The Sugar Mill Case: Public Waste and the Public Bid Law

I would like to send my deepest regards to Judge Melvin A. Shortess (ret.) and Professor Kenneth M. Murchison for their guidance and assistance with this note. Without them, this note would not have been possible.

"Lord Polonius: What do you read my lord? "Hamlet: Words, words, words."1

I. The Lacassine Syrup Mill

A series of reports published in 2006 on the construction of a 45 million dollar syrup mill in Lacassine, Louisiana made Agriculture Commissioner Bob Odom out to be a sweet-toothed robber baron eager to exploit local farmers and taxpayers for more sugar money.2 The Louisiana Department of Agriculture and Forestry built the Lacassine mill to help sugarcane farmers cope with rising trucking costs.3 The mill condenses cane stalks into syrup, which allows more sugar to fit into each load, and offers a rail spur for bulk shipments to refineries in New Iberia.4

Financing for the mill's construction came from state bonds secured by an annual $12 million in gambling taxes.5Commissioner Odom planned to recoup the mill's cost by selling the mill to a nonprofit farmer's cooperative.6 The farmers would use profits from the mill's operations to pay off the bonds, thereby shifting the construction costs off taxpayers.7

Critics of the Department's efforts regarded the facility as an irresponsible waste of tax money. The credit sale to farmers did not soothe fears that the mill would fail to generate profits without significant increases in cane production.8 If the mill failed, bond holders would be entitled to the gambling money to repay the debt.9 The project's speculative benefits coupled with the vast amount of money involved led some to suspect the Commissioner was engaged in self-dealing.10

Suspicions were no doubt heightened after the Commissioner announced he had changed his mind about selling the mill to the farmer's co-op.11 Under the new plan, the mill would be offered to unidentified outside investors while the co-op would receive a lease.12 Odom claimed the unknown investors were offering as much as $60 million to buy the facility.13

While the media was busy coloring the Commissioner as the sugar king of south Louisiana, no one was paying attention to the legal problems looming in the background. In building the Lacassine mill, the Department of Agriculture and Forestry ignored the Public Bid Law.14 Under the law, state agencies must advertise public works contracts and award them to the lowest responsible bidder.15 No bids were ever solicited for the Lacassine mill. Commissioner Odom acted as the project's general contractor.16 Under Odom's direction, firemen and office clerks who worked for the Department of Agriculture and Forestry furnished labor for the mill's construction.17 For specialized projects, the Commissioner hand-picked ...

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