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Archive for February, 2012

Morgan Keegan report on OGB’s fate is at DOA but don’t expect its release; it’s ‘part of the deliberative process’

Posted in Governor's Office, Layoffs, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Transparency on February 8, 2012| 1 Comment »

The long-awaited report by Morgan Keegan on the proposed fate of the Louisiana Office of Group Benefits (OGB) has been turned over to the Division of Administration, LouisianaVoice has learned.

LouisianaVoice has made a formal request under the Louisiana Public Records Laws for a copy of the Morgan Keegan report. That request was directed on Wednesday to Commissioner of Administration Paul Rainwater.

But don’t expect the report to be released willingly. Rainwater, in all probablity will fall back on the erroneous claim that, like the notorious Chaffe & Associates report of last year, it is exempt from the public records law “as part of the deliberative process.” Even that claim was made only after Rainwater’s first attempting to deny the existence of the Chaffe report. To say this administration is willing to bend the rules in order to protect its backside is being charitable.

The Morgan Keegan report is said to have included several options, two of which included the outright sale of OGB or turning the administration of the preferred provider organization (PPO) over to a third party administrator (TPA)—a move that would be accompanied by a massive layoff of OGB employees who presently process claims by state employees, retirees and dependents.

An earlier report, and the number cited by Rainwater last spring in testimony before the Louisiana Legislature, said that 149 OGB employees would be laid off.

That number now sits at 177.

The word of the layoffs comes only days after word of Jindal’s hiring of several former legislators and relatives of former chief of staff Timmy Teepell to high-level positions in his administration.

It was earlier reported by LouisianaVoice that the executive budget to be delivered to the Joint Legislative Committee on the Budget on Thursday would include a line item to sell OGB outright for $189 million but the Jindal administration later backed off on that option and chose the third party administrator instead.

Jindal was reported to have been only lukewarm to either proposal because, in his words, the state would still be “in the insurance business.”

Sources close to the administration said that Jindal has added yet another option: to do nothing in case of another widespread protest as was experienced when the administration first floated the idea of privatization the agency that has accrued a $500 million surplus while administering health care claims for state employees, retirees and dependents.

Rainwater fired former OGB director Tommy Teague last April after Teague did not fall in line quickly enough over the proposal to sell the agency. Afterwards, a firestorm of protests erupted across the state from state employees and retirees that resulted in Rainwater’s vacillating between selling OGB or contracting with a TPA.

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Notable Quotables (in their own words)

Posted in Governor's Office, Jobs, Notable Quotables, Politicians, Transparency on February 8, 2012| Leave a Comment »

“The bottom line is the governor appoints people who support his agenda for moving the state forward, not the other way around.”

–Jindal spokesman Frank Collins, explaining why Gov. Bobby Jindal chooses political loyalty over qualifications in making political appointments.

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Cockroaches and politicians: you can’t get rid of either one; an up close examination of some recent political patronage

Posted in Governor's Office, House, Senate, Legislature, Legislators, Politicians, Transparency on February 8, 2012| 6 Comments »

The obvious similarity between a cockroach and a career politician is that you can never get rid of either one.

Take Noble Ellington, for example.

Or Jane Smith.

Or Ricky Hardy.

Or Henry “Tank” Powell.

Or M.J. “Mert” Smiley.

Or what seems like the entire Teepell family or anyone connected to Timmy Teepell.

If the supporters of Piyush Jindal don’t realize that he is every bit the political opportunist that any of his predecessors were, that his political morals are no better than any other Louisiana politician who ever got himself elected, then there is little to no hope for this state.

We’ll get back to the governor’s appointees but first let’s take a look at the $150,000 man with no qualifications and no experience.

Commissioner of Insurance Jim Donelon on Tuesday announced that Ellington, who spent 24 years in the state legislature, flip-flopping from state senator to state representative as term limits dictated, joined the department as its number-two man last week at a salary of $150,000 per year.

Ellington served on the Louisiana House Insurance Committee for the past four years, “but that is the extent of his insurance involvement to my knowledge,” said Donelon.

Let that soak in: “That is the extent of his insurance involvement.”

Let this soak in as well: $150,000 per year to serve as the second in command of the state’s sprawling Insurance Department.

For the thousands of state civil service who may find themselves having to work longer to qualify for retirement and who may have to take a five-year average earnings as the formula on which to base retirement income if Jindal’s retirement legislation package passes, let this soak in, too:

You can take comfort in the knowledge that Ellington will draw a much fatter state retirement now that he’s drawing $150 thou per year as opposed to his 24-year legislative salary because $150,000 as a base for the next four years will pretty much set him up for life.

It’s no coincidence that Ellington landed on his feet this way after opting not to seek re-election last fall. He is the national immediate past president of the American Legislative Exchange Council (ALEC) and he hosted ALEC’s national convention in New Orleans last August.

ALEC, you might remember, is the national organization funded largely by the Koch brothers as well as a host of national corporation that boasts of its membership about a third of state legislators from all 50 states that sets the agenda for state legislation from prison privatization to charter schools to suspension of state employee pay raises to privatization of state employee health insurance, group benefits, risk management, Medicaid, the abolishment of state civil service and/or state employee unions and anything else that can cost state employees their jobs.

Cockroaches.

Finally, you can let these pearls of wisdom from Donelon regarding Ellington’s hiring soak in: “I’m very pleased that Noble made himself available for more public service.”

Wait. What? What self-serving politician has ever not made himself available for more public service, especially at $150,000 per year?

Donelon went on to say, “He brings a wealth of experience from his service in the legislature. I especially appreciate his expertise in issues affecting rural parts of the state.”

Really?

Okay, first of all, Donelon admitted that Ellington had little to no experience in the insurance field other than having served on the House Insurance Committee and then he turns right around to say he brings “a wealth of experience” to the table. What a crock. And exactly what expertise in issues affecting rural areas is applicable to the State Insurance Department?

Well, to be fair to Donelon’s possible motive, on Oct. 11, 2011, Ellington contributed $1,000 to Donelon’s re-election campaign.

Not that Donelon is alone is doling out political patronage.

Let’s take a look at some of the recent appointments by Piyush, the man who would counsel us to “do more with less.”

• Former State Rep. Jane Smith of Bossier City, ineligible for re-election because of term-limits and defeated in her own effort to flip-flop to the Senate, nevertheless landed a $107,500 per year position as deputy secretary of the Department of Revenue. Her qualifications for such a sensitive position were never enumerated.

• Former Reps. Ricky Hardy of Lafayette, who lost his re-election bid last fall, Henry “Tank” Powell of Ponchatoula, and M.J. “Mert” Smiley of St. Amant, were all appointed to part time positions as members of the State Pardon Board at $36,000 each.

It was Smiley who last spring, during the hearing on a $6.8 million amendment to the $68 million contract with F.A. Richard & Associates, the company that took over the privatization of the Office of Risk Management (ORM), who uttered one of the most bizarre questions to come out of any legislative hearing.

Hearing of the problem of ORM’s retaining employees who were leaving the agency for other jobs in anticipation of the phased-in privatization of the agency, Smiley asked ORM Assistant Director Patti Gonzales, “Isn’t there some way you can force them to stay?”

No, Mr. Smiley, not since the Emancipation Proclamation of 1863.

Smiley, by the way, will serve for only a year. It seems that after leaving the legislature, he ran for Ascension Parish tax assessor and somehow got himself elected but won’t take office until January of 2013. In the meantime, he needed a job and of course his impeccable qualifications made him the natural choice. For one year.

Cockroaches.

Other recent Jindal appointees:

• Former St. Tammany Parish President Kevin Davis, term-limited, bless his heart, was named director of the Governor’s Office on Homeland Security and Emergency Preparedness (GOHSEP), a political patronage black hole;

• Former St. Bernard Parish President Craig Taffaro, who lost his re-election bid, had no need to worry because Jindal simply created a new position. He was appointed to lead the state’s hazard mitigation efforts in which capacity he will oversee programs that distribute money for elevating homes and making other improvements to residences and public infrastructure;

• Matt Parker, brother-in-law of Jindal’s former chief of staff and present political adviser Timmy Teepell, was hired as Jindal’s intergovernmental affairs director;

• Taylor Teepell, Timmy Teepell’s brother, was named as Jindal’s deputy legislative affairs director. Before that, he was director of the state Republican Party’s Victory Fund;

• Melissa Henderson Mann, Timmy Teepell’s former executive assistant, was named as the new legislative liaison for the Department of Transportation and Development.

Frank Collins, Jindal’s spokesman (paid in the capacity of some suitable title, we’re certain), assured all that the hiring and appointment decisions were made strictly on the basis of merit. Each and every one, he said, had the qualifications and experience needed for their new positions.

To borrow a phrase from an old friend, please Mr. Collins. Don’t urinate on our heads and try to tell us it’s raining.

Cockroaches.

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Notable Quotables (in their own words)

Posted in Civil Service, Health Care, Notable Quotables, Transparency on February 7, 2012| 2 Comments »

“I don’t think you have come close to showing there’s either a cost saving or efficiency. Until that can be done, I think we have to reject.”

–Civil Service Commissioner Scott Hughes of Shreveport, to Carol Steckel, chief of the Department of Health and Hospital’s Center for Health Care innovation and Technology, on her presentation calling for a plan to contract out DHH’s information technology services, a plan that would result in the loss of jobs by state employees currently performing those functions.

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OGB privatization in Jindal’s budget will mean massive layoffs but it’s really important that he pleases ALEC

Posted in Budget, Governor's Office, Layoffs, OGB, Office of Group Benefits, Teague, Transparency on February 7, 2012| 4 Comments »

The Jindal administration has made last-minute changes in the executive budget to be submitted to the Joint Legislative Committee on the Budget on Thursday that could, if passed, result in “massive layoffs” in the Office of Group Benefits (OGB), LouisianaVoice has learned.

Under the revised budget, OGB will not be sold outright as originally advanced in an earlier version of the budget but instead OGB’s Preferred Provider Organization (PPO) will be taken over by a third party administrator (TPA) to be run in the same manner as the state’s HMO plan that is currently administered by Blue Cross/Blue Shield of Louisiana.

The original executive budget included a provision for the outright sale of OGB. Had that remained on the table and a buyer found, Morgan Keegan financial advisors of Memphis, Tennessee, stood to reap a $750,000 bonus for finding a buyer for OGB.

It was not immediately clear if the bonus for the legally-troubled firm—Morgan Keegan was fined $210 million by the Securities and Exchange Commission nearly two years ago for misrepresenting critical information to investors—would still be an option.

What is clear, however, is that there would be massive layoffs of OGB employees who currently run the state’s self-insured PPO which presently has a surplus of some $500 million.

Commissioner of Administration Paul Rainwater testified to the legislature last year that it was necessary to reduce the work force at OGB by 149 persons. Ostensibly, those would be the employees who now handle claims for state employees, retirees and their dependents.

The good news is there will be no premium increase to state employees and retirees in Fy-2013.

While the plan to sell OGB has been altered, the contracting of a TPA will nevertheless be tantamount to privatization of an agency that is generally well-received by state employees. The agency has established a record of rapid turnarounds on claims and under former administrator Tommy Teague, amassed the $500 million surplus.

Teague was fired by when he didn’t fall into line quickly enough to suit Rainwater over last spring’s efforts to privatize the agency. In his testimony, Rainwater flip-flopped several times as to whether the governor’s intent was to sell OGB or contract with a TPA. He used both terms almost interchangeably during questioning by legislators.

OGB is only one of several state operations Jindal is attempting to privatize. He succeeded with the Office of Risk Management (ORM), but only partially. The state paid F.A. Richard & Associates (FARA) $68 million in 2010 to take over ORM only to have FARA return eight months later for a contract amendment of $6.8 million, bring the total price to nearly $75 million. A scant two weeks later, FARA was sold to an Ohio company and last fall, that company was in turn sold to a firm out of New York. Neither transfer of ORM to the second or third firm was given advance written approval as was required of the state’s contract with FARA.

Jindal’s efforts to sell two state prisons were thwarted last year but it is expected that those efforts will be renewed.

The governor also is moving ahead full-throttle with his efforts to create for-profit charter schools to replace so-called failing public schools. There are some non-profit charter schools scattered throughout the state but the emphasis has been on for-profit schools as well as vouchers to enable children to move from failing schools to charter schools.

Jindal recently fired a shot across the bow of public school teachers when he unveiled his ambitious education program not before teachers but at the annual meeting of the Louisiana Association of Business and Industry, a virtual slap in the teachers’ faces by the proponent of virtual schools.

Jindal elevated—or lowered, if you prefer—the debate be suggesting that the executive director of the Louisiana Association of Educators should resign for his remark that poor, uneducated families might not have the wherewithal or the expertise needed to navigate the bureaucracy to transfer their children to better schools under Jindal’s proposed voucher system.

The governor, not content with simply promoting his program, suggested that teachers are given pay raises for the simple act of breathing and that they could only be fired for selling drugs in the workplace (schools).

Parts of the state’s Medicaid program have also been privatized by Jindal but his efforts to contract out the Department of Health and Hospital’s information technology services met stiff resistance from the state Civil Service Commission last week.

That confrontation, won for the moment by the Civil Service Commission, could serve as the impetus for Jindal to renew his unsuccessful 2010 efforts to abolish civil service and the Civil Service Commission.

State Rep. John Schroder (R-Abita Springs) introduced a handful of bills that year dealing with merit pay raises for state classified workers, and civil service in general, none of which were passed.

All of Jindal’s privatization proposals appear to be ripped directly from the pages of the playbook of the American Legislative Exchange Council (ALEC).

That playbook, an actual internet web page, includes a section entitled “Tools to Control Costs and Improve Government Efficiency. Among the “tools” it recommended were:

• Adopt a state hiring freeze;

• Reform state pensions;

• Delay automatic pay increases (we wondered where legislators came up with the term “automatic” in freezing merit increases a couple of years back;

• Embrace the expanded use of privatization and competitive contracting;

• Restructure state retiree health care plans.

Jindal only recently unveiled his plan for restructuring the state retirement system, a plan that includes tighter retirement qualifications, increased employee contributions, a revised formula for calculating benefits, defined contributions as opposed to the present defined benefits plan (similar to 401K plans found in the private sector, and a proposed lump-sum payout upon retirement.

The one issue that has remained unaddressed in the retirement discussion is if the state does go to a defined contribution plan such as those found in 401K plans, will the state then be required to pay the usual employer share to Social Security?

Some state employees currently do not pay into Social Security and thus are not qualified for Social Security benefits or Medicare upon retirement unless they worked in the private sector prior to their state employment.

If Jindal should revamp state retirement, it could mean that the state could be required to pay the customary employer percentage into those programs which could mean any savings achieved by privatization could be negated.

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