By Ariella Cohen, The Lens staff writer
Five months after The Lens first reported on nearly $17 million missing from the city’s largest economic-development fund, Mayor Mitch Landrieu still can’t account for the missing taxpayer dollars.
The missing money comes from the city’s Urban Development Action Grant fund, a pot of public money that made headlines last Carnival season when then-mayor Ray Nagin presented Zulu Social Aid and Pleasure Club, a group to which he belongs, with an oversized check representing a $400,000 city-backed, low-interest loan from the UDAG fund. When confronted with an audit showing $16.7 million in unaccounted-for loans or grants, Deputy Mayor Cedric Grant said that the city would get to the bottom of the mystery, vowing to come back to the City Council “with a complete list of which defaulted and which we are still having minor collections on.”
“I think I can have that report back to you prior to the next budget committee meeting,” Grant said.
That was in June.
In July, Grant told the council that the information is “a lot harder to find” than other financial records.
At a council budget hearing Wednesday, City Council President Arnie Fielkow requested that report again, wondering aloud why the council should continue to fund economic development when there were still unanswered questions on how money has been spent.
The issue arose as part of a larger debate over spending on an executive-branch office of economic development and the Nola Business Alliance, a nonprofit organization funded by a mix of public and private funds and operated independent of City Hall. Fielkow believes that the public-private partnership should take over the job of the city office. While the UDAG money won’t be spent to hire new employees for either organization, the fund is relevant to the debate because its mismanagement has been used to bolster arguments that economic development funds should be managed by business professionals rather than City Hall officials.
“We are still waiting on a report,” Fielkow said.
Previously, Fielkow asked New Orleans Inspector General Ed Quatrevaux to investigate the missing money. Quatrevaux did not immediately return calls on the status of the investigation.
Chief Administrative Officer Andy Kopplin assured the council that the administration continues to work on an accounting of the fund. The audit would be complete before any more money from the fund is spent, Kopplin said.
“There are some questions that predate our administration and we are trying to get to the bottom of that before we use the fund,” he said.
While questions still remain about the missing $16.7 million, the Landrieu administration has a better idea of how much money the UDAG does have. A balance sheet presented at Wednesday’s hearing showed $5.6 million remaining in the fund. The final summary report prepared by the Nagin administration showed a $3.7 million balance.