Taking a Louisiana Mud Bath

Louisiana politics are, well, different. When a Federal official declared at a national Governors conference a few years ago that "it's not part of my job to lie to people," Louisiana Governor Edwin Edwards cracked: "It's a very big part of mine." During his race against then Governor David Treen in 1983, he joked that his opponent seemed worried that Edwards, if elected, might loot the Governor's mansion. Quipped Edwards: "If we don't get Treen out of office soon, there won't be any money left to steal." Louisianians hooted and elected Edwards with 62% of the vote.

Last week a federal grand jury indicted the flamboyant Democratic Governor on 50 counts of racketeering, wire fraud and mail fraud. U.S. Attorney John Volz charged that Edwards and six associates, including a brother, Marion, and a nephew, had conspired to create 15 health corporations and to illegally acquire state certification that the companies, which existed only on paper, were needed to meet legitimate health needs in Louisiana. The companies would therefore be entitled to receive federal Medicare and Medicaid funds to reimburse them for capital expenditures. After gaining these certificates, the indictment alleges, Edwards and his co-conspirators sold the corporations to those interested in constructing health-care facilities. These operators paid more than $1 million for each of the companies.

The scheme had started, according to the indictment, in 1982, when Edwards was a private attorney between terms as Governor. His initial alleged co- conspirators were another attorney and a former state health official. Edwards is accused of concealing his partial ownership of four hospital corporations, reporting nearly $2 million in income from their sale as attorney's fees. When he became Governor again in 1984, the indictment claims, Edwards declared a moratorium on the issuance of all new certificates but exempted eight pending projects, five of which belonged to his associates. Edwards and the others are charged under the same racketeering law (RICO) that Federal prosecutors have recently been using to indict many Mafia families.

Federal investigators began looking into the hospital scandal after James A. Cobb Jr., a Louisiana attorney who represented other health-care operators, filed a suit against the state. "The people I represent are decent, hardworking people who didn't get a fair shake," Cobb complained. Once the probe was under way, Cobb contends, he got anonymous telephone threats. One caller, according to Cobb, said, "My friend, you really don't know what you're messing around with."

By his own count, Edwards has been a target of eleven other grand jury probes over the past decade, including one still under way. All of them, he claims, have been conducted by Republicans. But he has always shrugged off charges of wrongdoing. "People say I've had brushes with the law," he has said. "That's not true. I've had brushes with overzealous prosecutors."