Slippery details for Baby Oil case

A lawsuit arising from a former sheriff’s failure to collect taxes on a Houma company’s oil wells may be close to a conclusion, as attorneys representing the current sheriff and those representing the company enter the last stages of hammering out a settlement.

The company, Baby Oil, slipped by without paying $394,627 in taxes on its wells between 2010 and 2011. Former Terrebonne Parish Sheriff Vernon Bourgeois has maintained that he didn’t know the company, owned by entrepreneur Neil Suard, had requested more time to pay.

There is no provision in Louisiana law permitting a sheriff, as chief tax collector for the parish, to grant extensions. Ordinarily if a tax bill is not paid, notice is given and a property is seized and sold.

The failure of Bourgeois to collect the taxes was among shortcomings noted in an audit of his term in office by the Louisiana Legislative Auditor, including the taking of unauthorized vacation pay.

The vacation pay was returned to Terrebonne Parish by Bourgeois. Investigators for former Attorney General Buddy Caldwell found that enough evidence to prosecute Bourgeois for malfeasance in connection with the Baby Oil matter did not exist, primarily because of the legal requirement that a public official must have had criminal intent for that to happen.

Officials from Caldwell’s administration have since said that there is nothing to prevent Terrebonne Parish from suing Bourgeois to recoup any loss in connection with the wells. But the time limit for doing so likely has passed. The current Attorney General, Jeff Landry, announced through a spokeswoman that the office had closed out the matters involving Bourgeois in December, choosing not to move ahead with any further investigation or action.

Sheriff Jerry Larpenter, Bourgeois’ predecessor and successor, filed suit against Suard in 2012 to recoup the money lost, after he resumed office. But the case ground to a halt in 2014 and has not been back to court since.

Bill Dodd, the Houma attorney who represents the Sheriff’s Office, said he and Jerald Block, the attorney who represents Suard, have been in deep discussion that could bear fruit soon. Block said he could not discuss the matter beyond confirming that negotiations on the case are ongoing.

The problem, as attorneys explain it, is that Baby Oil may have the parish over a barrel, sort of.

Officials at the Louisiana Department of Natural Resources confirmed last week that anyone who takes over ownership of the wells will need to also take responsibility for the capping and plugging of those inactive wells. That costs a lot of money, and can result in serious liability if something goes wrong.

“We could seize the wells,” Dodd said. “But we don’t think that would be in the best interests of the taxpayers.”

A settlement, due to difficult financial circumstances for Suard, could take a long time to collect.

But Dodd and officials with knowledge of the case say that might still be preferable to a seizure.

In addition to the plugging and liability issues, the current oil market would make the likelihood of selling off the wells difficult if not impossible. •

Vernon Bourgeois