Feeds:
Posts
Comments

Archive for the ‘Contract, Contracts’ Category

Two cases show justice difficult to obtain when state holds all the cards in terms of legal staff and financial resources

Posted in Attorney General, Contract, Contracts, Corruption, Ethics, Finances, Fraud, Judges, Lawsuits, Politicians, Public Records, State Agencies, Uncategorized on June 23, 2017| 6 Comments »

Were political considerations behind separate decisions by a state district judge to prohibit a contractor from seeking public records or a Second Circuit Court of Appeal judge to overturn a $20 million judgment against the Louisiana Department of Transportation and Development (DOTD)?

While definitive answers are difficult, there does seem to be sufficient reason to suspect that the lines between the judicial and administrative branches of government may have been blurred by the Second Circuit Chief Judge’s decision to negate the award to a contractor who a 12-person jury unanimously decided had been put out of business because he refused to acquiesce to attempts of bribery, extortion and conspiracy.

Judge Henry N. Brown, by assigning the case to himself and then writing the decision despite the fact his father had been a DOTD civil engineer for more than 40 years, may have placed federal funding for Louisiana highway projects in jeopardy.

And the RULING by 14th Judicial District Court Judge David A. Ritchie prohibiting Breaux Bridge contractor Billy Broussard from making legitimate public records requests of the Calcasieu Parish Police Jury or of the Calcasieu Parish Gravity Drainage District 8 would appear to be patently unconstitutional based solely on the state statute that gives any citizen of Louisiana the unfettered right to make public records requests of any public agency.

In Broussard’s case, he was contracted by Gravity Drainage District 8 to clean debris from Indian Bayou following Hurricane Rita in 2005. Work done by his company was to be paid by FEMA. Gravity Drainage District 8 instructed Broussard to also remove pre-storm debris from the bottom of the bayou, telling him that FEMA would pay for all his work.

FEMA, however, refused to pay for the pre-storm cleanup and Gravity Drainage District 8 subsequently refused to pony up. Broussard, represented then by attorney Jeff Landry, since elected Attorney General, filed a lien against the drainage district.

When Broussard lost his case before Judge Ritchie, he continued to pursue his claim and submitted this PUBLIC RECORDS REQUEST to the drainage district and to the police jury. Those efforts resulted in a heavy-handed LETTER from attorney Russell J. Stutes, Jr., which threatened Broussard with “jail time” if he persisted in his “harassment” of Calcasieu public officials.

And the injunction barring Broussard from future records requests, instead of being filed as a separate court document, was sought under the original lawsuit by Broussard, which presumably, if Stutes’s own letter is to be believed, was a final and thus, closed case. That tactic assured that Broussard would be brought before the original judge, i.e. Ritchie, who was already predisposed to rule against Broussard, no matter how valid a claim he had.

That was such a blatant maneuver that it left no lingering doubts that the cards were stacked against Broussard from the get-go. Everything was tied up in a neat little package, with a pretty bow attached. And Broussard was left holding a $2 million bag—and assessed court costs of $60,000 to boot.

In Jeff Mercer’s case, federal STATUTE U.S. Title 49 specifically prohibits discrimination against Disadvantaged Business Enterprises (DBE). It further requires that all states receiving federal funding for transportation projects must have a DBE program.

Mercer, a Mangham contractor, sued DOTD after claiming that DOTD withheld more than $11 million owed him after he rebuffed shakedown efforts from a DOTD inspector who demanded that Mercer “put some green” in his hand and that he could “make things difficult” for him.

Mercer suffers from epilepsy, which qualified him for protection from discrimination under Title 49.

His attorney, David Doughty of Rayville, feels that Brown should never have assigned the case to himself, nor should he have been the one to write the opinion. Needless to say, Doughty does not agree with the decision. He has filed an APPLICATION FOR REHEARING in the hope of having Brown removed from the case.

LouisianaVoice conducted a search this LIST OF CASES REVERSED BY 2ND CIRCUIT and the Mercer case was the only one of 57 reversals decided by a jury.

So it all boils down to a simple equation: how much justice can you afford?

When an average citizen like Broussard or Mercer goes up against the system, things can be overwhelming and they can get that way in a hurry.

Because the government, be it DOTD, represented by the Louisiana Attorney General’s office, or a local gravity drainage district, represented by the district attorney, has a decided advantage in terms of manpower and financial resources, giving the individual little realistic chance of prevailing.

In Broussard’s case, he did not. Mercer, at least, won at the trial court level, but the process can wear anyone down and that’s just what the state relied upon when it appealed.

With virtually unlimited resources (I worked for the Office of Risk Management for 20 years and I saw how an original $10,000 defense contract can balloon to $100,000 or more with few questions asked), the government can simply hunker down for the long haul while starving out the plaintiff with delays, interrogatories, requests for production, expert costs, court reporter costs, filing fees and attorney fees. Keeping the meter running on costs is the most effective defense going.

The same applies, of course, to attempts to fight large corporations in court. Huge legal staffs with virtually unlimited budgets and campaign contributions to judges at the right levels all too often make the pursuit of justice a futile chase.

And when you move from the civil to the criminal courts where low income defendants are represented by underfunded indigent defender boards, the contrast is even more profound—and tragic, hence a big reason for Louisiana’s high incarceration rate.

The idea of equal treatment in the eyes of the law is a myth and for those seeking remedies to wrongdoing before an impartial court, it is often a cruel joke.

Read Full Post »

How to overturn $20M verdict against DOTD: get appeals judge whose daddy worked for DOTD to write the decision

Posted in Business, Contract, Contracts, Corruption, Courts, Ethics, Judges, Lawsuits, Transparency on June 17, 2017| 10 Comments »

Do you happen to remember the LouisianaVoice STORY of April 2014 in which Jeff Mercer, owner of a defunct Mangham construction company, claimed in a lawsuit that the state owed him more than $11 million that was withheld after he resisted shakedown efforts from a Department of Transportation and Development (DOTD) inspector who demanded that Mercer “put some green” in his hand and that he could “make things difficult for Mercer?”

Or do you happen to remember the follow up LouisianaVoice STORY of December 2015 in which the inspector, Willis Jenkins, admitted during the trial that he did indeed say he “wanted green,” but that he was only joking. Or that because money Mercer said he was entitled to was withheld, he eventually had to shutter his construction company?

Apparently Mercer possessed sufficient proof that a 12-person jury, after a grueling, 30-day trial, unanimously awarded him $20 million. Not only did the jury hold DOTD liable for damages, but it also held four individual DOTD employees—Willis Jenkins, Michael Murphy, Barry Lacy, and John Eason—personally liable.

Employed by the jury in arriving at its verdict was such benign nomenclature as “collusion,” “bribery,” “extortion,” “conspiracy,” and “corruption.”

But that wasn’t good enough for the Chief Judge of the Second Circuit Court of Appeal, a judge with a spotty legal record of his own—and a judge with ties sufficiently close to DOTD that he probably should never have touched this case in the first place—not even with the proverbial 10-foot pole.

Mercer’s award was not just reduced, but obliterated, when it was overturned in its entirety, showing again how subtle nuances of the legal system allow for gross injustice to be perpetrated against those lacking the right connections or campaign cash.

There was a similar case in Calcasieu Parish involving contractor Billy Broussard, a gravity drainage district, and a contract to clean hurricane debris out of a local bayou. Broussard was instructed to clean out pre-storm debris, to be paid by FEMA. FEMA refused to pay for the unauthorized cleanup, and the gravity drainage district has refused to honor its obligations, costing Broussard millions of dollars.

And the legal system has been irresponsible in protecting the rights of first Broussard and now Mercer, leaving one to wonder with some justification: “What happens when I need the protection of the courts?”

It’s interesting that in our society, we tend to put a lot of faith in robes. But a black robe and a gavel do not endow a person with wisdom, or even knowledge. They are merely symbolic. Yet, when we walk into a courtroom, we are expected—required—to be reverent, attentive, and respectful and to never, under any circumstances, question the authority of the man or woman on the raised bench clad in that black robe and holding that gavel.

Of course there must be decorum in an environment of dispute resolution. Otherwise, events quickly descend into chaos. But that certainly does not mean that the presiding officer of the court is infallible. Far from it.

And that seems to be the one fact that some judges tend to forget—all too often.

Judge Henry N. Brown, as Chief Judge of the Second Circuit, has the responsibility of assigning cases. In Mercer’s case, he somewhat incredibly chose to assign it to himself—and wrote the decision.

The problem with that? Oh, not much…except that Brown’s father was a civil engineer for DOTD for 44 years, thus creating what could be perceived as an instant conflict of interest. Nor, apparently, did he ever once see the need to inform Mercer or his attorney—or anyone else, for that matter—of this inconvenient little fact.

Mercer’s attorney, David Doughty of Rayville, is understandably upset. “Mercer has a constitutional right to a fair trial before an impartial judge,” he says in his MEMORANDUM in Support of Application for Rehearing and his Motion to Recuse and Vacate the Panel’s Opinion.

“Only after the June 7 decision (by the Second Circuit) did plaintiff (Mercer)/appellee learn that Chief Judge Henry Brown, Jr. failed to disclose the critical fact that his father, Henry N. Brown, Sr., had been a civil engineer for the State of Louisiana in the Shreveport area for 44 years,” the memorandum says.

Doughty cited a case in which a West Virginia judge refused to recuse himself and the state Supreme Court subsequently found “that the risk of perceived bias was so great that due process requires recusal.”

“Judge Brown’s failure to recuse himself from the case or even disclose this huge potential bias undermines the very fabric of our people’s faith in the judicial integrity of the Second Circuit Court of Appeal,” the memorandum says. “This failure erodes public confidence in the integrity or capacity of this judiciary.”

Doughty wrote that the Second Circuit’s decision should be vacated “especially in the wake of a unanimous 12-person jury verdict finding that the plaintiff had proven governmental corruption and conspiracy.”

Brown won a close race for reelection as district attorney in 1984 over then State Rep. Bruce Bolin of Minden. In that campaign, Bolin accused Brown of having dropped charges against 230 suspects. Some of those charges, Bolin said, included rape, narcotics violations and DWI. Bolin, in what must be considered campaign rhetoric, also said Brown had not adequately prosecuted murder cases.

But Brown was known for his dogged prosecution of murder cases as a district attorney. Sending five defendants to the electric chair, he was featured on CBS’s 60 Minutes and the Fox Channel’s The Reporters. He was called “The Deadliest Prosecutor” by one publication.

At least one of Brown’s high-profile prosecutions, however, was overturned by the Louisiana Supreme Court.

In 1986, he was the district attorney in the prosecution of James M. Monds of Keithville in Caddo Parish. Monds, at the time a surgical technician at Barksdale AFB, was convicted of the murder of a woman who was raped, assaulted, and mutilate in a high school parking lot. Despite his denial that he had ever met the victim and that he had no knowledge of her death, he was convicted. In 1994, the Louisiana Supreme Court ruled that insufficient evidence, most of it of a circumstantial nature, existed to continue to incarcerate Monds. He was subsequently released after serving nearly nine years in prison.

Doughty said it is a “matter of common sense that someone whose family is so deeply connected to the DOTD should not hear the case out of fundamental fairness” and that the decision to do so constituted violations of CANONS 2 and 3 of the Code of Judicial Conduct.

So, bottom line: There is often little correlation between law and justice.

And people like Jeff Mercer and Billy Broussard end up nailed to the wall by a perverted legal system that is grotesquely unfair, to say the least.

Read Full Post »

Jindal wanted it first, now Edwards pushes for state water chiller privatization despite a pair of unfavorable reports

Posted in Business, Contract, Contracts, DOA, Ethics, Finances, Governor's Office, Politicians, Privatization, RFP, Request for Proposals on May 26, 2017| 7 Comments »

It may not be as furtive as Sen. Neil Riser’s 2014 amendment to sneak a hefty retirement raise for State Police Superintendent Mike Edmonson through the legislature, but something doesn’t seem quite right about a request for proposals (RFP) due to be issued by the Division of Administration by the end of the month (Thursday).

And this time the legislature has nothing to do with it; curiously, the project was initiated by Bobby Jindal and continues to be pushed by John Bel Edwards despite two separate studies that have said it is a bad deal for the state.

A request for information (RFI) for a “public-private partnership related to the State of Louisiana’s Central Chilled Water Facilities” was issued by the Division of Administration on March 17, 2015. The Jindal administration as part of its privatization push, was exploring the feasibility of entering into an agreement whereby a private entity would take over operation of the facilities which provide chilled water to air-condition state buildings in the Capitol Complex and elsewhere.

The state currently operates two such facilities, one in South Baton Rouge and the other in North Baton Rouge.

Only two companies, Bostonia Group of Boston and Bernhard Energy of Baton Rouge, submitted proposals in May 2015 but on June 23, 2015, Glenn Frazier, director of the Office of State Buildings, issued a letter which said in part, “After thorough review of the two proposals by an evaluation committee, Bostonia Group’s proposal was rejected and Bernhard Energy was asked to present an oral presentation. After hearing Bernhard Energy’s oral presentation and reviewing there (sic) subsequent follow up information, the committee has determined that due to the exceptionally high cost, it is clearly not in the state’s best interest to enter into a public-private partnership with Bernhard for the proposed services.” OSB Review Team Report

Apparently not satisfied with that recommendation, the Jindal administration then entered into a $25,000 contract with Assaf, Simoneaux, Tauzin & Associates (AST) Engineering Consultants of Baton Rouge on October 20, 2015, for the “Evaluation and Feasibility Study” of Bernhard’s proposal.

The state currently owns all the equipment and piping for both plants. Bernhard proposed extending the piping to other non-state entities and to market the chilled water with 38 percent of the sales being credited to the state.

AST, in a June 29, 2016, letter to Bill Wilson of the Office of State Buildings (OSB), said the proposed 38 percent credit to the state “appears to be low given the fact that the state currently owns all the equipment and is producing and distributing the chilled water.”

Despite acknowledging that Bernhard had “tweaked” its initial offer to come up with a more attractive proposal, AST said the “adoption of this agreement would not be advantageous for the State of Louisiana in its current form.”

AST called the revised formula submitted by Bernhard “cumbersome,” adding that “Based on our assessment and analysis, we recommend the current response to the RFI not be accepted by the State of Louisiana as a final proposal/contract.” AST Review Team Report

Bernhard submitted four options: one calling for a 20-year contract, two for 30-year durations and the fourth for 99 years. Under terms of its proposal, Bernhard would pay the state cash up front, depending upon which option was agreed upon. Under Option One, the state would receive $9.1 million for the 20-year agreement. The state would receive $12 million under Option Two and $12 million under Option Three, each for a 30-year contract. For the 99-year agreement, the state would receive $14.5 million up front.

Bernhard would invest some $13 million in expanding the piping system in order to serve private entities in downtown Baton Rouge. The state, in turn, would purchase its chilled water from Bernhard Energy. Additionally, the state would continue to own all piping and equipment but would “retain the obligation to operate, maintain, repair, renew, and replace the Central Chilled Water Facilities (CCWF) including any improvements or new equipment installed by Bernhard.”

In an email exchange with the state, Bernhard was told, “The concept of having a State entity, i.e., Office of State Buildings contract with Bernhard Energy and then have the state pay for the services back to Bernhard Energy does not appear to be logical from the State’s perspective. This would additionally place a state entity (Office of State Buildings) serving both a private contractor at the same time as providing services to its State tenants. Doing so could would likely result in not providing the expected service levels to the agencies we serve and it (could) direct (sic) conflict with achieving the agency mission.” StateofLACCWF.BernhardResponses.12.19.15[1852].docx.0001

Bernhard’s response was immediate and significant in that the wording of the company’s response hinted that the entire RFP process may have been rigged to benefit Bernhard:

“Bernhard is confused by the response of the State on this item. During a meeting with Bernhard representatives on September 29, 2015, the State indicated that it could operate the facilities cheaper than Bernhard. To decrease the rates under the Thermal Services Agreement, Bernhard agreed to offer a proposal whereby it subcontracted the operation and maintenance of the facilities back to the State. If the State does not wish to have the operation and maintenance of the facilities subcontracted back to it, Bernhard can retain the operation and maintenance and the costs associated with the operation and maintenance of the facilities would be recovered through the rate structure previously proposed.

“In contrast, if the State does not wish to have Bernhard operate and maintain the facilities, which was, in large part the basis of the RFP, and it is unknown why the State would have issued the RFP, and allowed Bernhard and other respondents to expend substantial sums in pursuit of this project if the State had no intention of having a third party operate and maintain the facilities.”

But if you thought the project was dead, think again.

LouisianaVoice has obtained an email from Commissioner of Administration Jay Dardenne dated April 19 of this year in which it was made evident that the governor’s office wants the public-private partnership to become reality.

Here is that email:

I have assured the Gov that we will have the RFP on the street no later than May 31. My understanding, which I communicated to him, is that we anticipate that the statewide proposal (including Capitol Park and the DOA controlled properties across the state) will probably be the first one out of the chute based on the delays created by defects in the Southern proposal which has been sent back to the school. I want to make sure that we meet or beat the May 31 deadline. I know that everyone’s focus has been on the SFO (solicitation for offers) for the PM (prescription marijuana) (properly so) but this now needs to be a top priority. Please make sure your folks understand. Thanks. Jay (emphasis ours).

Just in case you don’t believe us: DARDENNE MEMO

Jim Bernhard, who heads up Bernhard Energy, previously served as Chairman of the State Democratic Party and was mentioned as a possible candidate for governor in 2007. He built and headed the Shaw Group before it was sold to Chicago Brick & Iron (CB&I) a few years ago for $3 billion.

He and his assortment of companies have been major players in the state’s political field, contributing more than $85,000 to Gov. John Bel Edwards in 2015 and 2016 and $56,000 to former Gov. Kathleen Blanco in 2003. By contrast, campaign finance records show that he and his companies gave only $3,000 to Jindal in 2003 ($1,000) and 2007 ($2,000).

But his generosity to Blanco apparently paid huge dividends in the aftermath of Hurricane Katrina in 2005.

The Shaw Group was contracted to place tarpaulins over damaged roofs at a rate of $175 per square (one hundred square feet per square). That’s $175 for draping a ten-foot-by-ten-foot square blue tarpaulin over a damaged roof. Shaw in turn sub-contracted the work to a company called A-1 Construction at a cost of $75 a square. A-1 in turn subbed the work to Westcon Construction at $30 a square. Westcon eventually lined up the actual workers who placed the tarps at a cost of $2 a square.

Thus, the Shaw Group realized a net profit of $100 a square, A-1 made $45 dollars per square, and Westcon netted $28 dollars a square – all without ever placing the first sheet of tarpaulin. Between them, the three companies reaped profits of $173 per square after paying a paltry $2 per square. The real irony in the entire scenario was that the first three contractors – Shaw, A-1, and Westcon – didn’t even own the equipment necessary to perform tarping or debris hauling. By the time public outrage, spurred by media revelations of the fiasco, forced public bidding on tarping, forcing tarping prices down from the $3,000-plus range to $1,000, Shaw and friends had already pocketed some $300 million dollars.

The state threatened prosecution of those who it felt overcharged for a gallon of gasoline in Katrina’s aftermath but apparently looked the other way for more influential profiteers.

Any odds on who gets the contract for the water chiller?

Read Full Post »

Another Jindal ‘reform’ fails legal smell test as Baton Rouge Judge strikes down changes to Workers Compensation laws

Posted in Contract, Contracts, Courts, Ethics, Governor's Office, Lawsuits, Legislature, Legislators, Office of Workers' Comp, Politicians on April 4, 2017| 9 Comments »

Bobby Jindal and former Director of the Louisiana Office of Workers Compensation (OWC) Wes Hataway are gone but a court decision late last month could represent a legal smack down of the way workers’ compensation claims have been handled since July 13, 2011, Jindal’s third year in the governor’s office.

The ruling by 19th Judicial District Judge Don Johnson takes direct aim at a law pushed through the Louisiana Legislature and which set up new medical treatment guidelines for injured workers which plaintiffs said violated the due process clauses of the state and federal constitutions.

In his WRITTEN REASONS FOR JUDGMENT, Judge Johnson struck down provisions which:

  • Stipulated that when a carrier/self-insured employer fails to return LWC forms within the five business days it is deemed to have denied such request for authorization;
  • Provided an automatic “tacit denial” of medical treatment;
  • Allowed OWC to enforce variances from medical treatment guidelines;
  • Denied treatment not covered by medical treatment guidelines;
  • Allowed the OWC a workers compensation carrier to arbitrarily submit—and the OWC medical director to accept—any information it desires without notifying the injured worker of the “evidence.”

The suit was brought against the Louisiana Workforce Commission (LWC) in 2013 by attorney Janice Hebert Barber and several physicians and injured workers who were denied benefits under the new law. Baton Rouge attorney J. Arthur Smith III represented each of the plaintiffs. Also named as defendants were LWC Secretary Curt Eysink, Hataway, and former OWC Medical Director Dr. Christopher Rich.

Barber said the regulations also discriminate against injured workers in that:

  • Medical benefits were denied to injured workers because their physicians could not return calls from Rich’s staff as quickly as they liked;
  • One request for medical treatment was denied because the injured worker’s attorney submitted too many pages of records to Rich;
  • Another request for treatment was denied because the case itself was 12 years old;
  • Numerous requests for treatment were denied because Rich claimed they were submitted by “bad doctors” who were “bad” only because they were too favorable to their patients, in Rich’s opinion;
  • Requests for medical procedures were denied on the basis of who owned the medical equipment which would be utilized for the procedure;
  • As of December 2012, Medical Director Rich had approved only 14 percent of all requests for medical treatment of injured workers in cases where compensability had already been determined;
  • Rich had denied requests for medical treatment in cases in which he never even spoke to the claimants;
  • Hataway repeatedly engaged in ex parte communications with attorneys and others representing workers compensation insurance carriers and self-insured employers;
  • Hataway and his staff repeatedly expressed the Jindal administration’s “positions” on issues to be litigated by workers compensation judges to the judges themselves.

Barber said in her lawsuit that the new regulations had “enriched workers’ compensation insurance carriers and has harmed injured workers in Louisiana.” She claimed that under the new regulations, the Louisiana Workers’ Compensation Corporation (LWCC), the state’s largest workers’ compensation carrier, more than doubled premium dividend payments to Louisiana employers than were paid the year before the new law went into effect.

When Jindal named his four nominees to the University Medical Center Management Corp. Board back in March of 2010, he not only was looking after some of his more generous campaign contributors, but he also placed one of them in a position of potential conflict of interest.

At the time of his appointment as medical director, Dr. Christopher Rich of Alexandria currently held three separate contracts with the state totaling more than $3.3 million and he had already run into ethical problems with one of those contracts.

Rich also was named by Jindal as one of four nominees for the proposed billion-dollar University Medical Center that was to serve as a replacement for the 70-year-old facility that was closed after its basement was flooded during Hurricane Katrina in 2005.

Like many of Jindal’s high-profile appointees, Rich, his wife Vickie and business partner Dr. Mark Dodson, also of Alexandria, combined to contribute $9,500 to Jindal’s campaigns in 2007, 2010 and 2011.

Rich had a $516,646 contract to serve as Medical Director of the Office of Workers’ Compensation (OWC) Administration that called on him to approve or disapprove medical treatments and procedures for the Office of Workers’ Compensation.

That contract is actually to Chrickie Investments, a company owned by him and his wife.

In 2009, the Louisiana Legislature passed a law which changed the process for determining whether or not medical treatment was “medically necessary.” If a workers’ comp insurance company denies a treatment request, the denial is referred to the OWC medical director, in this case, Rich.

Though the law was passed in 2009, problems with implementing the rules to enforce the new law delayed the actual enactment date of the law until July 13, 2011.

Rich testified before the House Labor Committee that he was “denying 80 percent” of all treatment requested.

At the same time he was contracted to be the sole determiner of all medical treatment for Louisiana’s injured workers, he and Dodson were partners in Louisiana Ortho Services which held a $2.3 million contract to provide orthopedic services for the state, specifically Huey P. Long Medical Center.

Huey P. Long Medical Center (HLMC) at the time was one of 10 state hospitals that made up the LSU Health Care System which is administered by the LSU Board of Supervisors which also oversees the University Medical Center Management Board on which Rich sits. HLMC was subsequently shut down by the Jindal administration.

Because he also owned an interest in Central Louisiana Surgical Hospital which also provided medical treatment to injured workers, the question of his eligibility to make decisions on medical treatment which could financially impact the hospital as well as Mid-State came before the Louisiana Board of Governmental Ethics on separate occasions.

In March 2011, the ethics board ruled that Rich was prohibited, in his capacity as Medical Director of the Office of Workers’ Compensation, from participation in any matter involving Central Louisiana Surgical Hospital.

In January 2012, however, a second opinion said there was no conflict since he had terminated his relationship with Mid-State—only six months since the state had awarded Louisiana Ortho, that $2.3 million contract. Though he no longer is affiliated with Mid-State, he remains a partner in Louisiana Ortho with Dodson who in turn remains as a partner with Mid-State. The timing and the connections, to say the least, are curious.

Rich and Dodson also were partners in a company called ACTIVEMED, Inc., which held a $523,000 contract to provide orthopedic medical services to Northwestern State University student athletes.

Activemed also provided secondary insurance, also known as a preferred provider network (PPN) for two Louisiana university college sports teams and athletes. Basically, the athletes’ primary health insurance is the first payor for sports-related injuries. Then, if the student treats with an Activemed provider and they are enrolled with Activemed, then Activemed picks up the tab for the remainder of the treatment.

This means that Drs. Rich and Dodson had direct control over which doctors Activemed refers injured students to and if those same doctors happen to treat any Louisiana workers’ compensation patients, there existed a potential conflict of interest for Rich.

Activemed’s internet web page contains no list of medical providers, nor is Activemed listed under the Louisiana Department of Insurance either as an insurance company, a third party administrator (TPA), or an adjusting company.

Read Full Post »

Handling of $250 million contract for 2016 flood recovery illustrates the extent of political corruption in Louisiana

Posted in Boards, Contract, Contracts, Corruption, Courts, Ethics, Fraud, Governor's Office, Lawsuits, Politicians, RFP, Request for Proposals on March 25, 2017| 18 Comments »

Here’s a story no one saw coming:

There’s political chicanery afoot in Baton Rouge.

Who’d-a-thunk it?

Okay all that was said tongue-in-cheek.

Unfortunately.

The truth is, we’ve become so inured to political sleaze in Louisiana politics that it’s become difficult to be either surprised or outraged, leaving only indifference as our emotion of choice.

All the ingredients are in place for graft, corruption, and exploitation and there are plenty of those more than willing to take advantage of the opportunity:

  • A contract to manage Louisiana’s flood recovery program worth anywhere from 16 percent to 22 percent of $1.6 billion in federal funds;
  • A former state senator, Larry Bankston, convicted two decades ago on two counts of racketeering who now advises the State Contractor Licensing Board that has managed to insert itself into the debate over the proposed contract;
  • Claims of bid irregularities by a losing bidder;
  • Support of that claim by Bankston who neglected to mention that his son worked for one of the losing bidders;
  • Cancellation by the state of the $250,000 contract so that it may be re-advertised;
  • A potential 2019 gubernatorial candidate questioning the propriety of Bankston’s employment by that state board;
  • Up to 150,000 homes and nearly half-a-million residents affected by Louisiana floods in 2016, many of whom are still waiting for the political inertia called Restore Louisiana to start things moving so they can get back into their flooded homes.

Anytime there’s big money involved, especially federal money, the potential always exists for political and legal jockeying and manipulation. The temptation can be overwhelming.

Stephen Winham recently wrote a column for LouisianaVoice on this very subject: https://louisianavoice.com/2017/03/18/forget-blaming-fema-guest-columnist-area-reporters-correctly-place-fault-with-state-for-flood-recovery-failures/

The fact that the plight of the state’s flood victims has been obscured, seemingly forgotten, in the process of too-long delayed recovery only makes the state of affairs all the more shameful and disgusting. But when you have no voice, you are quickly forgotten in the scramble for big bucks.

And the bigger the bucks, the more greed manifests itself. And the more the greed, the less focus there is on the victims. That’s the way it’s always been and apparently that’s the way it will always be.

And hardly addressed is the issue of just what the deliverables on such a contract would be. Here we have companies crawling all over each other in order to obtain a contract which represents 20 percent of the total allocation for flood recovery.

And those companies won’t put up the first piece of drywall or sheetrock. They won’t perform any plumbing or electrical work. They won’t install any flooring or apply the first coat of paint, nor will they hammer the first nail. In short, they will do nothing meaningful toward flood recovery other than to approve payments to those who do the actual work.

But they will collect up to 20 percent of the recovery money—likely more if they can succeed at the usual practice of coming back for a contract amendment a few months down the road.

This story has received fairly significant play in the Baton Rouge area but if you’ve not kept up with The Advocate’s coverage, here’s essentially what has transpired:

A team led by IEM, a North Carolina company affiliated with several Baton Rouge engineering and consulting firms, easily had the best score—by at least 16 points—among the five teams submitting proposals and also quoted the lowest price—$250 million.

But PDRM, led by CSRS of Baton Rouge, whose bid was $65 million higher, filed an official complaint with the State Licensing Board for Contractors, pointing out that IEM did not possess a commercial contractor’s license at the time of its bid.

The Request for Proposals issued by the state, however, said only that bidding companies had to possess a license or be able to obtain one. IEM did, in fact, obtain a license prior to the time bids were opened. Ironically, PDRM, the company which blew the whistle on IEM, did not possess a contractor’s license at the time it submitted its bid either.

Bankston, legal counsel for the licensing board, opined that eligible bidders needed a contractor’s license at the time of bid submissions—and the licensing board agreed. The following day, March 17, the state decided to CANCEL IEM’s contract and re-bid the project.

By offering the opinion that he did, apparently disqualifying both IEM and PDRM in the process, the winning bid would have then gone to the third lowest bidder had not the administration decided to pull the plug on the whole thing and start over.

That third company whose bid was $350 million, $100 million higher than IEM, was Rebuild Louisiana Now and was led by a Texas firm called SLS. SLS also owns a company called DRC Emergency Services. Bankston’s son, Benjamin Bankston, works as regional manager for DRC. Larry Bankston said he was unaware his son’s firm had any relationship to any of the bidding companies when he wrote his opinion.

DRC had its own legal problems back in 2012 over payments and gratuities the company was accused of giving former Plaquemines Parish Sheriff Jiff Hingle after the firm received two CONTRACTS from the then-sheriff totaling more than $3 million.

In March 2002, the Louisiana Supreme Court REVOKED Bankston’s law license after his conviction on two counts of racketeering in 1997 in connection with then-State Sen. Bankston’s sham rental of his Gulf Shores condo to video poker operator Fred Goodson for $1,555 per week.

Bankston’s conviction was UPHELD by the U.S. First Circuit Court of Appeals in July 1999.

Contracting board Chairman Lee Mallett of Iowa, said he retains “full confidence” in Bankston.

Louisiana Attorney General Jeff Landry DISAGREES. But Landry’s desire to run for governor against John Bel Edwards in 2019 is the worst-kept secret in Baton Rouge, so he’s going to do and say anything he can to embarrass the governor.

U.S. Rep. Garret Graves, also being mentioned as a potential opponent for Edwards in two years and who was instrumental in obtaining federal flood recover money for Louisiana, also takes issue with the decision to cancel the IEM contract and to start the bid process all over.

“This is very disappointing news,” Graves said, adding that the decision will only serve to further delay needed flood relief funds. “It is impossible to explain to flood victims why $1.6 billion in recovery dollars are stuck in the bureaucracy while homes remain gutted, molded and uninsulated.”

Graves said obtaining the federal money “wasn’t easy and now every time we talk to the Appropriations Committee and leadership folks, they cite the fact that we haven’t spent what we already received. It’s a concern absolutely.”

That politicians, lawyers and contractors would put their own interests ahead of those of people who have been forced out of their homes—some for a year now—only serves to drive home the point that while there has been a change of administrations in Louisiana, nothing really has changed.

Yep, there’s political chicanery afoot in Baton Rouge.

Who’d-a-thunk it?

Read Full Post »

« Newer Posts - Older Posts »