BATON ROUGE—Follow closely because this gets complicated.
Retired state employees haven’t gotten through to Gov. Bobby Jindal.
Retired teachers likewise failed in efforts to get his attention.
Not even state district judges by adopting a unanimous resolution have managed to convince Jindal that the sale of the Office of Group Benefits is a bad idea.
It is easily the most universally opposed proposal by Jindal since he took office but yet he plunges ahead, apparently oblivious to the will of the electorate. On Friday, the day of the week any savvy politician takes controversial action because of the lack of media coverage, he quietly approved Morgan Keegan & Co. of Memphis to determine “the proper administrative structure” of OGB.
Morgan Keegan was the low bidder of the three firms submitting proposals to conduct the financial analysis of the agency with a bid of $900,000, far below the $6 million the state was prepared to pay Goldman Sachs on the basis of an earlier request for proposals (RFP).
Goldman Sachs was brought in last October to help draft the initial RFP and subsequently was the only bidder at a reported cost of $6 million. Negotiations broke down over demands by Goldman Sachs that the state indemnify the Wall Street banking firm from any potential litigation.
Goldman Sachs submitted a bid of $3.5 million on the latest RFP and Barclays Capital had a bid of $5.5 million.
Commissioner of Administration Paul Rainwater said no changes will take place before Jan. 1, 2013, but that Morgan Keegan will include contract offers from health providers in the final evaluation.
But wait. Reuters News Service is reporting that Regions Financial Corp. may sell Morgan Keegan after agreeing to pay $210 million to settle allegations that its Morgan Keegan brokerage fraudulently marketed mutual funds filled with subprime mortgages and artificially inflated the funds’ prices.
What’s more, Regions has hired Goldman Sachs to explore “strategic alternatives” for Morgan Keegan, sending signals that Regions may be trying to unload Morgan Keegan.
So, what we have is this incredibly incestuous tangle whereby the Jindal administration has hired Morgan Keegan to explore the possible sale of OGB even as Regions has retained Goldman Sachs to explore the possible sale of Morgan Keegan even though Goldman Sachs less than a year ago was fined $587 million over claims that the bank misled investors in collateralized debt obligations linked to subprime mortgages.
What the hell is this administration thinking?
Well, it just stands to reason. After all, the only real job that Jindal has ever held in his 40 years is a brief stint with McKinsey & Company of Washington, D.C.
McKinsey & Company’s crowning resumé-padding achievement was its work as a consultant for Allstate Insurance. The consulting firm trained Allstate in how to minimize its losses after Hurricane Katrina by denying policyholders’ claims and to treat its policyholders with “boxing gloves” rather than its trademark “good hands.”
That should shed some light on what this administration is all about.
The latest development is another in a growing pattern that defines the Jindal administration: privatize state services in favor of private businesses, some of whom have become generous contributors to Jindal’s political campaign, as well as to key legislators and the Republican Party.
Corrections Corp. of America (CCA), for example, has contributed $13,000 to Jindal, $1,000 to House Appropriations Committee Chairman Jim Fannin (D-Jonesboro), $1,000 to Rep. Gerald Long of (R-Winnfield), and $6,000 to the Republican Party of Louisiana.
Jindal may have dropped his efforts to sell off state prisons, but he isn’t likely to ignore CCA’s generosity. You can expect him to renew those efforts nest year once he is re-elected in October.
He privatized the Office of Risk Management (ORM) a year ago but rather than sell that agency, the state actually paid F.A. Richard & Associates (FARA) $68 million to take over ORM. FARA then came back earlier this year and got approval on a $7 million amendment to that contract, bringing the state’s cost to $75 million. A week later, FARA announced it had been purchased by an Ohio firm.
One condition of the ORM takeover was that FARA was required to take ORM’s employees for a minimum of one year. Two ORM employees who went over to FARA were terminated long before that one-year moratorium and a third, the only Baton Rouge employee of the Ohio firm, was also terminated shortly after the sale.
That’s what state employees have to look forward to when their agencies are sold out from under them. The only way a private entity can justify taking over a state agency is to set fees high enough to realize a profit. State agencies do not pay taxes, something a private firm will have to do, nor are they required to turn a profit.
So how will a private firm turn a profit with a takeover of OGB? Two ways: increased premiums and massive layoffs. Rainwater has already said 149 OGB employees will be terminated.
In the ‘50s, ‘60s, and ‘70s, management would not dare trifle with employees’ lives they way they do in such a cavalier manner today. Men like Victor Bussie, Gordon Flory, and John “Red” Bourg and the AFL-CIO simply would not have allowed it.
Those were men of honor who knew what it meant to struggle or to fight for what was right. The so-called leadership ensconced on the fourth floor of the State Capitol has never had to labor for anything. The Gang of Jindal has never faced the prospect of unemployment, or having to make a mortgage payment, a car payment, or tuition payment with no income. They’ve never had to feed a family when there was no job.
With the present administration, there is no honor—and that’s about the worst thing that can be said of anyone. The slight cuts even deeper when it’s true.
What’s worse is state employees have brought it upon themselves; they let it happen, even encouraged it. They have become fat and lazy (read: comfortable and complacent), willing to sit back and allow the administration to chip away one brick at a time (ORM, OGB, state prisons), thinking it won’t happen to them.
But let’s turn the clock back just a year to 2010.
Remember those five bills introduced by Rep. John M. Schroder (R-Abita Springs)? Probably not, because people by their nature, have short memories. But they represented still another brick being chipped away by the administration. Here they are, just in case you need a reminder going into the October elections:
HB-752 called for a constitutional amendment to grant the legislature sole authority to provide for pay increases for persons in state civil service. Remember that one?
What about HB-755? That one called for a constitutional amendment that would have required the legislature to determine prior to each fiscal year if a pay increase may be granted to persons in state civil service and if so, the manner and amount of the increase. Can you say “Political Patronage?”
HB-757 would have required that reports regarding state civil service employees be submitted to the legislature instead of the Department of Civil Service. Can you say “Big Brother?”
Then there was HB-754, which would have prohibited pay increases to state civil service employees when there is a budget deficit.
Like this year? When there was a projected deficit of $1.6 billion? When the legislature nevertheless managed to pass a balanced budget? We’ll just call it the smoke and mirrors deficit.
That would mean that in any given year, the administration could “project” a deficit, and just as was the case for the past two years, there would be no pay raise for state civil service workers.
Finally, there was HB-753 which would call for a constitutional amendment to abolish the State Civil Service Commission altogether, as well as the Department of State Civil Service, effective Jan. 9, 2012.
If you think for one minute that Schroder was acting on his own with these half-baked proposals, think again. Never doubt that he got his marching orders from Jindal. And Jindal gets his orders from the National Republican Party. All you have to do is look around and see what other red states are doing to employee and teachers unions.
And even though neither of the bills passed, if you think the issue is dead, you tend toward self-deception or naiveté. If Jindal wins re-election and carries a Republican majority back into the legislature, you can bet some, if not all of these bills will back on the table next spring.
It’s all part of Jindal’s “do more with less” mantra.
Layoffs mean more responsibility for state workers. Of course, the governor’s office is exempt from being called upon to make painful sacrifices.
No pay raises for two years, coupled with increases in the prices of fuel, food, housing, clothing, college tuition, medical care, electricity, and other essentials, certainly translates to less in terms of net pay and job security.
Jindal’s policies are not unique by any means. They’re all part of a national Republican plan explained in minute detail in Naomi Klein’s eye-opening book The Shock Doctrine. But that’s another story for another day.
Perhaps state employees are finally beginning to awaken from their slumber and to say, in the immortal words of Peter Finch in the movie Network, “I’m mad as hell and I’m not going to take it anymore.” The American Federation of State, County, and Municipal Employees (AFSCME) recently paid a visit to OGB to recruit members. Several employees reportedly signed up with the union, affiliated with the AFL-CIO.
State law does not prohibit civil service employees from unionizing, though it does prohibit strikes.
Nor does state law allow civil service employees to participate in partisan politics or to participate in political action committees. But Louisiana Attorney General Opinions have ruled that it is permissible for civil service employees to participate in Committees on Political Education (COPE).
There is no prohibition against the formation of a Positive Action Coalition, Professional Assistance Cooperative, or some other organization with the PAC acronym.
Such a PAC would keep state employees abreast of developments affecting them in both the administration and the legislature. There would be no political endorsements, just ongoing educational bulletins and updates. There would be no membership dues, just voluntary contributions.
But there would be quite a few frustrated, concerned politicians who would think twice before trying to steamroll policies adverse to the welfare of state employees.
And that could only be a good thing.