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Citizen input? We don’t need no stinkin’ citizen input. We have LABI, the chemical association and campaign cash

Posted in Budget, Business, Corruption, Ethics, Exemptions, Incentives, Finances, House, Senate, Legislature, Legislators, Lobbyist, Louisiana Purchase, Media, Politicians, Revenue, Taxes on March 18, 2016| 12 Comments »

Regular readers of this site know our disdain for the undue influence of lobbyists and special interests over lawmakers to the exclusion of the very voters who elected those same lawmakers to represent them and their best interests.

Our opposition to political decisions made with priority given to campaign contributions over what is best for the state is well-known—and uncompromising. Money should have no place—repeat, no place—in political decisions.

Unfortunately, we know that is not the case. Politicians for the most part, are basically prostitutes for campaign funds and those who choose to remain chaste usually find themselves at a serious disadvantage come election time.

To that end, you can probably look for State Rep. Jay Morris (R-Monroe) to attract strong opposition when he comes up for re-election in 2019. And that opposition, whoever it might be, is likely to have a campaign well-lubricated by the Louisiana Association of Business and Industry (LABI), the Louisiana Chemical Association, and the oil and gas industry.

At the risk of belaboring the obvious, we have gone on record on numerous occasions as saying the voters are merely pawns to be moved about at will by big business in general and the banks, pharmaceutical companies, Wall Street and oil companies in particular. It is their money that inundates us with mind-numbing political ads that invade our living rooms every election year telling us why Candidate A is superior to Candidate B because B voted this way or that way and besides, good old Candidate A has always had the welfare of voters uppermost in mind.

The presence of that influence was never more clearly illustrated than in Tyler Bridges’ insightful story in Friday’s Baton Rouge Advocate. http://theadvocate.com/news/15225624-78/la-legislative-staffers-sort-out-changes-added-at-the-last-minute

In the very first paragraph of his story, Bridges wrote that a secret deal between Senate President John Alario (R-Westwego), House Speaker Taylor Barras (R-New Iberia) and lobbyists for LABI and the Louisiana Chemical Association.

We won’t bother to re-hash the details of that meeting and the agreement finally reached just before the closing minutes of the recent special session. You can read the details in the link to the Bridges story that we provided above.

But suffice it to say had it not been for Morris digging his heels in and threatening to kill his own bill when he learned of a manufacturing tax break that had been added to his bill, HB 61 that aimed at eliminating exemptions and exclusions on numerous sales tax breaks. Though a Republican, Morris feels that big business isn’t paying its fair share of taxes.

“I was not aware of the deal,” Bridges quoted Morris as saying. “I was not invited.”

Neither, apparently, were any spokespersons for consumers, organized labor, teachers, or the citizens of Louisiana.

Oh, but you can bet LABI President Steve Waguespack was invited to a meeting in Alario’s office earlier in the day, as was Louisiana Chemical Association chief lobbyist Greg Bowser.

Given that, we would like to ask Sen. Alario and Rep Barras why no one representing the people were invited to that little conclave. And don’t try to tell us that the Senate President and House Speaker were representing the people. You were not. You were representing the vested interests of the chemical industry and big business. Period.

Sen. Alario, Rep. Barras: the people of Louisiana are far more deserving of a place at the table in some furtive backroom meeting than LABI and the chemical association.

Either all factions are invited in or no one is. The playing field should be level.

By not excluding lobbyists or by not inviting those on whose shoulders are placed the greatest burden, the ones who placed you in office, you have not just failed at your job; you have failed miserably.

Our late friend C.B. Forgotston would have said of the meeting which produced that secret deal: “You can’t make this stuff up.”

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After 30 years, Louisiana still pursues its failed industrial inducement policy that only serves to empty state treasury

Posted in ALEC, American Legislative Exchange Council, Broadband, Internet, Budget, Business, Economy, Education, Exemptions, Incentives, Finances, Governor's Office, Higher Education, Incentives, Legislature, Legislators, Politicians, Revenue on February 24, 2016| 11 Comments »

As it turns out, that quote was attributed to Einstein in error but the fact that he never said it doesn’t alter the accuracy of the definition.

And for at least three decades, Louisiana along with the rest of the South, has insisted on following the same outdated industrial inducement policies first warned about in a 1986 report by MDC, Inc. (Manpower Development Corp.) of Durham, N.C.

One of the members of the MDC Panel on Rural Economic Development which produced the 16-page report Shadows in the Sunbelt was Dr. Norman Francis, then President of Xavier University and Chairman of Liberty Bank in New Orleans. https://gri.unc.edu/files/2011/10/Shadows-in-the-Sunbelt-86.pdf

That 1986 report was followed up in 2002 when MDC published a 44-page report entitled The State of the South. http://mdcinc.org/sites/default/files/resources/MDC_StateOfTheSouth_2014.pdf

Both reports said much the same thing: that the market had dried up. There were, the reports said, 15,000 industrial inducement committees in the South chasing 1500 industries—and if they relocated at all, it would be whether inducements in the form of tax incentives were offered or not. “At best, the states have assisted businesses in doing what they wanted to do anyway,” the ’86 report said.

“The factors which once made the rural South attractive (to industry) are now losing relevance,” it said. That’s because the South, which once boasted an abundance of low-cost labor, can no longer complete in the global market. Where American apparel workers would earn $6.52 an hour (remember, this was in 1986, but the numbers are still comparable), their counterparts in Korea and Taiwan earned $1 and $1.43, respectively, and Chinese workers made about 26 cents per hour.

Shadows in the Sunbelt called southern states’ tax incentives to lure business and industry a “buffalo hunt,” an analogy to the great buffalo hunts of the 19th century which nearly wiped out the North American bison population. “Yet the hunters (states) continue in their pursuit, hoping to bag one of the remaining hides,” the report said.

The stampede actually started in Mississippi 80 years ago through a program called “Balance Agriculture with Industry” whereby the state used municipal bonds to finance construction of new plants. That practice evolved into tax breaks offered to prospective industries as states began forfeiting property tax revenues to lure new jobs.

Today, Louisiana gives up about $3 billion each year in tax breaks and credits doled out in various programs, all of which are designed ostensibly to attract industry and raise the standard of living through more and better jobs but which in reality, do little of either.

What we’ve received instead are tax breaks for duck hunters, chicken plucking plants, Wal-Mart stores, fast food franchises and for industries that either (a) get the tax incentives but which soon shut down operations (Nucor Steel, General Motors) or (b) claim the creation of great numbers of new jobs but which actually are far fewer than announced.

In fact, the ’86 report said, a long-term study of job promises in South Carolina revealed that only 52 percent of the jobs promised actually materialized. In Louisiana, when Bobby Jindal ran for re-election in 2011, he claimed in TV ads that the Louisiana Department of Economic Development during his first term handed out incentives that brought 25,425 new jobs to Louisiana. The actual number, however, was only 6,729. That’s only 26.5 percent of the jobs promised. https://louisianavoice.com/2011/09/29/jindal-plays-fast-and-loose-with-jobs-claim-tv-campaign-ad/

The ’86 report said as much. “The costs of inducements offered to attract industry are also heavy—and in some cases counterproductive,” it said. Evidence showed that tax breaks did not significantly affect plant location decisions but states nevertheless open up the state treasury for companies to loot even though the benefits do not offset the costs. “Whatever the effectiveness of industrial recruiting in the past, current trends clearly indicate that its value as a tool for economic development is declining,” it said.

That was 30 years ago and we’re still giving away the store by adhering to a faulty ALEC-backed policy of favoring corporations over citizens.

As an alternative, the report recommended that in lieu of spending millions to attract out-of-state industries, states should implement programs to support local development and to encourage entrepreneurship.

The 2002 report, State of the South, only reiterated the recommendations of the study of 16 years earlier. It also should have sent a clear message to the Louisiana Legislature and to Bobby Jindal six years before he came to power. The latter report’s recommendations included:

  • Refocus state agencies responsible for economic development to pursue a broader, more strategic approach;
  • State governments should not measure success simply by the number of new jobs, but also in terms of higher incomes for people and improved competitiveness of regions within the states;
  • Modernize tax systems so that states have the fiscal capacity to provide excellent educatin, widely accessible job training, necessary infrastructure, and community amenities that enrich the soil for economic development;
  • Tighten performance criteria for industrial incentives—and encourage associations of Southern governors and legislators to reexamine the one-dimensional, incentives-driven recruitment strategy in favor of a comprehensive economic development strategy;
  • Dramatically expand efforts to erase serious deficits along the entire education continuum in the South, and bolster the education, health and well-being of children;
  • Draw on universities and community colleges to act as catalysts for state and regional economic advancement.

The 2002 report said high-poverty, sparsely-populated areas are last to get telecommunications infrastructure. More than 60 percent of the zip codes in the Delta areas of Arkansas, Mississippi and Louisiana have no broadband internet provider which further widens the competitive gap for these areas. Yet Jindal rejected an $80 million federal grant to install broadband in Louisiana’s rural areas. http://www.nola.com/politics/index.ssf/2011/11/80_million_grant_for_rural_bro.html

Because Louisiana, along with the rest of the South, made a commitment to low taxes, low public investment, and low education in return for jobs. That strategy trapped the state in a cycle of low-wage, low-skill industry “begetting more low-wage, low-skill industry,” and thus perpetuating the “Wal-Mart Syndrome.”

Mac Holladay, who served as head of economic development for three Southern states summed up the situation. “If we had put the vast majority of our economic development resources into incubators, small business services, export training, and existing business assistance instead of recruitment and overseas offices, it might have made a big difference.”

Tax abatements and other financial giveaways, the 2002 report said, “inevitably drain resources from schools, community colleges and universities—public investments that are crucial to long-term economic advancement. Incentives provide a better return on investment when they build a community’s infrastructure, provide workers with higher skills and attract jobs that pay markedly more than the prevailing wages.”

Even when Mississippi granted $68 million in incentives for Nissan’s assembly plant in Canton, a small town just north of Jackson, the company’s director of human resources told the Jackson Clarion-Ledger that he could not name any Canton resident likely to be hired for one of the 5,300 jobs starting at $12 per hour. He attributed that to the town’s 27 percent poverty rate, 76 percent of out-of-wedlock births and 44 percent of adults without a high school diploma.

Carley Fiorina, former chief executive for Hewlett-Packard and more recently an unsuccessful candidate for the Republican presidential nomination said, “Keep your incentives and highway interchanges. We will go where the highly skilled people are.”

“Not so long ago,” said the 2002 State of the South report, “the South sought to build its economy by enticing companies from afar to relocate with the bait of cheap land, low taxes, and a surplus of hardworking but undereducated workers. That old recipe no longer works to feed families and sustain communities.

“No comprehensive strategy would be complete without further efforts to bolster public schools,” the report said.

“There must be a recognition that the ultimate challenge lies in the educational and economic advancement of people who have gotten left behind,” it said. “We must get the message out to every household, every poor household, that the only road out of poverty runs by the schoolhouse.

“The line that separates the well-education from the poorly education is the harshest fault line of all.”

Yet, Louisiana’s leaders insist on doing the same thing over and over and expecting different results.

And we keep electing the same failed policy makers over and over and over…

Insanity.

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Wal-Mart: feeding at the public trough while underpaying workers, destroying Louisiana’s mom and pop businesses

Posted in Auditor, Business, Corruption, Economy, Ethics, Exemptions, Incentives, Finances, Incentives, Jobs, Legislature, Legislators, Public Records, Revenue, Taxes on February 24, 2016| 6 Comments »

The past is prologue

                                    —William Shakespeare (The Tempest)

In 1936, Mississippi Gov. Hugh White successfully pushed through the state legislature his answer to President Franklin Roosevelt’s New Deal so despised by southern states.

Mississippi could grow and prosper through his landmark “Balance Agriculture with Industry” program, according to Mississippi native Joseph B. Atkins, author of the little-known but important book Covering for the Bosses. The book is an examination of how newspapers in the South refused to give fair coverage to labor unions in their attempt to gain equitable working conditions for workers first in the textile mills and later the automobile industry.

https://books.google.com/books?id=o6AfWT79t2MC&pg=PA237&lpg=PA237&dq=shadows+in+the+sunbelt+1986&source=bl&ots=7Wb_bKCn48&sig=FIjJetyw-Li-lCk0c3zN_muV3MA&hl=en&sa=X&ved=0ahUKEwjL-Ob4k4_LAhWFPiYKHchPD50Q6AEIUDAJ#v=onepage&q=shadows%20in%20the%20sunbelt%201986&f=false

According to Atkins, White figured he could attract industry to Mississippi through the then-radical concept of offering attractive tax incentives and promises of low wages—and, of course, no unions.

The program, Atkins writes, eventually became a model for the entire South and today, Mississippi, in the latest rankings of the best states for business, can be found sitting firmly in….47th place among the 50 states, ranked ahead of only (in order) Kentucky, Louisiana, and West Virginia. In fact, the South can lay claim to six of the bottom 10 spots in the national rankings. They also include Arkansas (42nd) and Alabama (45th). Tennessee was only slightly better at 38th. Virginia (10th) and North Carolina (15th) were the only southern state in the top 20. http://247wallst.com/special-report/2016/02/17/the-best-and-worst-states-for-business-2/

So what went wrong with White’s grand scheme for Mississippi? Simply put, the same thing that doomed Louisiana, Alabama, Arkansas and Tennessee to the bottom one-fourth of the heap. They gave away their tax bases while at the same time condemning their citizens to lives of low wages and poor benefits. And Wal-Mart was first in line to fully exploit the plethora of incentives, be they the 10-year property tax exemptions, Enterprise Zone initiatives or some other inducement.

Wal-Mart, described by Wall Street Journal writer Bob Ortega in his book In Sam We Trust as “an amoral construct with one imperative: the profit motive.”

In October 2005, Atkins writes in Covering for the Bosses, that an internal Wal-Mart memo was leaked which revealed the true, impersonal attitude of the corporate office toward its 1.3 million American workers, 30 percent of whom are part-time workers.

In her memo to Wal-Mart executive vice president M. Susan Chambers complained of the costs of long-term workers. The company, she said, spent 55 percent more on them than on one-year workers even though “there is no difference in (the employee’s) productivity.” She said because Wal-Mart pays an associate “more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart….The least health, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart,” she said.

In plain language, she was advocating throwing older workers to the curb in favor of newer, lower-salaried workers.

Yet Wal-Mart has shoved its way to the public trough, securing some $100 million in economic development subsidies from the state in 20 cities from Abbeville ($1.67 million) to Vidalia ($1.65 million), from Shreveport ($6.3 million) to New Orleans ($7 million), from Monroe ($3.9 million) to Sulphur ($1.8 million).

Nationally, estimated annual subsidies and tax breaks to Wal-Mart and the Walton family total $7.8 billion per year. This for six Walton heirs whose collective net worth of $148.8 billion is more than 49 million American families combined. http://www.americansfortaxfairness.org/files/Walmart-on-Tax-Day-Americans-for-Tax-Fairness-1.pdf

A congressional report estimated that each Wal-Mart store in America generated an average of $421,000 in Medicaid, SNAP and public housing costs to taxpayers. That’s in addition to the estimated $1 billion taxpayers anted up in local and state government subsidies to have a Wal-Mart in their communities. Wal-Mart workers, who earn less than $10 an hour (about $18,000 per year), are offered a family health care plan with a $1,000 deductible costing $141 per month.

And remember that warm fuzzy “Made in USA” advertising campaign of Wal-Mart in which Wal-Mart in 2013 said it was starting a 10-year plan to increase spending on U.S. made products by $250 billion? Well fuggeboutit. It didn’t happen and last October, the company removed the “Made in the USA” logos from all product listings on its Web site after the Federal Trade Commission caught the company (gasp) lying. http://fortune.com/2015/10/20/walmart-made-in-the-usa/

Instead, much of its merchandise, clothing in particular, comes from third-world sweatshops where workers are paid pennies per hour in wages and children work up to 20 hours per day to make the clothing we purchase from Wal-Mart. https://www.dosomething.org/us/facts/11-facts-about-sweatshops

And here’s a real eye-opener.

In her book Cheap, author Ellen Ruppel Shell reveals a dirty little secret most consumers are unaware of: name-brand clothing sold at Wal-Mart aren’t quite what consumers think they are. “Discounting dilutes brands, making it less certain that they are a mark of quality,” Shell writes. http://www.nytimes.com/2009/07/19/books/review/Shapiro-t.html?_r=0

Hundreds of brands “slice and dice their offerings for various markets, selling different products in different types of stores for different prices under the same brand,” she said. “Chains such as Wal-Mart, Best Buy, Target and Home Depot have items manufactured ‘to their specifications,’ meaning that the brand name is almost devoid of meaning.”

That means a television with a model number available only at Wal-Mart is not really a Sony or a Samsung, for example, but a Wal-Mart television.

“Brands have become an end in themselves,” she writes. “…It is not the brand alone that entices discount shoppers; it is the high value we link to the brand versus the low price we pay that is so seductive.”

In recent years, Louisiana taxpayers have subsidized the construction of Wal-Mart stores in two affluent suburbs to the tune of a $700,000 tax credit. A tax credit is a dollar for dollar reduction of a tax liability meaning a $1 tax credit reduces one’s taxes by a full dollar. Bear in mind, these subsidies were Enterprise Zone projects. The Enterprise Zone program is designed specifically to lure business and industry into areas of high unemployment in order to help economically depressed areas. Instead, one of these stores were built in St. Tammany, one of the most affluent communities in the state.

Likewise, $330,000 in Enterprise Zone tax credits were awarded in 2013 to Lakeview Regional Medical Center in St. Tammany Parish for an upgrade to its facilities which created a grand total of five new jobs.

As far back as 2012, then-Secretary of the Department of Economic Development Stephen Moret said the Enterprise Zone program no longer fulfilled its purpose. http://www.nola.com/politics/index.ssf/2012/12/louisiana_economic_development_1.html

A Legislative Auditor’s report agreed, saying that 75 percent of new jobs, 68 percent of new businesses and 60 percent of capital investments were made outside the EZs. http://app1.lla.state.la.us/PublicReports.nsf/92629A33AAE8C55F862579EB0072ACEB/$FILE/00029DFA.pdf

That’s because unlike other states, Louisiana’s Enterprise Zone program allows the generous five-year tax breaks for retail establishments, businesses whose salaries traditionally are at the low end of the pay scale. Those include, besides Wal-Mart, chain stores like Walgreens and Raising Cane’s chicken outlets.

“Most of the projects are larger companies investing in relative affluent areas in Louisiana today,” Moret said in something of an understatement. He said that fact alone underscored the importance of making changes to the program.

Were changes made? No. In fact, in 2013, the year after his comments, the state awarded EZ tax credits totaling $19.6 million for projects that produced 4,857 new jobs which in turn generated about $10 million in state income taxes, or a net loss of more than $9 million to the state.

Meanwhile, Atkins quotes author Bill Quinn as saying Wal-Mart “has done more to stomp out Middle-class America than all other discount houses put together.”

Yet, the official policy of Louisiana has been to continue to give generous tax breaks to a company that underpays its employees, deceives customers into thinking they are “buying American” when in reality, they are propping up third-world sweatshops whose workers churn out second line brand names under slave-like working conditions.

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Bobby Jindal’s parade of lies and distortions about state’s wonderful business climate exposed in yet another survey

Posted in Business, Corruption, Economy, Education, Ethics, Exemptions, Incentives, Finances, Governor's Office, Incentives, Jobs, Politicians on February 23, 2016| 20 Comments »

After eight years of Bobby Jindal’s whiz-kid ALEC-backed policies of awarding tax incentives, exemptions, and inducements to the business and industry lobby and his constant boasting to Iowans and to Fox News of his smashing successes, Louisiana remains mired as the second-worst state in the nation for business.

So says the latest report of 24/7 Wall St., a financial news and opinion company headquartered in Delaware which publishes more than 30 articles per days on economics, health, and politics.

For its most recent survey, 24/7 compiled 47 measures into eight separate categories to determine the business climate for each state: business costs, cost of living, economy, infrastructure, labor and human capital, quality of life, regulation, and technology and innovation.

The U.S. has seen 71 consecutive months of private sector job growth through January, the report noted. Despite the consistent improvement, which dates back to February 2009 (the month after Jindal was first sworn in as governor), the recovery has been uneven and some states have experienced substantially less growth than others.

One of those is Louisiana, where the gross domestic product (GDP) growth of 1.5 percent was 21st lowest in the nation and average wages and salaries of $46,136 was 24th lowest.

Both of those ratings put the state at about the middle of the pack but other indicators showed a much bleaker picture. But only one other state, Maine, has experienced an annualized GDP decline over the past five years.

The 434 patents issued to residents in 2014 was 14th lowest in the nation. The projected working-age population growth through the year 2020 of minus 3.2 percent was seventh lowest and the 22.9 percent of adults with bachelor’s degrees was fifth lowest.

A decreasing working-age population, combined with the relatively low educational attainment means trouble for employers to fill positions with qualified job candidates. That could explain the high number of tax incentives to industries with low-paying, unskilled workers such as chicken plants and Wal Marts.

Almost 20 percent of Louisiana’s population lives below the poverty line, a statistic Jindal refused to address during his entire eight years of running for president. Moreover, the state unemployment rate was 6.4 percent. Both figures are higher than the national rates.

So, if Louisiana was second worst for business, which state was worst? Well, this time it wasn’t Mississippi which traditionally holds down the anchor spot. In this case it was West Virginia with lower GDP growth, lower average salaries, lower percentage of adults with a bachelor’s degree (actually the lowest), lower number of patents issued to residents and a lower projected working-age population growth than Louisiana.

The best state for business? That would be Utah. Where Louisiana and West Virginia each had a minus projected working-age population growth rate, Utah’s projected working-age population growth of 20.5 percent was second-highest. Despite the healthy projected population growth, Utah had an unemployment rate of 3.8 percent, fourth lowest in the nation.

Just more evidence of how Jindal was perfectly willing to twist and distort numbers to fit his ambitious but hopeless agenda.

Does anyone still wonder whether he was simply clueless or callously committed to his own ambitions?

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Cain family members: foxes guarding golden egg henhouse of lucrative privately-owned prison transitional work programs

Posted in Business, Campaign Contributions, Contract, Contracts, Corruption, Ethics, Governor's Office, Prison, Privatization on August 16, 2015| 8 Comments »

The combined revenues of $3.5 billion and net profits of $697 million for 2014, America’s two largest private prison companies, Corrections Corporation of America and the GEO Group clearly illustrate the profit potential in the operation of private prisons.

It’s no wonder. With 2.4 million people incarcerated in this country, America easily leads the civilized world with more than 700 of every 100,000 of its citizens kept behind bars. The Russian Federation is a distant second at 474 per 100,000 imprisoned. Canada has 118 per 100,000 of its population incarcerated. The four Scandinavian countries have the fewest number per 100,000 in prison. The numbers for them are, in order: Denmark (73), Norway (72), Sweden (67) and Finland (58).

If Louisiana were a nation, it would double the U.S. ratio. (At least we’re number one in the world at something.) Latest figures show 1,420 of every 100,000 Louisiana citizens (one of every 86 adults) is housed in a cell, giving Louisiana the distinction of having the highest rate in the world. Nearly two-thirds of those are non-violent offenders. We should be so proud. Louisiana’s rate of incarceration is three times that of Russia, nearly 10 times that of the United Kingdom, 12 times Canada’s rate, and 24 times that of Sweden.

But private prisons are not the only ones benefitting from the glut of prisoners in Louisiana. There are the prison telephone systems which charge exorbitant rates to prisoners’ families for collect calls home. The phone companies are protected by state contracts, making their operations a literal monopoly.

And then there are the privately-run prison work release, or “transitional work program” companies and that’s where the waters really get murky.

Most work release programs are supervised by parish sheriffs and some are kept in-house by the sheriffs. The one common thread is that all of them use the profits from inmate labor to underwrite other operations of the sheriffs’ departments. There have been private work release companies to spring up, operate for a while and then disappear, notably Northside Workforce in St. Tammany Parish as well as privately-run programs in Lafayette and Iberia parishes.

One such company isn’t likely to face the operational pitfalls experienced by the others, however. That is because of its connections to the top brass at the Louisiana Department of Corrections and Louisiana State Prison at Angola, connections that likely even extend into the governor’s office.

Louisiana Workforce, LLC (no connection with the Louisiana Workforce Commission) has been around for 10 years since it was founded on Feb. 4, 2005 by Paul Perkins. Both Perkins and Louisiana Workforce have been active in writing campaign checks to sheriffs, key legislators and Jindal since 2009.

It was not until 2014, however that Louisiana Workforce really burst onto the scene in a big way. Following an inmate’s escape from a Northside Workforce jobsite in St. Tammany that same year, Department of Corrections (DOC) Secretary James LeBlanc mandated that local sheriffs not be approved for outsourcing work-release programs without first going through a competitive bid process.

The only problem was, the process turned out to be not so competitive.

That’s not unusual if you take the trouble to talk to business owners who find themselves shut out of the state contract bid process. If they are completely candid, they will tell you that if a state agency prefers a given vendor, the specifications can be—and often as not, they are—written in such a manner as to eliminate all but the preferred vendor.

The practice is similar to, though not quite as blatant as, the north Louisiana parish police jury which, way back in the 1970s when I was a young reporter, decided to purchase a used bulldozer. When the advertisement for bids was published in the parish’s official journal (the local newspaper), the specifications included the serial number of the ‘dozer which quite understandably narrowed the field of eligible bidders somewhat.

It turned out that even though six private providers, along with a representative from the Beauregard Parish Sheriff’s Office, attended a pre-bid conference, Louisiana Workforce, LLC, in partnership with the Beauregard sheriff’s office, submitted the only bid.

Perkins is a former assistant warden at Louisiana State Prison at Angola who was earning $75,000 a year until his retirement in 2001. He also is a former business partner of both LeBlanc and Angola Warden Burl Cain. All that may or may not have played a part in the apparent easy manner in which Louisiana Workforce got the contract by default, but one competitor suggested that it may not have hurt.

It also may not have hurt that Perkins and Louisiana Workforce combined to pour nearly $40,000 into the political campaigns of five of the six sheriffs with whom Louisiana Workforce has contracts, or that another $15,000 was contributed to Bobby Jindal, or that thousands more to members of the legislature who sit on key committees like House Appropriations, House Criminal Justice or one of the three Senate judiciary committees.

Perhaps it is only a coincidence that Burl Cain asked for and received a favorable ruling from the State Board of Ethics in 2012 permitting him to be compensated for providing consulting services on a part-time basis to Louisiana Workforce—and even allowing him to have a “small minority ownership” in the company. It is not known whether or not Burl Cain actually performs any consulting work or receives any monetary recompense because while he, like all administrative personnel, is required to file a financial disclosure form with the state, he is not required to fill out a complete disclosure.

Even LeBlanc in 2006 received Ethics Board approval to offer consulting services or even own an interested in an unspecified work-release program.

Perkins said that while he feels Cain would be a valuable addition to his company and even though the Ethics Board approved such an arrangement, he felt that it would be a mistake for Cain to work for him while also serving as Angola warden.

But that does not by any measure preclude the presence of Cain influence on operations at Louisiana Workforce. The Louisiana prison system over the years has indisputably become a Cain family fiefdom.

DOC has something called Prison Enterprises which, on the surface, is a good thing in that it allows prisoners to learn marketable skills while at the same time providing a source of income to help fund prison operations. But Prison Enterprises is more than simply a means to sell soybeans, corn and cotton grown on the sprawling Angola farm; it is also a means of enrichment for enterprising (forgive the pun) entrepreneurs.

DOC’s own web page touts its Transitional Work Program (formerly work release) which certain eligible offenders may enter from one to three years prior to their release, “depending on the offense of conviction.” Participants “are required to work at an approved job and, when not working, they must return to the structured environment of the assigned facility,” the web page’s description of the program says. The “assigned facility,” of course, refers to the housing provided by private companies like Louisiana Workforce.

“Probation and Parole Officers are assigned monitoring responsibilities for contract transitional work programs,” it said. Claiming that transitional work programs are successful in assisting in the transition from prison back into the work force, the web page claims that 10 to 20 percent of offenders “remain with their employer upon release.”

Additionally, the two-paragraph description says, a second program called the Rehabilitation and Workforce Development Program, allows prisoners who have become skilled craftsmen to be placed in higher paying jobs where they “are able to make wages to maintain self-sufficiency.”

But then a peculiar thing occurs when readers are instructed to “click here” to see a list of transitional work programs throughout the state. Thinking we would find other companies similar to Louisiana Workforce, we clicked and presto! We were returned to DOC’s main page.

So, with Prison Enterprises overseeing the operations of DOC’s Transitional Work Program, who do you suppose presides over Prison Enterprises?

That would be Michael Moore, who earns $128,500 per year as Prison Enterprise Director. But serving right under him is none other than Marshall Cain, one of Burl Cain’s two sons who holds the title of DOC Prison Enterprise Regional Manager at $63,500 per year. Cain’s other sun, Nathan Cain, earns $109,000 per year as Warden of Avoyelles Correctional Center. (The elder Cain pulls down $167,200 as Angola Warden.)

But the key person in all this is Seth Smith, Burl Cain’s son-in-law, who earns $150,000 per year as a DOC Confidential Assistant. That’s more than his boss, LeBlanc, who makes $136,700 as DOC Secretary. So what does a confidential assistant do for that salary? Well, for openers, he assigns which prisoners go into the Transitional Work Program for parish sheriffs and private operators like Louisiana Workforce.

And since Louisiana Workforce gets to keep 62 percent of each prisoner’s earnings, plus $5 per day for each inmate it houses, it certainly would be to the company’s benefit to receive the most skilled workers for placement in the Transitional Work Program. After all, 62 percent of say, $15 per hour for skilled labor is considerable more than 62 percent of a minimum wage job like flipping hamburgers, for example.

One employer who hired an inmate through the program, wrote in a letter to the editor of the Baton Rouge Advocate last November that the system was rigged against the inmate. He cited an example of an inmate earning $200 per week. After the 62 percent is held out, he would be left with $76 before taxes and Social Security, leaving him only about $36 for a week’s work.

Then, he said, the program runs a commissary where inmates are charged “inflated prices” for necessities such as soap, toothpaste, deodorant, etc., leaving them with “virtually nothing to start a new life.” http://theadvocate.com/news/opinion/10768344-123/letter-inmates-left-with-pittance#comments

There are two sides of this scenario, of course. There is the argument that they are in prison because they committed a crime and therefore, should not be afforded favorable treatment. The other argument is that by working at below-market wages, they are keeping honest, law-abiding people from jobs they need to support their families.

But lost in both those arguments is the windfall profits reaped by the private vendors who are fortunate enough to have an inside track to the decision-makers at DOC and the sheriffs who run their own prisons.

Perkins and his company, Louisiana Workforce, LLC, have combined to contribute to five of the sheriffs with whom his company has contracts:

  • East Baton Rouge Sheriff Sid Gautreaux: $15,000;
  • Livingston Parish Sheriff Jason Ard: $4,500;
  • Iberia Parish Sheriff Louis Ackal: $7,000;
  • Terrebonne Parish Sheriff Jerry Larpenter: $4,340;
  • West Feliciana Parish Sheriff Austin Daniel: $6,850.

But the combined $37,690 to those five sheriffs doesn’t end there; he and his company have also contributed $15,000 to Jindal and thousands more to members of key legislative committees.

Small wonder.

An article in the New Orleans Advocate on Oct. 13, 2014, noted among other things that with Louisiana Workforce’s acquisition of the Phelps Correction Center in DeRidder, the company had about 1,200 inmates working in its work-release program. At an average of say, 62 percent of an average of only $10 per hour, plus another $5 per day for housing each inmate, Louisiana Workforce would receive nearly $17 million a year. At an average of $12 per hour, the paper said, the income would approach $20 million annually. http://www.theneworleansadvocate.com/features/music/10477753-171/work-release-operator-with-ties-to

It’s a system open for abuse with only minimal oversight. On Sunday, Associated Press moved a story in which inmates at a privately-run Nashville, TN., jail operated by Corrections Corporation of America, the largest private prison operation in the U.S., say they worked without pay to build commemorative games, bird houses, dog beds, and plaques which prison officials then sold online and at a flea market. http://www.msn.com/en-us/news/crime/inmates-say-they-worked-for-free-for-jail-officials/ar-BBlNdCG?ocid=iehp

To back up their claim, two of the prisoners said they concealed their names and the number of the Tennessee statute that makes it illegal for prison officials to profit off inmate labor beneath pieces of wood nailed to the backs of the items.

In 2010, the Louisiana Office of Inspector General (OIG) issued a report that said Louisiana Workforce employees forged or altered several dozen employer work-release forms and inmate authorization forms upon learning that DOC was going to make a site visit to its East Baton Rouge Parish facility. One employee, an assistant warden, admitted to forging at least 26 such forms and the OIG report said that higher-ups at Louisiana Workforce knew of the actions.

LeBlanc, in his response to the report, said that DOC had “no jurisdiction” to discipline the Louisiana Workforce staff, in effect saying that Louisiana Workforce is left to discipline itself.

And in 2013, the Legislative Auditor’s Office issued a report that challenged the use of inmate labor by then-Terrebonne Parish Sheriff Vernon Bourgeois to renovate a building used by Louisiana Workforce’s program. The audit said the cost of that labor was about $350,000 and the auditor’s office said the use of free inmate labor for the project may have been in violation of the Louisiana Constitution

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