At the risk of sounding a bit smug, regular readers may remember that we had serious misgivings about that $194 million CNSI contract with the Department of Health and Hospitals (DHH) from the outset.
And so, it turns out, does the FBI.
And Gov. Bobby Jindal, much like another governor of some 2,000 years ago, thinks by washing his hands, he can absolve himself of any blame in the entire matter.
Let’s review.
In early June of 2011, DHH Secretary-designate Bruce Greenstein appeared before the Senate Governmental Affairs Committee for his confirmation hearing and things quickly went south as Greenstein and Undersecretary Jerry Phillips became involved in the old irresistible force-immovable object standoff over the identity of the winning contractor to replace a 23-year-old computer system that adjudicated health care claims and case providers.
The contract is scheduled to go into effect in 2014 but that could change now.
Greenstein and Phillips contended that because of a state statute which required the official awarding of the contract by the House and Senate Health and Welfare Committees, they were prohibited from divulging the name of the winning contractor.
Then-Sen. Rob Marionneaux (D-Livonia), who has since retired from the legislature because of term limits, told Greenstein, “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?”
Greenstein and Phillips contended that because of a state statute which required the official awarding of the contract by the House and Senate Health and Welfare Committees, they were prohibited from divulging the name of the winning contractor.
Marionneaux argued that the statute “does not say you shall not divulge, just that 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 again attempted to invoke the statute but Marionneaux interrupted him. “Are you telling me right now, today, that you’re refusing to tell this committee who’s going to receive that contract?”
“We believe that the law states that we should call on the (joint) committee and then make the announcement to that committee,” Greenstein said.
“I read the statute,” Marionneaux said. “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,” Greenstein said.
“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.”
“I just don’t understand why this administration does this,” said Sen. Ed Murray (D-New Orleans). “You are, I suppose, just following directions.”
Sen. Jody Amedee (R-Gonzales) then laid the issue at the feet of 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.
Committee Vice-Chair Karen Carter Peterson said, “You don’t want me to know, but you know. Is this what we call transparency?”
Phillips tried to intervene, saying that once the contractor’s name is made public, “it’s the equivalent of an announcement.”
“Do you make the law?” Peterson asked.
“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).”
Greenstein eventual acquiesced and admitted that his former employer, CNSI, was the winner but he insisted that he had built a “firewall” between himself and the selection process and that he had no contact with anyone from CNSI during the selection.
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 subsequently learned, despite Greenstein’s assurances to the contrary, that Greenstein indeed did have some contact with his old employer and in fact, implemented changes in the request for bids that allowed CNSI to submit a proposal—a proposal that actually ranked third among four bidders on the technical merits of its proposal but which won the contract based on the lowest price.
The low bid prompted howls of protests from CNSI competitors who accused the Maryland firm of low-balling its bid in order to win the contract. There was no way the company could perform terms of the contract for the amount it bid, they said.
CNSI bid $184.9 million on the 10-year contract. ACS was second with a $238 million bid and Hewlett Packard ES came in at $394 million. A fourth bidder, Molina Medicaid Solutions did not score high enough on the technical front to warrant consideration.
It turns out that the claims that CNSI low-balled its bid may have had merit. Earlier this month, state officials held up a proposed $40 million change to the contract, which had already increased to $194 million. And now we learn that the FBI has launched an investigation into the manner in which the contract was awarded
But on Thursday, only hours after word that the FBI had served a four-page subpoena on DOA was made public, word came down from the fourth floor of the State Capitol that the CNSI contract was being cancelled.
Actually, the administration has known of this probe into the proposal and the CNSI contract for some time now. The subpoena was served on DOA and signed for by DOA counsel Lesia Batiste Warren on Jan. 7.
That means that our open, transparent and accountable administration has known of this probe for nearly three months and chose to say nothing until March 21 and then only after word leaked out about the investigation.
The subpoena called upon DOA to produce:
• All documents submitted by ACS State Healthcare, Client Network Services, HP Enterprise Services, and Molina Medicaid Solutions;
• All financial information (including but not limited to financial statements, income statements, balance sheets, and statements of profit and loss) submitted by ACS, Client Network Services, HP Enterprise Services and Molina, and
• Documents sufficient to show the date and time at which each response to the proposal was received by the state.
Perhaps Jindal, remembering stories about Earl Long shouting to Leander Perez at the height of legislative debate over desegregation, “Whatcha gonna do now, Leander? The feds have the A-bomb,” realized that he would not be able to invoke his beloved deliberative process exception with the FBI and so decided on Plan B: cancel the contract.
“Based on consultation with the Attorney General’s office, today I am terminating the state’s contract with CNSI, effective immediately, announced Commissioner of Administration Kristy Nichols. “The state will work with the current contractor, Molina Medicaid Solutions, to provide services during this transition and until a new RFP (request for proposal), overseen by the Division of Administration, is completed,” she said.
“We have zero tolerance for wrongdoing, and we will continue to cooperate fully with any investigation,” she added.
Yeah, that ought to do it. Cancel the contract and everything will be okay.
The only course of action to decide on now is who to throw under the bus—Greenstein or Phillips
But it might be wise to heed the advice of one sage political observer who says to ignore what the administration says and play closer attention to what was not said.
The fact that the contract was cancelled so quickly tells us two things:
• The administration knew this was coming because you can’t simply cancel a contract of this magnitude on the spur of the moment;
• The administration is scared.
“I don’t think this is over,” our unpaid consultant said.
Louisiana Voice 
It is called sole source. Can’t live without CNSI. The bid request will be cancelled and re-written to include all those dubious points of clarity that only CNSI can supply, produce, improve cost analysis, with expediency, as the paperwork will reflect by numerous counsel’s conclusions in the present administration’s supported written opinion.
Good! On both counts!!
Will Cnsi get into trouble because of this?
oh yea…. they are running as we speak
Oh and I think it’s Greenstein that’s going under the bus.
& Governor Bobby, the South Park bus driver…with Leche, it was trucks, right?
Greenstein may know where too many bodies are buried to be thrown under the “Jindal Bus”. This could get real interesting. Even though the contract was cancelled, it appears, to this layman, that conspiracy was involved.
Let’s hope and pray that the FBI investigates all of the things that he is shoving down the throats of Louisiana citizens—especially his awarding the Group Benefits administration to Blue Cross Blue Shield and his attempts to abolish the retirement System of state employees and especially his shenanigans with the education system of our state. LEGISLATORS TAKE NOTE OF THIS LATEST POST OF GRAFT, LIES AND POLITICS PLEASE.
Jail time?
AND DON’T FORGET, LEGISLATORS, TO KILL HIS PLANS TO REVISE THE LOUISIANA INCOME TAX STRUCTURE. IT WILL DEVASTATE RETIRED STATE EMPLOYEES AS WELL AS SMALL BUSINESSES IN THIS GREAT STATE
Kristy prefaces every sentence with, “the reality is…”
So, Kristy, just what is the reality of the current snafu??
Like BG, Kristy Nichols not long for this administration, either. Multiple incidents of not being prepared or saying the wrong thing. (Or speaking without thinking it thru first.)
IF ONLY other legislators had gone along with my calling for a secial session; instead we had to wait and now the governor is going to be able to blame the legislature as well. dee
What do you think is a likely outcome from the investigation other than BJ terminating someone to deflect blame? WHO could be charged? Want to take bets that insiders start to “turn”? This might be the start of another juicy chapter in Louisiana’s tradition of corruption. Oakdale better get a cell ready.
I wonder, were the Q&A’s during the confirmation session a dog and pony show, or (as usual) were the smart and insightful legislators outvoted by all of the other legislators that were either dimwitted, disinterested (when’s that lobbyist-funded lunch starting, anyway?!?) or somehow just hopelessly devoted to anything Jindal? Do some of these legislators just NOT want to be re-elected by backing Jindal on everything?
And would the karmic retribution be too sweet to materialize, that Jindal should occupy a cell in a prison system that he had once sought to outsource to one of his campaign contributors? I don’t know exactly which prison systems he was trying to outsource (to Whackenhut’s parent company), or whether a conviction for this particular investigation would require that he end up in a federal prison specifically, but the overall image of it is rather delicious. Especially when you consider how hard and how long so many entities went after EWE (regardless of whether you like him or not), and what he was convicted of in the end. I am honestly continually shocked at the steamroller effect that this administration has (stop us if you can), and how few people stand up for what is right or legal, let alone to keep him from being a complete Nero for our State (lyre optional).
Eloquently and aptly stated!! I hold similar view re: EWE…what’s a little riverboat gambling deal (if indeed we believe that truly went down as Feds case was laid out) in comparison to the shambles BJ has made of government, state institutions and people’s lives.
So then they confirmed him?
Yep. Go figure.
david.lubrano.1@facebook.com on March 22, 2013 at 7:00 am
Sure is going to be interesting to see if Jindal’s privatizing our State hospitials is going to be looked into. Was there a bid process there or did Jindal make this call on his own? If this were to come under investigation who would Jindal have to sacrifice?
I worked with Jerry Phillips for a long time and I would be very very surprised if he was involved in any improper dealings..also the statute dealing with the awarding of the fiscal intermediary contract is indeed ambiguous…If Greenstein interfered with the rfp review process that is a definite no no..this could go on a while..thank goodness I was out of there before this b.s.
According to a 2007 Jindal campaign brochure …
“When citizens, good government groups and the media asked legislators for specifics on projects they inserted into the bloated budget, the politicians refused to release the details claiming it was not public record. This is outrageous”
I remember Rep Karen Peterson practically begging the legislature to not confirm Greenstein because of the air of wrong-doing that was evident at the time and, yet, she was overruled. I hope she feels vindicated and it is just sad that all of this could have been avoided.
Yes, she was never one to shirk her legislative responsibilities…an astute, independent thinker and true rep of the people!
For your viewing pleasure:
http://senate.la.gov/Video/2011/June/060811S&GP2.asx
DHH Starts at 11:24. Contract first mentioned at 17:00.
Make you a bowl of popcorn and behold the true nature of Jindal and his trolls.
Reblogged this on The Daily Kingfish and commented:
BUT WHO IS DRIVING THE BUS!
let’s not forget… the runner up bidder was ACS, who now has a former employee working at the DOA as head of procurement… this is getting really interesting…
I knew long time ago that Greinstien had worked for CNSI; but I always thought he would get away with it and CNSI would have the contract. because I thought if I knew then everyone had to know and that’s just how politics work, crap happens that way! Even though Molina has had the contract for 24 years. And it just seemed fishy when they lost it. But now its up for bid again and I am just ready to see who gets the contract again. and to see things turned right again!
Until politicians are taken out of the process this is what you will get. Remove appointed positions from the govenor!
Is piyush the anti-christ when he arrived at dhh his rental/lease vehicle had a 666 license plate ( I kid you not) of course he changed it I guess after he noticed and figured some redneck would use it against him in his relentless rise to power…are you folks in all those churchs in North La. who will be crucified by the new sales tax proposal listening?
[…] On June 22, 2011, the Senate and Governmental Affairs Committee voted 5-2 to confirm the appointment of Greenstein as DHH secretary despite the confrontation between Greenstein and committee members over committee demands for Greenstein to name the winner of the $185 million contract to replace the state’s 23-year-old computer system that adjudicated health care claims and case providers. https://louisianavoice.com/2013/03/21/fbi-investigation-prompts-jindal-to-cancel-controversial-cnsi-c… […]
I understand CNSI in Washington was sued and is having problems on the Maryland Medicaid project.
The FBI should also investigate CNSI’s misconduct in Michigan, including the (publicly available) lawsuit by Southeast Michigan Health Information Exchange (SEMHIE) against CNSI and Sharif Hussein, who is just like Greenstein – inside trader – CNSI is corrupt through and through. They steal intellectual property on their contracts then re-sell it for huge margins. The FBI should shut these crooks down.
I’m sorry people but CNSI is not the only corrupt party in this deal.
We Immsad to say have voted in to office a crook in his own right.
Unless Jindalnhas some serious connections I think he will be under the bus with Mr. Greenstein also..
Was it not Mr. Greenstein who put together all of the DHH privatizing our hospitals together? I would say the FBI might just take a peak or 2 into those nice cozy deals.
All of the state health care workers that were offered jobs and accepted , had to choose between to places to go for health care with the plan offered them. One was Childrens hospital and the other the LSUMC . There may have been offered other plans I’m not sure , but to me this seems mighty strange.
Immwaittingbfor the hammer to drop . It may very well take a while but when the hammer hits it will hit hard, very hard.
[…] you may recall was seated next to Greenstein back in June of 2011 when the Senate and Governmental Affairs Committee was considering the confirmation of Greenstein as Jindal’s choice for DHH […]