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Archive for the ‘Contract, Contracts’ Category

We really don’t like clichés and while it may be the pot calling the kettle black, a rose by any other name should be avoided like the plague. And at the end of the day, we like to think outside the box and avoid the low hanging fruit.

But the more things change, the more they stay the same.

Take, for example, the latest twist in the saga of Walter Monsour, erstwhile Executive Director of the Baton Rouge Redevelopment Authority (RDA), an agency responsible for the redevelopment of blighted areas of East Baton Rouge Parish.

The problem was that RDA was operating on a shoestring budget of $847,000 and from that meager allocation, Monsour was drawing down $365,000 in salary and benefits—about 43 percent of the agency’s total budget.

On top of that, his son’s law firm was getting about $190,000 in contract payments from firms that received contract payments from RDA.

Mayor-President Kip Holden had earlier rejected RDA’s request for $3 million in funding from the city-parish and funding from federal tax credit programs had been drying up.

Under fire for his salary, Monsour resigned in November. In his resignation letter, he said he made his decision to leave in order to “extend the financial life of the RDA.”

Of course that’s not the end of the story. Things just don’t end that way in the realm of Louisiana politics and the politically connected.

Monsour, it turns out, has landed on his feet. He has been hired by CSRS, Inc., a self-described firm of engineers, architects, planners, surveyors and fund-sourcing experts.

Monsour joins the Baton Rouge-based firm’s “senior leadership team” and will lead a newly-formed private sector development business unit, according to an announcement by CSRS.

If the name CSRS seems familiar, perhaps it’s because we included them in our recent post about state contracts and campaign contributions to Gov. Bobby Jindal.

In that post, we discussed Jindal’s executive order to cut back on state contracts and speculated whether or not those cuts would apply to those who contributed generously to his various political campaigns.

We noted that CSRS had a $5 million contract with the state—to provide landman services on an “as-needed” basis—and that the company and its principals had contributed $10,000 to Jindal.

Well, that’s not entirely accurate. It turns out CSRS has been awarded 11 contracts totaling $15.2 million during Jindal’s administration and the campaign contributions total $20,000.

There were, besides the $5 million contract, which began on July 1, 2013 and will end on June 30, 2016, two others which combined to account for the bulk of that $15.2 million.

The first was a contract with the Office of Coastal Restoration for $4.1 million that ran from July 1, 2008 through June 30, 2011 that called for the firm to “augment” existing professional engineering staff. Upon expiration, it was immediately renewed for $4.2 million.

As for Monsour, he may have been thrown under the bus but he’s got his game face on and it looks like a win-win situation for him as he steps up to the plate with his boots on the ground for this cash cow and you can bet he won’t leave any money on the table.

And that’s the elephant in the room.

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           As 2014 winds down, we decided that everyone else does a year-end wrap-up of the year’s significant events, so why not us?

            Accordingly, here is our review of the first six months of LouisianaVoice installments. The last six months will appear on Wednesday (Dec. 31).

JANUARY

IT Contractor linked to Obamacare, other problems:

A company holding two contracts with the State of Louisiana worth $32.8 million was the lead IT contractor of the ill-fated Affordable Health Care enrollment web page rolled out late last year.

CGI Technologies and Solutions, headquartered in Quebec, has experienced problems with other contracts in Canada and the U.S. even before the Obamacare debacle.

CGI Technologies and Solutions was awarded a $32.5 million contract with the Office of Community Development’s (OCD) Disaster Recovery Unit (DRU) on March 2, 2012 to provide computer software hosting, support and training for OCD’s Hazard Mitigation Grant Program (HMGP), small rental programs.

That contract is scheduled to run out on March 1, 2015.

CGI executives have been involved with at least 20 other troubled government IT projects, including one contract to automate retirements for millions of federal employees that went $60 million over budget and despite $2.3 billion in contracts with two dozen federal agencies, the company was rejected by the Center for Medicare and Medicaid Services (CMS) because of “performance issues” in carrying out an earlier contract.

HGI ties to Jindal, Christie:

MSNBC and the Wall Street Journal have begun focusing attention on a Louisiana firm with more than $200 million in contracts with both the Chris Christie and Jindal administrations for federally-funded relief to hurricane victims.

Hammerman & Gainer, Inc., or HGI, of Lutcher, was awarded a $68 million contract in May of 2013 to oversee two programs distributing $780 million in federal money to Sandy victims. That contract was cancelled only six months later, on Dec. 6, 2013, because of mounting complaints about delays in processing claims.

New Jersey homeowners say they have been unable to get answers, paperwork has been misplaced and HGI employees, most of whom are temporary employees, could not be reached by phone and that the company’s recovery centers change rules midstream and that no reconstruction program grants to thousands of applicants already approved have yet been awarded.

HGI also just happens to hold a $60 million contract with the Louisiana Office of Community Development’s Disaster Recovery Unit to administer the state’s Road Home Program. That contract began on March 20, 2012, and ends on March 19, 2015. Prior to that contract, HGI had a similar contract for $83.3 million which ran from March 20, 2009 to March 19, 2012. The $83.3 million contract replaced a $912 million contract with ICF Emergency Management Services of Baton Rouge.

In New Jersey, HGI hired Glenn Paulsen, former chief of the Burlington County Republicans, as its legal counsel when it submitted its bid to run the two Sandy relief programs. Paulsen’s law firm Capehart Scatchard, made a $25,000 contribution to the Republican Governors Association which Christie now heads.

HGI contributed $15,000 to Jindal in three equal contributions in 2007, 2008 and 2009. The company also gave $7,500 to Robert Wooley ($2,500 in 2003 and $5,000 in 2002), $5,000 to the Republican Party of Louisiana, $5,000 in 2011, to New Orleans mayor Ray Nagin in March of 2006, only months after Hurricane Katrina, and $7,500 to his successor Mitch Landrieu in equal contributions of $2,500 in 2010, 2011 and 2012. In addition, HGI President Larry Oney gave $5,000 to Jindal’s campaign in 2008.

Alvarez & Marsal gets fat at state trough:

Jindal also awarded a four-month contract to Alvarez & Marsal for a tad more than $5 million that called for the firm to deliver $500 million in savings to the state.

A & M’s cozy if disastrous relationship with state government goes back further than Jindal. In December of 2005, the Orleans Parish School Board adopted Resolution 59-05 on the advice of the consulting firm.

The resolution, passed in the aftermath of disastrous Hurricane Katrina was specifically cited in the ruling earlier this week by the 4th Circuit Court of Appeal that upheld a lower court decision the school board was wrong to fire 7,500 teachers, effective Jan. 31, 2006.

Then-State Superintendent of Education Cecil Picard chose Alvarez & Marsal to prevail upon the school board to replace acting parish Superintendent Ora Watson with an Alvarez & Marsal consultant.

So, Watson was replaced, 7,500 teachers were fired, the teachers sued and won, leaving the Orleans School Board and the state liable for a billion-five and the firm that started it all is hired by Jindal to find a $500,000 savings.

Alvarez & Marsal is specifically cited—by name—no fewer than six times in the first 51 pages of a 2009 report calling for the privatizing the state’s charity hospital system. Alvarez & Marsal performed that bit of work under a $1.7 million contract that ran for nine months in 2009, from Jan. 5 to Sept. 30.

The firm also received a $250,000, contract of a much shorter duration (10 days) from Jindal on April 9, 2013, to develop Jindal’s proposal to eliminate the state income taxes in favor of other tax increases. That plan was dead on arrival during the legislative session and Jindal quickly punted before a single legislative vote could be taken.

The obvious next step for Jindal was to

Problems continue at OGB:

Charles Calvi and Patrick Powers are out at the Office of Group Benefits (OGB) and Susan West, late of the Office of Risk Management has been named Interim CEO—the fourth person to head OGB in less than three years.

Meanwhile, that $540 million reserve fund balance OGB had on hand to pay benefits at the time of Gov. Bobby Jindal’s infamous raping of the agency now sit at $240 million and is dwindling at a rate of $20 million per month, no doubt the result of Jindal’s 7 percent premium reduction six months before the January 2013 takeover of OGB by Blue Cross Blue Shield (BCBS) of Louisiana.

FEBRUARY

Adley’s not-so-hidden agenda:

State Sen. Robert Adley (R-Benton) filed Senate Bill 79 which was designed to give Jindal even more power by giving him greater freedom in appointing members of a levee board, specifically the Southeast Louisiana Flood Protection Authorities of both the east and west banks.

The bill was a counteroffensive to attempts by the east bank authority to push for a historic lawsuit that would hold oil and gas companies responsible for damages to coastal wetlands.

The Southeast Louisiana Flood Protection Authority East (SLFPAE) was attempting to force the oil and gas companies to pay for the state’s coastal restoration efforts.

The lawsuit claimed that the companies destroyed the state’s coastal wetlands by dredging canals that contributed to erosion. The marshes had served as a natural buffer that mitigated storm surge. The suit, if successful, could cost the companies billions of dollars.

Adley’s bill should come as no surprise, given his opposition to the lawsuit but some might question why Adley would oppose the legal action against the companies in the first place.

One consideration could be that he has owned pelican Gas Management Co. since 1993, was president of ABCO Petroleum from 1972 to 1993, is affiliated with the Louisiana Oil and Gas Association, and has been the recipient of more than $150,000 in campaign contributions over the years from companies, political action committees, and individuals affiliated with or controlled by oil and gas interests.

Adley’s bill was assigned to the Senate Transportation, Highways & Public Works Committee. The chairman of Transportation, Highways & Public Works?

Robert Adley.

Jindal tantrum goes national:

Jindal’s outburst upon exiting a meeting between the nation’s governors and President Barack Obama Monday was a petulant display of immaturity that only served to underscore his disgraceful scorn for Louisiana’s working poor in favor of pandering to the mega-rich Koch brothers in the apparent hope that some of their Americans for Prosperity (AFP) money might find its way into his campaign coffers.

His shameless promotion of the proposed Keystone XL pipeline project coupled with his criticism of Obama’s push for a minimum wage increase comes on the heels of word that Jindal is literally stealing from the blind in drawing down more than half of a trust fund established to assist blind vendors in state buildings to purchase equipment, to pay for repairs and to pay medical bills.

That trust fund shrank from $1.6 million to about $700,000, apparently because of yet another lawsuit the administration found itself embroiled in over the delivery of food services at Fort Polk in Leesville that sucked up $365,000 just for the state’s 21 percent share of attorney fees.

Jindal said of Obama’s push for an increase in the minimum wage that the president “seems to be waving the white flag of surrender” and that Obama’s economy “is now the minimum wage economy.”

CIA kidnap accomplice locates in Bossier City

A photo in the Shreveport Times shows a grinning Gov. Bobby Jindal shaking hands with David Zolet, executive vice president and general manager of the North American Sector of Computer Sciences Corp. (CSC) as the two jointly announced that the company plans to open a technology center at CSC’s national Cyber Research Park in Bossier City.

CSC will be the anchor tenant of the research park and will partner with Louisiana Tech University to account for 1,600 new jobs over the next four years, thanks in part to $14 million in state funding over the next decade to expand higher education programs to increase the number of computer science graduates per year.

CSC customers, meanwhile, were being urged to boycott the company over allegations that it took part in illegal CIA rendition flights in the U.S. “war on terror.”

Court documents have linked CSC to the rendition of German citizen Khaled El-Masri who was abducted on Dec. 31, 2003, after being mistaken for a known terrorist by the CIA.

El-Masri was blindfolded, beaten, imprisoned for 23 days, stripped, sodomized, chained, drugged, flown to Afghanistan where he was again beaten and imprisoned for another four months, interrogated, threatened, denied legal representation, force fed and finally flown in a CSC-chartered plane to Albania, where he was left on a remote road in the middle of the night some 1500 kilometers from his home.

CSC was contracted for the flight as well as for other illegal CIA renditions, according to human rights charity Reprieve. CSC has so far refused a request by Reprieve to sign a pledge of “zero tolerance to torture,” and has also declined to respond to questions from Computer Weekly about the allegations.

Germany has paid the company some $405 million since 1990 and over the past five years, the country has awarded more than 100 contracts to CSC and its subsidiaries.

The story said it is “no coincidence” that the company’s various German offices are often located near U.S. military bases.

Barksdale AFB, home of the U.S. Air Force’s 2nd Bomb Wing and Global Strike Command, and Cyber Research Park are nearly adjacent in their proximity to each other, with the proposed CSC facility and Barksdale separated only by I-20.

MARCH

Jindal contributor benefits from state road work

The controversy over that 55,000 hunting lodge that straddles three central Louisiana parishes has taken a new and curious twist as the result of a $1.7 million highway resurfacing project that conveniently runs right past the entrance to the lodge that is owned by a major contributor to Gov. Bobby Jindal and to unsuccessful congressional candidate State Sen. Neil Riser.

The overlay of LA. 127, also known locally as the Olla-Sikes Highway, started on Feb. 20 at the Caldwell Parish line and run 5.5 miles east in Winn Parish to LA. 1238, according to an announcement by the Louisiana Department of Transportation and Development (DOTD).

The LA. 127 project ends at the camp entrance and at the property of TV reality show Swamp People star Troy “Choot ‘em” Landry, whose campsite is located within the hunting camp.

A search of political campaign contributions show that camp owner Bill Busbice and his wife, Beth each contributed the maximum allowable $2,600 ($5,200 total) to State Sen. Neil Riser’s campaign for the 5th Congressional District seat won by Vance McAllister.

Jindal also picked up $20,000 from Busbice and Alfred Lippman of Morgan City, the registered agent for Olla Productions, LLC., one of Busbice’s may business entities.

Busbice contributed $5,000 to Jindal in April of 2009 and Beth Busbice gave another $5,000 in December of that same year, while Lippman contributed $5,000 in October of 2003, $3,500 in April of 2009 and his firm, Lippman, Malfouz, Tranchina & Thorguson of Morgan City gave another $1,500 in September of 2010.

Additionally, one of Lippman’s law partners, David Thorguson and his wife contributed $1,300 to Jindal, Jindal campaign records show.

Appel’s shrewd investments:

State Sen. Conrad Appel (R-Metairie) purchased Discovery Communications stock in 2010 a week before a major announcement of a partnership between Discovery Education and the Louisiana Board of Elementary and Secondary Education, Capitol News Service has learned.

On Dec. 7, 2010, Discovery Education, a division of Discovery Communications, announced that Louisiana and Indiana had joined Oregon in adopting the Discovery Education Science Techbook as a digital core instructional resource for elementary and middle school science instruction.

Appel is Chairman of the Senate Education Committee and was in a unique position to know not only of the pending deal between Discovery Education and the Louisiana Board of Elementary and Secondary Education (BESE) but also of the company’s recent agreement with Indiana and Oregon, as well as Texas and Florida.

Appel’s financial disclosure form obtained from the State Board of Ethics indicates his Discovery Communications stock purchase was for “between $5,000 and $24,999.”

Discovery Communications is traded on NASDAQ and on the date of Appel’s purchase, the company’s shares opened at $40.96 and closed at $40.78.

And while there was no significant movement in the stock’s prices on the date of and on the day’s following Discovery’s announcement of the agreement with BESE, the stock hit a high of $90.21 per share on Jan. 2 of this year, meaning Appel’s on-paper profit after a little more than three years was in excess of 100 percent. The stock closed on March 27 at $75.72, still an 85 percent gain for Appel.

Appel’s 2012 financial report reveals that he also purchased between $5,000 and $24,999 of Microsoft stock on June 4, 2012, the same date that the Louisiana Legislature adjourned its 85-day session.

Ten days earlier, on May 25, the Louisiana Legislature approved the implementation of Common Core in Louisiana after a major push by the Bill and Melinda Gates Foundation which poured more than $200 million to develop, review, evaluate, promote and implement Common Core.

APRIL

Deputy Sheriff dabbles in private background checks:

A former DeSoto Parish sheriff’s deputy may have violated state law by using his office to run background checks for a company in which he owned a major interest, according to a report by the Legislative Auditor’s office in Baton Rouge.

Lagniappe and Castillo Research and Investigations ran 41,574 background checks through the sheriff’s office during an 11-month period between April 1, 2012, and February 28, 2013, the report says. Robert Davidson, retired chief investigator for the DeSoto Parish Sheriff’s Office, is 50 percent owner of Lagniappe and Castillo. He was employed by DPSO from 1980 until his retirement in May of 2013.

The report, released on Monday, also noted that three DeSoto Parish Sheriff’s Office (DPSO) employees were paid nearly $2,000 by Lagniappe and Castillo Research and Investigations for running the background checks between January 2011 and May 2013, duties they would normally perform as part of their jobs with the sheriff’s office.

The company charged its customers $12 for each background report and paid the sheriff’s office $3 for each report. That represents an income of more than $374,000 and a profit of more than $372,000 for owners Robert Davidson and Allan Neal Castillo.

Extortion claimed on state highway project:

A six and one-half-year-old lawsuit took a dramatic turn following a Mangham contractor’s claim that the Louisiana Department of Transportation and Development (DOTD) denied payments for work performed by his company because he resisted shake-down efforts by a DOTD inspector.

Jeff Mercer owner of the now-defunct construction company that bears his name, worked as a subcontractor to several prime contractors on six different projects for which he has not been paid. He first filed his lawsuit against DOTD on Sept. 7, 2007, in state district court in Monroe, claiming that the state owes him nearly $9 million for actual work done for which he was never paid, plus interest and delay costs which bring the total to more than $11.6 million.

The $500 million savings report by Alvarez & Marsal (A&M) was finally released on Monday only minutes before adjournment of the 2014 legislative session.

The 425-page report, produced under a $5 million contract, while projecting a savings of $2.7 billion over five years (an average of $540 million a year).

Most of the projected cost savings were based on assumptions for which A&M offered little or no supporting data other than arbitrary estimates and suppositions that could have been produced at a fraction of the report’s $11,760 per-page cost.

MAY

It pays to play I:

If there are any lingering doubts that politicians are beholden to the special interest who bankroll their campaigns, consider the money that has been spread among our state lawmakers—just from the oil and gas interests:

  • The 144 incumbent legislators have received more than $5.8 million in campaign contributions by a single special interest group—oil and gas. That comes to an average of $40,357 per legislator.
  • For the 39 current members of the Louisiana Senate, the aggregate is a little north of $2.8 million, or $51,100 each.
  • A total of $2.99 million was distributed among the 105 House members—an average of $40350 each, the figures show.

So, by obtaining a dismissal of litigation that could conceivably cost oil companies several hundred million dollars—before it ever goes to trial or even to the discovery stage—by spreading $5.8 million around represents a nice return on investment.

And make no mistake about it: campaign contributions are just that—investments.

It pays to play II:

The Senate Finance Committee on Sunday (Sen. Dan Claitor discarded their oaths of office—their sworn duty to protect the interests of the people of Louisiana—in favor of political expedience of the very lowest sort by ripping $4.5 million from the budget for Louisiana’s developmentally disabled and allocating the money for a Verizon IndyCar Series race at the NOLA Motorsports Park in Jefferson Parish.

LouisianaVoice conducted a search of the Secretary of State’s web page to learn the identities of the NOLA Motor Club corporate officers and whose name should pop up as one of the principals? Laney Chouest, that’s who.

So, who is Laney Chouest, you ask?

Well, he also showed up as an officer in a few other corporations run by the politically active Chouest family of Galliano. Their main business is in shipbuilding and Laney Chouest was listed as an officer in Edison Chouest Offshore, Inc., Alpha Marine Service Holdings, LLC. and Beta Marine Services, LLC., to name only three.

So, armed with that information we did a campaign contribution search of only the last name of Chouest and we hit the mother lode.

Between 2007 and 2010, members of the Chouest family and their various businesses contributed $106,500 to Jindal.

JUNE

Legislator’s firm cited for environmental infractions:

A citation and a cease order issued to Dual Trucking Co. by the Montana Department of Environmental Equality for dumping oilfield radioactive waste from the nearby Bakken Oilfield, it turns out, is not the only problem State Rep. Gordon Dove (R-Houma) has experienced with environmental authorities, Capitol News Service has learned.

Vacco Marine, Inc., a company owned by Dove, who chairs the House Committee on Natural Resources and Environment, has been the subject of several investigations, negative reports, citations, and compliance orders by and from the Louisiana Department of Environmental Quality (DEQ) over a period of several years, records show.

Last week, while presiding over a meeting of the Natural Resources Committee, he joined 12 other members in passing an amendment to SB 469 that made the prohibition against suing oil companies for damages to the state’s wetlands and marshes retroactive.

Dove also serves as a member of the Louisiana Coastal Protection and Restoration Authority.

Lobbyists swarm to protect BP:

By now, most people who have followed the bill authored by Sen. Bret Allain (R-Franklin) but inspired by Sen. Robert Adley (R-Benton) know that big oil poured money and thousands of lobbying man hours into efforts to pass the bill with it accompanying amendment that makes the prohibition against such lawsuits retroactive to ensure that the SLPFA-E effort was thwarted.

Most followers of the legislature and of the lawsuit also know that up to 70 legal scholars, along with Attorney General Buddy Caldwell, strongly advised Jindal to veto the law because of the threat to the pending BP litigation.

Altogether, the 144 current legislators received more than $5 million and Jindal himself received more than $1 million from oil and gas interests. Allain received $30,000 from the oil lobby and Adley an eye-popping $600,000.

So, when BP lobbyists began swarming around the Capitol like so many blow flies around a bloated carcass, the assumption was that BP somehow had a stake in the passage of SB 469 and that infamous amendment making the bill retroactive.

John Barry, a former SLFPA-E who was given the Jindal Teague Treatment but who stuck around to pursue the lawsuit, said, “During the last few days of the session, we were very well aware that the BP lobbyists were extraordinarily active. They were all over the place. We all assumed there was definitely something it in for them.”

Something in it for them indeed.

Blogger Lamar White, Jr. observed that former Gov. Edwin Edwards spent eight years in a federal prison for accepting payments from hopeful casino operators for his assistance in obtaining licenses—all after he left office. New Orleans Mayor Ray Nagin was similarly convicted of using his position to steer business to a family-owned company and taking free vacations meals and cell phones from people attempting to score contracts or incentives from the city.

So what is the difference between what they did and the ton of contributions received by Adley and Jindal? To paraphrase my favorite playwright Billy Wayne Shakespeare, a payoff by any other name smells just as rank.

And while big oil money flowed like liquor at the State Capitol (figuratively of course; it’s illegal to make or accept campaign contributions during the legislative session), what many may not know is that Jindal may have had an ulterior motive in going against sound legal advice to sign the bill into law, thus protecting the interests of big oil over the welfare of Louisiana citizens who have seen frightening erosion of the state’s shoreline and freshwater marshes.

The Washington, D.C., law firm Gibson, Dunn & Crutcher is one of the firms that represented BP in negotiating a $4.5 billion settlement that ended criminal charges against the company. Included in that settlement amount was a $1.26 billion criminal fine to be paid over five years.

An associate of Gibson, Dunn & Crutcher who has defended clients in government audit cases and in several whistleblower cases is one Nikesh Jindal.

He also is assigned to the division handling the BP case.

Nikesh Jindal is the younger brother of Gov. Piyush, aka Bobby Jindal.

Suddenly, John Barry’s words take on a little more significance: “We all assumed there was definitely something it in for them.”

Something in it for them indeed.

By now, most people who have followed the bill authored by Sen. Bret Allain (R-Franklin) but inspired by Sen. Robert Adley (R-Benton) know that big oil poured money and thousands of lobbying man hours into efforts to pass the bill with it accompanying amendment that makes the prohibition against such lawsuits retroactive to ensure that the SLPFA-E effort was thwarted.

Most followers of the legislature and of the lawsuit also know that up to 70 legal scholars, along with Attorney General Buddy Caldwell, strongly advised Jindal to veto the law because of the threat to the pending BP litigation.

Altogether, the 144 current legislators received more than $5 million and Jindal himself received more than $1 million from oil and gas interests. Allain received $30,000 from the oil lobby and Adley an eye-popping $600,000.

So, when BP lobbyists began swarming around the Capitol like so many blow flies around a bloated carcass, the assumption was that BP somehow had a stake in the passage of SB 469 and that infamous amendment making the bill retroactive.

John Barry, a former SLFPA-E who was given the Jindal Teague Treatment but who stuck around to pursue the lawsuit, said, “During the last few days of the session, we were very well aware that the BP lobbyists were extraordinarily active. They were all over the place. We all assumed there was definitely something it in for them.”

Something in it for them indeed.

 

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One of Gov. Bobby Jindal’s favorite activities (second only to trips to Iowa and New Hampshire) appears to be his now-routine exercise of mid-year budget cuts and hiring freezes.

But like any deft politician, he leaves himself wiggle room.

Lots of wiggle room.

On Jan. 15, 2014, Jindal, in reaction to the state’s worsening fiscal condition, issued an executive order for a “limited hiring freeze” that extended to some 40 state agencies. That order stipulated that no agency use employee transfers, promotions, reallocations or the creation of new positions in such a manner as to exceed a ceiling imposed by the commissioner of administration. JANUARY HIRING FREEZE

As state finances continued to deteriorate, Jindal followed up with a statewide expenditure freeze on April 14. While that order imposed statewide cuts, it listed enough exemptions and exceptions as to render it practically meaningless—except for higher education and healthcare expenditures not covered by federal funding. As has always been the case, those were not spared. APRIL EXPENDITURE FREEZE

The order continued a trend that has come to define the Jindal administration: extensive mid-year cuts.

Then, on Nov. 7, Jindal issued his first executive order of the 2014-2015 fiscal year that began on July 1 for another statewide expenditure freeze. Again, the main areas cut were higher education and health care, though as with the April order, other agencies felt at least some of the effects. Theoretically at least, the only exceptions were essential services and federally funded programs. NOVEMBER EXPENDITURE FREEZE

Now, Jindal is at it again. On Dec. 18, he issued yet another executive order, the fourth of the calendar year and the second this fiscal year. This one called for expenditure reductions totaling $153 million and authorizing Commissioner of Administration Kristy Nichols to impose an additional $17.4 million in cuts for total cuts of $170.4 million.

DECEMBER EXPENDITURE REDUCTION

Among the latest cuts ordered by Jindal included:

  • Higher Education: $4.9 million;
  • Department of Education: $6.77 million;
  • Corrections: $336,780;
  • Division of Administration: $3.5 million;
  • Veterans Affairs: $240,000;
  • Office of Juvenile Justice: $1.98 million;
  • Office of the Department of Health and Hospitals (DHH): $131.8 million (includes $127.44 million in cuts to medical vendors, $2.64 million to medical vendor administration, and $308,213 in cuts to the Office of Citizens with Developmental Disabilities);
  • Office of Children and Family Services: $964,980;
  • Department of Natural Resources: $1.29 million;
  • Department of Economic Development: $1.4 million.

One of the more interesting sidebars to this entire scenario is that with the latest executive order, DOA gave some agencies only eight working days in which to provide a myriad of information, including lists of all contractors and amounts paid on the contracts.

DOA has consistently taken weeks and sometimes months in which to comply with similar requests by LouisianaVoice, a point which will be raised in any future litigation by LouisianaVoice. We will, in all probability, cite that long-standing legal precedent Goose v. Gander in our legal arguments.

We mentioned at the beginning of this post that Jindal has left himself a lot of room to maneuver around his own dictates and we had little problem in finding good examples.

In early November, only hours before that Nov. 7 hiring freeze for example, the Office of Group Benefits (OGB) brought two six-figure appointees over from Blue Cross and Blue Shield of Louisiana to assist OGB Chief Executive Officer Susan West in handling an agency that appeared to be spinning out of her control.

West makes $170,000 a year as CEO but the governor’s office somehow saw fit to pay Thomas Groves $220,000 a year as Assistant Commissioner and Elise Cazes $106,512 as Group Benefits Administrator.

And now we learn that OGB is still hiring long after that hiring freeze took effect last month.

The Office of Civil Service will close applications on Friday (Dec. 26) for the position of Group Benefits Director (what that entails). The salary range for that position is between $50,900 and $107,000, according to the Civil Service announcement.

That’s a pretty big spread and our bet is the new hire won’t be starting at the bottom of that scale.

It seems curious to us that OGB managed to survive—and even thrive, building a $500 million reserve fund balance—without all that added weight before the decision to fire former CEO Tommy Teague in April of 2011, lay off more than 100 personnel, to privatize the agency and in the process, manage to lose half of that $500 million reserve fund.

Not satisfied with increasing the number of administrative positions at OGB, the administration is currently advertising for a Chief Legal Officer for OGB, according to listings provided by Civil Service.

And then there is the case of Chance McNeely who, since last march has served as a $65,000-a-year policy analyst for the Governor’s office but more recently was appointed as Assistant Secretary for Environmental Compliance at the Department of Environmental Quality at an as yet undisclosed salary.

Three things stand out about the McNeely appointment. First, with Jindal’s term of office winding down to just over a year left, McNeely need a nice cozy spot to land in a classified (read: protected) position.

Second, the creation of that position would seem to violate Jindal’s own directive of last April that “no agency use employee transfers, promotions, reallocations or the creation of new positions in such a manner as to exceed a ceiling” imposed by the administration. Jindal and Nichols would argue that that caveat applied to the previous fiscal year, not 2014-2015 and technically, they would be correct. But the state’s financial condition is even worse than last year, so one might reasonably assume that prohibition should have been carried forward into the new fiscal year. But when it adheres to the wishes of Jindal, the rules apparently do not apply. After all, it was in a Division of Administration staff meeting a couple of years ago that the directive was given to staffers to not let the law stand in the way of the administration’s wishes.

And third, since when does Jindal care about the environment anyway? Remember that Jindal himself described climate change advocates as “science deniers.”

Curious indeed for a governor obsessed with reducing the size of government.

But, as those cheesy TV commercials say, there’s more. We also have the Department of Education.

Since January of 2014, DOE has chalked up 300 new hires—190 full time and 110 part time—at a combined salary of more than $9.6 million, or an average yearly salary of $50,857, including part timers.

The Recovery School District (RSD), which has experienced a string of critical state audits, had 93 of those 190 new full time hires at a combined salary of $4.1 million.

DOE hired 50 part time employees at $500 per week or more (a combined salary of $2 million per year) and 16 of those part timers, all employed by RSD, were hired at $1,000 per week or more. One of those, guidance counselor Nancye Ann Verlander, was hired at a part time salary of $3,000 per week ($156,000 per year), according to records provided by Civil Service.

Two others, Kathryn Elichman and Kenneth Elichman, were hired as part time administrators at $1,600 and $1,150 per week ($83,200 and $59,800 per year, respectively), records show, and a part time school nurse receives $72,800 per year.

Meanwhile, Jindal travels the country visiting fairs and community groups in Iowa and New Hampshire and grabbing network TV face time at every opportunity to proclaim how he has delivered a balanced state budget, reduced the size of government, lowered taxes, and turned Louisiana into a utopia for its four million citizens.

Those citizens, however, somehow continue to see Louisiana turn up near the bottom of surveys of all things good and at the top of all things bad.

Such is the surrealistic world of budget cuts and hiring freezes in the administration of Gov. Bobby Jindal.

 

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A report by the Pew Research Center earlier this week indicated the wealth gap between middle- and upper-income households in America continues to widen to record levels. http://www.latimes.com/business/la-fi-pew-wealth-gap-20141217-story.html

Congress has just acted to ensure that that record gap between rich and poor continues to grow https://www.ifebp.org/blog/Lists/Posts/Post.aspx?ID=72

And if you think we down here in Louisiana are insulated and unaffected, think again.

The Pew report, drawing on the latest data from the Federal Reserve, says the median wealth for high-income families was $639,400 last year—up 7 percent from three years earlier on an inflation-adjusted basis—while the median income for Louisiana households was reported at $39,622. The figure for Louisiana represented a drop of 19.7 percent from the state’s 1999 peak year of median earnings of about $48,400. http://www.advisorperspectives.com/dshort/updates/Household-Incomes-by-State.php

In 1983, the CEO-to-worker pay ratio was a shade less than 50:1. Today that difference stands at 331:1 and the CEO-to-minimum-wage-worker pay ratio is even more obscene at 774:1. http://www.aflcio.org/Corporate-Watch/Paywatch-2014

There also is this: http://www.investopedia.com/financial-edge/0711/5-outrageous-ceo-spending-abuses-and-perks.aspx

And yet, even as corporate CEO pay and perks continue to reach stratospheric figures that the average employee can only imagine, Congress took a step last week that could actually lead to a major financial hit for retirees.

If that mammoth spending bill passed by Congress on Dec. 11 escaped your scrutiny, perhaps you should have been paying closer attention. Included in that bill was an obscure amendment which will permit benefit cuts for retirees in one type of pension plan—multi-employer plans jointly run by unions and employers.

By definition, that would mean members of unions who work for several companies. That could conceivably include Teamsters, building trades, longshoremen and any other workers whose unions have working agreements with multiple companies. http://www.wsj.com/articles/pension-change-seen-as-setting-a-precedent-1418586647

Louis Reine, President of the Louisiana AFL-CIO, acknowledged the amendment was inserted as a means of keeping some pension plans that are on shaky footing afloat. At the same time, however, he warned that the move was a “slippery slope” and should be approved “with all due caution and deliberation.”

That’s because now that management has a foot in the heretofore impenetrable door protecting workers’ pensions, the table has been set for even more far-reaching legislation to strip away benefits in other areas, including the public sector.

Remember, it was on Jan. 25, 2012, just three years ago, that Gov. Bobby Jindal, in a speech to the Baton Rotary Club, outlined his plans to “reform the state pension system to keep the state’s promise to workers, protect critical services and save taxpayer dollars.” http://gov.louisiana.gov/index.cfm?md=newsroom&tmp=detail&articleID=3220

Among those plans to “protect the state’s promise to workers” was a revamp of the state pension system that would have gutted benefits for state employees. We have often cited here the example of the worker who, if she never received another pay raise, would be eligible to retire after 30 years with a retirement of $39,000 per year. But under Jindal’s plan to “protect” her, that $39,000 would be reduced to $6,000 per year—a $33,000 per year hit—and the employee was not eligible for Social Security or Medicare.

The courts, fortunately for state employees, declared the state’s pension plan a contract which could not be arbitrarily broken by the state, though the state was left free to offer new hires a defined contribution retirement plan as opposed to the defined benefit to which the employee we cited was entitled.

The Wall Street Journal called the amendment to the federal spending bill as a “model for further cuts,” and therein lies the real threat to workers and retirees alike.

Karen Friedman, Executive Vice President of the Pension Rights Center, said the measure would “set a terrible precedent” in that it could encourage similar cutbacks in troubled state and local pension plans and maybe even Social Security and Medicare.

That is a chilling prediction and in all probability, deadly accurate.

The thumbprints of the American Legislative Exchange Council (ALEC) are all over the amendment and the Koch brothers-run organization isn’t about to stop with gutting the pensions of a few union retirees.

And before anyone tries to claim that business and industry does not have an organized union to represent their interests, we have three words for you: U.S. Chamber of Commerce. And the U.S. Chamber is not only a member of ALEC, but is a major operative within ALEC. http://www.sourcewatch.org/index.php/U.S._Chamber_of_Commerce

In 1971, an obscure corporate attorney named Lewis Powell authored what has come to be known as the Powell Manifesto. In it, he laid out a blueprint for a corporate legislative agenda to his friend Eugene Sydnor, Director of the U.S. Chamber. That memorandum by Powell, written only two months before President Nixon nominated him to the U.S. Supreme Court, inspired the creation of the Heritage Foundation, the Manhattan Institute, the Cato Institute and Citizens for a Sound Economy, among others.

Powell’s memo has also served ALEC’s legislative agenda which includes, among other things, the privatization of Social Security and Medicare. http://reclaimdemocracy.org/powell_memo_lewis/

Is it merely a coincidence that Louisiana’s Right to Work law, supported by ALEC and the U.S. Chamber, was passed only five years after Powell’s memorandum and four years after the founding of the Louisiana Association of Business and Industry (LABI)?

So now, ALEC, the U.S. Chamber, and Republican leaders alike already have Social Security and Medicare in their crosshairs: http://www.motherjones.com/politics/2011/04/republican-social-security-cuts so can other private pension plans be far behind? Will the individual states like Louisiana renew efforts to slash retirement benefits for state employees?

As Louis Reine said, it is indeed a slippery slope and once the momentum moves in that direction, it will be virtually impossible to reverse.

And it’s important to remember that while public employees’ retirement benefits are at risk, the opening salvo has been aimed at private pension benefits. If they can pull that off, the rest will simply be low-hanging fruit.

Are you willing to take to the streets to defend what is rightfully yours?

How much is your retirement worth to you?

These questions are not hypothetical.

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“I’ll meet you over at confession on Saturday, if you want.”

—Public Service Commission Chairman Eric Skrmetta, to Louisiana Conference of Catholic Bishops Associate Director Robert Tasman, apparently implying that Tasman was being untruthful in his testimony that the conference desired a reduction of rates charged inmates for telephone calls.

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