Ok but why?

This can't just be explained away as a big, "Whoops! Turns out we didn't know how banks work!"  Although Dayen does at least entertain that possibility here. I guess you kind of have to given how stupid everything does feel these days. But still, no. It can't just be that. 

Contrary to their belief, Silicon Valley big brains are not the first ones to figure out that deposit insurance doesn’t protect their payroll accounts. Companies manage this small risk of bank failure through recognized insurance strategies. There are private-sector solutions like Intrafi’s Insured Cash Sweep, which essentially cuts up large accounts into $250,000 pieces and splits them across the banks participating in its network. CDARS, another Intrafi product, is a less liquid option that segments cash into CDs. Some prior FDIC officials have expressed anger at these schemes, but there also are cash management accounts with a “sweep” feature, or additional insurance to take out (this Forbes story has several examples).

Any risk manager worth their salt at a company knows of a panoply of ways to avoid the threat of bank failure on deposits. “The pain of having to explain this,” Porter said to me.

Importantly, SVB was part of the network of cash sweep banks; it had an offer on its website about it. But according to Adam Levitin, there were only $469 million in reciprocal deposits, which is where cash sweep would show up. In other words, almost nobody banking at SVB used them.

Why not? There are a couple of options. One, Silicon Valley startups are so bad with money that they never thought of this. (It’s incredible that Roku, which has been around for a while, had nearly half a billion dollars on hand at SVB, without hedging that risk at all.) The fact that VC big brains were toying with new types of deposit insurance this weekend that already exist (it’s like Uber reinventing the bus) raises that possibility.

The other possibility is that SVB wanted that money kept with them. There are very strange stories coming out about how SVB required companies to hold their money with them in exchange for venture debt agreements, and then gave cheap “white glove” service to founders: low-interest mortgages, lines of credit, and the like. SVB might have had a reason to want their hands on that money exclusively.

Is that sort of "white glove" service not precisely the reason FNBC executive Ashton Ryan was found guilty on 46 counts of fraud? Remember that? It just happened last month.  

Prosecutors convinced the jury that Ryan was the "quarterback" of a team of conspirators, as Assistant U.S. Attorney Ryan McLaren put it in closing arguments.

The list of "scoundrels" he said conspired with Ryan included Mississippi developer Gary Gibbs, who testified that he was essentially bankrupt as far back as 2013. For years, Ryan kept lending him $1 million each month to cover up his insolvency, documents showed, as he spent the proceeds on a private jet, luxury cars and top-of-the-line fishing boats. Gibbs owed the bank $123 million by the time it collapsed.

There were similar stories for other borrowers like Kenneth Charity, a transplant from Washington D.C. who had plans to get rich in the post-Hurricane Katrina real estate market, but who could never file his taxes or other documents on time — or make meetings — as his projects floundered. Ryan kept lending to Charity until his debt reached $18 million.

Ryan's defense during his trial was laughable. In so many words, he said that he was just trying to help some guys out.  Maybe the loans were reckless or outside the bounds of what was usual, but he was being "altruistic."  He literally used this term. It's a popular one among financial criminals these days. What it amounts to, in Ryan's case, is an explicit admission of guilt. He knew the law and broke it anyway for... reasons. 

It's that what's going on at SVB? Because, as Dayen explains, any CFO at any of the firms banking there had to have known how to responsibly insure themselves against risk.  But they just... opted not to. Dayen also suggests the same firms still could have dug themselves out of the mess their own mess. (A mess they created and then triggered as if on purpose, it seems.)

SVB’s losses aren’t really that major in the grand scheme; the haircut that depositors would take under normal rules would be minimal. It might take a minute, which with payroll being due was a risk startups didn’t want to take. But they have well-heeled benefactors—the VCs shouting about the end of the world—who could have supplied whatever bridge support was needed for companies they still profess to believe in.

But they chose not to do that either. Why? So far the only answer seems to be, to see if they could.  But what else?

Hello, and welcome to a fabulous New Year of blogging yellowly

Unfortunately this new year is still among the 2020s which, as we all know, are categorically bad. Anyway, I know I've been saying it is time to get the Yellow Blog back into running shape for a while and I know that every time Twitter starts to die, it seems like that is the time to crank it back up over here. But I really do mean it. Maybe this will finally be the thing that does it. 

Twitter CEO Elon Musk has confirmed that the character limit for tweets will increase from 280 to 4,000 characters early next month.

The feature, which was first proposed in December, is one of a number of changes to the social media platform that the tech billionaire plans to roll out over the coming months after purchasing it for $44 billion last October.

The increase in character length will be only the second time in Twitter’s 17-year history that it has changed the limit, having previously boosted the original 140 limit to 280 in 2017.

As the big social media sites have absorbed and siloed off the whole internet over the course of the past decade, so has Twitter eaten up more and more of my blog posts. That's mostly because I am incredibly lazy and it's easy to just tweet a half-baked thought out and let it go. But, when I'm doing it right, a blog post shouldn't be longer than one or two tweets anyway. Ideally, this is where the half-baked thoughts are supposed to go. 

But, also, this is supposed to be where I put stuff that I want to remember later. And a chronological, taggable, searchable web log of annotated bookmarks is far better for that purpose than the increasingly unreliable instant gratification machine currently being dismantled by a chaotic billionaire.  And if the tweet stretches out to blog post length anyway, (I just checked. So far this post isn't even over 2,000 characters.) it might as well be posted over here instead.  So this time, we mean it. We're gonna try and put the stuff that happens this year on the Yellow Blog so that it doesn't all blow by in a confusing haze this time. Besides, 2023 makes 20 years of posting here so we need to have a nice round archival number. 

I think what we'll do for a while is try to get at least one post up every day or so that collects some of those annotated bookmarks I mentioned. There are a couple of drafts of longer form writing that have been lingering for a while which I would like to finish but let's wade back into this a step at a time.

With that in mind, here is today's stuff I wrote down so I might remember it later. 

The Louisiana Democrats will need to find their own loser candidate for governor instead of borrowing a Republican loser

Late last year, there was a parlor game discussion going around trying to parse whether Dem-aligned power brokers and/or centrist establishment media would rally around a Bill Cassidy campaign for Governor in 2023. Cassidy is a "weird dude" and a perpetual darling of the Advocate editorial page. But that's not exactly an unassailable coalition to ride up against the Jeff Landry juggernaut. The last reporting we've seen has Landry wielding a $3 million war chest plus the official endorsement of the state Republican Party and multiple Super PACs all of which multiplies his fundraising capacity many times over. Anyway, Cassidy decided it wasn't worth it. Much better to sit around in the World's Greatest Deliberative Body doing nothing forever than to take on that headache. His fellow Senator John Kennedy (although he theoretically might have posed a stronger challenge to Landry) reached a similar conclusion last week.

When Bill said he wouldn't run, all of that speculation about Democrats and media picking a favorite Republican shifted over to Lt. Governor Billy Nungesser. For a long time it seemed like Billy and Jeff deserved each other.  For example, we know they both have a problem with librarians. Landry is on a typical "anti-woke" crusade to burn them all while Billy is retaliating against them for blowing the whistle on his corruption. Heck, since the day they were elected to their current positions, we've had them neck and neck in a pool to see which of the two would be the first one indicted and whose scandal would be the stupidest.  Maybe this is just a sign of the times, since despite the fact that each has had his share of doozies over this term, neither has yet landed in jail. Guess we should have bet the over.

And like any pair of like alpha dunces vying for the same space, Jeff and Billy clearly do not like each other.  Nungesser hasn't been shy about saying so. In December, Nungesser said that he had to run against Landry if Kennedy didn't because "Jeff is a bad person." That's was after a long summer of scrambling for endorsements and pre-announcing that he was planning to announce a candidacy.  

And yet, today, Billy says, nevermind all that. 

“But the worst pandemic in our lifetime and a series of devastating storms leaves me with unfinished business to bring tourism back to its peak performance, especially for the near 250,000 families who rely on this industry for their livelihoods. For that reason, and after much thought and prayer, I have decided to seek re-election to the Office of Lt. Governor"

Those devastating storms and the pandemic did not happen just this last month, though.  So who knows what really got Billy to back down? The upshot is the Democrats no longer have an easy way to just quietly sit out a Governor's election they had clearly been planning to just quietly sit out.  Can't wait to see what they come up with. They don't seem to be generating a lot of excitement these days, that's for sure. 

Ad-hoc garbage service

This Sunday morning, we were stunned to see a Richard's Disposal truck picking up on our block. Turns out they're dealing with a "backlog" maybe? What is going on here?

In a statement Monday night, Richard said the company is addressing the backlog with 70 additional personnel, pulling from crews in Baton Rouge and Jackson, Miss. Richard said he and the company "look forward to working cooperatively with the city council, mayor and all of city government to address the market conditions and other circumstances that affect timely trash collection,” according to the statement.

The statement did not address the administration's decision to turn over some routes to different contractors. 

Those "other contractors on some routes" is confusing. Apparently the city is juggling the routes that contractually belong to Richards among Waste Pro and IV Waste, the companies who recently took over Metro's territory. Now they're encroaching on Richards bit by bit as well. But it all seems to be happening according more to whim than a comprehensible scheme. 

Richard’s contract expires in March, 2024, though the city can terminate it for cause or "convenience," which essentially means it can be ended at the city's discretion. Officials have previously said they want to rebid the contract this year, but they have not laid out a time frame. 

Asked how long he expects his company to supplement Richard’s, Torres said officials had advised him “to be prepared to do it until they put it out to bid.”

Meanwhile, they're just making it up as they go. And paying a premium for it. 

My FNBC jury duty notice was sadly lost in the mail

 I didn't even get invited to the tailgate party.  Anyway, the trial is kicking off. 

A jury was seated Monday in the federal bank fraud trial of First NBC Bank founder Ashton Ryan, Jr., as lawyers readied for what is expected to be a weekslong trial probing the actions of Ryan, other executives and bank borrowers ahead of the institution's stunning 2017 collapse.

I have said many times there is probably a good book someone could put together centered around this bank collapse that might tell a broad story about the post-Katrina era of New Orleans politics, real estate, education, and non-profit corruption.  I don't really see this trial telling that whole story but... I may have liked to take a look at this list.

Lawyers involved in the case have said the prosecution's witness list initially was between 100 and 200, though it will call far fewer over the next few weeks. Witnesses are likely to include at least some of those who have taken guilty pleas in the case, including Gregory St. Angelo, the bank's former top lawyer.

Speaking of post-Katrina failures and corruption...

This is part of a series the T-P has been running about "changing streets" or some such. I think the idea here is to frame the massive displacement and dispossession New Orleanians have endured as just "inevitable progress" or whatever. But some of this stuff you can't gloss over. 

According to statistics from the New Orleans Data Center, since 2000, the area encompassing the Marigny, Bywater, St. Claude and St. Roch neighborhoods has gone from 61% Black and 32% White to 17% Black and 72% White. The number of households with annual income over $100,000 a year rose from 3% to 19%.

The article trots out familiar apologists CW Cannon and Rich Campanella to sigh and shrug but at least Cashauna Hill is here to point out that these aren't just natural forces at work. They are deliberate policy choices.  

Many of those pushed out crossed St. Claude Avenue, where the process continues today, said Cashauna Hill, executive director of the Louisiana Fair Housing Action Center. 

Hill said population changes and demographic shifts are often inevitable, and said opposing gentrification does not mean opposing investment.

The problem, she said, is that the city’s leaders have consistently favored policies that encourage gentrification — pouring millions into Crescent Park and the Rampart-St. Claude streetcar line and failing to rein in short-term rentals — while neglecting policies that would prevent it — primarily funding affordable housing.

No need to catalog all of the atrocities right now. But I will point out that the City Planning Commission is once again this month rolling out yet another round of STR regulation that looks on track to once again favor wealth over residents.  We'll catch up on that later. But seeing this picture of where our neighborhoods are today, reminded me of this remark from Mitch Landrieu when he took office as mayor. 

In August, when Mayor Landrieu announced his plan for spending New Orleans’ hard-won recovery dollars he warned a famously tradition-bound city that the time had come for change. “It’s especially important that we stop thinking about rebuilding the city we were and start creating the city we want to become,” he said, echoing his inaugural address.

This is the city we chose to become.  

When the "cyberattack" eats your homework

Amazing story from over the weekend. Let's see if we can sum it up in under 4,000 characters. I think we can. 

So, to start with a cop shot a dog. Apparently this was not the first dog this cop shot either. Which is why the owners of the dog that was shot (the second dog) requested the Public Integrity Bureau file on the first shooting as documentation for their lawsuit against the city. The city agreed to hand over the document. Except  WHOOPS it turns out the city cannot actually produce it because it is locked away in the Iron Mountain. 

Document storage company Iron Mountain is withholding hundreds of boxes of files it is storing for the city of New Orleans because of an ongoing financial dispute with Mayor LaToya Cantrell's administration, a City Hall spokesman confirms.

So, according to this report, the city hands over "hundreds of boxes" of public records (which departments and types of records is unknown although clearly NOPD is one) to a private contractor who can, apparently, hold them up for ransom in the (seemingly inevitable) event that the city falls behind on its bill.  That's very interesting! We'd love to know more about that situation. But, WHOOPS guess what. 

But there is no record of a contract to store old paper files for the NOPD or any other department. Iron Mountain’s local administrator, Robert Leamann, spoke to a reporter in early December and declined to provide information about the company’s scope of services for the city. He also said at the time he was unaware of a dispute with the city or the subpoena. After being sent a copy of the court records, he referred subsequent requests for comment to a corporate email address, which did not respond to multiple emails.

The company’s local attorneys, Kellen Matthew and Kathleen Cronin, also failed to respond to emails seeking comment.

Joseph could not say why the city purchasing office could not locate a contract with the company, but noted that all contracts and purchase orders contained in the city's BuySpeed and AFIN databases were lost in a 2019 cyber attack.

Oh man that "cyberattack" sure did a number on public records, huh. Man that is a shame that nobody can get anything from those databases. Unless, somebody... looks it it up and gives it to them... wait.. what? 

What?

Here are Buyspeed purchase orders the city pulled for @misaacstein last year. https://t.co/jffDInLBzN https://t.co/KuGGmE7HWD

— Charles Maldonado (@Maldonado_CB) January 9, 2023

Sometimes the cyber attacks and sometimes it doesn't, I guess. Just a mystery we'll never fully get a grip on. I wonder if it is going to attack those unwritten garbage contracts next.

Keep Doing What You're Doing

Honestly, I have no idea what Saints fans are so upset about this week. They're all ready to fire Dennis Allen after one season as Head Coach even though that one season was the greatest of his entire NFL career to date. In three prior seasons with the Raiders, the dude had never won more than 4 games. This year he won three whole games more than that. That's a 75 percent improvement! 

I'm never clear on what it is Saints fans are really after these days. We already won football in 2009 so there's no need to stress over that anymore. From that point until the time when the brutal criminal enterprise that is the NFL collapses under the weight of its own contradictions,  I just want to see as many interesting things happen as possible. A lot of interesting things happened to the Saints in 2022.  We listed some of them here. Whether those things are "good" or "bad" is really a matter of taste. 

All pro football teams are pretty evenly matched talentwise. Most games are decided according to a combination of dumb luck and which team is the least injured that week. Most of the jawing about whose fault that is or is not is just how fans have fun. NFL fans are basically conspiracy theory hobbyists constructing grand bullshit theories to draw certainties out of what is essentially unknowable. You feel a lot better about it all once you understand this.  Not everybody wins the Superbowl every year. Most teams, in fact, do not! Hopefully fans of the teams who do not don't see this as a complete waste of their time. How sad, that would be if they did. 

Anyway, I can't have strong feelings about Dennis Allen one way or the other.  He seems like a pretty boring middle-management guy. That's probably why he's risen to this particular point of mediocrity.  I definitely don't think the Saints got the most out of their offensive players this year. That seemed like a coaching issue to me. But, again, I'm just spinning theories like anybody else there. Whatever they do, I hope they don't bring those awful black helmets back.  I don't think those helped matters one bit.

Even the little ones are too big to fail

Turns out when all the important people in town know each other and spend all their time passing money back and forth, it doesn't matter how much or if they've stolen any of it because holding any of them accountable short circuits the whole system anyway. 

A federal judge on Monday jettisoned a prominent defense attorney and his law firm from the blockbuster fraud case against former First NBC Bank founder Ashton Ryan Jr. and four co-defendants, ruling they failed to reveal a conflict.

The stunning decision by U.S. District Judge Eldon Fallon promises a months-long delay for a trial that was slated to start June 6.

The five defendants face a 49-count indictment charging them in a conspiracy to commit bank fraud and related charges in connection with the epic collapse of First NBC five years ago. The bank’s implosion cost the Federal Deposit Insurance Corp. almost $1 billion — the worst U.S. bank failure since the 2008 financial crisis.

Only last month, Fallon wrote in a 42-page ruling, did prosecutors learn that Michael Magner, who represents former bank executive Robert Calloway, had previously represented Gary Gibbs, a bank borrower who has since pleaded guilty and agreed to testify as a key witness in the case.

The order disqualifies Magner, a former federal prosecutor, and his law firm, Jones Walker, from representing Calloway. Magner declined to comment Monday after the ruling.

Who is Tonya Pope's secret partner this time?

Tonya Pope is appealing (well, at least making  a public appeal through the media) the city's decision to exclude her from the list of finalists in the latest Six Flags redevelopment sweepstakes. 

TPC-NOLA Inc., which has long sought to revive the former Jazzland theme park at the Six Flags site, said in a formal protest Friday that the selection committee used "inconsistent, subjective and biased scoring" when judging six proposals for the abandoned property.

"Inconsistent, subjective, biased," maybe! That doesn't necessarily have to mean gender bias, specifically, although Pope does claim that too.  But, again, maybe. There certainly seemed to be some degree of favoritism involved when the finalists were announced.  And, besides, Pope knows more about this process than just about anybody by now.  Her company has been one of the very very many who have put together multiple proposals over the course of very very many attempts by the city to snag a developer for this cursed property.  

In the most recent round prior to this one, her plan involved... some kind of wax museum or something? Maybe that sounds wacky, but it's hardly the craziest thing that's been proposed so far. Nor is it any stranger than what the current front-runners have on the table. What's intriguing, though, about Pope's current bid is that the city says she was docked points in the evaluation process for not disclosing an important financial backer.

TPC-NOLA received 328 points. Committee member Nicole Heyman criticized that group for failing to identify its partner company, while committee member Jeff Schwartz rapped it for failing to prove it had obtained financing to build its proposal.  

Pope, the company president, said Friday that while her group did not want to out its partner at the public selection meeting, it is willing to provide that information to committee members privately.

Well who wouldn't be reassured by that?   It's not like Pope's partners in previous bids could have raised any questions.  The wax museum project was supposed to involve former Governor Edwin Edwards.  And in 2014, her proposal was backed by a certain financial outfit of note. 

Paidia's bid calls for a $50 million initial phase that would reconstruct the heart of the Jazzland park by next spring. Much of the money would come from a $25 million construction loan financed by First NBC Bank and federal tax credits for revitalization projects in impoverished neighborhoods. Paidia is also counting on another $10 million in private financing for equipment, $8 million in state tax incentives and $2 million in corporate sponsorships, according to its proposal.

 Really, in hindsight, it's remarkable that one didn't get done.  

Anyway, let's hope the committee takes Pope's complaint seriously enough to giver her another chance. If only so we can find out who the heck she's got on the team this time. 

I mean, yes, otherwise what is the point

Warren Treme pleaded guilty in the FNBC case. He is the fifth client among the indicted to do so. It looks here like Treme's eventual testimony will strengthen the case against Ashton Ryan because it emphasizes the importance of Ryan's personal relationship with the co-conspirators. For example, Ryan's prior involvement with Treme was ported over to FNBC when Ryan left his former position to found the new bank. 

Court documents signed by Treme Wednesday said he co-owned several companies with Ryan and initially borrowed from First Bank and Trust, where Ryan worked as president before leaving to found First NBC in 2006. Prosecutors said Ryan “exercised authority over Treme’s loans” from First Bank and Trust, even though his business relationship with Treme was a clear of conflict of interest.

Treme then took his business to First NBC from 2008 through about April 2017. On paper, another bank employee served as Treme’s loan officer, while Burnell technically approved the loans and assigned the credit risk rating to them. But, prosecutors charged, Ryan worked in concert with Burnell and Treme as Treme obtained millions of dollars in loans by filing documentation that all three knew was false.

Treme would then use the proceeds from loans to make payments on previous loans and hide the fact that he couldn’t keep up with loan payments because he was broke.

Another inference we can draw from this is the importance of these little connections throughout New Orleans business and politics. Which is why I keep saying I want someone to write a book about FNBC. You could tell the story of this bank collapse with a wide enough scope that it lays bare a lot of the insider corruption that drove the post-Katrina gentrification of New Orleans. I keep thinking it will happen if I say it often enough. 

And, look, it doesn't have to be a boring depressing sort of thing. There's a lot of fun in this too.  Treme understood this, anyway.

However, sometimes he wouldn’t even use the money to pay off debts, court filings said. On one occasion, he spent $300,000 to gamble and travel to the Caribbean, though Ryan and Burnell convinced First NBC board members that Treme had used that money to catch up on his loan payments.

As one does...

Reopen the can of worms

The pandemic closure has slowed the progress of the FNBC grand jury investigations. Remember this is a very long thread to pull on, though. And with enough time, persistence, and, well, pulling, the thread can connect to almost anyone who is anyone in the New Orleans area political/non-profit/business upper class. Here is who may be next on the line.

Additional borrowers could also get swept up in the case if prosecutors believe they committed fraud to get their credit extended. Among those whose loans the government is scrutinizing is businessman and former longtime St. Bernard Parish prosecutor Glenn Diaz, according to sources familiar with the probe.

Diaz, who slipped quietly out of public life after a failed campaign for district attorney in 2014, was in arrears on millions of dollars in First NBC loans that the feds consider dodgy. Another possible target is Mississippi developer Gary Gibbs, the recipient of the loans that were flagged by the FDIC in its civil allegations against Calloway. Those loans alone totaled $123 million when the bank collapsed.

The problem, though, is prosecutors have only so much time to reel everyone in. The statute of limitations on many of the potential charges here is only 5 years and we're 2 years, plus some into the story now. But the grad jury can't operate during the COVID shut down. So, while we know a lot of wealthy businesspersons have been leading the charge to "reopen Louisiana" in recent weeks, maybe a few of them aren't in such a hurry.

You might even say they went marching in

Again, this is all very much on brand for Bensonworld.

But attorneys for an alleged clergy abuse victim allege in new court filings that hundreds of emails currently under seal show the NFL franchise's higher-ups helped determine who should be included on the list, going “beyond public relations.”

The attorneys also assert that the available email exchanges show it was the Saints who went to the archdiocese first and offered their services — rather than the other way around.

The new motion, filed Thursday, purports those services included pitching “favorable stories” about the archdiocese and Archbishop Gregory Aymond to local news outlets, as well as drawing in other unspecified influential community members to help manage “the fallout” from the sex abuse crisis.

This wouldn't surprise anyone who understands the way upper crust New Orleans club stuff works. It's a broad circle of entertainers, cultural non-profits,  business jerks, tourism profiteers, media companies, political cronies, bankers and "philanthropists" who keep themselves enriched and perpetually in power at expense of the city's poor and working classes. And the key to keeping it all running is they always have each other's backs.

So, for example, because Gayle Benson puts time and money into supporting cultural non-profits like WYES, the folks there are happy to promote her various endeavors as well.  Similarly, when Gayle's and Greg Bensel's friends at the Archdiocese need a little logistical support in the PR department, of course they are happy to oblige. 

Update: I kind of think this story from this afternoon belongs in a post about the club of plutocrats who run everything. I'll explain but first, here is the story.

NEW ORLEANS, La. (WVUE) - As taxes begin to be filed for another year, the Internal Revenue Service is still trying to collect a hefty sum from New Orleans’ top-elected official.

Liens filed by the IRS show Mayor LaToya Cantrell and her husband, Jason, owe more than $95,000 in taxes. Federal tax liens have been placed on the couple for eight of the last nine tax years (2010-2015, 2017-2018).

The latest lien was filed on January 28 on the home owned by LaToya and Jason Cantrell. The IRS claims the married couple owes income taxes from 2018 totaling $19,406.99.

When I saw this my first thought was, oh of course, now that it is somewhat popular to go after the mayor in the press a little bit, they are going to pile on.  It's different now than it was before Cantrell was elected when a story on this same issue appeared in The Lens but was downplayed by most of the press herd as a political matter during election season.

But put all that aside for a second and notice this particular detail from the Lens story.

In an interview, LaToya Cantrell did not dispute that she and her husband had underpaid the IRS. However, she said, the IRS should have received it after she refinanced her house in 2013, before the agency placed the lien on her house.

Cantrell blamed the outstanding debt on a bank error by her mortgage lender, First NBC Bank.

I'm pretty sure it was only The Lens who mentioned that much.  Nobody really tried to put it in context, though. Well, almost nobody. 

I'm still waiting for that Epstein crossover moment

I'm still very behind on a lot of things I wanted to put on the blog this week. Probably won't get caught up for a while. But this is one for that if-I-don't-write-it-down-I'm-gonna-forget-about-it category. So here it goes.

Among the latest characters to pop up in the FNBC saga is real estate shark Gary Gibbs. (No, he is not the ex Saints defensive coordinator by that same name. Yes, I checked.) His case is one of several instances revealed so far where the bank appears to have been shoveling out new bad loans in order to cover old bad loans in the expectation that some external event might come about to turn everything around.

Regulators from the Federal Deposit Insurance Corp. said in a notice filed last week that Robert Brad Calloway, a former loan officer and chief credit officer at First NBC Bank, submitted false or misleading documentation in order to make a series of loans to Diamondhead, Mississippi-based businessman Gary R. Gibbs that totaled $123 million at the time of the New Orleans bank's collapse.

The filing says that Calloway, along with First NBC'S former CEO, Ashton Ryan, got the loans to Gibbs approved when they knew he didn't have the necessary collateral, and that they also knew the money was being used by Gibbs to cover payments on existing loans instead of for Gibbs' business expenses, as was represented to the bank's loan committee.

In Gibbs's case one such external event may have been his successful conning of a former business associate's widow out of her inheritance. She has filed a civil suit seeking to recover those assets which, thanks to FNBC's collapse, now may technically belong to a vulture capital firm. 

In her civil case, Heisler is trying to keep assets that include a $2 million brokerage account, a shopping center in Metairie and a building at 844 Baronne St. from being seized by Girod LoanCo, the debt investor that bought a large portion of the First NBC loans sold by regulators last year, including the notes Heisler signed.

Girod LoanCo is a specially created company that is ultimately owned by TPG Capital, a $100 billion private investment firm co-founded by billionaire James Coulter.

Coulter, by the way, has been turning New Orleans's disasters into "opportunities" for some time now.  Here he is in 2010 dishing out advice to the 'treps at Idea Village.

Coulter told the crowd Friday  morning that there are three types of entrepreneurs: the natural, the coin flipper, and the rest of us.

The natural entrepreneur has the natural gift of gab and persuasion, which helps him find success in business. The coin-flipper is successful purely out of luck, while the rest-of-us are hard-workers.

It's not clear which entrepreneur type Coulter is supposed to be here.  If we're going by the way he describes himself to Forbes, we'd have to say he's the right-place-at-the-right-time-with-the-right-barrel-of-cash type.

I married a woman from New Orleans, so I had family here. Post-Katrina I had a number of friends call me up and say they wanted to do something to help the community – not just Habitat for Humanity or Red Cross, we’ve done that, but what can we do for the community. So we raised some money from one email and said to some friends: find some good places to put it.

One of the questions was how do you create something sustainable? And if you look at jobs here it’s likely that one of the real job creation engines will be entrepreneurship because it’s a place where people want to live.

Not so sure about that "job creation engine" of entrepreneurship in retrospect.  Unless the job we're talking about is grifter.  Post-Katrina New Orleans has been a ripe environment for those. They do like to call themselves "entrepreneurs," though. I think we've covered that a fair amount.   Maybe that's the type Coulter is.  That's more or less how this reads, anyway.

I think it takes an entire ecosystem, and to that end it has to attract entrepreneurs, and that’s about a lot of people under 30. I think the renaissance going on in education with TFA people coming into town provides a natural fuel for the city.

So the first thing you have to do is have the entrepreneurs, and the second thing is you have to have a funding system to help them. Now you see investors coming into town and investors that you didn’t know were in town showing up. The third is you have to create an infrastructure of support – the chamber of commerce and government really make it easy for entrepreneurship here. And lastly there needs to be a confidence that it can get done here. That’s part of what we’re seeing in that community that’s important – it’s exhibiting that confidence.

Coulter is the type of entrepreneur who was able to"create an infrastructure of support" within business and government circles by exhibiting a lot of confidence in order to turn the "fuel" provided by things like school charterization into a "renaissance."  Got it.  Anyway, now he owns a bunch of assets that got sucked up in the collapse of the bank that financed many of the post-K con jobs you read about.  Good for him.

I wonder how many more of these stories and characters we will read about before the FNBC case is over. I do hope someone is researching the book. If done well something like that has the potential to connect a lot of interesting threads in this city. I promise I really was just joking the other day when I suggested that maybe somewhere in the pile of politically connected non-profits, start-ups, and university projects that exert so much influence on what happens in New Orleans, somebody might have some Epstein money laying around.  But, you know, maybe that's not all that far fetched....

Anyone surprised Walter Isaacson called Joi Ito's book "brilliant and provocative"?

— Evgeny Morozov (@evgenymorozov) September 7, 2019

Ken Charity's guilty plea

Did this make into the Daily Georges?  I must have missed it if it did.  Prior to the merger of the papers, the Advocate had been doing such a good job of following all things FNBC.  I'd hate to think they were giving up on that now that it's getting so good.  The BOI on Charity is pretty interesting for a number of reasons. I'd love to know more about who the other D.O.R.K.S. were, for instance. (Is "S." Gregory St. Angelo?)

Now we're getting into the Harry Potter character names

The essence of the FNBC scandal is about the way New Orleans's social and political elites leverage their status to launder various government grants, tax incentives, and charitable donations through non-profit entities, real estate transactions, and public-private  partnerships in order to pass money around among themselves and their friends. We are governed by a syndicate of wealthy criminals. During the critical post-Katrina "recovery" period, FNBC was their bank of choice.

The collapse of the bank exposes a lot of these people. Here is one whose actual name, believe it or not, is Charity.

Charity is the third person to be charged in the case, in which the bank, founded by high-profile New Orleans financier Ashton Ryan, was seized by regulators in the spring of 2017, leaving the Federal Deposit Insurance Fund on the hook for $1 billion. It was the biggest U.S. bank failure since the 2008-2010 financial crisis.

The charges brought Friday allege that Charity used front companies and conspired with "Bank President A" -- which, it is clear from previous charges brought in the case, is Ryan -- to submit false documents to obtain loans that totaled $18 million by the time the bank collapsed in April 2017.

Actually I remember this guy. One of the scams he was involved in had to do with Mitch Landrieu's use of "Fresh Food Retailer" grants ostensibly aimed at alleviating so called "food deserts" but in reality became a conduit for funneling money to corporate entities like Whole Foods or to hustlers like this Charity person. The Advocate links back to a Lens article about Charity and Landrieu's FFRI scam but apparently doesn't read it since they seem to think the strip mall in question is located in New Orleans East. [UPDATE: Turns out the US Attorney's office doesn't know where the mall is]

Or maybe they don't want to implicate any of the Landrieu people until they have to. And that's the interesting thing about this story. The FNBC failure could turn over a lot of rocks. But it's also likely the media is interested in looking under as few of those as possible.

La banque c'est moi

BIG NEWS today in the BIG federal investigation that everyone has been watching with rapt anticipation.  There is a new indictment in the FNBC scandal.

First NBC Bank's former top lawyer was charged in federal court Friday with conspiracy to defraud the New Orleans bank, which failed two years ago in the biggest U.S. bank collapse since the 2008 financial crisis.

Gregory St. Angelo served as First NBC's general counsel for a decade until 2016, and during that time, he took out loans totaling tens of millions of dollars from the bank, many of which went into default. He is accused of conspiring with two former top First NBC officials to defraud the bank: President and CEO Ashton Ryan, referred to in court documents as "Bank President A," and former Chief Credit Officer Bill Burnell, referred to in the documents as "Bank Officer B."

It says here that St. Angelo is and has been cooperating with prosecutors and is likely to plead and roll, probably on Ryan.  Seems like he's still keeping his spirits up, though. 

Ryan continues to maintain his innocence, according to his lawyer, Eddie Castaing.

“Anyone who committed fraud on the bank also committed fraud on Ashton Ryan and the board, and they should plead guilty," Castaing said Friday. "Ashton had nothing to do with it.”

Ashton Ryan IS the bank. Also he had nothing to do with any of the shady stuff the bank has been involved with. That's pretty good.

It's also a good sign. The further up this goes, the better it's going to be when someone like Ryan actually goes to court.  There are a lot more people and institutions that could get named in this thing.  One example, among many, is the soon-to-reopen African American Museum.

In 2012 the museum cut expenses by eliminating its executive director position. At the time, a board member said that NOAAM’s yearly income had fallen to $200,000, less than half the ideal $500,000 operating income. In March 2013 the museum announced it had closed to complete renovations and never reopened.

According to a report by WWL-TV, the museum’s troubles continued when Trumpeter Irvin Mayfield briefly became a board member. Mayfield had served as chairman of the New Orleans Public Library Foundation, and was accused of unlawfully steering nearly $1.4 million from that organization to the New Orleans Jazz Orchestra. He left the African American Museum board in 2016 after reportedly incurring a $1 million bank loan on behalf of the museum. The loan had been granted by First NBC bank, which dissolved in 2017.

According to WWL, a philanthropic group called Treme Guardian led by businessman John Cummings assumed the bank loan in the interest of the museum. In 2014, Cummings, an attorney, opened the Whitney Plantation in Wallace, La., an institution designed to confront the history of slavery. But in 2018, Treme Guardian sued the NOAAM in Orleans Parish Civil District Court, alleging the museum had failed to make payments on the $1 million loan, continued to allow it historic properties to deteriorate and neglected to carry proper insurance.

There are more than just that, of course.  Hopefully this keeps going. 

Defrocked

It's pretty harsh when an individual is legally barred from performing any more acts of banking from now on.

First NBC Bank’s stunning $1 billion collapse likely ended dozens of banking careers, some by choice and some by circumstance.

Gregory St. Angelo’s circumstances are unique.

St. Angelo, the former longtime attorney for First NBC, has been cited by a federal agency for having engaged in “unsafe or unsound banking practice” and essentially banned for life from the banking industry.

According to a four-page prohibition order issued by the Federal Deposit Insurance Corp., St. Angelo demonstrated “willful disregard for the safety or soundness of the bank,” which failed in April 2017.

The SS FNBC

Not particularly seaworthy it turns out.

State Rep. Blake Miguez’s family business is in jeopardy after it allegedly defaulted on a multimillion-dollar loan that originated with First NBC Bank, which collapsed last year.

The succeeding note holder, a Denver-based limited liability company, is now moving to seize two offshore supply vessels owned by Iberia Marine Service, which Miguez’s father founded more than four decades ago. The foreclosures could force the company to dissolve, according to court filings.

Miguez is kind of the Bobby Newport of Southwest Louisiana.  Although, if I read this correctly, it looks like his company is technically insulated from the whatever debt the one he inherited/bought or whatever this convoluted arrangement was supposed to be.... whatever that is liable for. 

Miguez served as president of Iberia Marine, and is now the chief executive of SeaTran Marine, a joint-venture that includes Iberia Marine. SeaTran bills itself on its website as the largest company of its kind on the Gulf Coast, with 19 vessels. The website trumpets its leader’s status as a state lawmaker.

Miguez’s father, Steven Miguez, personally guaranteed the First NBC loan, according to a business loan agreement filed in court records. The loan was secured with eight vessels, two of which are subject to federal foreclosure proceedings in Louisiana and California. They include the largest in SeaTran's fleet, the 205-foot Mr. Steven, as well as the 172-foot Lady Eve.

Iberia Marine relies on revenue from Mr. Steven to stay in business, and seizure of the boat “will definitely terminate all agreements and bareboat charters,” Steven Miguez said in a Chapter 11 bankruptcy declaration. That would force the company to dissolve, according to the declaration.

A lawyer for SeaTran, Stewart Peck, emphasized that neither that company nor Blake Miguez are defendants on any of the claims involving the loan. Iberia Marine, however, is a member of the SeaTran corporate entity, according to state records.

Anyway, it's another politically connected rich guy/family to add to the list of politically connected rich people dragged so far in the saga of the sinking of the FNBC money club. 

Aren't they all fired, though?

Looks like the Harney charter board violated open meetings laws when they moved to fire their principal for questioning the board's (highly questionable, btw) financial practices and for picking a fight with Juan LaFonta or something. But, isn't the whole question moot? I mean if the board itself is already fired, how do they get to fire anybody?

Harney has been under intense scrutiny from the Orleans Parish school district for mounting administrative problems, board composition, finances and other matters.

Days after Superintendent Henderson Lewis Jr. told parents the school would close at the end of the school year because he would not renew its contract, he said he would revoke the embattled charter school’s contract mid-year. If that happens, the district will run Harney directly until it closes at the end of the year.

Sophisticating up the corruption

After all these years of trying to do the new fancy kinds of grifting with all the apps and things, we still find the old standards are the favorites.  

Lewis and Aiken took turns explaining the problems at the small charter school. The school has been plagued by financial mismanagement, Aiken said, noting that the school’s bank statements were addressed to the Carondelet Street church where the board president, the Rev. Charles Southall, serves as pastor. Meanwhile, Southall’s home address in Baton Rouge is the one that Harney listed with the state agency that distributes per-pupil funding to schools, another potential violation.

She also noted the school improperly withheld tens of thousands of dollars in employee retirement contributions for weeks or months and did not fully document credit card expenses.

That's a good old fashioned public school being ripped off by some politically connected preachers right there.  That's the way we used to do things in this city. The quasi-privatization charter hell is just window dressing, really.

It's also got our favorite bank.

In an audit that examined the 2016-17 school year, auditors randomly checked purchases on one credit card statement. They said they couldn’t find receipts to back up two of the three purchases that month.

They also noted that Harney’s accounting handbook had no policy on how to handle credit cards.

In response, school officials sent an undated policy to the district in January. “The school credit card is utilized at the discretion of the Board President,” it said.

The new policy requires charges to be approved by the chief financial officer — the same administrator facing ethics charges.

Monthly statements show the card was issued by First NBC Bank and had a $20,000 credit limit.

“We discontinued doing credit cards in” — Southall paused. “When did the bank close? 2016. At the end of that, that was the end of it.”

First NBC Bank was declared insolvent in April 2017. Weeks earlier, Ashton Ryan Jr., the bank’s president CEO — and a Harney board member —  stepped down from the financial institution.

He remained on the charter board and later asked his name to be removed from financial documents.

Under-retailed

New Orleans has so many problems.  People here are under-employed, under-housed, under-insured.  There's a lot of stuff our elected persons could be working on.  Jason Williams is trying to help the Motwanis and Sonder make a little more money off of the "under-retailed" though.

On Monday, City Council President Jason Williams expressed optimism that Sonder’s approach would help efforts to bring more big-box retailers, such as an Apple store or Pottery Barn, to Canal.

“New Orleans is significantly under-retailed, but it’s not because we don’t have people with resources who want to spend money,” he said. “It’s because of our lack of investment over a period of time.”

Sonder operates about 350 commercial short-term rental units in the city, according to Bowen.

It's good to see someone is finally looking out for "people with resources" in this city.  You know it's been really hard for them ever since their special money club went under.

Aaron Motwani, CEO of Quarter Holdings, the Motwani family company that owns 1016 Canal, said the work there was “a long time coming,” partly due to financing that collapsed after First NBC Bank failed in April 2017. But now, partnering with Sonder on a 10-year lease offered a new option for using the building's space, he said.

“Canal Street has always been tough to attract retail and residents,” he said.

It's so tough to get "retail and residents" to the most valuable high ground property in the city.  Probably a good idea to put in a 200 STR virtual hotel, then. That will help a lot.  Maybe Jason isn't very bright about how this stuff works.  He was quoted last week as saying the luxury hotel will "help pull short term rentals out of the neighborhoods." Because building nice things for rich people has done a fantastic job of relieving the affordable housing crisis so far.  But this is the same guy who told us the rules passed two years ago would allow the city to use STR operators' "disruptive technology to disrupt them," so it seems he is likely to believe just about anything. 

Or maybe he's just likely to repeat whatever bullshit line the "people with resources" are pushing . It's probably that.

Everybody sues Ashton

How many like this are there?

But a decade later, First NBC Bank and St. Theresa are both closed, and in the aftermath of First NBC’s collapse, the Liljebergs’ borrowing is the focus of separate civil lawsuits in which they are both suing and being sued. One of the suits accuses Ryan of fraud.

The Liljebergs borrowed almost $40 million in a nine-year span, much of which, they now allege in court documents, was done without their approval and at Ryan's behest. They say the First NBC president and CEO issued them new loans so that they'd be able to make payments on older ones as they came due. His goal, they claim, was to “fraudulently improve” the bank’s finances.

So far this is only the second such civil case that may have to be stayed while the federal criminal probe against FNBC proceeds.  This "community bank" had a lot of loans out there in the, uh, the community.  Of course all of the recipients are going to claim they were being taken advantage of by Ryan.  But there's probably more to it than that in a lot of cases. I wonder how many we're going to learn about as this goes on.

Follow the money... in a circle

There's finally an indictment in the FNBC scandal. It might not be the last one.

Jeffrey Dunlap, 44, of Slidell, faces one felony count of conspiracy to commit bank fraud, in what's likely the first domino to fall. Federal prosecutors have been investigating potential criminal charges related to First NBC's stunning collapse in April 2017 collapse, and in fact, many of the latest allegations were aired in a civil lawsuit filed in November in 22nd Judicial District Court in St. Tammany Parish.

Dunlap was charged in a bill of information, which usually indicates a defendant is cooperating with the government.

The allegations in the case illustrate the sort of shell game the bank played counting various instruments as revenue producing assets. In this case, Ashton Ryan is supposed to have been, basically, lending money to himself via Dunlap's firm.

Phoenix's work on the Mandeville project, called Wadsworth Estates, spanned seven years beginning in 2009, and included utility work as well as installing drainage, roadways and other infrastructure to develop the property, located on La. 1088. Plans call for a high-end business park and commercial development.

Each time Phoenix's loan from the bank became due, Ryan referenced his own debt to the firm as incoming revenue to justify the loan's creditworthiness and extend it, according to the lawsuit, which alleges fraud, unjust enrichment and unfair trade practices.

Monday’s bill of information echoes that complaint, alleging that Dunlap schemed with Ryan so both men could “unjustly enrich themselves, disguise the true financial status of (Phoenix), and conceal the accurate performance” of the firm’s credit line.

Anyway, there's potentially a lot more.  I wonder if the scope of this will remain limited only to the Phoenix stuff, though. 

Can we build a monorail out of wax?

During his final year in office Mitch Landrieu learned for himself something that many others had discovered before him.  Nobody knows what to do with Six Flags.

Mayor Mitch Landrieu’s administration has not been able to find anyone to redevelop the site of the old Six Flags amusement park in New Orleans East, meaning the property will pass, untouched, from one mayor to another for a second time.

A Landrieu adviser conceded Tuesday that she had no news to share with the public board that manages the site, nearly a year after the same adviser announced Landrieu’s office would take the lead on redeveloping it.

Responsibility for the vacant 140-acre property now falls to the 15-member Industrial Development Board and Mayor-elect LaToya Cantrell, who will be sworn in next month.

When Mitch took charge of the proposals last year, it sparked a round of rumors and conspiracy theories about one or another ways a "fix" might be in the works.  Who knows if any of that was true. I suspect none of it was. But whatever he had in mind, it turned out "the timing" just wasn't right for it. Or at least, according to him, in retrospect, this is the reason nothing has happened.

But no such plans have materialized, Conwell said Tuesday, though she said the city still believes the site can be financially successful.

She also hinted that any project that might have come through was complicated by Landrieu’s impending exit from office.

“It is logical that anyone considering such an investment on this site would, given the timing, want to avoid the transition period between administrations,” Conwell said.

So they're saying there's a chance.

But, really, should they even be encouraging anyone at this point? The previous several attempts at this resulted in escalating frustrations at the Industrial Development Board as the same two or three bidders kept coming back with different versions of the same harebrained schemes. It got so bad at one point that the board called the proposals, "an insult to the people of New Orleans." This is also, famously, the process by which we came to know Frank Scurlock. And look how well that worked out.

But it was never only about Scurlock. There were other serial bidders with strange ideas and shoddy financing as well.  Does anybody remember this scrap metal scam, for example?  I think that's the only instance where the foolishness rose to the level of actual criminal activity. But there's always been the potential for that. And, of course, there is still time for more. Which is why it's a good idea to keep an eye out for anything having to do with Six Flags that maybe seems a little off. For example, there is this nugget at the bottom of the above linked Advocate story.

There was at least some positive news Tuesday: Developer Tonya Pope, who has long sought to revive the former Jazzland Theme Park at the site, announced that she will build a $20 million wax museum near the site instead.

That’s a modified version of a plan she and her partner, the now-closed Musee Conti, announced last year to feature the museum’s wax figures as a Jazzland theme park attraction.

Jazzland operated only two seasons before going bankrupt. It was sold in 2002 to Six Flags Entertainment, which had its own financial problems over its three-year tenure and never reopened the site after Katrina.

Pope said her project has received financial backing from former Gov. Edwin Edwards and is expected to be open by late 2018 or 2019.

Pope doesn't have Six Flags but she does have $20 million to build a wax museum near the still rotting site of Six Flags. That seems normal.

Previous to this, Pope has been involved with a company called  TPC-NOLA, a partner in bids on the property going back at least as far as 2011 when it was eliminated in the early rounds.  The next year, the winner of that prestigious contest sank into the swamp after the Riverwalk outlet mall redevelopment basically duplicated what they wanted to do in a better location.

The process didn't begin again until 2014 when IDB had a hard time getting anybody to apply.  Only Pope's group had put together a bid before the application deadline. This time, they claimed to have "spent the last two years maturing the plan and getting a lot more support from the community and business leaders."  What she meant was that they got Ashton Ryan's Money Club to buy in.

Much of the money would come from a $25 million construction loan financed by First NBC Bank and federal tax credits for revitalization projects in impoverished neighborhoods. Paidia is also counting on another $10 million in private financing for equipment, $8 million in state tax incentives and $2 million in corporate sponsorships, according to its proposal.

This is exactly the kind of shaky investment scheme that would go on to cause the spectacular collapse of FNBC. (Please see the Advocate's excellent reporting over the past year and a half.) The IDB seemed to sense a problem at the time. So they extended the deadline.  Only Scurlock showed up to join in the bidding, though. Unsurprisingly, his proposal was even less sound than Pope's and the whole thing was scrapped again.

Throughout this process, the IDB became increasingly uncomfortable with its position as a landlord. It's not really something that board is set up to do. So it was desperate to just sell the property off in 2016 when Pope came calling again.  But it wasn't clear what her plans were for development. Something about "mixed-use" dining and retail or whatever. But evidently not enough to convince anyone of anything.

In 2017, she came back again, along with Scurlock and a surprise last-minute bidder who just jumped up out of the audience.

As the board heard from the two groups making purchase offers as listed on the agenda, Henry Klein, an attorney who said he represents 30/90 Development, said his group wants to offer $5.5 million for the property, while giving no details who's involved in the group or their plans for the Six Flags site. Klein left the meeting while it was still ongoing.

IDB member Justin Augustine said people jumping out of the audience to make an offer is "not a professional process" and urged the board to use a more professional method to receive offers.

It was shortly after this episode that Mitch stepped in saying he was going to find a developer on his own.  Last month, we were not surprised to learn he was unsuccessful.  But, hey, the new mayor is installed now. And maybe we'll see where it goes when she gets back around to dealing with this. In the meantime, Pope will (maybe) be right there in the neighborhood playing around with her wax dolls or whatever. 

Taylor Circle

An all-monuments-matter type household tells us how they feel during Carnival 2016  

Ever since the Confederate statues came down last year, a parlor game has blossomed on our city's op-ed pages and at public meetings and candidates' forums and whatnot over the question of what to do next with the space they occupied.  Why bother to do anything?  We just wanted the Jim Crow monuments taken down.  It's perfectly fine to just strip the name Lee off of the circle (return it to Tivoli or whatever) and just leave it alone after that. There's no pressing reason a person should be commemorated there at all.

On the other hand, if we do re-name the circle, the way to do that would be to give it a name that directly speaks back at the propaganda we have removed.  The Confederate monuments were themselves a political statement made by the white supremacists in power at the time of their erection.  If we choose to continue using that public space to express our political purpose, we should do so in a way that rebuts the original statement.

The reason I had given up on rededicating the circle at all is most of the ideas I've seen bandied about fail to address the definitive conflict that makes the space significant in the first place. Some attempt to sanitize it with tourist-friendly symbols drawn from entertainment. Some would replace monuments to the exploitative capitalism of the 19th Century with monuments to the exploitative capitalism of the 20th and 21st.  One idea that might have been acceptable was the suggestion that we acknowledge resistance to Jim Crow and rename the circle after Homer Plessy. But Plessy is already being honored in a location more appropriate to his historic act of protest.

Perhaps the worst argument I've read has been this suggestion by Arthur Hardy to create a "Mardi Gras Circle."  Hardy's stated intention to "bring us all together," is, like many of the other lame ideas,  an inappropriate attempt at sanitizing the space.  But his idea is actually even worse than that given that his subject is freighted with much of the same social and racial conflict as the Lee Monument itself.  This isn't a knock against Mardi Gras. Far it be it for us to speak against that. But re-naming Lee Circle "Mardi Gras Circle" as Hardy suggests and for the reasons he gives, degrades the social and historical significance of the circle and of the holiday.

It's fair enough for Hardy to say that the celebration of Carnival "brings people together." But that is a superficial assertion. Mardi Gras brings us together, yes. But as it does that it also heightens and  illuminates our contradictions. It's actually the underlying social and political discord that makes the communal experience of Mardi Gras such a powerful act of civic catharsis. And, sure, that's a bit more than most people are consciously grappling with while screaming at the Nyx "Dancing Queen" float for a bedazzled purse.  But any reflective treatment of the pageant, say in the form of a monument, that does not evoke this idea does not do the subject justice.  Except Hardy isn't interested in a symbol of social conflict. He's interested in something that has a benign "healing effect." In trying to do this with a Mardi Gras Circle, he confounds his own purpose.

It's a bad purpose anyway.  Twisting our own uncomfortable history into myths intended to please the powerful is how we got into this mess in the first place.  Case in point, Hardy's supporting argument is so far off base it necessitates paying reverent homage to a white supremacist organization.

As New Orleans celebrates its tricentennial, it is worth noting that Mardi Gras has been an essential part of the city’s history for more than half these 300 years. Street masking and private balls occurred in the late-1700s. In 1857, the Mistick Krewe of Comus presented the first organized Mardi Gras parade in New Orleans.

Of course it was the very members of the "Mistick Krewe" and associated Old Line Carnival organizations who established the revanchist Jim Crow government in the first place.  These clubs comprised (and in fact still comprise) the cream of the city's elite business and political class. After the fall of the Confederacy, they turned their street parades (these "bringing people together" activities Hardy is on about) into acts of un-subtle racist protest against the Reconstruction government.

During Reconstruction, New Orleans’ white elites used the pomp and ceremony of Mardi Gras to reassert symbolic and political control after the Confederacy’s defeat. The Louisiana Constitution of 1868 ushered in desegregated schools and public transportation, recognized the citizenship of African Americans, and granted the right to vote and hold office to African-American men without property requirements. Local white men perceived this new racial equality as a threat and were eager to recapture their former power.

Carnival krewes took their political arguments to the streets and manipulated their festive displays to provide evidence of the illegitimacy and incongruity of black citizenship.

The Crescent City Democratic Club, later renamed the Crescent City White League, whose stated goal was to prevent the “Africanization” of New Orleans and Louisiana, formed the city’s second krewe in 1870. The Twelfth Night Revelers regularly caricatured African-American lawmakers as bumbling crows or backward strongmen.

Comus presented its infamous “the Missing Links to Darwin’s Origin of Species” and “the Aryan Race” themes in 1873 and 1877, respectively. The former theme culminated with an anthropomorphic crowned gorilla standing in contrast against a white Comus, suggesting the innate inferiority of black men holding civic office. In like fashion, the Knights of Momus displayed comical yet grotesque representations of mixed-race people among equally grotesque animal hybrids in its 1873 parade themed “the Coming Races.”

Mardi Gras had become a mode by which former slaveholders and Confederate sympathizers could maintain symbolic power and communicate ideas of white supremacy, social Darwinism and the “Lost Cause” even under the city’s interracial Republican government.

After Reconstruction, it was these organizations who raised the funds and political will to create and install the monuments.

Two decades after occupying Union soldiers had made camp at New Orleans' Tivoli Circle, a monument to Confederate Gen. Robert E. Lee was dedicated at the site. Among the guests at the ceremony on Feb. 22, 1884, were former Confederate President Jefferson Davis, former Confederate Gen. P.G.T. Beauregard and Lee's two daughters.

Four days later, Mildred and Mary Lee attended the Comus ball.

By looking past all of this, Hardy suggests it is no longer of any relevance.  But nothing could be further from the truth.  To begin with, Comus and his acolytes continue to exert massive influence on the city's social and political hierarchy.  For proof of this, one need only observe attendees at the annually televised Rex Ball and compare those names with those that appear on campaign finance reports, or the boards of our local "philanthropic organizations" and the corrupt financial institutions that connect them.

Furthermore, the Krewes continue to militate in favor of their "Lost Cause" propaganda to this very day. Comus and Momus no longer parade in an ongoing protest against a thirty year old anti-discrimination ordinance. But their membership does through associated successor organizations.  Over the three years (yes it took that long) of debate over the monuments, Chaos and D'Etat repeatedly ran floats "satirizing" the movement to take them down.

Hardy breezes past all of this context regarding the Old Line Krewes vis a vis Confederate monuments.  Worse than that, he implicitly takes their side of the anti-discrimination dispute which he characterizes as an "attack" on the celebration itself.

Even when the celebration itself was under attack in the early 1990s when reaction to an anti-discrimination ordinance caused temporary battle lines to be drawn, it was Mardi Gras parades that brought the community back together. I’m betting that Mardi Gras Circle will have the same healing effect as we move past the recent controversies over statues and monuments.

Also, lol at that bit about the battle lines being "temporary."  The Krewes still haven't let it go.

Nor have they let go of their beloved Confederate monuments. And they appear to have the sympathetic ear of the incoming mayor on this matter. Last week she told Gambit she's willing to let the krewes "people who care about"  the Confederate monuments display them in a cemetery because, in her words, "Reverence, you know, matters."

That an African American mayor of New Orleans in 2018 is still obligated (and willing) to kiss the rings of the white supremacist Carnival royalty like this is stunning. That Hardy would write their own self-victimization white resentment bullshit into his version of the narrative tells us enough to distrust his proposal.  Our city's most famous Mardi Gras historian is a.. nearly literal, I guess.. court historian. That's not a huge surprise, of course. The niche media career he's carved out for himself depends on a willingness to tell us a top-down version of history.  Nobody rises very far in our little town without flattering a few oligarchs.

Luckily, a letter to the T-P this week provides us with what might be a solution.  

With all the public hullabaloo about Lee Circle, there have been many suggestions about renaming it. While most of those suggestions seem good, I believe I have a better one. Dorothy Mae Taylor was a longtime civil rights advocate before she was elected as the first African-American woman on the New Orleans City Council in 1986.

Taylor became famous (and some would say infamous) when she proposed an ordinance in 1991 to desegregate the gentlemen's luncheon clubs that had been the public face of the Mardi Gras krewes.

Here is a way to address every elephant in the room.  Hardy wants the circle's name to reflect the fact that Carnival parades pass there every year. This certainly does that.  Better, it does so in a more honest and meaningful way than Hardy's bland obfuscation of history would. More generally, we said we would like the re-christening of the space to directly speak back at history in a way that better reflects the best of our present values.  Well, Taylor Circle would do that too.

The only question now becomes, how would we pay for it?  I don't suppose Frank Stewart wants to chip in, does he?