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DOE vehicles for personal use after Vallas fiasco? Never! Now they just lease ’em year-round for 7 DOE employees

Posted in Auditor, BESE, Cartoons, Education, Ethics, Public Records, Transparency, Uncategorized on December 15, 2013| 14 Comments »

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© 2013

You’d think that John White would’ve learned from others’ mistakes.

He is, after all, the Louisiana Superintendent of Education and one of the definitions of education is the act or process of educating or being educated, according to our handy dandy Free Online Dictionary which also defines education as the knowledge or skill obtained or developed by a learning process.

Education.com further defines education as “the act or process of imparting or acquiring general knowledge, developing the powers of reasoning and judgment, and generally of preparing oneself or others intellectually for mature life.”

It was only four years ago that the news broke that Paul Vallas, White’s predecessor at the Recovery School District had taken 30 personal trips to his hometown of Chicago between 2007 and 2009 in a state-owned Dodge Durango in violation of state regulations governing use of state-owned vehicles.

He even took one of those trips to appear on a Chicago TV station to announce his intent to run for governor and while he did make the announcement, he never ran for that office. He currently is a candidate for lieutenant governor in next year’s election.

The use of the Durango for personal trips did not become public knowledge until the vehicle was involved in an accident in Chicago and the Louisiana Office of Risk Management received a claim for damages from the Department of Education (DOE). Vallas was en route to a press conference to discuss a constitutional convention for Illinois at the time of that accident.

Then-State Education Superintendent Paul Pastorek, Vallas’s superior, said he was unaware that it was against regulations for Vallas to use the state vehicle for such trips, an incredulous claim at best.

Vallas subsequently moved on to Hartford, Conn., (where he would ultimately be deemed by a state judge to be unqualified and directed out of office) and was replaced by Gov. Bobby Jindal’s choice, John White. When Pastorek was booted, White was then promoted to State Superintendent.

So, the precedent was clearly there for White to see and to learn from. Certainly he was perceptive enough to avoid that particular pitfall. Pastorek, after all, had to pony up about $4,000 (an amount that also covered $946 in fuel costs) in reimbursement to the state on Vallas’s behalf though it was never made clear why Vallas himself was not held accountable for the costs.

So White would never repeat that mistake, would he? Of course not. We’re not going to catch DOE employees running all over creation in state-owned vehicles, no siree.

That’s what Enterprise Car Rental is for.

John White’s expenditures on Enterprise rental cars make Vallas look like Ebenezer Scrooge.

Remember that Vallas accounted for an estimated $4,000 in documented personal travel in a state vehicle over a period covering nearly three years, including fuel costs.

Seven current DOE unclassified employees with combined annual salaries totaling north of $1 million have tallied more than $63,700 in car rental fees in just over a year—and that does not even include fuel.

And while state regulations stipulate that only compact or intermediate vehicles may be rented by state employees at monthly fees not to exceed $680, some employees have been cruising around town in vehicles like Jeep Grand Cherokee, Jeep Liberty, Jeep Compass, GMC Terrain, Nissan Murano, Chevrolet Yukon, and Cadillac Escalade at monthly rentals as high as $1,450.

And with the exception of a couple of skipped months, the vehicle rentals, while charged on a monthly basis, would appear to be on a permanent basis for the employees, each of whom has been on the job for less than two years.

The records could be incomplete because LouisianaVoice initially requested the records on Oct. 18 only for the months of July 1, 2012 through Oct. 18, 2013. The records were only made available on Wednesday, Dec. 11, nearly two months after they were first requested.

State law requires that public records be produced on demand unless they are unavailable. In such case, the state must respond immediately as to when the records will be available within three working days of the request.

LouisianaVoice has made a supplemental request for Enterprise car rental records for each of the seven employees for their entire tenure at DOE as well as a complete record of fuel costs for the rental vehicles.

Neither White nor his Chief of Staff Kunjan Narechania responded to an email request from LouisianaVoice asking them to justify the issuance of permanent rental cars to state employees in light of the state’s ongoing budgetary problems.

Of course no story of DOE chicanery would be complete without the participation of our old friend David “Lefty” Lefkowith.

He is, as might be expected, one of the Enterprise Seven.

You will remember the ubiquitous Lefty as the motivational speaker who worked with pre-collapse Enron and Jeb Bush’s administration in an ambitious but unsuccessful effort to corner the market on drinking water in the state of Florida.

He next showed up first as a contract worker for DOE and then as the head of the Office of Portfolio for the department at $146,000 per year. He currently works with the department’s course choice program which has had its own image problems.

Despite Jindal’s oft-proclaimed goal of keeping the best and brightest Louisiana citizens in Louisiana, the administration seems hell bent on going outside the state for its talent and Lefty is no exception. He has maintained his residence in Los Angeles and actually commutes from that city to his day job at DOE. He apparently works only four days a week and heads west on Fridays and returns Sunday night or Monday morning.

Of course when he is in town he needs a vehicle to get around Baton Rouge and to take him to and from New Orleans International Airport each weekend. Records show he rents his Enterprise vehicles on a weekly basis, usually for four days at a pop (Monday through Friday) with sometimes a couple of hours extra thrown in.

Incomplete records show that he has spent about $6,000 on car rental fees (not counting fuel, of course) since Oct. 14, 2012. LouisianaVoice has requested complete records dating back to his date of employment with the department and including the cost of fuel for his vehicles.

To his credit, it should be pointed out that Lefkowith generally stuck to the compact car requisite rate of $32 per day for his rentals. On those occasions when he did upgrade, it was only to $36 per day—unlike some of his co-workers who did not appear to even attempt to stay within the state-approved rate mandates.

Following is an itemized list of the remaining six employees, number of months they have driven an Enterprise rental car, the type cars and the total cost (In some cases, the make of vehicle was not provided):

  • Kerry Laster, Executive Officer ($135,000)—nine months, from Nov. 2, 2012 through Aug. 20, 2013 (no record for Feb. 9 to Mar. 4, 2013): GMC Terrain, Hyundai Tucson, Cadillac Escalade (four months), Grand Cherokee, Ford Explorer (two months)—$11,205;
  • Melissa Stilley, Liaison Officer ($135,000)—12 months, from Aug. 13, 2012 to Sept. 5, 2013: Malibu, Jeep Liberty, Jeep Compass, Dodge Journey (three months), Chevrolet Tahoe, Ford Edge (four months)—$13,550;
  • Warren Drake, Liaison Officer ($160,000)—12 months, from Sept. 10, 2012 to Sept. 5, 2013: Honda Accord, Kia Sorento, Ford Flex, Grand Cherokee (nine months)—$8,160;
  • Gayle Sloan, Liaison Officer ($160,000)—12 months, from Sept. 4, 2012, to Sept. 30, 2013 (no record for December of 2012); Chevrolet Impala (three months), Toyota Camry, Jeep Liberty (seven months), Jeep Patriot—$9,060;
  • Francis Touchet, Liaison Officer ($130,000)—15 months, from July 11, 2012, to Sept. 16, 2013; Nissan Altima (two months), Nissan Murano (seven months)—$11,800;
  • Gary Jones, Executive Officer ($145,000)—12 months, from Sept. 17, 2012 to Sept. 13, 2013; Nissan Sentra (nine months), Ford Fusion (three months)—$7,980.

The free use of a rental car on a year-round basis could pose another problem besides the obvious criticism that might come from the Legislative Auditor.

These Enterprise rentals are not the occasional rentals for quick one- or two-day trips on departmental business; they are perks by every definition of the word—used year-round, nights and weekends, for personal use as well as the occasional business-related trip.

And perks are taxable in-kind income.

Or at least they should be…unless DOE neglected to report the in-kind payments and the employees neglected to report them on their tax returns.

If that is the case, then DOE and the seven employees could have some explaining to do to the IRS and the Louisiana Department of Revenue, that is if Revenue Secretary Tim Barfield should be inclined to pursue the matter.

But don’t count on that.

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For mega dose of humility, try testifying before legislative committees without having answers to important questions

Posted in Auditor, BESE, Boards, Budget, Commissions, Education, Health Care, House, Senate, Legislature, Legislators, LSU, Privatization, Public Records, Recovery School District, RSD on October 21, 2013| 11 Comments »

If public humility is your thing, all you have to do is appear before a state legislative committee or state commission unprepared to provide answers to even the most basic of questions.

That’s what happened last Friday in two separate legislative committee rooms during meetings of the State Bond Commission and the Joint Legislative Committee on the Budget (JLCB) during discussions of capital outlay projects and BA-7 requests, respectively.

BA-7s are budget request forms used to make changes in revenues and/or expenditure line items during the year. Agencies submit them to the Division of Administration (DOA) Budget Office and if approved there, they are placed on the monthly agenda of the JLCB for consideration.

Bond Commission Chairman State Treasurer John Kennedy was particularly rankled over the shifting of construction projects to be replaced by $5 million in capital improvements to the LSU Health Sciences Building in Shreveport which is being taken over by Biomedical Research Foundation of Northwest Louisiana (BRF).

After Mark Moses of State Facility Planning and Control submitted changes to the commission, Kennedy said, “In July, you said the list was top priority and shovel ready. Now you’re saying they are not. What changed?”

“Cash flow needs have changed,” Moses said. “We’re shifting money. Eighteen projects are complete and on 76 others, there has been no activity and if the need is not there, we shift the dollars.”

“Why did you say in July that they were top priority?” Kennedy asked again. “The problem is if we replace them with something else, the original projects go to the back of the line. We’re shutting 90 projects down even though we have already spent money on some of them and now we’re sending those projects to the back of the line.”

Kennedy then launched into his ongoing criticism of the privatization of the Louisiana Medical Center at Shreveport and E.A. Conway Medical Center in Monroe. “We’re making $5 million in capital improvements to the Health Science Center. Who’s going to own that?”

Liz Murrill, DOA chief legal counsel, said, “We own the building. They (BRF) are leasing it.”

“We’re spending $4.8 million on scanner clinical and research imaging equipment for Biomedical Research Foundation…”

“This is a non-state entity. The dollars are being used for a public purpose,” Murrill said.

“Like an NGO (non-government organization)? We’re just giving it to them?”

“We’re providing money for this piece of equipment,” she said.

“Do we require them to file quarterly reports?”

“It’s contemplated it will be used for a public purpose,” she said, failing to answer his question.

Kennedy then asked if the legislative auditor would be able to audit the expenditure of the funds to which Murrill said, “I assume so, just as with any capital outlay projects.”

“One of the conditions of the agreement is there would be no public record,” Kennedy said, referring to a clause in the certificate of agreement between the LSU Board of Stuporvisors and BRF which says, “Financial and other records created by, for or otherwise belonging to BRF or BRFHH (BRF Hospital Holdings) shall remain in the possession, custody and control of BRF and BRFHH, respectively,” and that “such records shall be clearly marked as confidential and/or proprietary,” and thus protected from Louisiana public records laws.

“A public record is a public record,” Murrill said somewhat tentatively. “We have procedures to decide what is public record.”

“Who decides what’s public?” Kennedy asked.

“It depends on who gets the request.”

“Do you have a problem adding a condition to these purchases on the legislative auditor’s being able to audit the purchases?”

“I think that’s the case now,” Murrill said.

“Why are we buying this for the Biomedical Center instead of LSU?” Kennedy asked.

Mimi Hedgecock of the LSU School of Medicine—and formerly Jindal’s policy advisor—said the purchase was part of the partnership with BRF prior to the certificate of agreement between LSU and BRF.

“Is it accurate to say we have not picked an operator of the hospital yet?” Kennedy asked. “The testimony before the Louisiana Joint Budget Committee was they (BRF) were going to pick an operator. We’re entering a 99-year lease and don’t know who is even going to run the facility. The legislature has no say. How can we audit if we don’t know who’s running it? We can’t audit HCA (Hospital Corp. of America).

“This makes a mockery of the capital outlay procedure,” Kennedy said. “You’re supposed to be building a priority of projects. In July, you cam to us and said these projects were absolutely top priority and (were) shovel ready. Now they’re not shovel ready or top priority. Now we have new projects and these projects are going to the back of the line. I don’t think this is a good way to do business.”

Joint Budget Committee

Things got even testier at the Joint Budget Committee, thanks to the amateurish performance of witnesses appearing on behalf of the Recovery School District (RSD), just another ongoing embarrassment for the Louisiana Department of Education (DOE).

The fun began when committee member Jim Fannin (R-Jonesboro), who also serves as House Appropriations Committee chairman, questioned RSD’s claim to having $34 million in self-generated funds for the projects it was submitting.

“Explain how you self-generated $34 million,” he said. “It’s unusual for RSD to self-generate that many dollars.

The breakdown given was $27.13 million in new market tax credits, $3.37 million from insurance proceeds and $4.05 million from Harris Capital funding for construction of Wheatly and McDonough 42 schools.

Fannin responded that the way the budget was presented was “confusing.” He said he was seeing too many “other” expenditures on the BA-7 submitted by RSD. “You have legal expenses of $800,000,” he said. “I never saw legal expenses of $800,000 to rebuild two schools.”

“Those legal fees pay for 82 schools—the entire master plan,” said RSD spokesperson Annie Cambre.

But it was Sen. Ed Murray (D-New Orleans) who peppered the RSD types with a barrage of withering questions—withering because the RSD representatives were woefully ill-prepared with answers much as State Superintendent John White has been since his appointment in January of 2012.

Murray asked about the expenditure of $375,000 in funds for engineering and architectural costs before RSD had authority to spend the money. “Are we using any of this $375,000 to pay them already?” he asked.

“Most were paid from multiple fund sources,” responded a young, unidentified red-headed RSD representative who more resembled a high school FBLA member than a public education professional.

“Let me ask my question again,” Murray said. “Are we using any of this $375,000 to pay them already?”

“For some of them, yes. Some are eligible from FEMA, some not,” said Red.

“Then why are we just now getting this request if we’re already using the money?”

“We already had some authority but we just realized we need additional authority.”

Murray, beginning to show his exasperation, then asked, “How much of the $375,000 have we spent so far?”

“I don’t know,” said Red. “I can get that for you.”

“It disturbs me that we’re spending money without authority to do so,” Murray said. “Let’s go to the legal expense of $800,000. How much of that have we spent?”

“Again, I don’t have that exact number,” said Red. “I can get that for you.”

“Mr. Chairman,” Murray said to committee Chairman Jack Donahue (R-Mandeville), “can we get them to come back next month when they have answers?”

“That would seem appropriate,” said Donahue. “There’re a lot more questions than answers.”

Bordelon, in a last-ditch effort to salvage the request said, “It’s important that everyone understand the timing of the Wheatly-McDonough projects. There will be several thousand students affected by any delay. The New Market tax programs and closing times are specific. Timing is of the essence.”

“We’d like to help you guys,” Donahue said, “but when you come here you don’t have sufficient information to answer questions. I don’t know how you think we can approve something when you can’t answer questions about the money you’re asking for that you’ve already spent and how many dollars are involved.”

“We were utilizing previously granted authority,” Bordelon said.

“I appreciate that,” Bordelon said, “but on the other hand, you’re already spending it and didn’t come for authority to do that until you started spending the money. And when members ask how many dollars have already been spent, and you can’t answer, that’s a problem.”

“It was my understanding we were operating under previously granted authority,” Bordelon persisted.

“That’s not what was said,” Bordelon said. “That was not the testimony. The testimony was you were already spending that money but you don’t know how many dollars were spent.”

Murray’s motion to defer action until next month passed unanimously and Murray then had one last word of advice to Bordelon.

“You say this is going to affect ‘several thousand students.’ I’m pretty familiar with Wheatly and McDonough 42. You don’t have several thousand students in those two schools. We want you, when you come before this committee, to tell us accurate information.”

Sen. Dan Claitor (R-Baton Rouge) added, “When you come back, be prepared to discuss the oddly round legal expenses and issues related to that.”

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Teepell weighs in on Ice waste story by tweeting blame back to Ex-Gov. Kathleen Blanco’s handling of Hurricane Katrina

Posted in Auditor, Contract, Contracts, Governor's Office, Transparency, Waste on August 4, 2013| 18 Comments »

Twitter apparently is the new eight-party line.

Growing up in Ruston when it truly was a rural community (the two taxi services were the One-Four (green Chevrolets) and the Twelve Hundred (black Fords) taxi companies because their respective telephone numbers were 14 and 1200. (One could go just about anywhere in Ruston for a quarter and the cabbie kept his money in a cigar box—and tipping was unheard of.) The local furniture store was 1. Apparently they had the first telephone ever installed in Ruston.

Much like Barney Fife and Andy in The Andy Griffith Show, we had to pick up the receiver and wait for the operator to come on the line and we would give her the number we wanted to call.

This was, of course, long before the first dial system came to Ruston and our number was changed from first 122-J and then 1190-M (the letters J and M told the switchboard operator which way to move the lever—push forward and pull back were the options—to ring the proper number on a two-party line. Four- and eight-party lines had ring codes like a long, a short and another long, etc.) to Alpine 5-0177, later AL5-0177 and then simply to 255-0177 and still later to 255-5276 because the telephone company didn’t want the last four digits starting with a zero. (And we thought things were simpler back then.)

But even with the dial system, we remained on a two-party line with our neighbor, the Williamsons. To my knowledge, neither of us listened to the others’ conversations because we were friends and respected each other.

Out in the country, it was a different story. The best way to get news back then was to listen in on those eight-party lines—mainly because with eight households sharing a line, it was impossible to know who was eavesdropping.

Ah, nostalgia. It’s not what it used to be.

Twitter, it seems, can be just as fun.

Take the recent exchange between Gov. Bobby Jindal’s alter-ego Timmy Teepell and Robert Mann, political historian, holder of the Manship Chair in Journalism at the Manship School of Mass Communication at LSU, and who formerly worked for three U.S. Senators and former Gov. Kathleen Blanco.

The topic of conversation was the recent report by the Louisiana Inspector General which noted that the Jindal administration paid the equivalent of $28 a bag for 10-pound bags of ice following Hurricane Isaac last year only to pay another $312,000 restocking fee to the ice vendor and then allow the ice to melt in an unrefrigerated storage building at a total cost of more than $7.1 million.

Occasionally others listening in on the 21st Century party line would chime in.

Unfortunately, we don’t have the entire string of comments, but we have enough to know that Teepell got a little thin-skinned about the whole matter and attempted to toss the issue back into the lap of Blanco by alluding to events that occurred in the wake of Hurricane Katrina in 2005.

Following are a few of the choice comments:

  • Mann: “Jindal’s response to Ice Capade is that too much is not enough. If only he took same approach to higher ed and health care funding.”
  • Teepell to Mann and Jan Moller of the Louisiana Budget Project: “Remember when (Mann) worked for Blanco and that hurricane hit and people didn’t have enough ice. That sucked.”
  • Mann to Teepell and Moller: “Waiting days and days for the ice, buses and troops that Bush and FEMA promised. That really sucked.”
  • Teepell to Mann: “Do u remember working for Blanco? Should I post links to the TV footage? When people need food, ice and water…u get it 4 them.”
  • Mann to Teepell: “You seriously want to talk about people ‘suffering’ under a governor’s watch?? Your irony meter needs adjusting.”
  • Teepell to Mann: “We got ice to everyone who needed it…but under your watch (Mann was working for Blanco at the time of Katrina), these folks were left to suffer.”
  • Mann to Teepell: “I recognize those people. They’re the same ones to whom you now refuse health insurance. They love Jindal.”
  • Teepell to Mann (attaching photo of a throng outside the New Orleans Convention Center after Katrina): “Do you recognize these people, too?”
  • At this point someone named Calvin Lester Jr. offered his two cents worth to Teepell and Mann: “Those are the people you (Republicans) made sure never came back so your guy could win.”
  • Another participant, Jenny Barber Valois, to Teepell and Mann: “I applaud having ordered ice. The amount and waste are unacceptable. Melting for a month, why not offer to public?”
  • Third party line member, identified only as Baudenski, to Teepell and Mann: “So happy that the nation’s most desperate can be used to prop up Jindalite’s rhetoric.”

That certainly beats the local news from the old eight-party lines where the most titillating news item was when it was learned that Mrs. Brewster just got back from Houston where she had a wart removed from her nose only to learn that Mr. Brewster had supper of squash, collard greens and cornbread with the widow Johnson while she was gone.

But I’d still rather hear about the wart on Mrs. Brewster’s nose any day than listen to Timmy Teepell whine.

Somehow, trying to prop this administration up by attacking someone who has been out of office for more than five years just doesn’t seem to be much of a defense for such monumental waste.

I guess as much as anything else, it’s his cavalier attitude that is so reflective of the entire Jindal administration that I find offensive.

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Notable Quotables (in their own words)

Posted in Auditor, Health Care, Legislature, Legislators, Notable Quotables on March 1, 2013| 6 Comments »

“In January 2011, DHH eliminated all but one internal audit position. In February, the one remaining auditor retired, leaving no internal audit function at all at the end of Fiscal Year 2011.

“Each year, in the Appropriations Act, the Legislature requires agencies with budgets in excess of $30 million to use existing positions for internal audit services.

“Considering DHH has over $650 million in assets and over $7 billion in annual revenue, an effective internal audit function is critical to safeguard state assets and operations.”

—Wes Gooch, audit manager for the Legislative Auditor’s Office, in testimony before the Legislative Audit Advisory Council on Feb. 21.

“I am outraged that a member of our staff would allegedly willfully misuse public funds that were intended for health care services.”

—DHH Secretary Bruce Greenstein, in a prepared statement Friday after it was learned that a DHH employee in the Bureau of Health Care Integrity is suspected of misappropriating $800,000 in DHH funds.

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Greenstein eliminates internal audit function at DHH; two years later, $800K misappropriated (privatization at work)

Posted in Auditor, Health Care, Layoffs, Legislature, Legislators, Privatization on March 1, 2013| 7 Comments »

Two years after the Department of Health and Hospitals (DHH) eliminated its six internal audit positions, an employee of the Louisiana Department of Health and Hospitals (DHH) has been placed on leave and is expected to be fired and prosecuted for the misappropriation of more than $800,000 in state funds, LouisianaVoice has learned.

The employee, a woman, is accused of depositing checks made payable to DHH into a non-DHH account. She would then withdraw the funds from that account for personal use, investigators said. The internal investigation was conducted by DHH’s Bureau of Health Care Integrity.

In addition to conducting its own investigation, DHH notified the Louisiana Legislative Auditor’s Office and the office of East Baton Rouge District Attorney Hillar Moore. The district attorney’s office will be asked to conduct an external investigation and to prosecute the employee. Restitution also will be sought by DHH.

“In January of 2011, DHH eliminated all but one internal audit position and the following month the one remaining auditor retired, leaving no internal audit function at all at the end of Fiscal Year 2011,” Wes Gooch of the Legislative Auditor’s office told a meeting of the Legislative Audit Advisory Council just over a week ago, on Feb. 21.

He said a recent audit showed for the second year, there was “no effective internal audit function” at DHH.

“In December of 2011, DHH contracted with one auditor to perform internal audit services from December 2011 through December of 2012,” he said. “In May of 2012, this contractor submitted a proposed updated internal audit charter and one internal audit report. No other internal audit activity occurred that year,” Gooch said.

“In June of 2012, this contractor exercised the contract termination clause, leaving no internal audit function in place at the end of 2012.

Gooch told the seven legislators in attendance that each year in the Appropriations Act, “the Legislature requires agencies with budgets in excess of $30 million to use existing positions for internal audit services.

“Considering that DHH has over $650 million in assets and over $7 billion in annual revenue, an effective internal audit function is critical to safeguard state assets and operations,” he said in his testimony.

For his part, DHH Secretary Bruce Greenstein was appropriately outraged over the latest findings. We know this because he said so. “I am outraged that a member our staff would allegedly willfully misuse public funds that were intended for health care services,” he said in a prepared statement.

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