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“We view the scope of services of the financial advisor is to primarily be that of a supportative and advisory role to the Office of Group Benefits, and therefore anticipate engagements with any committee of the Louisiana Legislature or other tribunal to be limited and infrequent.”

Division of Administration response to a question (posed by the Division of Administration) contained in addendum 4 to a Request for Proposals (RFP) for services of a financial advisor to conduct a financial analysis of OGB.

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BATON ROUGE (CNS)—Neither rain, nor sleet, nor act of sale by contractor shall deter Gov Bobby Jindal’s ever-onward march of privatization of state agencies.

LouisianaVoice has learned that F.A. Richard & Associates (FARA), the company that assumed control over the Louisiana Office of Risk Management (ORM) only last July, has been sold for an undisclosed amount to an Ohio company.

Avizent, of Dublin, Ohio, will apparently assume control of ORM, though no timetable was immediately available as to when the transition would take place.

FARA signed a contract with the Division of Administration (DOA) last year whereby the Mandeville company would be paid $68 million to take over all lines of coverage provided by ORM, as well as its Loss Prevention, Accounting, and Subrogation units.

ORM’s Loss Prevention, Subrogation, and Worker’s Comp sections were the first to go over to FARA and General Liability will follow later this year.

Only last week, Rep. Jim Fannin (D-Jonesboro), chairman of the House Appropriations Committee chastised DOA and ORM for neglecting to seek approval for a $7 million amendment to FARA’s five-year contract.

The Office of Contractual Review approved the amendment, according to ORM Assistant Director Patti Gonzales, because the agency is allowed one amendment without legislative approval so long as the amendment amount does not exceed 10 percent of the original contract amount.

A $7 million amendment, however, would be $200,000 in excess of 10 percent of the original $68 million contract.

FARA CEO Todd Richard sat beside Gonzales during the committee hearing last Thursday’s hearing but never mentioned the pending sale of his company.

Avizent has 35 offices in 25 states but the Baton Rouge office is manned by only one employee.

Attempts to obtain comments from Commissioner of Administration Paul Rainwater and Fannin were unsuccessful. A spokesman for FARA declined to comment but a spokesperson for Advizent CEO Tom Watson confirmed that Advizent was “in the process” of acquiring FARA. She said Watson was in Baton Rouge Thursday in preparation for a public announcement of the transaction.

ORM was the first successful privatization of a state agency by Jindal. Other agencies he is attempting to outsource include several state prison facilities and the Office of Group Benefits (OGB).

OGB presently has a request for proposals (RFP) for a financial analyst to assess the value of OGB and to then seek a third party administrator (TPA) to run OGB’s Preferred Provider Organization (PPO). Blue Cross/Blue Shield already administers OGB’s HMO but there has been considerable resistance to the privatization of the PPO.

Tommy Teague, the former CEO of OGB, who was fired on April 15, testified before the Senate Retirement Committee recently that he saw no need for a financial analyst if DOA only wanted a TPA. “There is no need to know the worth of the agency just to obtain a TPA,” he said, adding that a financial assessment would be needed only in the event the state wants to sell OGB.

Rainwater has been inconsistent about whether or not the state desires to sell or obtain a TPA, issuing conflicting statements in testimony before the Senate Retirement Committee (see May 18 Notable Quotables) and its chairman, Sen. Butch Gautreaux (D-Morgan City).

CNS has also learned that a number of private prison enterprises have contributed generously to Jindal’s political campaigns since his first run for governor in 2003.

Leading contributors included Corrections Corp. of America (CCA) of Nashville, Tennessee, the nation’s largest private prison firm ($13,000), which runs the state’s Winn Parish facility on a contractual basis; GEO Group of Boca Raton, Florida, which operates Allen Correction Center in Kinder in Allen Parish ($10,000); LaSalle Management of Ruston, which operates lockups in Claiborne, Ouachita, Catahoula, Jackson, LaSalle, Lincoln, and Concordia parishes ($10,000), and Emerald Correctional Management of Shreveport which operates facilities in West Carroll Parish ($10,000).

A fifth contributor, Wackenhut Corrections of Palm Beach Gardens, Florida ($10,000), once operated a juvenile detention center in Jena but after a CBS 60 Minutes report on abuses by guards at the center prompted federal investigations into the center, it was turned back over to the state.

Abuse of juvenile offenders is not limited to Louisiana.

A lengthy investigation in Pennsylvania revealed that two judges in Luzerne County were involved in the “cash for kids” scandal in which the judges handed down severe penalties for minor infractions. Many juveniles were led from the courtroom in shackles and were shipped directly to private-run detention centers that were paying kickbacks to the judges.

Judge Mark Ciavarella, who sentenced one teenage girl to 90 days in a detention center for the crime of spoofing her high school vice principal on MySpace, was convicted in February for his role in the $2.8 million bribery scandal.

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Gov. Bobby Jindal has outlined an ambitious program for his second term of office, including the privatization of the Louisiana Legislature, state colleges and universities, the sale of all state roads and highways and bridges to private concerns, and rapid expansion of the state’s charter school system, all to be controlled by private entities.

His plans for the state, which he calls the “Piyush Push,” were revealed by WikiLeaks which published a series of emails between Jindal and corporate campaign supporters who have contributed millions of dollars to Jindal’s wife’s charity, the Supriya Jindal Foundation for Louisiana’s Children. Upon learning of the WikiLeaks report, the governor called a press conference to explain his programs.

The privatization plan calls for the takeover of the Louisiana Legislature by a corporate board made up of the CEOs of Louisiana’s larger corporations and Wall Street bankers, including AT&T and Goldman Sachs.

The operating boards of state colleges and universities would be merged into a single governing board with board members serving at Jindal’s pleasure. An obscure clause in his plan would allow him to retain control of appointments even after he leaves office. The so-called super board would be comprised of major contributors who would purchase stock shares in the universities. Board members would be allowed to send their elementary- and high school-age children and grandchildren to state charter schools.

“We are not going to raise taxes on the people of Louisiana,” Jindal said at the hastily called press conference attended only by reporters from the Baton Rouge Business Report. “We are going to run these universities like a business. Tuition will be adjusted to a level comparable to that of our nation’s finest institutions, the Ivy League schools, of which I am an alumnus. The board members will not draw per diem or salaries for their services but we anticipate they will profit from their sacrifice and hard work through stock ownership and lucrative stock options in the universities,” the governor said.

“Again, I want to reiterate that we are not going to increase taxes but the new owners of state roads, highways, and bridges will certainly be free to charge a modest usage fee for travel on their byways and bridges,” Jindal said. “People who drive cars should understand that use of roads and bridges is a privilege, not a right and that a usage fee is not the same as a tax; it’s a fee. We believe that these usage fees will offset the need for any increase in gasoline taxes.”

As for the future of the legislature, Jindal said it will be downsized from the current membership of 144 to 12 white males who will inherit all current campaign contributions remaining and accruing to the 144 outgoing legislators. The only way an African-American would be appointed would be in the event of a class action lawsuit by representatives of minority groups. “It almost worked with the Board of Regents,” the governor said in defending his legislative plan.

A few legislators voiced reservations with the manner in which Jindal is moving to privatize their institution, but after having gone along with the governor in other privatization endeavors, most indicated they would not resist the new austerity moves by the governor. Nor was there any immediate indication that legislators would attempt to invoke the separation of powers doctrine under which the legislature has heretofore been largely independent of the governor’s office.

Sen. Carl Spackler of Bushwood, however, was one who vowed he will not vote in favor of privatization of the legislature. “I believe the legislative branch of government is protected in the Constitution somewhere and I’m going to read up on that,” Spackler said. “If I’m correct, I’m not going to sit still for him putting me out of a job. Who does Jindal think we are, state employees? I worked hard for my GED.”

But Jindal was emphatic about pushing for complete passage of his austerity package, saying there would be no compromise. “I want to emphasize that these moves are in keeping with my ‘more is less’ philosophy for all government,” he said. “For those who may question these actions, I would say to them, ‘Quit whining and work smarter.”

Neither is Jindal considering an increase in tobacco taxes. “Smoking is a private decision, an individual right, and smokers should not be penalized for exercising that right,” he said. “We are, however, imposing a significant surcharge for abortions to encourage the notion that life is sacred and women should not make such decisions too lightly. Again, I want to emphasize this is not a tax.”

He said he is also planning to sharply reduce the number of state employees. One example of his layoff plan would require every Louisiana citizen who is unwilling or unable to complete the process on-line to appear at a central location in Baton Rouge, Shreveport, Monroe, New Orleans, Alexandria, Lafayette, or Lake Charles for driver’s license applications and license renewals. “I don’t see why we can’t get by in each office with one or two persons,” he said. “How difficult can it be to issue a driver’s license?”

He also announced plans to double the size and the salaries of the state’s Homeland Security Office while at the same time saying he would cut staff at state hospitals to a single physician and nurse per specialty at each facility. “I believe with fewer doctors, people will find a way to stay healthier,” Jindal said.

“Again, I want to say we are not going to raise taxes,” he said. “That is not an option. We are, however, going to raise the annual deductible on medical care to $12,500 per year, increase co-payments to $50, and at the same time, we’re asking state workers to kick in another 75 percent on employee premiums on health care coverage and retirement benefits.”

Jindal used the press conference to take yet another swipe at big government in general and President Obama in particular. “The bloated federal government should take a look at Louisiana and say, “That’s how things should be done,” he said. “We’re proving in our open and transparent administration that our ethics are above reproach and we’re wiping out our deficit with good, open and honest government,” he said as the CEOs of AT&T, Northrop Grumman, Worley Catastrophe Response, and Blue Cross/Blue Shield stood behind him.

“I would once again call upon the Obama administration to repeal its drilling moratorium in the Gulf of Mexico so that our oil companies can make a decent living,” Jindal said.

Jindal said he would sell all public schools to private entities so that they could be converted to charter schools. He said the move would be a model of efficiency for the rest of the nation. “I believe the 25 percent loss in Detroit’s population over the past decade, for example, could be reversed simply by converting to my proposed system for Louisiana schools,” he said.

“I fully anticipate there will be a bidding war for acquisition of schools as public finance will guarantee a solid return for investors,” Jindal said. “Of course my administration will invest the funds derived from the sale so that cash flow will support scholarships to the schools or such other General Fund needs as might arise in the budget balancing process.”

He said those children unable to take advantage of the improved educational opportunities will be housed in dormitories near the Nucor Steel Mill in St. James Parish, the Tournament Players Club golf course in Jefferson Parish, and the Foster Farms chicken processing plant in Union Parish. “There, they will be given hands-on training to meet the plants’ needs,” he said. “If all else fails, they would certainly be qualified to become slag haulers, caddies at state-run golf clubs, or chicken pluckers.”

To insure that the schools will succeed and will demonstrate high test scores, students will be carefully pre-screened before being accepted for enrollment, Jindal said. The schools will be run by boards comprised of members selected by the owners. Owners and board members, along with the college and university Super Board members, will be given first choice of the available seats in the school for their children, as will those of select employees.

“I am fully aware that all this will require Constitutional amendments but I fully expect the voters of Louisiana to continue to support our programs. But just in case, beginning here and now, I am stepping up my schedule of visiting churches to garner popular support for my proposals. Beginning Sunday and continuing through Election Day, I will be visiting churches all over north Louisiana. My agenda will consist of three things: Sunday morning and Sunday evening services as well as Wednesday night prayer meetings.”

And that’s the way it is on Friday, April 1, 2011.

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The nation’s “most transparent” and “most ethical” administration is becoming more transparent with each passing day but the ethical part is looking a little shaky.

A Hammond firm that has one $380,000 contract with the state and another to oversee a $20 billion claims fund resulting from the BP Deepwater Horizon oil rig explosion in the Gulf of Mexico that killed 11 men last April and spewed nearly 5 million barrels of oil into the Gulf of Mexico hosted a $1,000-a-plate fundraiser for Gov. Bobby Jindal on Tuesday of this week.

The $1,000 is just to attend the event. If one wanted to be listed as a “host,” the ante was $5,000.

Worley Catastrophe Response, which also has had contracts with the Louisiana Office of Risk Management, was the primary host, and even made its Hammond training facility available for the event.

The Louisiana Code of Ethics, which apparently does not apply to elected officials, forbids state employees from accepting gifts from vendors.

But not to worry. Worley CEO Mike Worley was careful not to push the envelope insofar as the state ethics laws are concerned. He contended the event was on the up-and-up and that no ethics protocol had been breached because the function was held after business hours.

Apparently Worley’s contracts are rendered null and void after 5 p.m.—or at least placed in a state of suspended animation.

And, of course, Jindal ceases being governor “after business hours.”

Horsefeathers.

This is simply another case of Jindal’s twisting the rules to suit his needs and apparently those needs are all monetary. His campaign already has $12 million in the bank with no opponent in sight. The only candidate even mentioned thus far, Caroline Fayard, attempted to self-destruct in Bogalusa earlier this week with some off-the-cuff venom directed at Republicans in general. To say anyone, even Republicans, “eat their young” is a bit over the top and likely not to play well in north Louisiana.

But back to Piyush and his new take on the code of ethics. Remember: he was fined $2,500 back in 2008 for his failure to disclose $118,000 in expenditures by the state Republican Party on his behalf.

And now he allows a fund raiser in his behalf to be hosted by a firm holding fat state contracts. And he sees no conflict of interest.

Beautiful. Just beautiful. Sometimes even smart people learn slowly.

“People who support us are supporting our agenda and not the other way around,” the governor said. Now, if someone could just tell us what he meant by that ….

“I’m a resident of the state of Louisiana, and I support the governor,” Worley said. Apparently that overrides any silly old ethics laws. Erlichman and Haldeman supported Nixon, too, not that we’re drawing any comparisons.

Jindal’s press lackey Kyle Plotkin said the governor saw nothing inappropriate about the fund raiser. “Obviously, the governor is running for re-election, and he wants the support of all people in Louisiana,” he said.

Jindal and Attorney General Buddy Caldwell in February filed papers in U.S. District Court in New Orleans asking a federal judge to oversee the oil leak claims process.

Louisiana Democratic Party spokesman Kevin Franck called the fundraiser a conflict of interest for the governor who he said “is essentially taking money from somebody who works for BP at the same time he’s supposed to be holding BP accountable.”

State Rep. John Bel Edwards (D-Amite) was at a loss in trying to understand how Jindal did not see what Edwards said was a clear conflict in complaining about the claims process while attending a fundraiser at the headquarters of one of the claims adjusters.

He said Jindal should avoid any appearance of a conflict, regardless of whether or not he has an opponent. He added that because he has no opponent, however, “It may mean that he’s able to get away with it.”

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A routine opinion of the Louisiana Ethics Board has raised red flags over the involvement of former Commissioner of Administration Angelé Davis and an international public relations firm with a checkered past that wants a lucrative contract with the Louisiana Seafood Promotion and Marketing Board.

Fleishman-Hillard, headquartered in St. Louis but which has more than 80 offices on six continents, apparently has partnered with Davis to take advantage of Davis’s state experience in efforts to secure a consulting contract with the board that could ultimately be worth millions of dollars.

Davis, who was appointed Commissioner of Administration by Gov. Bobby Jindal, resigned last August to accept a position with infrastructure and construction services company Arkel International of Baton Rouge. She served as deputy commissioner under former Gov. Mike Foster and headed up the Department of Culture, Recreation and Tourism under former Lt. Gov. Mitch Landrieu during the administration of former Gov. Kathleen Blanco.

She is still employed by Arkel, but attempts to contact her on Monday reached only her office voice mail.

Now, it seems, she has formed a company called the Davis Kelley Group to freelance efforts to negotiate with a consulting company seeking a government contract. Kelley is her husband, 19th District Judge Tim Kelley.

The Davis Kelley Group’s corporate papers were registered and filed on March 3, less than a month ago, according to the Louisiana Secretary of State’s Office.

The business address of The Davis Kelley Group is the same as her and Judge Kelley’s residence, records show.

In Baton Rouge, any business run from a residence requires an occupational license. A check with the City Revenue and Taxation Office revealed no such occupational license has ever been granted to that or any other business at that address.

Davis is barred by state law from entering into contracts with state agencies for herself for a period of two years but the Ethics Board said she is not prohibited from contracting with a consulting firm that in turn is seeking such a contract.

At stake is a share of up to $15 million of the BP Oil Spill Rebranding/Market and Perception Recovery Fund established to assist the state’s seafood market in its recovery from last year’s catastrophic oil spill in the Gulf of Mexico. Oil spewed freely from the BP Deepwater Horizon well from April 20 to Sept. 19 before the flow was finally shut off.

The Seafood Promotion and Marketing Board has issued a 95-page request for proposals (RFP) for a consulting contract to assist the board in promoting Louisiana seafood.

The submission deadline for proposals is April 3 and the deadline for reviewing the proposals is April 19.

The top three firms will make their presentations on April 25 with the final selection of a consulting firm to be made later that week, according to the RFP.

In a letter dated March 21, the Ethics Board responded to Davis’s inquiry as to the propriety of her firm providing consulting services pursuant to a proposal anticipated to be submitted by Fleishman-Hillard.

“As part of your agreement with Fleishman-Hillard, if the contract is awarded to the company, you will provide consulting services and assist the company in its contract with the….board,” the letter said.

“You also stated that you would not enter into a contract with the Louisiana Seafood Promotion and Marketing Board and would not assist Fleishman-Hillard in any transactions with the Division of Administration, an agency with whom you terminated your employment relationship as Commissioner in August 2010.”

The letter informed Davis that she was not prohibited from providing the consulting services “in the manner described” if the firm is awarded the contract.

“Since you will not be entering into a contract with a state agency or assisting Fleishman-Hillard in transactions involving the Division of Administration, the Ethics Code does not prohibit you from assisting the company if it is awarded the contract…”

Fleishman-Hillard, founded in St. Louis in 1946, has enjoyed many lucrative federal contracts, beginning with a minor $39,000 contract in 1998. From there, the firm’s federal contracts ballooned to $33.6 million the next year.

Among the federal agencies that have awarded Fleishman-Hillard contracts are the Social Security Administration, the Library of Congress, the EPA, and the Department of Defense.

But all has not been rosy with the firm’s history.

In 2005, the City of Los Angeles sued Fleishman-Hillard for flagrant overcharges to the city’s Department of Water and Power between 1998 and 2004. In 2005, the public relations firm paid the city $5.7 million to settle the litigation after one former employee testified that she routinely billed about 10 fraudulent hours per week at a rate of $180 per hour. “You had to fake your hours or you weren’t billing enough time to be profitable,” she said.

The publisher of one trade publication blamed the pressure to overbill on Omnicon, the advertising parent of Fleishman-Hillard. He described Omnicon as being “manic about max hours being billed out to clients.”

Before that, in 1990, G.P.U., the New Jersey utility that owns the Three Mile Island nuclear plant, paid Fleishman-Hillard, its only outside PR firm, about $600,000 to supplement the company’s lobbying efforts. Fleishman-Hillard was retained by Standley Hoch, who left General Dynamics Corp. to become the G.P.U. CEO. In 1991, Hoch hired Susan Schepman away from Fleishman-Hillard. Only later was it learned that the two had an intimate relationship and Schepman had influenced Hoch to hire Fleishman-Hillard while she was a Fleishman-Hillard executive responsible for the General Dynamics account during Hoch’s tenure there.

In 2008, the firm secured a contract with the White House Office of National Drug Control Policy to “debunk the misconception that marijuana was harmless.” That was a full one-eighty from its position seven years earlier, in 2001.

It was a 2001 promotion that led to the real damage to Fleishman-Hillard’s credibility last year when the State of Ohio awarded the PR firm a $400,000 contract to run its campaign to reduce fatal drug overdoses despite the firm’s having once been a paid consultant for Purdue Pharma, manufacturer of one of the highly addictive painkiller Oxycontin. It was in 2001 that Fleishman-Hillard spearheaded a PR campaign to convince the public and regulators of the benefits of the drug while downplaying its dangers.

In 2007, Purdue Pharma and its three CEOs, Michael Friedman, Howard Udell, and Paul Goldenheim, pleaded guilty in federal court to misleading physicians and patients about the addictive and abusive qualities of Oxycontin.

So now it all comes down to this:

A former high official in the Jindal administration and wife of a state district judge is moonlighting to take advantage of her knowledge of state government in an effort to help secure a potential multi-million-dollar contract for a firm with a past record of overbilling, conflicts of interest, back-door deals, and questionable PR campaigns to promote a dangerous drug.

But, hey! It’s just another day at the office in Louisiana state government.

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