A former lieutenant at the Office of the State Fire Marshal “improperly” diverted emergency hurricane funds to several companies tied to his brother, who himself is a former state prosecutor, the Louisiana Legislative Auditor (LLA) said.
The LLA laid out the scheme in a new report, which partially relied on information from the district attorney for the 18th Judicial District and the sheriff’s departments for West Baton Rouge and Iberville parishes.
Lt. Robert McCormick diverted $846,140 to three companies doing business with or on behalf of his brother, Thomas McCormick, in the wake of Hurricane Laura, a category 4 storm that slammed into southwest Louisiana in August 2020, the report said.
The companies also diverted nearly $400,000 to Thomas McCormick’s law firm for “legal fees” and other broad expense categories. The taxpayer funds then were distributed to personally benefit the brothers and several other individuals, auditors said.
“We conducted this audit after receiving a report from the Division of Administration of some transactions made by personnel with the Office of the State Fire Marshal that may have violated LaCarte card policies and procedures,” Legislative Auditor Mike Waguespack said.
LaCarte cards are state-issued credit cards that allow OSFM employees to make purchases during emergencies.
The agency was tasked with conducting urban search and rescue operations as well as performing surveys of damaged building structures after Hurricane Laura. Gov. John Bel Edwards suspended regular procurement requirements to expedite help to hard-hit disaster areas, including rules affecting the LaCarte cards.
Certain expenses were flagged by the Office of State Travel, an agency with the Division of Administration, months later during a routine review process and reported to the Legislative Auditor. The “large, unusual purchases” pertained two vendors known as Gifts Unlimited LLC and Westside Services LLC. A third vendor, Emergency Logistics Solutions, later was identified.
“These records show that Lt. McCormick’s brother, Thomas McCormick, used Gifts Unlimited, Westside Services, and Emergency Logistics Solutions to contract with OSFM for supplies, equipment rentals, catering, and other emergency services that were requested and paid for by, or at the request of, Lt. McCormick,” the 90-page audit said.
“It further appears that Thomas McCormick charged OSFM excessive prices for some of the goods and services provided by Gifts Unlimited and Westside Services, including bottled water sold to OSFM at an average markup of nearly 10 times over the actual cost for the water in the aftermath of Hurricane Laura,” auditors said.
Records outlined in the report show OSFM paid Gifts Unlimited and Westside Services $783,531 for bottled water, transportation services, equipment rentals, catering, and other emergency services from Aug. 30, 2020, to April 29, 2021.
The amount includes $480,521 in LaCarte card purchases of which more than half ranged from $24,000 to $24,974. The finding is significant because single transactions are limited to $25,000.
The majority of the transactions also were requested and paid on or behalf of Lt. McCormick, auditors found.
The McCormick brothers and several alleged accomplices were indicted in July after District Attorney Troy Clayton brought charges against them in the 18th Judicial District, where Thomas McCormick once served as a prosecutor.
The charges included money laundering, racketeering, filing false documents and malfeasance while in public office.
Clayton said at the time that the Legislative Auditor’s office notified him after discovering potential wrongdoing earlier this year.
“They went under cover and they monitored it,” Clayton said.
The coordination between the district attorney’s office and state auditors could prove problematic, however, as attorneys for the McCormicks asserted innocence and said the prosecutor-auditor relationship was itself improper.
“We have serious concerns about the entanglement between the Legislative Auditor and the District Attorney and his agents during the investigation of this matter and both the speed with which it was indicted as well as the motives behind Mr. Clayton’s velocity,” the attorneys said in a response letter to the audit.
“It calls the Auditor’s independence into question when you allow prosecutors and law enforcement personnel to actively take part in your investigations to the extent noted herein,” they wrote.
This article was originally posted on Emergency management officer diverts hurricane relief to brother’s companies