Embattled Orleans Levee Board President Jim Huey resigned Wednesday amid cries of foul by colleagues that he might have overstepped his authority with unilateral decisions to hand no-bid contracts to relatives in the days after Hurricane Katrina and to collect nearly $100,000 in back pay several weeks before the storm.

Huey, whose nine-year-plus tenure at the agency’s helm is the longest on record, made no apologies for steering work to members of his wife’s family, saying those steps were taken under emergency conditions. As for the back pay, Huey said he was legally entitled to the money.

"Every single decision made during this crisis situation was made in the best interest of the levee district, and that will be proven in time," Huey said minutes after he faxed a letter of resignation to Gov. Kathleen Blanco, who controls six of the eight seats on the Levee Board.

While Huey maintains that his resignation was voluntary, sources close to Blanco said Wednesday that she demanded that he step down, citing the negative publicity he has attracted in recent weeks.

Huey, 55, said he resigned because the furor over his post-Katrina maneuvers had become "a sideshow" for the board as it struggles to recover from a disaster that destroyed levees and laid to waste much of the agency’s real estate holdings, from Lakefront Airport in eastern New Orleans to a commercial strip at West End.

Huey said he welcomes investigations into both contracts as well as the salary matter.

"I didn’t want to leave under these circumstances, but I fell victim to some other folks who don’t know what they’re talking about and they have to live with themselves," he said, declining to name names.

"I hold nothing against anybody," he said. "I am comfortable that I did the best I can and that history will tell the story. It always does."

Colleague ‘bewildered’

Huey’s exit comes two days before he was expected to address the controversy at the board’s monthly meeting.

Levee Board members Dan Foley and Eugene Green had called on Huey to give a full explanation of the back pay issue and provide an inventory of all contracts awarded by the agency since Aug. 25, the week before Katrina hit.

Foley, who said he was "bewildered and deeply disturbed by what’s happened," and Green have expressed concern that Huey took the actions without board approval. At Foley’s request, state Sen. Edwin Murray said last week that he had asked the governor’s office and the legislative auditor to launch inquiries into Huey’s decisions.

On Sept. 1, three days after Katrina came ashore, Huey leased 3,000 square feet of office space in Baton Rouge from board legal consultant George Carmouche, a cousin of Huey’s wife.

Huey said he authorized the six-month, $5,000-a-month agreement to ensure that the agency’s executive staff would have a place to operate after its lakefront headquarters was decimated by Katrina’s storm surge. He said he signed the lease only after state government failed to provide him a base of operation and after he saw that all available property closer to New Orleans had been locked up.

About a week later, Huey OK’d a business arrangement with Carmouche’s son, Scott, whose newly formed company was given the authority to coordinate the salvage of boats damaged or destroyed by the hurricane at the board’s two marinas. Huey said he was forced to move quickly on the salvage contract because the recovery of boats by insurance companies and owners was threatening to devolve into chaos along the Lakefront.

Board lacks contract

Technically, the board has no contractual agreement with Marine Recovery and Salvage LLC, which was formed by Michael G. Mayer, the owner of a local yacht repair and sales company that leases land from the board, and Scott Carmouche on Sept. 8, about a week after Katrina struck.

Using an emergency provision in state law, Marine Recovery was authorized to oversee the salvage operation by letter on Sept. 12. Scott Carmouche said his company recruited and then signed a contract with Florida-based Resolve Marine Group to actually do the salvage work.

Under the deal, Marine Recovery acts as the Levee Board’s liaison with boat owners and insurers and has been responsible for keeping an inventory of the recovered vessels.

Resolve Marine collects fees ranging from $150 to $350 per foot, depending on the size of the boat and whether the boat was on land or in the water. Carmouche said his company gets 10 percent of the fees collected.

As for the back pay, Huey said he obtained legal opinions certifying that he was entitled to about $96,000 in unpaid compensation dating to June 19, 1996, the day he was chosen board president.

The separate legal opinions Huey cited were prepared by the elder Carmouche and Gerard Metzger, a high school friend of Huey’s who also works as a contract lawyer for the board. Huey did not request an opinion from the board’s staff attorney.

After putting in long hours of service to the board, Huey said he felt that it was time to take advantage of a law letting levee board presidents collect a $1,000-a-month salary.

In a July 8 memo, Huey instructed managing director Max Hearn to deduct all per-diem payments he had received, halt the per-diem pay immediately and initiate a regular monthly payment of $1,000 beginning July 19.

Facts will tell, Huey says

In his letter to Blanco, Huey said "it is unfortunate that you have not been afforded the facts, but given the challenges before us, I am confident that this is the appropriate action to take at this time."

Once the "facts are reviewed," Huey told Blanco, "you will find all decisions and actions taken during this time of crisis will prove to have been made in the interest of the Orleans Levee District."

Under the agency’s rules, Huey’s resignation means that Vice President Mike McCrossen becomes acting president. McCrossen, named to the board a year ago by Blanco, is the former Orleans Parish recorder of mortgages, an elected post he held from 1990 to 1998.

Like Huey, McCrossen is an ally of state Sen. Francis Heitmeier of Algiers, a strong Blanco supporter.

Huey, an Algiers businessman who formerly operated a telecommunications firm, was named to the Levee Board in 1992 by Gov. Edwin Edwards and retained by Edwards’ successor, Mike Foster, in 1996. Huey was the lone gubernatorial appointee asked to stay on by Blanco after she took office in 2004.