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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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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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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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Civil Service rules prohibit campaign contributions by classied employees—unless you’re the governor’s mom

Posted in Boards, Campaign Contributions, Civil Service, Commissions, Ethics, Governor's Office, Toledo Bend, Water Sale, Water Reservoirs, Water Sales on October 15, 2013| 9 Comments »

For a man who has received more than $20 million in contributions to his various political campaigns, perhaps a half-million or so in questionable contributions shouldn’t raise too many eyebrows. After all, that’s less than 2.5 percent of the total.

Still, for the man who set himself up as the beacon of all that’s pure and pristine, the one who established the “gold standard” of governmental ethics, the one who loves to boast (only in out-of-state speaking engagements, of course) of “the most transparent” administration in the state’s history, anything less than clean campaign money should be unacceptable.

Alas, such is simply not the case.

Even his mother, a state civil service employee, got into the act in open violation of civil service regulations, but more about that later.

We have written at various times of many of the contributions which appear to be directly related to appointments to state boards and commissions. Donald “Boysie” Bollinger was appointed last March to the State Police Commission and Aubrey Temple of Deridder was appointed in July of 2008 to the Coastal Protection and Restoration Financing Corp.

Together, the two men and their businesses and family members have combined to give Jindal’s campaigns at least $95,000 and three of their business associates, Red McCombs ($15,000), Corbin Robertson ($5,000) and James Weaver ($1,000) formed a partnership to purchase water from the Toledo Bend Reservoir on the Louisiana-Texas border for re-sale in Texas. That attempt, at first supported by Jindal, failed when the Sabine River Authority reversed itself and killed the deal at least for the time being.

Temple, meanwhile, was paid $400,000 by the Coushatta Tribe back in 2001 for undisclosed services but he was never able to give an accounting for how the money was used. Also involved with the Coushatta Tribe was Alexandria attorney Jimmy Faircloth, who chipped in another $23,000 to various Jindal campaigns and has since reaped more than $1 million in legal fees for defending the state in various legal proceedings, most of which saw the state end up on the losing end of key court decisions.

Faircloth, while serving as legal counsel for the Coushattas, advised the tribe to sink $30 million in a formerly bankrupt Israeli technology firm call MainNet for whom his brother Brandon was subsequently employed as vice president for sales. The investment, to no one’s surprise except perhaps Faircloth, proved to be a financial bust for the tribe.

This is the same tribe, with Faircloth as legal counsel, that Paid disgraced lobbyist Jack Abramoff $32 million to help promote and protect their gambling interests but who provided little in return for his fee.

Another Abramoff associate, former House Majority Leader Tom DeLay, also contributed $5,000 to Jindal. DeLay was convicted of scheming to influence Texas state elections with corporate money but a federal appeals court overturned that conviction last month.

There was the $55,000 in laundered money the Jindal campaign received in 2007. Richard Blossman, Jr., president of Central Progressive Bank of Lacombe in St. Tammany Parish, issued $5,000 “bonuses” to each of 11 board members but instead of giving them the money, 11 contributions of $5,000 each were funneled into the Jindal campaign in the names of the board members—without their knowledge or permission. Regulators subsequently took over the bank and Blossman was sentenced to 33 months in federal prison for bank fraud.

Jindal has refused to return the money.

The State Board of Ethics also said River Birch, Inc., of Jefferson Parish formed six “straw man entities” through which it laundered $40,000 in illegal donations to Jindal.

Again, Jindal kept the money.

The governor accepted $158,500 in contributions from Lee Mallett and a host of his companies in Iowa, LA., and Lacassine and in return, Jindal appointed Mallett to the LSU Board of Supervisors—even though Mallett attended McNeese State University only briefly and received no degree. Jindal also had the Department of Corrections issue a directive to state parole and probation officers to funnel offenders into Mallett’s halfway house in Lacassine.

Jindal appointed Carl Shetler of Lake Charles to the University of Louisiana System Board of Supervisors in July of 2008 after Shetler, his family and businesses contributed $42,000 to Jindal. Shetler’s biggest claim to fame came when he managed to get McNeese placed on athletic probation by the NCAA after it was learned that he paid money to McNeese basketball players. Now he helps preside over the very school that he placed in jeopardy. So much for that “gold standard” of governmental ethics.

Jindal also accepted $2,500 from Hospital Corp. of America (HCA) which paid a record settlement of $2 billion to settle the largest Medicare fraud case in U.S. history. The founder and CEO of HCA was Rick Scott, later elected governor of Florida, for whom Jindal campaign extensively.

Speaking of Florida and records, Fort Lauderdale attorney Scott Rothstein was disbarred and sentenced to prison for running the largest ($1.4 billion) Ponzi scheme in the state’s history but not before he, his wife, his law firm and three of his corporations contributed $30,000 at a 2008 Jindal fundraiser hosted by Rothstein.

Most news media found the $10,000 contributed by Rothstein and his law firm but missed his wife’s and the corporation contributions that totaled an additional $20,000. Jindal announced that he would refund the money to a victims’ fund but instead, gave the $30,000 to the Baton Rouge Food Bank.

Jindal also took $10,000 from Affiliated Computer Services (ACS) and later gave ACS employee Jan Cassidy, sister-in-law of Congressman Bill Cassidy, a state job with the Division of Administration. ACS, meanwhile, has come under investigation by the Securities and Exchange Commission for certain accounting practices.

Then there was the $11,000 Jindal accepted from the medical trust fund of the Louisiana Horsemen’s Benevolent and Protective Association (LHBPA), whose board president, Sean Alfortish, was sentenced to 46 months in prison for conspiring to rig the elections of the association and then helping himself to money controlled by the association.

The association also was accused of paying $347,000 from its medical and pension trust funds to three law firms without a contract or evidence of work performed. A state audit said LHBPA improperly raided more than $1 million from its medical trust account while funneling money into political lobbying and travel to the Cayman Islands, Aruba, Costa Rica and Los Cabos, Mexico.

The association, created by the Louisiana Legislature in 1993, is considered a non-profit public body and as such, is prohibited from contributing to political campaigns.

Saving the best for last

All these were sufficiently questionable to tarnish the “Mr. Clean” image Jindal has attempted to burnish throughout his administration but the most blatant display of arrogance and complete disdain for campaign laws has to be three individual contributions in 2003 that totaled a mere $5,000—from Jindal’s mother.

So what’s wrong with a relative contributing to his campaign? Several family members, after all, gave to the campaign as do family members of many other candidates.

Well, nothing…except that his mother, Raj Jindal, is a classified state employee, according to Civil Service records, an IT Director 3 with the Louisiana Workforce Commission, formerly the State Department of Labor. She earns $118,000 per year and has been working for the state for 38 years, certainly long enough to know the prohibition against state classified employees being active in political campaigns. State employees, after all, are routinely sent periodic reminders of civil service regulations governing political activity.

Records provided by the State Ethics Commission campaign finance reports indicate that Raj Jindal contributed $3,000 on April 23, 2003, to son Bobby. Nine days later, on May 2, she contributed another $500 and on June 17, she chipped in an additional $1,500, bringing her total contributions to the $5,000 maximum allowable by law—for non-civil service employees.

Article X, Part I, Paragraph 9 of the Louisiana State Constitution says:

“Section 9.(A) Party Membership; Elections. No member of a civil service commission and no officer or employee in the classified service shall participate or engage in political activity; be a candidate for nomination or election to public office except to seek election as the classified state employee serving on the State Civil Service Commission; or be a member of any national, state, or local committee of a political party or faction; make or solicit contributions for any political party, faction, or candidate (emphasis ours); or take active part in the management of the affairs of a political party, faction, candidate, or any political campaign, except to exercise his right as a citizen to express his opinion privately, to serve as a commissioner or official watcher at the polls, and to cast his vote as he desires.

“(B) Contributions. No person shall solicit contributions for political purposes from any classified employee or official (emphasis ours) or use or attempt to use his position in the state or city service to punish or coerce the political action of a classified employee.”

One veteran political observer said that unless Jindal solicited the contribution, all liability lies with the governor’s mother for the rules violation.

But Jindal is a big boy, as evidenced by his advice earlier this year to his fellow Republicans to put on their “big boy pants.” He has to accept the responsibility for allowing his mother to flaunt state civil service rules not once, not twice, but three times. And yes, she also should be held accountable for her violation of rules that apply to every other state civil service employee.

Now the only question remaining is what will the Civil Service Commission do about the governor’s mother violating state campaign regulations governing political activity by Civil Service employees?

Our best advice is: don’t hold your breath waiting for disciplinary action.

The rules obviously do not apply to this governor.

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$70,000 job monitoring state boards & commissions went to a director of Bobby Jindal’s re-election campaign committee; an example of the fox serving as gatekeeper to the henhouse?

Posted in Boards, Commissions, Governor's Office, Jobs, Public Records, Transparency on July 7, 2013| 12 Comments »

For eight months, from Oct. 16, 2012, until June 28, Gov. Bobby Jindal had a director of his re-election committee on the state payroll overseeing state boards and commissions, according to state records.

The duties of Kendal Melvin, director of the Department of Boards and Commissions, was reassigned to Kyle Plotkin, communications director for the governor’s office, according to an announcement by Jindal on Friday, June 28. Plotkin was promoted by Jindal to Assistant Chief of Staff at that time and was given the supervision of state boards and commissions.

Plotkin was given a pay increase, from $90,000 to $110,000 to assume the additional duties, according to Jindal press secretary Sean Lansing.

Melvin, a Vermont native, was initially hired as Director of the Department of Boards and Commissions on Oct. 16, 2012, at a salary of $70,000 per year.

But records provided by the Secretary of State show that she was simultaneously serving as a director of the Committee to Re-elect Bobby Jindal.

Before becoming a state employee, she was on Jindal’s campaign payroll at annual salary of $44,578, according to Jindal’s campaign expenditure report. Her last paycheck from the campaign was for $1,711.86 on Oct. 15, 2012, the day before she went onto the state payroll, records show.

Each of her 46 checks from Jindal’s campaign between Jan. 14, 2011 and Oct. 15, 2012 was issued to her home address in Barre, Vermont, records show, a possible indication that she never moved her legal address to Louisiana even though she was working here.

Her hiring would again raise the question of why, if Jindal really wants to keep Louisiana’s best and brightest in the state as he says, does he continue to go out of state to hire many of his top appointees? Plotkin, for example, is from New Jersey and Jindal policy director Stafford Palmieri is from New York.

Jindal was re-elected in October of 2011 but his committee has continued to function, even filing an annual report on Jan. 10 of this year that showed Melvin was still a committee director.

All campaign expenditures however, are listed in the State Ethics Commission’s campaign finance records in Jindal’s name but no expenditures are listed for either the Committee to Re-elect Bobby Jindal or Friends of Bobby Jindal, the committee’s original name when it was first incorporated in January of 2004.

Jindal entered the 2011 election with nearly $9 million in his campaign treasury and facing only token opposition, so it naturally generates questions as to why his campaign committee remains active, even to the point of filing an annual report in January, instead of disbanding.

Since his re-election, Jindal has continued to collect more than $1.6 million in campaign contributions, leading to renewed speculation about his intentions to seek national office. He is presently 18 months into his second term and is constitutionally prohibited from seeking re-election.

What other reason could explain the need to continue fund raising, especially the $35,000 he raised in New York on a single day—Oct. 25, 2012? His 2012 inauguration, for example, only cost his campaign $156,000.

But an even bigger question is why an active director of Jindal’s campaign committee would be allowed to simultaneously draw a state paycheck for eight months.

State Civil Service rules generally prohibit state classified employees from engaging in political activity. Unclassified employees, however, may participate in political activities so long as such activity is carried out on the employee’s own time. (emphasis ours.)

Melvin was an unclassified, or appointed, employee.

A second question would be how Plotkin could assume assistant chief of staff duties and the directorship of Melvin’s department at an additional salary of only $20,000 compared to the $70,000 paid Melvin for a single function.

Put another way, how is it that Melvin required $70,000 to perform her job and Plotkin was able to absorb that and the assistant chief of staff’s duties for $50,000 less than her former salary for her one job?

Those questions were submitted via email to Plotkin but an automated response said he was out of the office until Monday, July 8. The automated response directed all questions to Sean Lansing of the governor’s office.

Accordingly, the questions were then directed to Lansing, who never responded.

What exactly is the Department of Boards and Commissions anyway, other than an obscure agency tucked away within the Executive Branch?

Basically, it is charged with the responsibility of processing and retaining records of all appointments made by the governor. The St. Peter of Louisiana boards and commissions, if you will.

So the department director is essentially the gatekeeper for all the boards and commissions (and there are many of them) to which the governor may appoint favored campaign contributors—which may go a long way in answering the second question because the job’s duties otherwise appear to be quite mundane.

Who better then to head up the department than a director of his re-election campaign? Such an individual theoretically would know who to reach out and touch for contributions and to not-so-subtly remind them to whom they owe their appointments to prestigious state boards and commissions.

During her tenure at the department, which began a full year after Jindal’s re-election, Jindal received more than $585,000 in campaign contributions, at least $42,000 of that from nine of his appointees to state boards and commissions. Those include:

• Tony Clayton, Southern University Board of Supervisors: $5,000;

• Charlotte Bollinger, State Board of Regents: $5,000;

• Carl Shetler, University of Louisiana Board of Supervisors: $5,000;

• William J. Dore, Sr., Southern States Energy Board: $5,000;

• Dave Roberts, Louisiana Stadium and Exposition District (Super Dome) Board: $5,000;

• Hank Danos, LSU Board of Supervisors: $5,000;

• Lee Mallett, LSU Board of Supervisors: $5,000;

• Blake Chatelain, LSU Board of Supervisors: two contributions totaling $2,000;

• Moore Investments (James Moore), LSU Board of Supervisors: $5,000.

Between Jindal’s re-election in October of 2011 and Melvin’s appointment to her state position in October of 2012, Jindal raked in a little more than $1 million, including $76,500 from eight appointees to boards and commissions. The bulk of that $76,500 came from $50,000 in 10 separate contributions from Board of Commerce and Industry member Bryan Bossier of Alexandria, family members and assorted businesses run by him.

The web page for the department features a question and answer section about the procedure for applying for appointment to a board or commission. Call us cynical, but we have taken the liberty of adding our own tongue-in-cheek answers (in parentheses and italics) to those provided by the department:

• (Q): How do I apply for a position on a board of commission?

• (A): Submit an official application, along with a letter stating why you are qualified or experienced in the area of the board’s activity. (read: Submit an official application, along with a letter stating your net worth and how much, in terms of contributions, you are willing to give);

• (Q): What happens after I submit an application to the Governor’s office?

• (A): When it is time for the Governor to make an appointment, an analysis is presented that includes the statutory restrictions and information on professional or personal experience either necessary or preferable to the board’s function. The analysis is reviewed and applicants screened. The Governor then makes his selections. (read: When it is time for the Governor to make an appointment, all political contributions are taken into consideration along with those of other applicants. The comparisons are reviewed and the Governor makes his selection based on the amount contributed by each applicant);

• (Q): How do I know if I am eligible to be appointed?

• (A): Most of the seats on the boards and commissions are restricted by statutes. You can research boards and commissions and the laws that govern them on the Internet. You may apply for any boards or commissions that interest you. Please specify your first and second choices. (read: Most of the seats on the boards and commissions are doled out on the basis of the applicant’s financial stability and willingness to contribute to the Governor’s campaign and on the applicant’s willingness to vote in the manner dictated by the Governor, with no questions asked or by asking only those questions approved in advanced and passed on to the member by the Governor’s staff).

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