By Andrés Fuentes, WVUE Fox 8

For the first time since a report surfaced about payroll fraud allegations, a “secret sex room,” and lack of disciplinary actions taken, New Orleans Sewerage & Water Board leaders spoke in front of the city council on Wednesday (June 28).

The conversation circled around a report from Fox 8′s partners at the non-profit news organization Verite. The article said the Water Board’s chief of security recommended firing employee Gregg Herbert for payroll fraud, theft, and falsification of records after he took home around $87,000 in overtime pay despite having a base salary of $49,000.

Verite says Herbert was let go but the decision was reversed last month, allowing him to retire with full benefits and $39,000 in back pay. Two other employees were recommended to be fired, but the Verite report says one of them has been promoted twice since then and the other one faced no discipline.

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Council members question the protocols surrounding such cases.

“What we do by process is we go to the OIG in terms of an added layer of investigation and we typically trust them to forward that on if they think it’s worthy of the DA’s office,” S&WB Executive Director Ghassan Korban said.

“And that happened in this case?” Councilwoman Helena Moreno asked.

“I don’t believe it happened. That’s a question for them. I don’t have an answer for that to be honest with you,” Korban said.

The Verite report says Korban said he is careful about disciplining or firing employees with staff already low and pay not high enough to recruit and retain workers. In the council meeting, Korban said his agency has roughly 1,300 employees in total.

“It sounds like what’s happening, either because of process or necessity, is that we are incentivizing people to stay in a position, get a low salary, do your work, then get into an overtime regime and then increase your salary exponentially,” Councilman Joe Giarusso said.

Verite also says it interviewed two current employees and one former worker from the Carrollton Plant who described and recorded video of a so-called secret sex room. Korban says the former worker who provided the video of the room is a disgruntled former employee.

“For me as the general superintendent, that is somewhat of an embarrassment,” Spooner said.

During the council meeting, Korban said a sexual harassment complaint brought light to the room, which originally was a storage area. Korban said the room was dismantled last year but he wasn’t aware of its existence until late last week.

Council leaders stressed the need for discipline.

“There’s no way a supervisor did not know of its existence. It’s just not possible,” Councilman JP Morrell said.

“And we will look into that for sure,” Korban said.

This article first appeared on WVUE Fox 8.

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