Open letter to Iberville Parish Council regarding approval of future applications from its Industrial Tax Exemption Program participants

July 19, 2019

Honorable Matthew Jewel

Chairman, Iberville Parish Council

58050 Meriam Street

Plaquemine, Louisiana 70765-0389

Dear Chairman Jewel:

Hoping that you and my parish's other council members have been following my pontifications on the subject over the last few years, I write to you once again, this time to request permission to speak with you prior to any actual votes on Agenda Items 11(A) and 11(B) at the upcoming meeting of the Iberville Parish Council. As I understand it (and although I’ve not spoken to a single member who was aware of the items being on the agenda or had reviewed either of the applications set for approval on Tuesday), Agenda Item 11(A) is from Ohmstead and Item 11(B) is from SNF-Floplam. I briefly looked last night at the materials pertaining to these agenda items forwarded to me through your clerk, Ms. Kirsha Barker, and I am satisfied that these requests, unlike those you approved for Cos-Mar and a few other companies within the last couple of years, may indeed be meritorious, beneficial, and worthy of approval by the Council and our parish’s other ITEP-jurisdictional bodies, but there are some concerns.

As you are aware, due to my legal experience as former General Counsel at Louisiana's Department of Natural Resources, former Chief of the Lands & Natural Resources Section at the Louisiana Department of Justice, Member of the Louisiana Mineral Law Institute, and indeed as an informed private citizen of this great parish who even became a candidate for state attorney general in part because of deep concerns regarding La. R.S. 30:51, I'm probably uniquely qualified to speak about certain things. And I say now that I am convinced that prior to giving any final approval to ITEP requests, you folks need someone to explain thoroughly the extreme risks Iberville's citizens could face when approving such requests when they may be coming from certain types of companies.

In a nutshell, there is a little-known (at least outside the circle of those involved in oil and gas and natural resource matters) provision in Title 30 that has not yet been cited in a single reported decision, but which exists and remains as a potential "get-out-of-jail-free" card for the oil, gas and petrochemical industry, even extremely bad actors who may have intentionally defrauded the state or our parish, and unless the legislature finally wises up and appropriately amends or repeals that law it's ludicrous for you to approve ITEP applications from any companies involved in the production, transportation or marketing of oil, gas or products thereof without at least assuring that our district attorney ― the person responsible for protecting our legal rights in civil litigation ― is fully cognizant of the applicants' 30:51 situation when seeking your approval. Initially enacted around the very same time we set up the ITEP program, in relevant part, La. R.S. 30:51 states "Any suit by an official or agency responsible for the enforcement of a law, order, or regulation governing the production, transportation and marketing of oil and gas, or products thereof, to enforce in civil proceedings a penalty by means of a money judgment or a forfeiture of property, shall be instituted within three years after the violation shall have been made known to the attorney general." That 65-word, single sentence law requires an examination of the type you've likely never considered, but which I'll give a little background:

I happen to know that with its own office's funding challenges, the AG isn't sufficiently staffed to handle even its current volume of natural resources matters, whereas the legislature won't authorize him to employ attorneys on a contingency fee arrangement, and industry has tried to use La. R.S. 30:51 as a defense even to royalty fraud litigation, as an example. In fact, while it was settled after trial on the merits in the district court and, consequently, remains an unreported decision, one need only look at the R.S. 30:51-related pleadings filed in the 2004 case of Chevron, USA v. State Mineral Board, No. 93648 17th Judicial District Court, Parish of Lafourche, State of Louisiana, to see the danger. In that case the state of Louisiana, in a three week jury trial, proved intentional massive royalty underpayments and also fraud on the part of its mineral lessee, ultimately obtaining a verdict exceeding $100 million, but it was continually forced to defeat numerous pretrial motions and interlocutory appeals by the defendant, who sought to have meritorious claims dismissed because of La. R.S. 30:51 notice. Cognizant of that case and a few other unreported matters wherein R.S. 30:51 defenses have surfaced to our surprise and detriment, some in government circles have for years quietly sought on occasion to amend or repeal the statute, but sufficient legislative initiative has always been absent.

I can say from experience that the AG's office simply isn’t and never has been sufficiently staffed or funded that it can investigate and act upon all the R.S.30:51 notices that it receives. I know of no other provision in our law similar to 30:51. Within the last few years we've dodged (at least we hope we did) the Deepwater Horizon environmental Armageddon, dealt with the Bayou Corne sinkhole incident, and survived the I-10 well explosion that shut down traffic in our region for weeks. And of course you recall the petrochemical incident a few years ago when our parish's emergency response authorities were kept in the dark while citizens with no adequate escape routes, sheltering in place, wondered what to do. Imagine the embarrassment if an ITEP recipient, after receiving huge incentives that divert revenues that otherwise would go to our taxing bodies, one day escapes financial consequences in a court of law because, unbeknownst to you or your paid legal advisor, it had R.S. 30:51 defenses to certain violations when it sought your approval!!! Thus I renew my request to speak on these things, in Executive Session if you deem it appropriate, and with the presence of Scott Stassi, Ricky Ward, Tony Clayton, and/or anyone from the office of the attorney general or governor that you may see fit to invite, before giving your final approval of future ITEP requests. I'm convinced that these competent legal advisors, in just a few minutes with the appropriate discussion in your presence, would agree with what I've represented.

With best regards, I am yours truly,

Isaac Jackson, Jr.

Louisiana's foremost La. R.S. 30:51 pontificator