Feeds:
Posts
Comments

Archive for the ‘Contract, Contracts’ Category

Landrieu is not the only one with Washington home; Graves funnels $million$ to father’s firm as Jindal’s $135,000 man

Posted in Campaign Contributions, Coastal Erosion, Congress, Contract, Contracts, Corruption, Elections, Ethics, Governor's Office, Politicians, Transparency on October 10, 2014| 14 Comments »

While we have had no trouble unearthing double standards, misrepresentations, distortions and outright lies in our coverage of the Jindal administration, political campaigns often take the practice to a new level.

The mind-numbing campaign for the U.S. Senate comes to mind. At this point in the campaign, voters just wish Mary Landrieu and Bill Cassidy would both shut up and leave us alone. But those TV ads from both camps keep pounding away at us, each accusing the other of distortions, lies, misrepresentations, pro-this, and anti-that.

The comic strip Non Sequitur would well have been referencing either candidate with this submission:

nq141010[1]

Or it could have been alluding to the recently ramped-up campaign of 6th Congressional District candidate Garrett Graves, former chairman of the Louisiana Coastal Protection and Restoration Authority (CPRA) and director of the Governor’s Office of Coastal Activities, who only recently kicked off his media blitz.

Of course most observers are accustomed to grandiose promises.

For at least the past 20 years or so, the challenger in the Baton Rouge mayor-president’s election without fail has promised to improve public education in East Baton Rouge Parish—never mind the fact that the mayor’s office has absolutely nothing to do with the East Baton Rouge Parish School Board. Zero. Zilch. They are two entirely separate political entities.

And we’re all used to congressional candidates saying they are going to fight waste, work to improve infrastructure, and vote to defend the Constitution blah, blah, blah.

But Graves has taken the rhetoric to a new extreme. He has one TV spot running on the Baton Rouge in which he says not that he will “work to” or “vote to,” but that he “will” repeal Obamacare, he “will” cut spending, he “will” stop illegal immigration, and he “will” eliminate terrorism.

Those are pretty big promises, folks, and unless he’s Clark Kent in disguise, we just can’t see how one freshman tea party congressman can impose his will on 434 other members of the House and 100 senators, not all of whom are tea partiers.

And while we are on the subject of political rhetoric, there has been much said about U.S. Sen. Mary Landrieu’s ownership of an $800,000 home in Washington, D.C. while not owning a home outright in Louisiana (though she is part owner, along with her siblings, of her parents’ home in New Orleans).

But not a peep has been said about Graves’ 2005 purchase of a home at 210 11th Street SE in Washington, also appraised at more than $800,000. Nothing on his federal financial disclosure statement for Jan. 1, 2013 through July 15, 2014, indicates ownership of a home in Louisiana—not even part ownership of his father’s home—although he does list ownership of property in Gulf Shores, Alabama. And Graves has never been elected to any office, let alone one that demands his presence in Washington.

He apparently purchased the home during his tenure in Washington. He worked as a policy adviser to former U.S. Sen. John Breaux and U.S. Congressman Billy Tauzin and worked for the Senate Commerce, Science and Transportation Committee and the House Energy and Commerce Committee. He also served as staff director of the U.S. Senate Subcommittee on Climate Change and Impacts. http://www.epa.gov/gcertf/bios/graves.html

Apparently he liked Washington well enough to plan on returning because he did not sell the home when he grabbed onto Gov. Bobby Jindal’s coattails in 2008 to head up CPRA at $135,000 per year through 2012. His salary was bumped up to $147,300 in 2013, according to his financial disclosure records.

Even though he left the state’s employ on February 28, his financial statement indicates he still received $52,961 in salary from the state this year and another $31,346 from Evans-Graves Engineers, the firm owned by his father, John Graves.

Graves flew pretty much under the radar until he became a high-profile opponent of the lawsuit filed by the Southeast Louisiana Flood Protection Authority-East against 97 oil and gas companies for damage to the state’s wetlands while at the same time carping at the U.S. Coast Guard for its failure to force BP to be more responsive to the Deepwater Horizon oil disaster. http://theadvocate.com/home/8290180-125/graves-to-step-down-from

His opposition to the lawsuit seeking to hold big oil responsible for the damage it has done to the state’s coastline for the past century notwithstanding, the real story of Garrett Graves is the awarding of more than $130 million in government contracts to his father’s engineering firm while he was head of CPRA, which oversees such contracts.

That figure represented an 1800 percent increase over contracts awarded to Evans-Graves for all years prior to Garrett Graves’ tenure at CPRA.

Some might call this old news, given the fact that Jeremy Alford first reported on this as far back as 2008. http://www.houmatoday.com/article/20080203/news/659908125

But the practice went unabated for years after his story and even more curious, when an ethics opinion was sought as to the propriety of the contracts, it was not the Louisiana Board of Ethics that was consulted, but attorney Jimmy Faircloth.

Faircloth, who was Jindal’s first executive counsel before running unsuccessfully for the Louisiana Supreme Court, has done extensive legal work for the administration, collecting fees in excess of $1 million defending losing positions that Jindal has championed.

But his issuing an ethics opinion in the case of Evans-Graves Engineering appears to have been a conflict in itself: Faircloth at the time was the legal counsel for Evans-Graves.

“As we discussed, Governor Jindal has asked that we disclose and commit to avoiding even the appearance of conflict,” Faircloth said in his opinion. “Thus, as we agreed, out of an abundance of caution, the appropriate solution is that your father’s company not pursue an interest in or receive any state contract that involves coastal restoration, levees or hurricane protection while you serve in the administration. This would explicitly include such contracts overseen by DOTD (Department of Transportation and Development) and DNR (Department of Natural Resources).”

Even though Garrett Graves in February of 2008 agreed to cease pursuing projects that could cause a conflict of interest, Evans-Graves kept receiving lucrative contracts from the U.S. Army Corps of Engineers, CPRA’s primary partner. And while Garrett Graves did not actually sign the contracts, his agency did set priorities for the state on corps-related work.

“I said from the beginning there was a potential conflict of interest, and apparently that fell on deaf ears,” said John Graves when the issue first arose more than six years ago. Jindal’s office professed to know nothing of the potential conflict.

And even though Garrett Graves was working for the state and his father’s company was receiving millions of dollars in contracts with the Corps of Engineers through Garrett Graves’ agency, Garrett Graves was given a Toyota Tundra truck by the elder graves in 2009, a clear violation of state ethics rules against state employees accepting gifts from vendors.

And while Evans-Graves was receiving millions of dollars in CPRA-approved contracts with the Corps of Engineers, Evans-Graves was subcontracting nearly $66.5 million in work to 18 construction and contract companies, compared to only $3.5 million prior to Garrett Graves’ appointment. Those 18 subcontractors have combined to contribute more than $250,000 to Graves’ congressional campaign.

Additionally, 11 of those 18 companies, along with corporate officers and family members, have combined to contribute nearly $316,000 to various political campaigns of Jindal.

Here is the list of subcontractors and the amounts they and/or their corporate officers and families contributed to Jindal:

  • Daybrook Fisheries—$1,000;
  • Industrial Specialty Contractors—$29,500;
  • Bollinger Shipyards—$65,850;
  • Major Equipment and Remediation—$50,000;
  • Arkel Constructors—$4,500;
  • Delta Launch Services—$11,000;
  • Cajun Constructors—$52,000;
  • Coastal Environments—$30,500;
  • Performance Contractors—$41,500;
  • H. Fenstermaker & Associates—$20,500;

JNB Operating—$5,000.

And now Garrett Graves just wants to move back into his $800,000 home in D.C.

Read Full Post »

July 2014 Buck Consultants OGB report, emails contradict committee testimony of DOA Commissioner Kristy Kreme

Posted in Contract, Contracts, DOA, Ethics, Governor's Office, Health Care, Legislature, Legislators, Office of Group Benefits, Privatization, Public Records on October 8, 2014| 31 Comments »

If the Retired State Employees Association (RSEA) goes forward with filing a legal challenge to the proposed changes to health care coverage for state employees, retirees and their dependents, it may have a significant hook on which to hang its case in a report submitted by a company contracted by the Jindal administration which attempted to base its plan changes at least in part on that same report.

If you’re confused, you should be for Commissioner of Administration Kristy Nichols laid the decision to make the changes in the Office of Group Benefits (OGB) plan at the feet of Buck Consultants but the firm’s report is in direct contradiction to the testimony of Nichols at the Sept. 25 hearing of the House Appropriations Committee.

The proposed health benefit changes are so radical for some 230,000 OGB members that the RSEA has scheduled a meeting with a law firm which has tentatively agreed to take the case on a pro bono basis, says Frank Jobert, RSEA’s executive director. http://theadvocate.com/sports/southern/10465870-123/retirees-considering-legal-challenge

RSEA is looking at the failure to go through the necessary legal procedures for approval of changes in plan benefits and “diverting” money from the OGB fund balance which has dwindled from a high of more than $500 million to less than half that amount and which is projected to go broke next year if changes are not implemented.

Nichols has consistently blamed the financial condition of OGB on rising costs she attributed to the Affordable Care Act (Obamacare). Critics, however, point to three straight years of decreased premiums that allowed the state to commit fewer state funds to its 75 percent match which in turn allowed the administration to divert those monies to cover budget holes even as the reserve fund continued to shrink.

Nichols was consistently evasive when asked during last month’s hearings of the House Appropriations Committee, three times managing to evade the direct question of who the actuary was who recommended decreases in premiums over three consecutive years.

Finally, State Rep. John Bel Edwards (D-Amite), who had already asked the question once without getting an answer, observed, “In fiscal 2013, there was a 7.11 percent reduction in premiums followed by 1.8 percent even though health care costs were going up by 6 percent.”

In questioning Nichols during the Appropriations Committee hearing, Edwards had accused the administration of taking a “self-manufactured crisis” and turning it into an emergency “because we had a fund balance that was healthy.

“We had OGB members who were relatively happy with the plan and today we have an unhealthy fund balance and OGB members who are very unhappy.”

He then asked again, “What actuary told you these reductions were sound?”

Nichols, who was already halfway out the door—before the committee meeting adjourned—on her way to taking her daughter to a One Direction boy band concert in the New Orleans Smoothie King Arena where she watched from the luxury box assigned to Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana), replied, “Buck Consulting recommended a 2.25 percent decrease for calendar 2012.”

https://louisianavoice.com/2014/10/01/watching-kristy-kreme-nichols-responding-to-legislators-like-watching-jerry-lewis-movie-mixture-of-exasperation-humor/

Well, not exactly. When one reads pages ii and iii of the summary report of the Buck Consultants Actuarial Valuation at 7/1/2013, a starkly different message is conveyed.

http://www.doa.louisiana.gov/osrap/library/afr%20packetts/2014OGB_OPEBValuationReport.pdf

On Page ii, under the CLAIMS AND PREMIUM EXPERIENCE heading, the report says:

  • “Overall, the plan had favorable claims experience, resulting in a gain. The gain was offset by losses associated with premiums not increasing as expected. See Substantive Plan discussions below.”

Under SUBSTANTIVE PLAN on Page iii, the report says:

  • “It is our understanding that the Plan premium rates, used both to determine contributions from the various employer agencies and to set contributions required from the retirees, were set artificially low to draw down the OGB’s reserve fund… (emphasis added.) As noted above, premium rates were again lower than expected for this year’s valuation.”

Moreover, an email from Buck Consultants representative Tom Tomczyk to OGB CEO Susan West dated Sept. 28 (three days after the Appropriations Committee hearing) says, “The 2.25percent (rate decrease) was not a recommendation for January 1, 2012, but only used to validate our projections for the Fiscal Year 2012-2013. We did not recommend a decrease of 7 percent effective August 1, 2012, or an additional decrease of 1.77 percent effective August 1, 2013. Further, we were not asked to provide any recommended rate adjustments for any fiscal year beyond what we provided for Fiscal Year 2012-2013.”

In fact, according to that same email, Tomczyk said Buck Consultants was asked in late 2011 for its projection of the indicated rate increase for Fiscal Year 2012-2013. “At that time, based on the most recent claims information available, we projected a rate increase (emphasis added) of 1.75 percent needed as of July 1, 2012.”

An earlier email, on Nov. 12, 2013, from Tomczyk to West’s predecessor, Charles Calvi, who served as CEO of OGB from Jan. 9, 2012, to Jan 31, 2014, concluded, “We have not been asked to provide recommendations for rate adjustments since calendar year 2012.”

The consulting firm’s report, dated July 2014, noted significant decreases in several areas of net liabilities to OGB and gains in areas that benefitted the agency’s bottom line, according to two financial experts who were shown the report.

“As I see it, the Buck report directly contradicts the way Ms. Nichols has presented this,” one said. “Unless I do not understand plain English, Buck says, ‘Overall, the plan had favorable claims experience, resulting in a gain.’ How can a clear gain be a loss by anybody’s definition?”

He noted the following:

  • The actuarial accrued liability (AAL) for July 2013 was $103 million less than what had been projected in July of 2012, meaning that OGB was in better shape on July 1, 2013, than had been predicted. The AAL also increased by only $157 from last year when it had been projected to increase by $260 million.
  • The amount paid in claims was less than predicted and actually decreased the AAL by $195 million—and would have decreased it even more had premiums not been less than projected.
  • The report clearly attributes a loss to OGB of $388 million—totally a result of reduced premiums through Fiscal Year 2012 and that this loss was increased by additional decreases in premium rates in Fiscal Year 2013.
  • The report, on Page iv, minimizes the effect of the Affordable Care Act (ACA) on these calculations and points out that the ACA provided improvements in Part D coverage.

“I am frankly shocked at this report and what has been said about this whole thing by others,” he said. “Either I am totally stupid or it blows all previous explanations away.”

Edwards, commenting on the contents of the Buck Consultants report, said, “Nothing in this supports Kristy Nichols.”

Read Full Post »

Kristy Kreme knows One Direction: ducks out on legislative committee for boy band concert at N.O. Smoothie King Arena

Posted in Contract, Contracts, DOA, Governor's Office, Health Care, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Teague on October 6, 2014| 25 Comments »

You have to hand it to Commissioner of Administration Kristy Kreme Nichols. When she has something to do, she is completely One Direction-al about it.

As the minutes ticked by during the House Appropriations Committee’s seven-hour hearing on the Office of Group Benefits on Sept. 25, and as Division of Administration (DOA) Executive Counsel Liz Murrill and the rest of the DOA pack occupied themselves by texting during heart-wrenching testimony from those who will be adversely affected by rising deductibles and co-pays, Kristy fidgeted.

She continued to fidget and to be as evasive as possible with her answers to questions from legislators until she suddenly “got an important phone call” and left the committee room. She did not return before the meeting finally adjourned.

In fact, it was not a telephone call that pulled her from the meeting at all.

One Direction, the latest boy band to make little girls squeal, was playing in the Smoothie King Arena in New Orleans and Kristy and her daughter (and possibly some of her daughter’s friends) watched the concert from the special Arena luxury suite assigned to Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana).

Kristy Kreme at the Smoothie King. Has a certain ring to it, doesn’t it?

Kristy Kreme could have told the audience the truth. Certainly OGB members, mostly retirees, who had traveled from all over the state to testify and to get answers would have understood that a teeny bopper band was more important to Kristy Kreme than the medical coverage of 230,000 state employees, retirees and dependents.

But you see, telling the truth simply is not her style.

Witness her repeated claims that the OGB $500 million reserve fund was reduced to only about half that amount because of Obama Care and rising health care costs. She made that claim repeatedly, blaming those two factors and those alone for the drawdown of the reserve fund when everyone on the committee and those in the audience knew better.

Everyone in attendance knew that three consecutive years of premium reductions in the face of rising costs was the reason the fund has been all but depleted. She would never admit that even though everyone knew that Jindal lowered the rates so that the state’s 75 percent contribution to member premiums would be reduced also, thus leaving money that would have gone to premium payments for Jindal to use to plug gaping holes in his budget.

Remember when Kristy Kreme’s predecessor, former Commissioner of Administration Paul Rainwater wrote that comforting letter to OGB members in April of 2011 in an effort to debunk all those rumors about increased costs and raids on the reserve fund? No? Well, we have it right here: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4F444D324D5441344C6C4245526A51344E7A413D

In that letter, Rainwater said members would continue to receive quality service and coverage, benefits would NOT change, and OGB’s administrative oversight would continue, “securing the continued success of all the plans.”

“As for the allegation that OGB’s surplus will somehow be ‘stolen,’” Rainwater continued, “let me be absolutely clear: this claim is categorically untrue.”

But that was yesterday, as Chad and Jeremy sang back in the 60s, and yesterday’s gone. Let us return to the AWOL Kristy Kreme.

Even as she was invoking her super powers to convince legislators and audience members that she had only the best interest of OGB members at heart and that the depletion of the reserve fund was beyond the control of the administration, the report of Buck Consultants, hired by Kristy Kreme said on page iii of its summary: IMG_9230

  • It is our understanding that the Plan premium rates, used both to determine contributions from the various employer agencies, and to set contributions required from the retirees, were set artificially low to draw down the OGB’s reserve fund, and it is our further understanding that this is a temporary deviation from the Plan’s substantive plan, which continues to provide for the legislated 75-25 cost-sharing under a “full subsidy” from the State. Our valuation anticipates that the 21 percent premium deficiency will be gradually eliminated on a uniform basis over five years from fiscal year 2015 through fiscal year 2019 through increases in retiree premium rates in excess of the underlying assumed health trend. The actuary notes that in the prior valuation at July 1, 2012, the plan incurred a loss of $388 million associated with premium rates lower than anticipated.

For the entire Buck Consultants report, click here. http://www.doa.louisiana.gov/osrap/library/afr%20packetts/2014OGB_OPEBValuationReport.pdf

State Rep. John Bel Edwards (D-Amite) said he had received a copy of the Buck report earlier. “Nothing in this supports Kristy Nichols,” he said.

Edwards has been a vocal critic of the proposed OGB changes, claiming that the increased co-pays and deductibles will create unnecessary hardships on retirees, some of whom are facing co-payments and deductibles higher than their monthly income.

The entire OGB affair has become so confusing that many OGB members were turned away from the first meeting held in Baton Rouge on Monday to explain the changes. Jindal fired about two dozen OGB workers in the last round of firings and Kristy Kreme immediately found it necessary to contract with Ansafone of San Diego, California, and Ocala, Florida which has been trying to hire 100 people in each state to man telephone banks to answer questions about Louisiana’s plan.

Kristy Kreme has already found it necessary to dispatch one OGB employee to San Diego to train Ansafone employees and now $107,000-a-year OGB Chief Operating Officer Bill Guerra is in San Diego conducting training sessions on how to answer questions from OGB members.

DOA, by the way, is supposed to be strapped for cash and there is a statewide freeze on out of state travel but apparently found it necessary to send Guerra to California for a month.

So, let’s recap:

  • Jindal fires most of the OGB employees, including director Tommy Teague, and turns over a perfectly smooth-running agency to Blue Cross/Blue Shield (BCBS) with promises of no changes in benefits or premiums.
  • Less than two years after BCBS takes over, the OGB reserve fund is depleted by one half.
  • The administration fires two dozen more employees because of a lack of work and then enters into a $1.3 million contract with a California company to respond to questions from Louisiana residents.
  • Kristy has to hire two executives from BCBS to help OGB CEO Susan West who apparently is not up to the task. One of those, who ostensibly serves under West, is paid a higher salary than West.
  • Kristy Kreme Nichols attempts to mislead legislators and OGB members by repeatedly saying Obamacare is responsible for rising health costs and the depletion of the OGB reserve fund. No one buys her story.
  • Kristy tells State Rep. John Bel Edwards that the OGB actuary, Buck Consultants, recommended a decrease in premiums but a single paragraph from the Buck Consultants report summary contradicts that claim.
  • Two OGB executives have been sent to California to attempt to teach Ansafone employees how to respond to questions from Louisiana residents.
  • Kristy Kreme ducks out on legislators near the end of the Sept. 25 hearing by the House Appropriations Committee to take her daughter to a One Direction concert in New Orleans where she and her daughter occupy Jindal’s suite at the Smoothie King Arena.
  • A survey of employee job satisfaction conducted in 21 agencies in the Division of Administration reveals widespread dissatisfaction and distrust of the administration. Understandably, the survey has never been released and its contents were not divulged until LouisianaVoice recently obtained a copy.

And now, Jindal is offering foreign policy advice to President Obama with the release of a “policy paper” that calls for more defense spending. http://www.nola.com/politics/index.ssf/2014/10/bobby_jindal_takes_on_obama_fo.html

Read Full Post »

OGB issues RFP for an actuarial contract in wake of Buck Consultant debacle; firm has problems elsewhere as well

Posted in Contract, Contracts, DOA, Governor's Office, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, RFP, Request for Proposals on October 1, 2014| 22 Comments »

Even as the Jindal administration was announcing that it was capitulating to the desires of the attorney general and state legislators to delay implementation of new proposed health coverage plans for state employees and retirees, the Office of Group Benefits (OGB) was quietly issuing a request for proposals (RFP) for actuarial services beginning Jan. 1, 2015.

https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4D7A4D774E4445794D793551524559334E444531

Greg Cromer (R-Slidell) and John Bel Edwards (D-Amite) asked several times during the hearing the identity of the actuary who recommended three consecutive years of premium reductions in the face of rising health care costs and it wasn’t until the fourth time the question was asked that an answer was forthcoming.

“In fiscal year 2012 there was a 3 percent erosion of the fund balance,” Edwards said. “Yet, in fiscal 2013, there was a 7.11 percent reduction in premiums followed by 1.8 percent even though health care costs were going up by 6 percent. What actuary told you those reductions were sound?”

“Buck Consulting recommended a 2.25 decrease for calendar 2012,” Commissioner of Administration Kristy Nichols said.

Edwards then asked if Buck Consulting was still under contract to the state.

“That contract is being bid,” Nichols said.

“I would hope so,” Edwards responded.

State records indicate Buck had a $2.1 million contract with OGB to provide actuary and consulting services. That contract ran from Dec. 1, 2009 through Jan. 1, 2012. Additionally, Buck had another $600,000 contract from June 1, 2011, to June 1, 2013, “to assist in advising the Division of Administration with regard to public retirement systems and insurance benefits for public employees, actuarial services” at $250 per hour and per diem payments of $165.

Buck Consultants is a subsidiary of Affiliated Computer Services which in turn was purchased by Xerox in 2009. Jan Cassidy, sister-in-law of 6th District Congressman and U.S. Senate candidate Dr. Bill Cassidy, worked as Regional Vice President of Business Development for ACS and Xerox for nearly four and one-half years before going to work for DOA in December of 2012 as Assistant Commissioner in Procurement and Technology at a salary of $150,000 per year. A search of state contract records in March of 2013 by LouisianaVoice turned up four contracts with ACS totaling $45.55 million.

ACS contributed $10,000 to the campaign of Gov. Bobby Jindal (R-Iowa, R-New Hampshire and R-Anywhere but Louisiana) in 2003 ($5,000), 2008 ($4,000), and 2009 ($1,000), Jindal’s campaign records show.

LouisianaVoice, in March of 2013, noted several contracts between ACS and other states, cities, and even the federal government which drew sharp criticism over problems experienced by the company as well as questionable contracts in Texas and Alabama.

https://louisianavoice.com/2013/03/15/doa-hires-jan-cassidy-sister-in-law-of-cong-bill-cassidy-at-150000-previous-employers-records-are-less-than-stellar/

But ACS wasn’t the only entity in that organization with problems. Buck Consultants was sued by Providence, Rhode Island in 2013 because, the city claimed, Buck miscalculated $700,000 per year in savings the city anticipated through pension reform. Instead, Mayor Angel Taveras said, the cost to the city was expected to be $10.8 million over the next 28 years.

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&ved=0CB4QFjAA&url=http%3A%2F%2Fwww.pionline.com%2Farticle%2F20130226%2FONLINE%2F130229899%2Fprovidence-ri-sues-buck-consultants-over-pension-savings-calculations&ei=0sIsVMTAE4OOyASQpIKIBQ&usg=AFQjCNEiIVz3kvxYoTszpqnKeonAQGq_-A&bvm=bv.76477589,d.b2U

In California, Buck Consultants was also accused of making several mistakes in its actuary for the Mendocino County retirement system, prompting the county to cancel its contract with the firm in March of 2011. Buck Consultants paid the county nearly $600,000 as a settlement of its dispute in September of that same year. http://www.ukiahdailyjournal.com/ci_17656902

http://www.ukiahdailyjournal.com/ci_18951388

In a case that should sound familiar to OGB members who have been following events since the privatization of the agency, retirees in Stanislaus County, California, in 2009 sued the county retirement board over its decision to shift $60 million in reserves to ease the county’s pension obligations for fiscal year 2009-10. http://www.modbee.com/2009/12/24/984878/retirees-challenge-stancera-over.html

And now OGB “is seeking proposals from actuarial and consulting (actuary) providers for a contract that will allow for benefit design, rate development, RFP scoring, and other analytical and financial support activities for the state health insurance plan,” the RFP says.

The actuary chosen for the contract “will provide methods for, and calculation of, health plan premiums for OGB health plans and other support services.”

So while Kristy Kreme continues to insist that the current plans for OGB do not call for increased premiums, only higher co-pays and deductibles, it’s interesting to note that the contract being sought by OGB certainly leaves the door open for premium adjustments down the road and it isn’t difficult to guess which way those adjustments will go.

The RFP says that OGB projects medical plan expenditures of almost $1.284 billion in fiscal year 2015, which begins next June 1. Of that amount $56.9 million will be in administrative costs, the RFP says, adding that OGB will require “ongoing consulting and assistance with benefit development, rate setting, risk adjustment determinations, financial analysis, analysis of claims and encounters, evaluation of expenditures, budget projections, trend calculations, causes and discovery of trend, evaluation of multiple benefit options, and financial and other reporting requirements as may be necessary to administer” the health plan.

Should Buck Consultants submit a proposal and should it be the low bidder, someone other than Kristy Nichols might wish to talk to the folks in Providence, R.I., Mendocino or Stanislaus counties in California to do a little vetting before a contract is awarded.

This consultant-happy administration has made a horrible mess of things with OGB since 2011. There’s no need to continue down that same road of bad decisions.

Read Full Post »

2010 RFP for OGB contract for NE Louisiana may have been crafted to give advantage to favored vendor over competitors

Posted in Campaign Contributions, Contract, Contracts, DOA, Ethics, Fraud, Governor's Office, Health Care, Office of Group Benefits, OGB, Office of Group Benefits, Privatization, RFP, Request for Proposals, State Agencies, Teague on September 25, 2014| 22 Comments »

A directive to craft a request for proposals (RFP) in such a way as to favor a specific vendor during a meeting of top administrative officials in 2010 may have violated the state’s bid laws and opened the door to charges of bid-rigging, according to a former State Senator who spoke with LouisianaVoice on Wednesday.

That meeting may also have been instrumental in the decision by then-Commissioner of Administration Angéle Davis to resign her position in early August of 2010.

Former State Sen. Butch Gautreaux (D-Morgan City), who was the State Senate’s representative on the Office of Group Benefits (OGB) Board of Directors, told LouisianaVoice that the meeting was held to discuss an RFP from vendors to provide health care coverage to state workers in northeast Louisiana.

Gautreaux said he was told by then-OGB Executive Director Tommy Teague that he (Teague) was directed by Timmy Teepell to “write a tightly-written RFP” so that only one company could meet the bidding criteria.

Teepell was Gov. Bobby Jindal’s Chief of Staff at the time of that meeting. Besides Teague and Teepell, also in attendance at that meeting were Jindal’s Executive Counsel Steve Waguespack who would succeed Teepell as Chief of Staff, and Davis.

Teague, contacted Wednesday by LouisianaVoice, confirmed the substance of Gautreaux’s story, though he said he was by now somewhat vague as to who was in attendance. “That happened so long ago,” he said, “but the gist of what he says is correct.”

Davis announced her resignation on June 24, 2010, though she stayed on until Aug. 8 when she was succeeded by Paul Rainwater. Teepell resigned in October of 2011.

The vendor that Teepell was most likely referring to was Vantage Health Plan of Monroe which currently holds two separate contracts with OGM worth a combined $53 million.

One of those contracts, for $45 million, is a one-year contract to provide a health maintenance organization (HMO) and hospitalization provider network plan and runs from Jan. 1, 2013 through Dec. 31 of this year. The second, for the same time period, is for $8 million to provide a Medicare Advantage plan for eligible OGB retirees. That plan, similar to ones offered by Peoples Health and Humana in South Louisiana, would be available only to those retirees eligible for Medicare. Retirees hired prior to 1986 and who have never worked in the private sector long enough to qualify for Social Security would not be eligible for the latter plan.

Vantage Health Plan has held 11 state contracts in all, totaling nearly $325 million at least as far back as former Gov. Mike Foster’s second term. The first, for $6.7 million, was for three years, from July 1, 2000, to June 30, 2003, to provide medical services for active and retired plan members.

Under Foster and into former Gov. Kathleen Blanco’s term, Vantage held two contracts: one for $46 million that ran three years, from July 1, 2003, to June 30, 2006 to provide an HMO program, physician and hospital provider network, and a one-year contract, from July 1, 2006 to June 30, 2007, was for $30 million to provide HMO services for state employees.

In Jindal’s first year in office, 2008, OGB issued a $9.925 million contract that ran for 30 months, from July 1, 2008, through Dec. 31, 2010, for Vantage to provide a Medicare Advantage plan for eligible retirees.

The following year, a $20 million contract for only 10 months—from Sept. 1, 2009, to June 30, 2010—was awarded to Vantage to provide an HMO plan to OGB members.

In 2010, Vantage received its biggest contract for $70 million for only 22 months, to run from July 1, 2010 to Aug. 31, 2012 for an HMO plan. That contract was one of four contracts with Vantage totaling $161 million that overlapped between July 1, 2010 and June 30, 2013.

Other contracts included:

  • One running from Jan. 1, 2011 to Dec. 31, 2012 for $14 million for Medicare Advantage plan for eligible retirees;
  • One for $10 million for only three months, from Sept. 1, 2012 to Dec. 31, 2012 for a medical home HMO plan for members;
  • One for $65 million for two years, from July 1, 2011 to June 30, 2013 for an HMO plan.

The obvious question is: Why Vantage?

For openers, Vantage and its officers have been active in writing checks for state politicians.

Gary Jones, president of Vantage, has personally contributed at least $20,000 to state politicians since 2003, including $10,000 to Jindal and $5,000 to former Gov. Blanco.

Michael Ferguson, a director of Vantage Holdings, Vantage Health Plan’s predecessor, gave $4,000 to state office holders, including $1,500 to Rep. Frank Hoffman (R-West Monroe) who serves as vice chairman of the House Health and Welfare Committee; Matthew Debnam, also a director of Vantage Holdings, $1,000 to Hoffman, and Terri Odom, also a Vantage Holdings director, $500 to Hoffman.

But it is Vantage Health Plan itself that is the biggest player in lining the pockets of state politicians.

Vantage, since Jan. 1, 2003, has kicked in no less than $61,900 to candidates. These include $1,000 to Jindal, $2,000 to former legislator Troy Hebert who now serves as director of the Office of Alcohol and Tobacco Control (AGC), $1,500 to House Speaker Chuck Kleckley (R-Lake Charles), $16,000 to Insurance Commissioner Jim Donelon and $5,000 to Sen. Mike Walsworth (R-West Monroe), among others.

While these contributions are all legal, they do raise the recurring issue of influence buying at all levels of government. And it is the $70 million contract in 2010 that raises the issue of possible bid-rigging. And while there may well have been no such attempt, if Teepell did indeed issue instructions to Teague to craft the RFP in such a way that only Vantage would meet the bid criteria, then the administration crossed a serious legal line for which it must be held accountable.

It was subsequent to that 2010 meeting and only weeks before the contract was awarded that Davis submitted her resignation and Teague was gone the following year on April 15, 2011.

This claim should spark investigations by the Inspector General’s office, the Attorney General, the East Baton Rouge District Attorney’s office and the U.S. Attorney’s office—the latter because federal Medicare funds were involved in several other Vantage contracts.

Read Full Post »

« Newer Posts - Older Posts »