Feeds:
Posts
Comments

Archive for the ‘Finances’ Category

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 »

By Stephen Winham

Guest Columnist

The 2017-18 budget was enacted in a ball of confusion that allowed an escalation of the blame game.  There was less back-slapping than usual when the latest unnecessary special legislative session ended, but perhaps more back-stabbing.

I heard Gov. Edwards on the radio blaming the legislature for not using recommendations of the latest blue-ribbon committee (Task Force on Structural Changes in Budget and Tax Policy) to formulate a plan for resolving the “fiscal cliff” facing us in 2018-19?  I was surprised nobody asked him, “Well, governor, why didn’t you?”

Surely the governor does not believe we have already forgotten that the centerpiece of his tax reform proposal was the previously unheard of and dead on arrival Commercial Activity Tax?  While his proposal did incorporate some of the task force proposals, his brand-new Commercial Activity Tax constituted $832 million of his $1.3 billion proposal.

When Gov. Edwards first talked about the Commercial Activity Tax I thought, “Oh, no, here we go again with another sham like the one Jindal put up in his his one and only stab at tax reform in 2013.”  Then, when Gov. Edwards put his CAT proposal in writing and balanced it with things that made sense, I thought he was proposing something he seriously thought would work.  By the time the CAT was introduced, however, it had already been severely watered down and it was subsequently amended beyond worth before the whole package was withdrawn – In other words, just like Jindal’s ersatz proposal, it never got out of the starting gate – And I came full circle to my original take on it.

Then Representatives Cameron Henry and Lance Harris began the drumbeat we have heard now for many years – “We don’t have a revenue problem.  We have a spending problem.”  That premise was picked up by legislators representing constituencies that believe it to be true (in the absence of a credible contrary argument), and the focus shifted to cuts.  Or did it?

Most of the things everybody considered critical, like full TOPS funding, higher education, and critical needs at corrections seem to have been funded, based on press reports.  State employees were even given a modest pay increase.  Yet no taxes were raised.  Since the Governor proposed an Executive Budget that left $440 million in what he considered priority needs unfunded, how is this possible?  I am still trying to find the answer to that seemingly simple question.

As you already know, state law requires the governor to submit an Executive Budget proposal balanced to the official forecast of revenues.  The legislature is also required to pass a balanced budget.  Although the original appropriations bills are based on the governor’s proposal, the legislature is under no obligation to pass a budget that matches what the governor has proposed.  In fact, there are states where the legislature pretty much ignores the governor’s proposal and starts and ends with its own ideas.  We must never forget that the legislature holds the power to appropriate and enact the budget, not the governor.  Our governor has veto power, including the power to veto line-items, but he does not make the law.  He is responsible for administering the enacted budget in accordance with law.

So, who really is to blame for the abysmal mess in which we find ourselves: the governor, or the legislature?  That’s an easy one – both.

Although the process has become significantly perverted, there should be only one way to balance our state budget on a continuing basis – match projected recurring revenue with projected expenses.  It is possible to do this and to do it in a way that is clearly understood.  At the end of the budget process we deserve a budget we can understand and live with – I am unconvinced we have either.

Governor Edwards did present a balanced budget proposal.  But was it clear and honest in its portrayal of our needs?  The Executive Budget presentation showed a general fund (tax-funded) need of $9.910 billion versus and official revenue forecast of $9.470 billion, leaving a gap of $440 million in unfunded needs.  All constitutional requirements were fully funded.  Here’s how the Governor said he balanced the budget:

  • Carrying forward most of the cuts made in FY 2016-2007 ($120 million)
  • Cutting general fund to the Department of Health ($184 million)
  • Across-the-board cuts in general fund of 2% ($48 million)
  • No funding for inflation
  • Funding TOPS at 70%
  • No funding of deferred maintenance and other infrastructure

If we got additional revenue, the governor proposed restoration of the cuts in hospitals and the across-the-board cuts.  In addition, he recommended full funding of TOPS, pay raises for state employees, technology enhancements, additional funding for prison contracts, match funding for DOTD, a 2.75% increase in the MFP for elementary and secondary schools, and other enhancements.

Fast forward to the budget ultimately enacted last week.  No additional revenue was raised.  TOPS is fully funded.  State employee pay raises are there.  Nobody is publicly claiming devastating cuts have occurred and the governor says he is happy with the budget.  We mullets (as the late C. B. Forgotston called us) are left to scratch our heads over how this is possible.  How is it possible to go from needing $440 million in additional money for a minimally adequate budget to needing ZERO while making most people happy?  What got cut?  How will the cuts affect people and businesses?  Until somebody answers these questions, we mullet mushrooms are left in the dark – and that is apparently where our “leaders” would as soon we stay.

We deserve better – all of us.  None of the following are unrealistic demands.  We need to start making them of our elected officials:

  1. An Executive Budget proposal that the governor truly believes in and is willing to fully defend. If, for example, 100% funding TOPS is not a high enough priority to be included in his base recommendations, then he should stand behind continuing the FY2016-2017 level of 70%.
  2. An Executive Budget proposal and an enacted budget that avoid across-the-board cuts. Across-the-board cuts only make sense if all programs are of equal value.  That is certainly not the case.  Further, after successive years of across-the-board cuts, the result can only be greater mediocrity and ineffectiveness.
  3. An Executive Budget proposal and enacted budget that make clear, concrete cuts anybody can understand with clear explanations of exactly how services are going to be reduced or eliminated.
  4. A progressive tax system that matches recurring revenue with recurring needs after all cuts possible have been made.
  5. Elected officials willing to hold their appointees to the highest standards possible with zero tolerance for the waste and abuses reported almost daily.
  6. Elected officials willing to put partisan politics aside in furtherance of the greater good.

Governor Bobby Jindal portrayed himself on the national stage as a budget-cutter par excellence.  If he was, why did he rely on tricks to “balance” annual budgets and leave Governor Edwards (and us) with a huge budget hole?

Why has Gov. Edwards not yet offered up a balanced budget he is willing to stand behind?  Why has the legislature not enacted a budget that makes sense and is sustainable in the future?  Is it a lack of courage, or is it an unwillingness to face reality?  It must be both, plus the partisanship that has recently made a political game of everything.

The governor and the legislature have competent staffs who have clearly defined our problems for many years.  A series of blue-ribbon panels and well-paid private contractors have studied the problem and recommended solutions for decades.  It is difficult to find evidence either individuals or businesses are overtaxed in Louisiana.  It is very easy to find low rankings of our state on infrastructure and quality of life issues important to both individuals and businesses.

We are mere pawns in the blame game – but we don’t have to be.   Let’s let our elected officials know we will no longer accept being held hostage to an incompetent and unresponsive government.  We want solutions, not the cop-outs and excuses we have been getting for way too many years.

Stephen Winham spent 21 years in the Louisiana State Budget Office, the last 12 as Director. He lives in St. Francisville.

Read Full Post »

When I found him this morning in the booth in the back in the corner in the dark at John Wayne Culpepper’s Lip-Smackin’ Bar-B-Que House and Used Lightbulb Emporium in Watson, Louisiana, Harley Purvis was in his usual mood, i.e. nasty.

The Greater Livingston Parish All-American Redneck Male Chauvinist Spittin’, Belchin’, and Cussin’ Society and Literary Club (LPAARMCSBCSLC) had scheduled an emergency meeting for 10 a.m. and only two of the six members (that would be Harley and me) had arrived. As president, Harley was not one to brook tardiness.

But there was something else on his mind today as I slid into the booth opposite him. I can always tell the degree of his consternation by the amount of coffee he’d consumed and the condition of the day’s newspaper. Today, I could tell he was on at least his fourth cup and the Baton Rouge Advocate looked as though a squirrel had chosen today’s edition for a nest.

You don’t rush Harley when something is weighing on his mind. He will speak when he’s ready, so I ordered a cup of John Wayne’s high-octane coffee brewed from yesterday’s leftover grounds that went down more like Number Two West Texas Crude. And I waited.

Finally he spoke.

“If you want to sum up the complete worthlessness of Congress, I can do it in two sentences,” he said.

“Based on my current income, if I retire at 65, I will qualify for about $3,500 per month in social security.”

That surprised me because I never knew Harley made that kind of income, let alone reported it to Uncle Sam. He went on.

“My wife, Wanda Bob, is a school teacher and a damn good-‘un but if I die before her, she will get maybe a couple hundred bucks a month in Social Security spousal benefits.”

“Wait, what?” I managed to stammer. Two sentences and I was floored.

“That’s right. Because Louisiana is one of 15 states in which have their own retirement systems and in which public employees do not participate in social security, there’s this thing called the Government Pension Offset (GPO) passed way back in the Carter administration.”

“Government Pension Offset?”

“Yeah. Stay with me. It was passed in 1977 and it’s called the Windfall Elimination Provision (WEP). It was passed ostensibly to prevent double dipping but as usual, it was passed without any real consideration of the consequences and it turned out to be a penalty for public service like the teaching profession.”

“A penalty? How so?”

“Simple. If she’d worked in the private sector at something like banking or a CPA, she would be entitled to my full Social Security benefits if I died first. Hell, even if she didn’t work at all and was a stay-at-home mom and housewife, she’d still be entitled to my full benefits. But because she chose to work as a teacher, she will penalized if I die first. Does that seem fair to you?”

I had to admit it didn’t. I asked him why something hadn’t been done to correct this egregious injustice. I should have known better than to ask.

“Hell, I can give you 535 reasons right up front!” he exploded. “That’s the 435 House members and the 100 Senators. They don’t give a rat’s patooty about us. Never have, never will. It’s like everything else they do: they give lip service but never follow through. Every member of Congress, with the possible exception of Clay Higgins and Ted Cruz is fully aware of this but they continue to sit on their butts and do zero about it. And they wonder why they have such low approval ratings.

“They’ve had bills introduced for years to do away with the WEP and enough members of Congress have signed on as co-sponsors because it looks great to the folks back home. The problem is, they won’t bring it up for a vote. That’s their way to come back home when they run for re-election and to tell the good voters that they tried to help them but couldn’t get other members to go along. That’s crap but it works and they can then concentrate on raising campaign funds and catering to the special interest. Meanwhile, we’re left holding the bag.”

“What can we do about it?” I naively asked.

“Not a damned thing! You think Garrett Graves or Mike Johnson or John Kennedy or Bill Cassidy has ever given a thought to this? Hell no, there’s no campaign contributions to go with it. And Clay Higgins is such a dumbass he wouldn’t know unless it was an NRA issue. He thinks GPO stands for Guns and Preemptive Ops and WEP stands for Weapons of Extreme Prejudice.”

“That’s pretty strong,” I said, taking a sip of my now-cold coffee.

“Well, I stand by it. There are 46,000 public school teachers in Louisiana and some 60,000 other state employees and the same rules apply each one whose spouse works in the private sector and pays into Social Security. I’d guess at least 75,000 or 80,000 are adversely impacted by this B.S.

“You tell me if you think it’s fair for me to pay into Social Security all my working life, die a few months after retirement and my widow get nothing? That’s money I paid into the system and because she chose to become a teacher and worked to enrich the minds of children by teaching them to think and reason, she’s entitled to nothing. Meanwhile, my next door neighbor’s wife who chose to stay home and not work is entitled to her husband’s benefits after he dies. Is that fair?”

I had to admit it wasn’t. And he was correct: he had summed up the complete worthlessness of Congress in two sentences.

I wanted to ask more questions but two more members of LPAARMCSBCSLC had arrived, giving us a quorum. Harvey, as president, pounded his gavel, bringing the meeting to order.

Read Full Post »

You just gotta love Louisiana politics.

No, really. It’s probably the only institution where one can set up his own little fiefdom, reward those in positions to promote his career, get caught up in multiple scandals, be forced to resign and be commended, appreciated, and otherwise recognized for his years of “dedicated and distinguished” service.

Take, for instance, Senate Concurrent Resolution 122, hereafter referred to as SCR 122, by State Senate President John Alario (R-Westwego), which commended, expressed appreciation and otherwise praised former State Police Superintendent Mike Edmonson. It passed by a 27-0 vote with 11 members either absent or not voting.

The resolution, which runs on for three full pages when a single paragraph would’ve sufficed, concludes with:

“BE IT RESOLVED that the Legislature of Louisiana does hereby commend and express appreciation to Superintendent of Louisiana State Police Colonel Michael David Edmonson on his retirement after thirty-six years of dedicated and distinguished service in law enforcement, including nine years as superintendent, and does hereby extend to him and his family full measures of continued success and happiness in their future endeavors.

BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to Mike Edmonson.”

It seems entirely fitting that this resolution would have been authored by Alario. After all, his son John W. Alario, serves as the $115,000 a year director of the DPS Liquefied Petroleum Gas Commission. That’s in the Department of Public Safety, where Edmonson also served as Deputy Secretary until his resignation.

LouisianaVoice also reported in September 2014 that John W. Alario’s wife, Dionne Alario, was hired in November 2013 at a salary of $56,300 to work out of her Westwego home supervising state police personnel in Baton Rouge—something of a logistics problem, to say the least. Well today, she is still there and now pulls down $58,500 per year. And she still works from home.

We were perfectly willing to let go of the Edmonson story after he resigned. But Sen. Alario’s resolution, however, compels us to review some of the highlights of Edmonson’s tenure as Superintendent of State Police.

Our first encounter with Edmonson came at the end of the 2014 legislative session when we learned that Charles Dupuy, who would rise to the rank of Lieutenant Colonel, conspired, along with State Sen. Neil Riser (R-Columbia) and Gov. Bobby Jindal, to sneak the amendment to Senate Bill 294 during the closing minutes of the session that allowed Mike Edmonson a “do-over” on his decision to enter the state’s Deferred Retirement Option Plan (DROP) which froze his retirement at his pay at that time of his decision to participate in DROP.

The major problem with that little plan is that it left other state troopers and state employees who similarly opted to enter DROP and then received significant promotions or raises out in the cold because the amendment did not afford the same opportunity for them. Before it was revealed by LouisianaVoice and before State Sen. Dan Claitor successfully filed a lawsuit to prevent the move, Edmonson was in line for a whopping pension increase estimated as high as $100,000 per year when the raises to state police were factored into the equation. (Claitor, incidentally, was one of those voting in favor of Alario’s SCR 122 demonstrating, we suppose, that he does not hold grudges.)

Here are some other Edmonson actions we wrote about in 2014:

  • “Consultant” Kathleen Sill, placed on the state payroll and being paid $437,000 plus $12,900 in air travel for 21 flights for her between Baton Rouge and her Columbia, S.C. home.
  • DPS Undersecretary Jill Boudreaux’s taking a $46,000 cash payout incentive to retire early from her $92,000 per year salary as Deputy Undersecretary, plus about $13,000 in payment for 300 hours of accrued annual leave and then re-hiring herself two days later—with a promotion to Undersecretary and at a higher salary of $118,600—while keeping the incentive payment and annual leave payment. Then-Commissioner of Administration Angele Davis ordered her to repay the money but Davis resigned before she could follow through on her instructions. Under her successor, Paul Rainwater, the matter was quietly forgotten.
  • Boudreaux’s son-in-law Matthew Guthrie who, while employed in an offshore job, was simultaneously on the payroll for seven months (from April 2, 2012 to Nov. 9, 2012) as a $25 per hour “specialist” for the State Police Oil Spill Commission.
  • Danielle Rainwater, daughter of former Commissioner of Administration Paul Rainwater, who worked as a “specialist” for State Police.

And then there are the spouses brought into the fold.

  • Jason Starnes benefitted from two quick promotions from 2009 to 2014 as his salary jumped from $59,800 to $81,250, an increase. Three years later, he makes $150,750 an overall increase of 152 percent.
  • As if that were not enough, his then-wife Tammy was brought in from another agency as an Audit Manager at a salary of $92,900. Today, she makes $96.600. So not only did make nearly $11,700 a year more than her husband initially (until he was promoted to Lieutenant Colonel), she also was in charge of monitoring the agency’s financial transactions, including those of her husband.
  • In January of 2008, just before Edmonson was named Superintendent of State Police by Gov. Bobby Jindal, State Trooper Charles Dupuy was pulling down $80,500. Today, the one-time Edmonson Chief of Staff makes $161,300, a bump of more than 100 percent.
  • Kelly McNamara and Dupuy, both troopers, met at work and eventually married and Kelly Dupuy’s star began ascending almost immediately. Her salary has gone from $65,000 in 2009 to $117,000 today
  • On Sept. 7, 2011, Mike Edmonson’s brother Paul was promoted from lieutenant to Captain, filling the spot previously held by Scott Reggio. On Oct. 10, 2013, Paul Edmonson was again promoted, this time to the rank of major. This time however, he was promoted into a spot in which there was no incumbent, indicating that the position was created especially for his benefit.
  • His rise has been nothing less than meteoric. Since December 2006, he has gone from the rank of sergeant to lieutenant to captain to major at warp speed and his pay rose accordingly, from $57,500 to $136,800 a year, a 138 percent increase—all under the watchful eye of his brother.

Doesn’t it give you a warm fuzzy to know that the good folks like Alario and Riser (who also, of course, voted for SCR 122) are looking out for us?

And isn’t it interesting, by the way, to know that Angele Davis, who tried to get Jill Boudreaux to repay her ill-gotten gains from her pseudo-early retirement, is pitted against Riser, who tried to sneak that illegal pension boost for Edmonson, in the upcoming election to succeed John Kennedy as State Treasurer?

As our late friend C.B. Forgotston would say if he were with us: You can’t make this stuff up.

Read Full Post »

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 »

Older Posts »