Stanford broker spoke to AG in 2008 about securities violations

A Stanford Group broker came to the state attorney general’s office in early 2008 with a complaint regarding possible violations of securities law, says an official with the office. “It had to do with manipulating paperwork,” says David Caldwell, head of the criminal and special investigations division for the Attorney General’s office.

Because of the nature of the complaint, the office referred the Stanford broker to the Louisiana Office of Financial Institutions. Commissioner John Ducrest says OFI on May 14, 2008 received a copy of the interview with the broker and two or three weeks later met with the Justice Department and the Securities and Exchange Commission in Dallas on “this overall issue.” The content of the complaint, he says, was only part of what was discussed at the meeting. Ducrest says he would share more information, but can’t. “I’m really constrained, unfortunately,” he says.

Caldwell says the complaint might have indicated unethical practices, but it did not indicate to the AG’s office anything on face value relating to the alleged Ponzi scheme perpetrated by Robert Allen Stanford and his companies. “Nobody came to us and said that this guy Stanford was running a Ponzi scheme,” Caldwell says. “We definitely didn’t know that.” The OFI, however, might have known and might already have been acting on that knowledge. “I hope one day to be able to talk about what were doing at the time. There are some very positive things,” Ducrest says. “Actions we took in 2007 and 2008 will eventually come to light.”

James Davis, the chief financial officer for Stanford Financial Group, has agreed to plead guilty when appears in court on July 13, according to a report from Reuters. To read the full story, click here.—Olivia Watkins

Jackson group to check out downtown

A contingent of about 70 people from Jackson, Miss., will be in Baton Rouge next week to learn about the progress the city has made in downtown redevelopment, Mayor Kip Holden says. The group will be in Baton Rouge on July 9-10, looking at a things such as the consolidation of state government buildings and how city initiatives spurred developments such as the Shaw Center for the Arts, the Hilton Baton Rouge Capitol Center and Kress at Third and Main, says Davis Rhorer, executive director of the Downtown Development District. “That’s a moment to celebrate, that we are moving to that level,” Holden says. Holden made the announcement Wednesday evening at a meeting of Progress Is Baton Rouge, a grassroots organization that supports the bond issue the mayor hopes to have before voters Nov. 14. The details of the next bond issue will be revealed July 22, but Holden says it will be at least $100 million smaller than the $989 million voters rejected last year that included various infrastructure improvements, expansion of the River Center and the Audubon Alive riverfront attraction. The cities of Baker, Central and Zachary, which voted overwhelmingly against the last bond issue, will be eliminated from the potential taxing district and therefore won’t vote this time around.—David Jacobs

Editor: A dirty war with ourselves

Mayor Kip Holden declared "an all-out war" on littering two years ago. But Baton Rouge remains filthy, says Business Report executive editor JR Ball. "Here’s the dirty little secret of our war: Trash doesn’t simply show up out of thin air," he says. "We have met the enemy, and they are us." Read his column here. Send comments to editors@businessreport.com.

Hensgens named managing partner of BSW

Scott N. Hensgens has been named managing partner of Breazeale, Sachse & Wilson. Hensgens, who has been with the firm since 1997, will serve as CEO of the firm and oversee its management and business operations. He will continue to practice law while serving as managing partner. The Crowley native earned a bachelor's from LSU and a law degree from Tulane Law School. In 2004, he was named to Business Report’s Forty Under 40. Hensgens replaces David Miceli, who left the firm in the spring to become head of Bach & Bingham.

Foster Farms to reduce contracted growers in La.

A California-based poultry company that recently took over a closed Louisiana processing plant with assistance from the state says it will not extend contracts to all of the plant's former growers. Foster Farms agreed to buy the shuttered Pilgrim's Pride poultry processing plant in Farmerville for $80 million, with the state contributing $50 million of the purchase price and another $10 million for equipment upgrades.

The company's director of marketing services, Ira Brill, says independent growers had been providing chickens to the Farmerville plant and another now-shuttered Pilgrim's Pride plant in Clinton, Ark. “As Foster Farms brings the Farmerville plant up to full capacity, it expects to extend contracts to the vast majority of Louisiana growers, but the regrettable fact is that this single plant cannot fully accommodate a grower base that was previously supplying two plants,” Brill says.

Brill says Foster Farms, which planned to spend about $18 million annually on chickens, would use such factors as cost, the quality of chicken housing and distance from a feed mill and the processing plant in its decision to extend grower contracts. Foster Farms plans to begin operations at the Farmerville plant on July 16. The company says total employment was projected to exceed 1,100 by September, with the payroll eventually hitting 1,300 again.

More state contracts for veterans?

The Louisiana Legislature and former governors have gone to great lengths to make the state’s veterans a bit more comfortable once they get back home. Veterans can get hunting and fishing licenses for no charge, enter state parks for free and get away without paying for certain license plates. There are ample housing and education opportunities. While there’s also preferential treatment given to veterans for some state jobs, there has never been a program aimed at helping soldiers-turned-entrepreneurs land state contracts—until now.

Earlier this week, Gov. Bobby Jindal signed into law a bill known as the “Veteran Initiative” that, in theory, provides more opportunities for veteran-owned business to participate in state procurement and public contracts. House Bill 559 by Rep. Jane Smith, R-Bossier City, would cost the state money if implemented, but how much is a fluid number as the governor and lawmakers grapple with a recurring billion-dollar shortfall.

Special preferences are already on the books for other types of small businesses and the new law will allow the commissioner of administration to set goals for two more categories: “veteran-owned businesses” and “service-connected veteran-owned businesses.” Jindal says that with billions of federal construction projects commencing in the state, this is a prime opportunity to create a program that assists Louisiana veterans in becoming business owners and entrepreneurs.—Jeremy Alford

U.S. jobless rate at 9.5%

Employers cut a larger-than-expected 467,000 jobs in June, driving the unemployment rate up to a 26-year high of 9.5%, suggesting that the economy's road to recovery will be bumpy. The Labor Department report, released today, showed that even as the recession flashes signs of easing, companies likely will want to keep a lid on costs and be wary of hiring until they feel certain the economy is on solid ground. June's payroll reductions were deeper than the 363,000 that economists expected and average weekly earnings dropped to the lowest level in nearly a year. However, the rise in the unemployment rate from 9.4% in May wasn't as sharp as the expected 9.6%. Still, many economists predict the jobless rate will hit 10% this year, and keep rising into next year, before falling back. All told, 14.7 million people were unemployed in June. If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.5% in June, the highest on records dating to 1994.

Poll: Most not planning to fly for summer vacations

Fifty-six percent of respondents to a Daily Report survey say they don't plan on flying to their summer vacation. Twenty-eight percent of people who took the online survey say they will be taking an airplane to their destination, 13% have already flown this summer and 3% are undecided. Nearly 1,500 people participated in the survey.

Today's question: What are you doing for the Independence Day weekend?

News roundup: Shaw subsidiary lands $100.7 million Navy contract … Faircloth stepping down July 10

Will install solar power systems: Atlantic Contingency Constructors, which was formed by The Shaw Group's environmental and infrastructure division, has been awarded a $100.7 million contract by the Navy to install solar power systems. The Virginian-Pilot newspaper reported the systems will generate renewable energy at Navy shore facilities in Virginia, Florida, Mississippi, Texas, Maryland and Washington, D.C. Atlantic Contingency is a venture between Shaw and AECOM Government Services of Norfolk, Va. The work should be completed by September 2010.

Making a run at the bench: Jimmy Faircloth, Gov. Bobby Jindal's executive counsel, will resign July 10 in order to run for a seat on the state Supreme Court, The (Monroe) News Star reports. The move doesn't come as a surprise; Faircloth announced in April he was leaving the administration after the legislative session ended so he could run for the vacant seat, which takes in northeast and central Louisiana. Faircloth, an attorney from Pineville, will oppose 4th District Judge Marcus Clark.

No Daily Report AM Friday

Daily Report AM will not be published Friday in observance of the Independence Day holiday. The newsletter will return Monday. Have a safe and happy extended weekend.