Louisiana Voice

Gov. Bobby Jindal’s office has ordered the Human Resources staff at the Office of Group Benefits (OGB) to report to Paul Rainwater and the Division of Administration (DOA), according to State. Sen. D.A. “Butch” Gautreaux (D-Morgan City).

Gautreaux, who is term-limited and not seeking elective office, called on opponents of privatization of the agency to mobilize to resist the governor’s plan.

He is a member of the OGB board of directors and is Chairman of the Senate Retirement Committee and has been a vocal opponent of both Jindal and administration plans to privatize OGB.

Sources inside the administration indicated the latest move requiring OGB to report to DOA is the first step in the administration’s efforts to dismantle the agency altogether prior to selling its book of business to a private investor.

A Request for Proposals (RFP) was issued earlier and a tentative deadline of June 15 set for the selection of a fiscal analyst to evaluate the assets of OGB preparatory to soliciting bids from the private sector for the takeover of the agency and its $500 million equity balance. No financial advisor has yet been publicly named by the administration even though public information requests have been submitted to Rainwater and Deputy Commissioner of Administration Mark Brady.

If a financial analyst is named and DOA does not respond to the public information requests, Rainwater and Brady will be in open violation of state public records law. Violators are subject to fines, courts costs and attorney fees.

Rainwater has been ambivalent as to the true intent of the administration, first issuing an earlier RFP specifically for the sale of OGB and later testifying before Gautreaux’s committee that nothing other than a third party administrator was being sought for the OGB Preferred Provider Organization (PPO) and possibly the HMO.

The agency went through two administrators within a two-month period once the efforts to privatize the agency became public knowledge.

Tommy Teague, who ran the agency as its CEO for five years, taking it from a $60 million deficit to a $500 million surplus, was fired on April 15 and replaced that same day by Scott Kipper, who moved over from the State Department of Insurance.

Six weeks later Kipper resigned over Rainwater’s failure to keep his promise to the Senate and Governmental Affairs Committee to make available to committee member Karen Peterson a report by Chaffe & Associates of New Orleans. His resignation became effective last Friday.

Chaffe had been hired in March by Jindal to conduct a preliminary assessment of OGB in order that Jindal could incorporate its findings into his executive budget by March 19. When no mention of the OGB sale was subsequently included in that budget, it was assumed by many that the Chaffe report did not say what the governor wanted to hear.

That theory seemed to be confirmed later first when Rainwater went back on his word, given under oath, and again when conflicting dates appeared to indicate the possibility that two versions of the report existed.

Rainwater testified before the Senate and Governmental Affairs Committee during his confirmation hearing on May 31 that he received the Chaffe report on May 25 but that it was in the “deliberative” process and its contents could not be divulged.

Four days earlier, Paul Holmes, an attorney with DOA, notified LouisianaVoice by email that the report was received on May 25 but that it was in the “deliberative” process and thus, not public record.

With both men claiming the report was received by DOA on May 25, it raised eyebrows when a copy of the report was “leaked” to the Baton Rouge Advocate. That report was dated June 3 by its authors, nine days after Rainwater and Holmes said they received it.

Moreover, the copy that was supposedly leaked did not contain the stipulation that the only benefit to privatizing OGB would be if the buyer retained the $500 million surplus. Those who had seen the May 25 version said that language was contained in the report.

Gautreaux, in a Tuesday email said the Joint Legislative Committee on the Budget needed to be informed of the administration’s latest maneuver. “Tell them to make it personal,” Gautreaux said to the email’s undisclosed recipients, adding that the OGB administrative staff will likely be fired as a next move by the governor.

“Jindal and his staff have no idea how frightening it is to a senior or anyone with chronic illness to not know if their medication will be covered or the procedures will be available under a private carrier yet to be announced, he said.

Even if the administration does understand, he said, “There is not an ounce of compassion in their hearts. You have to have a life experience like most of us have had to understand the fear that many OGB members have at the very threat of losing their coverage.

“I have a 40-year-old son with MS (multiple sclerosis). He has a family and a great job. He worries every day that if his company changes hands and he loses the coverage he has, he would never be able to afford the $3800 in medication he takes every month. There are thousands of stories like this in OGB,” Gautreaux said.

“Mobilize your troops now. We will never replace the valuable plan once it is lost.”