In what is being called one of the biggest cases of fraud in U.S. history, a corporation started in 1934 by a former senator and Louisiana governor, Huey Long, has received hundreds of millions of dollars from a corrupt political deal struck in the 1930s.
After a name-change in 1941, the Win or Lose Corporation was dissolved in 1951, according to state secretary of state’s office, but the family members of the corporation’s founders continue to reap the benefits as the state of Louisiana has done nothing to change the contract that is still currently in place.
According to a Fox 8 WVUE New Orleans investigation, the corporation has made about $811 million off of one state oil lease that they have held for over 70 years.
The Win or Lose Corporation was founded by the then-Sen. Long and also owned by state Sen. James A. Noe, New Orleans hotel owner Seymour Weiss, and Earl Christenberry, Long’s secretary. According to WVUE, Long’s name never appeared on the paperwork, but records show he was a partner of the company.
Long was killed in 1935, but his company kept operating through his family. In 1941, the company changed its name to the Independent Oil and Gas Company, Inc. and then it was dissolved in 1951.
How did Win or Lose end up making hundreds of millions of dollars off of one contract?
In 1936, Noe became governor of Louisiana and assigned W.T. Burton, a Louisiana businessman, an oil and mineral lease. Burton had no experience with mining or drilling, and records show he was a general contractor.
The lease, called State Lease 340, was for 500,000 acres off the coast of south central Louisiana. The terms stipulated that the state would get 12.5 percent of the royalties and Burton would receive the rest. WVUE notes that nowadays the state usually takes 20 to 25 percent in royalties.
Burton paid $75,000 for the lease and gave part of it to the Texas Company, now Texaco, who in turn paid him $95,000 for the lease, allowing Burton to turn a $20,000 profit.
The already fishy deal began to smell worse when Burton began to give more of his interest in the lease to the Win or Lose Corporation, owned in part by the governor at the time.
In the first 20 years, Win or Lose made over $38 million in inflation-adjusted dollars. In total, the corporation made around $811 million in today’s dollars.
Furthermore, State Lease 340 has no expiration date, as long as oil drilling and mining is occurring, the lease has been passed down through generations.
“The state, for whatever reason, has continued to perpetuate these contracts,” Bob Barton, a former journalist who has written about the issue, told WVUE. “And the folks who are involved, the heirs to the Win or Lose Corporation, continue to reap millions of dollars in benefits, and apparently will continue to do so.”
The state of Louisiana has made no move to challenge the contract or the transfers, and current Gov. Bobby Jindal has appointed Jack Lawton, a descendant of Burton, to the Louisiana State University board.
“For a variety of reasons — and I’m sure people are smart enough to figure out what those reasons are — it has continued to perpetuate itself,” Barton said. “And there millions and millions and millions and millions of dollars [sic] every year that could be state revenue that is not state revenue. It goes to private individuals. It’s a raw deal.”
WVUE also notes that “interest in State Lease 340 has been passed down to more than 200 different people.”
Noe has been brought to court over the issue, but a St. Mary Parish judge said that Louis Roussel could not sue Noe, only the state attorney general could. The judge ruled that Noe did nothing wrong.
Follow Michael on Twitter
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact [email protected]