NEW ORLEANS (AP) — A former southeast Louisiana prosecutor is accused of using at least $100,000 from his campaign fund on personal expenses including flowers, dinners and payments to his son, U.S. Attorney Kenneth Polite said.
An 18-count indictment handed up Thursday charged Walter Reed, for 30 years the district attorney for St. Tammany and Washington parishes, with conspiracy, wire fraud, mail fraud, money laundering and falsifying tax returns.
His son Steven Reed, 47, was charged with his father on four counts: conspiracy, wire fraud and two counts of money laundering.
Polite said campaign money was spent on a $2,600 steak dinner to recruit clients for his private practice: $1,885 for a family Thanksgiving dinner and a $500 gift card; and flowers with a card "from a secret admirer from Camp J" — the Louisiana State Penitentiary's solitary confinement area.
He said maximum total penalties would be 277 years in prison and a $4.5 million fine for Reed, 68, and 65 years and a $1 million fine for his son.
Louisiana campaign laws require campaign funds or donations to be used to support, oppose or otherwise influence nomination or election to public office.
Reed is not guilty and will be acquitted, defense attorney Rick Simmons said.
"Wait for all the facts. Do not just look at this indictment," he said in a news conference broadcast live by WVUE-TV.
Reed, who presented himself as tough on crime, said in July that he would not run for a sixth term because news reports about him were disrupting his office.
Those reports included allegations about his campaign spending, his dealings with a parish hospital, and word that the FBI was investigating Reed.
The indictment alleges that Steven Reed's bar corporation was paid $29,400 for catering it did not provide. The money laundering charges allege that Walter Reed required two companies to kick back $5,000 each to Steven Reed's Liquid Bread LLC, which owned Tugendhaft's Tavern.
Globpop, another company owned by Steven Reed, was paid $8,350 for a housewarming party at Walter Reed's condominium in April 2012, according to the indictment.
Reed also put $25,000 to $30,000 a year from St. Tammany Parish Hospital into his personal account even though assistant district attorneys often attended hospital board meetings for him, according to the indictment.
Simmons said documents dating back to 1996 show that Reed "understood it was a personal relationship," the hospital wrote the checks to Reed, not his public office, and Reed paid taxes on that money.
The indictment alleged that Reed reported less than his total income for 2009 through 2012. The amounts reported totaled $1.8 million.
"By our calculations, Walter Reed paid about 90 percent of the taxes owed," Simmons said.
"What we're fighting over is $100,000 in campaign contributions" that prosecutors say should have been reported as income because they allegedly were spent on personal matters, Reed said in a prepared statement.
"Usually, if someone pays 90 percent of the taxes it isn't a criminal case — it should be a civil case," Simmons, who was chief of the criminal division of the U.S. Attorney's Office in the 1970s and '80s, said in a telephone interview.
Reed also emphasized that he is not accused of selling his office — he's not charged with bribery or taking kickbacks for political favors.
"This is basically a tax case," he wrote.
Reed said campaign funds are not public money. "We will be challenging the use of an IRS investigation to enforce state campaign laws," he said in the statement.
– by AP Reporter Janet McConnaughey
