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To paraphrase Ronald Reagan: here they go again.

The expenditure of public funds, under the law, is supposed to be just that: public.

But trying to pry an accounting of legal costs associated with the state’s defense of 4th Judicial District law clerk Allyson Campbell has proved to be somewhat problematic, to say the least, for a north Louisiana publication.

The Ouachita Citizen in West Monroe is the only newspaper willing to take on the powers that be and so far, it has encountered a huge stone wall.

[The unwillingness of the Monroe News-Star to involve itself in the fight for the public’s right to know may be attributed to two factors: (1) it’s a Gannett publication which in and of itself, lends itself to mediocrity, and (2) Campbell once worked part time as something of a gossip columnist for the paper. Of course, it didn’t hurt that her father was an executive with Regions Bank and is married to the daughter of influential attorney Billy Boles, or that Campbell is the sister of Catherine Creed of the prominent Monroe law firm of Creed and Creed. Got all that? If not, here’s a LINK to one of our earlier stories about Campbell.]

But back to the latest developments in this ongoing saga. The Citizen made a by-the-books public records REQUEST of the Division of Administration (DOA) in which it sought an accounting of legal costs in defending Campbell in a lawsuit brought against her by Stanley Palowsky, III, for damages incurred when she “spoliated, concealed, removed, destroyed, shredded, withheld, and/or improperly handled” his petition for damages against a former business partner.

It seems that some 52 writ applications went missing for more than a year only to be found in Campbell’s office where, incredibly and inexplicably, she was using them as an end table in her office.

So, how DOA respond to the Citizen’s request? Basically, it said attorney’s bills for legal services were exempt from production under an exception pertaining to pending claims.

That’s debatable. Yes, in ongoing litigation, communications between attorney and client are definitely privileged. But a simple accounting of expenditures for legal representation has nothing to legal strategy or negotiations. It’s an expenditure, pure and simple, and should be available as a public record.

The Citizen, in its story, pointed out that Christian Creed, Catherine Creed’s husband and law partner, contributed $5,000 to Attorney General Jeff Landry’s campaign in November 2015.

But more significantly, LouisianaVoice combed through campaign reports and found that Christian Creed, Catherine Creed, and the Creed Law Firm were quite active in their support of other candidates.

Gov. John Bel Edwards was the beneficiary of $25,000 in contributions from both Catherine and Christian Creed over the three-year period of 2015-2107, and Commissioner of Administration Jay Dardenne received $2,000 in contributions from Christian Creed in 2013 and 2014.

Attorney Scott Sternberg of New Orleans is representing the Citizen and by letter dated August 27, gave DOA until today (August 30) to comply with the request.

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It’s a plaintiff attorney’s and a legislator’s nightmare.

As an illustration of just how bad the state’s fiscal condition really is, one need only examine the 40 court judgments stemming from litigation against the state in 2016 that have yet to be paid.

As former Speaker of the U.S. House Tip O’Neill once said, all politics is local and when a constituent wins or settles a lawsuit against the state, that person’s legislator is usually prompt in filing a bill in the House to appropriate funds for pay the judgment. That’s important to legislators. The state, after all, has denied classified employees pay raises for the better part of a decade but never missed paying a judgment other than the Jean Boudreaux case—until now.

It’s also a good indication of just how dire the state’s fiscal condition really is.

In all judgments of road hazard cases—cases involving auto accidents where the state is found at fault for inadequate signage, poor road maintenance or improper construction—as well as certain other claims like general liability or medical malpractice, funds must be appropriated via a bill submitted by a legislator.

In past years, with the exception of one major judgment, that has not been a problem. Only the $91.8 million class action judgment resulting from the 1983 flood in Tangipahoa Parish was never paid. In that case, lead plaintiff Jean Boudreaux claimed that construction of Interstate 12 impeded the natural flow of the Tangipahoa River, causing unnecessary flooding of homes and businesses north of I-12.

But in 2016, Rep. Steve Pugh of Ponchatoula submitted a bill to appropriate funds to pay the judgment. He did the same in 2017. It still remains unpaid, along with 36 other judgments totaling another $9.5 million for which bills were approved.

That puts the overall total judgments, including the 34-year-old Boudreaux case at more than $101 million.

And that doesn’t count the cost of attorney fees, expert fees, or court reporter fees, amounts practically impossible to calculate without reviewing the complete payment files on a case-by-case basis.

Twenty-four of the cases had two or more plaintiffs who were awarded money.

In 19 cases, awards were for $100,000 or more and three of those were for more than a million dollars—if indeed the money is ever paid.

In the meantime, judicial interest is still running on some of those judgments, which could run the tab even higher.

A list of those who were either awarded or settled cases in excess of $100,000 that remain unpaid and their parishes include:

  • Michael and Mary Aleshire, Calcasieu Parish: $104,380.82;
  • Kayla Schexnayder and Emily Legarde, Assumption Parish: $1,068,004;
  • Debra Stutes, Calcasieu Parish: $850,000;
  • Peter Mueller, Orleans Parish: $245,000;
  • Steve Brengettsy and Elro McQuarter, West Feliciana: $205,000;
  • Jeffrey and Lillie Christopher, Iberville Parish: $175,000;
  • Donald Ragusa and Tina Cristina, East Baton Rouge: $175,000;
  • Stephanie Landry and Tommie Varnado, Orleans Parish: $135,000;
  • Jennie Lynn Badeaux Russ, Lafourche Parish: $1.5 million;
  • Adermon and Gloria Rideaux and Brian Brooks, Calcasieu Parish: $1.375 million;
  • Theresa Melancon and DHH Medicaid Program, Rapides Parish: $750,000;
  • Rebecca, Kevin and Cheryl Cole and Travelers Insurance, East Baton Rouge: $400,000;
  • Samuel and Susan Weaver, Lafourche Parish: $240,000;
  • Henry Clark, Denise Ramsey and Lady of Lourdes Medical Center, Lafayette Parish: $326,000;
  • Anya and Abigail Falcon and Landon and Nikki Hanchett, Iberville Parish, $946,732.53;
  • Adam Moore and James Herrington, East Carroll Parish: $150,000;
  • Traci Newsom, Gerald Blow, DHH Medicaid and Ameril-Health Caritas, Tangipahoa Parish: $150,000;
  • Michael Villavaso, Orleans Parish: $443,352.51.

Lawsuits against all state agencies are handled by the Office of Risk Management (ORM), which Bobby Jindal privatized in 2011 in order to save the state money.

The privatization didn’t realize the savings Jindal had anticipated but now, at least, it looks as though the Division of Administration has found another way to save money on litigation costs:

Don’t pay the judgments.

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Before Louisiana voters trek to the polls in record low numbers on Oct. 14, there are a few things to consider about State Sen. Neil Riser, one of four candidates for the job of state treasurer, who, besides failing to help landowners being fenced out of their hunting lands, actually took campaign cash from a family member of the one erecting the fences.

Riser, author of that infamous bill amendment in the waning minutes of the 2014 legislative session that would have given State Police Superintendent Mike Edmonson an additional $100,000 or so per year in retirement benefits, has received some other interesting contributions as well.

The Louisiana Safety Association of Timbermen gave $2,500 to his senate re-election campaign in March 2014 and only 18 months later filed for BANKRUPTCY on behalf of its self-insurance worker’s compensation fund, leaving quite a few policy holders in the lurch.

Several nursing homes have contributed $2,500 each to his treasurer campaign. The nursing home industry, heavily reliant on state payments on the basis of bed occupancy, consistently benefited from favorable legislation by the Louisiana Legislature over the past decade that discouraged home care for the elderly.

But by far the biggest beneficiary of Riser’s legislative efforts is Vantage Health Plan, Inc., of Monroe which contributed $1,000 in 2015 to his Senate re-election campaign and another $1,000 to his treasurer campaign in March of this year.

Vantage has received six state contracts totaling nearly $242 million during the time Riser has served in the State Senate.

But it was Riser, along with Sens. Mike Walsworth of West Monroe, Rick Gallot of Ruston and Francis Thompson of Delhi, who pushed Senate Bill 216 of 2013 through the Legislature which cleared the way for the state to bypass the necessity of accepting bids for the purchase of the state-owned former Virginia Hotel and an adjoining building and parking lot. That was done expressly for the purpose of allowing Vantage to purchase the property for $881,000 despite there being a second buyer interested in purchasing the property from the state, most likely for a higher price.

By law, if a legislative act is passed, the state may legally skip the public bid process to accommodate a buyer. This was done even though a Monroe couple, who had earlier purchased the nearby Penn Hotel, wanted to buy the Virginia and convert it into a boutique hotel. Thanks to Riser and the other three legislators, they were never given the opportunity.

And Vantage, from all appearances, really got a bargain. The building was constructed in 1925 at a cost of $1.6 million and underwent extensive renovations in 1969 and again in 1984, according to documents provided LouisianaVoice, all of which should have made the property worth considerably more than $881,000. Read the entire story HERE.

Internal documents revealed concerns by Vantage that if the building were to be offered through regular channels (public bids), “developers using federal tax credits could outbid Vantage.”

Another document said, “VHP (Vantage Health Plan) fears that public bidding would allow a developer utilizing various incentive programs to pay an above-market price that VHP would find hard to match.”

Finally, there was a handwritten note which described a meeting on Nov. 1, 2012. Beside the notation that “Sen. Riser supports,” (emphasis added) there was this: “Problem is option of auction—if auction comes there is possibility of tax credits allowing a bidder to out-bid.”

All of which raises the obvious question of why did the Jindal administration turn its back on the potential of a higher sale price through bidding, especially considering the financial condition of the state during his entire term of office? We will probably never know the answer to that.

One might think that that kind of effort on its behalf would be worth more than a couple of thousand in campaign cash to Vantage. Vantage could have at least shown the same gratitude as the relative of the owner of 55,000 of fenced hunting property in Riser’s district.

When landowners in Winn, Caldwell and LaSalle parishes felt they were being fenced out of their hunting rights back in 2013, they did what any citizen might do: they went to their legislator for help–in this case, Riser, who paid the obligatory lip service of expressing concern for landowners Wyndel Gough, Gary Hatten, and Michael Gough but who, in the end, did nothing to assist them.

Instead, as so often happens today in politics, he sold out to the highest bidder.

One the $5,000 contributors to Riser’s campaign is none other than Hunter Farms & Timber, LLC, of Lafayette. An officer in that firm is Billy Busbice, Jr., of Jackson, Wyoming.

William Busbice Sr., one-time chairman of the Louisiana Wildlife and Fisheries Commission, and Junior’s father, is a partner in Six C Rentals Limited Partnership of Youngsville, LA. Which purchased and proceeded to fence in some 55,000 acres of prime hunting land a few years back.

The original LouisianaVoice story on that dispute can be read HERE.

All of which only serves to underscore the long-held perception that we in Louisiana, by continually electing the type of public officials who are interested only in the next big deal, get the kind of representation we deserve.

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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?

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Perhaps it’s time to direct some hard questions to Department of Public Safety and Corrections (DPSC) Secretary Jimmy LeBlanc.

LeBlanc, after all, is technically Mike Edmonson’s boss. Besides holding the title of Superintendent of State Police, Edmonson is also Deputy Secretary of DPSC.

LeBlanc only recently came through an intensive investigation into the Corrections, also under the DPSC umbrella. That investigation cost Angola Warden Burl Cain and several of his family members their jobs.

And yet DPSC general counsel Kathy Williams notified retired State Trooper Leon “Bucky” Millet by letter dated last Thursday (March 2) that DPS would not consider his complaint against the Louisiana State Troopers’ Association because Louisiana State Police (LSP) “considers the matter closed.”

She may wish to revisit that decision.

Today, FBI agents fanned out across the state to simultaneously serve federal grand jury subpoenas on 18 State Troopers, LouisianaVoice has learned. Included among those served were officers and directors of that very same LSTA that DPSC refuses to investigate.

One report indicated that the LSTA board of directors was in its monthly meeting Wednesday when federal agents walked in and served each board member with his subpoena.

LouisianaVoice has not learned the date of the grand jury nor was the specific subject readily available. But because troopers from across the state were served, it would seem reasonable to assume that the thrust of the federal investigation is the laundering of campaign contributions by the LSTA through the association’s executive director David Young, a story LouisianaVoice broke more than a year ago.

It was not immediately known if Young was one of those served on Wednesday.

It was also learned that the FBI has already interviewed some of those slapped with subpoenas today.

The LSTA board is comprised of trooper representatives from each of the eight state police troops. The individual troop headquarters are located in Baton Rouge in East Baton Rouge Parish, Kenner in Jefferson Parish, Mandeville in St. Tammany Parish, Lake Charles in Calcasieu Parish, Lafayette in Lafayette Parish, Monroe in Ouachita Parish, Bossier City in Bossier Parish and Gray in Terrebonne Parish.

Neither Edmonson, Deputy Superintendent Lt. Col. Charles Dupuy nor Director of Management and Finance Lt. Col. Jason Starnes were among those handed subpoenas. Only LSTA officers, directors and former officers and directors were served.

Regardless, reports out of State Police headquarters in Baton Rouge say command personnel have been in “full panic mode” all afternoon as they hunkered down in meetings. As my grandfather used to say, you probably couldn’t pull a needle out of their butts with a John Deere tractor. A federal grand jury subpoena, after all, is less welcome than an IRS audit letter—and who knows? That might not be far behind.

LSTA general counsel Floyd Falcon cannot represent any of those served if their legal interests should conflict with those of the association, as they quite likely will. That means that each of those served will have to retain his own legal counsel.

With that many having been served subpoenas, it’s likely that at least one, maybe several, will roll over and give the feds information they’re looking for in order to cut a deal. The scramble will be to see who can give up whom first because that’s will will likely get the best deal. What’s not likely is for any of them to lie because we’re sure they are all keenly aware that lying to the FBI, even if not under oath, can get a quick trip to a federal facility where one can work in the laundry for 20 cents per hour.

One thing you can expect out of all of this: there will be no united front. Targets are almost certain to turn on each other as the cannibalization begins in earnest. Edmonson already has thrown the four men who drove the expedition to California—and his secretary—under the bus.

And make no mistake: the clock is ticking on Gov. John Bel Edwards. Mike Edmonson, Charles Dupuy and Jason Starnes represent baggage he simply cannot afford to carry into his campaign for reelection. That campaign cranks up in less than two years.

Edmonson needs to go and he needs to take LeBlanc with him.

Back to you, Kathy Williams.

 

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