Feeds:
Posts
Comments

Archive for the ‘Finances’ Category

delaHoussaye’s civil settlement notwithstanding, anticipated ruling in his criminal prosecution could restrict OIG powers

Posted in Courts, Crime, Ethics, Finances, Fraud, Judges, Lawsuits, Politicians on April 27, 2015| 5 Comments »

By Robert Burns (Special to LouisianaVoice)

Two months ago, Louisiana Voice reported on Livingston Parish DA Scott Perrilloux’s determination to prosecute Corey delaHoussaye.  Perrilloux, working with the State Inspector General’s Office (IG), has charged delaHoussaye, an FBI informant responsible for FEMA denying $59 million to contractors for Livingston Parish’s hurricane Gustav cleanup due to rampant fraud, with falsifying public records.  Specifically, Perrilloux and the IG allege delaHoussaye submitted paperwork for some time periods for which he claimed to be working but which the IG asserts he was at times golfing, visiting his doctor, working out, and tending to other personal matters.

Perrilloux failed to procure an indictment of delaHoussaye in December of 2013, but he nevertheless proceeded forward with a bill of information.  Meanwhile, delaHoussaye filed federal and state civil suits against the parish as a result of incoming Parish President Layton Ricks stopping payment on a $379,000 check to delaHoussaye for his final invoice.

The civil matter ended Friday when delaHoussaye agreed to accept $325,000 as payment for his final invoice and to dismiss both his federal and state civil actions against the parish.

For now, the state criminal trial continues even though Judge Brenda Ricks ruled on February 23, 2015 that insufficient evidence exists to proceed with a trial.  Mere minutes after Ricks’ ruling, Perrilloux angrily stated to reporters that he would appeal Ricks’ ruling, and he added, “Just because they wear a black robe doesn’t mean they know everything.”  True to his word, Perrilloux recently filed an appeal with the First Circuit Court of Appeal seeking to overturn Ricks’ ruling and proceed with the criminal trial.

On Monday, April 20, 2015, delaHoussaye’s attorney, John McLindon, argued before Judge Ricks a motion to suppress and motion to quash the evidence gathered by the IG on multiple fronts.  Judge Ricks’ ruling, expected sometime this week, may go a long way on clarifying just what authority and powers the IG has.

First, McLindon asserts that the IG is entitled to access the records only of a “covered agency.”  Thus, IG access is limited to only executive branches of state government, of which Livingston Parish, with whom delaHoussaye executed his contract, clearly is not.  In an obvious admission that Livingston Parish is not a covered agency, Greg Murphy, Assistant District Attorney, placed Ben Plaia, an attorney for the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP), on the witness stand.  Murphy utilized Plaia’s testimony to buttress Murphy’s argument that, because GOHSEP controls access to federal emergency funding and because those funds flow through it to the parish, delaHoussaye’s records were fair game by virtue of GOHSEP’s standing as a covered agency.  Essentially, Murphy argued that, by virtue of funds flowing through GOHSEP, its own presumed covered agency status is imputed unto Livingston Parish.

McLindon attacked that assertion during cross examination by asking Plaia a series of questions.  When asked if GOHSEP, delaHoussaye, or C-Del (delaHoussaye’s company) were covered agencies, Plaia responded, “I don’t know.”  Obviously, if GOHSEP isn’t a covered agency, nothing can be imputed, and Plaia would not testify that GOSHEP is a covered agency.    When asked if delaHoussaye or C-Del were contractors of a covered agency, Plaia again responded, “I don’t know.”  Similarly, when asked if delaHoussaye or C-Del were subcontractors, grantees, or sub-grantees of a covered agency, Plaia again responded, “I don’t know.”  When asked if GOHSEP had any contractors or subcontractors, Plaia indicated that it did not.  When asked if it would be proper for GOHSEP to pay delaHoussaye or C-Del directly if invoices seeking payment were submitted directly to GOHSEP, Plaia responded, “No.  In fact, I believe it would be improper for us to do so.”

Based on Plaia’s testimony, not only was there no foundation to establish that GOHSEP could impute any covered status unto Livingston Parish, but there was no foundation for establishing that GOHSEP is even a covered agency with anything to impute.  Nevertheless, taking no chances, McLindon continued to attack the IG’s powers and authority even under the assumption that somehow covered status were deemed to exist and be imputable to Livingston Parish.

In doing so, McLindon is not the first attorney to fire a shot across the bow at the IG’s investigative powers and techniques.  In December of 2013, during the trial of Murphy Painter, former Commissioner of the Alcohol and Tobacco Commission (ATC), both Mike Fawer and Al Robert, Jr., Painter’s defense attorneys, sharply criticized the IG in terms of overreach regarding search warrants and sloppy investigative techniques.  Robert asserted to Federal Judge James Brady that the IG’s execution of the search warrant entailing Painter was both sloppy and that the agency acted well beyond the authority the judge granted.  In perhaps the most stunning quote of the entire trial, Robert, outside the presence of the jury, stated to Judge Brady, “Your Honor, this is not the FBI!  This is the OIG!  These people do not know what they’re doing!”

Similarly, when Fawer had IG investigator Shane Evans on the witness stand, he asked him to confirm his notes documenting that ATC officer Brant Thompson indicated Painter was “out of control, manic-depressive, and selectively enforcing alcohol statutes.” Evans confirmed that Thompson made those statements to him.  Fawer then asked Evans what investigative procedures he used to substantiate Thompson’s allegations against Painter.  Evans stated that he’d performed no investigative procedures at all and instead that he “merely wrote down what Thompson said.”  Fawer then inquired, “And based on your notations, my client (Painter) was summoned to the Governor’s Office later that evening, and he was fired by the Governor, wasn’t he?”  Evans responded that it was his understanding that Painter had resigned, to which Fawer responded, “Resigned, fired, whatever the case.  The bottom line is that very evening my client was out of a job all based on a few notes you wrote down with no attempt whatsoever to substantiate what you wrote, correct?”  Evans, who has left the IG and now serves as an investigator for the EBRP Coroner’s Office, didn’t challenge Fawer’s assertion.

McLindon takes Fawer and Robert’s assertions a step further and indicates his firm belief that the IG has no search warrant authority at all.  He argues that the Louisiana Legislature specifically granted the IG subpoena power but was silent on search warrant authority.  He said that fact, combined with the fact that, for criminal matters, “statutes are to be given a narrow interpretation and any ambiguity resolved in favor of the accused,” (the Doctrine of Lenity) means that the IG has no search warrant authority.  McLindon said that, prior to this case, nobody has ever challenged the IG on its search warrant authority, but he is formally doing so in this case and seeks for Ricks to make a formal ruling on whether they have such authority.  Murphy countered that Ricks must believe the IG has the authority to execute search warrants since she signed one dated June 21, 2011.  He then provided a copy to Judge Ricks, to which she responded, “You went way back to find that one, didn’t you?”

Next, even if covered status is somehow deemed to exist for Livingston Parish and search warrant authority is deemed by the court to be vested unto the IG, McLindon next argued that the IG failed to conform to the statutory requirement regarding an added step for subpoenas sought by the IG.  Specifically, McLindon argued the statute says that the judge shall issue a written decision within 72 hours of the application for the subpoena.  McLindon indicated that the IG and prosecutor have taken the position that the Motion for the Search Warrant is the decision, but McLindon counters that the motion is merely the application.  Furthermore, he stressed heavily that the Legislature could have granted unfettered subpoena power to the IG in the same manner as that which exists for the Attorney General, but it intentionally meant to provide an added layer of review in the case of the IG.  McLindon argued that the IG has been wrong to merely ignore that added layer as it has historically done.  Again, McLindon argued nobody has challenged the IG on this requirement, but he’s doing so in this case.

McLindon concluded his arguments by indicating that failure to suppress the evidence obtained by the IG for the reasons he argues “gives agencies carte blanche to engage in fishing expeditions into the private, sensitive information of citizens.”

In yet another added challenge to IG authority on obtaining its evidence, McLindon cited a case, State v. Skinner, in which the Louisiana Supreme Court made clear the need for a warrant, and not a mere subpoena, to obtain an individual’s medical records.  McLindon thus seeks for delaHoussaye’s medical records indicating he was visiting a physician during a timeframe that the IG alleges he reported working to also be suppressed.  He seeks such suppression based upon the IG obtaining the records via subpoena rather than a warrant.

Readers may read McLindon’s full post-trial memo outlining his arguments.

Louisiana Voice has interviewed several attorneys about the wisdom of the Louisiana Legislature granting the IG law enforcement authority even with the provision of no arrest powers, silence on search warrant authority, and an added hurdle for subpoenas which McLindon asserts has historically been simply ignored by the IG.  The consensus among the attorneys with whom Louisiana Voice has interviewed on the subject is that the Legislature made a mistake and that the IG is often abusing its power and, in at least some instances, acting in a reckless manner.  Perhaps Judge Ricks’ ruling later this week will provide guidance as to whether she may be inclined to agree and, more specifically, to concur with arguments McLindon has advanced in this case.

Read Full Post »

Reader’s heartfelt distress over the plight of our state under Jindal comes through in emotional letter to LouisianaVoice

Posted in Campaign Contributions, Corruption, Education, Ethics, Finances, Governor's Office, Health Care, Legislature, Legislators, Lobbyist, Politicians, Retirement on April 25, 2015| 29 Comments »

Editor’s note: Normally, we do not make a practice of publishing letters from readers as a guest column. But in this case, we make an exception because we were struck by the manner in which this writer expressed his concern for our state. With only minor editing for punctuation, syntax, etc., we offer here an essay written by a retired state employee now living in Pointe Coupee Parish.

By Kerry Phillips (Special to LouisianaVoice)

After reading this article:  https://louisianavoice.com/2015/04/24/it-wasnt-the-best-week-for-louisiana-as-state-hit-with-triple-whammy-at-least-no-1-lsu-beat-no-2-tex-am-in-baseball/,  and this article: http://bobmannblog.com/2015/04/24/for-jindal-if-the-choice-is-tax-hikes-vs-closing-lsu-its-bye-bye-lsu/, and after watching The Ed Show on April 24 on MSNBC regarding Jindal’s religious freedom bill and how he is truly now a national joke…..and finally, after reading Bobby Jindal’s op-ed in The New York Times, and not hearing anything about any of this in the news with the exception of a small article in The Advocate on the OGB fiasco, I have to say that as much as we love this great state of Louisiana, the heritage, the diversity, the culture, the beauty this state has to offer with many aspects, we will be moving AWAY from this state as soon as we possibly can.

We are at the bottom of every list possible nationwide, and thank God this info is getting out nationwide. We are a laughing stock. And I am sad. Sad for my state. Sad for the people, the young, elderly, poor, government workers, fire fighters, teachers. Should I go on?

I was born here.  I was born in Baton Rouge and attended fantastic schools there. I went to college in this state. I worked for over 30 years as a state employee. I was so proud when I first got my voter’s registration card and I have voted in every election. I retired, thinking my state would honor the commitments they made to me throughout my career.

Sadly, it seems I was fooled.

To know that our legislators are basically bought and paid for by lobbyists and special interests groups who truly have no interest in our state that we call paradise is sad. We have always been known nationwide as a “banana republic.” Now I see why.

No one should say that our citizens move away from this state because of a lack of jobs. They now move away because of this cruel joke that has been perpetrated on us by a handful of people within the last decade. None of these people even care about this state, our education, our colleges, our government workers, our healthcare, etc. What we’re seeing is robbery and pilfering by people who only care about one agenda. And that agenda has nothing to do with the welfare of the citizens of Louisiana. Nor does it have anything to do with our hospitals, our children’s education, or the workers of this state.

So when you turn on the local news and see people with arms folded, waiting and complaining about long lines at their Motor Vehicle offices, thank yourselves. When there is no hospital emergency system available for your loved ones, thank yourselves. When LSU does not exist anymore, God forbid, thank yourselves. When you fail to register your outrage when a contract giving away our state hospitals—with 50 blank pages—only to have the deal rejected by the federal government, thank yourselves.

My family and I plan to move to a more progressive state—to a state where citizens actually live in the current year/century and do not want to take us back to 1915, a state where people want to move forward in a way that benefits all citizens, not just the few. And no, it’s not because of my legislator, who has worked to improve the economy and to help state employees where I live. It’s because I am now becoming ashamed of our state and most of our legislators who helped get us in our current predicament.

I lived in Baton Rouge until we moved to the Central/Greenwell Springs area where I lived for more than 27 years. For the past 15 years, we have lived in Pointe Coupee Parish. And while I’d absolutely hate to leave this state (and it’s an extremely hard choice for me), I do think we’ve made our decision. Our state appears to be done, over with….unless…..our legislators decided to truly quit being Jindal’s lapdog. They need to quit being afraid to buck his system because his system has ruined and bankrupted our state. They need to stop allowing him to be a dictator in this state. He is not our God.

And when religious leaders—from north Louisiana, no less—oppose his religious freedom bill, we welcome their voices. We do not live with the Old Testament laws because with Jesus, a new testament was founded. Do we really want to go back? Are we going to go against what Jesus preached? I’m not. Are we going to allow Jindal’s religious freedom bill to become the hot topic offered only to deflect attention from the real issues, the disasters of his creation: the financial issues we now face that are the direct result of his ineptness?  Come on.

I pray so very hard that all of our legislators, men and women, will grow some courage and principles and do what is right for the whole of this state. I’m not stupid, though. I know legislators get benefits that no average citizen—or state employee—can get.  But, isn’t it time for them to sit back and ask themselves, “Do I really want to sell my soul for some Saints tickets or concert tickets or a fantastic meal at some expensive restaurant? Do I want to sell my soul? Or do I want to do what the citizens of this state want?”  “Do I want to do what Jesus would do?”

Heavy, thought-provoking questions to ask, I know. But, I know what I would do.

This is going to be one of the most historic legislative sessions in this state’s history. It is going to make or break our state. And I am afraid the state is going to break. And the poor, the sick, the elderly will be the ones to suffer.

Of course, there is nothing wrong with people prospering and living a great life. What’s wrong is people prospering and living a great life on the backs of other people.

And so I have this one simple plea for our legislators: For once, do what is right for the whole of the state.  I pray in earnest for that. My friends and I pray hard that the right things will be done. I would love to live here and pass on the culture and treasures this state has to offer to my grandchildren. But, if things continue on as they have for the last decade, we will have to choose differently.

 

Read Full Post »

It wasn’t the best week for Louisiana as state hit with triple-whammy; at least No. 1 LSU beat No. 2 Tex. A&M in baseball

Posted in Attorney General, Audit Reports, Budget, Contract, DHH, DOA, Finances, Governor's Office, Health Care, Higher Education, Incentives, Legislature, OGB, Privatization on April 24, 2015| 13 Comments »

Thank goodness for late-inning rallies Thursday and Friday nights by LSU’s No. 1-ranked baseball team to beat No. 2 Texas A&M 4-3  and 9-6, respectively. Otherwise, the news just keeps getting worse for Louisiana.

That’s right; we had to flip all the way back to the sports section to find anything good to write.

That’s because even as the legislature grapples with that $1.6 billion budgetary shortfall, things were becoming unraveled elsewhere as the administration was hit this week not with a double- but a triple-whammy that could end up costing the state hundreds of millions of dollars and could conceivably end up costing another LSU president his job.

We will try to take the events in chronological order.

On Tuesday, the administration received word from the Center for Medicare & Medicaid Services that CMS AGAIN REJECTS the administration’s Cooperative Endeavor Agreements (CEAs) in connection with the controversial state hospital privatization plan pushed by Bobby Jindal “because the state has not met its burden of documenting the allowability of its claims for Federal Financial Participation (FFP).”

The decision apparently will cost the state $190 million, according to a letter to State Medicaid Director Ruth Kennedy from Acting CMS Director Nikki Wachino.

On the heels of that letter, Commissioner of Administration Kristy Nichols received notification from Attorney General Buddy Caldwell on Thursday that the state had been OVERPAID BY $17 MILLION in tobacco settlement money and would have to repay that amount to the tobacco companies who then will redistribute it to states that were underpaid.

And on Friday, State Treasurer John Kennedy announced that national investors had pulled out of a large portion of a major bond deal for LSU after concerns were raised on Wall Street by LSU President F. King Alexander who announced on Thursday that he was preparing paperwork for the state’s flagship university to file for financial exigency, or academic bankruptcy. http://www.nola.com/politics/index.ssf/2015/04/lsu_academic_bankruptcy.html

Kennedy, in a Friday news release, said his office was “trying to sort out the facts,” but essentially, a $114 million bond issue that was in the works appeared to fall flat when investors pulled out on about $80 million in commitments. The bond sale was to have funded a Family Housing Complex, residence halls and a Student Health Center and also would have saved interest on existing debt. http://campaign.r20.constantcontact.com/render?ca=e9da20fd-7c07-4e6d-9d75-82afa4fb05a9&c=cdce75a0-62fb-11e3-959d-d4ae52a459cd&ch=ce38f740-62fb-11e3-95d9-d4ae52a459cd

A BloombergBusiness report said that while investors who bought the $114 million of debt sold by LSU they were not told the school was considering filing for exigency. http://www.bloomberg.com/news/articles/2015-04-23/louisiana-state-bond-buyers-greeted-by-insolvency-plan-next-day

A declaration of exigency by LSU and other colleges and universities across the state would open the way for the schools to fire tenured professors. http://www.bloomberg.com/politics/articles/2015-04-23/louisiana-state-to-draft-insolvency-plan-as-jindal-plans-cuts

One state official confided in LouisianaVoice that Alexander, in his attempts to underscore the severity of the financial crisis in Louisiana higher education, currently facing still more deep budgetary cuts, may have overplayed his hand in making a “premature” announcement of such magnitude.

Meanwhile, word leaked out of a Board of Regents committee meeting Friday afternoon that as many as one-half to 75 percent of Louisiana colleges and universities may be unable to meet payroll by June unless some solution is found quickly to the fiscal crisis that has spread a mood of imminent doom across state campuses. That source said he does not believe a solution will be found until the last week of the session—if then.

With a vengeful governor like Bobby Jindal, anything perceived by him to place him in a bad light is met with severe repercussions, namely teaguing, and Alexander’s pronouncements have certainly reflected poorly on the administration.

For new readers who may not be familiar with the term, teaguing refers to Jindal’s firing of Melody Teague because of her testimony before the state government streamlining committee and the similar firing of her husband, Tommy Teague, only six months later from his job as Director of the Office of Group Benefits (OGB) when he failed to go along with the ill-fated privatization of that agency. Dozens of other state employees and legislators have been either fired or demoted from committee assignments by Jindal for lesser sins. LouisianaVoice learned today that Melody Teague, who was suffering from ALS, died in March. http://www.legacy.com/obituaries/theadvocate/obituary.aspx?pid=174404543

For his part, Jindal, after more than seven years in office, has finally admitted there is a problem with “corporate welfare” in Louisiana, i.e. corporations that do not pay any taxes to the state.

One classic example cited by Steve Spires of the Louisiana Budget Project was Wal-Mart, which is a Delaware-based corporation. Spires, speaking at a State of (Dis)Repair conference in Hammond on Thursday, noted that Louisiana Wal-Mart stores are leased by local entities who pay exorbitant rent to the corporate parent in Delaware, a state with no state income tax, thus avoiding income tax in Louisiana while reaping the benefits of other incentives such as Enterprise Zone designation and 10-year property tax exemptions.

Jindal has only in the past couple of weeks so much as acknowledged the state has a problem with its generous tax breaks for corporations which cost the state billions of dollars per year.

Thus, as the budget crisis grows progressively worse with each passing year, Jindal has resorted to more and more sleight of hand in patching over budget holes with one-money.

Caldwell, in his letter to Nichols and Kennedy, said a number of states had been underpaid in tobacco fund settlement money by the tobacco companies because of accounting errors, and that a corresponding number, including Louisiana, had been overpaid.

Louisiana, he said, was overpaid by about $17 million which will have to be repaid so the money can be redistributed to the proper states.

The CMS rejection has been a problem for the administration since the privatization deals with several private hospitals were signed, though DHH Secretary Kathy Kleibert has attempted to see the world through rose-colored glasses, always expressing optimism that the state’s plan would be approved.

Not so.

In her three-page letter to Ruth Kennedy, Wachino said, “After careful consideration, CMS cannot accept the arguments advanced by the State in its Request for Reconsideration. While CMS recognizes the State’s efforts at corrective action, such measures do not address the State’s noncompliance for the period in question (Jan. 1, 2013 through May 23, 2014). For the reasons stated above, as well as in CMS’s Dec. 23, 2014, disallowance letter, the…disallowance is affirmed.”

All in all, the state has seen better weeks.

Go LSU! We need a sweep badly!

Read Full Post »

Lawsuit seeking to block OGB benefits, premium changes also names Governor, who may be served in Iowa or N.H.

Posted in Contract, Contracts, DOA, Finances, Governor's Office, Health Care, Lawsuits, Legislature, Legislators, OGB, Office of Group Benefits, Privatization on April 22, 2015| 19 Comments »

The absentee Jindal administration, already under fire for its fiscal train wreck that has legislators scrambling in attempts to cover a projected $1.6 billion budgetary shortfall, had a grenade dropped into its lap on Wednesday in the form of a LAWSUIT against the administration and the Office of Group Benefits (OGB) over the method in which OGB attempted to implement adverse changes in benefits and premiums for 230,000 state employees, retirees and dependents.

Baton Rouge attorney J. Arthur Smith filed the petition for declaratory and injunctive relief in Baton Rouge District Court on behalf of six plaintiffs who are either current state employees or state retirees.

At issue is the way that OGB attempted to increase premiums and reduce benefits for members of OGB last August without complying with the state’s Administrative Procedures Act (APA) which requires promulgation (a formal declaration of intent and public hearings) of any rule changes.

Listed as plaintiffs are Marilee Cash and Aileen Hendricks of East Baton Rouge Parish, Nancy Dickie and Debra Thornton of Lafourche Parish, Rebecca McCarter of Ascension Parish and Dayne Sherman of Tangipahoa Parish. Named as defendants were the State of Louisiana, the Office of the Governor, the Division of Administration (DOA), and OGB.

They claim to be members of an organization called Louisiana Voices of Employees and Retirees for Insurance Truth and Equity, (LA VERITE). They say they chose the name because La verite is French for Truth.

The petition tracks the record of the Jindal administration and chronicles the manner in which the plaintiffs claim that the administration, abetted by the legislature, frittered away a surplus of nearly $2 million at the time Jindal took office, repeatedly used one-time revenue to cover recurring expenses, repealed the popular Stelly tax plan, passed numerous business tax breaks totaling some $367 million, approved $20 million in private school tuition and home schooling tax credits and scrapped the sales tax that businesses previously paid on utility bills.

The rollback of the Stelly plan took place despite warnings from the Institute on Taxation and Economic Policy (ITEP) that the move would cost the state more than $1.8 billion in lost revenue over a three-year period from fiscal year 2010 through fiscal year 2012, the petition says.

The lawsuit says that the repeal of the Stelly plan provided a “substantial tax savings for upper income Louisiana” and accounted for about 75 percent of the state’s budget shortfall during those three years. “This does not take into account the billions of dollars the State of Louisiana hands out in business tax exemptions and incentives ever year that have gone unexamined by lawmakers to determine if they serve legitimate public objectives or are simply wasteful luxuries that the state can no longer afford,” it says.

Citing further examples of what it describes as fiscal mismanagement, the petition notes that from July 1, 2009 through June 30, 2010, the administration spent $2.4 billion in private consulting contracts. The following year, it said, that amount increased to $4 billion. The suit cited the Office of Contractual Review’s annual reports for 2009-2010 and 2010-2011 as its source.

Plaintiffs, in their petition, say that the administration announced in January of 2011 its intention to explore the privatization of OGB’s Preferred Provider Organization (PPO) even though a Legislative Auditor’s report predicted that premiums would increase because of marketing costs for a private provider, the necessity of a private provider’s turning a profit, the requirement that private health insurance companies pay premium taxes and the requirement that private companies must purchase reinsurance.

Despite that, the lawsuit says, then-Commissioner of Administration Paul Rainwater promised that in the event of privatization, benefits would remain the same and premiums would not be increased.

Blue Cross/Blue Shield of Louisiana won the contract to administer the PPO and the new plan went into effect on Jan. 1, 2013. That same year, the administration actually reduced rates by 7.11 percent and the next year another reduction of 1.77 percent went into effect.

“While this saved money for the employees,” the plaintiffs said, “it reduced the state’s required premium (matching) payments by about twice as much, thereby reducing the state’s obligation to pay into the system even though medical expenses were increasing by about 6 percent. The rate reductions, while saving the state money it could then apply to the budgetary shortfall, it meant that OGB could no longer cover expenses from current revenue and had to dip into its reserve fund, which was about $500 million when BCBS took over operations.

OGB has been spending millions per month more than it has been taking in in premiums and the Legislative Fiscal Office has said there is a risk that the reserve fund balance could be zero by the end of the current fiscal year (June 30).

“Gov. Jindal adamantly opposed every attempt on the part of legislators to deal with the financial crisis through tax increases,” the petition says, and he “capitalized on the financial crisis of the state to advance an ideological agenda that called into question the rationale for government to perform basic services on a wide range of issues.”

In listing three causes of action, Smith said the state and OGB violated the state’s APA by attempting to make “substantial unilateral modifications to both benefits and costs under the OGB health plan.”

Some of the changes included:

  • Significantly increasing out-of-pocket maximums for all health plan options;
  • Increasing deductibles for all health plan options;
  • Increased co-pays 100 percent for plans with co-pays;
  • Increasing the out-of-pocket maximums for prescription drug benefits by $300 (from $1,200 to $1,500, a 20 percent increase);
  • Eliminating out-of-network benefits for some plan options;
  • Requiring prior authorizations for certain medical procedures;
  • Removing all vision coverage from health plan options.

The plaintiffs point out that on Sept. 30, 2014, only seven days after an attorney general’s opinion said OGB had violated the APA with its unilateral modifications of benefits, OGB issued a press release “stating its intention to publish an emergency rule reinstating the legally insufficient Aug. 1 changes.”

OGB’s emergency rule, the petition says, “was an apparent effort to retroactively ‘cure’ the illegalities found by the Attorney General in his Sept. 23 opinion. Moreover, the fact (that) the changes would not become effective until March 1, 2015, belies the claim that (there) was an ‘emergency’ which necessitated less than full compliance with the APA.”

OGB did finally comply with the APA by conducting a public hearing on Dec. 29, 2014, in the middle of the Christmas and New Year’s holiday season and after the enrollment period had already been closed, causing the plaintiffs to call the hearing a “sham.”

“With all of the proposed changes, including significant changes (made) during the enrollment period, the haste in which they were handled, and the timing of the Dec. 29, 2014, public hearing, it was very difficult for state employees and retirees to intelligently evaluate their options under these proposed plans and (to) make informed choices,” the plaintiffs said.

The petition also claims the state violated due process and contract clauses.

It claims that state agencies can only change promulgated regulations by the process of the promulgation of a new rule or regulation and that if a change is not properly promulgated in accordance with the APA, “it is not a legally effective pronouncement by the agency (not a law), and therefore, none of the abortive attempts in August, September, October and thereafter should be viewed as having changed the existing law.

“Since the contracts clauses prohibit the state from passing a ‘law’ that retroactively impairs the obligations of contract, OGB can only legally change the benefits program when it adopts through proper procedure and final rule to that effect, and that final rule cannot constitutionally be given retroactive effect.”

The petition is seeking declaratory judgments that:

  • OGB’s health care plans are in violation of the Louisiana APA;
  • Defendants have violated the Constitution of the State of Louisiana;
  • OGB has violated its fiduciary duties as prudent administrators.

It also seeks injunctive relief enjoining the applications of the OGB health care plan modifications.

The lawsuit was assigned to 19th JDC Judge Janice Clark.

Read Full Post »

Higher education budget crisis could be part of deliberate pattern to force privatization of state colleges, universities

Posted in ALEC, American Legislative Exchange Council, American Legislative Exchange Council, Budget, Economy, Education, Exemptions, Incentives, Finances, Governor's Office, Higher Education, Incentives, Legislature, Legislators, Lobbyist, Politicians, Privatization, Revenue, Taxes, Veto on April 22, 2015| 12 Comments »

Bobby Jindal has promised to find money to address the funding crisis facing Louisiana’s public colleges and universities but besides the obvious dire financial straits in which the state currently finds itself, two important obstacles must be overcome by our absentee governor: the American Legislative Exchange Council (ALEC) and Grover Norquist.

The odds of appeasing just one in efforts to raise needed funding for higher education will be difficult enough, given Jindal’s allegiance to the two. Obtaining the blessings of both while simultaneously distracted by the siren’s call of the Republican presidential nomination will be virtually impossible.

Higher education, already hit with repeated cuts by the Jindal administration, is facing additional cuts of up to $600 million, or 82 percent of its current budget, according to news coming out of the House Appropriations Committee earlier this month. http://www.nola.com/politics/index.ssf/2015/04/louisianas_higher_education_bu.html

Such a fiscal scenario could result in the closure of some schools and across the board discontinuation of programs.

Moody’s, the bond-rating service, has warned that Louisiana higher education cannot absorb any further cuts. http://www.treasury.state.la.us/Lists/SiteArticlesByCat/DispForm_Single.aspx?List=c023d63e%2Dac65%2D439d%2Daf97%2Dda71d8688dff&ID=884

Louisiana has already cut per student spending by 42 percent since fiscal year 2008 (compared to the national average of 6 percent), fourth highest in the nation behind Arizona, New Hampshire and Oregon. The actual cut in dollars, $4,715 per student, is second only to the $4,775 per student cut by New Mexico. To help offset those cuts, Louisiana colleges and universities have bumped tuition by 38 percent, 10th highest in the nation but still a shade less than half the 78.4 percent increase for Arizona students. http://www.cbpp.org/research/recent-deep-state-higher-education-cuts-may-harm-students-and-the-economy-for-years-to-come?fa=view&id=3927

But that’s all part of the game plan for ALEC, the “model legislation” alliance of state legislators heavily funded by the Koch brothers which has as its overall objective the privatization of nearly all public services now taken for granted: prisons, pension plans, medical insurance, and education, to name but a few. http://www.cbpp.org/research/alec-tax-and-budget-proposals-would-slash-public-services-and-jeopardize-economic-growth?fa=view&id=3901

Jindal has already incorporated some of ALEC’s privatization proposals, namely state employee medical insurance and elementary and secondary education. He met with less success in attempts to initiate prison privatization and state retirement reform.

ALEC also proposes abolishing state income taxes, another proposal floated and then quickly abandoned by Jindal but pushed successfully by Kansas Gov. Brownback. http://www.washingtonpost.com/blogs/wonkblog/wp/2015/04/21/vwelfap/

And then there is Norquist, the anti-tax Republican operative who founded Americans for Tax Reform and who somehow survived the Jack Abramoff scandal and thrived. http://en.wikipedia.org/wiki/Jack_Abramoff_Indian_lobbying_scandal

What strange hold does he have over Jindal?

The pledge.

Jindal, as did a couple dozen Louisiana legislators, signed onto Norquist’s “no-tax” pledge—a promise not to raise taxes under any circumstances. The pledge even prompted Jindal to veto a 4-cent cigarette tax renewal in 2011 because in his twisted logic, it was somehow a new tax. The legislature had to adopt a last-minute constitutional amendment to make the tax permanent.

Undeterred, Jindal, through communications director Mike Reed, has said he would support a cigarette tax increase this year only if it is offset with a tax cut elsewhere. This despite estimates that a higher tax would not only generate needed income for the state, but would, by encouraging smokes to quit and teens to not start smoking, create long-term health care savings for the state. His veto also flew in the face of a 1997 article that Jindal authored while secretary of the Louisiana Department of Health and Hospitals in which he said, “Society must recover those costs which could have been avoided had the individual not chosen the risky behavior only to prevent others from having to bear the costs.” http://theadvocate.com/news/11930951-123/lawmaker-proposes-154-state-cigarette

Not to be confused with the “no-go” zones of Jindal’s vivid imagination, the “no-tax” pledge apparently is a good thing for Republicans and tea partiers and is considered sacrosanct to those who have taken the oath even if it locks politicians into the impossible situation of trying to resolve a $1.6 billion budgetary crisis while not increasing revenue.

Jindal routinely runs proposed legislation by Norquist for his blessings, according to Jindal spokesperson Reed who admitted as much. http://www.nola.com/opinions/index.ssf/2015/03/in_jindals_world_tax_is_a_tax.html

Even U.S. Sen. David Vitter signed the pledge but has assured voters it won’t be binding on him as governor—a dubious promise that would make him unique among signers. After all, a pledge is a pledge and when one signs it, so what difference would it make which office he holds?

So, how does all this figure into the budget crisis for higher education in Louisiana?

In a word, privatization. Or, taking the “state” out of “state universities.”

While neither Jindal nor any legislator has dared breathe the word privatization as it regards the state’s colleges and universities, at least one Jindal appointee, Board of Regents Chairman Roy Martin of Alexandria, has broached the subject, speaking he said, strictly as an individual. http://theadvocate.com/news/11716059-123/regents-look-at-privatizing-public

The slashing of higher education budgets appears to be a pattern as governors attempt to wean colleges and universities from dependence on state funding, transitioning their status from state-supported to state-assisted to state-located. http://www.usnews.com/news/articles/2015/02/27/scott-walker-bobby-jindal-aim-to-slash-higher-ed-funding

Privatization of state colleges and universities would, of course, push tuition rates even higher, making a college education cost prohibitive for many. But that dovetails nicely with the ALEC agenda as income disparity continues to widen with ever more generous tax laws that benefit the super-rich while placing growing burdens on lower-income taxpayers. By winnowing out those who can least afford college, privatization necessarily enhances the selection process to serve the elite and at the same time, opens up additional revenue opportunities for those in position to take advantage of privatized services such as book stores, printing, food services, and general maintenance. http://gse.buffalo.edu/FAS/Johnston/privatization.html

There is already a backlog of nearly $2 billion in maintenance projects on state college and university campuses just waiting for some lucky entrepreneur with the right connections.

http://theadvocate.com/home/5997316-125/backlog-of-maintenance

States like Louisiana, by such actions as simply increasing our cigarette tax (third lowest in the nation) and being less generous with corporate tax breaks and initiatives, could have reduced the size of the spending cuts or avoided them altogether. Sadly, that was not done and those looking at someone to blame cannot point the finger only at Jindal; legislators have been complicit from the beginning and must shoulder the responsibility for the present mess.

As a result, state colleges and universities have already cut staff and eliminated entire programs to such a degree that Louisiana’s high school seniors already are considering options out of state and other states are obliging. https://lahigheredconfessions.wordpress.com/

Should the legislature adopt any measures to raise revenue for higher education, such measures likely would be vetoed by Jindal if he gets the message from Norquist to do so.

If that occurs, his palpable disregard for the welfare of this state as evidenced by his growing absence will be dwarfed by the affront of taking his cue of governance from a Washington, D.C. lobbyist as opposed to listening to his constituents who want real solutions and not political grandstanding.

But that certainly would be nothing new for Bobby Jindal.

Read Full Post »

« Newer Posts - Older Posts »