[StBernard] Grand jury slams former St. Bernard Hospital CEO Wayne Landry and board member but issues no indictments

[Westley Annis]

Grand jury slams former St. Bernard Hospital CEO Wayne Landry and board
member but issues no indictments 
BY JOHN SIMERMAN | jsimerman at theadvocate.com Nov 30, 2016 - 2:00 pm 

A state grand jury issued a report Wednesday accusing former St. Bernard
Parish Hospital leader Wayne Landry and a former hospital board member, Jim
DiFatta, of conspiring to wrest control of the $70 million facility from the
Parish Council while presiding over a "grossly mismanaged" operation that
saw more than $32 million in losses over four years.

Yet the grand jury ended its lengthy investigation without indicting Landry,
DiFatta or anyone else on criminal charges.

The report says the grand jury, whose term expires Dec. 5, ran out of time
to follow up on an investigative audit last month from state Legislative
Auditor Daryl Purpera's office.

That audit said the public agency and foundation overseeing the hospital
spent nearly $100,000 under Landry's watch, possibly illegally, on Christmas
parties, events and gifts for doctors and employees. It also questioned a
lack of receipts for many credit card purchases and $1.4 million in payments
the hospital foundation made to a consultant long after the firm's written
contract had expired.

Wednesday's report, a rarity for a grand jury, closes out an investigation
that District Attorney Perry Nicosia's office launched nearly a year ago
with subpoenas for hospital financial records.

The report claims the investigation itself stymied a bid by Landry and
DiFatta to commandeer the public hospital through the St. Bernard Hospital
Foundation, a body formed in 2010 as a vehicle for capital fundraising and
tax credits.

But an attorney for Landry, who has accused Nicosia of misusing his office
to further a political vendetta, called the lack of criminal charges
telling.
"Since 2008 and until very recently, Mr. Landry has dedicated his time and
efforts, on a volunteer basis, to establishing and operating a first-class
hospital for the people of St. Bernard Parish. He has always acted with
honest intentions and strongly denies any allegations of wrongdoing made by
the St. Bernard Parish grand jury or the Louisiana legislative auditor,"
attorney Kyle Schonekas said in a statement.

The report arrived as Landry's attorneys were set to argue in court on
Thursday that Nicosia and his top lieutenant and one-time law partner, First
Assistant District Attorney Lance Licciardi, blatantly abused the powers of
the DA's Office in a bid to retaliate against Landry for his failed campaign
last year for parish president.

Landry ran against several candidates including eventual winner Guy McInnis,
an ally of the district attorney. 

In an Oct. 14 motion to have the DA's Office recused from the probe, Landry
claimed Nicosia and Licciardi held a "demonstrated personal interest" in the
investigation.

The motion called the DA's investigation into Landry and the hospital "a
thinly disguised campaign to politically destroy Landry and discredit anyone
who supports him."

Wednesday's report renders Thursday's scheduled hearing moot.

Even without an indictment, threats of criminal charges against Landry and
other hospital officials sparked an overhaul in leadership at the 40-bed
facility, which opened with fanfare in 2012 but has struggled financially as
a self-managed operation.

Grand jury target letters issued by the DA's Office in August — to Landry
and DiFatta, hospital CEO Charles Lindell and board member Andrew Sercovich
— resulted in hasty resignations from Lindell, DiFatta, Sercovich and board
member John Gray, followed soon afterward by Landry's dismissal as the
hospital's executive director.

DiFatta and Sercovich agreed in September to "immediately tender" their
resignations in exchange for the DA's Office's promise not to file charges
against them, including possible perjury charges, according to a Sept. 12
letter from Assistant District Attorney Michael Morales outlining the deal.

The Parish Council appointed replacements who quickly signed an agreement
with Ochsner Health System to step in and guide the hospital's finances in
the short term.

Much of the blame for the hospital's financial struggles has fallen on
Landry, who served on the Parish Council from 2008 to 2012 and helped
spearhead the hospital's development.

Landry resigned his seat on the hospital’s board in 2014 after a state
Ethics Board opinion said he could not hold that position while also serving
as the hospital's interim CEO. He stepped down from the latter post last
year after the appointment of Lindell, who had served as chief operating
officer.
But Landry at some point assumed a position as executive director for the
hospital, even while Lindell remained CEO. And according to the grand jury
report, the hospital board voted in April 2015 to grant Landry "legal
control of the hospital," turning Lindell into its titular head.

The grand jury report said additional documents and testimony would be
needed "before criminal responsibility can be determined." But Morales, the
prosecutor, declined to say whether the DA's Office would relaunch the probe
with a newly seated jury, citing grand jury secrecy rules.

Nicosia declined a request for comment Wednesday, saying in a statement that
the report's findings "are quite extensive and self-explanatory."

In alleging political abuse by Nicosia's office, Landry pointed to requests
Licciardi sent to the hospital as a private citizen prior to last November's
runoff for parish president, seeking hospital payroll records, contracts and
other records.

Landry's attorneys described it as an attempt to harm him on the campaign
trail with allegations of mismanagement or malfeasance.

According to sworn affidavits from Lindell and his executive assistant,
Marilyn Bridges, Licciardi showed up at the hospital two weeks before the
Nov. 21 runoff, seeking the records. When told they weren't ready, he
responded, "I guess I'll have to convene a grand jury for Wednesday. Who
should I inform?" the affidavits state.

Those requests were filed under the letterhead of Licciardi & Nunez, a law
firm the prosecutor shares with parish Court Clerk Randy Nunez.
 
Two weeks after McInnis beat Landry by 354 votes in the runoff for parish
president, state grand jury subpoenas were issued for various hospital and
foundation records. Those subpoenas sought credit card statements and
payments to outside counsel, among other documents. Nunez, acting in his
official role, signed the subpoenas.

Along with allegations of political chicanery, Landry claims Nicosia's
office had an inherent conflict of interest in pushing the grand jury probe
because the DA's Office also serves as legal counsel for the hospital board.

Morales acknowledged Wednesday that the DA's Office has been acting as
general counsel for the hospital since September, but he said the hospital
has retained private counsel for "anything related to the investigation."

DiFatta, whom the report accuses of facilitating Landry's alleged power
play, called the DA's pursuit of the probe politically motivated.

"When you cut through all of the grossly misleading and inaccurate
allegations produced in that grand jury report, you find no indictments
because there were no criminal activities conducted," he said.

"Equally there was no conspiracy, as I and other board members have publicly
and repeatedly stated for years that much of our efforts were being spent
keeping the dirty politicians' hands off our hospital."

"A lot of taxpayer money was used up" in the probe, he added. "It could have
been sorely used for our hospital."


Follow John Simerman on Twitter, @johnsimerman.