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More on Kristy’s new job: it appears Ochsner received $31 million to take over Leonard J. Chabert Hospital in Houma

Posted in Contract, Contracts, DOA, Governor's Office, Health Care, Lobbyist, LSU, Privatization, Public Records on September 17, 2015| 15 Comments »

ETHICS DILEMMA

(CLICK ON IMAGE TO ENLARGE)

“No former elected official, including a legislator, no former member of a board or commission, nor agency head for two years shall assist another person for compensation in connection with a transaction, or render service on a contractual basis for or be employed/ appointed to any position involving the agency by which he or she was formerly employed or in which he/she formerly held office.” (LA Rev Stat § 42:1121)

“…Kristy Nichols is leaving the public sector to become Ochsner Health System’s vice president of government and corporate affairs, the Jindal administration announced today.” (Baton Rouge Business Report, Sept. 15, 2015)

So Nichols will be going to work for Ochsner as a lobbyist. And while state law precludes her lobbying the legislative or executive branches for two years, there appears to be no prohibition to her lobbying local governments (parishes and municipalities) on the part of Ochsner.

Kristy, anticipating the end of her boss’s rocky tenure in January, found her own golden parachute at Ochsner. We don’t know her salary at Ochsner, but we’re guessing it’ll be six figures. Taken at face value, that would normally be the end of the story.

But with this gang, there’s always more than meets the eye. And thanks to our friend C.B. Forgotston who helped us connect the dots, we’re able to shed a little more light into how she parlayed three years of repeated budget crises into such a high-profile private sector job.

Remember the great state hospital privatization fiasco and the contract with 50 blank pages? http://www.modernhealthcare.com/article/20130602/INFO/306029998

The contract obligated the state to long-term spending obligations that will extend decades beyond the Jindal years. Let’s ignore for the moment the fact that the Center for Medicare and Medicaid Services has yet to approve the deal. Instead, let’s explore the Nichols-Ochsner connection.

It was two years ago that the LSU Board of Supervisors signed off on that contract to hand over operation of state-owned hospitals in Lake Charles, Houma, Shreveport and Monroe. The blank pages were supposed to have contained lease terms. Instead, the LSU board left those minor details to the Jindal administration (read: Commissioner of Administration Kristy Nichols).

Eventually details about the contracts emerged, including that of the Leonard J. Chabert Medical Center in Houma. And, thanks to the Louisiana Public Affairs Research Council, that is where we’re able to bring the picture into focus.

Leonard Chabert Medical Center was opened in 1978 as a 96-bed facility with 802 employees but by the time it was privatized, it was down to 63 beds.

In 2008, a hospital-based accredited Internal Medicine residency program was begun. In 2011, the hospital’s revenue was 47 percent uncompensated care for the uninsured, 29.5 percent Medicaid, 13 percent Medicare, 5.5 percent state general fund and 6 percent interagency transfer from other departments with only 1 percent being self-generated.

When the Jindal administration moved to unload state hospitals, Chabert was partnered with Southern Regional Medical Corp., a nonprofit entity whose only member is Terrebonne General Medical Center (TGMC).

TGMC was slated to manage Chabert with assistance with a company affiliated with (drum roll)…..Ochsner Health System, Louisiana’s largest private not-for-profit health system with eight hospitals and 40 health centers statewide.

So what were the terms of the agreement? Five years with an automatic renewal after the first year in one-year increments to create a rolling five-year term.

Though Southern Regional is not required to pay rent under terms of the agreement, the Terrebonne Parish Hospital Service District No. 1 is required to make annual intergovernmental transfers of $17.6 million to the Medicaid program for Southern Regional and its affiliates. Here are the TERMS OF THE OCHSNER DEAL AT LEONARD CHABERT MEDICAL CENTER

Here’s the kicker: the cooperative endeavor agreement (CEA) calls for supplemental payments of $31 million to Ochsner. It’s no wonder the Houma Daily Courier described the deal as “a valuable asset to Ochsner’s network of hospitals” and that the deal “expands Ochsner’s business profile.”

Between 2009 and 2013, Ochsner’s revenue doubled from $900 million to $1.8 billion and the deal only means more revenue for Ochsner, the Daily Courier said. http://www.houmatoday.com/article/20140325/articles/140329692?p=3&tc=pg

We’re certain it’s just coincidence that the LSU Board signed off on a blank contract that the Jindal administration would fill in after the fact.

And it’s just by chance that Kristy Nichols, as Commissioner of Administration, was responsible for that task.

And of course it was just happenstance that Ochsner received that $31 million payment and a mere two years later, just as her reign at DOA was ending, saw the need to bring Kristy aboard as vice president of government and corporate affairs.

So there you have it. All you have to do is follow the money.

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Kristy Nichols won’t be joining Jindal in White House; she bails for Ochsner lobbying job in wake of latest fiscal crisis

Posted in Budget, Contract, Contracts, DHH, DOA, Governor's Office, Higher Education, Lobbyist, OGB, Office of Group Benefits on September 16, 2015| 29 Comments »

“Danger, Will Robinson!”

Okay, for those of you not old enough to remember the ‘60s, that’s the catchphrase from the old CBS series Lost in Space.

But the warning might just as well be applicable for patients of Ochsner Health System come Oct. 15.

That’s the date Kristy Nichols will be leaving as Bobby Jindal’s Commissioner of Administration to become Ochsner’s Vice President of Government and Corporate Affairs (read lobbyist). That was something of a surprise in that the smart money had her going to Blue Cross/Blue Shield of Louisiana.

Even as Jindal was sending out an email blast informing all three of his Louisiana supporters that he had just landed in California for the Republican debate and that he was “fired up” (yes, he actually said that; we’re so lucky to be on his email list), Nichols was announcing her resignation.

In her own email sent to all Division of Administration (DOA) employees on Tuesday, Nichols said she will be helping Ochsner “to strategically manage their growth as a healthcare provider.”

In other words (well, not in other words; as Oscar Madison said to Felix Unger in The Odd Couple: “Those are the words”), she will be doing for Ochsner what she and her boss did for the state during her three-year reign.

There were some other classic quotes contained in Kristy’s email as well as the official announcement from Jindal’s office. “I believe that our accomplishments will provide lasting benefits for generations to come,” she said.

Well, the effects of her tenure will be felt for generations to come but to shoehorn the word “benefits” into that statement must’ve taken a bit of imagination on someone’s part.

“I am proud of the work that we have accomplished in making Louisiana a better place to live and raise a family, and I am confident that we will continue down this path going forward,” she added.

The amazing thing is she apparently said that with a straight face. In our upcoming book about Jindal, an entire chapter is devoted to why Louisiana is not a better place to live and raise a family. (A hint: there are nearly three dozen categories in which Louisiana ranks as the worst or near the worst in the nation—hardly a ringing endorsement of the claim of “a better place to live.”)

But for sheer brass cajones, the trophy has to go to Jindal who, in heaping praise on Nichols, said she has “fully dedicated herself to bettering the state of Louisiana,” and “Together, we’ve been able to reduce the size of government, improve health care across the state, and create a better, stronger Louisiana.”

No wonder the boy continues to languish at less than 1 percent in the Republican sweepstakes. Bobby, you may want to check out the 9th Commandment. That improved health care claim is a damned lie. There’s no other way to say it than to say our “Christian” governor is a damned liar. He knows it and we know it.

And as the state, barely two months into the current fiscal year, is already cutting $4.6 million in spending ($3.8 million of which fell on higher education), instead of sticking around to try to solve the mess, she bails. (But then again, we’ve had three years of her problem-solving and we know what that accomplished.)

Just as we learn that the TOPS free college tuition program will fall $19 million short, she lights a shuck.

Even as the projected budgetary shortfall for next year is already more than $700 million, she cuts and runs.

Most important, considering where she’s headed, the Legislative Fiscal Office informs us that Kristy’s office failed to account for $335 million in increased spending anticipated by the Department of Health and Hospitals. So, naturally, she’s going to work for Ochsner to (and we can’t repeat this often enough) do for them what she’s done for the state.

God help us but most of all, God help Ochsner, heretofore a premier provider of health care for residents of South Louisiana.

This is the individual who once said her job was to make Bobby Jindal look good. Well, we all know how that turned out.

She is the same one who commissioned an employee satisfaction/efficiency study only to find the results so devastating that she tried to keep them from becoming public. (Sorry to rain on your parade, Kristy, but it was leaked to LouisianaVoice which posted the results last October and which showed severe morale problems within DOA) https://louisianavoice.com/2014/10/02/employee-survey-of-doa-employees-reveals-simmering-morale-problem-no-one-more-popular-than-jindal-in-poll/

Then, after we ran the story, she set out on a crusade to find the leak and ended up punishing the wrong employees in the wrong agency. (How’s that for being proactive in addressing the problem of poor morale?)

She’s the same person who hired Alvarez & Marsal at $5 million and then promptly amended the contract (illegally) to $7.5 million for the company to find ways for the state to save $500 million. The 50 percent amendment was in violation of provisions that allow only a 10 percent maximum increase in contract amounts without legislative concurrence.

She’s the same one who orchestrated the Office of Group benefits debacle which raised premiums and lowered benefits for state employees, retirees, and dependents last year. That was after the state lowered premiums as a furtive means of lessening the state’s contribution obligations so that she and Jindal could use the extra money to patch over gaping budget holes—a tactic that depleted OGB’s reserve fund from $500 million to virtually nothing.

Kristy is the same one who has presided over budget disaster after budget disaster her entire tenure with this year’s patchwork effort barely lasting until legislators hit the door of the State Capitol to head back to their districts. Now, as higher education is facing even more budget cuts after the problem was supposed fixed, she smugly expressed confidence that the funds would be restored “if income forecasts improve.” She said she was “hopeful” about that possibility. http://neworleanscitybusiness.com/blog/2015/08/28/analysis-holes-and-worries-emerge-in-louisianas-budget/

And of course, we are all hopeful that we have the winning Power Ball ticket which would improve our own income forecasts.

And just last Friday (Sept. 11) a glowing press release was issued by DOA lauding the $75 million savings in the first year of the Office of Technology Services consolidation. http://www.doa.la.gov/comm/PressReleases/Consolidated%20Office%20of%20Technology%20Services%20Saves%20$75%20Million%20in%20First%20Year,%2009-10-15.pdf.

The only problem: the release was just one more in a long line of blatant lies designed to make the administration look good. And to be completely candid, it takes some real whoppers to do that.

Senate Bill 481 by State Sen. Jack Donahue (R-Mandeville) created the Office of Technology Services (OTS) and was signed into law by Jindal as Act 712 of the 2014 Regular Legislative Session as part of an effort to consolidate information technology (IT) services across state agencies.

At the Department of Transportation and Development (DOTD), for example, the IT budget has not been reduced and in fact, may have been increased, according to sources within DOTD.

DOTD is paying for things under the consolidation that it has never had to pay for before, such as paying DOA to house the servers and mainframe (previously housed in-house at DOTD facility). DOTD is also paying more to DOA for services such as the LaGOV Enterprise Resource Planning System (ERP),    the state’s data warehouse which provides “end-to-end” support for statewide and agency-specific administrative business processes.

Moreover, DOA has not allowed DOTD to purchase new equipment (which was budgeted) for the last three years. As much as 40 percent of DOTD computer equipment is six years or older, making it difficult to design roads and bridges with modern software.

So, while some savings may have been achieved by other departments and some general fund money saved (of which DOTD uses none), DODT Transportation Trust Fund (TTF) money is not being saved.

And while some savings might be realized in the future, in the short term it is most likely paper savings.

All these attributes are what Kristy Nichols will take with her to Ochsner.

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Jindal misfires on executive orders in Iowa as lawsuits keep piling up; legal counsel Jimmy Faircloth put on speed dial

Posted in Contract, Contracts, Courts, DOA, Elections, Governor's Office, Health Care, Lawsuits, OGB, Office of Group Benefits, Politicians on July 22, 2015| 22 Comments »

And the hits just keep coming.

Bobby Jindal, a little distracted in his presidential campaign by his pesky job back home in Louisiana, has yet more legal problems piling up on his desk.

Meanwhile, Jindal, laser focused on becoming the leader laughingstock of the free world, offered up one of his most confusing diatribes yet while on his 99-county tour of Iowa, offering conflicting comments that any reporter worth his press credentials should be salivating over about now.

As the infamous north Louisiana hospital deals, complete with a contract containing 50 blank pages, begins its inevitable collapse (predicted by just about anyone with an IQ higher than a cluster of wet Spanish moss), complete with litigation and a backdoor public relations campaign by the current operator of the LSU Medical Center in Shreveport and E.A. Conway in Monroe, yet another lawsuit has been slipped under the door.

The first court hearing for a lawsuit against the state Office of Group Benefits (OGB), the Office of the Governor and the state Division of Administration will be conducted July 27 in Baton Rouge District Court before Judge Janice Clark. The hearing is scheduled for 1 p.m.

And guess who the state’s defense attorney will be? Yep, you got it. Jimmy Faircloth who has enjoyed about as much courtroom success as Wiley E. Coyote in pursuit of the elusive roadrunner. The only thing missing from Faircloth’s courtroom misadventures are anvils and dynamite. In representing the state in the OGB litigation, Faircloth will be adding to more than the $1.5 million he has already received in other representations. It’s not all Faircloth’s fault of course; he has been given some dogs to defend by this hapless administration.

The lawsuit was brought by a group of state employees, teachers and retirees, who are asking the court to overturn changes to OGB’s health plans that took effect March 1—premium increases and reduced coverage that were predicted by LouisianaVoice way back when the privatization of OGB was first proposed by the Jindal administration.

Representing the plaintiffs is J. Arthur Smith III of the Smith Law Firm of Baton Rouge.

The plaintiffs are claiming that changes forced on them by OGB were not enacted legally and they were denied a reasonable opportunity, as required by the Louisiana Administrative Procedure Act, to comment on the proposed changes. The plaintiffs further maintain that the OGB and the administration violated due process, the contracts clause of the Louisiana Constitution and their fiduciary duties to plan participants. The plaintiffs also say that increased costs and decreased benefits pose a financial hardship that limits their access to healthcare services and needed medicines.

An association formed to fund the lawsuit, LA VERITE’ 2015, is registered with the Louisiana Secretary of State. LA VERITE’ is French for TRUTH, and stands for Louisiana Voices of Employees and Retirees for Insurance Truth and Equity. There are no dues and membership is open to any active or retired state employee, teacher, or other interested individual.

Plaintiff Marilee Cash, a retiree, said the goal of the lawsuit is to protect approximately 230,000 state employees, teachers, retirees and their dependents who have health insurance through the Office of Group Benefits. “Large increases in out-of-pocket expenses, combined with withheld pay increases for active employees and cost-of-living adjustments for retirees, pose a financial hardship for many people covered by OGB,” she said. “Our compensation has not kept up with inflation during Gov. Jindal’s administration, due to mismanagement of state funds and poor fiscal decisions. Before March 1, our healthcare costs and insurance premiums were manageable. Now these increased costs have put healthcare services out of reach for many dedicated public servants and retirees.”

The administration claims the changes were made to preserve the Group Benefits reserve, which has been drastically reduced as OGB reduced premium revenue while paying out increasing medical claims expenses. The fund, created by the premiums paid by those who are insured, stood at about $500 million just two years ago. Less than half that amount remains. The Jindal administration drew down the reserve by reducing employer contributions in order to balance the state budget and then using money saved from reduced employer contributions to patch holes in the state budget.

In Iowa, Jindal took what might be considered an ill-advised swipe at President Obama and the U.S. Supreme Court (you know, the court he said several days ago should be abolished) at the Family Leadership Summit over the weekend.

At issue was the court’s ruling on the court’s recent same-sex marriage decision that prohibits discrimination against gays by businesses.

“The next president should do what we did in Louisiana,” he said: “issue an executive order saying the federal government will not discriminate or take action against any individual or business that has a traditional view of marriage.”

But wait. Isn’t the ACLU suing Jindal over his May 19 executive order that he issued after the legislature shot down a bill by Rep. Mike Johnson (R-Bossier City) to pass the Marriage and Conscience Act?

And wait again. Didn’t Jindal recently go a little ballistic over executive orders issued by President Obama?

Yep. As a matter of fact, after calling on the next president to issue an executive order like his, he turned right around and said…Wait. We want to make that a separate paragraph:

            “We’ve got a president who has made it a consistent practice to ignore the Constitution, ignore the laws, issue executive orders,” Jindal said as he promised that if he is elected president, he would immediately rescind Obama’s “illegal” executive orders.

So, on the one hand, he wants to rescind Obama’s “illegal” executive orders while proposing that the next president (presumably himself) to issue an illegal executive order identical to his own “Marriage and Conscience” order—illegal because the governor may issue executive orders pertaining to the executive branch of government only and not on matters that affect private sector action of any kind, according to ACLU executive director Marjorie Esman.

But hey. Once again LouisianaVoice implores you to remember that it was a Jindal operative who told Division of Administration employees in a meeting, “Let’s not be bound by the law.” If that’s not downright Nixonian, then up is down, down is up, and Brenda Lee was acid rock.

Any bets as to who will be representing the state on the ACLU litigation?

We’re reminded of the joke that (and we’re paraphrasing to fit the situation here) Jindal is a lot like a slinky: Not really good for anything but they still bring a smile when you push them down a flight of stairs.

Except Jindal’s not a slinky. He’s more like a train wreck and the damage inflicted when he went off the rails was widespread and massive—and it impacted every one of us.

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Retired State Budget Office Director: finding consistent clear, unambiguous state finances data nearly impossible

Posted in Budget, DOA, Finances, Governor's Office, Legislature, Legislators on June 3, 2015| 8 Comments »

 

Editor’s note: (Even as Bobby Jindal is preparing for the publication of his second ghostwritten book, we at LouisianaVoice are working to complete the manuscript for our own book about the Bobby Years which will most likely offer a slightly different perspective on his eight years in the governor’s office. We hope to publish our e-book about the same time as Bobby’s epic. Until then, we will probably be posting less frequently and instead depending more on knowledgeable people like Stephen Winham to make contributions like the one below.)

By Stephen Winham (Special to LouisianaVoice)

“Figures don’t lie, but liars figure” – attributed to Mark Twain [and others]

Every day we are bombarded with numbers about our state and its finances.  We are told one day there is a $1.6 billion dollar structural deficit in Louisiana’s budget.  A few days later we are led to believe it is all but fixed – just a little tweaking and fiscal legerdemain at the end and we will be okay – for a little while, at least long enough for the governor to move on.

Governor Jindal tells us the number of state employees has been reduced by over30,000, but we are not told how many of them (the vast bulk) are still being paid by the state via contracts with private companies.  Not only that, we can’t find documentation among civil service or other official records to substantiate the 30,000 number itself.  The governor also claims to have reduced the budget by 26%, but we can’t figure out how he came to that percentage either.

One day we are told Governor Blanco left a $1.2 billion surplus that has now been squandered.  The next day we are told it was $800 million and that it wasn’t squandered.  One day we are told the budget is now and has always been in balance.  Then, we look at the Governor’s own Executive Budgets and see financial statements clearly showing operating budget deficits in 2 of the 3 first years of the Jindal administration (and as recently as FY2013-2014 – the last year the audited total is reported – when a subtle format change enabled use of the undesignated general fund balance to show a positive bottom line – more on this shortly).

We even read conflicting reports of the size of the budget.  The State General Fund, on which the most focus was placed before we started “sweeping” dedicated funds, is one number.  Total state funding from all sources is another, the total budget including federal funds is another and spending including double-counts resulting from interagency transfers by individual departments is yet another.  All these numbers get reported at different times by different sources.

So, are we being lied to, or is that too strong a term?  One thing is for sure – finding clear, consistent and unambiguous data about state finances is next to impossible.

Over a quarter of a century ago, state leaders agreed there was a need for one set of numbers upon which everybody could agree for things like how much revenue we could expect, how much spending could be expected to grow based on trend data, how many state employees there were, etc., etc..  After all, everybody was entitled to their own opinions, but there should be but one set of facts, right?  Right, but has this become a reality?  Obviously not.

Let’s take just one example of what I am talking about here – the Blanco surplus and what happened to it during the Jindal administration.  Examining this one issue requires me to bombard you with even more numbers, but I hope you will see why this is necessary to make my point.

Many consider the best measure of the surplus for a given year the Undesignated Unreserved General Fund Balance shown on the balance sheet of governmental funds contained in the Comprehensive Annual Financial Report (CAFR) prepared by the Division of Administration in accordance with Governmental Accounting Standards Board rules and audited by the legislative auditor.  This number reflects how much money was available in the general fund in a given year, how much we spent or firmly obligated, and how much was left.  But, as we will see, using this source is problematic, particularly since recent practice has been to use dedicated funds as if they weren’t and the CAFR reporting format has changed.

Blanco’s last budget submission was the one for fiscal year 2007-2008.  However, Governor Jindal took over the last 6 months of that budget year and the budget changed dramatically by fiscal year end.  For that reason, we could say 2006-2007 was Blanco’s last full budget.  The CAFR surplus as defined above for FY 2006-2007 was $1.158 billion.  The total fund balance line shows $1.778 billion.  The comparable numbers for FY 2007-2008 were $442 million and $783 million.

The Governor’s Executive Budget proposal includes a comparative statement each year that shows the audited budget for the prior year, the estimated budget for the current year, and the governor’s recommended budget for the coming year.  The audited actual prior year numbers appearing on these statements seem to be the most consistent budget numbers of those currently available.  Those statements show operating surpluses of $1.088 billion for fiscal year 2006-2007 and $865.7 million for 2007-2008.

So, how much of a surplus did Blanco leave Jindal?  It apparently depends on where you look, when you look, and how you define surplus.  For lack of a better source, I would choose the ACTUAL column of the Comparative Statements in the Executive Budget documents for the time being.  But, because budgets cross one year of administrations, it may be hard to come up with a definite answer from any source.

What happened to the surplus?  Well, using the governor’s own budget documents, we see the surplus decreased by $790 million (from $865.7 million to $76 million) between FY 2007-2008 and FY 2008-2009.  The subsequent statements show a deficit of $108 million at the end of the next fiscal year, and a deficit of $14 million the next year.  The statement shows a zero balance the following year (FY 2011-2012).  That analysis, and the fact we raided every fund we could to “balance” the budget in recent years tells me it got spent.  It would appear most of it was spent on capital outlay projects (the statement for FY 2008-2009 shows a reservation of $782 million for FY 2009-2010 capital outlay appropriations).  This is a good use, so let’s hope that’s where it went.  But, if so, why would anybody want to deny the surplus was used in the budget, much less that it ever existed in the first place?

If you find all of this confusing, join the club – it’s a big one.  Does it have to be this way? No.  We, all of us, could demand a governor back up his statements with hard evidence.  We could ask questions like this of his budget people, “When was the last time our budget was really balanced, and what can you show me to prove it?”

Somebody knows exactly how many employees no longer show up on the state’s payroll, but were shifted to private sector jobs paid for through state contracts.  Even if you don’t care about that, wouldn’t you like to see hard evidence of how many people actually work for the state?  Believe it, or not, that would seem to be currently impossible.

There are a lot of good data out there.  Look at the publications of the Legislative Fiscal Office and the House and Senate fiscal staffs for proof.  These folks are providing a lot of excellent information right now that is being ignored by most of the very people they work for, along with the mainstream media.  Go to their websites and see for yourself.  You might be amazed at the amount of understandable fiscal information you find there.  But our legislators and the press take the easy way out – they accept far too many ad hoc statements from almost anybody as fact without questioning them as to the basis.  As a result, we are ALL done a great disservice.

The truth is out there.  We simply need to agree on what the truth is and demand to see it and to see it consistently reported.

A warning to our next governor:  You are walking into a fiscal nightmare.  Find some good people – Consider the staffs of the legislative agencies above and look closely for career employees currently working at the Division of Administration and elsewhere who are competent, brave, and have the inside knowledge you desperately need. Do not look entirely for sycophants who put numbers together to please you. You certainly need moral support for your positions, but you have a greater need for people who will tell you the truth.  By retaining them, you, and we all, will be well-served.

(Stephen Winham is the retired Director of the Executive Budget Office for the State of Louisiana.)

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State Treasurer John Kennedy lobs extortion accusation at administration in support of Rep. Richard’s contracts bill

Posted in Audit Reports, Auditor, Civil Service, Contract, Contracts, DHH, DOA, Education, Finances, Governor's Office, Health Care, Higher Education, House, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Public Records, Revenue, State Agencies, Transparency on May 26, 2015| 8 Comments »

State Treasurer John Kennedy on Tuesday told the House Appropriations Committee that the Division of Administration exerts extortion-like tactics against legislators and takes the approach that it should not be questioned about the manner in which it hands out state contracts and that the legislature should, in effect, keep its nose out of the administration’s business.

Kennedy was testifying on behalf of House Bill 30 by State Rep. Jerome Richard (I-Thibodaux) which provides for reporting, review and approval by the Joint Legislative Committee on the Budget (JLCB) of all contracts for professional, personal and consulting services totaling $40,000 or more per year which are funded exclusively with state general fund (SGF) or the Overcollections Fund. HB 30

HB 30 FISCAL NOTES

Kennedy, in a matter of only a few minutes’ testimony, attacked figures provided by three representatives of the Division of Administration (DOA) who objected to the bill because of what they termed additional delays that would be incurred in contract approval and because of claimed infringement upon the separation of powers between the legislative and administrative branches of government.

Here is the link to the committee hearing. While Kennedy spoke at length on the bill, the gist of his remarks about DOA begin at about one hour and 13 minutes into his testimony. You can move your cursor to that point and pick up his attacks on DOA. http://house.louisiana.gov/H_Video/VideoArchivePlayer.aspx?v=house/2015/may/0526_15_AP

That argument appeared to be a reach at best considering it is the legislature that appropriates funding for the contracts. It also appeared more of a smokescreen for the real objections: DOA’s, and by extension, Bobby Jindal’s wish that the administration be allowed to continue to operate behind closed doors and without any oversight, unanswerable to anyone.

DOA representatives tried to minimize the effect of the bill by downplaying the number and dollar amount of the contracts affected (which raises the obvious question of why the opposition to the bill if its impact would be so minimal). The administration said only 164 contracts totaling some $29 million would be affected by the bill.

Kennedy, however, was quick to jump on those figures. “The numbers the division provided you are inaccurate,” he said flatly. “The Legislative Auditor, who works for you,” he told committee members, “just released a report that says there are 14,000 consulting contracts, plus another 4600 ‘off the books.’

“The fiscal notes of 2014 by the Legislative Fiscal Office—not the Division (DOA)—said the number of contracts approved in 2013 by the Office of Contractual Review was 2,001—not 160—professional, personal and consulting service contracts with a total value of $3.1 billion,” he said. “I don’t know where DOA is getting its numbers.

“To sum up their objections,” he said, “it appears to me that DOA and more to the point, the bureaucracy, is smarter than you and knows how to spend taxpayer dollars better than you. That’s the bottom line. They don’t want you to know. This bill will not be overly burdensome to you. Thirty days before the JLCB hearing, you will get a list of contracts. If there are no questions, they fly through. If there are questions, you can ask.”

Kennedy tossed a grenade at DOA on the issue of separation of powers when he accused the administration of blackmailing legislators who might be reluctant to go along with its programs.

“Let’s talk about how the division’s advice on contracts has worked out,” he said. “The Division advised you to spend all the $800 million in the Medicaid Trust Fund for the Elderly. Now they have zero in that account. In fact, they pushed you to do that. Some of you were told if you didn’t do that, you’d lose your Capital Outlay projects. How’s that for separation of powers? How’d that work out for you?

“My colleagues from Division who just testified against the bill are the same ones who told you to take $400 million out of the (Office of Group Benefits) savings account set aside to pay retirees’ and state employees’ health claims. How’d that work out?”

Kennedy didn’t stop there. He came prepared with an entire laundry list of accusations against the administration.

“My colleagues from Division are the ones who told you, ‘Look, we need to privatize our health care delivery system,’ which I support in concept. They sat at this table and I heard them say we would only have to spend $600 million per year on our public-private partnership and (that it would be) a great deal ‘because right now we’re spending $900 million.’ I thought we’d be saving $300 million a year. Except we’re not spending $600 million; we’re spending $1.3 billion and we don’t have the slightest idea whether it’s (the partnerships) working. How’d that work out for you?

“I sat right here at this table and I heard my friends from Division say we need to do Bayou Health managed care. You now appropriate $2.8 billion a year for four health insurance companies to treat 900,000 of our people—not their people, our people,” he said. “There’s just one problem: when the Legislative Auditor goes to DHH (the Department of Health and Hospitals) to audit it (the program), they tell him no.”

Kennedy said that pursuant to orders from DOA, “the only way they can audit is if they take the numbers given him (Legislative Auditor Daryl Purpera) by the insurance companies.

“This is a good bill,” he said. “It’s not my bill. My preference is to tell Division to cut 10 percent on all contracts and if you can’t do it, you will be unemployed. But this bill allows you to see where the taxpayer money is being spent.

“I have more confidence in you than I do in the people who’re doing things right now,” he said.

Kennedy said he was somewhat reluctant to testify about the bill “but I’m not going to let this go—especially the part about separation of powers.

“You want to see a blatant example of separation of powers?” he asked rhetorically, returning to the issue of the administration’s heavy handedness. “How about if I have a bill but you don’t read it. You either vote for it or you lose your Capital Outlay projects. How’s that for separation of powers?”

That evoked memories from November of 2012 when Jindal removed two representatives from their committee assignments one day after they voted against the administration’s proposed contract between the Office of Group Benefits and Blue Cross/Blue Shield of Louisiana.

“Everything they (legislative committees) do is scripted,” said Rep. Joe Harrison (R-Gray), speaking to LouisianaVoice about his removal from the House Appropriations Committee. “I’ve seen the scripts. They hand out a list of questions we are allowed to ask and they tell us not to deviate from the list and not to ask questions that are not in the best interest of the administration.” https://louisianavoice.com/2012/11/02/notable-quotables-in-their-own-words-142/

Rep. John Schroder (R-Covington) asked Kennedy what his budget was to which Kennedy responded, “Less than last year and less that year than the year before and probably will be even less after this hearing. But you know what? I don’t care.

“There’s nothing you can say to get Division to support this bill,” he said. “They’re just not going to do it.

“You can’t find these contracts with a search party. But if you require them to come before you, you can get a feel for how money is being spent that people work hard for and you can provide a mechanism to shift some of that spending to higher priorities.

“Next year, you will spend $47 million on consulting contracts for coastal restoration. I’m not against coastal restoration; I’m all for it. But these consultants will not plant a blade of swamp grass. Don’t tell me they can’t do the job for 10 percent less. That $47 million is more than the entire state general fund appropriation for LSU-Shreveport, Southern University-Shreveport, McNeese and Nicholls State combined.

“Under the law, agencies are supposed to go before the Civil Service Board and show that the work being contracted cannot be done by state employees but that is perfunctory at best,” Kennedy said.

To the administration’s arguments of delays in contract approvals and infringements on the separation of powers, Rep. Brett Geymann (R-Lake Charles) dug in his heels. “This is not a bad thing,” he insisted. “We’re not going to go through every page of every contract unless someone calls it to our attention. It doesn’t matter if it’s 14,000 or 14 million contracts. The number is immaterial. If there’s an issue with a contract, we need to look at it.”

For once, the administration did not have its way with the legislature. The committee approved the bill unanimously and it will now move to the House floor for debate where Jindal’s forces are certain to lobby hard against its passage.

Should the bill ultimately pass both the House and Senate, Jindal will in all likelihood, veto the measure and at that point, we will learn how strong the legislature’s resolve really is.

But for Kennedy, the line has been drawn in the dust.

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