Posted in Governor's Office, Notable Quotables, Transparency on June 9, 2011| Leave a Comment »
“Let’s not be bound by the law.”
—Consultant (read: someone wearing a suit and carrying a briefcase) to staff members of the Division of Administration, responding to questions about budgetary deadlines during discussion on zero-based budgeting. [It was a couple of years ago, but we’re just sayin’….]
Posted in Governor's Office, Health Care, House, Senate, Legislature, Legislators, Transparency on June 9, 2011| 6 Comments »
The Department of Health and Hospitals, after more than an hour and a half of back and forth bickering with the Senate and Governmental Affairs Committee, on Wednesday finally relented and admitted that the winning contractor on a 10-year, $34 million-per-year contract was CNSI the same company that formerly employed the DHH Secretary.
[LouisianaVoice missed the call on that one. Everyone in the know said it would be CNSI but we thought the contract would go to ACS, a subsidary of Xerox which already has six contracts totaling $148.3 million and which contributed $10,000 to the Jindal campaign. We didn’t think that even this administration was brazen enough to give the contract to the department secretary’s old employer. Guess we underestimated the stones of this administration.]
The committee was meeting to conduct confirmation hearings on DHH Secretary Bruce Greenstein who has been serving as secretary since his appointment last July. All cabinet members must be confirmed first through the committee hearing process and then by majority vote of the Senate.
Similar hearings were held last week for Commissioner of Administration Paul Rainwater, Deputy Commissioner Mark Brady and Office of Group Benefits CEO Scott Kipper. Kipper has since tendered his resignation, effective June 24, and his nomination withdrawn.
Just as last week with Kipper and to a lesser extent with Rainwater and Brady, Wednesday’s hearings quickly became contentious when Greenstein and Undersecretary Jerry Phillips became embroiled in a standoff with the committee over release of the name of the winning contractor pending formal approval by the joint House and Senate Health and Welfare Committees.
At stake is the contract to replace the 23-year-old computer system that adjudicates health care claims and case providers, Greenstein said. He said a state statute that requires the official awarding of the contract to be done by the joint health committees prevented him from divulging the name of the winning contractor.
Sen. Rob Marionneaux (D-Livonia) reminded Greenstein that the committee had run into refusals to release information by the Division of Administration (DOA) in the case of a report prepared by Chaffe & Associates of New Orleans on the financial assessment of the Office of Group Benefits (OGB).
Rainwater, at last week’s hearing, promised to make the report available but later backtracked and instructed Kipper to release the report to no one. Kipper subsequently resigned over that issue.
One of the first orders of business of the committee on Wednesday was to unanimously adopt a motion by Sen. Ed Murray (D-New Orleans) to subpoena the Chaffe report.
“On Monday, we picked up the paper and see where DHH refuses to release the name of the successful contractor,” Marionneaux said. “You cited a statute but the statute you cited does not say you shall not divulge, just that you shall not award the contract. We’re not here to award the contract, we just want to know who the contractor is. So, who is going to receive the contract?”
Greenstein answered that DHH had requested a joint committee meeting to hear its recommendation but Marionneaux interrupted him in mid-sentence. “One of the questions is about the company you used to work for (CNSI). Who is the company who is going to receive the contract?”
Again Greenstein tried to invoke the statute governing the awarding of the contract but was again interrupted by Marionneaux. “You said the administration of DHH, and that’s you as we stand here today. So you’ve made that decision not to divulge. Are you telling me right now, today, that you’re refusing to tell this committee who’s going to receive that $34 million contract?”
“We believe that the law states that we should call on the (joint) committee and then make the announcement to that committee,” Greenstein replied.
“I read the statute,” Marionneaux said, his patience beginning to wear thin. “Are you refusing to tell this committee who is going to be recommended by DHH to receive the award? Yes or no?”
“I’m not going to be able to say today.”
“We’re sitting here trying to decide if you, the leader of DHH, are going to be confirmed and we have a headline in Monday’s paper that you want to keep a secret and a direct question is being asked and you refuse to answer,” Marionneaux said.
“I just don’t understand why this administration does this,” said Murray. “You are, I suppose, just following directions. I just don’t understand it.”
It was Sen. Jody Amedee (R-Gonzales), however, who really laid the issue at the feet of Gov. Bobby Jindal when he 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?” Amedee asked.
“I can’t discuss the matter.”
“You can, you just choose not to,” Amedee said. “It’s not against the law. Can you tell me they didn’t get it (the contract)? That’s what everyone here wants to know. We want to know if the former employer of the Secretary of DHH got the contract for $34 million. If they didn’t get it, this will probably all go away. The more that this goes on, the more we think they got it.”
Greenstein did say that he erected a firewall between himself and the bidding process once the request for proposals (RFP) was issued so that he would not be involved in the selection process. He admitted that he not only had worked for CNSI, but also had past professional relationships with the other three bidders.
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 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.”
Marionneaux then asked about communications between Greenstein and CNSI. Greenstein admitted meeting with CNSI representatives as well as lobbyists for the other bidders and to speaking on the phone and exchanging emails with all four bidders but insisted all communications occurred prior to issuance of the RFP.
Marionneaux then offered a motion that was approved unanimously that the committee issue a subpoena for all written and oral communication records between Greenstein and the four bidders “as they relate to the contract for services with CNSI.”
As the committee wound down its questioning, Peterson said, “I hope the governor is listening because what has been happening is not in the best interest of the people nor is it consistent with his purported policy of transparency.
“This gives the appearance of your wanting to hide something, particularly since we now know the contractor is your former employer and you wanted to keep that from us. The behavior of you and Mr. Kipper (in last week’s confirmation hearing) is unacceptable. We need to do better.
“Do not let anyone or this administration do anything to taint you as a person or your integrity,” she said to Greenstein, whom she said she respected. “There are those who will attempt to do that to people. They’ll serve ‘em up and throw ‘em under the bus. Don’t let that happen to you.”
Posted in Governor's Office, Health Care, OGB, Office of Group Benefits, Transparency on June 8, 2011| 1 Comment »
LouisianaVoice has learned the names of the four Goldman Sachs representatives who met with Deputy Commissioner of Administration Mark Brady and then-CEO of the Office of Group Benefits (OGB) Tommy Teague last fall.
Those are the names spokesmen for the Division of Administration denied knowing anything about.
That meeting put into motion a chain of events that eventually resulted in the firing of Teague on April 15 and the resignation of his successor, Scott Kipper, last week. Kipper’s resignation takes effect on June 24.
In the interim, Goldman Sachs reportedly helped draft the first of two requests for proposals calling for the hiring of a financial analyst who would conduct a financial assessment of OGB and then market the agency to potential buyers.
In what quickly developed into a Keystone Kops-like comedy of errors, LouisianaVoice revealed that the Goldman Sachs was the only entity to submit a proposal on the RFP which it helped to write. The Wall Street banking firm subsequently pulled out of negotiations when it could not get the state to agree to indemnify the company in the event of litigation over the award.
Commissioner of Administration Paul Rainwater, under withering questioning from the Senate Retirement Committee, later flip-flopped between saying OGB and its $500 million surplus would be sold and that the state was merely seeking a third party administrator (TPA) for its Preferred Provider Operations (PPO), and admitting that the administration might be open to allowed a TPA for his HMO services as well.
The HMO is presently administered by Blue Shield/Blue Cross but that contract is currently in the throes of litigation between the state and the previous provider, Humana.
The state’s PPO is fully-insured and administered wholly by the state and Rainwater said the operation is too cumbersome and that at least 149 personnel should be cut and the operations turned over to the private sector.
In the meantime, the House Appropriations Committee restored the 149 positions cut by Gov. Bobby Jindal in the executive budget and amended out language that would have given Jindal authority to seize part of the $500 million surplus amassed under Teague, who took over the agency five years ago when it was $60 million in the red.
Jindal even retained the services of a New Orleans firm, Chaffe & Associates, to perform a quickie assessment of OGB in time for the March 19 deadline so that the proposed sale could be included in the executive budget. But that report was not contained in the budget and has never been released by the Division of Administration.
Rainwater claims the report is confidential but promised last week to provide the report to members of the Senate and Governmental Affairs Committee which was meeting to confirm Rainwater, Brady and Kipper. Kipper’s name has since been withdrawn, Rainwater welshed on his promise to make the report available and on Wednesday, the committee, at the insistence of Sen. Ed Murray (D-New Orleans), voted unanimously to subpoena the report.
Reports indicate the Chaffe report says the only advantage to privatizing OGB would be if the purchaser retained the $500 million surplus, leading in turn to speculation that that is the reason the report has not been released.
Rainwater’s office has denied knowing the identities of the Goldman Sachs representatives, even though they met with his top assistant and such meetings generally are documented as to times, dates, and names as well as outlines or notes on subjects of discussion.
On Wednesday, it was learned that the four Goldman Sachs representatives were David Levy, managing director of Public Sector and Infrastructure; Justin Goldstein, vice president, Public Sector and Infrastructure; Navtej Bhullar, vice president of Global Healthcare Group, and Ritu Kalra, vice president, Public Sector and Infrastructure.
Bhullar, a graduate of the Indian Institute of Management in 1999, joined Goldman Sachs as an associate in 2005, after having worked at Citigroup from 2002 to 2004. He is credited with having completed a number of mergers, initial public offerings and financing in the healthcare banking industry. Among those were the sale by Universal American of its Medicare PPD business, the sale of HealthDialog to BUPA, the sale of Athena Diagnostics to Quest Diagnostics, the sale of MedImmune to Astra Zeneca, and others.
Kalra, began her public finance career in 1996 and has been instrumental in the privatization of military housing units for the U.S. Navy and the U.S. Army. She also specializes on governmental finance and has covered the State of Louisiana since 2009. She participated in the financing of the state’s $400 million Transportation Infrastructure Model for Economic Development (TIMED) program. She holds an MA in journalism from New York University.
Goldstein has been with Goldman Sachs since 2000 and has covered Louisiana for the company since 2005. He is credited with a wide range of projects, though none were listed for Louisiana.
Levy is a graduate of Tulane University and received an M.S. in Industrial Administration. He oversees public sector relationships in the southern region for Goldman Sachs and is credited with executing financing assignments for the states of Florida, Georgia, South Carolina, and Louisiana.
Proposals on a second RFP were received by OGB on Monday of this week with the winning proposal to be announced on June 15.
If DOA desires additional data on the four Goldman Sachs reps, LouisianaVoice will be happy to share our information in the interest of transparency since Brady and Rainwater apparently lost their notes.
Posted in Governor's Office, Notable Quotables, Transparency on June 8, 2011| 1 Comment »
“Step Three: Make state and local government more open and accountable to the public.”
—Bobby Jindal, in his booklet on the need for ethics reform during his 2007 gubernatorial campaign.
Posted in Governor's Office, Health Care, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Public Records, Transparency on June 8, 2011| 2 Comments »
When attorneys for the Louisiana Department of Health and Hospitals last week refused to disclose the name of the firm awarded a multi-million-dollar contract, it wasn’t the first time the Jindal administration has withheld key information normally considered to be public record.
There is, of course, the infamous Chaffe Report prepared by Chaffe and Associates of New Orleans in March under a $49,999.99 contract to conduct a quickie financial assessment of the Office of Group Benefits so that Gov. Bobby Jindal could factor the information into his executive budget submitted on March 19.
Contents of that report, however, were not included in the executive budget, leading many to believe the report did not provide data that the administration wanted to hear. Refusal by Commissioner of Administration Paul Rainwater to release the report to legislators after first promising he would do so also fueled speculation that the administration was not satisfied with the report’s recommendations.
But even before that, the administration which touts itself at every opportunity as the “most transparent” and “most ethical, most accountable” administration in Louisiana history, has shrouded its contractual and financial machinations in a cloak of secrecy.
In 2009, DHH entered into a contract with ACS State Healthcare, a subsidiary of Xerox. That contract was to have run from July 1, 2009 through Dec. 31, 2009. It called for ACS to provide information and eligibility screening to individuals seeking services through the DHH Office of Aging and Adult Services (OAAS). The contract also called for ACS to provide assessment and care planning to individuals seeking and receiving long term care and personal care services, and to operate a telephone hotline for the office.
A copy of the contract is contained on the DHH web page but the amount of the contract and monthly payment terms are redacted, or blacked out. No reason was provided for censoring the contract amount in the document. There certainly no legal basis for the action.
An online search turned up the same contract information in another document, however, and while the contract number (679532) was the same on each document, the dates of the contract were not.
What began as a six-month contract turned into two years (July 1, 2009 through June 30, 2011) and the contract amount is $20 million. It has since been renewed at a higher contract amount.
ACS is one of four firms that submitted proposals for the most recent (but anonymous) DHH contract, expected to go for something in the neighborhood of at least $34 million. That’s what it now costs the state to operate its Medicaid Management Information System. It’s one of the nicest neighborhoods in the state, contractually speaking.
Other firms submitting proposals were HP Enterprise Services, Molina Medicaid Solutions, and CNSI.
DHH Secretary Bruce Greenstein served as vice president of Health Care for CNSI from June 2005 to September 2006, leading some to believe that CNSI will be named as the contractor. Greenstein said he took himself out of the selection process because of his past connection to the company.
LouisianaVoice, however, isn’t buying into conventional wisdom. To choose CNSI would simply be too obvious. We’re going with ACS—for eight reasons. That’s eight as in six contracts totaling $148.3 million and two contributions of $5,000 each to Jindal from ACS.
Besides that $20 million contract already alluded to, there is another contract with OAAS (July 1, 2011through June 30, 2014), which is simply a renewal of the present contract, for $26.6 million.
Other contracts include:
• $74.5 million with the Division of Administration (DOA), Office of Community Development that runs from Mar. 27, 2009 through Mar. 26, 2012 to assist hurricane damaged parishes recover rental units;
• $14 million with the Department of Children and Family Services from July 1, 2010 through June 30, 2016 to prepare ad-hoc reports;
• $7.2 million to provide management services to several DHH programs, including Community CARE, KidMed, and long term personal care;
• $6 million with the Office for Coastal Restoration for environmental science consulting services.
The latter two contracts each ran from July 1, 2009 through June 30, 2010.
The decision by DHH to withhold the identity of the contractor who, in all probability, will be handling claims processing and information systems for the state’s $6.6 billion Medicaid health insurance program for the indigent, remains unclear.
Former DHH Secretary David Hood said the decision sounded like an administrative one to him. “I’m not aware of any provision in the law that prevents release of a name,” he said.
Likewise, Sen. Willie Mount, chairperson of the Senate Health Committee, calling the DHH interpretation “weird,” said the law cited by DHH attorneys does not indicate to her that the selection, once made, cannot be announced. “If you have already made the decision, why can’t you disclose it?” she asked.
She and Hood agreed that springing the name of the successful bidder on legislators at a public hearing would give committees no time for vetting the selection.
When F.A. Richard was chosen as the successful bidder to take over the state’s Office of Risk Management (ORM) in March 2010, not only was the announcement made before legislative approval, the announcement was actually made before (ORM) employees were told.
The refusal to divulge the identity of the contractor, the contents of the Chaffe report, and the amount of the ACS $20 million contract with DHH are consistent with the refusals by the Louisiana Office of Economic Development and DOA to provide information required by state statute to the Legislative Auditor.
If nothing else during his first term of office, the Jindal administration has shown beyond any doubt that it is unwavering in its resolve to flaunt its peculiar brand of transparency.
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