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Archive for the ‘State Agencies’ Category

The Jindal administration has announced plans to jettison 24 more positions at the Office of Group Benefits (OGB) as a cost cutting measure for the cash-strapped agency but is retaining the top two positions and an administrator hired only a month ago.

The effective date of the layoffs is Aug. 15.

The latest cuts will leave only 47 employees when the agency is relocated to the Claiborne Building basement to share office space with the Office of Risk Management. The Claiborne Building also houses the Civil Service Department, the Board of Regents, the Department of Education, the State Land Office and the Division of Administration.

The layoff plan submitted to the Department of Civil Service on June 14, said there was insufficient work to justify all 71 positions.

Affected by layoffs are eight Benefits Analyst positions, three Group Benefits Supervisory spots, one Group Benefits Administrator, seven Administrative Coordinators, an Administrative Assist, two Administrative Supervisors, one IT Application Programmer/Analyst and one Training Development Specialist.

OBG Chief Executive Officer Susan West, one of those being retained, will be making a physical move back into her old offices. She previously worked for ORM before that agency was gutted by Jindal’s grand privatization scheme and she moved over to OGB.

West, who makes $170,000, and Interim Chief Operating Officer Charles Guerra ($107,000) are not affected by the layoff nor is Elis Williams Cazes ($106,000)) was appointed as Group Benefits Administrator on June 23.

Cazes was previously employed by Blue Cross/Blue Shield of Louisiana which serves as the third party administrator of the OGB Preferred Provider Operation at a cost to the state of $5.50 per month per enrollee, which computes to an amount a little north of $70 million per year.

Her position was created—and the requirements reportedly written especially to her qualifications—as the Medical/Pharmacy Administrator responsible for benefit plan management and vendor performance with the primary responsibility to “continuously monitor medical and pharmacy benefit plans to seek out modification of plans or implementation of new plans that reduce claims costs and provide efficiencies for the state and plan participants,” according to the justification given for retaining her position.

Well, we can certainly see where her position is as indispensable as West’s and Guerra’s.

All this takes place at a time whe OGB’s reserve fund has dwindled from $500 million at the time of the agency’s privatization in January 2013 to about half that amount today. Even more significant, the reserve fund is expected to dip as low as $5 million by 2016, just about the time Jindal leaves town for good.

Completing the trifecta of good news, we also have learned that health benefits for some 200,000 state employees, retirees and dependents will be slashed this year even as premiums increase.

In June, West broke the news to the OGB employees. She erroneously said the 47 remaining employees would be reassigned other duties and some might see pay reductions and that those with seniority could bump junior employees in desired positions. The Civil Service Department, however, said salaries could not be cut and bumping is no longer allowed.

Isn’t it nice to know your agency director knows the procedures?

Employees were told that letters would go out between July 1 and July 15 to those who were being laid off. On July 7, they were told the letters would be delivered by hand on Friday, July 11. None came. On the following Monday (July 14) confusion of the order of the day as Deputy Commissioner of Administration Ruth Johnson sent emails to those affected and instructed them to attend a noon meeting in the OGB board room. Upon entering the board room, each person was handed a packet that informed them that Civil Service had not approved the layoffs.

During the meeting, according to one who was there, West kept repeating, “I get this. I’ve been where you are. I get this. However, there are worse things. It’s not like losing a child. I get this.”

Way to soften the blow, Susan. You might have reminded them that the fighting between Israel and Palestine isn’t so bad because there’s also an Ebola outbreak in Africa or that while you’re losing your home to a hurricane storm surge, some people are having to endure heavy wind damage. Or better yet, take them all to a showing of The Fault in Our Stars. That’ll cheer them up.

“It was the ‘I get this’ and comparison of losing a job to losing a child that infuriated the OGB state employees,” the employee said. “This is the worst thing in their lives right  now, some are battling cancer and working; some have children and grandchildren to feed; some live paycheck to paycheck; some are taking care of the elderly and family; all have bills, rents/mortgages, school tuition, etc.”

But you really can’t blame Susan. She previously worked for ORM and was among those present when ORM Director Bud Thompson broke the privatization news to his employees by standing before them, grinning, as he said, “I still have my job.”

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To probably no one’s surprise except a clueless Gov. Bobby Jindal, the takeover of the Louisiana Office of Group Benefits (OGB) by Blue Cross Blue Shield of Louisiana 18 months ago has failed to produce the $20 million per year in savings to the state.

Quite the contrary, in fact. The OGB fund balance, which was a robust $500 million when BCBS took over as third party administrators (TPA) of the Preferred Provider Organization (PPO) in January of 2013, only 18 months later stands at slightly less than half that amount and could plummet as low as an anemic $5 million a year from now, according to figures provided by the Legislative Fiscal Office.

OGB is one of the main topics to be taken up at today’s meeting of the Joint Legislative Committee on the Budget (JLCB) when it convenes at 9 a.m. at the State Capitol.

OGB is currently spending about $16 million per month more than it is collecting in revenue, said Legislative Fiscal Officer John Carpenter.

The drastic turnaround is predicated on two factors which LouisianaVoice warned about two years ago when the privatization plan was being considered by the administration:

  • Jindal lowered premiums for state employees and retirees. That move was nothing more than a smokescreen, we said at the time, to ease the state’s share of the premium burden as a method to help Jindal balance the state budget. Because the state pays a percentage of the employee/retiree premiums, a rate reduction would also reduce the amount owed by the state, thus freeing up the savings to patch gaping holes in the budget.
  • Because BCBS is a private company, it must return a profit whereas when OGB claims were processed by state employees, profits were not a factor. To realize that profit, premiums must increase or benefits decrease. Since Jindal had already decreased premiums, BCBS necessarily found it necessary to reduce benefits.

That, however, still was not enough and the negative income eroded the fund balance to its present level and now legislators are facing a severe fiscal crisis at OGB.

And make no mistake: this is a man-made crisis and the man is Bobby Jindal.

In a span of only 18 months we have watched his grandiose plans for OGB and the agency’s fund balance dissolve into a sea of red ink like those $250 million sand berms washing away in the Gulf of Mexico in the wake of the disastrous BP spill.

There is no tactful way to say it. This Jindal’s baby; he’s married to it. He was hell bent on privatizing OGB and putting 144 employees on the street for the sake of some hair-brained scheme that managed to go south before he could leave town for whatever future he has planned for himself that almost surely does not, thank goodness, include Louisiana.

So ill-advised and so uninformed was Jindal that he rushed into his privatization plan and now has found it necessary to have the consulting firm Alvarez and Marcel, as part of their $5 million contract to find state savings, to poke around OGB to try and pull the governor’s hand out of the fiscal fire. We can only speculate as to why that was necessary; Jindal, after all, had assured us up front that the privatization would save $20 million a year but now cannot make good on that promise.

In the real world, the elected officials are supposed to be the pros who know that they’re talking about while those of us on the sidelines are mere amateurs who can only complain and criticize. Well, we may be the political novices here, but the results at OGB pretty much speak for themselves and we can rightfully say, “We told you so.”

Are we happy or smug? Hell, no. We have to continue to live here and raise our children here while Jindal will be taking a job with some conservative think tank somewhere inside the D.C. Beltway (he certainly will not be the Republican candidate for president; he isn’t even a blip on the radar and one former state official now residing in Colorado recently said, “No one out here has ever even heard of him.”)

In a five-page letter to JLCB Chairman Rep. Jim Fannin (R-Jonesboro), Carpenter illustrated the rate history of OGB going back to Fiscal Year 2008 when premiums were increased by 6 percent. The increase the following year was 3.7 percent and the remained flat in FY-10. In FY-11, premiums increased 5.6 percent, then 8.1 percent in FY-12 when the system switched from a fiscal year to calendar year. but in FY-13, the year BCBS assumed administrative duties, premiums dropped 7 percent as Jindal attempted to save money from the state’s contributions to plug budget holes. For the current year, premiums decreased 1.8 percent and in FY-15 are scheduled to increase by 5 percent.

OGB Report_July 2014 FOR JLCB

Carpenter said that since FY 13, when BCBS took over the administration of OGB PPO claims, OGB’s administrative costs began to shift to more third party administrator (TPA) costs as the state began paying BCBS $23.50 per OGB member per month. That rate today is $24.50 and will increase to $25.50 in January of 2015, the last year of the BCBS contract.

That computes to more than $60 million per year that the state is paying BCBS to run the agency more efficiently than state employees who were largely responsible for the half-billion-dollar fund balance.

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Just when you thought the news coming from this administration couldn’t possibly get any more dysfunctional…it does.

In fact, whatever semblance of logic this administration had remaining is fast circling the drain even as our governor attempts to push his agenda onto a national stage while leaving it to high-priced consultants and amateurs like Kristy Nichols to find solutions to mounting problems at home.

This is the same governor, Bobby Jindal, who recently told the graduating class at Jerry Falwell’s Liberty University that the entertainment industry’s intolerance is eroding the very foundation of America’s freedom—even as his Department of Economic Development continues to give away the store in the form of hefty tax incentives to….that very same entertainment industry.

As the Church Lady from Saturday Night Live would say, “Well now, isn’t that special?”

Earl Long might say it another way. He well may have been describing Jindal’s flexibility in spewing his political rhetoric to play to the views of his audience when he told Ruston Daily Leader fledgling reporter Wiley Hilburn in July of 1959 (only a couple of months before Long’s death) that Hilburn’s uncle, former Lt. Gov. C.E. “Cap” Barham, could “talk out of both sides of his mouth and whistle out of the middle at the same time.”

But bizarre as Jindal’s performance has been over the past six-plus years, he would be hard-pressed to surpass the downright preposterous laundry list of proposed cuts in spending rolled out on Monday by Nichols, serving as his proxy while he campaigns to be the Second Coming of Alfred E. Neuman.

All that was missing from Nichols’ theater of the absurd were the orange wig, red nose, big shoes and a seltzer bottle.

To say this administration is delusional is to be overly kind.

To refresh, you will remember that back in January, the administration signed a $4.2 million contract (quickly amended to $5 million in violation of state law requiring legislative concurrence on initial amendments greater than 10 percent) with the consulting firm of Alvarez & Marsal, charging the firm with finding $500 million in savings by April. Well, April has come and gone and now Nichols says the firm’s report will be a month late, now expected at the end of May.

Alvarez & Marsal (A&M), to further refresh the old memory banks, is the same firm that offered up the sage advice to the Orleans Parish School Board in December of 2005, only months after Hurricane Katrina, to fire 7,500 teachers, effective Jan. 31, 2006.

That little bit of economic wisdom may wind up costing the state $1.5 billion following a court decision in favor of the teachers who filed suit after being summarily fired.

A&M also is the same firm that recommended the privatizing of the LSU Medical Center in New Orleans (formerly Big Charity Hospital) in the voluminous Streamlining Commission report initiated during Jindal’s second year in office, thus sowing the seeds of Jindal’s ambitious privatization plan for LSU’s statewide system of hospitals.

And we all know how well that fared, don’t we?

According to friend and fellow blogger C.B. Forgotston, the preliminary report submitted by A&M last Thursday (May 8) was a whopping two and one-half pages in length ($2 million per page—by comparison, this post alone should be worth $10 million) and contained recommendations for only $74 million of the $500 million goal.

And now Nichols has come before the Senate Finance Committee to inform senators that “Every (cabinet) secretary signed off on the savings.”

Well, DUH! Of course they signed off on the proposals. They may be sycophants but they ain’t stupid. We know what happens to anyone in the state employ who might dare adopt a viewpoint at odds with Jindal. Obviously, these people who could never command comparable salaries in the private sector want to cling to their jobs like so many ticks in a hound dog’s ear.

But enough of the ancient history; let’s allow Jindal and A&M to demonstrate in their own words just how inane the future leader of the free world can be. Among the innovative ideas for saving the taxpayers $74 million are these jewels of pure brilliance:

  • Cutting back the hours of operation of the Cameron Parish ferry;
  • Circling employment ads for prison inmates;
  • Decreasing the thickness of asphalt on roadways;
  • Requiring pregnant women on Medicaid to use midwives or doulas for delivery;
  • Treating the partners of pregnant women in government health care programs for STDs.

Oh, we get it. Very funny. Kristy, you’re quite the card.

What? You’re serious?!!!?? No way! C’mon, guys; a joke’s a joke but now you’re starting to scare us. We’d rather hear something a little less scary—like finding the hook from the one-armed killer in the car’s door handle or about the water skier falling into a nest of water moccasins.

Okay, now sit back, Kristy, and take a reality check here. Where’s the proposal to prohibit offering six-figure salaries to washed-up politicians so they can occupy a desk for a few year to fatten their state pensions? We mean, even with motion sensor lighting, these guys are so useless that they inhabit darkened offices.

You want to cut the hours of operation of the Cameron Ferry from 24 to 16 or 18 hours and you want to cut the thickness of asphalt overlay in half—from two inches to one-inch? You say the two would save the Department of Transportation and Development (DOTD) $10.9 million?

Have you ignored the fact that the only detour along Highway 82 in Cameron Parish would require a drive of 120 miles?

You say Texas has already adopted a new material that allows that state to overlay roadways with one-inch-thick asphalt? Wonderful. Have you taken into account that the soil composition and consistency in Louisiana, particularly South Louisiana, is vastly different than that of Texas? To implement this foolish proposal would place an added onus on already over-burdened DOTD maintenance units when the thinner asphalt produces thousands of potholes that are certain to occur as the base beneath the asphalt deteriorates. If DOTD Secretary Sherri LeBas did agree to this idiocy as Nichols claims, she is grossly unqualified to head up the agency responsible for the construction and maintenance of the state’s roads and bridges.

Circling employment ads for prisoners? Gawd. For this, we’re paying A&M $5 million. We could have suggested that for a buck-fifty.

Nichols explained that the state intends to implement the program whereby low-risk prisoners in Orleans and Jefferson parishes would earn their keep by working by serving the latter portions of their sentences in minimum-security facilities such as parish prisons run by sheriffs and giving part of their paychecks to the prison operators to help pay for their room and board. She said that would save the state $9.4 million. How do you propose to keep the sheriffs honest in reporting actual salaries against what they report to the state? Just a thought.

Midwives and doulas for deliveries for pregnant women on Medicaid? Interesting concept. Has anyone thought of bringing back leeches? How about electric shock for mental illness? And willow bark for treating fever? And now, simply because they are on Medicaid, we propose to deny these expectant mothers the same childbirth facilities to which people like Kristy Nichols or Sherri LeBas or Kathy Kliebert might be privy?

And you propose to treat the sexual partners of pregnant women for STDs after the fact?

Beautiful, just bleeping beautiful.

This aberration of an administration, as we (borrowing a line from Three-and-a-Half Men) have said before, has all the emotional stability of a sack full of rats in a burning meth lab.

Even sadder is the fact that the legislature, in allowing this spoiled brat of a child Jindal to get away with his shenanigans, for failing so miserably to hold him accountable, isn’t far behind.

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A six and one-half-year-old lawsuit has taken 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 says 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.

He raised the stakes when he and three of his employees filed sworn affidavits with the court in which all four say DOTD inspector Willis Jenkins demanded that Mercer either “put some green” in his hand or that Mercer place a new electric generator “under his carport” the following day, Mercer’s affidavit says.

Foreman John Sanderson, carpenter Bennett Tripp and traffic control supervisor Tommy Cox, all employees of Mercer at the time, signed similar affidavits attesting to the same sequence of events in which they each say Jenkins tried to extort either cash or equipment from their boss.

The incident, all four said, occurred in 2007 when Mercer was contracted to perform work on a $79,463 project on Louisville Avenue in Monroe.

“While working on that project,” Sanderson said in his sworn statement, “I was approached by Willis Jenkins. Mr. Jenkins informed me at that time that he could make things difficult on Jeff Mercer, LLC.

“He indicated that this burden would not necessarily be on the Louisville Avenue project but on future jobs awarded to Jeff Mercer, LLC,” Sanderson said. “I replied, ‘You didn’t mean to say that,’” whereupon, Sanderson said, Jenkins repeated his threat. “During that conversation, I heard Willis tell Jeff that he ‘wanted green,’” Sanderson said.

Tripp, in his signed statement which was notarized by Baton Rouge attorney Jennifer Dyess, also said he heard Jenkins tell Mercer he “wanted some green.” He said he also heard Jenkins tell another Mercer employee that Jenkins, pointing to a generator in Tripp’s truck, said he “wanted one of those under his carport.”

Following complaints from Mercer, Jenkins was subsequently removed from the project but Tripp said the shakedown continued when another state official told Mercer employees, “Y’all had my buddy removed and we’re going to make the rest of the job a living hell.”

Cox likewise said he heard Jenkins tell Mercer employees he wanted a generator in his carport. “Willis (Jenkins) further indicated that he “wanted his generator to be new,” or “this could be a long job.”

Mercer, who founded his company in 2003, said that Jenkins approached him and said he needed “to put some green in his hand.” Mercer says in his affidavit that he asked Jenkins to repeat himself, and he did so. “I then replied that ‘I don’t do that,’” Mercer said.

Jenkins responded that Mercer “better do that or you won’t finish this project or any other project in this area.”

During their exchange, Mercer said that Jenkins told him, “This is going to be a long job if I don’t get the green or the generator.”

Mercer said in his sworn statement that he call Jenkins’ supervisor Marshall Hill and advised him of Jenkins’ action. “Marshall advised that he would remove Willis from the Louisville Avenue project,” Mercer said, adding, “Marshall also stated, ‘Off the record, this doesn’t surprise me.’ Shortly thereafter, (Jenkins) was removed from the …project.”

It was after that incident that Mercer’s problems really began, he says. After receiving verbal instructions on the way in which one project was to be done, it was subsequently approved but several days later, DOTD officials, including defendant John Eason, advised that the work was not acceptable.

Work for which Mercer says he has not been paid includes:

  • Two projects on I-49 in Caddo Parish ($1.6 million);
  • A Morehouse Parish bridge project ($7.1 million);
  • Louisville Avenue in Monroe ($79,463);
  • Well Road in West Monroe ($50,568);
  • Airline Drive in Bossier City ($57,818);
  • Brasher Road in LaSalle Parish ($70,139).

Mercer claims in his lawsuit there was collusion among DOTD officials to “make the jobs as costly and difficult as possible” for Mercer.

He claims that DOTD officials provided false information to federal investigators; that he was forced to perform extra work outside the contract specifications; that a prime contractor, T.J. Lambrecht was told if he continued to do business with Mercer, closer inspections would result, and that job specifications were routinely changed which in turn made his work more difficult.

DOTD interoffice emails obtained by LouisianaVoice seem to support Mercer’s claim that he was targeted by DOTD personnel and denied payment on the basis that the agency was within its rights to “just say no.”

One email from DOTD official Barry Lacy which was copied to three other DOTD officials and which stemmed from a dispute over what amount had been paid for a job, made a veiled threat to turn Mercer’s request for payment “to the U.S. Department of Transportation’s Office of Inspector General.”

Still another suggested that payment should be made on a project “but never paid to Mercer.”

“I did everything they told me to do,” Mercer told LouisianaVoice. “But because I refused to allow one DOTD employee to shake me down, they put me out of business. They took reprisals and they ostracized me and broke me but now I’m fighting back.”

Both Mercer and his Rayville attorney David Doughty indicated they had reported the events to the governor’s office but that no one in the administration had offered to intervene or even investigate his allegations.

It was not immediately clear if the Louisiana Office of Inspector General had been notified of the claims.

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An interesting civil trial is transpiring at the 19th Judicial District Court. Though estimates vary, if the plaintiffs prevail, about one taxpayer in five in the Greater Baton Rouge area may eventually wind up with a surprise check in the mail.

The trial involves a group of taxpayers, now represented as a class, who have sued the Amite River Basin Commission (ARBC) over what they claim are vastly overpaid property taxes covering construction of the Comite River Diversion Canal. The project was originally envisioned after the massive 1983 flood which resulted in significant backwater flooding long after rains had stopped. The concept behind the project involves providing a sort of relief valve (the Canal) to divert water from the Comite River into the Mississippi River. By lowering the water level of the Comite River, water levels would also be lowered in the Amite River basin in flood-prone areas such as Port Vincent and French Settlement.

What is in dispute is the amount of funding for which the ARBC (through local property owners) is responsible. The original estimate of the project’s construction costs was approximately $120 million (the current estimate is $199 million). Of that $120 million, the Army Corps of Engineers (through the Federal government) was to be responsible for 70% of the construction costs, or $84 million. The remaining $36 million cost was originally designated to be $30 million to the State of Louisiana, and $6 million to the ARBC.

A sidebar to the whole affair is how a Baton Rouge lawyer is legally or ethically able to represent ARBC when he also served as the plaintiff attorney in litigation against the state that could ultimately cost the state from $60 million to $70 million.

Plaintiffs’ attorneys have indicated that $6 million was the full extent of the construction costs for which the ARBC was responsible. To date, by way of a 3-mill property tax approved by voters in the District in 2000, combined with a renewal (at 2.65 mills) of that tax in 2010, plaintiff attorneys say about $24.5 million has been collected to date. The suit seeks a refund of the alleged $18.5 million overpayment.

At various stages in the trial, plaintiff attorneys have accused ARBC Executive Director Deitmar Rietschier of financial mismanagement and voter deception in order to “keep a project alive that is on life support.”

The attorneys have argued that Rietschier has an ulterior motive for over-collecting on the tax in order to fund his own $93,000+ annual salary along with his executive secretary’s $38,000 salary.  The board’s executive secretary, Toni Guitrau, also happens to be the Mayor of the Livingston Parish Village of French Settlement.

So, basically, the trial boils down to the claim that taxpayers of the district have been tricked into paying around $1.1 million in salaries for Rietschier and Guitrau during a period for which no funding has been appropriated for the project’s continued construction.

Plaintiff attorney Steve Irving argued that it is virtually impossible to accurately estimate the final cost of the project or if, it may even be completed.

Defense attorney Larry Bankston says there never was any intent to cap the ARBC’s contribution to construction costs at $6 million. He argues that the Canal project remains viable and is fully ongoing. He indicated that he has eight more witnesses to call.

Bankston’s roles as both plaintiff and defense attorney in cases involving the state would appear to pose a conflict of interests. Currently, he is:

  • Legal counsel to the State Auctioneer Licensing Board under a $25,000 contract;
  • Defense attorney for ARBC in its ongoing litigation over the overpayment of taxes to that board;
  • Plaintiff attorney in ongoing litigation against the Louisiana Department of Agriculture, and the state’s Rice Promotion Board and Rice Research Board over claims of excessive assessments against the state’s rice farmers.

Employing the doctrine that “the state is the state is the state,” it would appear that Bankston may have a conflict of interests under the code of ethics which governs attorney representation.

But as we discovered years ago, nothing is ever cut and dried in the legal world. And it’s obvious those in charge of attorney ethics or either ignorant of the subject or protective of their peers—or both.

And so it is with this question. We contacted a number of organizations, including the Attorney Disciplinary Board, the Louisiana Civil Justice Center, and the State Bar Ethics Council and each one punted. Eric K. Barefield of the State Bar Association’s Ethics Council did finally respond to our email question about the propriety of working both sides of Litigation Street but his answer did little to shed light on the issue:

“Thank you for your inquiry. The Louisiana State Bar Association’s Ethics Advisory Service is designed to provide eligible Louisiana-licensed lawyers with informal, non-binding advice regarding their own prospective conduct and/or ethical dilemmas under the Louisiana Rules of Professional Conduct (the “LRPC”).  According to limitations set by the Supreme Court of Louisiana, we are not permitted to evaluate contemplated disciplinary complaints, to serve as the catalyst for potential complaints or even to comment on the conduct of lawyers other than that of the requesting lawyer. 

“As such, regrettably, we are not permitted to help you evaluate whether the lawyer in your scenario has or may be violating the LRPC nor are we permitted to give you legal advice on matters such as those contained in your e-mail. 

“In addition to the foregoing, if you are concerned about protecting and/or asserting your rights and interests in this matter, perhaps you should strongly consider consulting another lawyer as soon as possible with regard to getting an evaluation of your facts and a legal opinion about your rights, interests and options.  Regrettably, no one on the staff at the LSBA is permitted to offer legal assistance and/or legal advice.”

That rendition of the Bureaucratic Shuffle would easily get a “10” rating on Dancing with the Stars.

Bankston, you may remember, is a former staff attorney for the Louisiana Attorney General’s office, was assistant parish attorney for East Baton Rouge Parish and a member of the Baton Rouge City-Parish Commission before his 1987 election to the Louisiana State Senate.

In 1994, while serving as chairman of the Senate Judiciary Committee, Bankston met in his law office with Fred Goodson, owner of a Slidell video poker truck stop. The FBI later said Bankston and Goodson discussed a plan to manipulate the legislative process in order to protect the interests of video poker companies in exchange for providing key legislators secret financial interests in video poker truck stops.

Bankston was subsequently indicted and convicted on two racketeering counts, one of which was a scheme whereby Goodson would pay Bankston “rent” of $1,555 per month for “non-use” of Bankston’s beachfront condo in Gulf Shores, Alabama—a bribe, according to prosecutors.

Bankston was sentenced to 41 months in prison in 1997 and ordered to pay a $20,000 fine.

Released on Nov. 6, 2000, Bankston was subsequently disbarred by the Louisiana Supreme Court on Mar. 9, 2002, retroactive to Nov. 19, 1997, but was re-admitted to practice law on Feb. 5, 2004.

So, now he represents two state boards and is suing two others and a state agency.

And there apparently is no one who can—or will—call a foul in this game.

 

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With the 2014 regular session of the legislature less than two weeks away, there have already been a couple of interesting developments that could prevent lawmakers from learning how a federal investigation of a major contract came about in the first place.

There already is speculation that two recent resignations in the Jindal administration may have something to do with avoiding testimony before legislative committees that may wish to look into the controversial $284 million contract between the Department of Health and Hospitals (DHH) and CNSI.

Subpoenas could be issued for Paul Rainwater, Jerry Phillips, and Bruce Greenstein but if they choose to ignore subpoenas, the legislature has options in that legislative subpoenas carry the same weight as a court subpoena provided a legislative subpoena meets certain criteria.

It is, to say the least, curious that former Commissioner of Administration Paul Rainwater (more recently, Gov. Bobby Jindal’s Chief of Staff), and DHH Undersecretary Jerry Phillips resigned only a few days apart and less than a month before the legislature convenes at noon on March 10.

Apparently timing in politics, like in comedy, is everything. Phillips, while giving no specific date for his retirement, did say he would retire “before the start of the session.”

DHH Secretary Kathy Kliebert said Phillips, who has worked for DHH for 25 years, will pursue “other employment options with the state following his retirement.” She said he would be replaced by DHH Deputy Director Jeff Reynolds on (drum roll, please…) March 10.

That, or course, raises the obvious question of whether Phillips will remain conveniently retired until the session adjourns on June 2 before becoming the latest retire-rehire, a popular trend among executive level state employees these days.

Phillips, you may recall was seated next to Greenstein back in June of 2011 when the Senate and Governmental Affairs Committee was considering the confirmation of Greenstein as Jindal’s choice for DHH Secretary.

It was Phillips who repeatedly advised Greenstein and defended his boss’s refusal to identify to the committee CNSI as the winner of the 10-year, $30 million-a-year contract to replace DHH’s 23-year-old computer system that adjudicates health care claims and case providers.

Greenstein has previously worked for CNSI and when he refused to identify the contract winner, then-Sen. Rob Marionneaux (D-Livonia) asked, “Are you telling me right now, today, that you’re refusing to tell this committee who’s going to receive that…contract?”

After several more exchanges between Greenstein and Marionneaux, Green said, “I’m not going to be able to say today.”

Sen. Jody Amedee (R-Gonzales) then asked Greenstein, “Who made the decision not to tell us this information under oath?”

“This was from my department…”

“You are the department,” Amedee interrupted. “Who is the person above you? Who is your boss?”

“The governor,” said Greenstein.

“Can you tell me if this company you used to work for—whether or not they got the contract?”

“I can’t discuss the matter.”

“You can, you just choose not to,” Amedee said.

At one point after Greenstein and Phillips repeatedly alluded to the “process and procedure” employed by DHH in awarding contracts, Amedee, in apparent frustration, tossed his pencil over his shoulder and turned away from the witnesses.

Committee Vice-Chair Karen Carter Peterson said, “You don’t want me to know, but you know. Is this what we call transparency?”

Phillips said once the contractor’s name is made public, “it’s the equivalent of an announcement.”

“Do you make the law?” Peterson shot back.

“I interpret the law,” said Phillips, who is an attorney.

“Then you’re not doing a good job. Mr. Secretary (Greenstein), I hope you’re paying attention. How many lawyers do we have on this committee? We make law and yet you choose to follow this gentleman (Phillips).”

“It’s all part of the process,” Phillips said. “It’s (the selection process) done in conjunction with consultation and direction from the procurement folks.”

“In conjunction with whom?” asked Peterson.

“They’re part of the Division of Administration,” he said for the first time, implicating DOA—and Rainwater—in the controversy.

Committee Chairman Robert “Bob” Kostelka (R-Monroe) finally broke in to say, “I don’t know the difference between firewalling and stonewalling but this committee’s concern is whether or not to recommend to the full Senate that these people should be confirmed for the jobs for which they’ve been nominated.

“The much larger issue here is the integrity of the entire DHH. We don’t care about your procedures. We’ve got to determine if we trust the integrity of the people before us. We’re asking you to put aside your procedures and protocol and answer our questions. Knowing that, I don’t see why
you cannot make this committee aware if a former employer of this man is going to win a multi-million dollar contract from the state.”

When Phillips again attempted to invoke “respect for the statute,” Kostelka interrupted. “Again, sir, this has nothing to do with making the award. We’re asking who got the contract. It’s pretty obvious to us that they’re (CNSI) the one getting the contract.”

At that point, Phillips asked if he could confer with Greenstein. The two left the room for 16 minutes and upon their return, Greenstein, after a few more questions, said, “It is CNSI.”

Rainwater, who on Feb. 17, unexpectedly announced his resignation as Jindal’s Chief of Staff, effective Mar. 3, a week before the legislature convenes. He served as Commissioner of Administration from Aug. 9, 2010, until October 15, 2012, when he moved across the street to the governor’s office.

As chief of staff, Rainwater has been in charge of the policy advisors and strategists and supposedly enjoys a close day-to-day working relationship with Jindal—though probably not nearly as close as Timmy Teepell through whom Jindal has funneled nearly $3 million from his campaign ($1.27 million), and his non-profit organizations Believe in Louisiana ($1.22 million) and America Next. (No payments have been listed for America Next, Jindal apparently having learned his lesson when he listed contributions and payments to Believe in Louisiana.)

It’s difficult to believe that Rainwater, in overseeing Jindal’s advisors and strategists, would have been unwise enough to advise his boss to go off the way he did at the National Governor’s Conference on Monday. He is far too intelligent for such foolishness.

Even the Baton Rouge Advocate saw Jindal for what he really is—a spoiled brat who, if he can’t have his way, pouts or throws a tantrum—as depicted in one of the best editorial cartoons we’ve seen in a long time:

http://theadvocate.com/multimedia/walthandelsman/8477684-123/walt-handelsman-for-feb-26

That was plain idiotic and inappropriate and in the world of political faux pas, ranks right up there with his college exorcism and his Republican response to President Obama’s 2009 State of the Union address.

The suggestion of a tactic to make Jindal look that silly in front of a national television audience could only have come from someone like Teepell. Unless, of course, Jindal simply ad-libbed it which is certainly not out of the question, given his propensity of letting his alligator mouth overload his jaybird backside.

But back to the resignations of Greenstein, Phillips and Rainwater.

Greenstein announced his resignation on Mar. 29, 2013 immediately after word of a federal investigation into the CNSI contract was announced. Even then, for reasons no one has yet explained, he was allowed to remain until May. At about the same time as Greenstein’s resignation announcement was made, it was learned that a federal grand jury in Baton Rouge had subpoenaed all records dealing with the CNSI contract from the Division of Administration (DOA) as early as January of 2013.

That would mean that Jindal had to know about the investigation as much as three months before Greenstein’s resignation but said nothing about the probe and only cancelled the CNSI contract after the Baton Rouge Advocate broke the story of the four-page subpoena.

And now, only days—and in one case, only hours—before the opening of the 2014 legislative session, two other prominent figures in the CNSI story will be gone, out of reach of any curious legislative committee which might wish to question them about their knowledge of events surrounding the awarding of the contract.

Legislative committees and subcommittees have the authority under legislative rule to conduct studies, administer oaths to witnesses and to seek subpoenas and punishment for contempt although subpoenas require the approval of the Speaker of the House or President of the Senate upon the request of the committee chairman or by a majority of the standing committee members.

Louisiana Revised Statute 24:4 through 24:6 provides that a person is guilty of contempt of the legislature “if he willfully fails after subpoena to appear or produce materials.” Initiation of prosecution for criminal contempt is by certification to the district in the proper venue, in this case East Baton Rouge Parish.

The legislative subpoena and contempt provisions have been upheld in a number of court cases, most notably a 1972 case involving a state legislator who claimed to have tape recordings of an attempt to bribe him and a 1979 case against then-Insurance Commissioner Sherman Bernard and his deputy commissioner.

The two men, who appeared subject to subpoenas, interrupted committee hearings on insurance regulations and left the meeting room despite warning that their actions subjected them to being held in contempt. The two were subsequently held in contempt and fined $500 each.

 

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The more we look at that contract between the Louisiana Department of Economic Development (DED) and LR3 Consulting, the more unanswered questions arise.

LR3, you may remember from our Feb. 5 post, is run by Lionel Rainey, III, who also happens to be the PR spokesperson retained by those who wish to form their own city of the St. George area of East Baton Rouge Parish, separate and apart from the city of Baton Rouge.

If one didn’t know better (and we truly did not initially), Rainey could easily be taken as the leader of the movement since local television news reports on the pullout efforts invariably feature him reciting the proponents’ talking points. Turns out he’s just a hired gun.

(Proponents, by the way, don’t like the term pullout because, they say, the St. George area is not within the Baton Rouge city corporate limits in the first place, so technically, it is not a pullout or secession; it’s simply a movement to incorporate the currently unincorporated area as a city of its very own.)

Before LR3, there was 3 Lions Consulting which was awarded a three-year contract (July 1, 2012, through June 30, 2015) by DED to “establish a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements” for DED’s Louisiana FastStart program (LFS) at a contract cost of $699,999.

In other words, Contract No. 713974 called for 3 Lions to compile a data base of potential employees for Louisiana plants and businesses—the same thing that the Louisiana Workforce Commission had been doing and which it still does.

But barely three months into the contract and after being paid just under $31,000, Jeff Lynn, LFS executive director, sent a one-paragraph letter of termination to 3 Lions partner Stanley Levy, III. “In accordance with the terms of our contract…Louisiana FastStart hereby provides you with the required five (5) day written notice to terminate our agreement, effective Oct. 19, 2012…”

The reason given for the termination was a two-word message scribbled on DED’s performance evaluation: “Ownership change.”

Levy apparently had parted company with his partner, precipitating the contract cancellation. His 3 Lions partner? Lionel Rainey, III, who had incorporated his new business, LR3, only a month before. LR3 was subsequently awarded an even bigger three-year contract ($717,204) on Oct. 20, 2012, just one day following the termination date of the 3 Lions contract.

The LR3 contract, to run from Oct. 20, 2012 through Sept. 30, 2015, again calls for the “development, establishment and/or delivery of a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements.”

Through January 13 of this year, DED had paid LR3 $186,880.

But the LR3 contract, like that of 3 Lions before it, is broken into three yearly maximums of $217,204 the first year and $249,999 in each of the second and third years.

For 3 Lions, the payment maximums were $169,999 the first year and $249,999 in each of the second and third years.

This was done, according to DED Communications Director Gary Perilloux, so as to avoid the necessity of issuing a request for proposals (RFP) and thus avoid “competitive bidding or competitive negotiation.”

The issuing of service contracts is permissible so long as the “total contract amount is less than $250,000 per twelve-month period,” according to Title 39, Section 1494.1 of the Louisiana Revised Statutes which then goes on to say, “Service requirements shall not be artificially divided so as to exempt contracts from the request for proposal process.”

Section 1499 of the same title says, “The head of the using agency or the agency procurement officer shall negotiate with the highest qualified persons for all contracts for professional, personal, or those consulting services for less than fifty thousand dollars, or those social services qualifying under R.S. 39:1494.1(A) at compensation which the head of the using agency determines in writing to be fair and reasonable to the state (emphasis DED’s). In making this determination, the head of the using agency shall take into account, in the following order of importance, the professional or technical competence of offerers, the technical merits of offers, and the compensation for which the services are to be rendered, including fee. Negotiation of consulting services for $50,000 or more or social services not qualifying under R.S. 39:1494.1(A) shall be conducted in accordance with Part II, Subpart B hereof. [RFP]

To justify the contract, an undated letter was sent to Sandra Gillen, since retired as the Director of the Office of Contractual Review, by DED contracts reviewer Chris Stewart which certified that “The services (being contracted for) are not available as a product or a prior or existing professional, personal, consulting, or social services contract.”

But wait. Not so fast.

LouisianaVoice has found yet a third contract with Covalent, LLC, for an even larger amount–$749,997—awarded more than a month after the LR3 contract.

That contract, divided into three equal maximum payments of, wait for it… $249,999, calls for the “development, establishment, and/or delivery of a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements.”

In other words, Covalent’s contract calls for it to perform services which are identical to those of first 3 Lions and then of LR3.

And yes, there is that same letter from Chris Steward to Gillen’s successor, Pamela Rice which certifies that “The services (being contracted for) are not available as a product or a prior or existing professional, personal, consulting, or social services contract.”

But…but…what about the LR3 contract?

Good question. It looks as though someone misrepresented the facts with that certification. DED now has two firms performing services that appear to be duplications of work being done by LWC—and neither of the contracts which combine for almost $1.5 million, was awarded on a competitive bid basis.

Apparently, Covalent is performing some work, though not nearly as much as LR3. From Jan. 3, 2013 through May 30, 2013, Covalent has been paid a grand sum of $35,465—and nothing since May 30. That’s a far cry from the $249,999 allowed under its contract.

All of which raises the obvious question: Why do these firms require such massive contracts and why did DED find it necessary to break them up in apparent violation of state statutes just so it could make the contract awards to whom it wanted?

And why did DED desire the services of Rainey over Levy to the point of cancelling the 3 Lions contract so it could award a second no-bid contract to Rainey’s new company? And why, only six weeks after awarding Rainey a $717,000 contract did DED contract with Covalent for $749,997 to perform the same services as Rainey?

What were the backgrounds of Levy and Rainey? And why did they terminate their partnership, especially when it cost Levy a nice, fat state contract?

For openers, LouisianaVoice found records that show LR3 was on the payroll of State Rep. John Schroder (R-Covington) since November of 2012 and has received $16,250 in 11 monthly payments of $1,250, one payment of $1,875 and another of $625. All payments were made at least a year after the 2011 elections.

3 Lions, before the dissolution, also appears have spread its services around. The firm received $5,600 from John Conroy in 2012 before Conroy dropped out of the Baton Rouge mayor’s race; $8,000 from State Treasurer John Kennedy, $34,000 from Board of Elementary and Secondary Education President Chas Roemer during Roemer’s campaign for re-election in 2011, and $52,600 from Secretary of State Tom Schedler during his 2011 campaign for re-election.

While Rainey and LR3 got the $717,000 contract with DED and a $20,000 contract with the Secretary of State’s office, Levy, with his new company, Fuse Media, has only managed a modest $49,825 post-LR3 contract to “develop a strategic communications plan, video series and animated PowerPoint slides for the Governor’s Office of Coastal Restoration.”

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The latter part of January 2014 should probably be remembered when the policies of Gov. Bobby Jindal began to unravel in rapid succession and as a time when he was finally exposed as far more goobernatoral than gubernatorial.

If that seems harsh and disrespectful of the man and the office, then so be it; it’s only because he has earned it—in spades.

He has submitted executive budget after executive budget crafted around one-time funding for recurring expenditures—something he vowed never to do when he was running for office. He has sold off state property and entire agencies to finance those budgets. He has gone on a privatization rampage that is now coming home to bite him in the posterior, to the surprise of few observers. He has stacked board after commission with campaign lackeys who possess few, if any, qualifications for their positions of responsibility for running such things as the state’s flagship university. He has embarked on an ambitious quest for the Republic presidential nomination that is doomed to failure and disappointment.

That said, let’s examine the developments of the past few days that have converged to upset the house of cards upon which his administration has been built over the past six years:

  • The Office of Group Benefits (OGB) was privatized only a year ago. In that time, some 100 state employees lost their jobs, a $500 million reserve fund has dwindled to half that because of an ill-advised decision by Jindal to reduce premiums to some 250,000 state employees, dependents and retirees by 7 percent to make the privatization more palatable—and to reduce the state’s share of premium payments thereby helping Jindal balance his budget. Meanwhile, Blue Cross Blue Shield of Louisiana, the third party administrator who assumed management of OGB as a “cost savings plan” was forced to draw down that cash reserve to pay claims.

The folly of that ploy, of course, manifested itself this week when it was learned that double digit (some say as much as 25 percent) premium increases are imminent in order to keep what was once arguably the best-run agency in state government afloat. Meanwhile, yet another CEO has departed and the fourth in less than three years has been ushered in.

  • The crash and burn disaster of the administration’s privatization of the LSU hospital system is even more dramatic. The Biomedical Research Foundation of Northwest Louisiana (BRF) took over the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Shreveport last October because Jindal assured us that it would save taxpayer dollars. Yet, less than four months after BRF assumed operation of the two facilities, it is asking the state to bankroll more than $120 million in hospital improvements and expansions.

And don’t forget this privatization deal was approved by the LSU Board of Stuporvisors. One of the board members who voted for the deal which at the time, included a contract with more than 50 blank pages, just also happens to be the CEO of BRF but Jindal pooh-poohed the very idea that there could be a conflict of interests.

  • Another hospital privatization, that of the Interim Louisiana Hospital which replaced the old Big Charity that was heavily damaged by Hurricane Katrina, is also proving to be a tad more costly than we had been told by Jindal, thanks to the scrapping of a $46.5 million medical records system that is less than two years old.

On Friday, Jan. 24, ILH CEO Cindy Nuesslein notified employees of the one-time LSU Medical Center now jointly run by Children’s Hospital of New Orleans and Touro Infirmary that the electronic health record system installed by Epic Systems Corp. was being scrapped in favor of something called the Soarian Clinicals Siemens platform. No cost estimate was provided for the changeover, but it’s a good bet that the cost will be borne by the state.

The Epic system only went live in July of 2012 and the Epic contract, which began on May 18, 2010, expired on May 17, 2013.

  • When Jindal privatized the University Medical Center in Lafayette, he also closed the medical center’s First Step Detox, a “first step” treatment center for those suffering from chemical dependency—typically chronic alcoholics, IV heroin and/or other opiate abusers, including polysubstance abusers. When First Step Detox reopened, it sublet the center to Compass, a private entity that accepts only private pay and insured patients.

The news release announcing the reopening of First Step made no mention of the new admission policy, nor did it mention the ever-shrinking number of options for treatment for indigent patients. Now former patients are referred to the overburdened Baton Rouge Detox where they are instructed to fax their paperwork in order that they may be placed on a long waiting list.

  • Another private contractor with four contracts worth more than $385.5 million has been the subject of two critical audits by the Legislative Auditor’s Office. Moreover, a north Louisiana doctor claims that physicians are refusing to accept patients with Magellan insurance.

The first state audit, released in mid-December, says that the Department of Health and Hospitals provided no external evaluation of the performance of Magellan under its $361.4 million contract to handle paperwork and connect Medicaid 151,000 patients with mental health care providers.

Last August, the legislative auditor’s office said claims payments have been problematic for four state agencies and blamed Magellan for failing to meet significant technical requirements.

DHH Secretary Kathy Kliebert disputed that claim, saying that the privatization is working. She said the number of health care providers has expanded from 800 to 1,700—a claim hotly disputed by Scott Zentner, a Monroe neuropsychiatric doctor.

“I wish I could get to the bottom of Kliebert’s phony numbers regarding the supposed increase in providers since the Magellan takeover because the evidence is clearly to the contrary,” Zentner said. “I would bet my medical license that people are being counted now (that) weren’t before.”

Zentner said Magellan’s contract extends to private and public providers in a number of treatment settings. “Previously, they (providers) were reimbursed by fee for contracted services through DHH and some were not billing Medicaid at all, such as employees with the Office of Family Support.” Now, though, providers who were already delivering services before Magellan are now being included in the count who were not before, he said.

“I find it despicable that the head of DHH is twisting the numbers to cover up for a dramatic decline in services,” he said.

Zentner retired in 2012 after 20 years that included work as a medical director and staff psychiatrist for DHH and as a clinical associate professor of psychiatry at LSU. He said he returned to private practice after being “unable to further tolerate Jindal’s dismantling of our mental health system.”

He said he accepts all private insurances now except Magellan after “having been burned by them in the past for unpaid claims. They are the ultimate master in the use of passive-aggressive stall tactics in denying payments to providers, typically for silly technicalities; eg, misspellings resulting from typos.”

“In the northeast region of the state, with Monroe as the center of a 12-parish district, 75 percent of the physician/psychiatrist coverage has abandoned the community mental health system since Jindal took office,” he said. “Several Medicaid rehab agencies have shuttered their doors, one mental health clinic has closed in Rayville and others, including those in Winnsboro and Jonesboro, have been reduced to part-time outreach clinics operated by skeleton crews. Other outreach clinics, providing the most basic of mental health services, have closed in Tensas and East Carroll parishes,” he said.

“Other regions in the state have experienced even greater cuts than ours, but I doubt any of the regional administrators who are still employed would admit this publicly lest they be fired by Jindal.

“I’m highly skeptical of their (DHH) claims that provider rolls have increased, as (their figures) grossly contrast with reality,” he said.

The second audit was of the Office of Juvenile Justice (OJJ) and cited the office for its failure to develop a plan to monitor OJJ contracts managed by Magellan.

Magellan has a $22.4 million two-year contract with the Department of Children and Family Services also scheduled to expire on Feb. 28.

That contract calls on Magellan to provide an array of coordinated community-based services “for children and youth with behavioral health disorders and their families that risk out of home placement.”

Magellan’s contract calls for it to take over management beginning Jan. 1, 2013, at Harmony Center-Camellia Group Home in Baton Rouge, Boys and Girls Villages in Lake Charles, Boys Town of Louisiana (two facilities, in New Orleans and Baton Rouge), Harmony Center-Harmony III Group Home in Baton Rouge, and Allen’s Consultation, Inc., in Baton Rouge.

The contract requires that Magellan submit a written report detailing its progress to OJJ every six months but as of December 2013, OJJ had not received any such report documenting use of contract funds or of meeting specific goals of the contract.

  • Finally, in what is probably the most heartless, most ungrateful act yet by this administration, Jindal last week ordered the Louisiana National Guard (LNG) not to process any benefits for gay veterans on state property—in open defiance of the U.S. Supreme Court’s ruling that the 1996 Defense of Marriage Act (DOMA) is unconstitutional. Apparently Jindal based his position on some state’s rights legal opinion which he feels gave him the leverage needed to deny benefits on state property. It looks to us like more work for Jimmy Faircloth to try and defend another administration policy of questionable legal merit.

What makes this order so egregious is the blatant flag waving hypocrisy in which Jindal envelopes himself.

This is the same governor who, in a great show of his patriotism for the benefit of newspaper photographers and television cameras, traveled all over this state to hand out those appreciation medals to military veterans. The bill to award the medals was passed in the belief that legislators would benefit from the goodwill but Jindal stole that opportunity from under their collective noses with his shameless traveling awards show, denying lawmakers the chance to get in on the act. (Just for the record, as a matter of principle, I chose not to stand in line to have him present my medal nor did I apply for it to be mailed to me even though I served.)

Moreover, as thousands of Louisiana guardsmen were deployed to Iraq and Afghanistan over the past decade or so, never once do I remember anyone in this administration inquiring if anyone being placed in harm’s way for his or her country was gay. Apparently it’s perfectly okay to get shot or blown up by a roadside IED if you’re gay but if you’re lucky enough to survive, don’t bother coming home and applying for benefits.

Never, in my 70 years, have I witnessed an act so gutless, so callused. To hide behind the flag and to call oneself a Christian and a patriot while at the same time issuing such a cowardly order is beneath contempt.

It is the act of a petulant little ingrate who would defend the senseless and insensitive comments of a Phil Robertson while pretending to support the men and women who wear the uniform that he never had the courage to wear.

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Whether driven by paranoia or some other motive, the Division of Administration (DOA) appears to have settled into a circle the wagons mentality in an apparent attempt to stymie two independent agencies from performing their duties in a timely fashion.

It has long been suspected that Gov. Bobby Jindal’s sycophants shielded him from the political realities by whispering in his ear the things he wanted to hear, i.e. that he is viable presidential timber, that he is adored and idolized by the great unwashed. His rigid practice of holding precious few press conferences—and those with his taking no questions—has only reinforced that perception.

But now comes something official, in writing, absent of deniability, which in its unmistakable implications, is as jaw-dropping as it is unprecedented. It also should make one wonder if anything was learned from 40 years of history.

An email memorandum dated Thursday, Jan. 16, was sent out by DOA to agency and department heads to the effect that any documents sought by the Legislative Auditor or the Legislative Fiscal Officer would be required to be in the form of formal requests for public records and routed through DOA.

That message, from the DOA Office of General Counsel, said that if anyone from the Legislative Fiscal Office or Legislative Auditor’s Office calls and requests documents, the requests are to be sent to the DOA legal counsel “and the request will be handled as a Public Records request.”

A second email was sent on Tuesday of this week, this one from the DOA Internal Audit Administrator.

That message noted that a number of audits were being conducted of DOA agencies and that all personnel should notify her of any audits that are initiated. “In addition, when responding to requests for information from auditors, please send the information through me before releasing the information to the auditors. Please make sure your staff is also aware that responses to audit requests for information must be submitted through me,” she said.

While perhaps not a fair comparison to the denial of records to the Judiciary Committee four decades ago—Jindal, after all, has not been accused of breaking any laws—it is nonetheless reminiscent, on a smaller scale, of events that pushed the presidency of Richard Nixon to the brink and, ultimately, over the edge in 1974.

So the Legislative Auditor’s office and the Legislative Fiscal Office will now be required to jump through hoops to obtain public records so they can do the job they are mandated by law to do.

Each member of the Legislative Audit Advisory Council was informed of the Jan. 16 memorandum but as of late Thursday, not one had responded to requests by LouisianaVoice for comments.

Those members include Rep. Hunter Greene (R-Baton Rouge), chairman; Sen. Edwin Murray, (D-New Orleans), vice-chairman; Sen. Robert Adley (R-Benton), Rep. Cameron Henry (R-Metairie), Rep. Dalton Honoré (D-Baton Rouge), Sen. Ben Nevers (D-Bogalusa), Rep. Clay Schexnayder (R-Gonzales), Sen. John Smith (R-Leesville), Rep. Ledricka Thierry (D-Opelousas), Sen. Mike Walsworth (R-West Monroe)

The Legislative Fiscal Office is an independent agency created by statute to provide factual and unbiased information to both the House of Representatives and the State Senate. The office provides assistance to individual legislators, committees of the Legislature and the entire Legislature. Often times, information is needed quickly to respond to requests from lawmakers and to compile fiscal notes on pending bills.

Specific information about the Legislative Fiscal Office can be found in the Louisiana Revised Statutes, RS 24:601 through 24:608.

The Legislative Auditor’s office performs financial audits of state agencies and universities on a routine basis. In addition, information technology (IT) auditors analyze computer systems of government agencies to ensure data integrity and security. http://senate.legis.louisiana.gov/Documents/Constitution/Article3.htm

Performance audits address specific objectives regarding economy, efficiency and effectiveness of programs, functions and activities of state agencies under Louisiana Revised Statutes 24:522 to provide the legislature with evaluation and audit of state agencies. Under R.S. 24:522, the Legislative Auditor’s office is mandated to audit each of the 20 executive branch departments over a seven-year period and, if necessary, to bring audit topics to the Legislative Audit Advisory Council for approval. Additionally, the Legislature may request a performance audit on a particular agency to address given issues or problems.

Investigative audits are conducted for the purpose of gathering evidence regarding fraudulent or abusive activity affecting governmental entities. Investigative audits are designed to detect and deter any misappropriation of public assets and to reduce future fraud risks.

Each of the 20 executive branch departments hopes to receive an unqualified opinion. That means that the Legislative Auditor has no reservations as to the accuracy and authenticity of the information contained in its report.

If DOA, however, is attempting, for whatever reason, to screen data or conceal file document contents requested by the Legislative Auditor, the issuance of a qualified opinion, meaning the auditor conducting the examination is not willing to vouch for the accuracy of the report because of the absence or unavailability of certain records, would likely be issued in its stead. Thus, the Legislature itself would be thwarted in its oversight role of all state agencies, an untenable position in which the Legislature most likely would not like to find itself.

Normally, when state auditors enter an agency, such as the Office of Risk Management (ORM), for example, they compile a list of documents (lawsuits, in the case of ORM) and make specific requests for each file as the auditor moves from one to another. In other agencies, the records auditors may wish to examine could be travel documents, payment receipts, attendance records, equipment inventories, university scholarship and tuition payments or athletic program expenditures, to name but a few.

Full compliance with either email directive could unnecessarily slow the process of either agency’s performance of their mandated duties by forcing their personnel to make formal requests each time they wish to review a file or document and then to wait until DOA decides to comply.

LouisianaVoice typically must wait weeks for even an acknowledgement of our requests even though the Public Records Act of Louisiana (R.S. 44:1 et seq.) clearly says that the custodian of the record requested must comply immediately or, in cases when a file is in use or otherwise unavailable, respond immediately in writing as to when the record will be available within three working days.

Legislative Auditor Daryl Purpera, when contacted by LouisianaVoice, said he was unaware of the memorandum from DOA.

“That’s going to keep ‘em pretty busy up there because we’re in every agency in the state conducting our audits,” he said.

He said he has never encountered any major problems with DOA and that his auditors were almost always able to obtain requested documents “except in cases of deliberative process, a phrase they’ve used from time to time.”

Deliberative process comes into play when actions on matters are pending in the governor’s office and the governor wishes to keep details confidential until decisions are made but the Jindal administration has arbitrarily expanded the definition to other agencies as well.

Purpera’s predecessor, Dan Kyle, experienced problems obtaining records from the departments of Insurance and Economic Development because of the sensitivity of certain records claimed by the agencies.

Purpera expressed some bewilderment as to the motives of DOA in issuing the memorandum. “I really don’t know why they would do that,” he said.

Legislative Fiscal Officer John Carpenter was not available for comment.

One possible motive behind the latest dictates from DOA could be that the administration wants sufficient time to review any potentially damaging documents and to take whatever steps necessary to deny unfettered access to records in order to conceal or delay their release under the deliberative process clause. Another possibility, far more unlikely (we hope) would be to give the administration an opportunity to destroy embarrassing documents.

If one thinks that would be an extreme measure even by this administration’s standards, consider this: There is a curious but seemingly unrelated message written on a whiteboard in one DOA office which directs employees: “Do not ask about the law, do not research the law.” But as an apparent disclaimer, the message also cautions that “ignorance of the law is not a defense.”

Curious indeed.

All of which, of course, only echoes the words of an administration consultant who told DOA employees a couple of years back: “Don’t let the law stand in the way” of the administration’s objectives.

History, apparently, really does repeat itself. Richard Nixon once said, when David Frost asked about the legality of the president’s actions, “Well, when the president does it, that means that it is not illegal.”

All that’s missing now is a tape with an 18½-minute gap.

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Some things are just downright difficult to understand;

  • Item: On June 20, Gov. Bobby Jindal signed HB 629 (Act 399) into law. The bill, passed during the 2013 legislative session, created the Office of Debt Recovery within the Louisiana Department of Revenue for the collection of delinquent debts owed to certain government entities—taxes that one source said far exceed the official estimates.
  • Item: A month later, on July 21, Jindal signed HB 456 (Act 421) into law that created a tax amnesty program whereby those owing taxes to the state may have 100 percent of their penalties and half the interest waived. The letters being sent out this week to delinquent taxpayers, however, could provide them with an argument on a legal technicality that also won’t have to pay the tax principal amounts.

As we said, some things just don’t make sense.

On the one hand, the legislature passes and Jindal signs into law a bill creating an agency whose specific purpose is to collect debt—lots of debts—owed to the state.

The new agency, according to the Legislative Fiscal Office will create 23 new state positions (the antithesis of the Jindal philosophy of government) at a cost of $1.7 million per year in salaries and benefits and another $4.4 million in administrative costs.

But with nearly $1.4 billion in payments owed to state government that are at least six months overdue, that would seem to be a good investment in that one estimate says that if the state increases debt collection efforts on such outstanding debts as delinquent college tuition installments and unpaid environmental monitoring fees by as little as 10 percent, it could generate an additional $100 million per year for the state.

On the other hand, Jindal’s new $250,000-a-year Secretary of Revenue and the Louisiana Legislature, by virtue of Act 421, will let delinquent taxpayers off the hook for all penalties and half the interest owed on those back taxes.

The Legislative Fiscal Office estimates about 300,000 persons and businesses who owe some $700 million in delinquent taxes will be eligible for the amnesty program, though only about 30,000 are expected to take advantage of the amnesty date, which will begin on Sept. 23 and end on Nov. 22.

The state anticipates receiving $200 million from the program for the current fiscal year with the revenues earmarked for health care bills. Any shortfall will result in even more health care cuts.

LouisianaVoice, however, has received information that indicates the amount of delinquent taxes, interest and penalties may be far larger than the $700 million estimate—almost three times that much, in fact.

Figures provided us shows that the total owed exceeds $2 billion. That includes taxes of $1.03 billion, interest of $687,000 and penalties of $301 million.

“It is amazing how many taxes are not paid,” said our source. “Amnesty will give us another few years in ‘garage sale’ money and then when it runs out, say four years from now in the middle of the next administration (the) Jindalites can cry foul and push for more of the same type programs.”

The amnesty letters are being printed this weekend and will be mailed out within the next few days. “The letter tells taxpayers what they owe and explains that they owe half the interest and no penalty,” the LDR employee said. “But it doesn’t mention anything about paying the tax. A good lawyer could mount a good argument on this.

“The word is that the error was discovered this week and the change would have been minimal (by) adding the words ‘tax and’ before the interest comment,” the employee said. “The really interesting thing is this form letter was put together some time ago and at the last minute someone decided to proofread it. Still, it seems as though someone, maybe in the legal department, would have been given this to read.”

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