlous condition for so long.

More fundamentally, Mr. Haydel was trying to take advantage of the system. If his own allegations are true, Mr. Haydel was trying to hang on to a piece of a bloated contract by giving a sweet deal to someone whom he took for a political insider.

Still, it's surprising that Mr. Haydel filed suit. People who try to profit from unethical activities rarely call in the authorities when they think they've been fleeced. Maybe Mr. Haydel got the idea from state legislator Kyle Green, who unsuccessfully sued Gov. Foster for double-crossing him on a backroom deal.

In truth, it doesn't matter who controls Metro. There is little or no need for a management contract at the RTA, which has its own managers. Mr. Smith has zero experience managing a public transit system, yet Mr. Haydel still promised him a $300,000-a-year salary plus 70 percent of the company's profits. If Mr. Haydel could still make money while giving Mr. Smith such generous terms, it clearly isn't providing many worthwhile services to the RTA.

1 comment:

bayoustjohndavid said...

At the time it was claimed that Smith acted without Nagin's knowledge and that Nagin was embarrassed or even mortified when he learned of his brother-in-law's actions. The local media swallowed the "Nagin's own 'Billy Carter'" spin hook, line and sinker. At the time it was totally believable. However, the "embarrassing" Cedric Smith has since served as a paid adviser to Nagin's "cash-strapped" re-election campaign and was a featured speaker at Nagin's second inauguration.