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Property Services Group and Aqua Alliance in New Orleans : Corruption Case

In June 2001, a politically prominent New Orleans' lawyer, who was formerly a member of the Sewerage and Water Board (S&WB), was indicted in an alleged bribery scandal involving the exchange of cash and legal services for political favours. Lawyer Sal Anzelmo, together with three former executives of Professional Services Group Inc, the company that once ran the city's wastewater treatment plants, were indicted in connection with an investigation of Professional Services Group Inc. and Katherine Maraldo, head of the S&WB committee in charge of the agreement with the treatment plant. The indictment accuses Maraldo of receiving over $70,000 to pay off a mortgage and obtaining legal advice from Anzelmo, who was retained by PSG, on the sale of her property. PSG is accused of falsifying records to cover up payments made to a lawyer it hired to represent Maraldo in a law suit against New Orleans. Its former executives - Michael Stump (PSG President at the time), William Gottenstrater (former PSG Vice President) and H. Grant Simmons (a former Vice President, but also consultant) - have either been fired or have left according to parent company Aqua Alliance, which has stated that it is co-operating with the investigation.

The five defendants all face one count of conspiracy, four counts of inter-state travel in aid of bribery, four counts of mail fraud and one count of wire fraud. Each could receive sentences of up to 50 years in prison, if convicted.

Whilst Anzelmo's position is unclear, Maraldo's attorney has said that his client will plead innocent. PSG's parent company Aqua Alliance has stated that it will plead guilty to one charge of bribery and pay a $3 million fine.

The origins of the case lie in the award in 1991 of a five year contract ($5.4 million per year) to PSG to operate the S&WB's two treatment plant. The contract provided for the possibility of five one-year extensions. However, it is alleged that PSG entered into a financial relationship with Maraldo, who was on the Sewerage and Water Board at the time, in order to secure a five year deal instead. The indictment alleges that Maraldo, unsuccessfully, pushed for a five year renewal of the contract, but that the terms of the contact remained unchanged. It alleges that PSG paid Maraldo monthly payments, ranging from $1,500 to $ 5,200 per month in the period January 1995 to September 1996, totalling $71,700, to pay off a mortgage on a property which was known as the "Oak Harbor Boater". Anzelmo's alleged role in the scheme was to put together a joint venture for the property that would have given Maraldo a large profit.

This is the second time Anzelmo has been involved in a federal investigation. In 1971 he was charged with fraud and conspiracy after his involvement with Louisiana Loan and Theft, a New Orleans-based investment banking firm that later went into bankruptcy receivership. Anzelmo was found innocent. However, he subsequently lost a bid for re-election to the state House of Representatives, where he had served from 1960 to 1972.

PSG's current operations are now run under the auspices of U.S Filter, which was a competitor at the time of the alleged bribery scheme and which is a likely contender for S&WB's large privatisation contract to run New Orleans' water and sewer systems. Aqua Alliance has stated that "the activity discussed in the plea agreement has nothing to do with U.S Filter or today's PSG".

French water giant Vivendi owns U.S Filter of which PSG is now a part.

The following lists all references contained in our database that are relevant to this briefing
The Times-Picayune [6/1/2000] 'Five face charges of cash for favors: Former legislator, S&WB official named' by Staff Writer [Source ID = 5621]

The Times-Picayune [6/1/2001] 'Five face charges of cash for favors. Former legislator, S&WB official named' by Staff writer [Source ID = 5622]

The Connecticut Post [6/13/2001] 'Federal probe turns focus to sewer system contracts' by MICHAEL P. MAYKO: [Source ID = 5718]

BC cycle [3/3/2002] 'NEW ORLEANS:Voters claim final word in possible privatization' : [Source ID = 6502]

Public Citizen [9/1/2001] 'The Big Greedy A Background Check on the Corporations Vying to Take Over New Orleans´┐Ż Water System' by Alex Tsybine: [Source ID = 7595]

AFSCME - the American Federation of State, County and Municipal Employees. [6/1/2000] 'PSG merged into US Filter Operating Services' : [Source ID = 8063]

Times-Picayune (New Orleans, LA) [9/3/2003] 'Water, sewer plan called fatally flawed; But privatization isn't dead yet' by Martha Carr: [Source ID = 8481]

UNICORN [] 'Property Services Group and Aqua Alliance in New Orleans' by UNICORN: [Source ID = 8668]

Public Citizen [] 'New Orleans´┐Ż Effort To Privatize Its Water And Sewer Systems: An Analysis' : [Source ID = 8803]

Times-Picayune [7/12/2003] ' SW&B conspirators still unpunished; Lack of transcript delays sentencing' by Martha Carr: [Source ID = 9004]

Times-Picayune (New Orleans, LA) [4/17/2003] 'Water board hopes to learn from Atlanta; City's privatization venture went south' by Martha Carr: [Source ID = 9005]

Connecticut Post Connecticut Post,, [1/23/2003] 'Former Sewer Firm Executive in Bridgeport, Conn., Details Scheming' by Michael P. Mayko: [Source ID = 9006]

Times-Picayune (New Orleans, LA) [6/9/2002] 'Texas jury finds pair guilty in S&WB case; PSG paid chairwoman to push contract extension, ruling says' by Stephanie Grace: [Source ID = 9007]

Times-Picayune (New Orleans, LA) [5/20/2002] 'Trial begins in S&WB bribery case; Prosecution says ex-official paid to promote company's interests;' by Stephanie Grace: [Source ID = 9009]

The Times-Picayune [1/10/2003] 'Ex-S&WB Official Will Go To Jail: She took bribe for city contract' : [Source ID = 9049]


UNICORN is a Global Unions Anti-corruption Network. It is supported by the international trade union bodies: the TUAC (Trade Union Advisory Committee to the OECD); Public Services International (PSI); and the International Confederation of Free Trade Unions (ICFTU).

UNICORN is financed by the Foundation Open Society Institute