Feeds:
Posts
Comments

Archive for the ‘Health Care’ Category

Say it ain’t so, Bobby; tell us DHH (your area of expertise) is not a party to Ethics violation with Kliebert’s brother-in-law

Posted in Audit Reports, Commissions, Contract, Contracts, Corruption, DHH, Ethics, Health Care, Privatization, Transparency on February 26, 2015| 4 Comments »

There is more damage control awaiting the most ethical administration in Louisiana history and just as with the Bruce Greenstein saga, the Department of Health and Hospitals (DHH) is front and center.

The Louisiana Board of Ethics last Thursday (Feb. 19) voted to file ethics charges against Galen Schum, DHH Secretary Kathy Kliebert’s brother-in-law, because of his failure to comply with state law requiring him to report income he received from a company under contract to DHH. ETHICS CHARGES

On Nov. 17, 2011, while Schum was serving as Director of Regional Operations for the Office of Behavioral Health (OBH), Magellan Health Services signed a two-year contract with OBH to administer behavioral health managed care services for children and adults.

That contract, approved on Jan. 23, 2012, and which went into effect on Mar. 1, 2012, was originally in the amount of $354 million for two years, but was amended to a three-year contract for $547.78 million and is scheduled to expire on Saturday.

On Feb. 13, 2012, just three weeks after the contract was approved and just over two weeks before it went into effect, Schum submitted a job application to Magellan and was hired on Feb. 27, only two days before the contract took effect.

He resigned from Magellan on Jan. 31, 2014 but during the time he was employed there, he earned more than $146,000 in salary, according to documents obtained by LouisianaVoice.

Kliebert was serving as Deputy Secretary of DHH when the Magellan contract was approved on Nov. 17, 2011, and remained in that capacity until April 1, 2013, when she was elevated to her current position of Secretary.

State law (R.S. 42:1114) provides with respect to the filing of financial disclosure statements, “…that each public servant and each member of his immediate family who derives anything of economic value, directly, through any transaction involving the agency of such public servant or who derives anything of economic value of which he may be reasonably expected to know through a person which (1) is regulated by the agency of such public servant, or (2) has bid on or entered into or is in any way financially interested in any contract, subcontract, or any transaction under the supervision or jurisdiction of the agency of such public servant shall disclose the following:

  • The amount of income or value of any thing of economic value derived;
  • The nature of the business activity;
  • Name and address, and relationship to the public servant, if applicable, and
  • The name and business address of the legal entity, if applicable.

The disclosure statement is required to be filed each year by May 1 and shall include such information for the previous calendar year.

R.S. 42:1102 defines “immediate family” as the children of the public servant, spouses of his children, his siblings and their spouses, his parents, spouse and the spouse’s parents.

“Galen Schum violated …the Code of Governmental Ethics by failing to file a financial disclosure statement on or before May 1, 2013, disclosing income received during 2012 from Magellan Health Services, Inc., and on or before May 1, 2014…at a time when Magellan Health Services, Inc. had a contract with the Louisiana Department of Health and Hospitals—Office of Behavioral Health and while his sister-in-law, Kathy Kliebert, served as the Deputy Secretary and Secretary of the Department of Health and Hospitals,” the Board of Ethics document says.

The board issued a formal request that the Ethics Adjudicatory Board:

  • Conduct a hearing on the foregoing charges;
  • Determine that Galen Schum has violated (state law) with respect to the foregoing counts, and
  • Assess an appropriate penalty in accordance with the recommendation of the Louisiana Board of Ethics to be submitted at the hearing.

Other documents obtained by LouisianaVoice indicate that Schum, on Jan. 18, 2011, in his capacity as Director of Regional Operations for OBH, presented a report to the Louisiana Commission on Addictive Disorders on the status of OBH’s ongoing privatization efforts—efforts which led directly to the awarding of the Magellan contract.

It was at that same Jan. 18 meeting that Kliebert announced to the commission that she had been selected as the new DHH Deputy Secretary and would be leaving her position at OBH.

Schum also participated in a commission meeting on Oct. 11, 2011, at which time he gave the commission “a brief update on the Louisiana Behavioral Health Partnership,” according to commission minutes of that meeting.

Schum said that the selection of the Statewide Management Organization (SMO) had been completed and that Magellan Health Services “was the vendor selected to be the Louisiana SMO, and that the Office of Behavioral Health was currently involved in the contract negotiation process with Magellan.”

Finally, the minutes of a Magellan Governance Board meeting of June 20, 2012, indicate that Schum was employed as a Reporting Analyst for the company.

Magellan had come under sharp criticism from the Legislative Auditor’s office in August of 2013 in a report that said the administration’s privatization of mental health and addictive disorder treatment programs had created confusion and added costs for local human services district that provide the care. http://www.nola.com/politics/index.ssf/2013/08/audit_shows_privatization_of_m.html

That audit report, which examined privatization results at human services districts in Baton Rouge, Houma, New Orleans and Amite, said privatization had caused problems with claims payments which increased costs for the districts and made it more difficult for the districts to receive reimbursement for services. The report also said the districts lost money under a requirement that they use Magellan’s electronic health records system.

The Capital Area Human Services District in Baton Rouge, for example, told auditors that its administrative costs for billing claims had increased $270,000 a year since the privatization took effect. That cost was attributed to problems with claims reconciliation and collection, the audit said.

Meanwhile, the report said, DHH failed to ensure that Magellan processed claims in a timely manner, often taking weeks or months to process claims. The report also said DHH failed to penalize the company when it did not meet planning and technical benchmarks. “No sanctions have been imposed on Magellan for not meeting all required contract provisions,” it said.

Just another Jindaled state agency headed for yet another privatized train wreck.

But don’t say we never warned you.

Read Full Post »

Moody’s warns that Louisiana higher education can’t absorb further cuts; Gov. Bobby taking the state out of state colleges

Posted in ALEC, American Legislative Exchange Council, Budget, Economy, Education, Exemptions, Golf Courses, Governor's Office, Health Care, Incentives, Legislators, Legislature, Privatization on February 23, 2015| 23 Comments »

As our friend and former State Budget Officer Stephen Winham recently said when Moody’s and Standard & Poor’s recently moved Louisiana’s credit outlook from stable to negative, the bond rating agencies are finally waking up to what the rest of us have seen coming for some time now.

Now Moody’s has gone on record as saying what Gov. Bobby refuses to acknowledge: Louisiana’s public universities are not equipped to absorb additional credit stress expected with an anticipated cuts of yet another $300 million.

State Treasurer John Kennedy agrees while Joseph Rallo, barely acclimated to his new office after being chosen last October as the state’s eighth commissioner of higher education, tried to remain optimistic in the face of the latest announcement by Moody’s that the state’s colleges and universities are now in danger of having their credit ratings reduced if the legislature does not finally grow a set and stand up to Gov. Bobby.

“Moody’s is putting us on notice that it will reduce the credit ratings…if the legislature continues to cut higher ed funding,” Kennedy said. “We’ve cut our college campuses by $700 million since 2008. We’ve made deeper cuts than any other state. Enough is enough.”

Rallo told LouisianaVoice that it is not a matter of not having the revenue available to fund higher education, but rather it is an issue of allocation of funding. He said Moody’s is holding off taking the step of actually downgrading high education’s credit rating until June in order to see what the legislature will do to resolve the funding problem.

The problem at this point is twofold: Gov. Bobby refuses to take steps to increase revenue and legislators lack sufficient backbone to face Bobby down for fear of losing precious projects in their districts by veto. The legislature always blinks first.

Therefore, if Bobby won’t take steps to increase funding (he’s a party to that no-tax pledge the tea partiers forced down the throats of legislators and congressmen who had no taste for facing up to real problems and finding real solutions when self-serving rhetoric and pandering could get them re-elected), then the only alternative is to cut and cut again and then cut some more.

What these tea partiers and their ilk, including Gov. Bobby, refuse to admit in their manic pursuit of free market economics, is that corporate welfare (read lucrative tax breaks) costs this country many times what individual welfare costs and corporate fraud costs the nation billions upon billions more than the roughly 1 percent in documented welfare fraud (see details of the 2008 Wall Street bailout for verification). Corporations and corporate executives pay far fewer taxes, percentage-wise, than do middle- and low-income taxpayers in this country. Those are the cold, indisputable hard facts. To claim otherwise is to throw up that same tired old argument that the middle- and low-income are a drag on the nation’s economy while the super-rich produce wealth and jobs, thank you very much.

But Gov. Bobby would much rather continue doling out tax breaks that cost the state billions of dollars with little or no return than to take the necessary steps to pull the state out of the financial quagmire in which it currently finds itself and thus allow college to be affordable to the middle class and for the working poor of this state to have access to health care.

And legislators are a party to the scheme and must share the blame. Let’s consider some projects in the districts of four key legislators from the 2014 legislative session:

  • Appropriations Committee Chairman Rep. Jim Fannin: $13 million in projects, including the Jackson Parish Riding Arena and Livestock Pavilion ($195,000 last year, $1.4 million in Priority 2 and $1.6 million in Priority 5 funding;
  • Senate President John Alario: $121 million in projects for Jefferson Parish;
  • House Speaker Chuck Kleckley: $107 million in projects in Calcasieu Parish;
  • Senate Finance Committee Chairman Jack Donahue: $60 million in projects in St. Tammany Parish.

And then there are these little projects we found in last year’s capital outlay bill:

  • City Parish Golf Complex improvements (Orleans)—$9.1 million;
  • Junior Golf Training Facilities (Caddo)—$445,000;
  • Golf Course Development (Calcasieu)—$1.6 million;
  • Zephyrs Baseball facilities repair (Jefferson)—$1.5 million;
  • Professional Sports facilities improvements (Jefferson, Orleans)—$18.4 million;
  • New Orleans Sports Arena improvements (Orleans)—$41.5 million;
  • Bayou Segnette Recreation Complex (Jefferson)—$5.5 million;
  • Improvements to New Orleans Superdome—$6 million;
  • Recreational complex (Iberia)—$100,000;
  • Baseball stadium improvements (East Baton Rouge)—$1.4 million (Baton Rouge has no baseball team);
  • Improvements to amusement area, tennis center improvements (Orleans)—$1.2 million;
  • Repairs to Strand Theatre (Caddo)—$950,000;
  • Various community centers (statewide)—$11 million;
  • Various hall of fame projects (statewide)—$15 million.

One can just follow the money to see why legislators become shrinking violets when Gov. Bobby is holding that veto pen. Sure, there will be all manner of posturing, bluster and harangue but in the end, they always end up going along with whatever the governor wants.

And the governor wants what the American Legislative Exchange Council (ALEC) wants and ALEC wants to take the state out of state universities.

And Louisiana isn’t alone.

If you don’t believe that, just take a look at what is going on in Wisconsin, Illinois, Arizona and Kansas. http://neatoday.org/2015/02/19/cuts-to-higher-education-taking-public-public-universities/

  • Louisiana: Tuition costs have increased 90 percent since Gov. Bobby took office;
  • Arizona: Tuition has more than tripled while state funding has decreased by $3,500 per student;
  • Wisconsin: Like Louisiana, $2 billion tax cuts have resulted in $300 million in cuts to higher education that could eliminate the schools of nursing, law, business, pharmacy and veterinary medicine at the University of Wisconsin-Madison even as Gov. Scott Walker lobbies for $220 million in public donations to the Milwaukee Bucks to build a new team arena;
  • Illinois is losing $2.1 billion in tax revenues because of lawmakers’ refusal to extend taxes that are expiring even as colleges are facing a $400 million cut;
  • Kansas is projecting a loss of $5 billion in revenues because of reckless tax cuts and higher education, not surprisingly, is on the chopping block.

It’s not a coincidence, it’s a pattern. And what would one suppose these five states have in common besides this disturbing trend in higher education funding?

Republican governors who feel they owe their allegiance not to the voters of their states, oddly enough, but to ALEC and the Koch brothers who insist on defunding state colleges and universities in the hopes they will be forced to become private universities.

That, of course, will drive tuition up even further, necessitating much larger student loans and greater profits to lending institutions and Wall Street. It also will make a college education assessable only to the wealthy while relegating the rest of society to low paying jobs in the service sector in the absence of manufacturing jobs that have all been moved offshore.

Louisiana, says Moody’s latest assessment, has had the steepest declines in state funding in the nation from 2009 through 2014.

“As the state tries to close its widening budget gap, Louisiana public universities will face additional reductions in state appropriations,” the assessment said. “After five years of the deepest cuts to public higher education in the nation and significant expense reductions, these universities are ill-equipped to face additional credit stress.”

Moody’s said the timing and magnitude of budget cuts, the ability of universities to quickly align expenses with revenue, and the degree of financial cushion to absorb operating volatility “will factor into our assessment of ratings and outlooks for individual universities.

“Currently, Louisiana public university credit quality is lower than the median A1 nationally, reflecting historically weak state funding, anemic operating performance and limited liquidity,” the report said.

So while legislators wring their hands and gnash their teeth over the hard decisions they’re going to have to make this year, just remember no one held a gun to their heads and made them drop those golf courses and baseball parks into the Capital Outlay bill last year. And the year before that. And the year before that.

And remember that Gov. Bobby and ALEC do not (boldface that: Do Not) have the survival of our universities as public institutions as a priority item. If they are ultimately forced to become private colleges, that will be perfectly fine with them.

With all due respect to Dr. Rallo, we shouldn’t expect too much from this governor in the way of meaningful solutions to a problem that has persisted since he became governor more than seven years ago—long before the latest decline in oil prices which he conveniently uses as a scapegoat for Louisiana’s fiscal ills.

The late Wiley Hilburn, who headed up the journalism program at Louisiana Tech University, once told us that Bobby visited the Ruston campus when he was Commissioner of Higher Education under former Gov. Mike Foster, ostensibly to get an overview of university operations. Instead he spent his entire visit in Hilburn’s office playing computer games.

Perhaps that’s what Louisiana’s public colleges and universities are to Gov. Bobby—a game with students serving only as action figures for his personal enjoyment.

It certainly appears that that’s all this state is to him.

Read Full Post »

Buck Consultants had contract with MedImpact at time it recommended MedImpact for major contract in Alabama; later repeated recommendation for $500M OGB contract

Posted in Contract, Contracts, Ethics, Health Care, Lawsuits, OGB, Office of Group Benefits, Public Records, RFP, Request for Proposals on February 20, 2015| 7 Comments »

What began as an 18-month $350 million contract with a San Diego firm with ties to former U.S. House Speaker Newt Gingrich has morphed into a 15-month $500 million agreement with the Office of Group Benefits OGB to administer the state’s prescription drug program for more than 220,000 state employees, retirees and dependents.

But details have emerged that raise questions about a possible conflict of interests involving a consulting firm retained by a teachers benefits program in Alabama and OGB in Louisiana which ultimately recommended awarding contracts to the same company by both states.

OGB’s contract with MedImpact was originally for $350 million and was to run from Jan. 1, 2014 through June 30 of this year but has been amended to $500 million and the terms shortened to March 31, which equates to an increase of about 74 percent.

Gingrich launched the Center for Health Transformation as part of an ambitious consulting and communications conglomerate to let consumers, not health maintenance organizations (HMOs), choose their doctors, medical treatments and hospitals. http://hl-isy.com/Products-and-Services/Pharmacy-Benefit-Evaluator/PBE-Abstracts/2012/MedImpact

But Gingrich failed to reveal that his idea would be financially beneficial to drug manufacturers, health insurers and other health care professionals who paid up to $200,000 annually to participate in the center’s operations.

MedImpact was one of those companies.

Gingrich’s taking money from organizations and then using the weight of his name to advance their interests was described as “a massive financial conflict of interest” by Sid Wolfe, director of health research for the watchdog group Public Citizen. http://www.washingtonpost.com/wp-dyn/content/article/2007/06/10/AR2007061000484.html

Even former Congressman Billy Tauzin of Louisiana has entered the picture as co-chair of Medicine Access and Compliance Coalition (MACC), an assortment of health care providers who advocate lower drug prices through the federal 340B Program. http://www.huffingtonpost.com/2013/08/13/billy-tauzin-drugs_n_3719468.html

Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in the Medicaid drug rebate program to provide outpatient drugs at discounted prices to taxpayer-supported health care facilities that provide care for uninsured and low-income people. http://www.aha.org/content/13/fs-340b.pdf

Despite the magnitude of the MedImpact contract, it is the company’s connections to Buck Consultants, hired by the state to select the winner from among four proposals for that contract, which appears more than a little questionable.

OGB’s Notice of Intent to Contract for the Pharmacy Benefits Management (PBM) service, obtained from the Division of Administration (DOA) nearly four months after requested by LouisianaVoice—and then only after we filed a lawsuit against DOA—says, “Representatives of Buck Consultants, OGB’s actuarial consulting firm, provided assistance to the (selection) committee throughout the review and evaluation process.”

Buck Consultants, readers may remember, figured prominently in the controversy over DOA’s mishandling of OGB and the dissipation of more than half of OGB’s $500 million reserve fund.

Commissioner of Administration Kristy Nichols told a legislative committee that Buck Consultants had recommended that the state lower premiums for members of OGB, a move that led directly to the evaporation of the reserve fund. Communications between Buck and DOA obtained by LouisianaVoice, however, refuted Nichols’ claim.

Four firms submitted proposals to administer the prescription drug program for OGB. They were CVS Caremark, Express Scripts, Catamaran and MedImpact. CVS was disqualified because of sanctions imposed on the company in January of 2013 by the Center for Medicare and Medicaid Services (CMS).

Catamaran was the previous contractor but the company and the state have been involved in extended litigation which is expected to continue at least through June 30 of this year.

“As indicated in the Buck report, the proposal submitted by MedImpact has been determined to be the most advantageous to the state…,” said the Notice of Intent to Contract. “Accordingly, the committee recommends that the contract …be awarded to MedImpact.”

The connections between MedImpact and Buck, a global human resource benefit consulting firm that is part of the Xerox conglomerate, however raise conflict of interests issue—a relationship that LouisianaVoice traced back to the awarding of a contract to MedImpact in 2010 to administer the pharmaceutical benefits program for Alabama public school teachers, retirees and dependents through the state’s retirement system.

The Alabama Public Education Employees’ Health Insurance Plan (PEEHIP) board members, lacking pharmacy specialty training, retained Buck Consultants in late 2009 and early 2010 to handle the entire process, including writing the request for proposals (RFP), receiving and scoring the RFPs and making a recommendation for a contract.

Buck handled the entire process and gave the board the choice of contracting with MedImpact which was named by Buck primary contact person Michael Jacobs as having the best of several proposals submitted. The entire recommendation to the board took up a single paragraph in the board minutes.

The employee for the Retirement System of Alabama (RSA) who negotiated and signed the contract between the state and MedImpact later admitted in deposition that he had been involved in a relationship with a female representative of MedImpact.

But it was the relationship between Buck, Jacobs and MedImpact that warrants a closer look.

Even as he was contracted by RSA to issue, receive and evaluate the RFPs, it turns out that Buck, unbeknownst to Alabama officials, was simultaneously under a $50,000 contract to MedImpact. BUCK DEAL WITH MEDIMPACT

Jacobs, in a Dec. 23, 2009, letter to MedImpact Vice President of Business Development Bryan Boda, noted that the term of the contract was from Dec. 24, 2009, through Feb. 28, 2010, but upon written notice, “will be extended for an additional term, as mutually agreed to by both parties.”

Attached to that letter was a description of the scope of services to be provided by Buck which, among other things called for Buck to:

  • Provide MedImpact with marketplace information without disclosing anything to identify MedImpact’s proposal;
  • Collect competitor information, utilizing the internal proprietary Buck database of vendor information and drawing upon Buck’s “extensive data base” on PBM industry practices as well as outside public sources;
  • Develop a competitive employer marketplace analysis;
  • Present its final report during a final meeting with MedImpact at its (MedImpact’s) corporate headquarters.

It should pointed out that attorneys for three Alabama pharmacies excluded from participation in the prescription drug program for the teachers found it necessary to obtain the letter of agreement between Buck and MedImpact from Buck after MedImpact refused to provide the information.

The discovery of the contract between Buck and MedImpact during the time Alabama was in the process of selecting a prescription drug administrator for PEEHIP immediately raises the question of whether a similar arrangement existed between the two during the time Louisiana was selecting an administrator for OGB’s prescription drug benefits program.

An email to Buck Consultants posing that question was not answered.

MedImpact also refused to divulge what it was paying for prescription drugs, revealing only what it was charging Alabama. In one case, attorneys for the three pharmaceutical companies did obtain a document showing that MedImpact paid about $26 for an amoxicillin prescription but charged the state $96.

That, of course, also raises the question of how the billing is done by MedImpact for OGB. Does MedImpact pass along a 300 percent mark-up to OGB at a time when the state is, for all practical purposes, broke? MedImpact calls itself a transparent company but like our “transparent” governor, it has not been forthcoming thus far with details about what it pays for prescription drugs or about its contract with Buck Consultants.

And at the other end of the spectrum, it appears that not nearly enough hard questions have been asked by officials—either in Alabama or Louisiana.

After all, how can it be considered an acceptable practice for Buck Consultants to contract with a state to issue an RFP, evaluate the proposals and make a recommendation to award the state contract to a firm already contracted with Buck Consultants for Buck to collect competitor information?

Read Full Post »

DOA to LaVoice: ‘no records responsive to your request’ though some travel costs being sought already approved

Posted in Budget, Contract, Contracts, DOA, Health Care, Lawsuits, OGB, Office of Group Benefits, Privatization on February 18, 2015| 10 Comments »

Even as the governor’s office was imposing travel and spending freezes as the state continued to struggle with an overwhelming budget deficit last fall, the Office of Group Benefits (OGB) was spending nearly $9,600 to send two of its top executives on five separate trips to California and Florida to train new phone bank employees to handle inquiries about pending changes to health coverage for state employees, retirees and dependents.

The expenditures also occurred in the wake of Gov. Bobby’s depletion of the OGB reserve fund from $500 million before privatization of the agency to less than half of that by last September.

A Division of Administration (DOA) employee with close ties to Commissioner of Administration Kristy Nichols and Deputy Commissioner Ruth Johnson revealed to LouisianaVoice last year that DOA had contracted with Ansafone which has offices to set up the phone bank to take calls from OGB members.

When we were first told of the contract, we understood the company to be Answerphone, Inc., which is in Albany, N.Y. We later learned, however, that the company was actually Ansafone with offices in Santa Ana, California and Ocala, Florida.

The dates of travel for Elise Williams Cazes and Charles Guerra to destinations in California and Florida were from Sept. 9 through Nov. 13 with Cazes running up travel, lodging, meal and car rental expenses of $5,553.74 in three trips and Guerra accounting for the remaining $4,044.33 in his two trips, records show.

Guerra is the Chief Operating Officer for OGB while Cazes, previously employed by Blue Cross/Blue Shield of Louisiana (BCBS), was appointed Group Benefits Administrator last June.

The requirements for her position as the Medical/Pharmacy administrator responsible for benefit plan management and vendor performance were written especially to her qualifications, according to our same DOA source.

LouisianaVoice made a public records request on Oct. 4 for a record of Guerra’s expenses but received a response from DOA on Oct. 13 which said, “The Division of Administration has no records which are responsive to your request.”

But when DOA finally did comply with our request on Jan. 23—and only after we filed a lawsuit against the state on Jan. 16—records indicated that OGB CEO Susan West approved meal expenses of $457 for Guerra for the dates of Sept. 30 through Oct. 5. West signed off on that approval on Oct. 10, three days prior to DOA’s denial of the existence of expense records, meaning DOA had at least partial records in response to our request.

Moreover, records show that the state was billed $732.39 for Guerra’s hotel reservations for that trip on Sept. 23, a full 11 days before our request for the records was submitted and nearly three weeks prior to DOA’s denial of the records.

Likewise, Enterprise Car Rental invoiced the state another $225.82 on Oct. 5 for lease of a vehicle during Guerra’s visit to Santa Ana.

Finally, records reveal that Shorts Travel Management, which books all travel for state employees, billed the state $675.39 on Sept. 23 for Guerra’s Sept. 30 flight to California and his return to Baton Rouge on Oct. 5.

So, bottom line, the state was billed $2,090.60 for travel, car rental, lodging and meals for the first of Guerra’s two trips to California—all well before denial our public records on the basis of DOA’s claim that no such records existed.

For Guerra’s second trip to California, from Nov. 10 through Nov. 13, DOA paid $949.84 for his flight, $290.12 for his meals, $176.77 for his car rental, and $537 for his hotel. The remaining $175 was for parking, airline baggage fees and booking fees for both trips.

Cazes ran up her $5,553.74 in charges for two trips to California and one to Gainesville, Florida, as well as several trips for meetings in various localities in Louisiana in her personal vehicle.

She cost the state $787 for meals for the three out-of-state trips, along with $506.74 in parking and in-state travel in her vehicle, $2,452.34 for airline tickets, $532.80 in car rental fees, $1,197.86 for hotels and $77 in ticket booking fees.

In addition to the $9,598.07 in travel, lodging and related expenses for the two, the state also entered into a $1 million contract with Ansafone to hire 200 persons in California and Florida to field calls about sweeping changes being proposed for OGB at the time.

The “training” that Cazes and Guerra conducted on their trips consisted of a few days of reading handouts distributed to new employees hired to man the phone banks. At the end of training and the first day actually on the job the employees were informed that what they had been told in the training sessions was wrong and the Ansafone web page containing its “Five Star Recipe for Customer Service Failure” was subsequently taken down.

Read Full Post »

Two major investment rating firms threaten Louisiana with downgrade; state is now officially at the financial end game

Posted in Campaign Contributions, Corruption, Earl Long, Economy, Ethics, Exemptions, Finances, Fraud, Governor's Office, Grant, Grants, Health Care, Higher Education, House, Incentives, Jobs, Legislators, Legislature, Lobbyist, Media, Office of Group Benefits, OGB, PACs, Politicians, Revenue, Senate, Taxes on February 14, 2015| 29 Comments »

75b6e117b785e594d770c9bcc52fd34e_2phq_lt4o[1]

(CLICK ON IMAGE TO ENLARGE)

“That clanking sound you heard,” says blogger C. B. Forgotston, “was Louisiana’s proverbial fiscal can hitting the end of the road.” And he has been around state government long enough to know the signs.

“Like a kid behaving badly, we’ve been placed on probation,” added State Treasurer John Kennedy.

Both men’s assessments were in response to the double whammy of two investor rating services’—Moody’s and Standard & Poor’s—action to move Louisiana’s credit outlook from stable to negative on Friday and to threaten the more severe action of a downgrade.

“This should be a wake-up call that we need to stop spending more than we take in,” Kennedy said.  “We’ve drained our trust funds, we’ve relied on nonrecurring money and we’ve had to cut the budget in the middle of the fiscal year for too many years now.  Many have been warning that this day would arrive, and it has.”

The dual action by the two ratings services impacts $2.7 billion in outstanding general obligation debt and $1.25 billion in related debt.

Moody’s warned that continued structural imbalances, steep growth in pension costs, deterioration in financial liquidity and failure to contain costs in the state’s Medicaid system will result in a credit rating downgrade, making it more costly for the state to borrow money.

S & P added a warning that “Should budget adjustments fail to focus on recurring solutions or if the structural gap grows with continued declines in revenue or material reductions in federal program funding to the state, we could lower the rating” even further.

Gov. Bobby immediately attempted to put a positive spin on the bad news (or as Forgotston described it, tried to pour perfume on the manure pile to change the smell but not the content) by saying that the agencies didn’t lower the ratings on the existing outstanding General Obligation bonds.

But what Gov. Bobby did not say, according to Forgotston, was that the rating on those bonds was not lowered because the Louisiana State Constitution gives those bonds first call, even before employee retirement benefits, on all the money in the state treasury. “In other words, if the state goes bankrupt, those bonds will be paid,” he said, adding that future state borrowing will also cost more.

It could also mean that in the event of default, retirees won’t be getting their pension checks, something that should get the gray panthers up in arms.

At this point, we feel it important to point out—just in case anyone still needs reminding—that Gov. Bobby has been traveling all over the country (well, mainly to Iowa and Washington, D.C.) spewing his rhetoric about how he has cut the number of state employees, how Louisiana’s economy is out-performing other states, how new industry is locating to Louisiana, and how little it costs to attend LSU.

Except it’s all part of his big lie—except, of course, the part about hauling state workers out to the curb.

But if he is so hell-bent on claiming and then taking credit for all these wonderful events and trends (of course he never mentions the state’s high poverty rate, poor health care availability, our second lowest median household income, the eighth lowest percentage of citizens with a bachelor’s degree or higher, or our fifth highest violent crime rate), then he must shoulder the blame for the bad news as well.

Any coach will tell you that’s the way the game is played; if you take credit for the wins, you have to take the blame for the losses.

And of course, he never, never does that. Everything out of his mouth is about all the great accomplishments of his administration, and always spouted off in such rapid-fire fashion as to give little chance for argument from dissenters. It’s his style to overwhelm with statistics quoted by rote in his boring staccato delivery.

Well, Bobby, your rhetoric—and for that matter, you as well—are wearing a little thin.

The doubt began creeping in here in Louisiana midway of your first term and has continued to build until now the national media have caught on. Only last week, three or four national stories revealed the pitiful shape you are leaving our state in for your unfortunate successor to attempt to clean up.

Unfortunately, whoever follows you will most likely be a one-term governor because no one can clean up your mess in a single term and the voters are likely to grow weary of whoever is unfortunate enough to follow you and turn him or her out of office after four years in a desperate attempt to find a quick solution that in reality may take decades. You have set this state back that far (Thank you, Gov. Mike Foster for inflicting this plague upon us).

And, Gov. Bobby, you can just mothball your national political ambitions. Being President is a far distant fantasy by now and any prospects of a cabinet position are just as surely disappearing like so much sand through your fingers. You can now only accept that you will go down as one of, if not the most vilified governor in the history of this state. You have succeeded, by comparison, in making Earl Long appear to have been in full control of his mental faculties back in 1959.

And lest anyone think we are giving the legislature a free pass on this situation, think again. With only a handful of exceptions, those of you in the House and Senate have been complicit in this charade of governance. You have aided and abetted this pitiful excuse of a chief executive who, while pandering repeatedly that he had the job he wanted, nevertheless plunged full speed ahead toward his fool’s errand of seeking the Republican presidential nomination. Why, his own family was talking openly of his becoming President—at his first inauguration way back in 2008!

Moody’s and S &P were each quite thorough in laying out the reasoning for their simultaneous actions on Friday.

Moody’s said its action reflects a $1.6 billion structural deficit, continued budget gaps, the state’s large Medicaid caseload, job growth below the national average and significant unfunded pension liabilities.  “The negative outlook reflects the state’s growing structural budget imbalance, projected at $1.6 billion for fiscal 2016, or about 18% of the $8.7 billion general fund even after significant budget cuts of recent years,” Moody’s said. “The state has options for reducing the imbalance, including scaling back various tax credit programs, but the overall scale of balancing measures needed may further deplete resources and reduce the state’s liquidity, which has been one of its strengths.”

S & P was no kinder, citing Gov. Bobby’s reliance on non-recurring revenue which it said only served to increase future budgetary pressures. “In our view, the state’s focus on structural solutions to its general fund budget challenges will be a key determinant of its future credit stability.

“We could consider revising the outlook back to stable if revenue trends stabilize and if Louisiana makes material progress in aligning its recurring revenues and expenditures on a timely basis with a focus on recurring solutions. Should budget adjustments fail to focus on recurring solutions or if the structural gap grows with continued declines in revenue or material reductions in federal program funding to the state, we could lower the rating,” S & P said.

Forgotston, in his own unique way, tells us what Moody’s and S & P were really telling us: “Bobby, you and the legislators have made a big ‘number-two’ mess in your fiscal pants and we have no faith in your ability to clean it up. Folks, don’t let the legislators try to fool you; this is very bad news for us taxpayers and the legislators are the reason for it.”

Yes, it’s easy to blame Gov. Bobby because he has in his seven years initiated every Ponzi scheme one could imagine from giving away something like $11 billion in tax incentives (according to one recent story), to giving away the state’s charity hospitals, to robbing the Office of Group Benefits reserve fund, to attempting to rob the state’s retirement system, to refusing federal grants for needed projects, to rejecting Medicaid expansion and thus depriving the state’s indigent population access to decent health care which in turn led directly to the announced closure of the emergency room of a major Baton Rouge hospital. The list goes on.

But, as Gov. Bobby is so fond of saying, at the end of the day, it was the legislature, through the “leadership” of Senate President John Alario, House Speaker Chuck Kleckley and Appropriations Committee Chairman Jim Fannin that allowed him to do it by refusing to grow a collective set and stand up to this vindictive little amateur dictator.

This is an election year and Louisiana voters—particularly state employees, former state employees who have lost their jobs because of Gov. Bobby, teachers, retirees and the state’s working poor would do well to remember what this governor has done to them and which legislators voted to support the administration’s carnage inflicted upon this state.

There are those few in the House and Senate who have spoken up and tried to be the voices of reason but those voices have been drowned out by Gov. Bobby’s spinmeisters.

So when you vote for governor next fall, you would do well to ignore the TV commercials bought by those who want only to continue down this same path of economic destruction and growing income disparity and consider who you believe really has the best interest of the state, and not the special interests, at heart. In other words, think for yourselves instead of letting some ad agency do your thinking for you.

If you don’t get your collective heads out of the sand and in the most emphatic manner you can muster, tell your neighbors, your friends, your family, the clerk at the store where you shop for food and clothing, the cashier at the restaurant where you eat what this governor and this legislature have done to you and to them, then come next fall, you have no one to blame but yourselves.

The time for joking about Gov. Bobby is over. We’re at the end game now.

Read Full Post »

« Newer Posts - Older Posts »