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Jindal’s privatization push beginning to crater as one setback follows another; National Guard order reveals his hypocrisy

Posted in Audit Reports, Auditor, Budget, Commissions, Contract, Contracts, Governor's Office, Health Care, LSU, OGB, Office of Group Benefits, Privatization, State Agencies on January 29, 2014| 24 Comments »

The latter part of January 2014 should probably be remembered when the policies of Gov. Bobby Jindal began to unravel in rapid succession and as a time when he was finally exposed as far more goobernatoral than gubernatorial.

If that seems harsh and disrespectful of the man and the office, then so be it; it’s only because he has earned it—in spades.

He has submitted executive budget after executive budget crafted around one-time funding for recurring expenditures—something he vowed never to do when he was running for office. He has sold off state property and entire agencies to finance those budgets. He has gone on a privatization rampage that is now coming home to bite him in the posterior, to the surprise of few observers. He has stacked board after commission with campaign lackeys who possess few, if any, qualifications for their positions of responsibility for running such things as the state’s flagship university. He has embarked on an ambitious quest for the Republic presidential nomination that is doomed to failure and disappointment.

That said, let’s examine the developments of the past few days that have converged to upset the house of cards upon which his administration has been built over the past six years:

  • The Office of Group Benefits (OGB) was privatized only a year ago. In that time, some 100 state employees lost their jobs, a $500 million reserve fund has dwindled to half that because of an ill-advised decision by Jindal to reduce premiums to some 250,000 state employees, dependents and retirees by 7 percent to make the privatization more palatable—and to reduce the state’s share of premium payments thereby helping Jindal balance his budget. Meanwhile, Blue Cross Blue Shield of Louisiana, the third party administrator who assumed management of OGB as a “cost savings plan” was forced to draw down that cash reserve to pay claims.

The folly of that ploy, of course, manifested itself this week when it was learned that double digit (some say as much as 25 percent) premium increases are imminent in order to keep what was once arguably the best-run agency in state government afloat. Meanwhile, yet another CEO has departed and the fourth in less than three years has been ushered in.

  • The crash and burn disaster of the administration’s privatization of the LSU hospital system is even more dramatic. The Biomedical Research Foundation of Northwest Louisiana (BRF) took over the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Shreveport last October because Jindal assured us that it would save taxpayer dollars. Yet, less than four months after BRF assumed operation of the two facilities, it is asking the state to bankroll more than $120 million in hospital improvements and expansions.

And don’t forget this privatization deal was approved by the LSU Board of Stuporvisors. One of the board members who voted for the deal which at the time, included a contract with more than 50 blank pages, just also happens to be the CEO of BRF but Jindal pooh-poohed the very idea that there could be a conflict of interests.

  • Another hospital privatization, that of the Interim Louisiana Hospital which replaced the old Big Charity that was heavily damaged by Hurricane Katrina, is also proving to be a tad more costly than we had been told by Jindal, thanks to the scrapping of a $46.5 million medical records system that is less than two years old.

On Friday, Jan. 24, ILH CEO Cindy Nuesslein notified employees of the one-time LSU Medical Center now jointly run by Children’s Hospital of New Orleans and Touro Infirmary that the electronic health record system installed by Epic Systems Corp. was being scrapped in favor of something called the Soarian Clinicals Siemens platform. No cost estimate was provided for the changeover, but it’s a good bet that the cost will be borne by the state.

The Epic system only went live in July of 2012 and the Epic contract, which began on May 18, 2010, expired on May 17, 2013.

  • When Jindal privatized the University Medical Center in Lafayette, he also closed the medical center’s First Step Detox, a “first step” treatment center for those suffering from chemical dependency—typically chronic alcoholics, IV heroin and/or other opiate abusers, including polysubstance abusers. When First Step Detox reopened, it sublet the center to Compass, a private entity that accepts only private pay and insured patients.

The news release announcing the reopening of First Step made no mention of the new admission policy, nor did it mention the ever-shrinking number of options for treatment for indigent patients. Now former patients are referred to the overburdened Baton Rouge Detox where they are instructed to fax their paperwork in order that they may be placed on a long waiting list.

  • Another private contractor with four contracts worth more than $385.5 million has been the subject of two critical audits by the Legislative Auditor’s Office. Moreover, a north Louisiana doctor claims that physicians are refusing to accept patients with Magellan insurance.

The first state audit, released in mid-December, says that the Department of Health and Hospitals provided no external evaluation of the performance of Magellan under its $361.4 million contract to handle paperwork and connect Medicaid 151,000 patients with mental health care providers.

Last August, the legislative auditor’s office said claims payments have been problematic for four state agencies and blamed Magellan for failing to meet significant technical requirements.

DHH Secretary Kathy Kliebert disputed that claim, saying that the privatization is working. She said the number of health care providers has expanded from 800 to 1,700—a claim hotly disputed by Scott Zentner, a Monroe neuropsychiatric doctor.

“I wish I could get to the bottom of Kliebert’s phony numbers regarding the supposed increase in providers since the Magellan takeover because the evidence is clearly to the contrary,” Zentner said. “I would bet my medical license that people are being counted now (that) weren’t before.”

Zentner said Magellan’s contract extends to private and public providers in a number of treatment settings. “Previously, they (providers) were reimbursed by fee for contracted services through DHH and some were not billing Medicaid at all, such as employees with the Office of Family Support.” Now, though, providers who were already delivering services before Magellan are now being included in the count who were not before, he said.

“I find it despicable that the head of DHH is twisting the numbers to cover up for a dramatic decline in services,” he said.

Zentner retired in 2012 after 20 years that included work as a medical director and staff psychiatrist for DHH and as a clinical associate professor of psychiatry at LSU. He said he returned to private practice after being “unable to further tolerate Jindal’s dismantling of our mental health system.”

He said he accepts all private insurances now except Magellan after “having been burned by them in the past for unpaid claims. They are the ultimate master in the use of passive-aggressive stall tactics in denying payments to providers, typically for silly technicalities; eg, misspellings resulting from typos.”

“In the northeast region of the state, with Monroe as the center of a 12-parish district, 75 percent of the physician/psychiatrist coverage has abandoned the community mental health system since Jindal took office,” he said. “Several Medicaid rehab agencies have shuttered their doors, one mental health clinic has closed in Rayville and others, including those in Winnsboro and Jonesboro, have been reduced to part-time outreach clinics operated by skeleton crews. Other outreach clinics, providing the most basic of mental health services, have closed in Tensas and East Carroll parishes,” he said.

“Other regions in the state have experienced even greater cuts than ours, but I doubt any of the regional administrators who are still employed would admit this publicly lest they be fired by Jindal.

“I’m highly skeptical of their (DHH) claims that provider rolls have increased, as (their figures) grossly contrast with reality,” he said.

The second audit was of the Office of Juvenile Justice (OJJ) and cited the office for its failure to develop a plan to monitor OJJ contracts managed by Magellan.

Magellan has a $22.4 million two-year contract with the Department of Children and Family Services also scheduled to expire on Feb. 28.

That contract calls on Magellan to provide an array of coordinated community-based services “for children and youth with behavioral health disorders and their families that risk out of home placement.”

Magellan’s contract calls for it to take over management beginning Jan. 1, 2013, at Harmony Center-Camellia Group Home in Baton Rouge, Boys and Girls Villages in Lake Charles, Boys Town of Louisiana (two facilities, in New Orleans and Baton Rouge), Harmony Center-Harmony III Group Home in Baton Rouge, and Allen’s Consultation, Inc., in Baton Rouge.

The contract requires that Magellan submit a written report detailing its progress to OJJ every six months but as of December 2013, OJJ had not received any such report documenting use of contract funds or of meeting specific goals of the contract.

  • Finally, in what is probably the most heartless, most ungrateful act yet by this administration, Jindal last week ordered the Louisiana National Guard (LNG) not to process any benefits for gay veterans on state property—in open defiance of the U.S. Supreme Court’s ruling that the 1996 Defense of Marriage Act (DOMA) is unconstitutional. Apparently Jindal based his position on some state’s rights legal opinion which he feels gave him the leverage needed to deny benefits on state property. It looks to us like more work for Jimmy Faircloth to try and defend another administration policy of questionable legal merit.

What makes this order so egregious is the blatant flag waving hypocrisy in which Jindal envelopes himself.

This is the same governor who, in a great show of his patriotism for the benefit of newspaper photographers and television cameras, traveled all over this state to hand out those appreciation medals to military veterans. The bill to award the medals was passed in the belief that legislators would benefit from the goodwill but Jindal stole that opportunity from under their collective noses with his shameless traveling awards show, denying lawmakers the chance to get in on the act. (Just for the record, as a matter of principle, I chose not to stand in line to have him present my medal nor did I apply for it to be mailed to me even though I served.)

Moreover, as thousands of Louisiana guardsmen were deployed to Iraq and Afghanistan over the past decade or so, never once do I remember anyone in this administration inquiring if anyone being placed in harm’s way for his or her country was gay. Apparently it’s perfectly okay to get shot or blown up by a roadside IED if you’re gay but if you’re lucky enough to survive, don’t bother coming home and applying for benefits.

Never, in my 70 years, have I witnessed an act so gutless, so callused. To hide behind the flag and to call oneself a Christian and a patriot while at the same time issuing such a cowardly order is beneath contempt.

It is the act of a petulant little ingrate who would defend the senseless and insensitive comments of a Phil Robertson while pretending to support the men and women who wear the uniform that he never had the courage to wear.

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Absurd state savings plan by Alvarez and Marsal examined; executive pay cuts alternative offered to ‘do more with less’

Posted in Budget, Contract, Contracts, DOA, Governor's Office, Health Care, Higher Education on January 26, 2014| 2 Comments »

When they were competing for the Republican presidential nomination in 1980, George Bush referred to Ronald Reagan’s economic platform as “voodoo economics.” When he lost to the Gipper and was named as Reagan’s running mate, Bush called himself a convert.

Well, we at LouisianaVoice are far from converted and the first wave of savings for state government rolled out by Alvarez and Marsal (A&M) can only be called doo-doo economics. In fact, the laundry list of so-called “savings” waved under the noses of the media by Minister of Propaganda Kristy Nichols leaves us even more skeptical of the now $5 million A&M contract than before.

That’s right. A&M has done such a wonderful job that its contract has been amended from the original $4.2 million to $5 million.

And Nichols’ dog and pony show is not only a clumsy effort to make an ill-advised contract look attractive, it’s downright insulting to taxpayers’ intelligence. It’s also an embarrassing admission that the Jindal team simply is not up to the task of running the state.

When she was caught “misspeaking” when she told legislators that the contract guaranteed a $500 million savings in four months—the $500 million was mentioned in the firm’s cover letter but not in the contract—she said the contract would be amended to say that. Well, apparently that little correction cost an additional $800,000. That wasn’t the way we interpreted “amended.”

Let’s face it: if she truly “misspoke” in proclaiming the contract guaranteed a $500 million savings, she should never have been given the responsibility of holding the state’s purse strings; she’s utterly and completely unqualified to hold her job. If, on the other hand, she simply lied to legislators, she should be summarily fired. What’s next, blocking the access ramp to the Sunshine Bridge so Troy Landry can’t get to Pierre Parte?

Compared to this administration, New Jersey Gov. Chris Christie is an unimaginative moron when it comes to creative ways to fool some of the people even some of the time.

In releasing the list, Nichols bubbled that the contract has already paid for itself in its first month in finding more than $4 million in savings. But, realistically speaking, we should expect nothing else from this administration. Gov. Bobby Jindal is so adept at misdirection, that should his presidential bid fall short, he can fall back on a second career as a stage magician. Let’s compare the “news” releases on the governor’s web page against the facts: http://www.gov.louisiana.gov/index.cfm?md=newsroom&tmp=home&navID=3&cpID=0&catID=2

  • Guv: “Louisiana marks sixth consecutive year of population in-migration.”
  • Fact: Our friend Elliott Stonecipher provided figures from the U.S. Census Bureau that show the state’s out-migration from July 1, 2012 to July 1, 2013 resulted in a loss of 2,492 people. If we have had, as Jindal insists, six straight years of gains, how is it that the state has gone from eight congressional districts to seven and more recently, to six congressional districts?
  • Guv: “Governor Jindal announces funding hike for higher education and new workforce incentive fund.”
  • Fact: While Jindal trumpets a $141.5 million funding increase for higher ed, Bob Mann correctly points out that $88 million of that is in the form of increased tuition. “Jindal will generously allow students and their parents to pay more to attend college and will magnanimously permit those schools to keep the money,” Mann said. http://bobmannblog.com/
  • Guv: Everything in Louisiana is either great or on the upswing (from various news releases).
  • Fact: Just examine the contents of this link. http://710keel.com/louisiana-and-arkansas-among-worst-states-in-america/

So you see the trend here and it’s certainly no surprise that the Kristy Nichols “fact sheet” more closely resembles bull sheet. It seems, from the calculations provided, that Louisiana may have already joined the states of Colorado and Washington in legalizing pot. Somebody in charge seems to be smoking something.

The first month’s A&M submissions and the projected savings and our observations (in parentheses) include:

  • Electronic visit verification of at-home visits—$500,000. (First of all, what agency is this for? Second, how is this “savings” quantified? Just tossing figures out there doesn’t cut it.);
  • Curtail unnecessary spending on high cost pharmaceuticals through case management—$154,000. (Where is the Secretary of the Department of Health and Hospitals (DHH) Kathy Kliebert? Shouldn’t she have been doing this already?);
  • Cut duplication in health care treatment through elimination of preprocessing claims—$750,000. (See previous if A&M is directing this at DHH. If it’s the Office of Group Benefits, more on that momentarily.);
  • New rate structure for patients requiring less attention than acute care but more than nursing home patients—$300,000. (Translation: cut medical benefits to the poor.);
  • Holding pediatric day care facility owners and operators accountable for management—$154,000. (You mean we weren’t doing that already either? And please explain how this constitutes a savings.);
  • Increasing occupancy bed rates—$2.5 million. (Say what? First of all, bed rates for what facilities? Second, we thought A&M was looking for savings, not increased revenue. Doesn’t that constitute a tax increase? And isn’t Jindal opposed to tax increases, even renewal of cigarette taxes? No, wait, this would be like the tuition increases, wouldn’t it? Not a tax increase, a fee increase. Different, right? Right. Got it.

We’re guessing the pea is under shell number two.

As the finale of her show and tell, Nichols proclaimed that A&M will work with the Office of Group Benefits (OGB) to find ways to make the agency more efficient.

Way to go, guys. You elbow your way in to take over what was very possibly the most efficient, well-run agency in the state to set up a revolving door of CEOs, a disappearing reserve fund balance and for the first time in many years, delays in paying claims. So now you bring in A&M to make things better—the same A&M that said the state should fire 7,500 New Orleans public school teachers following Hurricane Katrina. The state did, the teachers sued and the teachers won and now the state owes $1.5 billion as a result.

We took the four-year $5 million contract, subtracted 464 days for weekends and holidays and came up with a cost of something slightly north of $63,600 per day for A&M’s contract. At that rate, they better not be taking coffee and lunch breaks.

In unveiling his FY15 budget last week, Jindal released a nifty little PowerPoint presentation that showed the number of authorized positions in state government that had been cut during FY14. Not all the cuts resulted in layoffs, of course, because some positions that were eliminated were already vacant and there were also retirements that were not filled.

The figures show that 10,088 positions have been eliminated during the current fiscal year. Of that number 946 were in DHH, 5,998 in the Health Care Services Division, and another 2,209 were in higher education.

But wait. That same PowerPoint shows that the Executive Department (that would be the governor’s office) added 60 positions. Wait. What? Added 60 positions? So much for Jindal’s demand of state employees to do more with less.

Civil Service records show that within the Division of Administration (DOA) alone, there are 64 positions that pay $100,000 or more—a total of more than $6.8 million. Nine more, including Jindal, who work in the governor’s office, earn in excess of $100,000 per year for a total of another $1.3 million. The two highest paid are Chief of Staff Paul Rainwater ($204,400) and Ray Stockstill, listed as Director for Planning and Budget ($180,000).

Stockstill previously worked in DOA as State Director for Planning and Budget before being named Assistant Commissioner in February of 2010. He retired from that $180,000 position, effective Christmas Day of 2010 and returned to his previous position as a re-hire two days later, thus allowing him to draw retirement in addition to the $180,000 he is being paid.

Those lofty numbers do not include other employees listed in the governor’s office but who work in such areas as the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) or the Office of Financial Institutions.

So, in the spirit of economy, here’s a rock-solid suggestion that is certain to save the state a boatload of money:

Bring the A&M suits into the governor’s office and DOA, give them a mandate to cut 50 percent of that $8.1 million—not necessarily layoffs but just tell those 73 people, including the governor, to do more with less—less salary, that is. Let those administrators who are so eager to throw the rank and file employees to the curb learn firsthand what sacrifice is all about. We’re certain that with the teeming civic spirit that oozes from the fourth floor of the State Capitol, there would be unanimous consent.

That, Ms. Nichols, really would make the A&M contract pay for itself.

Now just sit back and hold your breath until that happens.

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Jindal administration clamps down on accessibility of agency records by Legislative Auditor and Legislative Fiscal Officer

Posted in Audit Reports, Auditor, Budget, Ethics, Governor's Office, Legislature, Legislators, Public Records, State Agencies, Transparency on January 23, 2014| 14 Comments »

Whether driven by paranoia or some other motive, the Division of Administration (DOA) appears to have settled into a circle the wagons mentality in an apparent attempt to stymie two independent agencies from performing their duties in a timely fashion.

It has long been suspected that Gov. Bobby Jindal’s sycophants shielded him from the political realities by whispering in his ear the things he wanted to hear, i.e. that he is viable presidential timber, that he is adored and idolized by the great unwashed. His rigid practice of holding precious few press conferences—and those with his taking no questions—has only reinforced that perception.

But now comes something official, in writing, absent of deniability, which in its unmistakable implications, is as jaw-dropping as it is unprecedented. It also should make one wonder if anything was learned from 40 years of history.

An email memorandum dated Thursday, Jan. 16, was sent out by DOA to agency and department heads to the effect that any documents sought by the Legislative Auditor or the Legislative Fiscal Officer would be required to be in the form of formal requests for public records and routed through DOA.

That message, from the DOA Office of General Counsel, said that if anyone from the Legislative Fiscal Office or Legislative Auditor’s Office calls and requests documents, the requests are to be sent to the DOA legal counsel “and the request will be handled as a Public Records request.”

A second email was sent on Tuesday of this week, this one from the DOA Internal Audit Administrator.

That message noted that a number of audits were being conducted of DOA agencies and that all personnel should notify her of any audits that are initiated. “In addition, when responding to requests for information from auditors, please send the information through me before releasing the information to the auditors. Please make sure your staff is also aware that responses to audit requests for information must be submitted through me,” she said.

While perhaps not a fair comparison to the denial of records to the Judiciary Committee four decades ago—Jindal, after all, has not been accused of breaking any laws—it is nonetheless reminiscent, on a smaller scale, of events that pushed the presidency of Richard Nixon to the brink and, ultimately, over the edge in 1974.

So the Legislative Auditor’s office and the Legislative Fiscal Office will now be required to jump through hoops to obtain public records so they can do the job they are mandated by law to do.

Each member of the Legislative Audit Advisory Council was informed of the Jan. 16 memorandum but as of late Thursday, not one had responded to requests by LouisianaVoice for comments.

Those members include Rep. Hunter Greene (R-Baton Rouge), chairman; Sen. Edwin Murray, (D-New Orleans), vice-chairman; Sen. Robert Adley (R-Benton), Rep. Cameron Henry (R-Metairie), Rep. Dalton Honoré (D-Baton Rouge), Sen. Ben Nevers (D-Bogalusa), Rep. Clay Schexnayder (R-Gonzales), Sen. John Smith (R-Leesville), Rep. Ledricka Thierry (D-Opelousas), Sen. Mike Walsworth (R-West Monroe)

The Legislative Fiscal Office is an independent agency created by statute to provide factual and unbiased information to both the House of Representatives and the State Senate. The office provides assistance to individual legislators, committees of the Legislature and the entire Legislature. Often times, information is needed quickly to respond to requests from lawmakers and to compile fiscal notes on pending bills.

Specific information about the Legislative Fiscal Office can be found in the Louisiana Revised Statutes, RS 24:601 through 24:608.

The Legislative Auditor’s office performs financial audits of state agencies and universities on a routine basis. In addition, information technology (IT) auditors analyze computer systems of government agencies to ensure data integrity and security. http://senate.legis.louisiana.gov/Documents/Constitution/Article3.htm

Performance audits address specific objectives regarding economy, efficiency and effectiveness of programs, functions and activities of state agencies under Louisiana Revised Statutes 24:522 to provide the legislature with evaluation and audit of state agencies. Under R.S. 24:522, the Legislative Auditor’s office is mandated to audit each of the 20 executive branch departments over a seven-year period and, if necessary, to bring audit topics to the Legislative Audit Advisory Council for approval. Additionally, the Legislature may request a performance audit on a particular agency to address given issues or problems.

Investigative audits are conducted for the purpose of gathering evidence regarding fraudulent or abusive activity affecting governmental entities. Investigative audits are designed to detect and deter any misappropriation of public assets and to reduce future fraud risks.

Each of the 20 executive branch departments hopes to receive an unqualified opinion. That means that the Legislative Auditor has no reservations as to the accuracy and authenticity of the information contained in its report.

If DOA, however, is attempting, for whatever reason, to screen data or conceal file document contents requested by the Legislative Auditor, the issuance of a qualified opinion, meaning the auditor conducting the examination is not willing to vouch for the accuracy of the report because of the absence or unavailability of certain records, would likely be issued in its stead. Thus, the Legislature itself would be thwarted in its oversight role of all state agencies, an untenable position in which the Legislature most likely would not like to find itself.

Normally, when state auditors enter an agency, such as the Office of Risk Management (ORM), for example, they compile a list of documents (lawsuits, in the case of ORM) and make specific requests for each file as the auditor moves from one to another. In other agencies, the records auditors may wish to examine could be travel documents, payment receipts, attendance records, equipment inventories, university scholarship and tuition payments or athletic program expenditures, to name but a few.

Full compliance with either email directive could unnecessarily slow the process of either agency’s performance of their mandated duties by forcing their personnel to make formal requests each time they wish to review a file or document and then to wait until DOA decides to comply.

LouisianaVoice typically must wait weeks for even an acknowledgement of our requests even though the Public Records Act of Louisiana (R.S. 44:1 et seq.) clearly says that the custodian of the record requested must comply immediately or, in cases when a file is in use or otherwise unavailable, respond immediately in writing as to when the record will be available within three working days.

Legislative Auditor Daryl Purpera, when contacted by LouisianaVoice, said he was unaware of the memorandum from DOA.

“That’s going to keep ‘em pretty busy up there because we’re in every agency in the state conducting our audits,” he said.

He said he has never encountered any major problems with DOA and that his auditors were almost always able to obtain requested documents “except in cases of deliberative process, a phrase they’ve used from time to time.”

Deliberative process comes into play when actions on matters are pending in the governor’s office and the governor wishes to keep details confidential until decisions are made but the Jindal administration has arbitrarily expanded the definition to other agencies as well.

Purpera’s predecessor, Dan Kyle, experienced problems obtaining records from the departments of Insurance and Economic Development because of the sensitivity of certain records claimed by the agencies.

Purpera expressed some bewilderment as to the motives of DOA in issuing the memorandum. “I really don’t know why they would do that,” he said.

Legislative Fiscal Officer John Carpenter was not available for comment.

One possible motive behind the latest dictates from DOA could be that the administration wants sufficient time to review any potentially damaging documents and to take whatever steps necessary to deny unfettered access to records in order to conceal or delay their release under the deliberative process clause. Another possibility, far more unlikely (we hope) would be to give the administration an opportunity to destroy embarrassing documents.

If one thinks that would be an extreme measure even by this administration’s standards, consider this: There is a curious but seemingly unrelated message written on a whiteboard in one DOA office which directs employees: “Do not ask about the law, do not research the law.” But as an apparent disclaimer, the message also cautions that “ignorance of the law is not a defense.”

Curious indeed.

All of which, of course, only echoes the words of an administration consultant who told DOA employees a couple of years back: “Don’t let the law stand in the way” of the administration’s objectives.

History, apparently, really does repeat itself. Richard Nixon once said, when David Frost asked about the legality of the president’s actions, “Well, when the president does it, that means that it is not illegal.”

All that’s missing now is a tape with an 18½-minute gap.

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Rejection by former supporters, appointees’ opposition and Alvarez & Marsal contract lies create perfect storm for Jindal

Posted in Budget, Contract, Contracts, Governor's Office, Higher Education, Legislature, Legislators, Politicians, RFP, Request for Proposals on January 20, 2014| 10 Comments »

Between the lies, former supporters separating themselves from him and promises of opposition by appointees, things aren’t looking up for Gov. Bobby Jindal.

Even some legislators who formerly were loyal lapdogs for the governor have learned that they have teeth and they are beginning to growl.

And from our perspective, it’s a beautiful day when Jindal and his misrepresentations are finally be called out for what they are: lies.

Commissioner of Administration Kristy Nichols was too busy to address a questioning reporter but her mouthpiece, Greg Dupuis, said she misspoke (a euphemism for lied) when she told legislators that a $500 million minimum savings was included in the verbiage of the 80-page request for proposals (RFP) for a contract was subsequently awarded to the consulting firm of Alvarez & Marsal at a price of $4.2 million. dt.common.streams.StreamServer

Instead, it turns out, the only mention of $500 million was contained only in the firm’s cover letter, which is not legally binding.

Now Nichols, apparently holding the fort down alone while her boss is on an industry-seeking trip to Asia, says the contract will be amended. http://theadvocate.com/home/8138286-125/jindal-administration-promises-to-amend

She said it, however, only after a barrage of criticism from legislators who expressed everything from disappointment to outright doubt to rare criticism—by Senate President John Alario (R-Westwego), no less—of Jindal’s secrecy in awarding the contract without informing lawmakers. http://theadvocate.com/home/8131113-125/much-vaunted-savings-not-included

Sometimes you need a fresh set of eyes,” said Ruth Johnson, assistant commissioner for statewide services.

Chief skeptic in residence C.B. Forgotston, however, dredged up some old Jindal campaign promises which tend to fly in the face of such logic.

Forgotston cited this Jindal utterance taken from his campaign brochure on state finances:

  • “Government spending is not just about writing checks to anyone and everyone. It is about being a responsible steward of the public’s money. It is about holding public officials and recipients accountable for the financial decisions they make on our behalf. It is about making sound fiscal priorities and sticking to them.

And extracted from that same brochure:

  • “RESPONSIBLY MANAGE AND ACCOUNT FOR SPENDING OF HARD-EARNED TAXPAYER DOLLARS:”
  • “Identify and recruit top-caliber cabinet secretaries.”
  • “All appointments must be talented, articulate, experienced managers that can consistently deliver desired outcomes while reducing costs wherever possible.”

The question then becomes, Forgotston said, “If the consulting report finds savings in the state departments under Jindal’s jurisdiction…we will hold Jindal accountable?

C.B. has a refreshing way of cutting through all the bureaucratic gooneybabble and getting right to the heart of an issue. http://forgotston.com/

Carrying his not-so-rhetorical question even further, should we hold Nichols accountable for the supposed oversight and subsequent lying…er, misstatement to the legislature about a mythical $500 million savings?

One former supporter of Jindal—both from a philosophical and financial perspective—seems to think so.

A funeral certainly is an unusual, if not inappropriate, place to discuss politics but with so many current and former elected officials on hand for the services of Wiley Hilburn, the retired former head of the Louisiana Tech journalism department, it was almost inevitable that the subject of Jindal would find its way into the idle conversation. Funerals and weddings are, after all, major social functions at which, if only in passing, acquaintances are renewed, ideas are exchanged and common ground is explored.

After the services Sunday, as guests were milling around in front of the Presbyterian Church of Ruston, one former supporter, in a brief but revealing conversation, was unrestrained in his disgust with Jindal. There was no subtlety or coyness, no mincing of words.

Without identifying the person, let it suffice to say that considerable money made its way from his bank account—and that of his company and family members (all legal, in case anyone wonders) into the campaign coffers of Jindal and now the good governor won’t even take his phone calls.

That will turn an ally into an enemy faster than just about anything else. No benefactor takes being ignored lightly and this man said as much on Sunday. “I thought (Mike) Foster was flaky and (Kathleen) Blanco had her moments,” he said. “But this guy….he forgot why he was elected the moment he walked through those doors. He’s completely turned his back on this state while he pursues something else, whatever that might be.”

This from a one-time staunch supporter.

One doesn’t have to consider long and hard what Jindal’s other options might be as he flits across the breadth and depth of the country in an attempt to line up support for a presidential run—a run that has about as much chance as a one-legged man in a tap dancing contest. Jindal would be far more appealing in a twerking marathon than a presidential campaign. New Jersey Gov. Chris Christie would have a better chance trying to cut in on commuters en route to Fort Lee during morning rush hour on the George Washington Bridge.

Of course, he is so obsessed with his quixotic quest that he doesn’t have a clue and those sycophants with whom he surrounds himself don’t have the stones to tell him. That or they are even more unrealistic in their rose colored glasses than he.

That arrogance could also prove to be a shocking lead-up to unpleasant surprises during his final two years in office as even some of his appointees—those from whom he demands unconditional loyalty and subservience—are muttering to themselves about a possible coup d’état.

Commenting on State Treasurer John Kennedy’s observation on last Friday’s Jim Engster Show on Baton Rouge’s public radio station that Jindal has gutted the budgets of higher education 67 percent since entering office, another attendee at Sunday’s funeral said, “We’re going to have to stand up against this guy. Higher ed can’t take any more hits.”

Of course, it remains to be seen if there will be follow through on the part of appointees and legislators.

But while they may have once been talking among themselves behind closed doors and never openly, they now are airing their complaints in a more public manner.

Like sharks circling in the waters, they may finally smell blood.

That could make the next two years both turbulent and interesting.

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Firm’s advice to fire Orleans teachers after Katrina may cost taxpayers $1.5B; hired for $4M by Jindal to save state money

Posted in Boards, Budget, Commissions, Contract, Contracts, Courts, Education, Governor's Office, Jobs, Judges, Layoffs, Legislature, Legislators, ORM, Office of Risk Management, Privatization, Revenue, Teague on January 17, 2014| 9 Comments »

It’s small wonder that Gov. Bobby Jindal wanted to get out of town quickly—he departed the state for an extended trip to Asia to recruit business and industry investment in Louisiana—given the flak he is receiving from the legislature and radio talk show hosts over his hiring of a consulting firm at a cost of $4.2 million to somehow magically find $500 million in state government savings. http://theadvocate.com/csp/mediapool/sites/dt.common.streams.StreamServer.cls?STREAMOID=sZuDzNJoJK2fudmeRm9FJpM5tm0Zxrvol3sywaAHBAlauzovnqN0Cbyo1UqyDJ6gE0$uXvBjavsllACLNr6VhLEUIm2tympBeeq1Fwi7sIigrCfKm_F3DhYfWov3omce$8CAqP1xDAFoSAgEcS6kSQ–&CONTENTTYPE=application/pdf&CONTENTDISPOSITION=Alvarez%20Marsal%20Government%20Savings%20Contract.pdfhttp://theadvocate.com/news/8045923-123/vitter-super-pac-raises-15

And that contract doesn’t even take into account Pre-Jindal recommendations by the firm that may ultimately end up costing taxpayers $1.5 billion which, of course, would more than offset any $500 million savings it might conjure up that the Legislative Fiscal Officer, the State Treasurer, the administration, the legislature and the Legislative Auditor have been unable to do, largely because of a time honored political tradition affectionately known as turf protection.

One might even ask, for example, why representatives of the consulting firm, Alvarez & Marsal, who somewhat smugly call themselves “efficiency engineers,” were wasting their time Friday at the gutted Office of Risk Management. Isn’t there already a promise of $20 million in savings on the table as a result of Jindal’s privatization of that agency four years ago? For just that one small agency, that’s 4 percent of the entire $500 million in savings Jindal is seeking through the $4 million contract. (The elusive $500 million savings, for the real political junkies, represents only 2 percent of the state budget.)

The Baton Rouge Advocate also got in on the act on Saturday with Michelle Millhollon’s excellent story that  noted that the actual contract contains no mention of a $500 million savings. http://theadvocate.com/home/8131113-125/vaunted-savings-not-included-in

That revelation which is certain to further antagonize legislators, including Senate President John Alario (R-Westwego) whom Jindal will now probably try to teague for his criticism of the governor’s penchant for secrecy.

Hey guys, your contract is only for four months, so why waste your time in an agency that supposedly is on the cusp of a $20 million savings? That ain’t very efficient, if you ask us.

Legislators immediately voiced their displeasure at the contract. “There’s a lot of people who don’t like it,” said Rep. John Schroder (R-Covington), a one-time staunch Jindal ally.

Rep. Tim Burns (R-Mandeville), chairman of the House Governmental Affairs Committee (if he hasn’t been teagued by now), said when the dust settles any cost cutting will ultimately be the responsibility of state officials. “Even the best PowerPoint presentation isn’t going to cut government,” he said. “The trick is to make the political choices.”

The contract raises immediate questions how Jindal, now entering his seventh year in office, could justify the move in light of his many boasts of efficiencies his administration has supposedly initiated.

Ruth Johnson, who is overseeing the contract for the Division of Administration, defended the deal with the simplistic and less than satisfactory logic that “Sometimes you have to spend money to save money.”

And while Jindal has indicated he wants a final set of recommendations in April, the contract runs through 2016, meaning the final cost could far exceed the $4.2 million Alvarez & Marsal is scheduled to receive for its review.

Jim Engster, host of a talk show on public radio in Baton Rouge, on Friday predicted during an interview with State Treasurer John Kennedy that Alvarez & Marsal’s final report will most likely bear an uncanny resemblance to the 400-plus-page interim report of Dec. 18, 2009, by the infamous Commission on Streamlining Government.

The hearings by that commission, you may remember, gave birth to the term teaguing, a favorite tactic employed by the Jindal administration when a state employee or legislator refuses to toe the line. A state employee named Melody Teague testified before that commission and was summarily fired the following day. Six months later her husband, Tommy Teague, was fired as head of the Office of Group Benefits when he was slow in getting on board the Jindal Privatization Express. Mrs. Teague appealed and was reinstated but her husband took employment elsewhere in a less volatile environment.

The Alvarez & and Marsal representatives have pleaded ignorant to questions of whether their report will draw heavily from the four-year-old commission report and even professed to not know of its existence.

A curious denial indeed, given that Johnson was also the ramrod over the streamlining commission during Jindal’s second year in office. Does she not share this information with the firm or was all that commission work for naught? Or part of Jindal’s infamous deliberative process? Curious also in that Alvarez & Marsal is specifically cited—by name—no fewer than six times in the report’s first 51 pages, each of which is in the context of privatizing the state’s charity hospital system. The report quoted the firm as recommending that:

  • “The governor and the legislature authorize and direct the LSU Health System to adopt the recommendations of Alvarez and Marsal for the operation of the interim Charity Hospital in New Orleans. The governor and legislature direct every other charity hospital in Louisiana to contract for a similar financial and operational assessment with a third party private sector consulting firm, such as but not necessarily Alvarez and Marsal, that specializes and has a proven track record in turnaround management, corporate restructuring and performance improvement for institutions and their stakeholders.”

That’s right. That is where the seed was apparently first planted for the planned privatization of the LSU Hospital system, even to the point of directing the LSU Board of Stuporvisors to vote to allow a Shreveport foundation run by one of the LSU stuporvisors to take over the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe. Alvarez & Kelly performed that bit of work under a $1.7 million contract that ran for nine months in 2009, from Jan. 5 to Sept. 30 (almost $200,000 per month).

Alvarez & Marsal also received a $250,000, contract of a much shorter duration (10 days) from Jindal on April 9, 2013, to develop Jindal’s proposal to eliminate the state income taxes in favor of other tax increases. That quickie, ill-conceived plan was dead on arrival during the legislative session and Jindal quickly punted before a single legislative vote could be taken

But Alvarez & Marsal’s cozy if disastrous relationship with state government goes back further than Jindal, even. http://www.alvarezandmarsal.com/case-study-new-orleans-public-schools It’s a relationship that could become one of the most costly in state history—unless of course, the state chooses to ignore a court judgment in the same manner as it has ignored a $100 million-plus award (now in the neighborhood of a quarter-billion dollars—with judicial interest) stemming from a 1983 class-action flood case in Tangipahoa Parish.

In fact, the state probably has no choice but to ignore the judgment as an alternative to bankrupting the state but that does little to remove the stigma attached to a horrendous decision to accept the recommendation of Alvarez and Marsal which subsequently was rewarded with a $29.1 million three-year state contract from April 4, 2006 to April 3, 2009 to “develop and implement a comprehensive and coordinated disaster recovery plan in the wake of Hurricane Katrina.”

In December of 2005, the Orleans Parish School Board adopted Resolution 59-05 on the advice of the crack consulting firm that Jindal somehow thinks is going to be the state’s financial salvation.

That resolution, passed in the aftermath of disastrous Hurricane Katrina was specifically cited in the ruling earlier this week by the 4th Circuit Court of Appeal that upheld a lower court decision the school board was wrong to fire 7,500 teachers, effective Jan. 31, 2006. The wording contained in the ruling said:

  • “In December 2005, the OPSB passed Resolution No. 59-05 upon the advice and recommendation of its state-selected and controlled financial consultants, the New York-based firm of Alvarez & Marsal. The Resolution called for the termination of all New Orleans Public School employees placed on unpaid “Disaster Leave” after Hurricane Katrina, to take effect on January 31, 2006.1 On the day that the mass terminations were scheduled to take place, Plaintiffs amended their petition to seek a temporary restraining order preventing the OPSB from terminating all of its estimated 7,500 current employees at the close of business on that day. The trial court granted the TRO and this Court and the Louisiana Supreme Court denied writs on the issue. The TRO was later converted into a preliminary injunction that restrained, enjoined and prohibited the OPSB, et al, from “terminating the employment of Plaintiffs and other New Orleans Public School employees until they are afforded the due process safeguards provided in the Orleans Parish School Board’s Reduction in Force Policy 4118.4.” Nevertheless, Plaintiffs and thousands of other employees were terminated on March 24, 2006, after form letters were mailed to the last known address of all employees of record as of August 29, 2005.”

The appellate court upheld the award of more than $1 million to seven lead plaintiffs in the case of Oliver v. Orleans Parish School Board but adjusted the lower court’s damage award, ordering the school board and the Louisiana Department of Education to pay two years of back pay and benefits and an additional year of back pay and benefits to teachers who meet certain unspecified requirements.

Immediately following Katrina, state-appointed Alvarez and Marsal set up a call center to collect post-Katrina addresses for a majority of staff members in time for the anticipated layoffs. But when the state began the hiring process for schools that had been taken over, the terminated employees were never called, prompting plaintiff attorneys to charge that the entire procedure was intentional and part of the state’s plan to take over the Orleans Parish school system.

Plaintiffs said that then-State Superintendent of Education Cecil Picard chose Alvarez & Marsal to prevail upon the school board to replace acting parish Superintendent Ora Watson with an Alvarez & Marsal consultant.

So, Watson was replaced, 7,500 teachers were fired, and the teachers sued and won, leaving the Orleans School Board and the state liable for a billion-five and the firm that started it all is hired by Jindal to find savings of an unspecified amount. What could possibly go wrong?

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