Louisiana Voice

Members of the Senate and Governmental Affairs Committee, led by Sen. Ed Murray (D-New Orleans), grilled three of Gov. Bobby Jindal’s appointees in 40 minutes of tense confirmation hearings on Tuesday.

The committee will make its recommendations on the confirmations of Commissioner of Administration Paul Rainwater, Deputy Commissioner Mark Brady, and Office of Group Benefits (OGB) CEO Scott Kipper to the full Senate which will then vote on those recommendations.

It didn’t take long for Rainwater’s survival instincts to kick in at the expense of Kipper who, it seemed, had been instructed to say as little as possible but soon found himself in trouble as members of the committee quickly smelled blood and moved in for the kill.

The thrust of the questioning of Rainwater and Kipper (Brady, who spent the first few minutes of questioning fidgeting in his chair, was all but ignored) centered around administration efforts to privatize OGB and the existence and availability of a report generated by a New Orleans firm.

Chaffe and Associates was hired in March by the administration to generate a rush financial analysis of OGB preparatory to the receipt of proposals from financial analysts with experience in negotiating sales of insurance companies.

Committee staff members had received an email from Paul Holmes, an attorney with DOA, that was identical to one he sent LouisianaVoice on Friday (see May 31 posting) that denied access to the Chaffe report, a denial not well received by committee members.

During the questioning process, Rainwater threw his two subordinates under the bus by denying knowledge of conversations between Brady and Kipper relative to keeping the Chaffe report from the public. Rainwater seemed content to leave Kipper twisting in the wind while he busied himself with texting.

Requests by LouisianaVoice for a copy of the Chaffe report were sent directly to Rainwater which would seem to weaken his deniability of any knowledge of efforts by Brady and Kipper to keep the report confidential.

That comment came after Kipper, appearing to be taking directions from higher ups to reveal as little as possible to the committee, first said he had no knowledge that the Chaffe report existed and that he wouldn’t have wanted to see it at any rate because of an existing request for proposals (RFP) on the OGB privatization. He said he feared the Chaffe report might jade his decisions on the RFP if he knew its contents.

Rainwater spent much of the time Kipper was testifying taking notes and openly texting at the witness table, never once coming to the aid of his subordinate to clarify an answer or to assist Kipper when he faltered. Instead, he appeared perfectly willing to let Kipper suffer the wrath of the committee for actions perpetrated by his (Rainwater’s) office.

Murray was incredulous that Kipper, as CEO of OGB had not seen a report that potentially “could affect thousands of people.”

But that was not the most damaging part of Kipper’s testimony. Earlier, he bantered with Murray over the very existence of the report and quickly lost credibility with the committee.

When he asked Kipper if a third party had been brought in to conduct a financial analysis of OGB, Kipper replied, “Not that I’m aware of.” That answer set off a firestorm of questioning from several senators.

Murray later came back to say, “I’m told a report was done but the Legislative Auditor was denied access to that document because it was part of the ‘deliberative process.’ Now we have another report (Chaffe) that was requested by members of the Senate staff and you won’t turn it over. Are you telling this is not true?” he asked.

“I’ve not seen the report,” Kipper said.

“So it does not exist?”

“I have no knowledge that it exists.”

“You’re the CEO of OGB and you’re telling me you have not seen a report that would impact OGB? Other people have seen it. When will you see it?” Murray asked. “Have you asked for it?”

“I have not.”

“This is really disturbing to me that you, as CEO of OGB, have not seen a report that is out there that is so important to so many people,” Murray said. “The report might tell you there is no need to privatize OGB. Don’t you think you need the benefit of that information? Who suggested that Chaffe do the report?”

“I don’t know,” Kipper said.

“You don’t know that either? Who’s running OGB?”

In fairness to Kipper, the Chaffe contract was issued prior to the firing of Kipper’s predecessor, Tommy Teague, on April 15.

Sen. Karen Carter Peterson (D-New Orleans), vice chairman of the committee, raised the issue of transparency with Rainwater.

“Did you commission the Chaffe report?” she asked.

“Yes,” said Rainwater.

“Wouldn’t it be helpful for Mr. Kipper to have the report?”

“He will get the information, obviously,” Rainwater said.

“No, it’s not obvious,” she said. “Why would the CEO of the agency not have the information before making a major decision on the agency’s fate?”

“It (the Chaffe report) was more of a validation of what we already had,” Rainwater responded, not saying that the data validated had been compiled with the aid of Goldman Sachs which helped draft the original RFP on which Goldman Sachs was the lone bidder. “The numbers came back as we thought they would,” he said.

“We’re looking in this hearing at character and judgment. How can I have confidence in confirming anyone if I don’t have confidence in their character, judgment and integrity?” Peterson asked.

“Transparency is something touted by the administration but to withhold information from key department officials is significant.”

Sen. Jack Donahue (R-Mandeville), directing his remarks to Rainwater, noted that Kipper had testified that he did not want to review the Chaffe report.

“That was a conversation between Mr. Kipper and my deputy commissioner (Brady). I was not aware of those discussions.”

“If you spent money on this report, it would seem that everything should be on the table,” Donahue said. “I’m surprised by your answers to tell you the truth.”

“I’m surprised by the conversations my staff has had,” Rainwater countered, again revealing his willingness to deflect criticism onto his lieutenants for actions that, ultimately, were his responsibility.

Peterson returned to Kipper’s testimony about his lack of knowledge about the existence of the Chaffe report. “You testified you didn’t know if the report existed,” she said. “You raised your right hand and took an oath. Are you sure you don’t want to try again?

“The first element in these jobs is integrity. I don’t think that of you, Mr. Kipper. I think you’re fudging. I think you’re teetering and for someone in your position, there is a fundamental element of trust necessary. I don’t have that today. Do you want to try again on that report?”

“Senator, I’ve not seen the report,” Kipper said.

“Do you know the report exists?” she asked.

When Kipper hesitated, she again asked, “Do you know the report exists?”

“I think the report exists,” he responded.

At that point Murray said, “Even after the commissioner (Rainwater) told you the report exists, you still don’t know it exists?”

“I believe it exists,” Kipper said again.

“This is absolutely amazing to me that you can sit there and give answers like that,” Murray said.

“It disturbs me that the CEO of OGB sat there and I had to pull it out of him that the report even existed and even as I was asking Mr. Kipper those questions, his bosses (Rainwater and Brady) sat right next to him and said nothing,” he said.

“I hope you change your attitude,” he said to Kipper. “If you are confirmed, I hope you will take your job more seriously and treat us with more candor.”