New Orleans has always had its idiosyncratic folkways, but surely one of the most peculiar is how it lets a public official know he's making waves: the whispering campaign. For months now, anonymous hecklers have been sending faxes and e-mails to anyone with an ounce of political awareness--which in New Orleans is ot a small number-- attacking first-term Mayor Ray Nagin. They even mailed out a glossy four-color flier to African-American households accusing Nagin, who is black and presides over a majority-black city, of stacking his administration with white appointees.

It all evokes a period some years back, after Richard Pennington took over as the city's police chief and set out to shake up one of the most corrupt departments in the country. Cop-watchers began getting anonymous telephone calls, in which a voice on the other end would say, "Pennington's leaving. The moving van's in front of his house right now." Pennington had no intention of leaving at the time and had to call several press conferences to deny the allegations. He eventually came to take the harassment as a signal that he really WAS shaking things up.

So is Nagin. The communications company executive-turned-mayor has been in office a bit over a year, and in that time he has declared an all-out assault on petty corruption in city government; asserted his determination to end cronyism in the awarding of city contracts; brought in a hard-charging group of mostly private-sector appointees to wring more efficiency out of City Hall operations; focused on broadening the city's economy beyond tourism and making it easier for businesses of all kinds to operate; and even come close to making good on his pledge to fill 60,000 potholes. As a result, anonymous fliers notwithstanding, his public standing is sky high at the moment.

No doubt a part of this is due to Nagin's personality. Amiable, self- confident and approachable, he displays the off-handed and slightly mischievous good humor that New Orleans savors in a public figure. Where another politician might have gone standoffish and bitter at his anonymous critics--who'd neglected to mention that just as many members of his inner circle are black as are white--Nagin casually deflated them, telling the New Orleans Times-Picayune, "When I was growing up, we had these guys in the neighborhood that were always portraying themselves as big and bad, but underneath it they were really kind of soft and they would always run. We used to call them 'ginny women.' That's what they remind me of: those 'ginny women.' They gossip and they hide and they run and they act bad."

Yet a good bit of Nagin's popularity also stems from the unfamiliar feeling he has prompted among New Orleanians over the last year: the belief that perhaps the city really can change for the better. "Maybe people are feeding on their hopes," says Larry Lorenz, a journalism professor at Loyola University and host of a weekly public affairs roundtable on public television. "But they perceive that he has made moves against the traditional ways of doing things, the political back-scratching. They think he's honest, that he is not profiting from the office, and that he's not allowing an inside group to profit."

In essence, Nagin has set out to change the Big Easy's political culture, a tall order in any city but particularly demanding in this one. This is, after all, a city that still likes to think of itself as not quite American, thanks to its French and Creole roots, even though two centuries have passed since it became part of the United States. As Michael Lomax, a former Atlanta city council member who is now president of Dillard University in New Orleans, puts it, "This is a city that is more than rooted in the past. It's MIRED in the past."

In that sense, Nagin's grounding in business culture is a boon: It gives him the ambition, the impatience and the freedom as a political outsider to shake up the status quo. But at least in his first year, it has also carried a cost: Most of Nagin's missteps can be traced either to his discomfort with playing the politician or his tendency to discount the habits of local government. So far, this has just amounted to some bruised egos and bureaucratic gaffes, but it has also set up a crucial question for Nagin's next few years in office: Can he learn enough of the political arts to make tangible progress in revitalizing both New Orleans' economy and its image, without compromising his businesslike approach?


That Nagin is mayor at all is a sign of how ready New Orleans was for someone different. At the time he jumped into the contest last year to replace Marc Morial, who was forced out of office by term limits, Nagin was a political non-entity. The head of Cox Communications in New Orleans, he was one of the city's most well-connected corporate executives, but his political following was limited mostly to the business community and the small group of reformers around town; early polls had him standing at about 1 percent in a crowded primary field.

Yet Nagin, who is now 47, saw an opening. "When this race came up," he says, "I was looking at it and assessing what was going on in the city, and I just wasn't happy, man. And the more people I talked to, the more people were disenchanted with the candidates and what they were talking about. Then the tipping point for me was talking to my son and his friends about what they were going to do after high school, and to a person--there were like five or six of them--they told me they didn't see a future in New Orleans or the state."

These are hard times for the Big Easy. Although the city made strides under Morial, cutting its alarming crime rate and consolidating its position as a tourist destination, it was never among the cities that boomed during the 1990s, and its economy has continued to contract. The oil industry, once a source of thousands of high-paying white- collar downtown jobs, has been quietly abandoning the city; tourism, even in the best of times, generates far smaller incomes among its employees, and these have not been the best of times.

What Nagin recognized, and most of his opponents did not, was that voters were tired of seeing their friends, neighbors and family members pick up and leave, and that they didn't just blame a poor economy--they blamed a political way of life that tolerated petty sleaze, insiders helping their friends and the "laissez les bons temps rouler" carelessness that has often characterized Louisiana's governance in the modern era.

So Nagin spent the campaign talking about how, as he says, "politics is the dominant industry in New Orleans and Louisiana, and it suffocates business development." He promised to focus on jobs and economic development, and to re-order city government so that it supported growth and business. This brought him to the attention of the Times-Picayune and Gambit, the city's alternative weekly newspaper, both of which picked him out of the field, endorsed him and pushed his candidacy hard. Together with factional divisions that hampered the campaigns of several veteran New Orleans politicians, that attention helped boost him into a runoff against Chief Pennington. Pennington, popular because of his successes in turning around the NOPD, was widely seen as the Morial faction's candidate, but he turned out to be an unpersuasive campaigner with no clear agenda for fixing the city. Nagin emerged with 60 percent of the vote, polling especially well among white and middle-class black voters. Pennington is now the police chief in Atlanta.

The city government that Nagin encountered when he took over was in bad shape. There were two days' worth of cash in the bank, a $25 million projected deficit, a $100 million backlog of public works projects, and overall, what Nagin calls "a financial mess."

"You have no idea, man," he says. "All of the federal funding the city relied on had been spent for the entire year, and some had been promised for the year afterward. We started to look at contracts, they were let for five, 10, 15, 20 years. Then when we looked in the financial department, we found an antiquated, paper-intensive system-- checks were stuck in people's desk drawers, they used a 25-year-old computer system with eight-track tapes for data storage. I've still got on my desk an Israeli phone switch that has none of the normal features. I still don't know how to do the voice mail on it."

Even more worrisome than the city's technical incapacity, its workforce "was completely demoralized," in the words of a veteran City Hall administrator. Part of the problem was that city workers had gone without raises for years, but that was coupled with a workplace culture that had been allowed to go off the rails under previous administrations. "People saw that nothing happened to the bad employees, the people who didn't even show up," he says. "And they saw the mayor's family and friends making millions [from city contracts]. So they said, 'We're grossly underpaid, why should I even try? We're nothing.'"

Undoubtedly the most eye-catching issue that came up with the change of administrations, though, was corruption. Nagin and his team got an inkling of just how badly off the city was on their first day in office, when the chief administrative officer at the time, Kimberly Williamson Butler, found a cassette tape in her desk drawer detailing the misuse of $1.8 million in federal funds. The investigation she sparked eventually led to a raft of arrest warrants for malfeasance and bribery in the city's taxi and vehicle inspection bureaus, the dismantling of the city's Utilities Department--which had overseen the taxi bureau--and national headlines for Nagin. Although the district attorney at the time, Harry Connick, refused to prosecute most of the taxi drivers arrested for proffering bribes and some of the actual prosecutions fell apart in court, two brake-tag inspectors did plead guilty to bribery charges. The investigation and the arrests of city employees were a bombshell for a jaded city. "The corruption investigation was done in a kind of amateurish way," says Ed Renwick, a veteran political analyst who teaches at Loyola University, "but the public ate it up. It was the first time in memory anyone had seen a politician cleaning up corruption."


In pushing his campaign against corruption, Nagin has had more in mind than simply restoring faith in the workings of local government. He also sees it as a key step on the road to economic revitalization. "We joke about petty corruption on the floor of the legislature or the city council," says C.B. Forgotston, a longtime legislative aide in Baton Rouge who is now a lawyer and reform advocate in New Orleans, "but it's not a joke to an executive sitting in a building in New York." Although the city's investigation mostly unearthed low-level misdeeds, the overall anti-corruption push has been rejuvenated by the acting U.S. Attorney, Jim Letten, whose office is pursuing some 15 public-corruption probes in New Orleans and its neighboring parishes; at least a half-dozen of the investigations are focused on New Orleans city government.

There is no question that Nagin has transformed the atmosphere in town. "Ray has helped in the perception and reality of a city government as an institution that's trying to clean itself up," Letten says. "He's very popular in federal enforcement circles. He has our confidence." And Nagin himself, in his State-of-the-City address this spring, made a point of saying, "The perception that you have to do business under the table, whether it's real or imagined, if you want to do business in New Orleans is fading."

Nagin is indeed changing the fundamentals of how the city does business. He has ended contracts that administrators felt smacked too heavily of favoritism and renegotiated others on terms more favorable to the city--although some critics point out that Nagin still has not formally restructured the city's contracting procedures. His technology director, Greg Meffert, has produced a city Web site that makes it easy for businesses to apply for permits, and has also used the site to display property-tax assessments as part of a running political battle with Orleans Parish's independently elected assessors, who have had a tendency to hand out unequal and artificially low assessments, according to a state legislative audit. Earlier this year, Nagin reorganized city government, cutting the number of departments and offices overseen by the chief administrative officer from 33 to just a handful, focusing in particular on putting all the public safety departments under one administrator, and financial matters under another. "We wanted to make sure that any one particular direct report to the mayor had a maximum of 10 to 12 departments and agencies working for them," Nagin says. "What I found in corporate America is that's about the most anyone can effectively manage in a big organization."

Apart from the anti-corruption push, the more lasting economic development changes have been quieter. Beth James, who managed Cox Interactive Media before becoming Nagin's economic development director, pretty much wiped out the entire department and built it anew after taking over. "I'd asked people what were their goals for the year and how to achieve them," she says, "and they had no clear goals or objectives that would move the city forward or make life easier for the businesses here."

One of the city's problems has been that its emphasis on tourism can take it just so far, not only because the jobs tend to be low-paying but because it puts the city at the mercy of an uncertain industry: Recent decisions by Carnival Cruise Lines on which ships will dock at New Orleans, for instance, have generated worried headlines because they mean the loss of well over 100,000 visitors a year to the city. "Mardi Gras, food, music, the French Quarter, the Superdome--they're all good," says former Louisiana lieutenant governor Jimmy Fitzmorris, a business consultant in town. "But you need a thriving economic tradition. You need to bring businesses here."

Recognizing that New Orleans has an astounding array of untapped assets--"This is the most creative city in the U.S., bar none," James says--Nagin and James have launched a series of initiatives designed to build on them. Some are aimed at helping local entrepreneurs, musicians, artists and others build their businesses. Others have focused on understanding trends among local businesses so that the city can respond with appropriate workforce training initiatives or other services--"The biomedicine corridor between Tulane [University] and Charity Hospital," says Nagin, "is a diamond in the rough: There's already like 2,000 high-paying jobs over there, and if we could find the people and link them up, they would hire them tomorrow, there's that much demand." The city has begun wooing the movie industry, and expanding facilities for cruise ships. Moreover, Nagin likes to point out, "Our port has five raw materials where we're the number one importer in America: coffee beans, raw metals, steel, plywood and rubber. We only do value-added manufacturing on one of those--coffee beans. The other four, the raw materials sit in warehouses anywhere from eight to 12 months, until someone decides to move them to another location to be processed. To me that makes no sense." James' office has begun talking to wire rope manufacturers, and sent out a DVD with Nagin's economic development pitch to every rubber manufacturer in the country.


Of all the things Nagin has done, the one that probably resonates most deeply in the daily lives of New Orleanians is his drive to fill 60,000 potholes by this month. "The potholes were visible symbols of what drives you crazy about the city, and what doesn't work," says Michael Lomax. And when you fill them, as Larry Lorenz says, "By God, people notice."

By delivering early successes such as this, Nagin has secured himself a reservoir of goodwill that will be crucial as he moves forward. For although he's had no serious mishaps so far, the blemishes that did crop up in his first year could prove more troublesome down the road.

For one thing, there's Nagin's tendency to rely almost entirely on a small cadre of aides and advisers, most of whom come from the business world. They are a close-knit group, in constant touch with one another on their Blackberry wireless communicators, and they have tended not to trust anyone outside their immediate orbit, either within the bureaucracy or the larger political community. As one bureaucrat says, "This group came in and said, 'You were here when all this was going on, so either you were a part of it, or you didn't do anything about it.'"

This has caused some tension not just with the city council--early on, Nagin was not especially good about running his plans by council members--but also with the city's legislative delegation in Baton Rouge, especially members of the House. "Elected officials have egos," says state Senator Lambert Boissiere. "They want to be leaders. The mayor's style was not one that the House members readily accepted. He, in essence, is saying, 'I made certain decisions, I'm sticking to it, I want to work with you but this is my way.' Some had been accustomed to Morial's style, who was a master politician; he knew how to play up to elected officials for things he needed." And so small initiatives that Nagin has wanted out of Baton Rouge, such as legislation that would help the city take abandoned property, have moved more slowly than they might have otherwise.

Nagin himself recognizes that he has work to do on this front. "My fundamental premise is that people are going to understand the logic of what we're trying to do, and ultimately it'll benefit them in their constituencies, so they'll move with us," he says. "But sometimes, they just want to make statements and get attention or just try and slow it down a little bit, because they're not necessarily part of the program. I'm learning to be patient." Boissiere agrees. "I think the problem is being resolved," he says. "Both parties are realizing that neither can survive without the other."

The issues within the city bureaucracy have been equally troublesome, in part because there is an acute culture clash between Nagin's appointees and many of the people who work for them. "They just don't bother to notify the Council or department heads of things they want to do," says a City Hall veteran. "These pronouncements come out, and people have to respond, 'Are you aware that according to the law, you have to notify X and Y?' It's not that you can't do it, just that you have to do it a certain way."

Every once in a while, this produces an embarrassing moment for Nagin, as when he fired his first CAO, Kimberly Williamson Butler, who was having trouble meshing with the rest of his inner circle, and offered her a $75,000 severance payment. "I read about it over my morning cereal and my wife had to pick me off the ceiling tiles," says Gil Buras, the lawyer for the city's civil service board. "The law is, you pay governmental employees pursuant to established pay plans. You can't give bonuses or severance packages."

Similar issues caused Nagin to backpedal on an ambitious plan to install a merit-pay system within city government as a means of shaking up its culture of marginalism. The night before the plan was to be submitted, Nagin called it off. He says, "When we started to implement it, we got a bunch of legal opinions that said, 'Well, you have to jump through many hoops before you can do something like that,' and we just didn't have the time to clean that up." A city employee familiar with the plan says that the "hoops" had been cleared up: "I think they just got cold feet," he says. "It was too early to risk a situation where a handful of people got 10 percent increases and everyone else got 2 percent.


Perhaps Nagin's most difficult test will be how he handles several potential pitfalls that lie ahead of him. One is a move to privatize the city's Sewerage and Water Board, a Morial initiative that he has carried on. The agency is a New Orleans institution, responsible not only for drinking water and sewage but also for maintaining the massive pumping stations that keep the city dry after heavy storms. "If those pumps shut down," says Buras, "we're under 2 feet of water." Residents in the city have taken a keen interest in the agency's future, and recently voted 80 percent in favor of submitting any privatization contract to a citywide initiative--a move that caused one firm considering bidding to back off, unwilling to face the uncertainty. Nagin has suggested he has no interest in putting a contract to a public vote, but the issue will be a difficult one to massage.

Then there's the matter of those anonymous fliers accusing Nagin of stacking his administration with whites. In and of themselves, they don't amount to much, but they do raise an issue for Nagin. New Orleans is still a racially divided city in which any moves seen to benefit one race are often considered harmful to the other. "The community believes--and certainly the black community believes--that it's zero sum," says Michael Lomax. "There is this corrosive suspicion and hostility that people feel around whites and blacks engaging in something together. There was certainly a black establishment that felt comfortable with Marc Morial and [his predecessor] Sidney Barthelemy, and that don't have the same role in this administration."

Nagin has already demonstrated that he has no patience for this kind of thinking, but moving the city beyond it will require political skill. This is not only because of the resistance among people who have lost influence at City Hall, but also because, Lomax believes, Nagin's long-term success will rest on whether he can motivate new players, both black and white, to work with him on transforming the city. "He needs significant wins he can point to and say, 'We did this by engaging new people,'" says Lomax.

On that front, Nagin is off to a promising start--the whispering campaign against him would never have been launched otherwise. And although reformers in Louisiana have had a tendency to fall short of expectations, it may turn out that Nagin is exactly the right person for the moment. "Don't confuse energy and enthusiasm for naivete," says Lomax. "These people are serious, businesslike, and are not to be dissuaded. The naysayers had better get up early and work hard, because they've got people on the other side who are as determined as they are and probably have better work habits."