Sometimes it’s just mind-boggling to try and fathom what goes through the minds of our political leaders.
The only possible explanation may be found in the 1969 book The Peter Principle by Dr. Laurence J. Peter and Raymond Hull. In their book, they introduced the “salutary science of hierarchiology” which theorized that in a hierarchy, employees tend to rise to their level of incompetence.
Take, for example, that news release from the Department of Health and Hospitals (DHH) just last Aug. 13. DHH trumpeted the recovery of more than $124 million in fraudulent payments in the Medicaid program, “the highest rate of recovery in any state in the nation at nearly 2 percent of all Medicaid dollars spent in Louisiana.
One must wonder just where the oversight was at the time that should have caught and prevented such overpayments.
Yet, only two months prior to that announcement, a red-faced DHH learned that one of its own had embezzled more than $1 million to finance her gambling addiction.
In that case, DHH accountant Deborah Loper was accused of diverting funds over a six-year period in a scheme that revealed glaring weaknesses in departmental policy.
Her arrest warrant said she intercepted more than 130 checks payable to DHH “meant for invaluable health care services for Louisiana’s Medicaid recipients,” Attorney General Buddy Caldwell said.
She had been entrusted to manage a bank account opened in 2006 on behalf of the National Association of State Human Services Financial Officers in order to underwrite the association’s 2009 conference.
Former DHH fiscal director Stan Mead volunteered to hold the conference and designated Loper and her immediate supervisor to organize the event. Loper was given responsibility for management of the account and had the authority to conduct financial transactions, the warrant said.
She was instructed to close the account following the conference but instead, fabricated documents so as to give the appearance she had complied but instead, merely changed the address on the account so that she could receive the monthly statements at her home.
The main source of the money was Medicaid reimbursements that were issued to DHH by licensed Medicaid providers and were intended to be returned to the state’s Medicaid program, Caldwell said.
Her embezzlement went unnoticed by her superiors until February of 2013 when she inadvertently deposited one of the checks for more than $40,000 into her own account and her bank subsequently froze her account.
Only three months before the revelation of that financial oversight by DHH officials, we learned of an ongoing FBI investigation into that infamous $300 million contract with CNSI which quickly resulted in cancellation of the contract by the Jindal administration and the resignation of DHH Secretary Bruce Greenstein.
Then in February of this year, Greenstein’s undersecretary Jerry Phillips announced his retirement after 25 years at DHH. Oddly, he announced he was retiring to “pursue other employment options with the state.”
DHH Secretary Kathy Kliebert said Jeff Reynolds would replace Phillips on March 10, the same day the legislative session convenes.
Reynolds started with DHH as an Accountant Administrator 5 in July of 2006 at $102,000 per year. Most recently, he served as Medicaid Deputy Director at $113,734 per year.
And the person who served as Loper’s immediate supervisor while she was skimming that $1 million from DHH?
Jeff Reynolds.
Louisiana Voice 
Wow! Thanks Tom! A lot of our administrators are clueless….. all they can say is…. Yes Governor Jindal!
Tom it was almost one year ago today, March 1, 2013 when you exposed DHH for going 2 years without auditors. Once there were six and then down to one. The statement by then head of DHH, Greenstein commented on how outraged he was that one of their own would steal money from the state. More importantly is that legislators knew DHH handled millions of state dollars and thought it wise to leave the bank vault open. One can only wonder if Loper was the only one who stole so freely knowing she could. Question, Where is she now? Did Caldwell pursue this case and is she serving the 115 years of imprisonment as reported by one source during the investigation?
Was a full audit done after her lawyer phoned DHH about the one million dollars that was missing when up till that moment it was unknown to Greenstein? Thanks for the reminder of fraud and abuse by our current and past administration government employees at the top of Jindal’s food chain.
Jerry Phillips has put off CMS on answering questions about the funding mechanism concerning the Charity Hospital Privatization Scheme for the past year and NOW JEFF IS LEFT IN CHARGE! The Jindal Administration has already spent hundreds of millions of Federal Dollars with the assumption the Feds (CMS) will approve the “legitimacy” of state matching dollars Louisiana has put up. Until the questions are answered and we get a response back from CMS, we are in essence borrowing this money from the Feds. Since Jerry Phillips is apparently unable to understand what the words in the questions mean, why should we believe Jeff will do any better. So in addition to blocking Legislative committees from asking questions about Greensteingate, the “timely” resignation of Jerry Phillips will also stymie the Legislators from finding out why the Jindal Administration refuses to answer the CMS questions. My prediction is that a few months from now, Jeff Reynolds will sign a contract with Tony Alvarez ll and Bryan Marsal for another few million dollars. Their firm will then hire Jerry Phillips who will finally respond to CMS, and just as Jindal is leaving office, we will learn WE are responsible for repaying the Feds half a billion dollars in Medicaid Matching Funds!
Wow! If I didn’t know this to be true, I would think I was reading a fictional story! DHH is a mess! I worked in IT when they first attempted to privatize DHH IT. We had one of the most productive IT departments. Most of us had been handling and doing our jobs for years, and loved it! DHH HAD ONE OF THE BEST VIDEO SYSTEM IN STATE GOVERMENT! Not any more. It was mainly put together by DHH IT Techs, along with product company technicians. It’s now non-functional, and millions of dollars worth equipment sits unused. Man, the stories I could tell you that I’m hearing would blow your mind! Let’s just say, DHH now has a dysfunctional IT department. This was done under the brilliant Mr. Greenstein. What a waste of tax payers money! I’m now retired cause of that mess. Thank God! I had enough time in to receive my full retirement! Tom, I wish you would revisit this situation and report what’s really going on. There’s still a lot that needs to be told. Only you Tom; I know I can count on you to tell the truth!
As a current DHH IT employee, I can confirm that the department has been trying for over well 2 months to get the video network going with the “vastly superior outside vendor.” Or as someone else observed, GoToMeeting was invented in less time than DHH has taken in trying to get their video network working again.
My current pet peeve is that all IT people have known for years: that Microsoft support for Windows XP was going to end April 8, 2014. DHH IT has known for months that some old computers are not capable of running Windows 7. Note that Jindal has generally not permitted computer purchases for 5 years. Only now are we gearing up to install Windows 7 on the majority of our computers that are still running Windows XP. And only now are they getting ready to order computers to replace the ones that can’t run Windows 7.
I understand that other departments are ordering hundreds of computers that their reduced IT staffs can’t install before April 8.
Is it fair to speculate that Jindal has set up statewide IT to fail so he has an excuse to replace us with the kind of “efficient outside vendors” that are handling the DHH video conferencing?
It’s easy pickings for these sorts of articles. A fairer treatment might mention that DHH has had withering budget cuts perhaps resulting in this 0.00014% of the $7B outlay being misplaced?
But it’s 1 MILLION, right!? This is the edge of the problem, albeit a felony for one individual. The core problems require a deeper appreciation and have bigger costs in terms of what is not being done: improving health, sharing valuable information, auditing/fraud detection, etc. 8 or 9-figure items!
There has been a steady and irreplaceable attrition, both in terms of lost institutional knowledge and hiring freezes. What happens to managers of few once their subordinates are gone? Organizational folding into evermore compact units. Entire programs, whose missions lie at the very core of what taxpayers fund DHH for, are completely without personel. Who would want to pick up those lost causes? Only the best and brightest? That might not happen. In order to get any raise in pay those best and brightest must resort to becoming job gypsies, moving into vacated or new positions once every 12 month (or so) cycles. It might happen quicker if not for civil service job market restrictions on such activity. This is effective both for slowing cronyism and postponing productive activity until it becomes beneficial.
Did anyone notice state government payroll not shrinking at the same rate of employment cuts? Perhaps the new hires have 20% more productivity? Not so fast; managing others through Byzantine organization charts is valued “exclusively” over technical/academic brawn leading to unproductive behavior in some cases (intra-office politics) and rather clever and commendable in others (making pseudo-managers of the most productive). This doesn’t bode well in the Information Age!!! Cultivating politics instead of web services.
What about those benefits? Ahhhh, the sleeping giant, a perverse “eat your young” pension system that doesn’t protect from inflation the pensions of those exiting state employment early and yet rewards late comers (age>50) with higher than Wall Street returns. Specifically, if you leave state employment at 40 without returning then your retirement depreciates by 25 years the moment you walk out the door, CHA-CHING! The boomer retirees who are the recipients of your generosity perhaps owe you some gratitude but they might be more apt to replace you while they REMAIN on their pension (aka “Double Dipping”). The young have that incentive to maximize their salary in the short term through job hopping before either retreating to a private sector/401k in lieu of joining the rank and file.
So is this “Big Government doesn’t work” or “self fulfilling prophecy?” Whatever your flavor, there is a failure to implement the simplest of organizational principles. Meanwhile, the majority of civil servants are martrying themselves in ways that border on sainthood for the taxpayers. May we all respect and applaud their efforts while the mud flies!
Uhhhhhh….Jeff Reynolds has been with the state for 25 years. Another distorted hit piece by Aswell.
Hit piece? Distorted? check your thought patterns. Mr. Reynolds is being set up by the Jindalites.
Also, the DHH office of aging and adult services bought hundreds of laptops and left them in a closet for years. This type of spending is par for the course at DHH.