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Wally Pontiff Sr. in the heart of a jeff parish scandal (Posted on 11/3/09 at 4:22 pm)
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When West Jefferson Medical Center's board of directors reviewed its employee voluntary insurance plans two years ago, it decided to make a change. It transferred most of the business it had done with two previous brokers to Wally Pontiff Sr.
"Wally is a local guy," board member Barry Bordelon said in 2007 to explain the switch. "I don't know of a better, nicer, more honest and straightforward person than Wally Pontiff."
Now, however, interviews and
newly disclosed documents show that Pontiff was secretly splitting his hospital commissions with an insurance agency co-owned by Jefferson Parish government's chief administrative officer, Tim Whitmer, and with former Parish President Tim Coulon.
After the board appointed Pontiff, the Jefferson Parish Council ratified the choice. But the resolution offered by Councilman Elton Lagasse doesn't mention Coulon or Lagniappe Industries, the company owned by Whitmer and his wife, Dawn.
"The only one we ever knew was going to get the job was Wally Pontiff," Lagasse said Thursday. "I had no idea Tim Whitmer or Tim Coulon was involved. We had no idea how they split fees."
Pontiff, who works for B&A Insurance Agency of Metairie, shared commission for servicing new insurance accounts with several agencies from at least 2001 to 2007, records show.
But the board's decision in April 2007 gave Pontiff and B&A the lion's share of the earnings for the accounts, eliminating Group Insurance Associates of Metairie and cutting back business with Bryan Wagner Insurance of New Orleans.
It's a deal that sheds light on a practice in southeast Louisiana of public agencies awarding insurance work to politically connected people.
Metropolitan Crime Commission President Rafael Goyeneche said he suspected a backroom deal after reviewing an internal insurance document that disclosed B&A's partnership with Lagniappe Industries.
"This contract was shared with Lagniappe by B&A even though (Lagniappe's) name never appears publicly," Goyeneche said. "It would create the appearance of impropriety if (Whitmer's) firm was awarded this contract, and this looks to be obviously an attempt ... to shield the public from his financial involvement in what is essentially a parish-awarded contract."
Tim Whitmer did not respond to several messages and e-mails seeking comment.
B&A's owner, Gary Burke, said he partnered with Lagniappe and others on the hospital business to cut down on competition.
"We just joint-ventured it," said Burke, who confirmed the agreement is still in place."We do it all the time."
Pontiff is the father of Wally Pontiff Jr., a Louisiana State University baseball player who died suddenly in 2002 of rare heart problem. Afterward, the Parish Council renamed Metairie Playground for him.
While Lagniappe is owned by the Whitmers, state Insurance Department records show that it counts among its agents Coulon; his wife, Mary; and longtime political operative Maurice "Hippo" Katz and his wife, Judy.
Katz didn't return messages for comment.
Coulon said he was an independent insurance broker who partnered with Lagniappe Industries. He also said he cut a side deal with Pontiff to earn some of the commission from the insurance plans at West Jefferson.
He wouldn't say whether he had lobbied hospital board members. Nor would he disclose how much money he has made on the deal.
"My compensation and that of my partners is not a matter I will share, again as a private business owner," he wrote in an e-mail. He also did not list any other public entities with which he does business.
The hospital board is appointed by the Parish Council, Parish President Aaron Broussard and hospital medical staff.
When Pontiff and B&A were named sole agents of record in 2007, they began collecting a percentage of the premiums paid by employees who signed up for voluntary insurance plans with Colonial Supplemental Insurance. Colonial's plans cover accident and cancer insurance, its representatives said. Employees had other coverage options as well, including dental and vision.
Group Insurance and Wagner Insurance had serviced Colonial's plans with hospital employees for at least two years and had put together a new plan for 2007. The board adopted the plan in January, correspondence shows.
But three months later, rather than allow those agencies' brokers to collect commission for the new policies, the board chose Pontiff and B&A instead.
Pontiff didn't respond to messages left at his Metairie home for comment. Nor did Bordelon, the board member who pushed for Pontiff and who works as the top aide to Lagasse.
Dr. Frank DiVincenti, the board's current chairman, didn't respond to a message left at his Marrero office.
Under the new arrangement, Lagniappe Industries receives 44 percent of the commission for each new employee who signs up for coverage, according to an internal Colonial Insurance document obtained by the Crime Commission and provided to The Times-Picayune.
West Jefferson Medical Center CEO Nancy Cassagne said hospital employees paid $428,000 this year for voluntary coverage plans. But that figure represents premiums not only for new policies but for the management of policies already in place. In addition, agent commissions are only a percentage of total premiums, so it's unclear how much Lagniappe is making in commissions.
Both Lagniappe and Burke have been involved in questionable deals in the past on benefit plans for public employees.
Lagniappe Industries lost a dental insurance plan it serviced in St. John the Baptist Parish on Oct. 13, when the Parish Council canceled the contract on the advice of District Attorney Tom Daley. Lagniappe had won the contract to be the broker of record for parish employees insurance plans around the same time that Parish President Bill Hubbard's company, Hubbard Enterprises, was receiving business potentially worth millions of dollars from Jefferson Parish.
Hubbard pleaded guilty to federal bribery charges in September and resigned. Whitmer has said Hubbard's contracts and Lagniappe's agreement with St. John were unrelated.
Burke urged the Jefferson Parish School Board to hire investment advisers to manage its employees optional savings program. That group would go on to lose $4 million in bad investments, and its members pleaded guilty to federal fraud charges.
Burke was selling insurance policies to school system employees at the time. He was not charged with a crime in the investment scandal.