Louisiana Voice

BATON ROUGE (CNS)—Neither rain, nor sleet, nor act of sale by contractor shall deter Gov Bobby Jindal’s ever-onward march of privatization of state agencies.

LouisianaVoice has learned that F.A. Richard & Associates (FARA), the company that assumed control over the Louisiana Office of Risk Management (ORM) only last July, has been sold for an undisclosed amount to an Ohio company.

Avizent, of Dublin, Ohio, will apparently assume control of ORM, though no timetable was immediately available as to when the transition would take place.

FARA signed a contract with the Division of Administration (DOA) last year whereby the Mandeville company would be paid $68 million to take over all lines of coverage provided by ORM, as well as its Loss Prevention, Accounting, and Subrogation units.

ORM’s Loss Prevention, Subrogation, and Worker’s Comp sections were the first to go over to FARA and General Liability will follow later this year.

Only last week, Rep. Jim Fannin (D-Jonesboro), chairman of the House Appropriations Committee chastised DOA and ORM for neglecting to seek approval for a $7 million amendment to FARA’s five-year contract.

The Office of Contractual Review approved the amendment, according to ORM Assistant Director Patti Gonzales, because the agency is allowed one amendment without legislative approval so long as the amendment amount does not exceed 10 percent of the original contract amount.

A $7 million amendment, however, would be $200,000 in excess of 10 percent of the original $68 million contract.

FARA CEO Todd Richard sat beside Gonzales during the committee hearing last Thursday’s hearing but never mentioned the pending sale of his company.

Avizent has 35 offices in 25 states but the Baton Rouge office is manned by only one employee.

Attempts to obtain comments from Commissioner of Administration Paul Rainwater and Fannin were unsuccessful. A spokesman for FARA declined to comment but a spokesperson for Advizent CEO Tom Watson confirmed that Advizent was “in the process” of acquiring FARA. She said Watson was in Baton Rouge Thursday in preparation for a public announcement of the transaction.

ORM was the first successful privatization of a state agency by Jindal. Other agencies he is attempting to outsource include several state prison facilities and the Office of Group Benefits (OGB).

OGB presently has a request for proposals (RFP) for a financial analyst to assess the value of OGB and to then seek a third party administrator (TPA) to run OGB’s Preferred Provider Organization (PPO). Blue Cross/Blue Shield already administers OGB’s HMO but there has been considerable resistance to the privatization of the PPO.

Tommy Teague, the former CEO of OGB, who was fired on April 15, testified before the Senate Retirement Committee recently that he saw no need for a financial analyst if DOA only wanted a TPA. “There is no need to know the worth of the agency just to obtain a TPA,” he said, adding that a financial assessment would be needed only in the event the state wants to sell OGB.

Rainwater has been inconsistent about whether or not the state desires to sell or obtain a TPA, issuing conflicting statements in testimony before the Senate Retirement Committee (see May 18 Notable Quotables) and its chairman, Sen. Butch Gautreaux (D-Morgan City).

CNS has also learned that a number of private prison enterprises have contributed generously to Jindal’s political campaigns since his first run for governor in 2003.

Leading contributors included Corrections Corp. of America (CCA) of Nashville, Tennessee, the nation’s largest private prison firm ($13,000), which runs the state’s Winn Parish facility on a contractual basis; GEO Group of Boca Raton, Florida, which operates Allen Correction Center in Kinder in Allen Parish ($10,000); LaSalle Management of Ruston, which operates lockups in Claiborne, Ouachita, Catahoula, Jackson, LaSalle, Lincoln, and Concordia parishes ($10,000), and Emerald Correctional Management of Shreveport which operates facilities in West Carroll Parish ($10,000).

A fifth contributor, Wackenhut Corrections of Palm Beach Gardens, Florida ($10,000), once operated a juvenile detention center in Jena but after a CBS 60 Minutes report on abuses by guards at the center prompted federal investigations into the center, it was turned back over to the state.

Abuse of juvenile offenders is not limited to Louisiana.

A lengthy investigation in Pennsylvania revealed that two judges in Luzerne County were involved in the “cash for kids” scandal in which the judges handed down severe penalties for minor infractions. Many juveniles were led from the courtroom in shackles and were shipped directly to private-run detention centers that were paying kickbacks to the judges.

Judge Mark Ciavarella, who sentenced one teenage girl to 90 days in a detention center for the crime of spoofing her high school vice principal on MySpace, was convicted in February for his role in the $2.8 million bribery scandal.