The Lafayette Utilities System paid more than $8 million to its sister LUS Fiber operation for a monitoring system of questionable value, the second such self-dealing transaction that boosted the fiber company’s revenues in possible violation of state law.
Mayor-President Joel Robideaux recently discovered the utility payments made to Fiber over eight years and reported the transactions Monday to the Louisiana Public Service Commission and the city-parish council.
Robideaux, in a letter to the PSC, said his staff uncovered the payments during a review of a state audit that earlier this year revealed LUS made more than $1.5 million in other payments to Fiber for service to lift stations that was never used.
The millions in payments between LUS and the related Fiber operation could violate the state’s Fair Competition Act, which prohibits local governments from unfairly subsidizing a related government utility. Critics have questioned whether LUS has unfairly inflated Fiber’s revenue, making the phone, cable and internet provider seem profitable.
“The purpose of this letter is to self-report a possible violation,” Robideaux wrote in his letter to the PSC.
The utility and the Fiber operation were jointly managed by Terry Huval, who retired last year a few months after LUS’s $1.5 million in questionable payments for services to Fiber were discovered. Robideaux already had moved to separate LUS and Fiber before Huval’s departure.
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