July 2, 2022

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House speaker wanted Louisiana to pay stepsons $48K for remodel of state-owned apartments | Legislature

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When a pipe burst at the Pentagon Barracks in February 2021, the state agency that oversees the historic structure across from the State Capitol moved forward in normal fashion to fix the three damaged apartments.

Officials hired a state-approved contractor, who set about replacing the waterlogged floors and fixtures with a goal of getting it all done before that year’s legislative session six weeks later.

But House Speaker Clay Schexnayder, the leader of the House, insisted on a more comprehensive remodel of the two apartments he uses at the Pentagon. One unit provides living quarters, while the other serves as a lounge for visitors.

And Schexnayder ditched the state’s contractor and brought in a new company to do the work: A small contractor called DAPA Enterprises, owned by his two stepsons, Jonathan and Beau Diez, according to documents received from a public records request. The documents included emails between state officials, invoices, budgets and notes from state officials.

Meanwhile, Schexnayder’s wife Phoebe requested new appliances, and turned to Gorman Brothers in Prairieville, an appliances retailer, where she works as a bookkeeper.

With the changes sought by the Schexnayders, they replaced the Formica countertops with quartz, a costly upgrade; the old ceramic tile floor with a more contemporary tile floor; and the range and hood in their living quarters with appliances worth at least $13,500.

In all, upgrading the place would cost taxpayers at least $44,338.10, according to a state document.

The state-hired contractor didn’t get the chance to install the appliances or complete the remodel, however. Schexnayder locked out the workers when they tried to finish the work, claiming they did a poor job. That’s when he hired his stepsons.

They billed the state for an additional $48,462.06, according to state records. Officials at the state Division of Administration prepared to reimburse DAPA — until they learned that the company was not in the state’s procurement system, which meant the state could not pay the contractor.

DAPA is not licensed by the state Licensing Board for Contractors, which requires contractors to be licensed if they do work on apartment buildings like the Pentagon Barracks if the materials and labor exceed $50,000. While the company billed just under that amount, it’s not clear whether the cost of the materials they used would require them to be licensed.

A day after The Advocate | The Times-Picayune asked him questions about the spending, Schexnayder offered a defense of his actions to the full House when he presented House Bill 756, which would put the Pentagon Barracks and other nearby state buildings under the lieutenant governor’s office. He is privately saying he would run for the office.

Schexnayder told House members the delays in repairs by the Division of Administration were “political” and said he indeed hired his stepsons to oversee repair work. The speaker didn’t mention that he tried to bill the state for the work.

Schexnayder said in a statement he waited too long for the state to finish the work, and eventually “made the decision to get it done myself.” He said when the Division of Administration didn’t pay the $48,462.06 in invoices, “I paid for it myself.”

But Jonathan Diez, one of the stepsons, said in an interview he has still not been paid for the work and hasn’t been told why. He said it was a “great question” why he hasn’t been paid yet.

Schexnayder added that he “worked out a payment plan and the subcontractors came first.” His personal financial disclosure for 2021 shows his only income was $59,787 from his work as speaker and less than $5,000 from his construction business.

Schexnayder could have paid for the work out of the speaker’s budget or by using money from one of two legislative-oriented nonprofit groups he co-founded last year that don’t have to report their contributions or spending.

Schexnayder’s hiring of his stepsons to work on the Pentagon building doesn’t appear to be illegal, even if he paid them using state funds. The Louisiana Board of Ethics has held that stepsons are not considered “immediate family,” which are prohibited from contracting with an elected official’s agency.

But Daryl Purpera, who served as the Louisiana Legislative Auditor from 2009 to 2021, said the transactions don’t look good.

“Whenever you start doing things with family, you need to ensure it’s an arms-length relationship,” Purpera said. “These issues need to be done very carefully.”

Schexnayder, 53, a Republican from Gonzales, was elected speaker by the House as his third and final term began in 2020.

As the speaker, Schexnayder wields enormous power, deciding which committees House members sit on, which bills are heard and who gets to live in the coveted Pentagon Barracks apartments, among other things.

The House speaker receives a few perks. One of them is use of the two apartments at the Pentagon Barracks, a former military garrison steps from the State Capitol. The series of four two-story red brick buildings surround a courtyard with a fountain in the middle.

Schexnayder pays $500 per month, according to state records, for side-by-side units that face the Pentagon’s courtyard. A select group of lawmakers picked by the speaker and Senate president get apartments on the cheap, paying $200-$400 a month; many have roommates.

One of Schexnayder’s apartments contains 1,735 square feet and offers him a place to sleep with a bedroom, kitchen and living room. The adjoining one, with 635 square feet, also has a kitchen and serves as a lounge for legislators and other visitors.

Schexnayder had been speaker for about a year when a three-day freeze in mid-February 2021 ruptured a pipe in the Pentagon attic, sending water cascading into a second-floor apartment and Schexnayder’s two first-floor apartments. The lounge suffered the worst damage.

The Office of State Buildings, which is part of the sprawling Division of Administration, immediately got to work.

With the legislative session set to begin in six weeks, the agency declared the incident an emergency to accelerate the work. It hired one company to remove the water-logged floors, ceilings, cabinets and furnishings in all three apartments. State officials hired another contractor to return the units to their former condition.

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That contractor, Baton Rouge-based Nerams Construction, began working on Schexnayder’s two apartments on March 3, 2021, according to state records, less than 10 days after the rupture.

But Schexnayder began to change the plans even as the contractor got to work.

On March 5, Cindy Mancuso, Schexnayder’s executive counsel, relayed that Schexnayder “wants a different ceramic tile in his apartments” than in the one upstairs that was also being remodeled because of flood damage. That apartment should have wood laminate floors that are in other apartments, she said.

“Those apartments are just used by the members,” Mancuso wrote. “The Speaker’s spaces — (units) A-10 and A-11 are public areas, used by many outside groups, etc. He wants something ceramic and durable, but he will have specific ideas about what, so we’ll have to ask him.”

On March 8, Phoebe Schexnayder made her wishes known when she met with an official from the Office of State Buildings to “discuss our current construction activities, timeline, and expectations with regards to finishes,” according to notes of an agency official.

Phoebe wanted the quartz countertops, a more contemporary tile for the floor, a new kitchen sink and new appliances and fixtures.

In the lounge, the Schexnayders also wanted the Office of State Buildings to remove a wall to open up the kitchen, remove a bathtub and convert the room into a closet and renovate another closet.

Officials at the Office of State Buildings signed off on the changes.

Nerams did its best to handle the changes sought by the couple and try to complete the work before the legislative session began on April 12.

On April 9, Schexnayder and an Office of State Buildings representative toured the apartments to see what work remained. The speaker pointed out some touch-ups he wanted, but had no complaints about the work, according to the Division of Administration.

Nerams worked through the night to fit the new sink, which had just arrived, with the new countertops. The contractor was set to finish installing the new tile floor the next day.

But that day, the “Speaker would not allow Nerams into apartment to complete punch list items because reconstruction work was not up to his standards,” according to notes of a state official.

That’s when Schexnayder brought in his stepsons’ company to finish the job. They had to finish installing a little over half of the new floor, as well as kitchen and bathroom cabinets, two new sinks, a dishwasher, Sheetrock and the new appliances in the lounge. They also had to repaint it. DAPA billed the state $35,526.10 for the work in that unit.

The Office of State Buildings had determined that the speaker’s living quarters had only a punch-list of items, including touch-up paint and installation of baseboards. DAPA billed $12,935.96 for work done in that apartment. Mancuso forwarded both invoices to the Office of State Buildings, according to emails obtained through a public records request.

“That’s a lot,” said Ivan Quinones, who runs Nerams with his wife, said when told the price, adding that the job took longer than planned because he had to wait for the new floor ordered by the Schexnayders.

Being pushed aside surprised Quinones.

“We didn’t even have a chance to pick up our tools,” he said, estimating the loss at about $1,500.

While Nerams was still on the job, Phoebe Schexnayder arranged for top-of-the-line appliances from Gorman Brothers. Those included a $2,600 Kitchen Aid ice maker, an $8,500 range and a $2,500 wall hood, according to emails.

While it’s not clear who paid for the appliances, the speaker’s office appeared to plan on paying for them with tax dollars, emails show. Mancuso emailed Office of State Buildings representatives on March 23 to ask about the appliances, and said if “we” need to order them, “we can then turn the invoice in for reimbursement from (the Office of State Buildings) under the insurance policy.” She added that if they were going to be “House property,” they would need to issue a purchase order to Gorman and give the appliances an inventory number.

An owner of Gorman Brothers didn’t respond to inquiries about the appliances.

Around the same time the work was getting done, in April 2021, Schexnayder and other legislative leaders hatched a plan for funding upgrades to the State Capitol Complex, a group of historic buildings that includes the Pentagon Barracks. They formed two nonprofits to solicit donations to pay for work privately, with lobbyists asked to write checks.

The saga of Schexnayder’s apartments didn’t end with the remodel.

When the Legislature convened this year, Schexnayder proposed a new plan for the Pentagon Barracks.

He filed House Bill 756 that would take the State Capitol Complex — a group of historic buildings including the Capitol, Pentagon Barracks and Old Arsenal Museum — from the Division of Administration and put it under the lieutenant governor’s office.

The move put Schexnayder, who has become one of Gov. John Bel Edwards’ foremost adversaries in the Legislature since he became speaker, further at odds with Edwards’ administration.

Commissioner of Administration Jay Dardenne has objected to HB756, saying the Office of State Buildings can oversee the Pentagon Barracks and the other State Capitol Complex buildings more efficiently and more cheaply.

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