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Campaign finance ethics fines mount up; collections? not so much since Gov. Jindal’s ethics ‘reform’ hyperbole of 2008

Posted in Commissions, Ethics, Governor's Office, Politicians, Transparency on June 19, 2013 | Leave a Comment »

Gov. Bobby Jindal loves to travel across the country telling anyone who will listen about the “gold standard” of ethics reform he singlehandedly passed to strengthen Louisiana’s ethics laws as one of his first acts upon taking office in 1981.

Except it simply isn’t so.

There are more than 981,000 reasons that indicate Jindal’s boasts are just so much hot air, devoid of any substance.

More than 300 candidates for local, state and national offices, many of them attorneys (and more than a few disbarred attorneys) owe more than $891,500 in fines for filing campaign finance reports late or not at all.

Moreover, 25 political action committees (PACs) owe an additional $90,000, according to figures provided by the Louisiana Board of Ethics.

So, just how is it that so many fines and such a large amount—at least four candidates had accrued penalties in excess of $25,000 each—have managed to go uncollected for so long (some dating as far back as 1999)?

For the answer to that, we have to go all the way back to January, 2008, Jindal’s first month in office. One of his first acts was to call a special session of the legislature to pass his “ethics reform” package that effectively gutted the State Board of Ethics. Ten of the board’s 11 members resigned in protest—seven of those because the “reform” legislation transferred ethics enforcement power from the state ethics board to administrative law judges, a move that rendered the board useless.

Next question: What’s so wrong with turning enforcement power over to administrative law judges? Well, for starters, the administrative law judges are selected by an appointee of the governor, hardly a hands-off, arms-length, non-political approach to ethics. In fact, Elliot Stonecipher, a Shreveport demographer and political analyst, observed the Jindal package created a situation in which “we could have people with a relationship with the governor (enforcing ethics laws).”

For decades the ethics commission had full authority to bring charges, hear cases and impose penalties on public officials accused of wrongdoing. No more.

Former Ethics Chairman Frank Simoneaux, who has been critical of the manner in which the ethics board and the administrative judges have interacted on issues, said he agrees that the responsibility for investigating and deciding ethics cases should be split but that administrative judges are not the method that should be employed.

Oh, and there’s this: Jindal proposed the legislation while he was under investigation by the Louisiana Board of Ethics. The timing of his “reform” measures has to be considered at least somewhat suspect, given that the ethics commission cited Jindal’s campaign for campaign finance disclosure violation just before Jindal pushed through his package.

Examples of outstanding ethics fines for late campaign finance reports include:

• Richard C. Bates, a 2006 candidate for 24th Judicial District Judge (Jefferson Parish) who has since been disbarred: $2,600;

• Michael Bell, former legislative assistant to former Sen. Wilson Fields (now a district judge) and himself an unsuccessful 2011 candidate for the state senate: $3,260;

• District Judge Wilson Fields, unsuccessful 2010 campaign for First Circuit Court of Appeal: $1,000;

• William Bowman: unsuccessful 1997 candidate for St. Helena Parish Clerk of Court: $2,720;

• Raymond Brown: unsuccessful 2004 candidate for Orleans Parish Sheriff: $9,500;

• Douglas Castro: unsuccessful 2005 candidate for Orleans Parish Clerk of Court: $10,420;

• Albert Donovan, former legal counsel to Gov. Edwin Edwards, 2003 unsuccessful candidate for Secretary of State: $39,500;

• James Fahrenholtz: 2000 and 2004 candidate for Orleans Parish School Board: $41,000;

• Sandra Hester: unsuccessful 2004 candidate for Orleans Parish School Board: $10,660;

• Percy J. Marchand: unsuccessful 2007 candidate for Orleans Parish state representative: $26,600;

• Robert Murray: unsuccessful 2003 and 2007 candidate for state representative: $16,900;

• Donald Ray Pryor: unsuccessful 2002 candidate for Orleans Parish Registrar: $36,200;

• Gary Wainwright: unsuccessful 2007 candidate for Orleans Parish District Attorney: $30,700;

The Ethics Commission is so weakened by Jindal’s 2008 ethics revamp that it is not only unable to collect outstanding fines but it is even powerless to prevent those with unpaid fines from running in subsequent political races.

Enforcement is just as ineffective with political action committees.

The United Democratic Ballot, Inc., for example, owes $14,000 in unpaid fines dating back to 2002.

Others include:

• The Westbank Independent Coalition (Jefferson Parish): $8,000 in 2003;

• The African American Voters League: $9,000 in 2002;

• Baton Rouge Youth Movement: $8,000 in 2011 and 2012;

• Home Builders Association of Central Louisiana: $8,000 in 2010;

• Independent Rx PAC: $3,500 in 2010;

• Shreveport Committee on Political Education: $4,400 in 2006 and 2010;

As a reward for his comments critical of Jindal’s ethics reform package, Simoneaux was not re-nominated to another five-year term on the board—effectively fired—by the Committee on House and Governmental Affairs in April of 2012.

Ethics, like beauty, are in the eye of the beholder. Put another way: those who have the gold are making the rules.

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Notable Quotables (in their own words)

Posted in Contract, Contracts, Governor's Office, Health Care, Privatization on June 12, 2013 | Leave a Comment »

“Claims for federal matching funds cannot be based upon estimates or projects. Please add language that describes the actual historical utilization and trend factors utilized in the calculation.”

“Are the (private) hospitals required to provide a specific amount of health care service to low income and needy patients?”

—Questions posed to the state in a Jan. 30 letter to the Louisiana Department of Health and Hospitals by Bill Brooks, Associate Regional Administrator, Division of Medicaid and Children’s Health Operations in Dallas.

“If we were to deny these contracts, we will not be able to provide these services to the citizens. I believe the hospitals would close.”

—Louisiana Civil Service Commission member Scott Hughes of Shreveport, commenting on his switching his vote from opposed to the privatization contracts for hospitals in New Orleans Houma, Lake Charles, and Lafayette to a vote in favor. At the same time, Hughes said he still had concerns over whether federal officials (CMS) would approve Medicaid financing necessary to bring the Jindal budget into balance. His concerns centered around questions about some of the financial data provided by the administration.

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CMS wants more answers to Louisiana hospital privatization plan; millions of dollars in Medicaid funding hang in balance

Posted in Commissions, Governor's Office, Health Care, Layoffs, Privatization on June 12, 2013 | 17 Comments »

The Louisiana Civil Service Commission notwithstanding, the state may not yet be out of the woods with its plan to privatize nine of 10 LSU hospitals and clinics that provide medical care for the state’s poor and uninsured and which provide training sites for many of the state’s medical students.

A spokesman for the Center for Medicare and Medicaid Services (CMS) in Dallas said on Wednesday that it still has not received answers to all its questions put to the state in a Jan. 30 letter and the continued flow of hundreds of millions of dollars in federal Medicaid funds could hinge on satisfactory responses by the state to those questions.

The Civil Service Commission on Monday reversed an earlier vote and approved the contracts for the takeover of four hospitals in Houma, Lafayette, New Orleans and Lake Charles.

That approval, however, was based on criteria that did not appear to fall within the purview of the commission. Commission member Scott Hughes of Shreveport said since the commission’s previous vote of last week, the legislature approved a budget for next year that assumed the privatization of the hospitals. That action, he said, would leave no money available to operate the hospitals through LSU if the deals had been rejected.

A lawsuit against the City of New Orleans by the New Orleans Civil Service Commission—not unilateral administration or legislative actions—has traditionally been the precedent the commission considers when presented with layoff plans from state agencies. That decision said that administrations “do not have the unfettered discretion to potentially decimate the civil service system by eliminating all civil service positions to privatization.”

That ruling also said the city must turn over “all documents and other evidence which (might) enable the commission to determine (1) whether any civil service employees will be involuntarily displaced from civil service and if so, (2) whether the contract was entered into for reasons of efficiency and economy and not for politically motivated reasons.”

The question of whether the contracts will produce greater efficiency and economy remain unanswered because the contracts for the privatization of the four hospitals contained insufficient financial details.

Hughes changed his vote of opposition last week to one of approval on Monday after Michael Kaiser, chief executive officer of the LSU Health Care Services Division described the financial arrangements in a general overview with few specifics.

Kaiser said a reduction in federal Medicaid financing to the state would force the closure of facilities. He even listed a number of closures that were under consideration before the lease deals—all of which apparently helped Hughes see the light and to become a convert. “If we were to deny these contracts, we will not be able to provide these services to the citizens,” he said. “I believe these hospitals would close.”

So apparently the procedure is to delete funding from the state budget, thereby creating a crisis by throwing the continued operation of the hospitals into doubt and forcing the Civil Service Commission to do the governor’s bidding by accepting the contracts and in the process, throwing some 4,000 employees out of work.

The CMS spokesperson on Wednesday said, “CMS does not play any role in the actual privatization of the hospitals. “However, as part of the privatization, the State of Louisiana is modifying the Medicaid reimbursement to those hospitals. The change in reimbursement requires the submission of State Plan Amendments (SPA). CMS currently has received some of the necessary SPA and they are under review.”

When asked to be more specific as to the number of SPA responses, he replied, “We’ve received two or three but we don’t have a firm number on how many the state would need to submit.”

Last Jan. 30, Bill Brooks, associate regional administrator for the CMS Division of Medicaid and Children’s Health Operations in Dallas, sent a six-page letter to Ruth Kennedy, director of the Bureau of Health Services Financing for the Department of Health and Hospitals (DHH) in which he requested additional clarifying information which he cautioned had the effect of “stopping the 90-day clock” for CMS to take action on the proposed State plan amendment (SPA) which “proposed to revise the reimbursement methodology for inpatient hospital services to establish supplemental Medicaid payments to non-state owned hospitals in order to encourage them to take over the operation and management of state-owned and operated hospitals that have terminated or reduced services.”

Brooks said a new 90-day clock would not begin until his office had received satisfactory responses to his requests.

A CMS spokesperson on Wednesday clarified that stipulation. “By regulation, we have 90 days from initial submission to review, disapprove or request additional information,” he said. “When we request additional information and the state formally responds, we have an additional 90 days to review and approve or disapprove.”

He said CMS has no control on how long it may take the state to respond. “These are complex state plan amendments, so you can assume that requests for additional information will occur.”

One of the requirements that Brooks cited was one which said CMS “must have copies of all signed standard Cooperative Endeavor Agreements.” He also asked the state to provide all Intergovernmental Transfer (IGT) management agreements and “any other agreements that would present the possibility of a transfer of value between the two entities.”

He said, “CMS has concerns that such financial arrangements meet the definition of non-bona fide provider donations as described in federal statute and regulations.

“Detailed information needs to be provided to determine whether the dollar value of the contracts between private and public entities had any fair market valuation. There can be no transfer of value or a return or reduction of payments reflected in these agreements,” he said.

“Additionally, whether the State is a party to the financial arrangement or not, the State is ultimately responsible to ensure that the funding is appropriate.”

Brooks asked, “How many entities does the State anticipate will participate in this arrangement? Please submit a list of all participating hospitals, all transferring entities doing the IGT, and the dollar amount that the transferring entities will IGT. Please describe how the hospitals are related/affiliated to the transferring entity and provide the names of all owners of the participating hospitals.”

In the case of the Leonard Chabert Medical Center in Houma, the lessee is listed as Terrebonne Medical Center of Houma but in reality, Ochsner Medical Center of New Orleans will be taking over operations of Leonard Chabert.

“What is the source of all funds that will be transferred?” Brooks asked. “Are they from tax assessments, special appropriations from the State to the county (parish)/city or some other source?

“The State plan methodology must be comprehensive enough to determine the required level of payment and the Federal Financial Participation (FFP) to allow interested parties to understand the rate setting process and the items and services that are paid through these rates,” Brooks said. “Claims for federal matching funds cannot be based upon estimates or projections. Please add language that describes the actual historical utilization and trend factors utilized in the calculation,” he said.

Brooks also asked if the private hospitals destined to take over operations of the state facilities are required to provide a specific amount of health care service to low income and needy patients. “Is this health care limited to hospital only or will health care be provided to the general public? What type of health care covered services will be provided?” he asked.

The CMS spokesperson on Wednesday said if CMS disapproved an amendment, “there would be no federal dollars provided for the changes proposed in the State Plan Amendment.”

“No federal dollars” could translate to hundreds of millions of dollars for a state already wrestling with suffocating budgetary constraints.

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LA. not the first state in which CNSI contracts have come under scrutiny but you’ll need a program to follow players

Posted in Contract, Contracts, Governor's Office, Health Care, Transparency on June 9, 2013 | 26 Comments »

Even as he was tweaking the bid specifications that would qualify Client Network Services, Inc. (CNSI) to submit a proposal for a $185 million contract with the Department of Health and Hospitals (DHH), Bruce Greenstein must surely have known of problems his former employer had experienced in other states.

In a related story, LouisianaVoice has learned that James Gorman, a senior technical advisor for the Center for Medicare & Medicaid Services (CMS) founded a company, HWT, a subsidiary of OptumInsight, a “trading partner” with Bayou Health, the program through which most of Louisiana’s Medicaid recipients receive health care services.

CMS is a federal agency within the U.S. Department of Health and Human Services (DHHS) which is charged with working in partnership with state governments to administer Medicaid. CMS must also give its stamp of approval on state contracts with companies such as OptumInsight and CNSI.

Greenstein worked in Seattle for Microsoft prior to his being named DHH Secretary by Gov. Bobby Jindal in July of 2010. Prior to that he also worked for the U.S. Department of Health and Human Services (DHH) where he oversaw the state Medicaid programs in the Northeast. He led the federal government’s efforts in working with states in reforming state Medicaid programs—a position that would have afforded him intimate knowledge of the workings of companies like CNSI, OptumInsight and others.

Then-DHH Secretary Greenstein awarded but then refused to identify CNSI as the winner of the contract a year ago. His refusal threatened his confirmation by a Senate committee before he finally relented and named CNSI.

Greenstein worked for CNSI in 1995 and 1996. He told the Senate committee that he had constructed a “firewall” between him and CNSI so that he could not influence the awarding of the contract. But emails obtained by the committee revealed that Greenstein and CNSI executives exchanged dozens of emails during the selection process.

Protesting the award at the time were unsuccessful bidders ACS State Healthcare of Atlanta, Ga., and Molina Medicaid Solutions of Long Beach, Calif.

ACS claimed that CNSI deliberately low-balled its cost. CNSI subsequently obtained a $9 million amendment, increasing the cost to $194 million and then requested an additional $40 million immediately prior to word that the FBI had subpoenaed all CNSI records from the Division of Administration.

Had the second amendment been granted, the cost would have been close to the $238 million bid of ACS but the CNSI contract was cancelled by the administration as a federal grand jury investigation got underway. That investigation is still ongoing.

While at CNSI, Greenstein was vice president for Healthcare. While there, he focused on state healthcare systems and claims payments and vital records systems.

Given his experiences with Medicaid systems and given the fact that he resided in Seattle at a time when CNSI was experiencing a multitude of problems with its system in Washington, it’s difficult to imagine that he was unaware of problems the company was having when he “tweaked” the bid specifications to accommodate his former employer.

In 2006, CMS launched an investigation into ongoing problems with the State of Maine’s web-based information management system. CNSI was contracted for that work in 2001 at $14.5 million, but the costs quickly escalated to $70 million as complaints began coming in almost immediately. CNSI had never built a Medicaid billing system before landing the contract with Maine and the company missed its 2002 deadline for completion as well as several subsequent deadlines. Even after the system finally went live in 2005, it malfunctioned and for more than a year the state had to send out estimated payments to Medicaid providers.

After only three days it was learned that the new system had sent 24,000 claims (about 50 percent of all claims) into a “suspended” file.

Normally, suspended claims were those that were either rejected or which contained minor errors. The original system had suspended only about 20 percent of the claims.

Now, instead of payments, doctors were receiving no payments and when they resubmitted the claims, the new system installed by CNSI automatically rejected them again because it was programmed to reject any claim it had already rejected.

Claims had to be processed by hand by state employees but they could process only 1,000 claims per week. Even when the rejection rate was reduced to 20 percent, doctors complained that it was still rejecting legitimate claims.

Doctors, dentists, hospitals, clinics and nursing homes received no payments for services for weeks at a time and some practices were forced to close their businesses or to take out loans to pay their bills.

The experience was much the same in Washington State where hundreds of thousands of claims went unprocessed, causing some doctors and clinics to cease taking new Medicaid patients until they got paid for the ones they’d already treated.

Glitches in the CNSI system resulted in the suspension of thousands of claims which, like those in Maine, had to be processed by hand. By November of 2010, there was a backlog of about 271,000 suspended claims.

One medical center said the state was about $3.8 million behind in payments.

A CNSI spokesperson attributed the problems to managerial mistakes and not deficiencies in the product. “We did not understand the magnitude of such an implementation,” he said. That would seem to be an understatement as the original contract cost of $71 million ballooned to $164 million.

In Michigan, a 2006 three-year, $51.5 million contract was amended no fewer than five times and the contract amount currently is $227.2 million.

And now, the State of Illinois, in an apparent effort to circumvent public bid laws, has entered into an interagency agreement with Michigan to create a shared Medicaid Management Information System (MMIS) to serve both states with CNSI getting the contract for both states.

One of the common threads connecting Illinois and Louisiana is OptumInsight, which reported $1.3 billion in corporate revenues in 2008. OptumInsight has a contract with Illinois to administer its MMIS exchange.

Besides serving as a “trading partner” with Bayou Health, OptumInsight is a wholly-owned subsidiary of UnitedHealth Group. UnitedHealth Group, in turn, offers benefits through two companies, UnitedHealthcare and Optum. UnitedHealthcare has an $83 million consulting contract with DHH to provide enhanced primary care case management. Bringing things full circle, Optum has three operating divisions: OptumHealth, OptumRx and OptumInsight.

If all that is confusing to you, don’t feel bad. The question is how difficult will it be for the federal grand jury to sort all this out so that it can make a determination of whether or not any laws were broken with Louisiana’s contract with CNSI?

A second, even more interesting question is why did the Jindal administration, in cancelling the CNSI contract, issue the self-serving statement that it would not tolerate corruption when there has been no trial or even any formal charges filed?

Third, and most important of all, if Jindal is so intolerant of corruption, why did he allow Greenstein to “resign,” but remain on the job for an entire month before his departure?

It would seem at this point that the answers to all three questions lie with Greenstein and those answers may well rest on what kind of deal he can make with federal prosecutors—depending, of course, on whether the investigation reaches the point of indictments.

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Civil Service Commission rejects LSU Hospital privatization by 4-3 vote but re-hearing is already set for 8 a.m. Monday

Posted in Boards, Civil Service, Contract, Contracts, Governor's Office, Health Care, LSU, Transparency on June 5, 2013 | 52 Comments »

Gov. Bobby Jindal had another roadblock thrown in his path to privatization of four LSU hospitals on Wednesday when the State Civil Service Commission, by a 4-3 vote, rejected the state’s contracts with private hospitals to take over state-run facilities in New Orleans, Lafayette, Houma and Lake Charles.

The matter has already been scheduled for a re-hearing on Monday at 8 a.m. in the Louisiana Purchase Room on the first floor of the Claiborne Building at 1201 North Third Street in Baton Rouge.

In taking the action, commission members complained that the information provided by LSU was insufficient.

Really? A contract with 50 blank pages was not enough? The commission perhaps needed some specifics—like an offer and an acceptance and a termination clause?

It should be noted that the commission did not vote to reject the administration’s layoff plans relative to the privatization of the Interim Hospital in New Orleans, University Medical Center in Lafayette, Leonard Chabert Medical Center in Houma and W.O. Moss Medical Center in Lake Charles.

Civil Service Director Shannon Templet must make a decision on the layoff plan by next Tuesday in order for the layoffs to become effective on June 24.

But if the privatization plan is not approved, the hospitals would necessarily have to keep nearly 3,000 classified employees on the job in order to keep the hospitals open.

Dr. Fred Cerise, the former head of the LSU Health System who was fired by Jindal (through the Board of Stuporvisors, of course), said on Wednesday that the Centers for Medicare & Medicaid Services (CMS) still has not given the go-ahead for the hospital privatization plan and without that approval, everything else is moot.

Cerise said the state plans to use the $110 million that Children’s Hospital in New Orleans is paying to take over the Interim Hospital (formerly Big Charity before that facility was abandoned after Hurricane Katrina and a new structure built) will be used by the state to leverage greater matching funds from Medicaid.

“But if CMS does not approve the plan, the state will have to repay Medicaid for any excess money it received on the basis of that $110 million,” he said, adding, “I don’t think there’s any way CMS is going to give its stamp of approval to this plan.”

Dr. Michael Kaiser, Chief Executive Officer of the LSU Health Care Services Division, said he would ask the commission to reconsider its decision. He said the commission would be provided with the agreements between LSU and the private companies.

“I’m not sure what they intend to show the commission on Monday,” Cerise said, “but there’s no way they can show a savings when contracts for privatizing two of the hospitals (Chabert and Moss) don’t even contain any financial details.”

That, of course, raises the question of just why was the commission not provided copies of the agreements in the first place. Did Kaiser expect the commission to simply rubber stamp the privatization plan as it has in the past and as the LSU Board of Stuporvisers does on a regular basis with anything Jindal sends over?

In the past the Board of Stuporvisers has done Jindal’s bidding without question—from the firing of LSU President John Lombardi, LSU System General Counsel Raymond Lamonica, and Drs. Roxanne Townsend and Cerise, to operating in complete secrecy to hire a new LSU president who possesses credentials that are questionable at best, to approving essentially blank contracts for the takeover of LSU hospitals in Shreveport, Monroe, Houma and Lake Charles. The contracts consisted of about 50 blank pages and contained no mention of financial terms, specific offers, acceptances or termination clauses.

And for the privilege of doing Jindal’s bidding, members of the Board of Stuporvisers get to metaphorically lick the master’s hand with campaign contributions totaling about a quarter-million dollars between them.

All of which raises another question that no one has asked to this point but one for which there is a desperate need for an answer:

• When was the last time the LSU Board of Stuporvisors took any action during this governor’s administration that supported academics and was not done to achieve a political agenda—Jindal’s political agenda, to be specific?

Anyone? Bueller? Bueller? Anyone?

Kaiser, in the wake of the unexpected rejection of the administration’s plan by the commission, only now bemoans the fact that in anticipation of approval of the privatization, the public hospitals have no money in the state budget for the new fiscal year that begins on July 1.

That would be because Jindal did not include funding in his budget back in January because he was certain his privatization plan would be approved.

Somewhere out there, the ghost of Jim Nabors as Gomer Pyle is flashing a big, innocent grin and saying to Bobby Jindal, aka Barney Fife, “Sur-PRISE, Sur-PRISE, Sur-PRISE!” (Our apologies to Barney Fife.)

Kaiser said the administration would have to try and determine what other action could be taken if the privatization is not approved.

More than 3,500 employees work at the four hospitals. Of that number, 2,953 are classified, or Civil Service rank-and-file employees. The remainder are unclassified and do not enjoy Civil Service protection. Their layoffs do not have to be approved by the commission.

More than half of the classified employees (1,690) are employed at the Interim Hospital in New Orleans. The remainder are at University Medical Center in Lafayette (487), Leonard Chabert Medical Center in Houma (556) and W.O. Moss Medical Center in Lake Charles (220).

It will be interesting to see if any legislators from the affected areas show up for Monday’s Civil Service Commission re-hearing. Republican House Speaker Chuck Kleckley is from Lake Charles.

Other Calcasieu Parish House members include Democrats Michael Danahay, A.B. Franklin, and Dorothy Sue Hill and Republicans Brett Geymann, John Guinn and Ben Hensgens.

Calcasieu senators include Republicans John Smith, Ronnie Johns and Dan “Blade” Morrish.

House members from Lafayette Parish include Democrats Terry Landry, Jack Montoucet, Stephen Orgego and Vincent Pierre and Republicans Taylor Barras, Stuart Bishop, Nancy Landry, and Joel Robideaux.

Senators who represent Lafayette Parish are Republicans Elbert Guillory, Johathan Perry, Page Cortez and Fred Mills.

Terrebonne/Lafourche parish House members include Republicans Gordon Dove, Sr., Joe Harrison and Lenar Whitney of Terrebonne and Democrat Jerry Gisclair and Independent Jerome “Dee” Richard, both of Lafourche. Richard, by the way, was present at Wednesday’s commission hearing.

Representing Lafourche and Terrebonne parishes in the Senate are Democrats Troy Brown and Gary Smith and Republicans Norbert Chabert and Bret Allain.

Orleans Parish House members include Democrats Neil Abramson, Jeffery Arnold, Austin Badon, Wesley Bishop, Jared Brossett, Walt Leger and Helena Moreno. Orleans Republicans include Raymond Garofalo, Christopher Leopold and Nick Lorusso.

Senators who represent Orleans include Republicans A.G. Crowe and Conrad Appel and Democrats Karen Carter Peterson, Jean-Paul Morrell, David Heitmeier and Edwin Murray.

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LSU Board of Stuporvisors gives away store with improbable blank contract for private operation of four state hospitals

Posted in Campaign Contributions, Contract, Contracts, Governor's Office, Health Care, LSU, Privatization, Public Records on June 4, 2013 | 24 Comments »

Depending upon which source you consult, there are from four to six essential components of a contract that make the document legally binding.

The LSU Board of Stuporvisors apparently is unaware of any of them.

• There first must be an offer.

Okay, this one’s a little broad. There was an offer…of sorts. The Biomedical Research Foundation of Northwest Louisiana offered to assume administrative and operational control of the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe.

Likewise, Southern Regional Medical Center and Terrebonne General Medical Center offered to manage the Leonard J. Chabert Medical Center in Houma and Lake Charles Memorial Hospital offered to take over in-patient care and medical education from W.O. Moss Medical Center which will cease operating as a hospital.

But after that, it gets a little sticky:

• There must be an acceptance.

Acceptance is defined as an “unconditional agreement to the precise terms and conditions of an offer.”

To that end, the Board of Stuporvisors came off looking like Larry, Moe and Curly trying to match business acumen with Warren Buffett.

Or Jethro Bodine in negotiations with Donald Trump. You get the picture

The Board of Stuporvisors’ approach to this major enterprise was more akin to the manner in which car dealers attempt to sell a major consumer product with the cheesiest, most offensive television ads possible.

Simply put, there were no specifics in the contract—only 50 or so blank pages to be filled in later.

• Consideration: the payment exchanged for the promise(s) contained in the contract.

Without a specific offer, there can be no financial terms (consideration) and accordingly, no acceptance.

• Termination Clause: allow a contract to be ended without cause, though some courts have held that the clause cannot be invoked without cause.

So thus far, we have no specific offer, no financial terms (consideration) and no termination clause—only an acceptance of a vague offer—all of which brings up the fifth component of a legal contract:

• A contract must be recognized as valid by the courts and subject to the court’s ability to compel compliance.

It’s hard to imagine a contract being recognized as valid by any court anywhere (except possibly in Louisiana) where there is no specific offer, no acceptance of a specific offer, no financial terms and no termination clause.

Finally, we have the strongest, most binding qualifier of all for a legal contract:

• Competent Parties: parties to a contract must be competent and authorized to enter into a contract.

Wow, that’s a toughie.

Competent?

Hell, the LSU Board of Stuporvisors just gave away the store. How competent is that?

Competent?

Let’s ask a few simple questions of the board members, seven of whom own their own businesses, three are in government/public service, one is a banker, one is a publisher, one is a doctor and one is an attorney:

• Would you, as an executive, doctor, banker, attorney or business owner, allow your company, firm, practice, publication, or bank to enter into a contract with no stipulations, no conditions, no financial considerations—all to be filled in at a later date by someone other than yourself, after the contract has been signed by all parties?

We didn’t think so. So, why would you commit LSU and the State of Louisiana to such an ill-advised agreement?

Competent?

The LSU Board of Stuporvisors just named as the new president of the state’s flagship university a man whose highest academic achievement was that of assistant professor before he succeeded his father to the presidency of Murray State University in Kentucky as if he was the heir to some throne and then was named by his personal friend and benefactor, the chancellor of the University of California system, as president of California State at Long Beach. How competent is that?

Competent?

The Board of Stuporvisors put up a determined fight to keep secret the list of candidates for the LSU presidency.

It’s almost as if they were guarding a highly classified state secret.

Or hiding something.

What could they have been hiding?

Who knows? With the propensity for secrecy that has become the trademark of the Jindal administration, everything is concealed from view. Remember, it was Gov. Bobby Jindal who invented the term “deliberative process” as an all-encompassing term to protect his office from the public’s right to know what its government is up to.

It is Jindal’s Department of Education that has been sued at least three times in efforts to pry public information out of that shadowy department.

It was in Jindal’s Department of Health and Hospitals (DHH) that a controversial $184 million contract was awarded to the former employer of then-DHH Secretary Bruce Greenstein—a contract that is now under the microscope of federal investigators.

One has to wonder at this point how hard a legal battle the Board of Stuporvisors would wage against efforts to determine specifics of the hospital contracts.

Why are we so jaded, so cynical?

We’re not; we’re realistic, pragmatic. We connect the dots. Let’s review.

• Item: The Biomedical Research Foundation of Northwest Louisiana offered to assume administrative and operational control of the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe.

• Item: The President and CEO of the Biomedical Research Foundation of Northwest Louisiana is John F. George, Jr., M.D.

• Item: John F. George, Jr., M.D., is a member of the LSU Board of Stuporvisors.

• Item: John F. George, Jr., M.D., made two contributions of $5,000 each to Jindal’s 2007 and 2008 campaigns.

• Item: The Jindal administration dismissed talk of a conflict of interest by pointing out that George will not receive a salary as president and CEO of the foundation, thereby allowing him to remain as a (voting) member of the LSU Board of Stuporvisors.

• Item: On Oct. 25, 1996, the Louisiana State Board of Ethics ruled that Natchitoches Times Publisher Lovan Thomas was prohibited from participating in a decision by the Board of Trustees for State Colleges and Universities to contract with the Times for printing services and that the participating question “cannot be cured by recusal since (state law) prohibits an appointed member of a board from curing a participating problem through disqualification.”

And lest we forget, there are always those pesky campaign contribution reports that members of many boards and commissions must wish we would forget.

We won’t. We can’t.

Let’s take a quick look at those who found it in their hearts to support Jindal financially and were subsequently rewarded with coveted seats on the LSU Board of Stuporvisors:

• Hank Danos: $18,500;

• Robert “Bobby” Yarborough (former Jindal Campaign Treasurer): $45,000;

• Scott Ballard: $5,000 from his company, WOW Café & Winery Franchising;

• James E. Moore: $21,000 from Moore and his company, the Marriott Courtyard of Monroe;

• Stanley Jacobs: $10,000 from Jacobs and his wife;

• Scott Angelle: $4,000;

• Ray Lasseigne: $17,232 from Lasseigne and his company, TMR Exploration;

• Blake Chatelain: $28,000 from Chatelain and his wife;

• Rolfe McCollister (former Jindal Campaign Manager): $18,000;

• Jack Lawton, Jr.: $61,000 from Lawton, his business interests and family members;

• Chester Lee Mallett: $15,000;

• John George: $10,000.

What’s even more difficult to fathom is that 12 of the 15 members of the LSU Board of Stuporvisors actually coughed up more than a quarter-million dollars for the privilege of serving as a pack of submissive lap dogs for the governor—obviously with no will of their own.

So now, salary or no, George is allowed to serve as President and CEO of the foundation while also serving as a voting member of the LSU Board of Stuporvisors which, in its collective wisdom, has just approved a contract for his foundation to take over the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe—a contract with millions of dollars and hundreds of state jobs at stake—and a contract which contains 50 blank pages but which also:

• contains no specific offer;

• contains no acceptance of a specific offer;

• contains no termination clause and from all appearances to our admittedly layman’s mind;

• is susceptible to a challenge by some indignant taxpayer(s) or group of affected hospital employees in that it could be interpreted as invalid because of the court’s inability to compel compliance, and

• has no competent parties—at least on the LSU Board of Stuporvisors’ side of the bargaining table.

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Notable Quotables (in their own words)

Posted in ATC, Governor's Office, Legislature, Legislators, Notable Quotables on May 30, 2013 | 3 Comments »

“You cannot take the freedom of law-abiding Americans, whether you disagree with them or not, and keep your own freedom. When you do that, you go to jail.”

—Gov. Bobby Jindal, speaking to Virginia Republicans earlier this month in saying the Obama administration “bears responsibility” for the Internal Revenue Service investigation of conservative, including the Tea Party.

“It was also YOU who gave the directive to research Tom Aswell.”

—Excerpt from the letter written in March by fired ATC agent Michelle Chavis to Troy Hebert, director of the Office of Alcohol and Tobacco Control. Hebert is an appointee of Gov. Bobby Jindal and serves as a lap dog, er, messenger boy between Jindal and members of the State Legislature.

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Jindal’s criticism of IRS investigations of conservatives is more of the same notoriously lame, hypocritical hyperbole

Posted in ATC, Education, Governor's Office, House, Senate, Legislature, Legislators, Lobbyist, Politicians, Public Records, Transparency on May 30, 2013 | 6 Comments »

It was with more than a little amusement that we read a couple of weeks ago that Gov. Bobby Jindal had called for jail time for any Internal Revenue Service officials found to have unfairly targeted conservative groups to be put in jail.

As usual, Jindal made his indignant, self-righteous proclamation at an out-of-state forum. This time, it was in a speech to Virginia Republicans in yet another stop in his 2016 presidential campaign that would be better suited for a Saturday Night Live parody skit than serious political discourse.

Oh, it’s not that we don’t agree with Jindal on this one point. The IRS certainly is far too powerful and is a force to be feared if one happens to be on the wrong end of a tax audit.

But coming from Jindal, it is simply yet another example of the “reform” governor’s façade of pseudo-transparency—hypocritical at worst, the subject of stinging ridicule at best.

“You do not take the freedoms of law-abiding citizens, whether you disagree with them or not, and keep your own freedom,” the Boy Blunder opined. “When you do that, you go to jail.”

But here’s the thing, Guv: It was only last March 11—not even three months ago—that we learned that one of Bobby’s boys, one Troy Hebert to be precise, director of the Office of Alcohol and Tobacco Control (ATC), had ordered a background investigation on LouisianaVoice editor Tom Aswell (that would be me). Here is the link to that post:


http://louisianavoice.com/2013/03/11/atc-director-troy-hebert-orders-background-investigation-of-louisianavoice-publisher-tom-aswell-but-did-we-pass/

Normally, we would not hold Jindal accountable for the actions of a rogue department head. But now the question must be asked if Hebert’s investigation was truly the action of a rouge department head, of someone who went “off the reservation,” or if the investigation may have been ordered by higher-ups.

Hey, even Henry Kissinger once said paranoid people sometimes have real enemies and recent events and revelations may well justify that paranoia. Read on.

On May 11, we sent a public records request to Superintendent of Education John White and we copied Department of Education (DOE) General Counsel Joan Hunt as is our practice when seeking records.

The request was straightforward enough: we asked for correspondence between White and his old New York boss Joel Klein dating back to July 1, 2011. Specifically, we were attempting to learn what communication the two had conducted relative to InBloom, the company Klein is now affiliated with and which was founded by News Corp. CEO Rupert Murdoch to serve as a “parking place” (in White’s words—a computer data bank, in more formal terms) for sensitive personal information on Louisiana students and teachers.

Hunt, subsequent to our request, fired off an email that same day to White, DOE attorney Willa LeBlanc and Hebert that said, “Troy, we need to reply and say that.”

But Hunt, most likely inadvertently, copied us into the reply as well.

Curious as to why Hebert would be included in the loop since he is about as far removed from DOE as possible (he’s under the Louisiana Department of Revenue) and equally curious as to what was supposed to have been said, we sent another public records request for all correspondence between DOE officials and Hebert.

The response to that request was even more puzzling:

“No Documents. Attorney-client privilege.”

Okay, first there are no documents but if there were, they would be privileged. That’s like the attorney who responded to a claim that his dog had bitten a passerby: “My dog does not bite. My dog was confined in the yard that day. I don’t own a dog.”

Really puzzled now, we sent another email on May 26 reiterating our request for correspondence between DOE and Hebert: “Inasmuch as you took the liberty to send your email to Troy Hebert, director of ATC and who is not an attorney nor is he a client of you or DOE, there is no client-attorney privilege.”

We also told Hunt that her provision of information about me to a non-involved third party constituted a “serious breach” that I was willing to report to the Louisiana Supreme Court’s Attorney Disciplinary Board.

Two days later we received another letter from the DOE legal office which said:

“As was indicated in the Department’s response dated and emailed to you on May 15, 2013, the Department has no public records responsive to your request. Any communications between the Legal Staff of LDOE and Troy Hebert would be privileged (attorney work product/privilege) and not subject to being released pursuant to a public records request. In addition, the Department is not in possession of any emails between Troy Hebert and John White.” There it is again: My dog doesn’t bite; I don’t own a dog.

We remained perplexed as to why Troy Hebert was brought into the conversation about our initial request. As the director of an agency completely removed from DOE, we knew there was no way possible that Hebert could be a client of either DOE or any of its legal staff and that fact only intensified our determination to learn what was going on.

Then we had occasion to interview Sen. Bob Kostelka (R-Monroe) Tuesday night about the Senate and Governmental Affairs deferral of a bill to protect state employee whistleblowers which had passed unanimously in the full House.

In that interview, Kostelka, a remarkably candid public servant, intimated that the committee had killed the bill to protect employees from supervisory reprisals for revealing official wrongdoing because one Troy Hebert had personally contacted each of the committee members to convey the message that the administration, i.e. Jindal, was not in favor of the bill. Kostelka, seeing the proverbial handwriting on the wall, did not object to the motion by Sen. Greg Tarver (D-Shreveport) to defer the bill.

It is not entirely clear why Hebert would be interjecting himself into legislative matters given the somewhat watery thin theory (in the case of Louisiana, at least) of separation of powers under which our state government proclaims to function.

He is, after all, a member of the administration, or executive branch and should not be lobbying the legislative branch. In fact, he is not even a registered lobbyist. And his dog doesn’t bite.

But at least we can now connect the dots as it all comes together. Hebert is one of those hangers-on—kind of like the new kid in town who hangs around the fringes of the playground hoping to make friends with the locals. He will do anything to curry favor with his boss—not exactly a wise career move at this point—including serving as a go-between messenger boy between the governor’s office and legislators.

…And between the governor’s office and DOE.

And Jindal now has the cajones to vilify the IRS for spying.

We bet Jindal doesn’t even own a dog.

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Troy Hebert resurfaces as Jindal bag man in successful effort to defeat Rep. John Schroder’s whistleblower protection bill

Posted in ATC, Ethics, Governor's Office, House, Senate, Legislature, Legislators, State Agencies, Transparency on May 29, 2013 | 15 Comments »

Bobby Jindal as a reform governor in favor of transparency, accountability, integrity, honesty, and ethics, is a joke. A cruel joke.

There, we’ve said it. The man is a chameleon. If you threw him into a big box of crayons, he would explode from system overload.

He says he is for transparency but then he hides behind the deliberative process that he pushed through the legislature shortly after taking office.

Apparently, he also is now hiding behind Troy Hebert, director of the Alcohol and Tobacco Control Agency.

Jindal claims he will not tolerate any compromise of ethics.

To put it bluntly, he lies.

Take House Bill 387 by Rep. John Schroder (R-Covington) for example.

It passed the House unanimously, 100-0 with five members not voting.

On Wednesday, the Senate and Governmental Affairs Committee unceremoniously deferred the bill without objection and with virtually no discussion.

All HB 387 would have done was protect state whistleblowers from reprisals.

The bill said, in part:

• Any public employee who provides information to a legislator or to a legislative committee upon request of a legislator or legislative committee shall be free from discipline, reprisal or threats of discipline or reprisal by the public employer for providing such information;

• No public employee with authority to hire, fire, or discipline employees, supervisor, agency head, nor any elected official shall subject to reprisal or threaten to subject to reprisal any public employee because of the employee’s disclosure of information to a legislator or legislative committee upon request of a legislator or legislative committee;

• If any public employee is suspended, demoted, dismissed, or threatened with suspension, demotion, or dismissal as an act of reprisal in violation of this Section, such employee shall report such action to the Board (of Governmental Ethics);

• An employee who is wrongfully suspended, demoted, or dismissed shall be entitled to reinstatement of his employment and entitled to receive any lost income and benefits for the period of any suspension, demotion, or dismissal;

The bill also provided for punishment of any supervisor who attempted to discipline, demote or fire a whistleblower.

The Jindal administration had opposed the bill as being “too broad,” claiming it could create “unintended consequences” that would inhibit the ability of agency leaders to manage their departments.

The bill was introduced after some state officials who disagreed with the Jindal administration lost their positions (“teagued”) and lawmakers subsequently experienced difficulty in obtaining information from agencies.

Perhaps it was “unintended consequences” that Jindal feared last year when he vetoed Senate Bill 629 by Sen. Ronnie Johns (R-Lake Charles).

SB 629, for those of you who don’t remember, would have provided “’transparency’ reporting to the legislature by the Department of Health and Hospitals (DHH) concerning the Louisiana Medicaid Bayou Health program and the Louisiana Behavioral Health Partnership and Coordinated System of Care programs.”

SB 629 was approved unanimously in the House, by a 102-0 vote with three absences. Then it went to the Senate where is was again approved unanimously, 38-0 with one absence.

Jindal promptly vetoed the bill.

Fast forward six months and the FBI issues a subpoena for all records in the possession of the Division of Administration relative to the $184 million CNSI contract with DHH.

Bruce Greenstein, who was DHH secretary at the time the contract was awarded, had once worked for CNSI and it was learned that he had tweaked the bid requirements in order that CNSI might qualify as a bidder on the contract.

Embarrassed, Jindal cancelled the CNSI contract and Greenstein resigned.

In an unrelated incident, Greenstein eliminated the position of internal auditor at DHH and some months later, a DHH employee was arrested for embezzling funds from the agency. With no internal auditor, how was it that the employee was discovered?

A private investigator.

That’s right, a private investigator. That’s indictment enough of this administration, but to allow the continued intimidation of state employees who know of illegal or unethical activity is to encourage the continued abuse of power by supervisory personnel even as the state treasury is looted.

But Jindal vetoed SB 629 as being unnecessary, perhaps even burdensome.

So now, the Senate and Governmental Affairs Committee, at the urging of Hebert, deferred without objection HB 387.

Sen. Bob Kostelka (R-Monroe), who sits on the committee, said Hebert had contacted every member of the committee to convey the message that the administration was opposed to the bill.

So why is Hebert carrying the water for Jindal? He has enough troubles running his own agency.

Who knows? Perhaps he fancies himself as Jindal’s heir apparent. He has about as much chance of achieving that objective as Jindal has of becoming president.

Kostelka described Schroder as “pissed” at the Senate committee’s deferral of his bill. “I see what’s happening here,” he was quoted by Kostelka as saying as he got up from the witness table to exit the committee room.

So now Jindal has won his version of transparency, accountability, integrity, honesty, and ethics. State employees may now continue to fear leaking information to legislators or the media. Only the bravest will dare come forward now and then only with total confidence that their names will never be divulged—a standing guarantee from LouisianaVoice.

Kostelka said he did not object to the motion by Shreveport Democrat Greg Tarver to defer the bill “because I saw the handwriting on the wall. The governor had gotten to the committee members through Hebert.”

Here are the other Senate and Governmental Affairs Committee members and their email addresses:

• Jody Amedee (R-Gonzales, chairman): amedeej@legis.la.gov

• Mike Walsworth (R-West Monroe, vice-chairman): walsworthm@legis.la.gov

• Jack Donahue (R-Mandeville): donahuej@legis.la.gov

• Jean-Paul Morrell (D-New Orleans): morrelljp@legis.la.gov

• Ed Murray (D-New Orleans): murraye@legis.la.gov

• Jonathan Perry (R-Kaplan): perryj@legis.la.gov

• Neil Riser (R-Columbia): risern@legis.la.gov

• Greg Tarver (D-Shreveport): tarverg@legis.la.gov

If you are predisposed to do so, shoot them an email and ask 1): what they’re trying to hide; 2): why they knuckle under to a lame duck, dishonest, self-absorbed, politically ambitious excuse of a governor, and 3): if they always check their manhood at the door.

The time is long past for the electorate of this state to stand together and call an end to politicians pimping out the state’s resources and contracts to political cronies and campaign contributors.

The only reason to send errand boys like Troy Hebert to massage legislators is to ensure that state government works only for the perpetuation of political corruption and not for the benefit of the governed.

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Rep. Richard has money-saving bill: cut state spending on professional, personal, consulting contracts by 10 percent

Posted in Budget, Contract, Contracts, Governor's Office, House, Senate, Legislature, Legislators, Revenue, State Agencies, Transparency, Waste on May 23, 2013 | 23 Comments »

State Rep. Jerome “Dee” Richard believes he may have found a way in which to cut into the state budget deficit to the tune of about half-a-billion dollars.

HB-73 by Richard would require a 10 percent reduction in the total dollar amount for professional, personal and consulting service contracts under the jurisdiction of the Office of Contractual Review (OCR) for Fiscal Year 2013-14.

The proposed law also would require the OCR to submit reports on the status of the implementation of the law to the Joint Legislative Committee on the Budget on Oct. 1, 2013, Jan., April 1 and July 1 of 2014.
It also would require that the OCR director to submit a monthly report to the House Appropriations Committee summarizing all contracts and dollar values awarded the previous month.

The Legislative Fiscal Office (LFO) said the annual report of the OCR released in January of this year showed there were 2,284 professional, personal and consulting contracts with the state with a combined contract value of approximately $5.28 billion.

The LFO said the bill would result in an “indeterminable decrease” in overall state expenditures in FY-14. “To the extent this bill would have been enacted during the 2012 regular legislative session, the projected 10 percent reduction in the value of OCR approved professional, personal and consulting services contracts for FY-13 would have equated to approximately $528 million less,” the LFO’s fiscal notes said.

Richard’s bill would allow exceptions but only if certain conditions were met, namely:

• There were no state employees available or capable of performing the needed work;

• Required services are not available as a product of a prior or existing contract;

• There be a written plan to monitor and evaluate performance of the contract;

• The proposed contract would be determined to be a priority expenditure by the Commissioner of Administration.

Such a reduction, should it be approved and implemented, would help close a gaping budget hole of hundreds of millions of dollars for the state.

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