Feeds:
Posts
Comments

Archive for the ‘Contract, Contracts’ Category

CMS rejects hospital privatization plan leaving $300M hole in 2015 budget and immediate $70M shortfall for higher ed

Posted in Budget, Contract, Contracts, DHH, Finances, Governor's Office, Health Care, Higher Education, House, Senate, Legislature, Legislators, Privatization on May 2, 2014| 26 Comments »

Not that we told you so, but…..we told you so. Several times.

LouisianaVoice has questioned the wisdom—and legality—of the shaky LSU hospital privatization deals since day one and on Friday, the U.S. Centers for Medicare and Medicaid Services (CMS) notified the state that it had refused to sign off on the administration’s plans to privatize LSU hospitals in New Orleans, Shreveport, Monroe, Houma, Lake Charles and Lafayette.

The decision deals a devastating blow to the administration and the state budget for next fiscal year which begins on July 1.

Even more important, the decision throws into serious doubt the operating budget for higher education for the remaining two months of the current fiscal year.

Only last week, Jindal asked State Treasurer John Kennedy to transfer $40 million from other areas to continue funding higher education because an anticipated $70 million in hospital lease payments had not been made.

Kennedy said Friday he was assured that the money would be repaid as soon as the lease payments were received. “Now, I just don’t know,” Kennedy said. “If that $70 million isn’t forthcoming, we have a problem right now, not next year. I don’t believe the legislators realize this yet. I don’t think they realize they will have to cut another $70 million from somewhere to keep higher education afloat. We have to support higher ed.

“Wow. This catches me flat-footed,” he said. “I didn’t expect a decision this soon.”

Commissioner of Administration Kristy Nichols said last week that she was confident that the lease payments would be made but the CMA decision casts a huge shadow over those prospects.

Kennedy added that he believes the legislature will now have to consider his proposal calling for an across the board 10 percent cut in consulting contracts. “That would generate $500 million,” he said.

State Rep. Rogers Pope (R-Denham Springs) said the decision raises the question of “where the state will make up $300 million-plus. You have to wonder how many cans we can keep kicking down the road.

“This is a discouraging development. The budget is scheduled to come to the House floor next Thursday, so there’s no time to find additional money. I just don’t know how to react or how many services we can cut.

“Just last week (Department of Health and Hospitals Secretary Kathy) Kliebert assured the Senate there was nothing to worry about and now this…”

Another legislator was even more outspoken in his criticism of the governor.

“Governor Bobby Jindal’s reckless pursuit of using federal Medicaid funds in an ill-conceived scheme to privatize state-run hospitals has backfired and now the people of Louisiana will pay a dear price,” said State Rep. Robert Johnson (D-Marksville) in a prepared statement. “Governor Jindal has written a blank check to sell our charity hospital system, which is ultimately used by Louisiana’s working poor, and today it has bounced.

“People could die. The sick will get sicker. Our precious hospitals are in turmoil. The state budget is in tatters. Governor Bobby Jindal sits in the midst of this fiscal and healthcare debacle clutching his dreams of the presidency at the taxpayers’ expense.

“I, along with many others, predicted this outcome and now the people of Louisiana have been left with the tab.

“The Jindal administration’s announcement of an appeal is a typical, timid, tepid response that will bear no more fruit than the barren tree Jindal planted last year.

“It will take all of us. Now is not the time to fall back on partisan bickering or to cling to ideology in the face of a fiscal and healthcare disaster,” he said.

Part of the problem was most likely the manner in which the administration was attempting to use federal dollars to attract more federal matching dollars to finance Jindal’s privatization plan; the feds just weren’t buying it.

Here is the scheme:  The private hospital pays LSU money to lease the LSU hospital.  That money does not stay with LSU; it ends up (directly or indirectly) being used as match in the Medicaid program.  After matching those lease payments with federal funds, the total, larger amount is paid back to the private partner in the form of a Medicaid payment.   The lease payments supplant the state funds.  However, the legislative fiscal office has already raised concerns about the leases being $39 million short which is  why the Division of Administration has already begun planning on “double” lease payments this year.

For years states have devised schemes to receive additional federal funds while reducing the state contribution for Medicaid.  There is a problem with these schemes, however.  Consider this from a 2009 report by the Congressional Research Office:

“In 1991, Congress passed the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments (P.L. 102-234). This bill grappled with several Medicaid funding mechanisms that were sometimes used to circumvent the state/federal shared responsibility for funding the cost of the Medicaid program. Under these funding methods, states collect funds (through taxes or other means) from providers and pay the money back to those providers as Medicaid payments, while claiming the federal matching share of those payments. States were essentially “borrowing” their required state matching amounts from the providers. Once the state share was netted out, the federal matching funds claimed could be used to raise provider payment rates, to fund other portions of the Medicaid program, or for other non-Medicaid purposes.”

DHH’s scheme included a “borrowing” component that looked similar to the practices this legislation was aimed at preventing.  Medicaid rules do not allow a Medicaid provider (read “hospital” here) to voluntarily donate money to the state when they know they will get this money back plus more (the federal share) as part of an increase in their Medicaid payments.  The federal oversight agency, CMS, had previously expressed concerns to state officials that these lease payments could qualify as non bona fide provider donations.

If CMS determined these are conventional fair market value leases, they would have allowed the payments.  Beyond the basic annual lease payments, the deals included “double lease payments” and other large up front lease payments designed to fix the state’s budget problem raising the specter of non bona fide provider donations.  If these payments were deemed to be non-allowable, the federal government will recoup any federal funds that were paid as match for these state funds.

The privatization deals were done at a cost of $1.1 billion to the state this budget year, much of that ($882 million) expected to come from federal funds under the scenario alluded to above.

But a terse message from CMS brought all those plans crashing down: “To maintain the fiscal integrity of the Medicaid program, CMS is unable to approve the state plan amendment request made by Louisiana.”

Predictably, Jindal, who refused to wait for federal approval before plunging ahead full bore with his sweeping privatization of the LSU hospital system, said, “CMS has no legal basis for this decision.” (At least he didn’t call the decision “wrong-headed,” as he did in 2012 when a state district court ruled his school voucher program unconstitutional.)

Jindal said he will appeal the decision but for the time being, the six hospitals will be operating under financing plans that have been shot down, which should come as no surprise to observers of this administration. Friday’s decision prompted one of the governor’s critics to comment, “Jindal deserves every misfortune that this may bring him. The people of this state, however, don’t deserve this. He used them for his selfish political purposes.” Another said, “It would be karma if this fiasco totally destroyed Jindal’s national dreams.”

The one question still left unanswered is whether attorney Jimmy Faircloth will once again be called on to defend yet another dog of a legal case on behalf of this blundering administration, thus adding to his legal fees which already exceed $1 million.

Read Full Post »

Contractor claims in lawsuit that DOTD official attempted ‘shake down’ for cash and equipment during Monroe work

Posted in Contract, Contracts, Corruption, Ethics, State Agencies on April 9, 2014| 5 Comments »

A six and one-half-year-old lawsuit has taken a dramatic turn following a Mangham contractor’s claim that the Louisiana Department of Transportation and Development (DOTD) denied payments for work performed by his company because he resisted shake-down efforts by a DOTD inspector.

Jeff Mercer owner of the now-defunct construction company that bears his name, worked as a subcontractor to several prime contractors on six different projects for which he says he has not been paid. He first filed his lawsuit against DOTD on Sept. 7, 2007, in state district court in Monroe, claiming that the state owes him nearly $9 million for actual work done for which he was never paid, plus interest and delay costs which bring the total to more than $11.6 million.

He raised the stakes when he and three of his employees filed sworn affidavits with the court in which all four say DOTD inspector Willis Jenkins demanded that Mercer either “put some green” in his hand or that Mercer place a new electric generator “under his carport” the following day, Mercer’s affidavit says.

Foreman John Sanderson, carpenter Bennett Tripp and traffic control supervisor Tommy Cox, all employees of Mercer at the time, signed similar affidavits attesting to the same sequence of events in which they each say Jenkins tried to extort either cash or equipment from their boss.

The incident, all four said, occurred in 2007 when Mercer was contracted to perform work on a $79,463 project on Louisville Avenue in Monroe.

“While working on that project,” Sanderson said in his sworn statement, “I was approached by Willis Jenkins. Mr. Jenkins informed me at that time that he could make things difficult on Jeff Mercer, LLC.

“He indicated that this burden would not necessarily be on the Louisville Avenue project but on future jobs awarded to Jeff Mercer, LLC,” Sanderson said. “I replied, ‘You didn’t mean to say that,’” whereupon, Sanderson said, Jenkins repeated his threat. “During that conversation, I heard Willis tell Jeff that he ‘wanted green,’” Sanderson said.

Tripp, in his signed statement which was notarized by Baton Rouge attorney Jennifer Dyess, also said he heard Jenkins tell Mercer he “wanted some green.” He said he also heard Jenkins tell another Mercer employee that Jenkins, pointing to a generator in Tripp’s truck, said he “wanted one of those under his carport.”

Following complaints from Mercer, Jenkins was subsequently removed from the project but Tripp said the shakedown continued when another state official told Mercer employees, “Y’all had my buddy removed and we’re going to make the rest of the job a living hell.”

Cox likewise said he heard Jenkins tell Mercer employees he wanted a generator in his carport. “Willis (Jenkins) further indicated that he “wanted his generator to be new,” or “this could be a long job.”

Mercer, who founded his company in 2003, said that Jenkins approached him and said he needed “to put some green in his hand.” Mercer says in his affidavit that he asked Jenkins to repeat himself, and he did so. “I then replied that ‘I don’t do that,’” Mercer said.

Jenkins responded that Mercer “better do that or you won’t finish this project or any other project in this area.”

During their exchange, Mercer said that Jenkins told him, “This is going to be a long job if I don’t get the green or the generator.”

Mercer said in his sworn statement that he call Jenkins’ supervisor Marshall Hill and advised him of Jenkins’ action. “Marshall advised that he would remove Willis from the Louisville Avenue project,” Mercer said, adding, “Marshall also stated, ‘Off the record, this doesn’t surprise me.’ Shortly thereafter, (Jenkins) was removed from the …project.”

It was after that incident that Mercer’s problems really began, he says. After receiving verbal instructions on the way in which one project was to be done, it was subsequently approved but several days later, DOTD officials, including defendant John Eason, advised that the work was not acceptable.

Work for which Mercer says he has not been paid includes:

  • Two projects on I-49 in Caddo Parish ($1.6 million);
  • A Morehouse Parish bridge project ($7.1 million);
  • Louisville Avenue in Monroe ($79,463);
  • Well Road in West Monroe ($50,568);
  • Airline Drive in Bossier City ($57,818);
  • Brasher Road in LaSalle Parish ($70,139).

Mercer claims in his lawsuit there was collusion among DOTD officials to “make the jobs as costly and difficult as possible” for Mercer.

He claims that DOTD officials provided false information to federal investigators; that he was forced to perform extra work outside the contract specifications; that a prime contractor, T.J. Lambrecht was told if he continued to do business with Mercer, closer inspections would result, and that job specifications were routinely changed which in turn made his work more difficult.

DOTD interoffice emails obtained by LouisianaVoice seem to support Mercer’s claim that he was targeted by DOTD personnel and denied payment on the basis that the agency was within its rights to “just say no.”

One email from DOTD official Barry Lacy which was copied to three other DOTD officials and which stemmed from a dispute over what amount had been paid for a job, made a veiled threat to turn Mercer’s request for payment “to the U.S. Department of Transportation’s Office of Inspector General.”

Still another suggested that payment should be made on a project “but never paid to Mercer.”

“I did everything they told me to do,” Mercer told LouisianaVoice. “But because I refused to allow one DOTD employee to shake me down, they put me out of business. They took reprisals and they ostracized me and broke me but now I’m fighting back.”

Both Mercer and his Rayville attorney David Doughty indicated they had reported the events to the governor’s office but that no one in the administration had offered to intervene or even investigate his allegations.

It was not immediately clear if the Louisiana Office of Inspector General had been notified of the claims.

Read Full Post »

Jindal health plan shows he wants to be POTUS in worst way—apparently the same way he has been LA. governor

Posted in ATC, Boards, Civil Service, Contract, Contracts, Courts, DHH, Education, Elections, Ethics, Governor's Office, Higher Education, Jobs on April 3, 2014| 28 Comments »

Here’s the political shocker of the year: Gov. Bobby Jindal says that the Republican Party would be better off selecting a governor as its 2016 presidential nominee.

Wow. Who saw that coming?

Jindal might wish to ask former Massachusetts governor Mitt Romney how that scenario worked out for him.

Wonder how Sens. Ted Cruz of Texas, Rand Paul of Kentucky and Marco Rubio of Florida feel about that little snub?

Better yet, wonder who he had in mind? Gosh, there are so many: Chris Christie of New Jersey, Wisconsin’s Scott Walker, Ohio’s John Kasich and Rick Perry of Texas whom Jindal was quick to endorse a couple of years ago before Perry’s political machine sputtered and died on some lonely back road. Then there are those former governors Jeb Bush of Florida, Mike Huckabee of neighboring Arkansas, and Sarah what’s-her-name up there in Alaska.

Oh, right. We almost forgot because well…he’s just so forgettable, but there’s also Jindal who recently placed about 12th in a 10-person straw poll at that wild-eyed, frothing-at-the-mouth Conservative Political Action Conference (CPAC).

But he’s running. You betcha (sorry, Palin, we couldn’t resist). He is so intent in his as yet unannounced candidacy that he has already drafted his own plan to replace the Affordable Care Act, aka Obamacare.

Presidential candidates are usually expected to exhibit voter empathy and to be spellbinding orators who are capable of mesmerizing of voters en masse. John Kennedy comes immediately to mind. So do Ronald Reagan and Bill Clinton. I mean, after Clinton took two steps toward that audience member in his debate against President Bush the First in 1992 and said, “I feel your pain,” Bush never had a chance. Clinton looked that voter dead in the eye and spoke one-on-one as Bush was checking his watch.

Jindal has all the empathy of Don Rickles, but without the charisma.

As for oratory skills, to borrow a line from a recent Dilbert comic strip, he should be called the plant killer: when he speaks, every plant in the room dies from sheer boredom.

So much for his strong points: let’s discuss his shortcomings.

Jindal believes—is convinced—he is presidential timber. The truth is he has been a dismal failure at running a state for the past six years and he’s already written off the final two as he ramps up his campaign for POTUS.

Yes, we’ve been beset by hurricanes Katrina, Rita, Ike and Gustav. Yes, we had the BP spill. All of those provided Jindal valuable face time on national TV and still he trails the pack and when you’re not the lead dog in the race, the view never changes.

Because of those catastrophes, the state has been the recipient of billions of federal dollars for recovery. Nine years later, Jindal cronies still hold multi-million contracts (funded by FEMA) to oversee “recovery” that is painfully slow. The state received hundreds of millions of dollars to rebuild schools in New Orleans. Construction on many of those schools has yet to commence. The money is there but there are no schools. (Correction: Largely white Catholic schools have received state funding and those facilities are up and running.)

Jindal tried to restructure the state’s retirement system—and failed. Yes, the retirement systems have huge unfunded liabilities but Jindal’s solution was to pull the rug from under hard-working civil servants (who by and large, do make less than their counterparts in the private sector: you can look it up, in the words of Casey Stengel). As an example, one person whom we know was planning to retire after 30 years. At her present salary, if she never gets another raise over the final eight years she plans to work, her retirement would be $39,000 per year.

Under Jindal’s proposed plan, if she retired after 30 years, her retirement would have been $6,000—a $33,000-a-year hit. And state employees do not receive social security.

Never mind that state employees have what in essence is a contract: he was going to ram it down their throats anyway—until the courts told him he was going to do no such thing.

He has gutted higher education and his support of the repeal of the Stelly Plan immediately after taking office has cost the state a minimum of $300 million a year—$1.8 billion during his first six years in office.

He even vetoed a renewal of a 5-cent per pack cigarette tax because he opposed any new taxes (try following that logic). The legislature, after failing to override his veto, was forced to pass a bill calling for a constitutional amendment to make the tax permanent. Voters easily approved the amendment.

Then there was the matter of the Minimum Foundation Program, the funding formula for public schools. Funds were going to be taken from the MFP to fund school vouchers until the courts said uh-uh, you ain’t doing that either.

Jindal’s puppets, the LSU Board of Stuporvisors, fired the school’s president and two outstanding and widely admired doctors—all because they didn’t jump on board Jindal’s and the board’s LSU hospital privatization plan. Then the stuporvisors voted to turn two LSU medical facilities in Shreveport and Monroe over to a foundation run by a member of the stuporvisors—and the member cast a vote on the decision. No conflict of interest there.

Six months after the transition, the Center for Medicare Medicaid Services (CMS) has yet to approve the transition and if it ultimately does not approve it, there will be gnashing of hands and wringing of teeth in Baton Rouge (That’s right: the administration won’t be able to do that correctly, either) because of the millions of dollars in federal Medicaid funding that the state will not get or will have to repay. Jindal will, of course, label such decision as “wrong-headed,” which is an intellectual term he learned as a Rhodes Scholar.

And from what we hear, his little experiment at privatizing Southeast Louisiana Hospital (SELH) in Mandeville by bringing in Magellan to run the facility isn’t fairing too well, either.

By the way, has anyone seen Jindal at even one of those north Louisiana Protestant churches since his re-election? Didn’t think so.

For some reason, the word repulsive keeps coming to mind as this is being written.

Jindal’s firings and demotions are too many to rehash here but if you want to refresh your memory, go to this link: https://louisianavoice.com/category/teague/

The LSU Board of Stuporvisors, by the way, even attempted to prevent a release of a list of potential candidates for the LSU presidency. One might expect that member Rolf McCollister, a publisher (Baton Rouge Business Report), would stand up for freedom of the press, for freedom of information and for transparency. One would be wrong. He joined the rest of the board to unanimously try to block release. Again, led as usual by legal counsel Jimmy Faircloth who has been paid more than $1 million to defend these dogs (dogs being the name given to terrible, indefensible legal cases), Jindal was shot down in flames by the courts and the Board of Stuporvisors is currently on the hook for some $50,000 in legally mandated penalties for failing to comply with the state’s public records laws.

It would be bad enough if the administration’s legal woes were limited to the cases already mentioned. But there is another that while less costly, is far more embarrassing to Jindal if indeed, he is even capable of embarrassment at this point (which he probably is not because it’s so hard to be humble when you’re right all the time).

In a story we broke more than a year ago, former state Alcohol and Tobacco Control commissioner Murphy Painter refused to knuckle under to Tom Benson and Jindal when Benson’s application for a liquor license for Champions Square was incomplete both times it was submitted. Budweiser even offered an enticement for gaining approval of a large tent and signage it wanted to erect in Champions Square for Saints tailgate parties: a $300,000 “contribution” to the Louisiana Stadium and Exposition District (Superdome), whose board is heavily stacked with Jindal campaign contributors.

https://louisianavoice.com/2012/09/04/new-lsu-teaguing-by-%CF%80-yush-may-be-imminent-raymond-lamonica-rumored-on-way-out-as-system-general-counsel/

And:

https://louisianavoice.com/2013/02/page/3/

Jindal fired Painter. Because firing him for doing his job might be bad press, more solid grounds were sought and Painter was subsequently arrested for sexual harassment of a female employee and of using a state computer database to look up personal information on people not tied to any criminal investigation (something his successor Troy Hebert ordered done on LouisianaVoice Publisher Tom Aswell).

The female employee recanted but Painter nevertheless was put on trial and once more the Jindalites were embarrassed when Painter was acquitted on all 29 counts. Unanimously.

But wait. When a public official is tried—and acquitted—for offenses allegedly committed during the scope of his duties (the Latin phrase is “in copum official actuum”) then Louisiana law permits that official to be reimbursed for legal expenses.

In this case, Jindal’s attempt to throw a state official under the bus for the benefit of a major campaign donor (Benson and various family members), will wind up costing the state $474,000 for Painter’s legal fees and expenses, plus any outstanding bills for which he has yet to be invoiced.

So, after all is said and done, Jindal still believes he is qualified for the highest office in the land. He is convinced he should be elevated to the most powerful position in the world. If he has his way, it won’t be an inauguration; it’ll be a coronation.

So intoxicated by the very thought of occupying the White House is he that he has presumed to author a 26-page white paper that not only critiques Obamacare but apparently details his plan to replace the Affordable Care Act. Could that qualify as another exorcism on his part?

His epiphany, however, appears to be more akin to the Goldfinch that regurgitates food for its young nestlings than anything really new; it’s just a rehash of old ideas, it turns out.

During his entire administration—and even when he served as Gov. Mike Foster’s Secretary of the Department of Health and Hospitals—he devoted every waking moment to cutting Medicaid and depriving Louisiana’s poor citizens of health care. Even as head of DHH, according to campaign ads aired on the eve of the 2003 gubernatorial election, he made a decision which proved fatal to a Medicaid patient. That one campaign ad was aired so close to the election date that he was unable to respond and it no doubt contributed to his losing the election to then-Lt. Gov. Kathleen Blanco but he won four years later.

Nevertheless, his sudden interest in national health care prompts the obvious question: where the hell has he been for six years?

Not that we would for a moment believe that his newfound concern for healthcare is for political expedience but he apparently isn’t stopping there as he sets out to save the nation.

“This (health care plan) is the first in a series of policies I will offer through America Next (his newly established web page he expects to catapult him into the White House) over the course of this year,” he said.

We can hardly wait.

 

Read Full Post »

Baton Rouge attorney represents two state boards; suing two others, plus a state agency and apparently there’s no conflict

Posted in Boards, Commissions, Contract, Contracts, Courts, Ethics, House, Senate, Politicians, State Agencies, Taxes, Transparency, Waste on April 2, 2014| 5 Comments »

 

An interesting civil trial is transpiring at the 19th Judicial District Court. Though estimates vary, if the plaintiffs prevail, about one taxpayer in five in the Greater Baton Rouge area may eventually wind up with a surprise check in the mail.

The trial involves a group of taxpayers, now represented as a class, who have sued the Amite River Basin Commission (ARBC) over what they claim are vastly overpaid property taxes covering construction of the Comite River Diversion Canal. The project was originally envisioned after the massive 1983 flood which resulted in significant backwater flooding long after rains had stopped. The concept behind the project involves providing a sort of relief valve (the Canal) to divert water from the Comite River into the Mississippi River. By lowering the water level of the Comite River, water levels would also be lowered in the Amite River basin in flood-prone areas such as Port Vincent and French Settlement.

What is in dispute is the amount of funding for which the ARBC (through local property owners) is responsible. The original estimate of the project’s construction costs was approximately $120 million (the current estimate is $199 million). Of that $120 million, the Army Corps of Engineers (through the Federal government) was to be responsible for 70% of the construction costs, or $84 million. The remaining $36 million cost was originally designated to be $30 million to the State of Louisiana, and $6 million to the ARBC.

A sidebar to the whole affair is how a Baton Rouge lawyer is legally or ethically able to represent ARBC when he also served as the plaintiff attorney in litigation against the state that could ultimately cost the state from $60 million to $70 million.

Plaintiffs’ attorneys have indicated that $6 million was the full extent of the construction costs for which the ARBC was responsible. To date, by way of a 3-mill property tax approved by voters in the District in 2000, combined with a renewal (at 2.65 mills) of that tax in 2010, plaintiff attorneys say about $24.5 million has been collected to date. The suit seeks a refund of the alleged $18.5 million overpayment.

At various stages in the trial, plaintiff attorneys have accused ARBC Executive Director Deitmar Rietschier of financial mismanagement and voter deception in order to “keep a project alive that is on life support.”

The attorneys have argued that Rietschier has an ulterior motive for over-collecting on the tax in order to fund his own $93,000+ annual salary along with his executive secretary’s $38,000 salary.  The board’s executive secretary, Toni Guitrau, also happens to be the Mayor of the Livingston Parish Village of French Settlement.

So, basically, the trial boils down to the claim that taxpayers of the district have been tricked into paying around $1.1 million in salaries for Rietschier and Guitrau during a period for which no funding has been appropriated for the project’s continued construction.

Plaintiff attorney Steve Irving argued that it is virtually impossible to accurately estimate the final cost of the project or if, it may even be completed.

Defense attorney Larry Bankston says there never was any intent to cap the ARBC’s contribution to construction costs at $6 million. He argues that the Canal project remains viable and is fully ongoing. He indicated that he has eight more witnesses to call.

Bankston’s roles as both plaintiff and defense attorney in cases involving the state would appear to pose a conflict of interests. Currently, he is:

  • Legal counsel to the State Auctioneer Licensing Board under a $25,000 contract;
  • Defense attorney for ARBC in its ongoing litigation over the overpayment of taxes to that board;
  • Plaintiff attorney in ongoing litigation against the Louisiana Department of Agriculture, and the state’s Rice Promotion Board and Rice Research Board over claims of excessive assessments against the state’s rice farmers.

Employing the doctrine that “the state is the state is the state,” it would appear that Bankston may have a conflict of interests under the code of ethics which governs attorney representation.

But as we discovered years ago, nothing is ever cut and dried in the legal world. And it’s obvious those in charge of attorney ethics or either ignorant of the subject or protective of their peers—or both.

And so it is with this question. We contacted a number of organizations, including the Attorney Disciplinary Board, the Louisiana Civil Justice Center, and the State Bar Ethics Council and each one punted. Eric K. Barefield of the State Bar Association’s Ethics Council did finally respond to our email question about the propriety of working both sides of Litigation Street but his answer did little to shed light on the issue:

“Thank you for your inquiry. The Louisiana State Bar Association’s Ethics Advisory Service is designed to provide eligible Louisiana-licensed lawyers with informal, non-binding advice regarding their own prospective conduct and/or ethical dilemmas under the Louisiana Rules of Professional Conduct (the “LRPC”).  According to limitations set by the Supreme Court of Louisiana, we are not permitted to evaluate contemplated disciplinary complaints, to serve as the catalyst for potential complaints or even to comment on the conduct of lawyers other than that of the requesting lawyer. 

“As such, regrettably, we are not permitted to help you evaluate whether the lawyer in your scenario has or may be violating the LRPC nor are we permitted to give you legal advice on matters such as those contained in your e-mail. 

“In addition to the foregoing, if you are concerned about protecting and/or asserting your rights and interests in this matter, perhaps you should strongly consider consulting another lawyer as soon as possible with regard to getting an evaluation of your facts and a legal opinion about your rights, interests and options.  Regrettably, no one on the staff at the LSBA is permitted to offer legal assistance and/or legal advice.”

That rendition of the Bureaucratic Shuffle would easily get a “10” rating on Dancing with the Stars.

Bankston, you may remember, is a former staff attorney for the Louisiana Attorney General’s office, was assistant parish attorney for East Baton Rouge Parish and a member of the Baton Rouge City-Parish Commission before his 1987 election to the Louisiana State Senate.

In 1994, while serving as chairman of the Senate Judiciary Committee, Bankston met in his law office with Fred Goodson, owner of a Slidell video poker truck stop. The FBI later said Bankston and Goodson discussed a plan to manipulate the legislative process in order to protect the interests of video poker companies in exchange for providing key legislators secret financial interests in video poker truck stops.

Bankston was subsequently indicted and convicted on two racketeering counts, one of which was a scheme whereby Goodson would pay Bankston “rent” of $1,555 per month for “non-use” of Bankston’s beachfront condo in Gulf Shores, Alabama—a bribe, according to prosecutors.

Bankston was sentenced to 41 months in prison in 1997 and ordered to pay a $20,000 fine.

Released on Nov. 6, 2000, Bankston was subsequently disbarred by the Louisiana Supreme Court on Mar. 9, 2002, retroactive to Nov. 19, 1997, but was re-admitted to practice law on Feb. 5, 2004.

So, now he represents two state boards and is suing two others and a state agency.

And there apparently is no one who can—or will—call a foul in this game.

 

Read Full Post »

Senate Education Chairman Appel purchases Discovery stock week before company enters into state Techbook agreement

Posted in BESE, Contract, Contracts, Education, Ethics, House, Senate, Legislature, Legislators, Politicians, Public Records on March 27, 2014| 8 Comments »

On Dec. 7, 2010, Discovery Education, a division of Discovery Communications, announced that Louisiana and Indiana had joined Oregon in adopting the Discovery Education Science Techbook as a digital core instructional resource for elementary and middle school science instruction. https://www.discoveryeducation.com/aboutus/newsArticle.cfm?news_id=663

Thanks to a sharp-eyed researcher, Sissy West, who writes a blog opposing the Common Core curriculum, we have learned that on Nov. 30, seven days before the deal between the state and Discovery Education was made public, State Sen. Conrad Appel (R-Metairie) purchased Discovery Communications stock, according to financial disclosure records filed with the State Ethics Board. http://nomorecommoncorelouisiana.blogspot.com/2014/03/crisis-of-confidence.html

Appel is a major proponent of education reform in Louisiana, including the controversial Common Core curriculum.

He also is Chairman of the Senate Education Committee and was in a unique position to know not only of the pending deal between Discovery Education and the Louisiana Board of Elementary and Secondary Education (BESE) as well as the company’s agreement with Indiana and Oregon, as well as Texas and Florida.

The Discovery Education Techbook is touted as a “Core Interactive Text” (CIT) that “separates static text from a fully digital resource.” http://www.discoveryeducation.com/administrators/curricular-resources/techbook/K-8-Science-digital-textbook/index.cfm

Appel’s financial disclosure form indicates his Discovery Communications stock purchase was between $5,000 and $24,999. APPEL REPORT PDF

Discovery Communications is traded on NASDAQ and on the date of Appel’s purchase, the company’s shares opened at $40.96 and closed at $40.78.

And while there was no significant movement in the stock’s prices on the date of and the days following Discovery’s announcement of the agreement with BESE, the stock hit a high of $90.21 per share on Jan. 2 of this year, meaning Appel’s profit over a little more than three years, on paper, was in excess of 100 percent. Put another way, he doubled his investment in three years. The stock closed on Thursday (March 27) at $75.72, still an overall gain of 85 percent Appel.

The most significant thing about Appel’s Nov. 30, 2010, purchase of the Discovery Communications stock is the volume of shares traded on that date. More than 7.5 million shares of Discovery Communications stock were traded that day, more than double the next highest single day volume of 3.1 million shares on Aug. 1, 2011. Daily trading volume generally ran between 1.1 million and 1.9 million shares in a monthly review from December 2010 through March of this year. http://finance.yahoo.com/q/hp?s=DISCA&a=10&b=30&c=2010&d=02&e=28&f=2014&g=m

While there is no way to know with any certainty, it is possible that the Discovery Education’s Techbook deals contributed to the surge of trading activity on Nov. 30.

Appel’s 2012 financial report reveals that he also purchased between $5,000 and $24,999 of Microsoft stock on June 4, 2012, the same date that the Louisiana Legislature adjourned its 85-day session. MICROSOFT

Ten days earlier, on May 25, the Louisiana Legislature approved the implementation of Common Core in Louisiana after the Bill and Melinda Gates Foundation poured more than $200 million to develop, review, evaluate, promote and implement Common Core.

www.gatesfoundation.org/How-We-Work/Quick-Links/Grants-Database

And while no one is suggesting that Appel is involved in any type of illicit behavior or insider trading, the timing of his stock purchases might raise a few eyebrows. It could appear to some as more than coincidental—and ill-advised—that such transactions and official state actions would occur in so close a timeframe not once, but twice, and would involve a single individual who promoted Common Core legislation and who served as chairman of a key legislative committee that dealt with education issues.

Perception, as they say, is everything.

Read Full Post »

« Newer Posts - Older Posts »