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Archive for the ‘Governor’s Office’ Category

Landrieu is not the only one with Washington home; Graves funnels $million$ to father’s firm as Jindal’s $135,000 man

Posted in Campaign Contributions, Coastal Erosion, Congress, Contract, Contracts, Corruption, Elections, Ethics, Governor's Office, Politicians, Transparency on October 10, 2014| 14 Comments »

While we have had no trouble unearthing double standards, misrepresentations, distortions and outright lies in our coverage of the Jindal administration, political campaigns often take the practice to a new level.

The mind-numbing campaign for the U.S. Senate comes to mind. At this point in the campaign, voters just wish Mary Landrieu and Bill Cassidy would both shut up and leave us alone. But those TV ads from both camps keep pounding away at us, each accusing the other of distortions, lies, misrepresentations, pro-this, and anti-that.

The comic strip Non Sequitur would well have been referencing either candidate with this submission:

nq141010[1]

Or it could have been alluding to the recently ramped-up campaign of 6th Congressional District candidate Garrett Graves, former chairman of the Louisiana Coastal Protection and Restoration Authority (CPRA) and director of the Governor’s Office of Coastal Activities, who only recently kicked off his media blitz.

Of course most observers are accustomed to grandiose promises.

For at least the past 20 years or so, the challenger in the Baton Rouge mayor-president’s election without fail has promised to improve public education in East Baton Rouge Parish—never mind the fact that the mayor’s office has absolutely nothing to do with the East Baton Rouge Parish School Board. Zero. Zilch. They are two entirely separate political entities.

And we’re all used to congressional candidates saying they are going to fight waste, work to improve infrastructure, and vote to defend the Constitution blah, blah, blah.

But Graves has taken the rhetoric to a new extreme. He has one TV spot running on the Baton Rouge in which he says not that he will “work to” or “vote to,” but that he “will” repeal Obamacare, he “will” cut spending, he “will” stop illegal immigration, and he “will” eliminate terrorism.

Those are pretty big promises, folks, and unless he’s Clark Kent in disguise, we just can’t see how one freshman tea party congressman can impose his will on 434 other members of the House and 100 senators, not all of whom are tea partiers.

And while we are on the subject of political rhetoric, there has been much said about U.S. Sen. Mary Landrieu’s ownership of an $800,000 home in Washington, D.C. while not owning a home outright in Louisiana (though she is part owner, along with her siblings, of her parents’ home in New Orleans).

But not a peep has been said about Graves’ 2005 purchase of a home at 210 11th Street SE in Washington, also appraised at more than $800,000. Nothing on his federal financial disclosure statement for Jan. 1, 2013 through July 15, 2014, indicates ownership of a home in Louisiana—not even part ownership of his father’s home—although he does list ownership of property in Gulf Shores, Alabama. And Graves has never been elected to any office, let alone one that demands his presence in Washington.

He apparently purchased the home during his tenure in Washington. He worked as a policy adviser to former U.S. Sen. John Breaux and U.S. Congressman Billy Tauzin and worked for the Senate Commerce, Science and Transportation Committee and the House Energy and Commerce Committee. He also served as staff director of the U.S. Senate Subcommittee on Climate Change and Impacts. http://www.epa.gov/gcertf/bios/graves.html

Apparently he liked Washington well enough to plan on returning because he did not sell the home when he grabbed onto Gov. Bobby Jindal’s coattails in 2008 to head up CPRA at $135,000 per year through 2012. His salary was bumped up to $147,300 in 2013, according to his financial disclosure records.

Even though he left the state’s employ on February 28, his financial statement indicates he still received $52,961 in salary from the state this year and another $31,346 from Evans-Graves Engineers, the firm owned by his father, John Graves.

Graves flew pretty much under the radar until he became a high-profile opponent of the lawsuit filed by the Southeast Louisiana Flood Protection Authority-East against 97 oil and gas companies for damage to the state’s wetlands while at the same time carping at the U.S. Coast Guard for its failure to force BP to be more responsive to the Deepwater Horizon oil disaster. http://theadvocate.com/home/8290180-125/graves-to-step-down-from

His opposition to the lawsuit seeking to hold big oil responsible for the damage it has done to the state’s coastline for the past century notwithstanding, the real story of Garrett Graves is the awarding of more than $130 million in government contracts to his father’s engineering firm while he was head of CPRA, which oversees such contracts.

That figure represented an 1800 percent increase over contracts awarded to Evans-Graves for all years prior to Garrett Graves’ tenure at CPRA.

Some might call this old news, given the fact that Jeremy Alford first reported on this as far back as 2008. http://www.houmatoday.com/article/20080203/news/659908125

But the practice went unabated for years after his story and even more curious, when an ethics opinion was sought as to the propriety of the contracts, it was not the Louisiana Board of Ethics that was consulted, but attorney Jimmy Faircloth.

Faircloth, who was Jindal’s first executive counsel before running unsuccessfully for the Louisiana Supreme Court, has done extensive legal work for the administration, collecting fees in excess of $1 million defending losing positions that Jindal has championed.

But his issuing an ethics opinion in the case of Evans-Graves Engineering appears to have been a conflict in itself: Faircloth at the time was the legal counsel for Evans-Graves.

“As we discussed, Governor Jindal has asked that we disclose and commit to avoiding even the appearance of conflict,” Faircloth said in his opinion. “Thus, as we agreed, out of an abundance of caution, the appropriate solution is that your father’s company not pursue an interest in or receive any state contract that involves coastal restoration, levees or hurricane protection while you serve in the administration. This would explicitly include such contracts overseen by DOTD (Department of Transportation and Development) and DNR (Department of Natural Resources).”

Even though Garrett Graves in February of 2008 agreed to cease pursuing projects that could cause a conflict of interest, Evans-Graves kept receiving lucrative contracts from the U.S. Army Corps of Engineers, CPRA’s primary partner. And while Garrett Graves did not actually sign the contracts, his agency did set priorities for the state on corps-related work.

“I said from the beginning there was a potential conflict of interest, and apparently that fell on deaf ears,” said John Graves when the issue first arose more than six years ago. Jindal’s office professed to know nothing of the potential conflict.

And even though Garrett Graves was working for the state and his father’s company was receiving millions of dollars in contracts with the Corps of Engineers through Garrett Graves’ agency, Garrett Graves was given a Toyota Tundra truck by the elder graves in 2009, a clear violation of state ethics rules against state employees accepting gifts from vendors.

And while Evans-Graves was receiving millions of dollars in CPRA-approved contracts with the Corps of Engineers, Evans-Graves was subcontracting nearly $66.5 million in work to 18 construction and contract companies, compared to only $3.5 million prior to Garrett Graves’ appointment. Those 18 subcontractors have combined to contribute more than $250,000 to Graves’ congressional campaign.

Additionally, 11 of those 18 companies, along with corporate officers and family members, have combined to contribute nearly $316,000 to various political campaigns of Jindal.

Here is the list of subcontractors and the amounts they and/or their corporate officers and families contributed to Jindal:

  • Daybrook Fisheries—$1,000;
  • Industrial Specialty Contractors—$29,500;
  • Bollinger Shipyards—$65,850;
  • Major Equipment and Remediation—$50,000;
  • Arkel Constructors—$4,500;
  • Delta Launch Services—$11,000;
  • Cajun Constructors—$52,000;
  • Coastal Environments—$30,500;
  • Performance Contractors—$41,500;
  • H. Fenstermaker & Associates—$20,500;

JNB Operating—$5,000.

And now Garrett Graves just wants to move back into his $800,000 home in D.C.

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ATC Commissioner Troy Hebert apparently holding up application of retired agent McDonald’s ID commission

Posted in ATC, Commissions, Corruption, Ethics, Governor's Office, Retirement on October 10, 2014| 3 Comments »

Not only does Troy Hebert berate, intimidate, harass and even fire personnel, he keeps the pressure on even after they’re gone.

Hebert, director of the Office of Alcohol and Tobacco Control, has already been shown to be an egotistical administrator who insists that his underlings rise and greet him with a cheery “Good morning, Commissioner,” whenever he enters a room.

He has contracted with 17-year-old girls in efforts to entrap bar owners into selling alcohol to underage patrons.

He has said he would rid his agency of all black employees and indeed, has already had to settle one lawsuit with an African-American former agent whom he fired and is currently facing litigation from three others.

He has ordered an investigation into the background of LouisianaVoice’s Editor and even boasted that he could have LouisianaVoice’s computer hacked if he so desired.

He even threatened criminal trespass charges against a woman who took his crippled Great Dane dog home in the belief it had been abandoned.

But most demeaning of all, he forced agents to write essays as punishment as if they were school children.

In short, he has run his agency with the impunity of an out of control despot, instilling fear in his staff…because he can. And he has done so without the slightest fear of restraint or discipline from his boss, Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana).

Take the case of former agent Jeffery McDonald.

A veteran of 18 years in law enforcement, McDonald was summarily fired by Hebert for failure to answer charges against him that included a claim that his GPS indicated he was in one place for two hours when in fact he had been riding for five hours with another agent.

His fate was sealed, apparently, in a staff meeting in Baton Rouge when he disagreed with the ATC attorney who indicated she thought it unfair that ATC agents could have a take-home vehicle and she could not. Hebert at the time was attempting to institute a competition whereby top-rated agents would get a take-home vehicle. “They were pitting agents against each other in an unfriendly manner that was detrimental to morale,” McDonald said.

But prior to that, about two years ago, is when the real trouble started and typical Louisiana politics entered the picture.

McDonald and a Tensas Parish sheriff’s deputy raided a restaurant that was selling liquor without benefit of having obtained a permit to sell alcohol.

McDonald wisely turned the liquor over to the deputy for safekeeping at the sheriff’s office. Later, after a local mayor and a state legislator got involved, McDonald was contacted by his superiors and told “to return the evidence and to not file misdemeanor charges” against the owner of the establishment.

“I told them I didn’t have the liquor, that I had turned it over to the sheriff’s office,” he said.

State law says a law enforcement officer must be given 30 days in which to obtain legal counsel if he desires before his final termination. “But they didn’t do that,” he said. “They notified me on May 16 and ordered me to meet them on May 22 for an internal investigation,” he said. “I told them my attorney was out of town and I asked for a later meeting. I was on sick leave with a heart condition at the time. They never got back with me until they sent him his recommended termination notice on June 4. “It was hand delivered by state police on the 5th and they gave me until June 10 to respond but I was undergoing treatment was unable to respond by their deadline. They came to get my equipment on the 11th without providing the legally required seven days from receipt of notification,” he said.

“When they terminated me, they said I had not responded in a timely manner even though they did not give me the legally-required seven days.”

Frustrated with dealing with Hebert and his rules which seemed to change daily, McDonald put in for retirement. His retirement was approved on Aug. 22.

On Aug. 30, he wrote Hebert and the human resources departments of the Department of Revenue and ATC to request a retired ID commission card as allowed under state law.

A retiring agent is supposed to receive the commission upon retirement and McDonald did so eight days after his retirement went through.

Hebert, reportedly upset that McDonald was allowed to retire before he could fire him, has not responded to McDonald’s request.

Without his commission, McDonald cannot legally qualify to carry a firearm as a retired peace officer.

It’s not the first time a commission has been held up. Hebert’s policy regarding the commissions is all over the road; he issued one on the same day one agent retired while another who retired at the end of 2011 was forced to make several phone calls before getting his commission. A third waited eight months and before being given instructions to follow a vague, non-existent policy that including writing a letter to Hebert. Even after writing the letter and sending Hebert a copy of the federal Law Enforcement Officers Safety Act which explains the right to the commission, it still took intervention on the part of a state senator to finally obtain the commission.

Such is the manner in which Troy Hebert runs his shop.

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July 2014 Buck Consultants OGB report, emails contradict committee testimony of DOA Commissioner Kristy Kreme

Posted in Contract, Contracts, DOA, Ethics, Governor's Office, Health Care, Legislature, Legislators, Office of Group Benefits, Privatization, Public Records on October 8, 2014| 31 Comments »

If the Retired State Employees Association (RSEA) goes forward with filing a legal challenge to the proposed changes to health care coverage for state employees, retirees and their dependents, it may have a significant hook on which to hang its case in a report submitted by a company contracted by the Jindal administration which attempted to base its plan changes at least in part on that same report.

If you’re confused, you should be for Commissioner of Administration Kristy Nichols laid the decision to make the changes in the Office of Group Benefits (OGB) plan at the feet of Buck Consultants but the firm’s report is in direct contradiction to the testimony of Nichols at the Sept. 25 hearing of the House Appropriations Committee.

The proposed health benefit changes are so radical for some 230,000 OGB members that the RSEA has scheduled a meeting with a law firm which has tentatively agreed to take the case on a pro bono basis, says Frank Jobert, RSEA’s executive director. http://theadvocate.com/sports/southern/10465870-123/retirees-considering-legal-challenge

RSEA is looking at the failure to go through the necessary legal procedures for approval of changes in plan benefits and “diverting” money from the OGB fund balance which has dwindled from a high of more than $500 million to less than half that amount and which is projected to go broke next year if changes are not implemented.

Nichols has consistently blamed the financial condition of OGB on rising costs she attributed to the Affordable Care Act (Obamacare). Critics, however, point to three straight years of decreased premiums that allowed the state to commit fewer state funds to its 75 percent match which in turn allowed the administration to divert those monies to cover budget holes even as the reserve fund continued to shrink.

Nichols was consistently evasive when asked during last month’s hearings of the House Appropriations Committee, three times managing to evade the direct question of who the actuary was who recommended decreases in premiums over three consecutive years.

Finally, State Rep. John Bel Edwards (D-Amite), who had already asked the question once without getting an answer, observed, “In fiscal 2013, there was a 7.11 percent reduction in premiums followed by 1.8 percent even though health care costs were going up by 6 percent.”

In questioning Nichols during the Appropriations Committee hearing, Edwards had accused the administration of taking a “self-manufactured crisis” and turning it into an emergency “because we had a fund balance that was healthy.

“We had OGB members who were relatively happy with the plan and today we have an unhealthy fund balance and OGB members who are very unhappy.”

He then asked again, “What actuary told you these reductions were sound?”

Nichols, who was already halfway out the door—before the committee meeting adjourned—on her way to taking her daughter to a One Direction boy band concert in the New Orleans Smoothie King Arena where she watched from the luxury box assigned to Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana), replied, “Buck Consulting recommended a 2.25 percent decrease for calendar 2012.”

https://louisianavoice.com/2014/10/01/watching-kristy-kreme-nichols-responding-to-legislators-like-watching-jerry-lewis-movie-mixture-of-exasperation-humor/

Well, not exactly. When one reads pages ii and iii of the summary report of the Buck Consultants Actuarial Valuation at 7/1/2013, a starkly different message is conveyed.

http://www.doa.louisiana.gov/osrap/library/afr%20packetts/2014OGB_OPEBValuationReport.pdf

On Page ii, under the CLAIMS AND PREMIUM EXPERIENCE heading, the report says:

  • “Overall, the plan had favorable claims experience, resulting in a gain. The gain was offset by losses associated with premiums not increasing as expected. See Substantive Plan discussions below.”

Under SUBSTANTIVE PLAN on Page iii, the report says:

  • “It is our understanding that the Plan premium rates, used both to determine contributions from the various employer agencies and to set contributions required from the retirees, were set artificially low to draw down the OGB’s reserve fund… (emphasis added.) As noted above, premium rates were again lower than expected for this year’s valuation.”

Moreover, an email from Buck Consultants representative Tom Tomczyk to OGB CEO Susan West dated Sept. 28 (three days after the Appropriations Committee hearing) says, “The 2.25percent (rate decrease) was not a recommendation for January 1, 2012, but only used to validate our projections for the Fiscal Year 2012-2013. We did not recommend a decrease of 7 percent effective August 1, 2012, or an additional decrease of 1.77 percent effective August 1, 2013. Further, we were not asked to provide any recommended rate adjustments for any fiscal year beyond what we provided for Fiscal Year 2012-2013.”

In fact, according to that same email, Tomczyk said Buck Consultants was asked in late 2011 for its projection of the indicated rate increase for Fiscal Year 2012-2013. “At that time, based on the most recent claims information available, we projected a rate increase (emphasis added) of 1.75 percent needed as of July 1, 2012.”

An earlier email, on Nov. 12, 2013, from Tomczyk to West’s predecessor, Charles Calvi, who served as CEO of OGB from Jan. 9, 2012, to Jan 31, 2014, concluded, “We have not been asked to provide recommendations for rate adjustments since calendar year 2012.”

The consulting firm’s report, dated July 2014, noted significant decreases in several areas of net liabilities to OGB and gains in areas that benefitted the agency’s bottom line, according to two financial experts who were shown the report.

“As I see it, the Buck report directly contradicts the way Ms. Nichols has presented this,” one said. “Unless I do not understand plain English, Buck says, ‘Overall, the plan had favorable claims experience, resulting in a gain.’ How can a clear gain be a loss by anybody’s definition?”

He noted the following:

  • The actuarial accrued liability (AAL) for July 2013 was $103 million less than what had been projected in July of 2012, meaning that OGB was in better shape on July 1, 2013, than had been predicted. The AAL also increased by only $157 from last year when it had been projected to increase by $260 million.
  • The amount paid in claims was less than predicted and actually decreased the AAL by $195 million—and would have decreased it even more had premiums not been less than projected.
  • The report clearly attributes a loss to OGB of $388 million—totally a result of reduced premiums through Fiscal Year 2012 and that this loss was increased by additional decreases in premium rates in Fiscal Year 2013.
  • The report, on Page iv, minimizes the effect of the Affordable Care Act (ACA) on these calculations and points out that the ACA provided improvements in Part D coverage.

“I am frankly shocked at this report and what has been said about this whole thing by others,” he said. “Either I am totally stupid or it blows all previous explanations away.”

Edwards, commenting on the contents of the Buck Consultants report, said, “Nothing in this supports Kristy Nichols.”

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Kristy Kreme knows One Direction: ducks out on legislative committee for boy band concert at N.O. Smoothie King Arena

Posted in Contract, Contracts, DOA, Governor's Office, Health Care, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Teague on October 6, 2014| 25 Comments »

You have to hand it to Commissioner of Administration Kristy Kreme Nichols. When she has something to do, she is completely One Direction-al about it.

As the minutes ticked by during the House Appropriations Committee’s seven-hour hearing on the Office of Group Benefits on Sept. 25, and as Division of Administration (DOA) Executive Counsel Liz Murrill and the rest of the DOA pack occupied themselves by texting during heart-wrenching testimony from those who will be adversely affected by rising deductibles and co-pays, Kristy fidgeted.

She continued to fidget and to be as evasive as possible with her answers to questions from legislators until she suddenly “got an important phone call” and left the committee room. She did not return before the meeting finally adjourned.

In fact, it was not a telephone call that pulled her from the meeting at all.

One Direction, the latest boy band to make little girls squeal, was playing in the Smoothie King Arena in New Orleans and Kristy and her daughter (and possibly some of her daughter’s friends) watched the concert from the special Arena luxury suite assigned to Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana).

Kristy Kreme at the Smoothie King. Has a certain ring to it, doesn’t it?

Kristy Kreme could have told the audience the truth. Certainly OGB members, mostly retirees, who had traveled from all over the state to testify and to get answers would have understood that a teeny bopper band was more important to Kristy Kreme than the medical coverage of 230,000 state employees, retirees and dependents.

But you see, telling the truth simply is not her style.

Witness her repeated claims that the OGB $500 million reserve fund was reduced to only about half that amount because of Obama Care and rising health care costs. She made that claim repeatedly, blaming those two factors and those alone for the drawdown of the reserve fund when everyone on the committee and those in the audience knew better.

Everyone in attendance knew that three consecutive years of premium reductions in the face of rising costs was the reason the fund has been all but depleted. She would never admit that even though everyone knew that Jindal lowered the rates so that the state’s 75 percent contribution to member premiums would be reduced also, thus leaving money that would have gone to premium payments for Jindal to use to plug gaping holes in his budget.

Remember when Kristy Kreme’s predecessor, former Commissioner of Administration Paul Rainwater wrote that comforting letter to OGB members in April of 2011 in an effort to debunk all those rumors about increased costs and raids on the reserve fund? No? Well, we have it right here: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4F444D324D5441344C6C4245526A51344E7A413D

In that letter, Rainwater said members would continue to receive quality service and coverage, benefits would NOT change, and OGB’s administrative oversight would continue, “securing the continued success of all the plans.”

“As for the allegation that OGB’s surplus will somehow be ‘stolen,’” Rainwater continued, “let me be absolutely clear: this claim is categorically untrue.”

But that was yesterday, as Chad and Jeremy sang back in the 60s, and yesterday’s gone. Let us return to the AWOL Kristy Kreme.

Even as she was invoking her super powers to convince legislators and audience members that she had only the best interest of OGB members at heart and that the depletion of the reserve fund was beyond the control of the administration, the report of Buck Consultants, hired by Kristy Kreme said on page iii of its summary: IMG_9230

  • It is our understanding that the Plan premium rates, used both to determine contributions from the various employer agencies, and to set contributions required from the retirees, were set artificially low to draw down the OGB’s reserve fund, and it is our further understanding that this is a temporary deviation from the Plan’s substantive plan, which continues to provide for the legislated 75-25 cost-sharing under a “full subsidy” from the State. Our valuation anticipates that the 21 percent premium deficiency will be gradually eliminated on a uniform basis over five years from fiscal year 2015 through fiscal year 2019 through increases in retiree premium rates in excess of the underlying assumed health trend. The actuary notes that in the prior valuation at July 1, 2012, the plan incurred a loss of $388 million associated with premium rates lower than anticipated.

For the entire Buck Consultants report, click here. http://www.doa.louisiana.gov/osrap/library/afr%20packetts/2014OGB_OPEBValuationReport.pdf

State Rep. John Bel Edwards (D-Amite) said he had received a copy of the Buck report earlier. “Nothing in this supports Kristy Nichols,” he said.

Edwards has been a vocal critic of the proposed OGB changes, claiming that the increased co-pays and deductibles will create unnecessary hardships on retirees, some of whom are facing co-payments and deductibles higher than their monthly income.

The entire OGB affair has become so confusing that many OGB members were turned away from the first meeting held in Baton Rouge on Monday to explain the changes. Jindal fired about two dozen OGB workers in the last round of firings and Kristy Kreme immediately found it necessary to contract with Ansafone of San Diego, California, and Ocala, Florida which has been trying to hire 100 people in each state to man telephone banks to answer questions about Louisiana’s plan.

Kristy Kreme has already found it necessary to dispatch one OGB employee to San Diego to train Ansafone employees and now $107,000-a-year OGB Chief Operating Officer Bill Guerra is in San Diego conducting training sessions on how to answer questions from OGB members.

DOA, by the way, is supposed to be strapped for cash and there is a statewide freeze on out of state travel but apparently found it necessary to send Guerra to California for a month.

So, let’s recap:

  • Jindal fires most of the OGB employees, including director Tommy Teague, and turns over a perfectly smooth-running agency to Blue Cross/Blue Shield (BCBS) with promises of no changes in benefits or premiums.
  • Less than two years after BCBS takes over, the OGB reserve fund is depleted by one half.
  • The administration fires two dozen more employees because of a lack of work and then enters into a $1.3 million contract with a California company to respond to questions from Louisiana residents.
  • Kristy has to hire two executives from BCBS to help OGB CEO Susan West who apparently is not up to the task. One of those, who ostensibly serves under West, is paid a higher salary than West.
  • Kristy Kreme Nichols attempts to mislead legislators and OGB members by repeatedly saying Obamacare is responsible for rising health costs and the depletion of the OGB reserve fund. No one buys her story.
  • Kristy tells State Rep. John Bel Edwards that the OGB actuary, Buck Consultants, recommended a decrease in premiums but a single paragraph from the Buck Consultants report summary contradicts that claim.
  • Two OGB executives have been sent to California to attempt to teach Ansafone employees how to respond to questions from Louisiana residents.
  • Kristy Kreme ducks out on legislators near the end of the Sept. 25 hearing by the House Appropriations Committee to take her daughter to a One Direction concert in New Orleans where she and her daughter occupy Jindal’s suite at the Smoothie King Arena.
  • A survey of employee job satisfaction conducted in 21 agencies in the Division of Administration reveals widespread dissatisfaction and distrust of the administration. Understandably, the survey has never been released and its contents were not divulged until LouisianaVoice recently obtained a copy.

And now, Jindal is offering foreign policy advice to President Obama with the release of a “policy paper” that calls for more defense spending. http://www.nola.com/politics/index.ssf/2014/10/bobby_jindal_takes_on_obama_fo.html

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Edmonson Amendment notwithstanding, big dollar pay raises, aka pension spiking, could hook state for millions

Posted in Civil Service, Ethics, Governor's Office, Retirement on October 6, 2014| 5 Comments »

The Jindal administration may have been thwarted in sneaking through an amendment giving State Police Superintendent Mike Edmonson an extra $55,000 per year in retirement income but pay raises for at least 29 mostly unclassified employees could mean additional liabilities of $25 million to $42 million over 20-30 years for the Louisiana State Employee Retirement System (LASERS), LouisianaVoice has learned.

Even as merit pay increases for rank and file civil service employees has been frozen for the last five years, top tier employees, mostly unclassified supervisors and agency heads, have realized pay raises ranging from a one-year increases of 12.5 percent for the governor’s director of communications and 118.7 percent for the CEO of the Office of Group Benefits (OGB) to nearly 127 percent for the press secretary for the Department of Health and Hospitals.

No fewer than 10 of the pay bumps not surprisingly benefitted gubernatorial appointees and employees in the office of Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana), who has devoted much of his time while in the state to firing state employees, slashing medical benefits and trying to destroy the state retirement system.

Retirement for state employees is computed by multiplying the average salary for the top three earning years times the number of years employed times 2.5 percent.

Thus, in the case of Susan West, who was promoted from State Risk Administrator at a salary of $83,200 in 2013 to the $170,000-a-year position as CEO of Group Benefits, her retirement, should she remain at OGB for three years, would be based on the higher amount, a difference of $86,800.

Thus, if she retires after 20 years at her present salary, she will receive 50 percent of $170,000, or $85,000 per year as opposed to $41,600—an additional $38,600 per year—had she remained at the $83,200 pay level. That would mean an additional $1.158 million in retirement income over 30 years.

In her case and in the cases of a few others, the salary increases were the result of major promotions but in others, pay increases went with lateral moves or new assignments and some of the other promotions would appear to be just for the purpose of implementing pay raises for favored employees.

In the case of 20 employees, the pay increases were $1,000 or more bi-weekly, or at least $26,000 a year while 10 others’ pay increases ranged from $500 to $999 bi-weekly, according to records obtained from the Office of Civil Service.

And it’s all legal—as opposed to the backdoor attempt the Edmonson to revoke his decision to enter the state’s Deferred Retirement Option Plan (DROP), which locked in his retirement at his captain’s rank level when he entered DROP.

In that case, Jindal, his executive counsel Thomas Enright, State Sen. Neil Riser, Edmonson and his chief of staff, Charles Dupuy all appear to have conspired to sneak an amendment, aka the Edmonson Amendment, onto a law officer disciplinary bill on the final, hectic day of the legislature. The amendment sailed through both the Senate and House and Jindal promptly signed it into law only to have a state district judge rule the procedure unconstitutional.

By granting generous pay raises, a procedure known as pension spiking, retirement benefits are automatically ratcheted upward, even if the employees does not stay a full three years at the higher level.

If, for instance, an employee who made $75,000 two years in a row gets a $25,000 raise to $100,000 and stays for only an additional year, his retirement still goes up. Say the employee retires after 40 years. He automatically retires at 100 percent of his salary. Not the $100,000 level, but not the $75,000 level, either. Two years at $75,000 is $150,000. Add the one year at $100,000 and you get $250,000. Divide that by three years and his retirement is $83,000. So, by jacking his salary up by $25,000 for one year, he gets an additional $8,333 per year for the rest of his life.

In California, pension spiking could increase public pension costs as much as $796 million over the next 20 years the state controller said recently.

Besides West, here is pay raise information for a few other Louisiana employees since 2010:

  • Kathy Klebert, Assistant Secretary, Department of Health and Hospitals from July 1, 2010, to Jan. 21, 2011 at salary of $140,000; promoted to Deputy Secretary on Jan. 22, 2011 at salary of $145,000; named DHH Secretary on April 1, 2013, at salary of $236,000 upon resignation of Bruce Greenstein. Overall increase of 68.6 percent since 2010.
  • Ruth Johnson, former head of the Department of Children and Family Services—retired at salary of $130,000 per year on June 21, 2012, re-hired on May 27, 2013 as Director of Accountability and Research in the Division of Administration at $150,000; promoted to Assistant Commissioner on Sept. 30, 2013, at $170,000; promoted to Director’s title in the governor’s office on Feb. 24, 2014, at $180,000. Overall increase of $50,000 (38.5 percent) since June 21, 2010.
  • William Guerra, hired as State Budget Management Analyst 3 on May 3, 2010 at $48,500, promoted to Chief Operating Officer for the Office of Group Benefits on Feb. 20, 2014, at $107,000 per year, a four-year increase of $58,500, (120.6 percent).
  • Courtney Phillips, hired on Oct. 1, 2010, as a Program Manager 2 at a salary of $93,000, was named DHH Deputy Secretary at $145,000 per year on May 10, 2013, a three-year increase of $52,000 (55.8 percent).
  • William Jeffrey Reynolds, named DHH Medicaid Deputy Director on May 31, 2011, at a salary of $113,700, promoted to DHH Undersecretary on March 10, 2014 at $145,000, a three-year raise of $31,300 (27.5 percent).
  • Calder Lynch, hired on Oct. 25, 2010 as DHH Press Secretary at $52,000, on Aug. 26, 2013, was named Kleibert’s Chief of Staff at a salary of $118,000, a raise of $66,000 (126.9 percent).
  • Thomas Enright started on Mar. 8, 2010, as Executive Counsel for the Department of Veterans Affairs at $104,000 and on Feb. 4, 2013 was hired as Jindal’s Executive Counsel at $165,000, a $61,000 increase in only three years (58.7 percent).
  • Jane Patterson was an IT Telecommunications Technical Services Administrator on Nov. 18, 2012, at a salary of $126,000 and an IT Telecommunications Administrator on Oct. 1, 2013, at a salary of $131,500, a raise in less than a year of $4,900 (3.9 percent).
  • Christopher Guilbeaux was an $85,200-a-year Section Chief for the Governor’s Office of Home Security and Emergency Preparedness (GOHSEP) on June 29, 2011. Two years later, on Oct. 1, 2013, he was a $130,000-a-year Deputy Director, a raise of $44,800 (52.6 percent).
  • Stephen Chustz was appointed as Section Head at the Department of Natural Resources on Aug. 9, 2012 at $129,200, up $25,600 (24.7 percent) from his $103,600-a-year salary as Deputy Assistant Secretary on Sept. 30, 2011.
  • Jerome Zeringue has gone from Deputy Director of the Governor’s Coastal Protection and Restoration Authority at $126,250 in July of 2011 to advisor to the governor at since last Feb. 28 at $160,000, a $33,750 (26.7 percent).
  • Thomas Barfield came on board as Jindal’s Executive Counsel in July of 2009 at $167,000 per year but by July of 2013, he was the $250,000 per year Secretary of the Department of Revenue (DOR), a three-year increase of $83,000 (49.7 percent).
  • What’s the difference between an Assistant Secretary and a Deputy Secretary? Apparently, about $19,100 a year. Jarrod Coniglio went from Assistant Secretary of DOR on Oct. 15, 2010 at $107,800 to Deputy Secretary on July 1, 2013, at $127,000 (a 17.7 increase).
  • In just over a year, Andrew Perilloux went from Assistant DOR (May 27, 2013) at $90,000 to Under Secretary on Aug. 18, 2014 at $107,800, an increase of $17,800 (19.8 percent).
  • Joseph Vaughn, Jr. was making of $69,000 on Jan. 29, 2012, as an Assistant Director of DOR and was named Assistant Secretary on Jan. 30, 2012 at a salary of $107,800, a raise of $38,800 (56.2 percent).
  • Noble Ellington (you remember him, the legislator who retired and went to work as Deputy Commissioner of Insurance) is making $162,100 in that position, up $6,200 (up 4 percent) from Oct. 1, 2012.
  • Kyle Plotkin, the New Jersey import started out in the governor’s office on Nov. 19, 2008 as Press Secretary and on July 26, 2011, was named Special Assistant to the governor at $85,000. Less than three years later, on Mar. 4, 2014, he was named Chief of Staff at $165,800, a three-year increase of $80,800 (95 percent).
  • Michael Reed of Boston began as an $80,000-a-year Deputy Director of Communications on Feb. 4, 2013 and a year later was Director of Communications at $90,000 (12.5 percent).
  • The difference between Administrative Assistant and Executive Assistant apparently is $24,000. Elizabeth “Lizzy” Rayford Bossier was making $30,000 on Sept. 10, 2012, as an Administrative Assistant in the governor’s office. By July 22, 2013, she was making $54,000 as an Executive Assistant, an increase of $24,000 (80 percent).
  • Melissa Mann has gone from Executive Assistant in the governor’s office in February of 2010, at $54,000 to Assistant Director of Legislative Affairs on March 3, 2014, at $95,000, a $41,000 (75.9 percent) increase.
  • Elizabeth Murrill went from being the governor’s Executive Counsel on Nov. 5, 2010, at $110,000 to Executive Counsel and Chief Texter for the Division of Administration on Oct. 16, 2012, at $165,000, an increase of $55,000 (50 percent).
  • Ileana Ledet was making $63,300 a Public Information Director 2 for the Department of Insurance (DOI) on Feb. 7, 2011, and on Oct. 1, 2013, whe was earning $127,400, an increase of $64,100 (101.3 percent).
  • Keith Lovell was making $83,300 as a Coastal Resources Scientist Manager for the Department of Natural Resources (DNR) in May of 2010, and by April 1, 2013, he was making $109,200 as Assistant Secretary of DNR, an increase of $25,900 (31 percent).
  • Barry Landry was making $70,000 a year as a Public Information Director 1 for the Department of Education (DOE) on Jan 27, 2014 and less than five months later, on June 2, was making $85,000 as Press Secretary, a $15,000 (21.4 percent) increase.
  • Marian Lee Schutte was making $60,000 as a Coordinator for DOE on Dec. 2, 2011, and on July 22, 2013, she was a director earing $75,000, an increase of $15,000 (25 percent).
  • Robert Keogh has been a Procurement Director for DOE’s Recovery School District (RSD) since June of 2012 but his salary has also jumped $15,000 (25 percent) in two years, from $60,000 to $75,000 on May 12, 2014.

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