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Attorney General opinion accuses π-yush of parliamentary chicanery in Office of Group Benefits privatization contract

Posted in ALEC, American Legislative Exchange Council, Attorney General, Campaign Contributions, Civil Service, Contract, Contracts, Ethics, Governor's Office, Health Care, Jobs, Layoffs, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Prison, Privatization, RFP, Request for Proposals, Transparency on September 15, 2012| 5 Comments »

A Louisiana Attorney General’s opinion released Friday has accused the administration of Gov. Piyush Jindal of attempting an end run around the legislature in its efforts to privatize the Office of Group Benefits (OGB).

Meanwhile, another state prison is abruptly closed by Jindal.

The eight-page opinion, written by Assistant Attorney General Michael J. Vallan, says that the proposed privatization of the Office of Group Benefits and the ensuing contract with Blue Cross/Blue Shield of Louisiana must be approved by the House Appropriations Committee and the Senate Finance Committee, as well as the Office of Contractual Review.

But don’t expect Jindal to capitulate too easily, for while the opinion, which boiled down to a interpretation of under which state statute the privatization action was taken, is just that—an opinion. It has no force of law and the likely action to be taken by Jindal and the Division of Administration (DOA) is to simply ignore it and proceed as planned.

The only recourse in such a scenario, would be for the legislature to file suit against Jindal to get a determination of which statute should apply in the privatization process—one which effective bypasses legislative authority or one which specifically requires approval of the two committees.

The requirement for approval of the Office of Contractual Review may as well have been deleted from the opinion since the office is a part of DOA and answers directly to Commissioner of Administration Paul Rainwater, making that agency’s approval a virtual given.

The Division of Administration, through OGB issued a request for proposals (RFP) earlier this year and on April 30 issued a Notice of Intent to Contract (NIC) for Administrative Services Only (ASO), meaning for the awarding of a contract to a third party administrator (TPA) to take over the administrative duties for the state’s Preferred Provider Organization (PPO) plan, the High Deductible Health Plan (HDHP) with Health Savings Account (HAS), and the LaChip Affordable Health Plan (LaCHIP).

Blue Cross Blue Shield of Louisiana (BCBS) was already serving as third party administrator for the state’s HMO coverage for state employees and their dependents through OGB and on July 20, OGB issued a report and recommendation to the Evaluation Committee in which it proposed awarding the PPO, HDHP, HAS and LaCHIP business to BCBS as well.

That recommendation was approved by the State Civil Service Commission on Aug. 1.

State Rep. Katrina Jackson (D-Monroe) two days later requested an expedited legal opinion from the attorney general’s office based on her belief that the legislature had to sign off on the awarding of such contracts.

Vallan, in his opinion, said that Louisiana Revised Statute 42:802(B)(8)(b) “clearly provides that any such contract shall be subject to review and final approval by the appropriate standing committees of the Legislature having jurisdiction over review of agency rules by OGB as designated by (statute), or the subcommittees on oversight of such standing committees, and the Office of Contractual Review of the Division of Administration.”

“It is our understanding that the House Appropriations Committee and the Senate Finance Committee are the appropriate standing committees having jurisdiction over OGB rules.

“Therefore, pursuant to the plain language of …42:802, it is the opinion of this office that any contract negotiated by OGB pursuant to the authority granted by …42:802(B)(8) shall be subject to review and final approval by the House Appropriations Committee and the Senate Finance Committee.”

The entire issue hangs on which statute was used in the issuance of the NIC and the subsequent awarding of the contract to BCBS.

“According to OGB,” Vallan said, “the contract at issue was not negotiated pursuant to the provisions of …42:802(B), but was instead negotiated pursuant to the authority provided by Louisiana Revised Statute 42:851.”

While acknowledging that 42:851 does not require legislative approval of contracts, Vallan said, “Our reading of …42:851 is that it applies to situations where a particular state governmental or administrative subdivision, department, agency, school system, etc., intends to procure private contracts of insurance for its respective subdivision, department or agency.

“We do not believe that …42:851 provides OGB with the authority to enter into the proposed contract with BCBS. We are of the opinion that such authority is clearly granted by …42:802. An interpretation of both …42:802 and 42:851 authorize OGB to execute the proposed contract with BCBS would render the provisions of (the two statutes) duplicates of each other and their provisions superfluous and/or meaningless. Such an interpretation should be avoided.”

Vallan said that by enacting 42:802, it was clear that the legislature “has expressed its desire that contracts governing the provision of basic health care services, as well as certain other related contracts be subject to review and final approval by the legislature.

“To interpret …42:851 as offering some sort of alternative route to execute such contracts, thereby escaping legislative oversight, appears to be contrary to the logic and presumed fair purpose the legislature had in enacting …42:802.

“In summary, it is the opinion of this office that the proposed contract between OGB and BCBS is a contract negotiated pursuant to the provisions of …42:802. As such, the contract is subject to review and final approval by the appropriate standing committees of the legislature having jurisdiction over review of agency rules by the Office of Group Benefits.”

Almost lost in all the legalese is the fact that if Jindal’s privatization plan is ultimately approved—by the legislature or by the courts—121 state employees who show up each day to see to it that the medical claims of more than 100,000 state employees, retirees and their dependents are paid in a timely fashion will see their jobs vanish.

Jindal sees privatization through rose-colored glasses—provided him, no doubt, by generous corporate campaign contributors—despite the obvious pitfalls.

Take the Office of Risk Management (ORM), for example. It was the first state agency to be privatized and the company that the state paid $68 million to take over the TPA functions. The takeover was to occur in phases, with the worker’s compensation section one of the first to go and the road hazard section scheduled later this year as the last section to go over.

One of the conditions of the privatization contract was that the TPA absorb displaced ORM employees for a minimum of one year.

In only about eight months after taking over ORM in September of 2010, the contractor, F.A. Richard and Associates (FARA) of Mandeville, was back, asking for an amendment of a tad over $6.8 million to its contract, bring the total to just under $75 million.

Because the request was for an additional 10 percent, legislative approval was not necessary; there is a provision that contractors may get a one-time bump of 10 percent without legislative concurrence.

Legislators were not too happy to learn of that provision but in less than a month, FARA sold out to a company in Ohio which in a matter of only a few more months, sold out to a company in New York.

But here’s the clincher: the contract with FARA contains a clause which specifically says that its contract with ORM may not be transferred or reassigned without prior written approval. When DOA was asked for a copy of the written approval to transfer the contract to each of the out-of-state companies, the response was no such document existed.

So, because of not one, but two flagrant violations of its contract for privatization, ORM is being run by an out-of-state corporation even before all the ORM sections were phased into the contract.

And where are those former ORM employees today? Well, it seems, only a handful of former ORM employees remain there.

OGB remains on the privatization chopping block despite the encouraging legal opinion of the state’s highest legal office. It remains to be seen how it all will play out.

Meanwhile, Jindal, having failed to privatize state prisons as he wished, is simply closing facilities. J. Levy Dabadie Correctional Center was closed earlier this year with nary a word to area legislators of his intent.

On Friday, September 14, Jindal dropped another bombshell.

C. Paul Phelps Correctional Center in DeQuincy is being closed with its 700 medium security prisoners to be transferred to Angola State Penitentiary.

Again, state employees, about 150 of them, have had their livelihoods jerked from under them with no prior warning. About 70 of those will be given the opportunity to transfer to Angola. As for the rest?

Apparently they’re not Jindal’s problem. After all, he likes to say do more with less.

And now, with such a stellar record to back him up, Jindal is turning his attention to the privatization of the LSU Health System and its 10 affiliated hospitals statewide that treat the state’s poor and which train medical students.

Does anyone see a trend?

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What happens when a dictator gains control over education, health care, legislators? Ask Gov. π-yush, campaign donors

Posted in ALEC, American Legislative Exchange Council, Contract, Contracts, Education, Ethics, Governor's Office, Health Care, Higher Education, House, Senate, Layoffs, Legislature, Legislators, LSU, OGB, Office of Group Benefits, ORM, Office of Risk Management, Privatization, Transparency on September 7, 2012| 6 Comments »

Let the dismantling begin.

The LSU Board of Supervisors, packed with 11 of its 15 members who contributed an aggregate of more than $225,900 to Gov. Piyush Jindal’s political campaigns, voted Friday to take the first official step toward what will likely become the complete destruction of the LSU Health System.

The board, which since April has fired, demoted or reassigned LSU President John Lombardi, health system head Dr. Fred Cerise, Interim LSU Public Hospital CEO Roxanne Townsend and LSU System General Counsel Ray Lamonica, voted on Friday to authorize LSU hospitals in Shreveport, Monroe and Alexandria to develop requests for proposals (RFPs) for public-private partnerships for the three hospitals.

Jindal has already slashed $14 million in appropriations for Lallie Kemp Regional Medical Center in Tangipahoa Parish. That represents nearly 35 percent of the facility’s total budget and will mean the loss of surgery, cardiology and ICU services and dramatic cuts to oncology, gynecology and disease management as well as up to 150 staff members who stand to lose their jobs.

Additionally, the LSU Hospital in Bogalusa had its budget cut by $3 million, forcing the facility to close several clinics and to absorb pediatrics into primary care.

In Mandeville, Southeast Louisiana Hospital is slated for closure beginning next month, leaving the Florida parishes, Orleans, Jefferson, St. Bernard and Plaquemines parishes with no state mental health treatment centers.

W.O. Moss Regional Medical Center in Lake Charles also was designated for massive budget cuts and University Medical Center (UMC) in Lafayette was earmarked for $4.2 million in cuts but Jindal said the LSU plan would “protect critical services.

In an apparent effort to head off employee protests, UMC administrator Larry Dorsey notified employees not to attend a public rally—on or off the clock—protesting the cutbacks subject to disciplinary measures. That email was in stark violation of state civil service rules which specifically allow employees to attend such rallies as long as it is on their own time.

The Shreveport Times Friday morning published a story saying that LSU System supervisors would vote later in the day on beginning the process to develop RFPs on public-private hospital partnerships for hospitals in Shreveport, Monroe and Alexandria.

LSU Health spokesperson Sally Croom said the resolution, which was not added to the board’s agenda until Thursday, apparently after Lamonica was forced to resign as general counsel, and after the reassignment of Townsend, would give officials authority to develop an RFP.

Late Friday, as has become the custom of the administration, the announcement was formally made. Robert Barish, chancellor of LSU Health Shreveport, notified “faculty, staff and friends” by memorandum.

“As promised, I wanted to update you on the most recent activity regarding our continuing efforts to ensure a successful future for LSU Health Shreveport in the wake of the federal cuts to Louisiana’s Medicaid budget,” he said. “As you might recall, we were asked to explore several approaches to address the continuing budget challenges or our hospital system.

“Today, the LSU Board of Supervisors authorized us to explore public-private partnerships for our three hospitals. It is important to note that this is being done to see how collaboration with other hospitals might look and whether this may be a workable option.

“We will follow the Board instructions to explore this option, which is among several we are looking at during this fact-finding process. We have been looking at other hospitals which have faced similar situations successfully.

“We are committed to a thorough fact-finding process and exploring possibilities that would ensure continuation of our important missions of education, patient care and research.

“I will keep you updated as more information becomes available.”

It was not immediately known if similar messages were sent to employees of the facilities in Monroe and Alexandria.

The resolution passed by the board said:

• BE IT RESOLVED by the Board of Supervisors of Louisiana State University that LSU Health Sciences Center Shreveport and Health Care Services Division are hereby authorized to develop and seek a Request for Proposal for the purpose of exploring public private partnerships for the LSUHSC-S affiliated hospitals, namely the LSU Medical Center in Shreveport, the E.A. Conway Medical Center in Monroe and the Huey P. Long Medical Center in Pineville/Alexandria and each of the hospitals in Health Care Services Division; and

• BE IT FURTHER RESOLVED that this is necessary for identifying potential partners and long-term strategies which may help ensure the organization’s clinical services and financial stability in light of budgetary challenges caused by the recent decrease in federal Medicaid funding; and

• BE IT FURTHER RESOLVED that the authority to seek a Request for Proposal does not mandate the Request for Proposal be released, nor does it mandate a proposal be accepted should one be released. The President shall have the discretion to authorize the release of the Request for Proposal and to accept the proposal that he deems in the best interest of the university.”

So, there you have it. A figurehead president brought out of retirement to replace a president who had a bad habit of being candid and outspoken is given the final authority to release the RFP and to accept the proposal “that he deems in the best interest of the university.”

What are the odds that this interim president and his hand-picked board will take any action, up and including taking a bathroom break without the approval of Piyush Jindal?

We already have more than sufficient evidence that Jindal is rapidly moving toward successfully destroying public health care in Louisiana. The closure of Charity Hospital in New Orleans following Hurricane Katrina, though nearly three years before he came to power, lay the groundwork for his later actions.

The federal government’s decision to slash Louisiana’s Medicaid appropriation by more than $572 million—along with state cuts of $287 million, bringing the total loss of funding to $859 million—simply gave him a convenient opportunity to accelerate a program he already had in place.

One need only look at what Jindal has done to higher education and public education to see a dangerous trend of cutbacks in crucial public services. His obsession with granting tax exemptions totaling $5 billion a year for corporate donors, transferring funds from parish school boards to private, for-profit schools, and forcing state colleges and universities to increase tuition to cover budgetary cuts has put the state on a dangerous collision course with fiscal reality that will remain long after Jindal has moved on to a cabinet position or in pursuit of higher office.

Jindal won’t be around to answer for his policies…but 144 legislators will be.

And so will Louisiana voters.

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On-LSU-presidents-revenue-secretary-and-the-proper-use-of-hyphens: it’s-just-another-day-in-the-Piyush-World-of-Oz

Posted in ALEC, American Legislative Exchange Council, BESE, Boards, Governor's Office, Higher Education, LSU, Politicians, Regents, Revenue, Transparency, Vouchers on August 17, 2012| 12 Comments »

Baton Rouge has always been a city rife with favoritism and appointments bordering on the outrageous and absurd. But now, with a new level of exorbitant salaries pitted against wholesale layoffs of rank and file employees during Piyush Jindal’s administration, the intensity of rumors, hyphens, retreads and big salaries from the “do more with less” governor has been ramped up a notch.

You may wish to sit down to prepare yourself for what may well be the most astounding appointment in Jindal’s tenure—one that should have every LSU alumnus and every LSU professor and instructor, active and retired, metaphorically storming the Governor’s Mansion with torches and pitchforks.

The object of their outrage, however, won’t be there of course.

But before we get too far into the latest developments surrounding the world’s largest state monument to corruption and excess (that would be the 24-story State Capitol building), we are going to go out on a limb and predict that the latest boy genius, State Superintendent of Education John White, is going to realize just how inept and unqualified he is for his job and will be gone by this time next year.

He has quickly become Boy Blunder to Jindal’s Batty Man.

Meanwhile, the Jindalista continues to pillage the state with layoffs, cutbacks, sell-offs and closures, all the while continuing to add to the already top-heavy administrative payroll with more appointments at ever-dizzying salaries.

Jindal apparently is making his appointments these days by remote control because he is rarely in Louisiana to attend to pressing state business.

The latest example of Jindal’s spot-on imitation of Nero was the announcement on Thursday, Aug. 16, that Jindal has been given a speaking role at the Republican National Convention in Tampa, Florida, later this month.

It’s odd to the point of being downright bizarre that on the 35th anniversary of the death of Elvis Presley, the Republican Party would carry out such a public suicide attempt. The obvious question has to be: What the hell were they thinking? Doesn’t anyone in a decision-making position remember that dreadful 2009 response to President Obama’s State of the Union address?

Now Comedy Central and Youtube will have two separate clips to (pick one) amuse/embarrass/nauseate us.

We can almost hear him now as he blathers on to bored, drunk, or in at least one case, womanizing delegates: “Two things…,” “At the end of the day…,” “Three things…”

Meanwhile, Rome, aka Louisiana, continues to burn at the altar of spurned federal grants, Medicaid and higher education cutbacks and the tragicomedy now known as school vouchers…er, scholarships.

So, how has the state’s Émigré Executive addressed these problems?

For one, he dredges up former staff member Jim Barfield to appoint as the new Secretary of Revenue at more than double the salary of former Secretary Cynthia Bridges who was forced out for doing her job after Jindal signed an alternative fuel tax credit that threatened to break the bank even further.

Then, the Board of Elementary and Secondary Education (BESE), led by Wondering Woman Penny Dastugue and Chas Roemer, appointed Heather Cope, who appears to be even younger and, if possible, more unqualified than White, to the post of BESE executive director.

But more important than either of these is the rumored appointment of current Secretary of the Louisiana Department of Economic Development (LED) Steve Moret as LSU president/chancellor.

The fix is reportedly in already for Moret’s appointment to replace former LSU President John Lombardi who was fired in April at Jindal’s behest (despite any protestations to the contrary) after being openly critical of budgetary cutbacks to higher education.

Interim President Bill Jenkins, of course, denies the report, but what else could he be expected to do? He didn’t get the call to come back after Lombardi’s firing because of any independent streak of his own. Jindal, as is well known by now, simply does not tolerate independence, candor or free thinking on the part of subordinates.

Jindal already had a solid majority on the LSU Board of Supervisors—quite possibly one of the more politically-charged and possibly the most controversial board in state government—when it voted to fire Lombardi in April. Now he has solidified that majority with the appointments last month of Scott Ballard of Covington and Lee Mallett of Iowa to the board.

Ballard’s company, WOW Franchising, parent company of WOW Café & Winery, contributed $5,000 to Jindal’s campaign in 2007.

Mallett had separate contributions of $5,000 each in 2003 and 2006 and five of his companies contributed another $20,000 between 2007 and 2011.

Moret was appointed head of Economic Development when Jindal took office in January of 2008 and has presided over the giveaway of $5 billion a year in corporate tax incentives and exemptions that have been putting the state deeper into the fiscal abyss with each passing year.

Before coming to LED, Moret had a lackluster tenure as president and CEO of the Baton Rouge Area Chamber, though at the time of Moret’s appointment, Jindal’s spindoctors lauded his accomplishments at the chamber.

Like Jindal, Moret is an alumnus of the McKinsey Group, a Washington, D.C., think tank that consults with governments and corporations worldwide.

One of McKinsey’s more notable contributions was working with Allstate Insurance to train the company in the best way to deny claims stemming from losses suffered by Gulf Coast residents in the wake of hurricanes Katrina and Rita in 2005.

That should square up pretty well with the American Legislative Exchange Council (ALEC) anyway.

Other than those two entries on his curriculum vitae, Moret has little else to qualify him to lead the state’s flagship university. But hey, who needs an academic mind at the helm of a large university?

Such an appointment would further lower the school’s esteem, already pummeled by draconian budget cuts that forced tuition increases and threaten the very existence of the LSU School of Medicine and state teaching hospitals while reducing the position of president to nothing more than political puppet status—even more so than it already is—and heap ridicule on the state in general and LSU in particular.

Oh, well, there’s always football.

The LSU board will be on retreat Saturday (a legally-questionable procedure in that it appears to violate the state’s open meeting law—specific personnel matters certainly may discussed in executive session, but political bodies, including the LSU board, must first convene in public session and then vote to go into executive session) to discuss combining the jobs of president and chancellor.

Jenkins, responding to reports that the decision had already been made to select Moret, snapped, “That’s nuts!” he said, “irrational” that the board would pay a consultant and go through the motions of a national search if the decision were already made.

You could almost envision Jindal’s arm extending from Jenkins’ backside but you could still see Piyush’s lips moving.

Barfield worked as president and chief operating officer for the Shaw Group until becoming Jindal’s first secretary of the Louisiana Workforce Commission (formerly the Department of Labor) before being brought in to serve briefly as Jindal’s executive counsel.

While serving as secretary of the workforce commission, he helped Jindal to fight off legislators’ attempts to overturn Jindal’s rejection of $98 million in federal stimulus money for unemployment benefits–the first of hundreds of millions in federal dollars rejected by MIA Piyush.

Barfield left the administration in January of 2010 to become the chief development officer for Amedisys, a home health and hospice care company. Three months later, on March 17, he and Amedisys each contributed $5,000 to Jindal’s campaign and last December the company contributed another $1,000.

Barfield’s salary will be $250,000 a year, more than twice the $124,000 being paid Bridges and $83,000 more than the $167,000 per year he was earning in his last job in the administration. That $83,000 bump, by itself, could pay the salaries of a couple of laid-off state employees.

Because state law prohibits a cabinet member appointed while the legislature is not in session from making more than his or her predecessor, Jindal simply “created” through slick political subterfuge the position of executive counsel for the Department of Revenue and set the salary at $126,000 in addition to the $124,000 that was paid Bridges.

How’s that for transparency, openness and accountability?

But it does pose three intriguing questions:

• Since Barfield will now be his own legal counsel, does he have a fool for a client?

• Is the proposal to combine the positions of LSU president and chancellor being put on the table for the same reason as creating the position of executive counsel for Barfield—to double the salary for the new appointee to be named by Jindal’s rubber-stamp proxy, the LSU Board?

• And finally, is there any level to which this governor will not stoop to get what he wants, even to the point of circumventing the law?

BESE, meanwhile, apparently was unable to find anyone in Louisiana qualified for its executive director’s post despite Jindal’s oft-expressed desire to “keep the best and brightest in Louisiana.”

Heather Cope comes to us from Seattle, the same place where Jindal reached out and touched Bruce Greenstein for the position of secretary of Health and Hospitals.

Cope brings a boatload of qualifications, none of which would appear to apply to her new post. She reportedly has a desire to expose the problems in education, which led her to work for an education think tank, the prestigious League of Education Voters, which calls itself an advocate of systemic changes in public schools. Ever heard of it? Didn’t think so.

She also enjoys “immersing herself in foreign cultures (domestic and international).” So what, exactly would qualify as a “domestic” foreign culture? Other passions include watching historical dramas, quoting Monty Python sketches and giving lessons to co-workers on the proper use of hyphens.

The only thing missing to wrap up the Miss Congeniality title was world peace but there apparently was enough there to qualify her for a salary of $125,000 per year.

Most of the cabinet level positions pay more than the state’s top elected officials, including Jindal, receive in salary.

A quick review of a partial list of cabinet level salaries in the Piyush Jindal administration as reported by the Baton Rouge Advocate:

• Economic Development Secretary Stephen Moret: $320,000;
• Department of Health and Hospitals Secretary Bruce Greenstein: $236,000;
• Commissioner of Administration Paul Rainwater: $204,400;
• Department of Environmental Quality Secretary Peggy Hatch: $137,200;
• Louisiana Workforce Development Executive Director Curt Eysink: $137,000;
• Department of Corrections Secretary Jimmy LeBlanc: $136,700.
• Wildlife and Fisheries Secretary Robert Barham: $123,600.

And that doesn’t include the secretaries of Natural Resources, Department of Transportation and Development, Veterans Affairs, Commissioner of Higher Education, Superintendent of Education and all those former legislators (including two cabinet level positions—Veterans Affairs and Wildlife and Fisheries) appointed to all those six-figure income positions.

The more things change, the more they remain the same.

Laissez les bon temps rouler.

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Piyush lags in eliminating state jobs; did it cost him snub from Mitt Romney as his vice presidential running mate?

Posted in ALEC, American Legislative Exchange Council, Charters, Civil Service, Economy, Education, Governor's Office, Jobs, Layoffs, State Agencies, Transparency on August 14, 2012| 6 Comments »

(Editor’s note: at least one person failed to detect the parody in a recent posting about the Delhi Charter School, so leaving nothing to chance, we’re letting everyone know up front that the headline is tongue-in-cheek as are a couple of comments in the body of this story.)

Not only was Gov. Piyush Jindal not among the top six finalists in the recent Mitt Romney Vice Presidential Sweepstakes, it now turns out that Louisiana’s absentee governor is not even among the top 15 in what he does best: eliminating state jobs.

That may explain in part why Romney, who once said he likes to fire people, did not include Jindal on his short list of five potential running mates whom he called last week to let them know he had decided on Rep. Paul Ryan of Wisconsin. Jindal was so far down that list that he didn’t even warrant a courtesy call.

Even though the Governor in-Abstentia has eliminated more than 6,000 state jobs during the months between June 2011 and June 2012, that wasn’t good enough to put him in the top 15 for placing workers in the unemployment lines who have mortgages, tuition costs, and other living expenses, according to a report just released by the National Governors’ Association and the National Association of State Budget Officers (NASBO).

Apparently, the 6,400 positions cut in this year’s budget were not factored into the equation. If they had been, that almost certainly would have vaulted Piyush to within a heartbeat of the presidency. State job losses, after all, appear to translate to economic gains in the eyes or our globetrotting governor.

“States go to great lengths to avoid layoffs,” NASBO Executive Director Scott Pattinson said, exposing the naked truth that he has not been to Louisiana since 2008.

For that matter, the Disappearing Governor hasn’t been in the state much since then himself.

Pattinson also pointed out that laying off employees is not always the best fiscal strategy. “Firing state government workers often does not result in money saved in the short term. Once required benefits and severance (unemployment payments) are included, states may not see savings for at least a full fiscal year.”

The study attributed the widespread layoffs of state government employees to a stalled recovery from the recession and “shifting political pressure.” That shifting political pressure alluded to may be traced back to the American Legislative Exchange Council (ALEC), which is very up front in its advocacy of massive state employee layoffs and equally impressive tax breaks for corporate friends of all politicians of a Republican stripe.

To that end, Jindal, the Incredible Vanishing Governor, invisible to the naked eye, has been most compliant. While many corporate tax breaks and incentives were already in place well before he assumed office in January of 2008, he has nevertheless encouraged the continuance and expansion of those breaks—to the state treasury’s financial detriment of approximately $5 billion per year.

But have no fear, Ghost-Governor Piyush the Magnificent, upon his return—if he ever does return—is almost certain to pick up where he left off. With the announced closure of prisons and state hospitals, teacher layoffs in virtually every parish because of his ill-conceived voucher scheme, and deep cuts to the LSU medical school’s programs, he is sure to begin cutting into the lead of the states ahead of Louisiana in the layoff game.

If Piyush truly is a disciple of “trickle-down economics” (and Rush Limbaugh did refer to him as the next Ronald Reagan), then we can anticipate additional layoffs at the local level—by parish and municipal governments—as the excrement begins to flow downhill.

In case you may be curious, in no particular order other than alphabetical, here are the top 15 states in layoffs:
• Alabama
• California
• Connecticut
• Florida
• Maryland
• Massachusetts
• Michigan
• Missouri
• Nebraska
• Nevada
• New Mexico
• Ohio
• Oregon
• South Dakota
• Washington

It should be pointed out that there was no significant edge for one political party over another in the layoff Race to the Top (where have we seen that before?): The party representation is as equal as possible, given there is an odd number of ranking states. Eight of the top 15 states have Republican governors and seven of the governors are Democrats.

And lest political observers worry about the state’s rankings, not to worry.

We’re pretty sure that Louisiana easily ranks No. 1 in the number of days in which the Phantom of Governor’s Office has been out of state.

That’s gotta count for something.

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Political science professors trash Jindal, OGB privatization, legislature in scathing reports; can Teagues be far behind?

Posted in ALEC, American Legislative Exchange Council, Campaign Contributions, Civil Service, Contract, Contracts, Governor's Office, Health Care, Layoffs, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Teague, Transparency on July 31, 2012| 7 Comments »

A Baton Rouge attorney has filed papers in opposition to the privatization of the Office of Group Benefits (OGB) for Wednesday’s Civil Service hearing but in the process he could get two university professors teagued by Gov. Piyush Jindal.

Attorney J. Arthur Smith filed his lengthy objection on behalf of 177 OGB employees who stand to lose their jobs if the proposed takeover by Blue Cross/Blue Shield (BCBS) goes through. He reminded the Civil Service Commission that the fundamental purpose of the Civil Service system “is to prevent permanent classified employees from being subjected to adverse personnel actions based on political influence.”

Political influence on the part of the Jindal administration is precisely what he is claiming—along with offering evidence that privatization has not proven to be the panacea claimed by governmental entities that have boldly gone where Piyush is attempting to go now.

BCBS was recently announced as the winner of the state contract to take over the OGB Preferred Provider Organization (PPO) which serves some 60,000 state employees, retirees and dependents.

But two political science professors at LSU and Southern University were sharply critical of the administration’s motives for privatizing OGB and challenged the administration’s fiscal arguments in written reports.

The State Civil Service Commission will hear presentations by the administration and by opponents of the privatization proposal on Wednesday at 9 a.m. in the appropriately named Louisiana Purchase Room of the Claiborne Building on North Third Street in Baton Rouge.

Smith cited a court case—New Orleans Civil Service Commission v. City of New Orleans—in which the Louisiana Supreme Court ruled that the mayor and city council “do not have the unfettered discretion to potentially decimate the civil service system by eliminating all civil service positions to privatization, and, therefore, we find that checks on that discretion are necessary and authorized by the Constitution.”

That ruling also said that the city must turn over all documents and other evidence which enable the Commission to determine (1) whether and civil service employees will be involuntarily displaced from the Civil Service; and, if so, (2) whether the contract was entered into for reasons of efficiency and economy and not for politically motivated reasons.”

The Jindal administration has been conspicuously reluctant in providing “all documents and other evidence,” to the legislature as well as the media. The reason for non-disclosure, which has become almost a cliché, is the often-cited “deliberative process,” an obscure provision behind which the governor consistently hides. He pushed through the deliberative process provision shortly after becoming governor and since has boasted non-stop to the nation that he has made state government more responsive, accountable and transparent.

Smith cited several examples in which privatization has run into problems, including cost overruns, little or no cost savings, inferior service, and a lack of accountability. In many of those cases, he said, governmental entities have on occasion been forced to bring outsourced services back in-house. That has already happened with OGB once before.

He also cited what he considered to be conflicts of interest regarding BCBS. He cited contributions to Jindal of $43,500 by BCBS; $12,500 by Louisiana Health & Indemnity (BCBS’s parent company), and at least $100,000 by BCBS to the Supriya Jindal Foundation. The foundation is run by Jindal’s wife, Supriya Jindal.

Moreover, Smith said the State of Louisiana “essentially donated in excess of $1 million to Louisiana Health & Indemnity to expand and upgrade its headquarters building.” That subsidy, which produced only 22 new jobs, was approved in 2009 as an Enterprise Zone project.

Smith also said the Jindal administration has failed to prove that the proposed OGB privatization would result in increased efficiency.

He cited former OGB Director Tommy Teague as saying in March of 2010 that if OGB is dismantled, the PPO provider network, most of the agency’s extensive expertise in claims, provider services, customer service and information technology would be lost. Also lost, he said, would be the capacity to reinstate the existing self-administered PPO plan structure. Teague pointed out that OGB, in addition to providing “excellent customer service,” also holds down costs by self-administering the PPO plan.

His arguments notwithstanding, Smith’s aces are two political scientists who have weighed in on the side of OGB employees with comprehensive reports that take issue with the administration stand that privatization would be best for OGB and the state.

Albert L. Samuel, chairman of the Political Science Department at Southern University, was critical of the fiscal irresponsibility of the administration and legislature in the aftermath of Hurricanes Katrina and Rita which he said led to the current fiscal crisis.

“Due to federal recovery dollars as a result of the 2005 hurricanes and historically high oil prices, the (Jindal) administration inherited a budget surplus of nearly $2 billion. During its first year in office, the administration and its legislative allies swiftly passed a series of large tax cuts and spent millions of dollars in one-time money on road projects, deferred maintenance at state colleges and universities, levee improvements, coastal restoration projects and upgrades to Pennington Biomedical Center,” he said. “Perhaps most notably, Gov. Jindal signed a repeal of the Stelly Tax Plan which provided a substantial tax savings for upper-income Louisianians.”

When the 2008 financial crisis struck, however, Samuel noted that rather than reconsidering the deep tax cuts that were enacted in previous years, Jindal “held steadfastly to (his) conservative ideals.” Jindal, he said, “adamantly opposed every attempt on the part of legislators to deal with the financial crisis through tax increases.”

“Consistent with that Naomi Klein calls ‘The Shock Doctrine,’ the governor capitalized on the financial crisis of the state to advance an agenda that called into the question the rationale for government to perform basic services on a wide range of issues.”

Samuel concluded his 21-page report by saying that political motivations “are driving the Jindal administration’s push to privatize the Office of Group Benefits.

“It locates Gov. Jindal squarely on the cutting edge of a national Republican party, determined to pursue this course without making a clear and convincing case that OGB, as currently constituted, has failed to provide quality service and coverage to its plan members at reasonable costs to taxpayers.

“The proposed privatization cuts to the heart of the fundamental rationales for having a civil service system in the first place—the idea of protecting state government workers from dismissal driven by politics.”

LSU political science professor Belinda Creel Davis cited from Shrinking the State: The Political Underpinnings of Privatization, a book by Harvey Feigenbaum, Jeffrey Henig and Chris Hamnett who said that privatization “is a political tool having the end goal of realigning institutions and decision-making in order to privilege the goals of one group over another.”

Davis cited the privatization of Louisiana’s Medicaid program as “an excellent example” of the difficulty in evaluating the effectiveness of privatization, specifically citing Jindal’s reluctance to approve legislative oversight of privatization programs.

“The Louisiana Legislature has passed bills in the 2011 and 2012 sessions that were designed to give legislators more information on the way the Jindal administration is implementing health care programs for the poor via private health care firms.

“For the second year in a row, Gov. Jindal has vetoed the bills, claiming they were unnecessary and duplicative since the Department of Health and Hospitals (DHH) issues extensive evaluations.

“It is interesting to note that his veto message does not claim that the report issued by DHH provides all or even most of the information sought by legislators. In the 2012 session, Senate Bill 569, seeking greater transparency on this matter passed unanimously in the House and Senate. Legislators seeking transparency regarding implementation must find the reports lacking if they have sought additional information, but they are unable to access the information they seek—resulting in a more difficult accountability process under privatization than you would see under government provision of the service.

“This is exactly the type of consequence systemic privatization predicts,” she said.

“In my opinion, as a scholar of public policy and government, privatization is an inherently political process. The evidence from both national and state studies supports this view. I believe the case before you is a clear case of politically motivated privatization.”

Those are the kinds of statements, bold and insightful as they may be, that seem to get people teagued these days.

Teagueing, after all, is the one activity in which this administration is abundantly transparent and open.

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