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Archive for the ‘Corruption’ Category

By Robert Burns

LouisianaVoice writer

Following up our recent post regarding shill bidding and the Louisiana Auctioneer Licensing Board (LALB) turning a blind eye to the illegal practice, I’ll now shift to another alarming aspect:  racism.  To get the true tone and tenor of that racism, I would encourage readers to click on the audio links supplied in this post and merely listen to (or watch) what is said.

As mentioned in our first installment, Rev. Freddie Phillips was appointed to the LALB in early 2008.  He is the first and, to date, only African American auctioneer in Louisiana’s history.  Rev. Phillips attended the 2008 National Auctioneer’s Association (NAA) convention soon after he joined the LALB.  He wasn’t aware that, as an LALB Member, he was entitled to have his trip paid for by the LALB.  Upon his return and learning that fact, he applied for reimbursement.  His request, however, became engulfed in an ocean of technicalities (most notably reimbursement being sought after the closeout of a fiscal year), so Rev. Phillips ultimately ceased pursuit of the reimbursement.  Instead, he informed me that he would seek approval to attend the 2010 NAA Convention as an LALB representative instead.

Accordingly, at the May, 2010 LALB meeting, Rev. Phillips made what he thought would be a simple request to attend the Convention.  He quickly got a surprise, however, when I was the only other LALB member voting to approve his request.  He thus became the first LALB member to be denied the privilege of attending as a Board representative.  Many board members, in explaining why they opted not to approve his attendance, were rude and mean-spirited in their assessment of Rev. Phillips.  Those assessments included former long-time LALB chairman Delmar “Buster” Gay’s saying that  Rev. Phillips may be an embarrassment at the convention.  Then-Vice Chairman (now Chairman) Tessa Steinkamp also said that she wouldn’t want Rev. Phillips to represent the LALB.

Frustrated in his efforts, Rev. Phillips began seeking historical LALB travel records, only to face demands by then-Chairman James Comer and former long-time Chairman Gay as to why he wanted the records. (Editor’s note: Louisiana’s public records laws expressly prohibit any inquiry into why a citizen would want to see any public record.) The badgering reached an apex when Comer told Rev. Phillips to get an attorney and sue the LALB.  As evidenced by the preceding audio clip, Comer also indicated that Rev. Phillips and I may end up “by theirselves (sic),” implying that Gov. Jindal may soon remove one or both of us from the LALB (a prophetic statement as I was subsequently terminated).  Rev. Phillips  finally spoke up, saying, “I don’t have to take this.”   Others also spoke up in his behalf.  First, I defended him.  Also, audience member (and then-auctioneer) Nell Stuart expressed her displeasure with comments made regarding Rev. Phillips.  Finally, Rev. Phillips’ then-Representative, Rep. Regina Barrow, whom Rev. Phillips and I invited so she could witness first-hand the relentless attacks, voiced her own observations of “underlying issues” that she’d witnessed.

All of the audios in the preceding paragraph transpired at one meeting (which would turn out to be my last):  August 2, 2010.  I sent all of these audios clips (and others) to Gov. Bobby Jindal’s office and relayed my sentiments that the kind of conduct being exhibited by Chairman Comer, former long-time Chairman Buster Gay, then-Vice Chairman (now Chairman) Steinkamp, and others was completely unacceptable and that I expected either changes or that other more professional board members would be recruited to serve.  I also made it clear to the Jindal administration that I intended to provide these audio clips to anyone who requested them or may have interest in them.  I was given my walking papers (I believe the term is teagued) by Gov. Jindal 39 days later.  What Gov. Jindal nor the Board counted on was that my ouster would leave me free me video subsequent meetings.

The August 2, 2010, LALB meeting prompted Rep. Barrow to address board and commission appointments in general at a special meeting of the Joint Committee on Governmental Affairs on November 17, 2010.  She requested that a representative from the LALB attend to answer any questions the panel may pose but only Rev. Phillips and Ms. Steinkamp attended.

Rev. Phillips never received a check for his attendance at that legislative hearing even though the LALB had no qualms about issuing Ms. Steinkamp a check for her $97 per diem for her attendance. When Rev. Phillips inquired why he didn’t receive a per diem payment,  Executive Director, Sandy Edmonds, said that since Rev. Phillips was “suing the board” (Rev. Phillips filed a Writ of Mandamus to obtain travel records which Chairman Comer was refusing to provide), he “should not be a representative of the board.”

Following is a list of a few of the events involving Rev. Phillips that have transpired since my ouster from the LALB:

1.  1/10/11:  Rev. Phillips repeatedly threatened with lawsuits for questioning the fact the LALB didn’t vote to approve its attorney charging for time attending an NAA Convention (the same one he was denied being able to attend).  The threats begin at the 3:09 mark of this video.  The lawsuit treat was followed up in writing soon thereafter.  (Note:  By the time of that meeting, former long-time Chairman Buster Gay’s LALB membership had been severed.  Also the 1/10/11 meeting turned out to be Chairman Comer’s last meeting as his membership was severed days after the meeting).

2.  7/17/11:  Rev. Phillips’ license is threatened for attempting to bring up issues at New Orleans Auction Galleries (NOAG), which filed bankruptcy on 4/1/11 and employed LALB Chairman Steinkamp as its “Vice President, Director, and Treasurer.”  Chairman Steinkamp begins her threat at the 1:33 mark of this video.  At the time of bankruptcy, NOAG had over $600,000 in unpaid consignors and had been paying company operating expenses with consignor escrowed funds, yet Chairman Steinkamp, her position with NOAG notwithstanding, never alerted the LALB to any problems at NOAG and the LALB instead learned of them via the bankruptcy filing.

3.  9/17/11:  Rev. Phillips is asked four times within a two-minute span if he is “carrying a weapon.”   There’s no way to know if there’s a correlation, but Board Attorney Anna Dow sent then-Chairman Comer this letter dated July 25, 2010 relaying that the females feel a need for security in light of “events over the last few years.”  From the August 2, 2010 meeting on, the LALB has employed an EBRP Deputy (Ronald Landry) at all its meeting at a cost of $160/meeting.  Rev. Phillips told me that the “are you carrying a weapon” inquiry was the proverbial “last straw” and that he informed Gov. Jindal’s administration hat he would not agree to serve another concurrent term and that Jindal needed to begin searching for a replacement for his second term.  Gov. Jindal did appoint a replacement days after he began serving his second term.

4.  11/05/12: At the first LALB meeting that Phillips missed in more than four years, LALB Vice Chairman James Sims and Consumer Member Greg Bordelon respond to the roll call with “I’s here.”  Rev. Phillips requested that I submit that audio clip to Gov. Jindal’s Office, so I did.  Accordingly, knowing that an article in The Advocate was pending about the incident, Gov. Jindal’s office requested that the Inspector General’s Office investigate the matter.  The IG’s Office issued this report in which Sims attributed his response to his “diabetes and dentures.”  Bordelon, meanwhile, denied answering the roll call in that manner in the Advocate article but ultimately admitted he did make the roll call response but said he was “merely mocking Sims, a North Louisiana redneck.”  Shortly after release of the IG report, The Advocate published this article of the report’s findings.  Bordelon’s LALB membership was severed about three months later.  Mr. Sims continues to serve as LALB Vice Chairman.

Rev. Phillips decided that it would be a good idea for the LAPA website to have an “embarrassment index” which was alphabetized by board member or affiliate.  It was an excellent suggestion, and here’s that alphabetized link of embarrassments for anyone who’d like to see it.  Perhaps future LALB meetings will provide additional material.

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Robert Burns of Baton Rouge, a former fraud investigator, has agreed to join LouisianaVoice as an underpaid (read: gratis) researcher and contributing writer. His initial series of stories will chronicle his experiences as a member of the Louisiana Auctioneer Licensing Board. 

—Tom Aswell

 

By Robert Burns

LouisianaVoice writer

Following up on Tom Aswell’s recent posts regarding the Louisiana State Board of Dentistry, there is another State Board with an extensive history of questionable activity:  The Louisiana Auctioneer Licensing Board (LALB). The board is comprised of five auctioneers and two at-large “consumer” members.  The board’s actions include turning a blind eye to an illegal practice called “shill bidding,” ignoring the apparent victimization of elderly auction clients, racism and possible travel voucher and payroll fraud.

In early 2008, Gov. Bobby Jindal appointed me and a very good friend, Rev. Freddie Phillips (Louisiana’s first and only African American auctioneer) to the LALB.  Rev. Phillips and I each endured relatively short, tumultuous tenures on the LALB due to our observations of abuse and the fact that we did not (and do not) hold back in voicing our displeasure with that abuse.

In fact, sensing that Louisiana’s then-only auctioneer trade association, the Louisiana Auctioneer’s Association (LAA), seemed to openly encourage these practices (particularly shill bidding), Rev. Phillips decided to form a second association, the Louisiana Association of Professional Auctioneers (LAPA).  Although he invited any auctioneer willing to adhere to LAPA’s strict code of ethics to join only two others, myself and auctioneer JonEric Kramer, did so. Other auctioneers, and especially LALB Members, became furious that LAPA’s website, Rev. Phillips’ brainchild, so readily exposes widespread unethical activity within the auction industry.

My post for today focuses on the issue dearest to me: shill bidding.

LAPA’s first tenet is vigorous opposition to shill bidding, an illegal auction practice in which plants are placed in the audience by the auctioneer or seller for the sole purpose of driving up the bid with no intention to buy the property.  The practice is illegal unless it is divulged to the auction bidders; however, the practice is pandemic in Louisiana’s auction industry. In my opinion, shill bidding is literally destroying the auction industry. The entire auction process hinges on the public being able to rely upon that process for market transparency. When shills are introduced, the transparency is destroyed and the public rapidly becomes cynical and justifiably distrustful of auctioneers.

The issue of shill bidding came to a boil in 2010 when then-Rep. Damon Baldone (D-Houma) asserted that auctioneer Barbara Bonnette, an Alexandria-based auctioneer, tried to artificially inflate his $675,000 bid on an historic home in Thibodaux by falsely representing that a $700,000 bid had arisen when, in reality, it had not.  Rep. Baldone was furious over the attempt to “steal” $55,000 from him (by advancing his bid to $725,000, from $675,000, plus a 10% buyer’s premium associated with that advancement).  As a result, during the 2010 legislative session, he introduced a bill (HB 1439) to make shill bidding a crime and declare it “theft by nonviolent means.” That’s when all hell broke loose in the Louisiana auction industry. I testified in favor of Baldone’s bill,  and overnight became the most hated auctioneer in Louisiana.  LAPA has a webpage to explain shill bidding, and another to  publicize statements made by auctioneers in public forums about shill bidding.  Those public statements include prominent Livingston-based equipment auctioneer Marvin Henderson testifying in strong opposition to the bill, State Rep. John E. “Johnny” Guinn, R\-Jennings (who is himself a Louisiana-licensed auctioneer) stating publicly to the LALB that he was “embarrassed” by my testimony, the formal reading into the House records of the nineteen (19) auctioneers testifying or stating vigorous opposition to the bill, auctioneer Joe Massey relaying he felt I had “stabbed auctioneers in the back,” auctioneer Marvin Henderson trivializing my auction career.  All of this furor over my steadfast resolve that auctioneers ought to obey the laws prohibiting shill bidding (or fully disclosing it to conform with the law).  So, I found myself as a sitting member of the LALB, an agency for which the stated purpose is to “protect the public” (which is precisely what shill bidding laws are designed to do), and I became public enemy number one among Louisiana auctioneers for adhering to the very Oath I took when becoming an LALB Member!

My testimony led to immediate actions by LALB Members and the auctioneer community to have me removed from the LALB.  First, then-LALB Chairman James Kenneth Comer sought to have ethics charges brought against me for my testimony.  Ironically, in the weeks leading up to my testimony, LALB Executive Director Sandy Edmonds was actively recruiting auctioneers via phone, including me, to testify against the bill (she was doing so at the behest of then-Chairman Comer).  Rev. Phillips received a similar phone call, and I confirmed that prominent Kenner-based real estate auctioneer Dave Gilmore had also gotten such a call.  So, Chairman Comer, through Ms. Edmonds, was actively recruiting auctioneers to testify against the bill, a practice which is clearly an ethical violation (to recruit either for or against), yet he would seek to have ethics charges against me for my testimony in favor of the bill. The Ethics Board quickly relayed that I had in no way committed an ethics violation as I was “expressing (my) opinion regarding shill bidding and not those of the LALB.”

Immediately after my testimony in favor of Baldone’s bill, I was approached by several auctioneers in the hallway.  One of the auctioneers, State Rep. John E. “Johnny” Guinn (R-Jennings), used profanity in berating me over my testimony.  The incident got so bad that I filed a police report with Capitol Police.  The officer who took my report relayed that he personally delivered it to then-House Speaker Jim Tucker.  The officer relayed to me that Speaker Tucker was furious over Guinn’s conduct.  Speaker Tucker, in turn, delivered the police report to Jindal’s office, and that was the last I ever heard of it.  However, I have strong reason to believe that my filing clearly infuriated Guinn as evidenced by Guinn mailing this letter to Gov. Jindal seeking my removal from the LALB.  Nine days later, Jindal complied and sought my resignation.  His “Special Assistant,” Jonathan Ringo (who now is an associate attorney with Jimmy Faircloth’s firm), upon my asking him why my resignation was being sought, said only that “things just aren’t working out.”  When I refused to resign, Gov. Jindal terminated my services effective September 10, 2010.

As I’ll demonstrate in my next installment, my shill bidding testimony was likely not the only reason Jindal removed me from the LALB.  I was complaining bitterly to his office regarding my observation of blatant racism on the LALB regarding Rev. Phillips.

 

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Sometimes it’s just mind-boggling to try and fathom what goes through the minds of our political leaders.

The only possible explanation may be found in the 1969 book The Peter Principle by Dr. Laurence J. Peter and Raymond Hull. In their book, they introduced the “salutary science of hierarchiology” which theorized that in a hierarchy, employees tend to rise to their level of incompetence.

Take, for example, that news release from the Department of Health and Hospitals (DHH) just last Aug. 13. DHH trumpeted the recovery of more than $124 million in fraudulent payments in the Medicaid program, “the highest rate of recovery in any state in the nation at nearly 2 percent of all Medicaid dollars spent in Louisiana.

One must wonder just where the oversight was at the time that should have caught and prevented such overpayments.

Yet, only two months prior to that announcement, a red-faced DHH learned that one of its own had embezzled more than $1 million to finance her gambling addiction.

In that case, DHH accountant Deborah Loper was accused of diverting funds over a six-year period in a scheme that revealed glaring weaknesses in departmental policy.

Her arrest warrant said she intercepted more than 130 checks payable to DHH “meant for invaluable health care services for Louisiana’s Medicaid recipients,” Attorney General Buddy Caldwell said.

She had been entrusted to manage a bank account opened in 2006 on behalf of the National Association of State Human Services Financial Officers in order to underwrite the association’s 2009 conference.

Former DHH fiscal director Stan Mead volunteered to hold the conference and designated Loper and her immediate supervisor to organize the event. Loper was given responsibility for management of the account and had the authority to conduct financial transactions, the warrant said.

She was instructed to close the account following the conference but instead, fabricated documents so as to give the appearance she had complied but instead, merely changed the address on the account so that she could receive the monthly statements at her home.

The main source of the money was Medicaid reimbursements that were issued to DHH by licensed Medicaid providers and were intended to be returned to the state’s Medicaid program, Caldwell said.

Her embezzlement went unnoticed by her superiors until February of 2013 when she inadvertently deposited one of the checks for more than $40,000 into her own account and her bank subsequently froze her account.

Only three months before the revelation of that financial oversight by DHH officials, we learned of an ongoing FBI investigation into that infamous $300 million contract with CNSI which quickly resulted in cancellation of the contract by the Jindal administration and the resignation of DHH Secretary Bruce Greenstein.

Then in February of this year, Greenstein’s undersecretary Jerry Phillips announced his retirement after 25 years at DHH. Oddly, he announced he was retiring to “pursue other employment options with the state.”

DHH Secretary Kathy Kliebert said Jeff Reynolds would replace Phillips on March 10, the same day the legislative session convenes.

Reynolds started with DHH as an Accountant Administrator 5 in July of 2006 at $102,000 per year. Most recently, he served as Medicaid Deputy Director at $113,734 per year.

And the person who served as Loper’s immediate supervisor while she was skimming that $1 million from DHH?

Jeff Reynolds.

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