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Archive for the ‘Governor’s Office’ Category

Bonus recipients exempt from ‘Do More with Less’ edict

Posted in Civil Service, Governor's Office, Transparency on September 1, 2011| 2 Comments »

BATON ROUGE (CNS)—If you believe you’ve done a good job at work and would like a nice bonus, you might get in touch with Gov. Bobby Jindal or Commissioner of Administration Paul Rainwater.

Never mind that times are tough, that unemployment is up, or that state classified personnel have not received a merit increase going on three years now.

Heck, even if you think you deserve a bonus just for showing up at work, you might place a quick call to Baton Rouge.

For that matter, if you’re taking college courses or taking on additional duties at work, you may already be a winner.

While the Jindal administration has been trying to cut the number of employees on the state payroll and continues to put the squeeze on employees by denying pay increases, several employees received around $250,000 in bonuses in the past year, according to records provided by the Louisiana Office of Civil Service.

The State Department of Children and Family Services paid several classified employees $132,184 in rewards and recognition bonuses. Many of those received multiple bonuses for taking on emergency preparedness duties.

Regional administrator Catherine Michiels received more than $11,000 in five separate payments over and above her $90,000 salary for agreeing to be a lead area manager on emergency preparedness, according to a spokesman for the agency.

The Division of Administration (DOA) paid out nearly $90,000 in payments to employees on top of their regular salaries to help upgrade the state’s computer systems.

But wait. Wasn’t it just a short while ago that Jindal admonished state employees and state agencies quit whining and to “do more with less” just before he left on yet another of his frequent out-of-state fund raisers?

In a departure from what has become a familiar routine at DOA, division spokesman Michael DiReso said the administration decided to pay employees extra to take on the project in favor of hiring outside help. The Jindal administration has demonstrated a propensity to hiring contract workers but decided against that in Rainwater’s agency.

Ray Stockstill, an unclassified employee, received $9,000 over three pay periods in December of 2010. Rainwater said he made the decision to pay Stockstill in addition to his $180,000 salary because Stockstill was needed during the recent fiscal crisis and difficult budget process.

“The reality is Ray is 67 years old,” Rainwater said. “There was a possibility of him considering retirement.”

At 180 grand per? That’s only $20,000 less than we paid President Bill Clinton to walk around with a little black briefcase with which he could launch a nuclear war.

At any given time in state government, there are hundreds of employees who are “considering retirement,” but because Stockstill works for Rainwater, he apparently warranted special consideration over others “considering retirement.”

Rainwater said Stockstill was instrumental in helping win passage of a state operating budget that spared health care and education from drastic cuts. “Ray’s a very strong leader,” Rainwater said. “He’s a good negotiator.”

But wasn’t that his job? What’s wrong with tossing a good ol’ “attaboy” his way, something that other rank and file civil service employees find missing from the governor’s repertoire these days?

He said he offered Stockstill the lump-sum payment as an incentive to persuade him to remain with the administration for another year. He now plans to retire in November—unless, of course, another surplus is in the offing.

Louisiana State Penitentiary at Angola Warden Burl Cain received $14,872 and Dixon Correctional Institute Warden Steve Rader received more than $11,000 for “regional warden duties.”

Department of Corrections Pam Laborde said the wardens did not receive lump sum bonuses but that they were added to their pay every two weeks.

Well, that certainly softens the blow to employees who have gone without raises while the costs of fuel, food, utilities, college tuition and other commodities have continued to rise.

Laborde said the regional warden concept dates back four years. Cain and Rader help oversee other parts of the prison system, she said.

Again, we refer you to Jindal’s “DMWL” (Do More with Less) obsession as the phrase applies to rank and file workers.

State Rep. Jim Fannin (D-Jonesboro), chairman of the House Appropriations Committee, said he would not have made the payments while at the same time talking about budget cuts. “I certainly would have handled it a different way,” he said.

That seems logical but what is logical does not policy make with this administration. Jindal preaches that because of budgetary constraints, all must share the pain but in the final analysis, pain-sharing appears to be doled out on a somewhat selective basis. Ask the bonus recipients sometime if they adequately shared the pain.

The administration finally got around to making it official. State agencies were specifically prohibited last year from granting merit raises to the great unwashed, as the administration seems to think of them. We prefer to call them what they are: state classified employees.

Before that, it was strictly by subterfuge—smoke and mirrors, if you will.

It was during the tenure of former Commissioner of Administration Angéle Davis that word came down to agencies under the DOA umbrella that the method of grading employees’ performance on annual professional performance ratings (PPRs) was to be altered.

Oh, the change was subtle, to be sure, but it was change nonetheless and its effects were immediate. The word came directly from DOA. Supervisors and managers were told privately—conveniently, nothing was put in writing—that they were strongly encouraged not to give ratings of 4.0-4.5 (the highest rating, for “outstanding”) or even 3.5-4.9 (exceeds expectations). A rating of, 2.5-3.49 simply means an employee “achieves expectations,” but supervisory personnel were verbally discouraged from awarding anything higher than a 2.0, which would automatically make the employee ineligible for a merit increase.

There will be official denials from the administration, of course, but too many supervisors—all independent of one another—have shared this information with LouisianaVoice for there not to be more than a grain of truth to the story.

After all, they had nothing to gain from revealing this unwritten policy. All they gained was the ability to look their employees in the eye and themselves in the mirror.

But certainly no bonus.

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State audit shoots down OGB privatization but this time administration unable to prevent its release à la Chaffe

Posted in Auditor, Governor's Office, OGB, Office of Group Benefits, Privatization on August 30, 2011| Leave a Comment »

BATON ROUGE (CNS)—A state audit of the Office of Group Benefits (OGB) released Monday by the Legislative Auditor’s Office would appear to validate fears expressed by opponents of privatization of the agency.

The 22-page audit report represents a substantial setback to the administration’s plan to sell off the agency and its $500 million surplus even though it’s not likely to change its position on selling off OGB, state prisons and Medicaid operations.

Among the findings of the audit:

• A private company may incur marketing costs that are higher than OGB;

• As a state agency, OGB is exempt from paying premium taxes while other (private) health insurance companies are required to pay premium taxes according to R.S. 22:838(B);

• OGB does not have a profit motivation because it is a state agency whose goals are to provide a service and pay claims. A private company will most likely build a profit margin into the premium structure;

• If the contractor assumes all risk (fully insured), the contractor will most likely purchase reinsurance. Currently, OGB does not have reinsurance. These cost considerations are dependent on the premium and/or benefit structure restrictions that are placed on the contract;

• If the state sells the business, the incurred liabilities, up to the date of the sale, must be paid by either the state or the new owner. If the state remains responsible for the incurred liabilities, there should be a provision in the contract to address payment of these liabilities. If not, there would be no revenue stream after the sale to pay the outstanding claims;

• The sale of the business would diminish the legislative and/or state administrative control over cost, benefits, or changes to the plans;

• Cost savings may result from the efficiencies gained by using an established health care provider with well-structured administrative processes. The contract would be the vehicle for establishing cost parameters.

The audit also mentioned the administration’s contract with Chaffe and Associates to establish the fair market value of the operations of OGB as of Jan. 31, 2011, apparently so that Gov. Jindal could include the proposed sale of the agency in his Executive Budget.

“According to the 2012 OGB Executive Budget initially submitted, OGB estimated a savings of $10,155,906 resulting from personnel reductions of 149 positions,” the audit report said. “It was explained to us that the reduction would be result of the PPO (Preferred Provider Organization) being privatized. Those positions were restored in the budget process.”

The audit also mentioned the administration’s contract with Chaffe and Associates to establish the fair market value of the operations of OGB as of Jan. 31, 2011, apparently so that Gov. Jindal could include the proposed sale of the agency in his Executive Budget. That information, however, was not included in the Executive Budget, leading many to believe the report did not contain information the administration desired.

Fueling that speculation was the reluctance of the administration to release the Chaffe report, even in a faceoff between Commissioner of Administration Paul Rainwater, Assistant Commissioner Mark Brady and the legislature.

A report was eventually leaked to the media but that only prompted more skepticism because Rainwater on May 31 and Division of Administration (DOA) attorney Paul Holmes four days earlier, on May 27, each indicated the Chaffe report was received by DOA on May 25 but could not be release because it was still in the “deliberative process.”

Chaffe officials, however, did not sign off on the report’s signature page until June 3. Moreover, none of the leaked report’s pages were date stamped even though all documents received by DOA are routinely date stamped.

There was speculation that there may have been two reports—one that said the only advantage to selling OGB would be if the buyer retained the agency’s $500 million surplus (a clause that at least one person who saw the report prior to its being leaked said it contained) and the leaked report which did not contain such language.

Moreover, the report said, the Chaffe report, which was performed under a $49,999.99 contract—one cent below the amount requiring statutory review—placed a value of $217 million on OGB, assuming a five-year privatization term.

The report, however, failed to take several considerations into account, according to the audit report. “The valuation range:

• does not assume any increased costs as a result of the Patient Protection and Affordable Care Act;

• does not consider the impact, if any, of increased premium costs incurred by the state as a result of the privatization;

• does not consider the value of the existing fund balance, which was $499.2 million as of the valuation date of Jan. 31, 2011.

In effect, the audit report indicated the $49,999.99 paid Chaffe was money wasted.

The audit report did not address the discrepancies mentioned above nor did it attempt to reconcile the significant difference in bids on two separate but virtually identical requests for proposals (RFPs) issued by DOA.

The first RFP was issued on Feb. 4 that called for the services of a financial advisor to determine OGB’s assets and determine a fair market value and to actively recruit bidders to purchase the agency.

Prior to the date of that RFP, as early as October of 2010, Goldman Sachs was brought in to help draft the RFP. Goldman Sachs subsequently was the lone bidder on that RFP with a bid of $6 million. Negotiations broke down over Goldman Sachs’s insistence on the state’s indemnifying the Wall Street banking firm in any ensuing litigation.

A second RFP was then issued on May 6 and three firms submitted bids. They were Goldman Sachs, Barclays Capital and Morgan Keegan. On July 15, Rainwater announced that Morgan Keegan had been chosen for the contract on the basis of its bid of $900,000–$5.1 million lower than Goldman Sachs’s bid on the first RFP.

In the interim between the issuance of the first RFP and the acceptance of Morgan Keegan as the contractor on the second RFP, OGB lost two directors.

On April 15, Tommy Teague, who had taken the agency from a $60 million deficit to the $500 million surplus in a period of only six years, was terminated by Rainwater, who never gave any reason for Teague’s firing.

Teague was replaced on that same day by Scott Kipper, who was brought over from the Louisiana Department of Insurance. Kipper resigned on June 24, just over two months after his appointment.

The audit report says any plan to sale OGB must be approved by the Legislature under the provisions of R.S. 49:968(C). “Any substantial changes to the function and role of OGB in regard to the administration and management of group insurance policies would require legislative action to amend applicable substantive laws addressing the resulting reorganization of the Executive Branch,” the report said. “This reorganization is, by Constitution, with the exclusive authority of the Legislature.”

State Sen. Butch Gautreaux (D-Morgan City) said he had not fully reviewed the audit “but it appears that the auditor agrees that there are a lot of unanswered questions and that the buyer would have to agree to keeping the plan pretty much as it is. I seriously doubt that a for-profit (company) would agree to those terms,” he added.

Rainwater, in his response to the audit, fell back on the same argument the administration has used throughout the debate: the number of employees at OGB–309–which he insists is excessive.

He also denied that the wholesale privatization of OGB is under consideration. even though he expressly listed that as an option in testimony earlier that that was indeed an option, even going so far as to say in April that that the OGB surplus would be “an attractive selling point” because the private company that ultimately purchases the agency would not have to dip into its own capital to pay claims initially.

Rainwater noted that the report said state auditors were unable to identify any states that had “fully” privatized their state employee health insurance agencies. “Given that this administration itself has never proposed the complete privatization of OGB, the relevance of this research point is not exactly clear,” Rainwater said.

In April, however, he expressly listed that as an option in testimony before the Senate Insurance Committee that full privatization was indeed an option, even going so far as to say that that the OGB surplus would be “an attractive selling point” because the private company that ultimately purchases the agency would not have to dip into its own capital to pay claims initially.

Rainwater took the same stance with auditors’ observation that the “wholesale privatization” of OGB would require approval by the full Legislature. “I wonder, again, about the practical usefulness of the point since it is based on a premise—the ‘full’ or ‘wholesale’ privatization of OGB—that is not even under consideration.

In his testimony before the Senate Insurance Committee, however, he said, “We’re taking OGB out of the day-to-day business of running an insurance company.”

He downplayed speculation in the audit that privatization might result in higher insurance premiums, saying such speculation cannot be supported based on the research contained in the report.

Despite a record of fast turnaround of claims payments, Rainwater said, “The possibility of providing quality service in a manner that’s also more efficient is precisely why we have begun this evaluation of OGB, and we owe it to the taxpayers to evaluate it fully.”

Even though he has stated publicly that OGB was being taken “out of the day-to-day business of running an insurance company,” he said in his letter, “OGB’s administrative oversight will continue, securing the continued success of all the plans.”

Administrative oversight has already resulted in DOA’s approval in May of this year of a $7 million amendment to the $68 million paid F.A. Richard and Associates (FARA) by the state a year ago to take over the operations of another state agency, the Office of Risk Management. A week after that contract was amended, FARA was sold to an Ohio company.

So much for administrative oversight.

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Jesters for the Natural Diminution of All Logic (JNDAL)

Posted in Governor's Office, Health Care, Legislature, Legislators on August 25, 2011| 3 Comments »

It was a typical hot, humid summer day in Louisiana’s capital city as the agency director (AD) sat at his desk going over his budget for the coming year. The legislature had implemented drastic cuts while continuing to approve projects in their districts that just didn’t make any sense.

Since when was the state responsible for funding local court houses, fire stations, convention centers, municipal buildings, golf courses, baseball parks, parish roads, and chicken plucking plants? Yet, there they all were, line item by line item in the state budget, about half a billion dollars worth.

Yet, for the third straight year, he was unable to provide pay raises for his employees who, during those same three years, had seen the price of groceries, gasoline, health insurance and college tuition continue to rise. For the most part they were all good, hard-working employees. There were the few duds, of course; every agency has those. In fact, every private sector employer has the occasional slacker. In some cases, the laziest, least qualified employees are related to the boss. Same thing in the public sector; you’d be surprised how many of the so-called deadhead state employees are related to legislators.

Oh, well, there was nothing he could do about it, he sighed to himself. That’s just the way it is.

Then there came a knock at his door. “Come in,” he called out, looking up from his budget printout.

His administrative assistant opened the door and ushered in three men, all strangers. They were young, dressed in jeans and cowboy boots and there was an air of arrogance the AD picked up on immediately, putting him on his guard.

“These gentlemen are here to see you from Jesters for the Natural Diminution of All Logic,” his assistant announces.

“The Jest….who? What?”

“Jesters for the Natural Diminution of All Logic,” said one of the men. “My name is Tippy. We just call ourselves JNDAL.”

“I’m sorry, I’ve never heard of you. Did you have an appointment?”

“We don’t need an appointment,” said Tippy, whose hair was cropped short and whose western shirt was opened at the collar. He didn’t wear a sport coat or a tie with his jeans. Probably drives a Jeep Cherokee, thought the AD. Tippy continued: “We represent the governor’s office and we’re here to go over the administration’s new plan for grading state agencies on Proficiency, Efficiency, and Effectiveness. We refer to it as PEE.”

“PEE? What? Wait. I’ve never heard of any grading plan. When did all this come about?” the AD asked, clearly bewildered.

“It’s a new program patterned after the school grading system initiated by the Department of Education,” Tippy said. “We send in a team to test your employee performance and if they return with a Detrimental Unqualified Negative Grade, you are subject to having your agency taken over by a private entity and you can be terminated.”

“How can you justify turning this department over to a private agency?” the AD asked, incredulous. “And how can you use some silly test as a barometer in determining my performance? I’ve been a dedicated public servant for 30 years and suddenly I’m not good enough to meet your standards?”

Tippy almost sneered at the question. “You are a reflection of your workers and they are a reflection of you. It’s that simple. If there’s a problem with any of your employees then of course it’s your fault.”

“Wait a minute here. There are all sorts of mitigating circumstances at play in any given office at any given time. You can’t make a blanket judgment like that.”

“Certainly we can. We’re doing it with the schools. Anyone can see if there’s a problem in the school, it’s the teachers and principal who are to blame. Surely you can see that?”

“No. No, I can’t. I have an employee who has been with this agency 33 years and he’s just been diagnosed with prostate cancer. He’s missed work because of treatment but that doesn’t make him any less valuable.”

“Chronic absenteeism is something we cannot overlook in the grading process,” Tippy said.

“I have another who is going through a very stressful divorce. He’s been married 12 years and has three children and his wife just moved in with a tattoo artist and took the kids. You have to cut him a little slack.”

“Aw, poor guy. You mean we should look the other way when his productivity falls off just because he’s having problems? Afraid not.”

“And there’s a single mom raising four kids and the father just took off. She’s having a hard time making ends meet with day care and sometimes has to take off when one of the kids gets sick.”

“Where are her parents? Why can’t they help out once and awhile?” Tippy opened his notepad. “You also had an employee who wrecked a state vehicle.”

“Yes, and we investigated that. He was on assignment and was within the scope of his employment when a drunk ran a red light and broadsided him.”

“You also had an employee who likes to gamble at the casino and who embezzled money from your agency,” Tippy said.

“Yes and we ran a background check on him when he applied for his job. We recommended that he not be hired at that time based on his background but apparently he had some connections with a legislator and I was instructed to hire him anyway,” the AD explained. “I wasn’t allowed to even discipline him, much less prosecute him for the embezzlement.”

“Nevertheless, that goes against your record,” Tippy responded. “I’m afraid your agency just doesn’t measure up to the JNDAL standards.

“We have a company from Myanmar that has submitted a proposal to take over your agency,” Tippy continued. “Please notify your employees that beginning the first of the month, they will be working at the pleasure of Golden Land Enterprises, LTD., and will be required to remit 25 percent of their gross salary to Golden Land President Mykaili Tnushi.”

“What about me?” the AD asked.

Tippy looked up from his notepad. “Surely you can’t be serious. How can you expect to continue in your position when your agency just got such a dismal grade from JNDAL?”

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Notable Quotables (in their own words)

Posted in Civil Service, Governor's Office, Notable Quotables, Politicians, Transparency on August 24, 2011| Leave a Comment »

“The lust for power can be just as completely satisfied by suggesting people into loving their servitude as by flogging and kicking them into obedience.”

—Aldous Huxley, author of Brave New World, in a letter to George Orwell, 1949.

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Jindal’s privatization roadmap pockmarked with potholes

Posted in Charters, Education, Ethics, Governor's Office, Grant, Grants, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Privatization, Transparency on August 24, 2011| 1 Comment »

Gov. Bobby Jindal’s efforts towards privatization of state government can best be summed up in a single word: disastrous.

If a movie were to be made of the manner in which this administration has carried out its perceived mandate to privatize state prisons, education, health care, risk management and the Hazard Mitigation Grant Program, it would almost certainly feature Larry, Moe and Curly playing the parts of Jindal, Commissioner of Administration Paul Rainwater and former Superintendent of Education Paul Pastorek.

Take, for example, the $340 million, 10-year contract awarded by the Department of Health and Hospitals (DHH) to Maryland-based CNSI Corp. It’s difficult to imagine that anything could be botched any worse than the manner in which the contract winner was announced.

The awarding of the contract just happened to coincide with the confirmation hearings on DHH Secretary Bruce Greenstein. Smelling blood in the water, members of the Senate Governmental Affairs Committee asked Greenstein point-blank to name the company awarded the contract.

He refused.

And with good reason, it turned out. It turned out that Greenstein had once worked for CNSI. But, he assured the committee members after finally identifying the CNSI as the winning bidder for the contract to process Medicaid claims for the state he had taken himself out of the selection process and even erected a “firewall” between him and the contract selection.

But wait. There’s more. Turns out that Greenstein did indeed have some contact with his old employer and in fact, implemented changes in the request for bids that allowed CNSI to submit a proposal. That proposal actually ranked third among four bidders on the technical merits of its proposal but won the contract based on the lowest price which is still one of the largest contracts ever awarded by the state.

While it might not be privatization in the truest sense of the word, let’s go back to the 2010 legislative session when Rep. John Schroeder introduced a slew of bills aimed at dismantling state civil service and the Civil Service Board. Had his bills been successful (they weren’t), what would Jindal have replaced civil service with, contract workers? That’s already being done to some extent as we shall see presently.

Schroeder backed off at this year’s legislative session. It is, after all, an election year. But if he and Jindal are re-elected, don’t be surprised to see the civil service bills resurface. Even if Schroeder is not re-elected, Jindal will likely find a friendly legislator to introduce some version of the bills next year.

Then there were the privatization battles fought on two fronts during the 2011 session: prisons and the Office of Group Benefits (OGB). Both were shelved at least until next year but that doesn’t mean either issue is dead. Far from it. In fact, the OGB privatization effort is still simmering and the proposed prison sales will most likely be back on the legislative agenda next year.

But neither Jindal nor Rainwater appear particularly eager to defend the OGB privatization in a public forum. Both managed to be elsewhere recently when the Baton Rouge League of Women Voters held a luncheon to discuss the OGB issue. It would have been the perfect opportunity for Jindal or Rainwater to come clean with the public and explain exactly what the administration’s intent is for the agency and its $500 million surplus. Both men were invited to take part in the forum but Jindal was at yet another Baptist church somewhere in north Louisiana and Rainwater was speaking at a Rotary meeting in Alexandria.

It was the best opportunity yet for the administration to demonstrate its openness, accountability and transparency that Jindal hypes at all his fundraising appearances—in other states, that is.

Could there be a reason for their reluctance to discuss the merits of OGB privatization openly and to accept questions about their motives?

Well, let’s just look at the sequence of events thus far.

First there was the request for proposals (RFP—a term appearing with ever-greater frequency in this administration) that Goldman Sachs was recruited to help draft and then Goldman Sachs was the lone bidder—at a cool $6 million. That was not to take over OGB; that was just to evaluate the agency’s assets and to go out into the marketplace and find a buyer.

In the interim, Jindal had contracted Chaffe and Associates of New Orleans to conduct a quickie evaluation so that he could include the sale of the agency in his proposed executive budget. Chaffe was contracted for $49,999.99—one cent below the amounted that would have required approval of the Office of Contractual Review.

But then, Jindal did not include the OGB sale proposal in his executive budget after all, leading observers to speculate that perhaps Chaffe’s report did not reflect what the governor had anticipated. Requests were made for copies of the report but the governor was not forthcoming, choosing instead to disavow his own edict of openness and accountability.

Meanwhile, word got out that the report specifically said the only advantage to selling OGB would be if the buyer got the $500 million surplus.

When legislators began clamoring for copies of the Chaffe report, it was subsequently “leaked” to the Baton Rouge Advocate. Trouble is, the part about the only advantage of selling OGB was not in that report. Nor were any of the pages of the “leaked” report date stamped. Every document received by the Division of Administration (DOA) is routinely date stamped. Finally, there was a major discrepancy in the purported date that the report was received by DOA.

DOA attorney Paul Holmes, in a May 27 email to LouisianaVoice, claimed that the Chaffe report was received at DOA on May 25 but that it was part of the “deliberative process,” and unavailable for public inspection. Rainwater likewise, on May 31, told legislators that he had received the report on May 25 but again invoked the “deliberative process” excuse for not releasing it.

But when the report was “leaked,” it was noted that Chaffe officials did not sign off on the report’s signature page until June 3.

Is it possible that there were two separate versions of the report? One which didn’t say what the governor wanted to hear that is still being withheld from the public and another, more generic version that was “leaked” to the Advocate? Perhaps we will never know.

One thing we do know, however, is that the administration is determined to privatize OGB, even to the point of dealing with Wall Street bankers with problems of their own.

In rebidding its RFP for a broker, Morgan Keegan was named the contractor to shop around for a buyer for OGB. Morgan Keegan bid only $900,000, considerably less than Goldman Sach’s bid of $6 million on the original RFP.

It turns out, however, that Morgan Keegan has been placed on the auction block by its parent company, Regions Financial Corp., after MK agreed to pay $210 million to settle charges of fraud in the marketing of mutual funds filled with subprime mortgages that artificially inflated the funds’ prices.

Regions retained (who else?) Goldman Sachs to market MK. But Goldman Sachs was fined $587 million a year ago on charges that it misled investors in collateralized debt obligations linked to subprime mortgages.

John Maginnis, in his Louisiana Political Weekly column, more recently has called attention to the mismanagement of the $756 million program for hurricane victims to elevate their homes which was approved near the end of the Kathleen Blanco administration and reluctantly inherited by Jindal’s administration.

The program, administered under a $66 million contract with The Shaw Group has been bogged down with delays, shoddy work, payment disputes and more recently, charges of graft and corruption in the form of a whistleblower lawsuit by two employees of the program who claim that a state official accepted jewelry and meals in exchange for providing confidential information that enabled a contractor to pursue eligible homeowners.

Rainwater, embarrassed into finally acting, announced an investigation in conjunction with the federal Homeland Security inspector general and the state attorney general’s offices. The state official has been placed on leave.

Assuming “full responsibility,” Rainwater said, “I obviously wish we had acted quicker.”

Taking a break from his out-of-state fundraisers and visits to Baptist churches, Jindal paused long enough to issue an executive order to crack down on “incompetent, unscrupulous or predatory contractors and subcontractors.”

Maginnis, however, said Jindal should also be taking a “hard look” at the performance of Shaw, one of the largest of the state’s privatization contractors. He said the administration does not need to repeat its mistakes thus far with the monumental $2.2 billion Medicaid program it is contracting out to five insurance companies next year or with the ever-increasing number of charter schools.

Charter schools represent another blot on the privatization performance record. Abramson in New Orleans and Kenilworth in Baton Rouge, both run by Pelican Education Foundation, have come under intense scrutiny of late.

Operated by Cosmos Foundation out of Pennsylvania, Pelican has already had its Abramson charter revoked by the state. Its sister organization in Texas, Harmony Science academies, as well as similar Cosmos schools in other states, are subject of an FBI investigation into charges that teachers, imported from Turkey to teach, are required to kick back up to 60 percent of their salaries to Cosmos founder Fethullah Gulen.

In New Orleans, a Pelican official is alleged to have offered a state education department investigator a $20,000 bribe to “make problems go away.”

Thos problems included no supervision of students for weeks after a teacher left, sexual activity between students, teachers doing science projects for students, cheating on exams, and other deficiencies.

Perhaps someone should ask how Harmony could justify $7 million in travel expenses over a three-year period in Texas or how it could justify overall payments of nearly $250 million for 38 schools in that state.

More importantly, perhaps someone should ask why teachers are being imported from Turkey when teachers who live here are being laid off because of budgetary cutbacks–cutbacks imposed in order that charter schools might flourish.

More will be forthcoming on this issue in days ahead.

Now for the Office of Risk Management (ORM), the one agency that Jindal has successfully privatized. Or has he?

A year ago, the operations of ORM were taken over by F.A. Richard and Associates (FARA) of Mandeville under a contract that called for the state to pay FARA “not to exceed” $68.2 million to take over ORM over five years.

That was last July. Eight months later, FARA requested and received a $6.8 million amendment to its contract, which now said it would be paid “a maximum amount” of $74.9 million. In a matter of days following approval of the amendment, it was learned that FARA was sold to Avizent, a firm out of Columbus, Ohio. Avizent promptly laid off the only person working in its Baton Rouge office.

Now comes word that Avizent may be selling out to Sedgwick Claims Management Services of Memphis, which had earlier purchased Cambridge Integrated Services Group, Nationwide Better Health’s productivity solutions, Selective Settlements International, and Specialty Risk Services.

Catherine Bennett, communications manager for Sedgwick, said she had not heard reports of the Avizent acquisition and could not comment on the matter.

FARA/Avizent, meanwhile, has informed ORM that because of the backlog of documents to be scanned into its system, it would not be able to take over the Property Section of ORM by Jan. 1 as originally scheduled. That date has been pushed back to April 1.

Because of the delay, two ORM claims adjusters will be out of work as of Jan. 1. ORM has chosen to release the two employees, presently paid in the area of $25 per hour, in favor of retaining contract adjusters who are not state employees. They work for private adjusting firms and the state pays their firms $60 per hour to provide temporary adjusters for ORM.

So why would the state terminate employees making $25 per hour in favor of paying $60 per hour for contractors? Benefits. The state does not provide health coverage, retirement, sick leave, or annual leave for contract adjusters. Nor does it provide job security through civil service protection.

Can you say privatization?

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