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Archive for the ‘OGB, Office of Group Benefits’ Category

There’s blood in the water and the sharks are starting to circle.

To clarify the analogy somewhat, the blood is $750 million in tobacco settlement money and the sharks would be 144 state legislators and the guy masquerading as Louisiana’s governor.

Bobby Jindal, the same guy who as Secretary of the Louisiana Department of Health and Hospitals (DHH) in 1996, opposed the state’s participation in the 46-state litigation against the nation’s four largest tobacco companies, now wants to sell off the remaining portion of the 1998 settlement of that suit to generate $750 million for the state treasury.

That’s the same Bobby Jindal who as DHH secretary, was well aware that the state was spending millions of dollars per year in treatment of indigent patients for tobacco-related illnesses at the state’s charity hospitals, but nevertheless signed affidavits along with his boss, then-Gov. Mike Foster, that argued that Attorney General Richard Ieyoub did not have the authority to sue on behalf of the state and DHH.

That’s also the same Bobby Jindal who as governor in absentia, successfully opposed the lawsuit by the Southeast Louisiana Flood Protection Authority-East (SLFPA-E) against 97 oil and gas companies in an effort to hold them accountable for damages to Louisiana’s coastal wetlands, claiming that SLFPA-E did not have authority to file suit on behalf of the state.

No matter. The tobacco litigation was settled for $365.5 billion in 1998 and the state was in line to receive $4.6 billion, or $141.2 million per year for 25 years and continued payments as long as tobacco products are sold within the state as its share of the settlement. http://kff.org/other/state-indicator/tobacco-settlement-payments/

But in 2001, the state, with the support of State Treasurer John Kennedy, sold 60 percent of its settlement income as a hedge against the possibility of bankruptcy by the tobacco companies. That money was placed in a trust fund that generates revenue for health care, education and the Taylor Opportunity Program for Students (TOPS), the program that provides college scholarships to Louisiana high school students to meet curriculum and grade criteria.

Now, though, Jindal is proposing selling off the remaining 40 percent, a move that Kennedy opposes, saying it represents the same disastrous fiscal policy that is responsible for the current $1.6 billion structural deficit in the state budget.

Commissioner of Administration Kristy Nichols, in her usual condescending manner, said Kennedy does not understand what the administration is trying to do.

“The only way we will consider this is if it creates recurring revenue for TOPS,” she said, adding that the money would not be spent all at one time.

But Nichols and Jindal only have a few months left in office and have no way of guaranteeing how the money will be used and Kennedy is more than a little skeptical of Jindal’s motives. “It’s just another gimmick to generate one-time money,” he said. “It’s just not a good idea to sell the family silver.”

He said the administration does not have the authority to dictate how the money is spent. “That will be the decision of the legislature and with the history of the legislature being what it is, you know they can’t wait to get their hands on this money,” he said.

Kennedy said the proposed sale is much like the manner in which the Office of Group Benefits (OGB) saw its reserve fund reduced from $500 million to only about $100 million and still dwindling.

“The administration reduced premiums for OGB members which on the surface, looked like a great thing for the members.” What the administration didn’t say is that the move also reduced the state’s corresponding obligation to match premiums, thus freeing up money the state would have paid into OGB for helping Jindal patch his budget holes. Meanwhile, because of reduction in income from premiums, OGB found itself paying out about $14 million more in benefits each month than it was taking in, thus creating a continuous drawdown on the reserve fund.

Kennedy said the revenue from the sale of the tobacco settlement cannot be used to plug budget holes because it would have to be used for TOPS and higher education. But by dedicating the money for TOPS, it would allow the administration to take the money it would normally use for those two purposes and redirect it to the state budget.

Kennedy said the administration has taken on all the characteristics of a junkie in search of a fix.

He said Jindal’s chronic use of one-time money to fill budget holes has included selling state property, raiding the Medicaid Trust Fund for the Elderly, indirectly taking funds from the OGB reserve fund. “When you get hooked badly enough, you will sell your shoes for a fix,” Kennedy said. “Any farmer knows it’s a bad idea to sell your seed corn because then you don’t have anything to plant next year’s crop.”

Noting that Moody’s and Standard & Poor’s bond rating agencies have already put Louisiana on negative credit watch, he said the rating agencies will take a dim view of the state’s selloff of the remainder of the tobacco settlement which is currently generating about $50 million a year for the state.

Nichols said the proposal to sell the remaining 40 percent of the settlement would have to be approved by the Tobacco Settlement Financing Corp. Board, the Legislature and the State Bond Commission. The board is scheduled to meet Tuesday at 10:30 a.m. in House Committee Room 1 in the State Capitol.

Approval by the board is expected to be a mere formality since the board members are Jindal appointees.

“My fear is that all $750 million of this money will be spent,” Kennedy said. “Everyone will want a piece of the pie. That will only add to our structural deficit and what will we do next once the money is gone? We’ve got to stop thinking about the next election and begin thinking about the next generation. Don’t hold this fire sale.”

If the board does approve it and it goes before the Legislature, “we are going to do everything we can to oppose the sale,” Kennedy said.

The practice of Bobby Jindal’s selling off everything in sight to raise money is reminiscent of a 2011 comment by former State Sen. Butch Gautreaux (D-Morgan City) who, in criticizing Jindal’s practice of selling state property, suggested acerbically that perhaps the administration should consider selling the 24-story State Capitol building because “it would make a great waterslide.” http://louisianavoice.com/2011/04/29/of-water-slides-and-comparisons-between-2-state-health-plans/

 

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In the seven-plus years of his administration, Gov. Bobby has pretty much had his way with the legislature in passing his so-called reform programs. The lone exception is his aborted effort to abolish the state income tax a couple of years ago.

Everything else—education reform, state employee retirement reform, privatization of the Office of Risk Management, the Office of Group Benefits, the state’s charity hospital system, rejection of Medicaid expansion, cutting funding for higher education, the sell-off of state property, and of course, all those generous corporate tax exemptions, credits and incentives for—sailed through the legislature, to borrow a phrase from my formative years, like crap through a goose.

Only the courts were able to restore some degree of sanity to the education and retirement changes.

So how has all that change worked out for the state?

Well, according to Marsha Shuler, writing in today’s Baton Rouge Advocate, the OGB reserve fund, which was already largely depleted since the privatization of that agency, has now fallen below that financial advisers believe to be a “safe” level. Those reserve funds, which were more than $500 million before Gov. Bobby’s meddling, are now at a dismal $102.8 million and at a burn rate (paying out more than it’s taking in) of $14.9 million a month (spending $1.14 for every dollar in revenue), the fund is on a trajectory of hitting less than $30 million by June 30. http://theadvocate.com/news/11705445-123/group-benefits-reserves-continue-to

The privatization of the state’s charity hospital system has resulted in a $190 million state liability to Medicaid even after the privatization deal was approved in part by the Centers for Medicare and Medicaid Services. http://www.thenewsstar.com/story/news/local/2015/01/11/hospital-decision-good-jindal-less-others/21538739/

The ripple effect of the hospital privatization has also resulted in the decision by Baton Rouge General Mid-City to close its emergency room facilities next month because of operating losses generated by the closure of Earl K. Long Medical Center which served the poor community of Baton Rouge.

But never one to pass up an opportunity to put a positive spin on bad decisions, Gov. Bobby, while taking pot shots at the Obama administration for everything from Obamacare to his Mideast policies to the threat of an imminent Islamic coup in Europe, keeps telling us (on those rare occasions when he is in the state) how wonderful things are and how Louisiana continues to outpace the rest of the nation in economic growth and business climate. http://gov.louisiana.gov/index.cfm?md=newsroom&tmp=detail&articleID=4156

His head cheerleader, Rolfe McCollister is right behind him, lending the influence of his publication, the Baton Rouge Business Report, to augment Gov. Bobby’s rosy proclamations.

http://www.businessreport.com/business/columns/la-makes-biggest-leap-in-forbes-rankings

But one should keep uppermost in mind that McCollister was treasurer of Gov. Bobby’s re-election campaign and as Bobby’s appointee to the LSU Board of Stuporvisors, was instrumental in securing the Pete Maravich Assembly Center for that prayer rally attended by about 3,500 people in the spacious 18,000-seat arena.

But let’s look at the latest survey, one which Gov. Bobby undoubtedly will ignore as he traipses about Iowa, New Hampshire and South Carolina in search of enough commitments to get him to even register in polls of likely Republican presidential contenders.

24/7 Wall St. is a corporation which runs a financial news and opinion company. The company publishes up to 30 articles per day which are published throughout the world.

Its latest survey, issued today (Feb. 27) puts Louisiana at the very bottom of its list of the Best and Worst States for Business. http://247wallst.com/special-report/2015/02/26/the-best-and-worst-states-for-business/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=FEB272015A&utm_campaign=DailyNewsletter

That’s right, Mississippi no longer owns the anchor spot in 24/7 Wall St.’s multitudinous surveys of things good and bad. This one belongs to Louisiana.

Here’s what the survey says about Louisiana:

  • No state fared worse on 24/7 Wall St.’s business climate Index than Louisiana. The state is not the worst place to run all businesses, however. The manufacturing sector accounted for more than 20% of Louisiana’s economic output in 2013, the fourth highest such contribution in the country. Despite the strong sector, Louisiana generally provides poor conditions for business.
  • Nearly one in five residents lived in poverty in 2013 — nearly the worst rate in the nation — contributing to both the low quality of the labor force as well as a low quality of life in the state. The working-age population was projected to decline by 3.2% from 2010 through 2020, one of the worst declines in the nation. While nearly 30% of Americans had at least a bachelor’s degree as of 2013, only 22.5% of Louisiana adults had at least such a degree, also nearly the lowest rate. Poor education contributed to poor scores in innovation. The state was one of only a handful of states where the average venture capital investment was less than $1 million.

There were several factors that went into the evaluation of the state’s lowly status as a place to do business:

  • The state’s gross domestic product growth of 1.3 percent was 17th lowest in the nation;
  • Average wages and salaries of $44,828 were 23rd lowest;
  • The percentage of adults with bachelor’s degrees was 5th lowest at 22.5 percent;
  • The 395 patents issued to residents were 13th lowest;
  • The negative 3.2 percent projected working-age population growth was 13th lowest.

The survey also noted that Louisiana ranked:

  • 47th in infrastructure;
  • 48th in the quality of life (the lack of adequate health care for many could be a factor in that statistic);
  • 49th in labor and human capital

Mississippi? As far as Louisiana and Gov. Bobby are concerned, that state is up there in the stratosphere at only the 4th worst in the nation.

Rounding out the bottom five were West Virginia (49th), Kentucky (48th), and Alabama (46th).

The five best, in order, were Utah, Massachusetts, Wyoming, South Dakota and Delaware, according to the survey.

Iowa and New Hampshire ranked 12th and 14th, respectively, which may help explain why Gov. Bobby spends so much time in those places instead of the state that he was elected to govern.

Nah.

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What began as an 18-month $350 million contract with a San Diego firm with ties to former U.S. House Speaker Newt Gingrich has morphed into a 15-month $500 million agreement with the Office of Group Benefits OGB to administer the state’s prescription drug program for more than 220,000 state employees, retirees and dependents.

But details have emerged that raise questions about a possible conflict of interests involving a consulting firm retained by a teachers benefits program in Alabama and OGB in Louisiana which ultimately recommended awarding contracts to the same company by both states.

OGB’s contract with MedImpact was originally for $350 million and was to run from Jan. 1, 2014 through June 30 of this year but has been amended to $500 million and the terms shortened to March 31, which equates to an increase of about 74 percent.

Gingrich launched the Center for Health Transformation as part of an ambitious consulting and communications conglomerate to let consumers, not health maintenance organizations (HMOs), choose their doctors, medical treatments and hospitals. http://hl-isy.com/Products-and-Services/Pharmacy-Benefit-Evaluator/PBE-Abstracts/2012/MedImpact

But Gingrich failed to reveal that his idea would be financially beneficial to drug manufacturers, health insurers and other health care professionals who paid up to $200,000 annually to participate in the center’s operations.

MedImpact was one of those companies.

Gingrich’s taking money from organizations and then using the weight of his name to advance their interests was described as “a massive financial conflict of interest” by Sid Wolfe, director of health research for the watchdog group Public Citizen. http://www.washingtonpost.com/wp-dyn/content/article/2007/06/10/AR2007061000484.html

Even former Congressman Billy Tauzin of Louisiana has entered the picture as co-chair of Medicine Access and Compliance Coalition (MACC), an assortment of health care providers who advocate lower drug prices through the federal 340B Program. http://www.huffingtonpost.com/2013/08/13/billy-tauzin-drugs_n_3719468.html

Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in the Medicaid drug rebate program to provide outpatient drugs at discounted prices to taxpayer-supported health care facilities that provide care for uninsured and low-income people. http://www.aha.org/content/13/fs-340b.pdf

Despite the magnitude of the MedImpact contract, it is the company’s connections to Buck Consultants, hired by the state to select the winner from among four proposals for that contract, which appears more than a little questionable.

OGB’s Notice of Intent to Contract for the Pharmacy Benefits Management (PBM) service, obtained from the Division of Administration (DOA) nearly four months after requested by LouisianaVoice—and then only after we filed a lawsuit against DOA—says, “Representatives of Buck Consultants, OGB’s actuarial consulting firm, provided assistance to the (selection) committee throughout the review and evaluation process.”

Buck Consultants, readers may remember, figured prominently in the controversy over DOA’s mishandling of OGB and the dissipation of more than half of OGB’s $500 million reserve fund.

Commissioner of Administration Kristy Nichols told a legislative committee that Buck Consultants had recommended that the state lower premiums for members of OGB, a move that led directly to the evaporation of the reserve fund. Communications between Buck and DOA obtained by LouisianaVoice, however, refuted Nichols’ claim.

Four firms submitted proposals to administer the prescription drug program for OGB. They were CVS Caremark, Express Scripts, Catamaran and MedImpact. CVS was disqualified because of sanctions imposed on the company in January of 2013 by the Center for Medicare and Medicaid Services (CMS).

Catamaran was the previous contractor but the company and the state have been involved in extended litigation which is expected to continue at least through June 30 of this year.

“As indicated in the Buck report, the proposal submitted by MedImpact has been determined to be the most advantageous to the state…,” said the Notice of Intent to Contract. “Accordingly, the committee recommends that the contract …be awarded to MedImpact.”

The connections between MedImpact and Buck, a global human resource benefit consulting firm that is part of the Xerox conglomerate, however raise conflict of interests issue—a relationship that LouisianaVoice traced back to the awarding of a contract to MedImpact in 2010 to administer the pharmaceutical benefits program for Alabama public school teachers, retirees and dependents through the state’s retirement system.

The Alabama Public Education Employees’ Health Insurance Plan (PEEHIP) board members, lacking pharmacy specialty training, retained Buck Consultants in late 2009 and early 2010 to handle the entire process, including writing the request for proposals (RFP), receiving and scoring the RFPs and making a recommendation for a contract.

Buck handled the entire process and gave the board the choice of contracting with MedImpact which was named by Buck primary contact person Michael Jacobs as having the best of several proposals submitted. The entire recommendation to the board took up a single paragraph in the board minutes.

The employee for the Retirement System of Alabama (RSA) who negotiated and signed the contract between the state and MedImpact later admitted in deposition that he had been involved in a relationship with a female representative of MedImpact.

But it was the relationship between Buck, Jacobs and MedImpact that warrants a closer look.

Even as he was contracted by RSA to issue, receive and evaluate the RFPs, it turns out that Buck, unbeknownst to Alabama officials, was simultaneously under a $50,000 contract to MedImpact. BUCK DEAL WITH MEDIMPACT

Jacobs, in a Dec. 23, 2009, letter to MedImpact Vice President of Business Development Bryan Boda, noted that the term of the contract was from Dec. 24, 2009, through Feb. 28, 2010, but upon written notice, “will be extended for an additional term, as mutually agreed to by both parties.”

Attached to that letter was a description of the scope of services to be provided by Buck which, among other things called for Buck to:

  • Provide MedImpact with marketplace information without disclosing anything to identify MedImpact’s proposal;
  • Collect competitor information, utilizing the internal proprietary Buck database of vendor information and drawing upon Buck’s “extensive data base” on PBM industry practices as well as outside public sources;
  • Develop a competitive employer marketplace analysis;
  • Present its final report during a final meeting with MedImpact at its (MedImpact’s) corporate headquarters.

It should pointed out that attorneys for three Alabama pharmacies excluded from participation in the prescription drug program for the teachers found it necessary to obtain the letter of agreement between Buck and MedImpact from Buck after MedImpact refused to provide the information.

The discovery of the contract between Buck and MedImpact during the time Alabama was in the process of selecting a prescription drug administrator for PEEHIP immediately raises the question of whether a similar arrangement existed between the two during the time Louisiana was selecting an administrator for OGB’s prescription drug benefits program.

An email to Buck Consultants posing that question was not answered.

MedImpact also refused to divulge what it was paying for prescription drugs, revealing only what it was charging Alabama. In one case, attorneys for the three pharmaceutical companies did obtain a document showing that MedImpact paid about $26 for an amoxicillin prescription but charged the state $96.

That, of course, also raises the question of how the billing is done by MedImpact for OGB. Does MedImpact pass along a 300 percent mark-up to OGB at a time when the state is, for all practical purposes, broke? MedImpact calls itself a transparent company but like our “transparent” governor, it has not been forthcoming thus far with details about what it pays for prescription drugs or about its contract with Buck Consultants.

And at the other end of the spectrum, it appears that not nearly enough hard questions have been asked by officials—either in Alabama or Louisiana.

After all, how can it be considered an acceptable practice for Buck Consultants to contract with a state to issue an RFP, evaluate the proposals and make a recommendation to award the state contract to a firm already contracted with Buck Consultants for Buck to collect competitor information?

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Even as the governor’s office was imposing travel and spending freezes as the state continued to struggle with an overwhelming budget deficit last fall, the Office of Group Benefits (OGB) was spending nearly $9,600 to send two of its top executives on five separate trips to California and Florida to train new phone bank employees to handle inquiries about pending changes to health coverage for state employees, retirees and dependents.

The expenditures also occurred in the wake of Gov. Bobby’s depletion of the OGB reserve fund from $500 million before privatization of the agency to less than half of that by last September.

A Division of Administration (DOA) employee with close ties to Commissioner of Administration Kristy Nichols and Deputy Commissioner Ruth Johnson revealed to LouisianaVoice last year that DOA had contracted with Ansafone which has offices to set up the phone bank to take calls from OGB members.

When we were first told of the contract, we understood the company to be Answerphone, Inc., which is in Albany, N.Y. We later learned, however, that the company was actually Ansafone with offices in Santa Ana, California and Ocala, Florida.

The dates of travel for Elise Williams Cazes and Charles Guerra to destinations in California and Florida were from Sept. 9 through Nov. 13 with Cazes running up travel, lodging, meal and car rental expenses of $5,553.74 in three trips and Guerra accounting for the remaining $4,044.33 in his two trips, records show.

Guerra is the Chief Operating Officer for OGB while Cazes, previously employed by Blue Cross/Blue Shield of Louisiana (BCBS), was appointed Group Benefits Administrator last June.

The requirements for her position as the Medical/Pharmacy administrator responsible for benefit plan management and vendor performance were written especially to her qualifications, according to our same DOA source.

LouisianaVoice made a public records request on Oct. 4 for a record of Guerra’s expenses but received a response from DOA on Oct. 13 which said, “The Division of Administration has no records which are responsive to your request.”

But when DOA finally did comply with our request on Jan. 23—and only after we filed a lawsuit against the state on Jan. 16—records indicated that OGB CEO Susan West approved meal expenses of $457 for Guerra for the dates of Sept. 30 through Oct. 5. West signed off on that approval on Oct. 10, three days prior to DOA’s denial of the existence of expense records, meaning DOA had at least partial records in response to our request.

Moreover, records show that the state was billed $732.39 for Guerra’s hotel reservations for that trip on Sept. 23, a full 11 days before our request for the records was submitted and nearly three weeks prior to DOA’s denial of the records.

Likewise, Enterprise Car Rental invoiced the state another $225.82 on Oct. 5 for lease of a vehicle during Guerra’s visit to Santa Ana.

Finally, records reveal that Shorts Travel Management, which books all travel for state employees, billed the state $675.39 on Sept. 23 for Guerra’s Sept. 30 flight to California and his return to Baton Rouge on Oct. 5.

So, bottom line, the state was billed $2,090.60 for travel, car rental, lodging and meals for the first of Guerra’s two trips to California—all well before denial our public records on the basis of DOA’s claim that no such records existed.

For Guerra’s second trip to California, from Nov. 10 through Nov. 13, DOA paid $949.84 for his flight, $290.12 for his meals, $176.77 for his car rental, and $537 for his hotel. The remaining $175 was for parking, airline baggage fees and booking fees for both trips.

Cazes ran up her $5,553.74 in charges for two trips to California and one to Gainesville, Florida, as well as several trips for meetings in various localities in Louisiana in her personal vehicle.

She cost the state $787 for meals for the three out-of-state trips, along with $506.74 in parking and in-state travel in her vehicle, $2,452.34 for airline tickets, $532.80 in car rental fees, $1,197.86 for hotels and $77 in ticket booking fees.

In addition to the $9,598.07 in travel, lodging and related expenses for the two, the state also entered into a $1 million contract with Ansafone to hire 200 persons in California and Florida to field calls about sweeping changes being proposed for OGB at the time.

The “training” that Cazes and Guerra conducted on their trips consisted of a few days of reading handouts distributed to new employees hired to man the phone banks. At the end of training and the first day actually on the job the employees were informed that what they had been told in the training sessions was wrong and the Ansafone web page containing its “Five Star Recipe for Customer Service Failure” was subsequently taken down.

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

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

JANUARY

IT Contractor linked to Obamacare, other problems:

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

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

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

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

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

HGI ties to Jindal, Christie:

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

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

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

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

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

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

Alvarez & Marsal gets fat at state trough:

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

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

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

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

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

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

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

The obvious next step for Jindal was to

Problems continue at OGB:

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

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

FEBRUARY

Adley’s not-so-hidden agenda:

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

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

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

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

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

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

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

Robert Adley.

Jindal tantrum goes national:

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

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

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

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

CIA kidnap accomplice locates in Bossier City

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

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

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

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

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

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

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

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

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

MARCH

Jindal contributor benefits from state road work

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

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

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

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

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

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

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

Appel’s shrewd investments:

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

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

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

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

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

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

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

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

APRIL

Deputy Sheriff dabbles in private background checks:

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

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

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

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

Extortion claimed on state highway project:

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

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

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

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

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

MAY

It pays to play I:

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

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

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

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

It pays to play II:

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

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

So, who is Laney Chouest, you ask?

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

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

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

JUNE

Legislator’s firm cited for environmental infractions:

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

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

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

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

Lobbyists swarm to protect BP:

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

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

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

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

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

Something in it for them indeed.

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

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

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

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

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

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

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

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

Something in it for them indeed.

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

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

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

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

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

Something in it for them indeed.

 

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