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Archive for the ‘Legislature, Legislators’ Category

If ever there was an appropriate analogy to the old expression rearranging the deck chairs on the Titanic, Gov. Bobby Jindal’s methods of dealing with successive years of budgetary shortfalls (read: deficits) would have to be it.

The Louisiana Public Service Commission (PSC) now has openly defied him (each member, even down to former Jindal cabinet appointee Scott Angelle) on his order for the commission to render unto Caesar Jindal 13 PSC vehicles to be included with about 700 other vehicles to be auctioned early next year in an effort to raise some $1.4 million ($2,000 per vehicle).

That is significant because unless we missed something somewhere along the way, that is the very first time any state agency, the legislature included, has stood up to this little bantam rooster. Tommy Teague did and was fired but the agency he headed, the Office of Group Benefits, went quietly to the slaughter like so many sheep.

Legislators, fearing capital outlay cuts in their districts or demotion from plum committee assignments, have likewise been strangely quiet as a group with only the occasional individual protests.

That move of selling off vehicles is more like the analogy of robbing your kid’s piggy bank to meet the mortgage payment than any real solution to a much larger problem and raises the logical question: what will the administration do next to scrape together a few dollars?

And the news only gets worse for Jindal’s fading presidential aspirations (hopes that themselves are a joke because something that doesn’t exist already can’t very well fade.

Even more ominous than ripping vehicles from state agencies, is the looming certainty of more mid-year cuts and employee layoffs in the wake of growing budgetary ills. Those fortunate enough to avert the layoffs will see no merit increases for FY-16 and contract reductions are expected to continue—except for certain favored contractors favored by our transparent governor. No agency head in his right mind would cut funds for a contractor with a close Jindal connections (read: campaign contributions).

In the meantime, we will also be curious to see if any of those six-figure Jindal appointees are among those being laid off. You can most likely check that box “No.”

Jindal, of course (along with most legislators) has been blaming the state’s worsening fiscal condition on the precipitous drop in crude oil prices.

Not so, says long-time state government observer and chief curmudgeon and former legislative assistant C.B. Forgotston.

Here’s the way he explains it:

            If one merely looks the “spot” prices regularly reported in the media it seems like much bigger issue. It’s nothing like the “oil bust” of the 1980s. At that time a majority of the state revenues were from oil severance taxes. That is no longer the case.

            Additionally, the state’s severance tax revenues are based on the contract price, not the “spot” price that is regularly reported in the media. For example, some of the companies currently drilling in the Tuscaloosa Marine Shale have pre-sold their potential finds at $96 per barrel. That is the price on which the taxes will be paid. The consensus in the oil industry is the current downturn in oil prices is temporary. It may last 6 months or it may last a year; it is not a forever thing.

            Also reducing the impact on state revenues, as pointed out by Legislative Fiscal Office economist Greg Albrecht, low oil prices means savings for consumers. Their spending shifts to other items on which sales taxes are collected. For businesses, especially small businesses, it means more profit which means higher income taxes.

The major problem in the current budget and creating the $1.4B shortfall projected for next year’s budget is not a reduction in revenues, but overspending. Overall revenues have grown every year that Jindal has been governor. However, he and the legislators have consistently spent not only one-time revenues on recurring expenses, but imagined revenues under the guise of “efficiencies” which cannot be measured.

            Blaming oil prices is merely a scapegoat for passing fiscally-irresponsible budgets for the last 7 years.  Don’t let those responsible avoid the blame. It’s time to hold Jindal and the legislators’ feet to the fire by telling them to set better priorities based on real, as opposed to imagined, revenues and amorphous efficiencies.

They’ve got one more time to get it right in the 2015 Regular Session. If they don’t the first order of business for the new governor and new legislators in early 2016 will be to hold a special session to raise taxes and reduce services to balance the final Jindal budget.

And lest anyone might be foolish enough to write Forgotston off because he retired and no longer involved in day to day state matters, that would be a serious mistake. But even discounting Forgotston, we have Greg Albrecht, chief economist for the Legislative Fiscal Office, weighing in on the subject. And he is very much involved in the day to day operations of the state.

Albrecht takes a different tact in explaining how we got where we are. http://theadvocate.com/news/11102302-123/economist-greg-albrecht-louisiana-tax

Albrecht says that priorities for spending state revenue on such pesky items as education, infrastructure and social services are set only after we first dole out billions of dollars in tax credits, rebates and exemptions that place a terrific drain on state financial resources.

Here’s one that he didn’t mention but which we feel is worth pointing out: if the NFL awards a Super Bowl to New Orleans, Saints owner Tom Benson gets a cool million dollars from the state. That has already happened once since that condition was included in a generous incentive package negotiated to keep the Saints in New Orleans.

Another practice that has since terminated but which cost the state millions: when a visiting NFL team such as Atlanta, Tampa Bay, etc., played in New Orleans, every traveling member of that team—players, coaches, support personnel, etc.—was required to pay state income tax on 1/16th of his income. That individual, after all, received 1/16th of his salary in Louisiana. As soon as the Louisiana Department of Revenue received a check for those taxes, the state cut a check for an identical amount to Benson.

Albrecht said many of the tax breaks are “open-ended spending” and unappropriated. “It’s on autopilot” and the spending “is the priority” of state government because all other spending is secondary.

He said attempts to curtail the programs have run into resistance in the form of screams of protest from business interests who would be impacted. They consistently deflect talk of costs to the state by parroting the old line about the economic benefits of the programs designed to attract certain businesses or to assist certain segments of the citizenry.

But when Enterprise Zone exemptions are used to build Wal-Mart stores in affluent communities like St. Tammany Parish (where two have been built using the program), one must wonder at the benefits derived from a program designed to uplift pockets of high unemployment.

Companies pay about $500 million to local governments in property taxes on inventory that is considered property and the state simply reimburses those companies dollar for dollar. “We’re on the hook for whatever the local assessor puts down,” Albrecht said. http://www.thenewsstar.com/story/news/local/louisiana/2014/12/15/state-gives-away-billion-tax-breaks/20460681/

He said legislators have asked that he examine the various tax breaks for possible cutbacks and while Rep. Joel Robideaux (R-Lafayette), chairman of the House Ways and Means Committee which deals with taxes, feels legislation will be filed to alter some of the tax credits, he is realistic in the knowledge that any attempt to amend or eliminate the breaks could be vetoed by this corporate welfare-happy governor.

“The veto pen will determine what passes or not,” Robideaux said. “The question is, ‘Can we craft legislation that will avoid the veto pen?’”

Earlier this year, Sen. Jack Donahue (R-Mandeville) managed to get overwhelming passage of a bill that called for more oversight of the tax break programs by the state’s income-forecasting panel.

But Jindal, who never met a tax break he didn’t like, promptly vetoed the bill, saying it could effectively force a tax increase on businesses by limiting spending for the incentive programs.

You gotta give Jindal credit for creativity, though. Only he could twist the definition of removal of a tax break for business into a tax increase even while ignoring the fact that removal of those tax breaks could—and would—mean long-term relief for Louisiana citizens who are the ones shouldering the load. And for him to willingly ignore that fact borders on malfeasance.

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A confrontation reminiscent of the one nearly 50 years ago between the managing editor (yours truly) and the family news editor at the Ruston Daily Leader has arisen between Gov. Bobby Jindal and the Louisiana Public Service Commission (PSC) and if the late Wiley Hilburn were alive today, he might well find the latest one just as amusing.

Hilburn was on hand when I needed a camera to cover a breaking news story. The only problem was, the news camera was broken and the only one available was a cheap one Publisher Tom Kelly had purchased for use by family news editor Virginia Kavanaugh for her section. “Give me your camera,” I said as I hung up the telephone and stood from my chair across from her. “I have to get a picture of a wreck on I-20.”

“No,” said Mrs. Kavanaugh. “You can’t have it. It’s for my use.”

In complete exasperation and more than a little frustrated at this unexpected lesson in humility, I looked over at Hilburn who had just walked in with a news release from Louisiana Tech University. The look I got in return told me I was on my own. “But I’m the managing editor!” I finally blurted. It was the only thing that came to mind in response to her unexpected insubordination. As I write this, I swear I can still hear Hilburn laughing at the absurdity of the scene that unfolded before his eyes. He would repeat that story for my benefit for years to come, laughing just as hard as he did that morning at the very audacity of my naïve belief that in some parallel universe, my managing editor badge trumped her title as family news editor.

And I never got that camera.

Now the PSC has ripped a page from Mrs. Kavanaugh’s playbook and it’s just as funny.

Jindal, in a desperate attempt to scrape together a few pennies to cover what at last estimate was a deficit of about $141 million, is conducting a fire sale of what state assets still remain after he disposed of state buildings and parking garages in years past to patch similar budget holes.

The administration wants to sell some 700 state vehicles, including 13 assigned to the PSC but commissioners voted unanimously Wednesday (Dec. 17) to direct the PSC staff not to relinquish the vehicles because, the commission lacks funds with which to rent cars and to sell them would hinder its work.

Jindal planned to confiscate the vehicles to be sold with the others early next year in yet another cost-cutting move. The administration says the PSC vehicles aren’t used enough to justify their upkeep.

(The same might be said for some of the governor’s highly-paid appointees. And let’s not even discuss the cost of overtime, lodging, travel and meals for state police security details that accompany the governor on all of those trips to Iowa, New Hampshire and Washington.)

It should be noted that the $141 million shortfall was before the latest plunge in oil prices which Jindal conveniently blames for the fiscal mess in which the state finds itself—again. Legislative Auditor Daryl Purpera is scheduled to give a presentation tomorrow (Thursday, Dec. 18) to the Joint Legislative Committee on the Budget and early indications are the governor’s office and Commissioner of Administration Kristy Nichols aren’t going to be very happy.

The $1.4 million anticipated from the sale of the vehicles represents a shade less than 1 percent of the $141 million deficit (which may be even more after the legislative auditor’s report) and is only a tiny fraction of the $25 billion state budget.

“Of the 13 state vehicles at the Public Service Commission, 11 of them are driven less than 15,000 miles a year,” said Jan Cassidy, Assistant Commissioner of Administration for Procurement. “The cost of maintaining underutilized vehicles is greater than the cost of reimbursing employees for travel when it’s necessary,” she said.

The $1.4 million anticipated from the sale of the vehicles would not be net since the state would be required to either pay employees for use of personal vehicles or pay for rental of cars through a contract the state has with Enterprise Car Rentals.

The administration put agencies on notice about the planned sale last week, giving them two weeks to turn over vehicles designated for auction.

“Reducing state expenses requires all state agencies to review their priorities and ensure they are spending taxpayer dollars appropriately,” Cassidy said.

One of those voting to defy the governor was Scott Angelle who once served in Jindal’s cabinet. A dispute between the PSC and the governor’s office has been simmering and the vehicle flap is only the latest issue as things have reached a boiling point.

The PSC has been critical of a recent practice by the administration and the legislature to take over funds paid to the PSC as fees by regulated companies. Members say the action amounts to an unconstitutional tax levy while the governor and legislator argue for the right to use the fees as part of the state budget. That outcome of that argument is now pending in court.

We can only assume that state police vehicles were exempt from the fire sale order. But with this administration, who knows?

Nor was there was any immediate word on whether or not the administration would attempt to seize the PSC vehicles, which would just be another log on that smoldering fire.

But somewhere within the walls of the Governor’s mansion (he’s rarely on the fourth floor of the State Capitol, we’re told), Bobby Jindal must be incredulous as he exclaims perhaps to wife Supriya or, to a curious butler, “But I’m the governor!

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By guest columnist James D. Kirylo

It is said that education is the great equalizer.  Yet, we know when it comes to resources, opportunity, and the quality of a teacher, not all educational experiences are equal.  Then we react with a bevy of voices coming from a variety of corners on how to better equalize the great equalizer.  To be sure, when making sense of gray matter, complexity, and multi-layered challenges inherent in education, the solutions are not easy.

Yet, when it comes to navigating through this entangled web, a leading thread to direct that charge ought to have the name “teacher” at its pinpoint.  There are few absolutes when it comes to education.  And of those few, one is this: There is positive correlation between a high quality teacher and student success.

It is, therefore, logical that if we want to move toward educational transformation, we need to ensure that teacher education is right up there on the priority list.  It is no coincidence that high achieving countries, like Singapore, South Korea, and Finland are quite selective as to who teaches their youth, how they prepare those who are to teach their youth, and how they maintain ongoing development while teaching their youth.

That a common thread in high-achieving countries is an elevated priority on teacher education ought to raise our collective sensibilities, stirring movement toward embracing that model right here in Louisiana.  To that end, the following summarizes what we need to qualitatively do in our backyard if we expect to move toward long-lasting transformative educational change:

  • Entrance requirements and processes into teacher education programs need to be more rigorous and more selective.
  • Those who are accepted into teacher education programs should be provided tuition waivers, grants, and other incentivizing initiatives.
  • Teacher education programs across the state must be creatively innovative, systematic, and unified in which not only content knowledge is emphasized, but also concepts, practices, and theories related to human development, pedagogy, curriculum, and learning are thoroughly explored in light of the diverse country in which we live.
  • Field experiences and rich mentorships are emphasized that works to connect the thoughtful relationship between theory and practice.
  • Upon graduation, teacher candidates leave their programs with great expertise, expectation, and adulation as they move into the teaching profession.
  • Once in the classroom, teachers regularly engage in ongoing and meaningful professional development, with them at the center of facilitating that endeavor.
  • The school curriculum in which teachers teach is wide-ranging, with an inclusive priority on the various arts, physical education, and foreign language.
  • When it comes to curricula, assessment, and evaluation decisions at the school setting, teachers are integral members at the table.
  • At the school setting, a test-centric focus has to be abandoned and replaced with a learning-centric focus that is energizing, inspiring, and imaginative.
  • Students, teachers, and schools are not in competition with one another, but work to cooperate, collaborate, and lift each other up.
  • All schools, regardless of location and economic demographic have equal access to quality resources, material, and high quality teachers.
  • The teaching profession is viewed with great respect, indicative of the competitive salaries, the working conditions in which teachers are placed, and how teachers are professionally viewed, treated, and honored.
  • A top-down hierarchal structure needs to be replaced with a teacher leadership empowerment structure.
  • “Fast-track” teacher training programs, such as TFA and LRCE, are not acceptable routes to teach our youth.
  • The waiving of requirements for those going into administrative type roles are not acceptable routes to work in leadership positions in our schools, systems, and state.
  • Only well-prepared, qualified, and certified teachers from high quality teacher education programs must teach our youth.

While there are certainly some examples of good efforts occurring in teacher education programs in our state, we are not doing nearly enough. Without doubt, if we are to move toward educational transformation in Louisiana, the systematic prioritization of teacher education is a must, the fostering of the professionalization of teaching is vital, and ultimately education must be viewed as an investment in which the entire state can be richly furthered.  Indeed, our international friends have provided us with an outstanding model.

(James D. Kirylo is an education professor, a former state teacher of the year, and his most recent book is titled A Critical Pedagogy of Resistance.  He can be reached at jkirylo@yahoo.com)

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If anything at all can be taken from the 100-plus pages of grand jury testimony of Bruce Greenstein, it’s that Greenstein’s memory lapses and his reluctance to adequately answer repeated questions about his role in the awarding of a major contract to his former bosses taxed the patience of members of the grand jury who were forced to listen to his verbal sparring with prosecutors for hours on end.

But in the end, there was no smoking gun, although Greenstein, former Louisiana Department of Health and Hospitals (DHH) Secretary, on several occasions during his testimony said an agency-wide memorandum cautioning DHH employees to avoid contact with bidders on the $189 million contract during the selection process did not apply to him.

Though grand jury testimony is normally secret, several perjury counts returned against Greenstein in the nine-count indictment were based on his grand jury testimony so it would be subject to discovery in order for Greenstein to prepare his legal defense and therefore would be public.

Greenstein also admitted he initiated what has come to be known as “Addendum No. 2,” which was crucial in allowing his former employer, CNSI, to qualify to submit proposals for the contract, which it ultimately won in mid-2011. The contract was cancelled in March of 2013 when it became known than the FBI had been investigating the contract since January of that year.

During his testimony, it was revealed that Greenstein had maintained constant contact with a friend at CNSI, Vice President of Government Affairs Creighton Carroll and that the frequency of those contacts increased dramatically during Greenstein’s interviewing for the Louisiana job and during the formulation of Addendum No. 2.

In the first five months of 2010, for example, there eight total contacts consisting of texts and phone calls between the two men. In June of, however, just before he began the interview process for the DHH position, there were 75 contacts. From July through January, there were 864 contacts, including 227 in January of 2011 alone, when “the whole Addendum 2 stuff was going down,” according to Assistant Attorney General Butch Wilson. “Before you take office,” Wilson said, “we have not even a dozen contacts with Mr. Carroll. And after you take office, we have a total…of 2,882 communications. How do you explain that?”

“He is a prolific texter,” Greenstein replied.

Further into the questioning, Wilson was still trying to reconcile Greenstein’s testimony before the Senate and Governmental Affairs Committee in which he claimed he had no contact with CNSI officials during the bidding process and the facts to the contrary as revealed by the thousands of text messages and telephone calls between Greenstein and CNSI.

“…Four months after a very important conversation with your friend and former employer, Mr. (CNSI co-founder and President Adnan) Ahmed, and you tell Sen. (Karen Carter) Peterson (D-New Orleans) there were no vendor conversations regarding the RFP (request for proposals) after it was released,” Wilson said. “And you admitted a minute ago that that conversation with Mr. Ahmed definitely involved the RFP. So that was not an accurate statement, was it?”

“I did not make it at the time thinking it was an inaccurate statement,” Greenstein said.

Greenstein’s memory appeared to grow progressively worse as the questions became more pointed.

“Do you recall a meeting with DHH officials and DOA (Division of Administration) people, specifically (then-Commissioner of Administration) Paul Rainwater and (DHH Assistant Secretary) J.T. Lane…where you had a meeting regarding the emails that had been found? Do you remember that meeting?”

“I don’t.”

“You don’t remember that meeting with Mr. Lane and Mr. Rainwater and several other people in between your testimonies before the Senate?”

“I don’t remember it.”

“Do you recall being explicitly asked by folks at the meeting from both DHH and DOA, ‘Is this all there is?”

“No.”

“I’m going to ask you again,” said Wilson. “Are you sure?”

“I don’t remember having a meeting with Paul Rainwater about these emails.”

At one point during Greenstein’s testimony, it was revealed by Wilson that Greenstein supposedly agreed to a letter of recommendation on behalf of CNSI to his counterpart in Arkansas. He cited a Feb. 5, 2013 email from Carroll to DHH executive counsel Steve Russo which said, “As you know, B.G.—which I believe probably means Bruce Greenstein—has agreed to a letter of recommendation…to the Arkansas Department of Human Services on behalf of the CNSI, which was also trying to get a contract for a (sic) MMIS (Medicaid Management Information Systems) system in Arkansas, correct?”

The letter subsequently went out over Undersecretary Jerry Phillips’ signature, Wilson noted, asking “Whose idea was that?”

“I can’t remember who wanted to sign it,” Greenstein said. “I know that I didn’t want to sign that.”

“Then why does Creighton say, ‘As you know, B.G. has recommended a letter of recommendation’?”

“I probably said that when asked about a recommendation,” Greenstein said.

“Your friend asked you to help his company…get more business and you said, ‘I will do that,’ right?”

“I didn’t say I will do that.”

“Well, if you said yes, why is Jerry Phillips sending out a letter?”

“Well, it’s not Bruce Greenstein on the letter.”

“I’m going to ask you pointblank. True or false: this letter that was rewritten and signed by Jerry Phillips, you directed him to do that?”

“I do not remember that,” Greenstein said.

“How could you not remember that?”

“Because I don’t remember that.”

“That’s hard to believe, Mr. Greenstein,” Wilson said. “I mean, this reference is clearly a discussion that you had with Creighton Carroll regarding this letter that he sends to your department that he, or someone from CNSI, wrote that is then minimally changed and signed by not you, but your under-secretary.

“Jerry Phillips didn’t show you this letter before he sent it out?” Wilson asked.

“I can’t remember seeing…I don’t remember seeing it.”

“It just looks to me like between Creighton’s comment here about ‘B.G. has agreed to a letter of recommendation’—and that was on Feb. 5th and the letter was issued on Feb. 14th, nine days later—this was almost sounds like cold feet. The former letter he sends is for your signature, but in nine days, now it’s got Mr. Phillips’ …signature on it.”

[The Arkansas Department of Human Services, in July of that year, disqualified CNSI from participating in the bidding on its system as a result of the Louisiana investigation and resignation of Greenstein.]

Wilson also questioned the propriety of allowing CNSI to bid on the contract to process Medicaid claims for DHH. Brandishing a letter dated Dec. 7, 2010, from the Charlotte, N.C., law firm McGuire-Woods, he said the firm was representing CNSI in a major financial default case that threatened to bankrupt the company—a full six months before the CNSI contract was signed.

“Were you ever aware of the fact that they were basically in receivership with BOA (Bank of America) at the time they were bidding? Were you ever informed of that? Were you ever told that, as a matter of fact, their line of credit had been restricted by Bank of America to the extend they could not spend money unless they got prior approval from BOA? Did Mr. Carroll and Mr. Ahmed ever tell you about the troubles, the clear financial troubles that the company was having at the time they were trying to get this money from this bid?

“Should that have been disclosed to DHH?” Wilson asked.

“That’s a good question,” replied Greenstein.

Further into Greenstein’s testimony, he was asked if he was told to resign or be fired.

“I was told to resign,” he said.

“Were you specifically told by the administration officials that you had lied to them?”

“No.”

“They just said, ‘Get out’?”

“Actually, it was Paul Rainwater—when he was in the Chief of Staff’s office.

“And did Paul ever say, ‘Bruce, you lied to us’?”

“No.”

“You are sure about that?”

“I don’t remember it.”

“You tried not to tell the Senate that CNSI had won (the contract),” Wilson said. “You didn’t tell the Senate about communications with CNSI regarding Addendum No. 2. You didn’t tell the Senate about hundreds of communications with Carroll. You did not tell DHH and DOA officials about communications with Carroll after they asked you if there was anything else, although you say you don’t recall that meeting.”

At one point in the questioning, this time from Assistant Attorney General David Caldwell, it appeared there would be a link established between the events surrounding the contract and Gov. Bobby Jindal’s office, but the line of questioning ended almost as abruptly as it started.

Referencing the date of Jan. 10, 2011, Caldwell said, “I see some calls from Bruce Greenstein’s work cell back and forth between you and Timmy Teepell. What did Timmy have to do with…was he was with Division of Administration or the governor’s office at that time?”

“At that time I think he was with the Chief of Staff for the governor,” Greenstein said. [Teepell never worked for DOA].

“Do you recall what he was talking to you about?” Caldwell asked.\

“I have no idea,” replied Greenstein.

“Was he talking to you about that amendment [Addendum No. 2] of this particular contract?”

“Probably not.”

“What involvement did Mr. Teepell have in this process? What information did he have about the DHH contracts? Because I think that maybe even Mr. Ahmad said in the paper that he had gone over to the governor’s mansion to talk to him, right? I’m just trying to get a sense as to how much involvement people within the governor’s office might have had.”

Caldwell also singled out a series of communications between Greenstein and Alton Ashy, who was the lobbyist for CNSI. “Was he trying to push this amendment for CNSI, this Addendum No. 2?”

“Yeah, I mean, he should have been… but he had a lot of other business at DHH as well.”

Caldwell later noted that Greenstein at one point had asked DHH Chief of Staff Calder Lynch specific questions about Ashy, saying, “A company I know wants to hire him” and that Lynch had responded, “Not that it’s terribly helpful or relevant, but we can speak offline.” Offline could, for example, mean speaking by phone rather than leaving a paper trail of emails.

“How did you come to get involved with recommending a lobbyist on CNSI’s behalf? I don’t understand how all that went down.”

Caldwell also grilled Greenstein on his intervention on behalf of CNSI when it became apparent that CNSI was unable to make good on its required bond for the contract. “Did you have discussion with (DHH executive Counsel) Steve Russo in which it was discussed whether you could wait until the contract was signed to call for the bond to be posted?”

“I don’t remember a conversation like that.”

Greenstein and Caldwell sparred over the refusal to allow Greenstein to communicate with Russo after the investigation was initiated. “DHH wouldn’t allow me to talk with my own attorney,” Greenstein complained.

“Is he your personal lawyer?” Caldwell asked.

“He represented the secretary in many proceedings…he reiterated many, many times…that he was my attorney and we have attorney-client privilege.”

“Let me explain to you why he doesn’t want to talk to you,” Caldwell said. “There’s all these things in your deposition where you have said that people said something or they didn’t say something—and I will tell you right now, it is directly contradicted by what those people have said. [Caldwell hinted at but never actually said that Russo was—and is—paid by the State of Louisiana and represents DHH but not any DHH personnel once they come under investigation for or charged by the state with wrongdoing].

Later, Caldwell brought up boasts by CNSI officials that they had political influence with Greenstein’s office. “Are you aware that they constantly threw it around that they had influence on the ninth floor and this is how they were going to get the contract?”

“No,” Greenstein replied.

Even though Greenstein maintained that he pushed for Addendum No. 2 as a means of opening up the bidding process to more vendors in the hopes of obtaining the best deal possible for the state, Caldwell noted that when another bidder, ACS, requested an extension of the proposal deadline, “Bruce said no,” according to an internal DHH email.

After the attorneys took their shots, individual members of the grand jury had their turn at asking questions of Greenstein and the mood of the grand jury was best summed up by one member near the close of testimony who said:

“Sir, I just have two questions. How are you being transparent when you can’t recall anything and secondly, when you sit down with your children and you explain your part in Louisiana history, what will you tell them?”

For those with lots of time on your hands, here is a link to the full transcript of the grand jury testimony: http://www.auctioneer-la.org/Bruce_Greenstein_Grand_Jury_Testimony.pdf

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You have to love the Division of Administration (DOA) and the Office of Group Benefits (OGB). Their concern for the 230,000 state employees, retirees and dependents is surpassed only by their arrogance.

Saying “We heard the financial concerns of our members and Legislators,” Commissioner of Administration Kristy Nichols made the self-serving announcement that OGB has decided to delay the effective date of changes arbitrarily (and illegally) implemented to medical and pharmacy plans from Aug. 1 to Sept. 30. OGB RELEASE

Here is the information provided on the OGB web site: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4D7A4D344D6A45794E533551524559334E6A4D32

Never mind that State Rep. John Bel Edwards (D-Amite) told Nichols and OGB CEO Susan West back on Sept. 25 that they were flirting with major litigation and the threat of having to refund millions of dollars to OGB members who were hit with benefits changes which were illegal until such time as a rule could be adopted. Here is the link to video clips of that hearing: http://youtu.be/ct652tBa8Mc.

Except for Edwards who said the move was illegal. He requested and obtained an Attorney General’s opinion that agreed with him.

            Nichols, as is her custom, was not going to promulgate rules at all in implementing the new rates members would have to pay for prescriptions even though the law requires advertisement and public hearings on such changes. Instead, the administration, facing a shrinking OGB reserve fund because of its repeated premium cuts, plunged ahead, the law and state employees be damned.

The premiums were reduced so that the state would enjoy a similar reduction in the 75 percent of premiums it is required to pay for health coverage of OGB members. Gov. Bobby Jindal and Nichols cut the rates by nearly 9 percent despite a report from Buck Consultants which stated flatly that it never made such actuarial advice.

Pursuant to testimony given in the Sept. 25 hearing by the Joint Legislative Committee on the Budget (JLCB) in which Kristy said Buck Consultants had recommended a premium reduction, Edwards requested a copy of the actuarial recommendations.

            “I still have not received any actuarial recommendations for the 2013 and 2014 premium reductions at OGB,” Edwards said Tuesday. “Nor have they told me that such recommendations do not exist. Clearly, they do not.”

The OGB web site does contain a request for proposals (RFP) for an actuarial that is dated Sept. 26: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4D7A4D774E4445794D793551524559334E444531

The Baton Rouge Advocate said the refunds the state must now make to OGB members who were overcharged in the form of out-of-pocket expenses will come to nearly $4.5 million and is expected to be refunded within 60 days.

http://theadvocate.com/news/10718472-123/group-benefits-change-announced

Getting the refunds for the overcharges won’t be a walk in the park if past experience with the OGB pharmaceutical benefits administrator is any indication. “Members who incurred increased pharmacy costs between Aug. 1 and Sept. 29 based on exclusions must submit an appeals form to MedImpact,” said the news release from OGB, adding that Blue Cross and Blue Shield of Louisiana (BCBS) will reprocess claims for members who incurred increased medical costs through their providers during that time period. There is an appeals form for MedImpact on the OGB web page, but it appears to apply only to prescriptions that were rejected or denied by pharmacies in August and September: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4D7A4D344D6A45794E693551524559334E6A4D33

If members incurred costs that were not submitted through a provider, they must submit an appeal request form to Blue Cross and Blue Shield,” the release said. “The forms can be found on the OGB website at www.groupbenefits.org.”

Edwards said the burden should not be placed on state employees and retirees to file appeals on overpayments. “Group Benefits has the claims information and they should be required to make the determination of who is owed what and it should be Group Benefits that takes the initiative on this,” he said.

Of course, by placing the onus on employees and retirees, DOA is counting on members being unfamiliar with the process or uninformed about the refund program altogether. If they do not file appeals for refunds, no refund will be made and the state will not have to repay victims of the overcharges. “That’s why Group Benefits should be the one responsible for seeing to it that everyone who was overcharged because of its illegal actions in implementing the changes in the first place should get those overcharges refunded,” Edwards said. “The members should not be held responsible for the illegal actions of Group Benefits and DOA.”

Here are links to the after-the-fact DOA Emergency Rule declaration: http://www.doa.louisiana.gov/doa/Presentations/Emergency_Rules_-_Office_of_Group_Benefits_9-30-2014.pdf and DOA’s Notice of Intent: http://www.doa.louisiana.gov/doa/Presentations/Ordinary_Rule_-_Office_of_Group_Benefits_10-01-2014.pdf

The clumsy attempt at circumventing the law is just another in a long line of embarrassing episodes perpetrated by the Jindal administration as the governor pays less and less attention to the home front in his quest for the Republican presidential nomination, leaving the job of running the state to appointees equally unqualified as he to run so much as a snow cone stand.

Nichols typically ignored the threat of litigation in making the announcement just as the administration ignored the law in implementing the changes, even disagreeing in that Sept. 25 hearing on the necessity of publishing the proposed changes and conducting public hearings.

And West even attempted to justify the changes by pointing out to retirees and active members that she must pay the same premiums as they. She apparently failed to consider the fact that most state employees and certainly most retirees do not make her $170,000 per year salary.

The Retired State Employees Association (RSEA) threatened a lawsuit, challenging the administration’s contention that it could use the emergency rule (employed repeatedly by the administration during Jindal’s nearly seven years in office) to make changes in the medical and pharmacy plans.

Nichols was not even around for the conclusion of that Sept. 25 JLCB meeting, having stepped out of the committee room ostensibly to take an “important” phone call. In reality, it turned out she stepped out permanently to take her daughter to a boy band concert in New Orleans where she watched from the comfort of the governor’s luxury box at the Smoothie King Arena (see the snow cone stand reference above).

“Let’s hope that the legislature will continue to exercise oversight on this issue to drive more changes in the plans whereby the out-of-pocket cost increases of OGB members are reduced and (so that) the state will share in the cost of restoring the system’s soundness,” Edwards said in a prepared statement.

 

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What kind of person, serving as a municipal fire chief, would purchase ribbons and decorations of previous conflicts from a military surplus store and pen them on his own uniform?

Apparently the kind of person that Deputy Secretary of the Department of Public Safety (DPS) and Gov. Bobby Jindal would want to protect even to the point of prevailing upon an ally in the legislature to file an amendment to abolish the very agency conducting an investigation of that and other offenses.

At the same time State Fire Marshal Butch Browning was being reinstated in May of 2012 by his boss, Mike Edmonson who serves as both State Police Superintendent and Deputy Secretary of DPS, State Rep. Joe Harrison (R-Napoleonville) was introducing an amendment to House Bill 1, the state’s operating budget, to pull the $1.7 million funding for the Office of Inspector General (OIG) in the middle of OIG’s investigation of allegations of payroll fraud and a sloppy inspection of a carnival ride in Greensburg only seven hours before teenage siblings were injured by the ride.

The timing of the amendment was enough to make you toss your lunch of stone cold ethics and hot back room politics.

Browning “retired” on April 18 in the middle of that investigation but returned just 12 days later, on April 30, with an $8,000-per-year increase in pay after being “cleared” by Edmonson of any wrongdoing—six months before an investigative report by OIG was even issued.

But if Jindal and his co-conspirators intended to thwart the investigation by abolishing the agency led by Stephen Street, those efforts wilted in a backlash of public support for the office immediately ensued which caused the legislature—and Jindal—to back down from the effort despite a favorable 11-5 vote on Harrison’s amendment by the House Appropriations Committee.

Remember, this is the same governor who two years later would attempt to sneak through another amendment granting Edmonson a lucrative $55,000-a-year increase in retirement benefits only to have that plan crash and burn when LouisianaVoice learned of the implications of the amendment by State Sen. Neil Riser (R-Columbia).

OIG serves as white-collar watchdog and as an internal affairs division within state government but Harrison, in offering his amendment, argued that OIG’s functions overlapped those of State Police and the Attorney General’s Office.

As we have already seen, State Police, under the direction of Edmonson, gave Browning high marks in exonerating him from any wrongdoing and as we have also seen in other matters, the Attorney General’s Office is more than a little reluctant to involve itself in the investigation of any state agency—except of course in a situation such as that of former Department of Health and Hospitals Secretary Bruce Greenstein where the feds are already actively investigating a questionable contract with Greenstein’s former employer.

In that case, Attorney General intervention made good press.

In fact, since the 1974 State Constitution was adopted over the objections of then-Attorney General Billy Guste, the Attorney General’s duties are primarily restricted to defending state agencies, not investigating them and can generally enter a local matter at the express invitation of the local district attorney. In fact, the Attorney General has even begged off certain investigative matters, citing a potential conflict of interest should his office be called to defend or represent the agency.

Hammond attorney and state government watchdog C.B. Forgotston, former chief counsel for the House Appropriations Committee disagreed with Harrison’s contention that the OIG is “pretty much redundant.”

Forgotston said the office might be redundant “if any other agency in the state was stopping waste and fraud within the executive branch. Nobody at the state level is pursuing corruption in Louisiana,” he said.

Street said he linked his office’s funding to the amount of money it uncovers through wrongdoing by state officials and contractors. OIG’s annual report in 2012 showed the office had uncovered $3.2 million in fraud and waste the previous fiscal year, nearly double the office’s $1.7 million budget appropriation.

The reaction to Harrison’s bill and to Jindal’s transparent ploy was immediate.

“Is it a bargain to spend $1 to root out nearly $2 in fraud in Louisiana?” the Lake Charles American Press asked in a May 15, 2012, editorial. http://www.americanpress.com/AP-Editorial-5-16-12

“Apparently, some members of the state Legislature don’t think so,” the editorial said, adding that Harrison had admitted that he did not agree with the OIG’s investigation of Browning. He said there should have been no investigation in the first place but Street said his office had received a complaint (from the New Orleans Metropolitan Crime Commission) about how Browning was doing his job and so he launched an investigation. “I was told if you do this (job) right, you’ll eventually have people trying to shut you down,” Street was quoted by the paper as saying.

The editorial disagreed with Harrison’s claim that State Police and the Attorney General’s Office could take up the slack. “The attorney general in Louisiana is too much of a political species to launch investigations into wrongdoing by other politicians or political agencies,” it said in something of an understatement. “An office that ferrets out nearly $2 in fraud for every $1 it costs is too valuable to Louisiana to eliminate.”

The non-partisan Public Affairs Research Council (PAR) agreed. “The state needs a self-motivated watchdog agency to stop waste, mismanagement, abuse and fraud in executive-branch government,” it said in a May 7, 2012, news release. http://www.parlouisiana.com/explore.cfm/parpublications/commentariesandletters/100092

“Stephen Street… is a former criminal staff lawyer with the Third Circuit Court of Appeal, a former public defender and a former Section Chief with the state Attorney General’s Insurance Fraud Support Unit who handled white-collar prosecutions. He has extensive experience teaching courses on white-collar crime investigation,” the PAR release said.

“A sudden halt in funding of the Inspector General would terminate ongoing investigations and send a message nationwide that Louisiana government is open for corrupt or wasteful business. Lawmakers who oppose continued funding of the office while also criticizing particular ongoing investigations are running the risk of deeply politicizing the state’s law enforcement systems. If these efforts at shutting down the Inspector General’s office are successful, their effect will be to strongly encourage further political interference in the law enforcement profession throughout the state,” the release said.

James Gill, then a columnist for the New Orleans Times-Picayune, wasn’t nearly as charitable. As only he can, Gill noted that Edmonson had exonerated and reinstated Browning even before Street’s investigation was complete. Then came Gill’s zinger: “Perhaps Edmonson forgot that he had claimed Browning’s resignation had nothing to do with the allegations against him.” http://www.nola.com/opinions/index.ssf/2012/05/battle_over_funding_for_louisi.html

Gill quoted Harrison as claiming that he had thought for two years that Louisiana did not need an inspector general. “Anyone but a politician would be carted off to the funny farm for saying that,” he wrote, adding that despite Harrison’s claim that his amendment had nothing to do with Browning, he launched into “a passionate denunciation of the inspector general’s office over its treatment of browning.” Gill quoted Harrison as saying no good investigator “would bring it (the investigation) to this point without verifying information.”

“Even a politician deserves a trip to the funny farm for spouting such nonsense,” said Gill at his derisive best.

But even more to the point, Gill observed that “Since Browning has already been returned to duty, it may not matter much what conclusions the inspector general reaches.”

May not indeed. This administration is, after all, the gold standard of ethics.

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State Rep. Jim Fannin (D/R-Jonesboro) may have inadvertently exposed the Jindal administration’s $178 million “surplus” for the fraud it is in a brief conversation with one of our readers from north Louisiana who knew the right questions to ask, LouisianaVoice has learned.

Fannin, Chairman of the House Appropriations Committee, delivered a “State of the State” address at the Fall Meeting of the Louisiana Retired Teachers Association in Baton Rouge on Monday and afterwards was confronted by retired teacher Kay Riser Prince of Ruston.

Rubbing her forefinger and thumb together, Riser asked Fannin, “Is Jindal’s new-found money real—that is, can the light bill be paid with it, or is all on paper?”

“I don’t know,” answered Fannin initially before he finally said it is money that was assigned to various agencies but not spent.

“When I taught at (Louisiana) Tech,” Riser responded, “we were told that if we did not spend money that had been allocated by June 30, it went back to the state.”

Fannin then admitted to Prince that was where Jindal’s “discovery” of some $320 million originated.

Prince was able to obtain an answer to a question no one else has been able to get—probably because Fannin was sent a list of funds Jindal had supposedly “swept” from some 17 agencies to arrive at his bogus surplus and when asked point blank, he acknowledged that the surplus was, at best an illusion, an accounting sleight of hand.

So now it would appear that the surplus so proudly proclaimed by Jindal is not cash after all, but an accounting entry and any available cash at the time of the under-budget expenditures (reportedly dating all the way back to 1997) has long since reverted back into the General Fund and has been spent.

In fact, if the state kept books like a business, this shell game might well have affected the retained earnings of owners’ equity and may have even resulted in Enron-like indictments.

In standard business practice, such funds would have been included as a carry-forward asset but never as revenue leading to a subsequent accounting period budget surplus. You can ask Enron’s now defunct accounting firm, Arthur Andersen, about that.

But Gov. Bobby Jindal and Commissioner of Administration Kristy Nichols have each seen their shadows and have retreated back into the fantasy world in which they now reside—but not before Nichols fired off a broadside at State Treasurer John Kennedy for not knowing of the existence of a nonexistent bucket of cash lying around for all these years—and they’re not scheduled to emerge until the Legislative Auditor’s report sometime in late December.

By that time, of course, Jindal will be in Iowa or traipsing around in the snows of New Hampshire in search of caucus and primary votes he hopes will catapult him into semi-serious contention for the Republican presidential nomination—an exercise our crystal ball tells us will give him the distinction of having less a chance at the nomination—or even of being picked for VP— than Alf Landon had of beating FDR in 1936 or of Barry Goldwater upsetting LBJ in ’64. Meanwhile, the looming legislative session will be but a mere distraction, and Louisiana’s financial troubles will start to become a fading bad dream for him and a mess to be sorted out by his successor.

 

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