Louisiana Voice

Here’s a can’t-miss formula for success that Gov. Bobby Jindal is asking us to accept with no questions asked:

First, hire a consultant who was hit with a major fine for misleading clients—we’ll call him Shady—to find employment for a second consultant—we’ll call him Sneaky—who was also fined for misrepresentation.

Then a third party enters the picture to contract with Sneaky to broker the sale of a major asset even as Shady continues to negotiate for full time employment for Sneaky.

Set the contract at $150,000 just for Sneaky to show up to make a determination of the asset’s financial worth.

Then, if the asset sells, well, let’s give Sneaky a nice fat bonus of say, $750,000 for providing “unbiased advice” on the bidding process and contract negotiations.

We will repeat that last part: Sneaky is expected to give “unbiased advice” in its efforts to collect an additional $750,000.

Remember, too, that Sneaky has already been fined $210 million for misrepresenting critical information “exactly when investors needed it most.”

That is precisely the scenario that currently exists with the contract between Morgan Keegan brokerage and the Louisiana Division of Administration regarding the proposed sale of the Office of Group Benefits (OGB) and its $500 million surplus.

After the state’s attempt to engage Goldman Sachs at a cost of $6 million to market OGB to private investors—you may remember that Goldman Sachs helped write the request for proposals (RFP) for the OGB sale and then submitted the only proposal—fell through over demands by Goldman Sachs that it be indemnified from any potential litigation.

A new RFP was then issued and Morgan Keegan was the low bidder last July.

But Morgan Keegan had recently agreed to pay $210 million to settle allegations that it had fraudulently marketed mutual funds filled with subprime mortgages and artificially inflated the funds’ prices.

So Regions Financial Corp., Morgan Keegan’s parent company, decided to divest itself of the troublesome brokerage firm.

So, who did Regions retain to explore “strategic alternatives” for Morgan Keegan?

None other than Goldman Sachs which, less than an year earlier, was fined $587 million over claims that it had misled investors in collateralized debt obligations linked to subprime mortgages.

Morgan Keegan eventually sold, but at a price that was less than the value it had recorded on its financial books.

Now comes word that if Morgan Keegan, which is being paid $150,000 to determine the financial value of OGB, will rake in a bonus of up to $750,000 more if OGB is subsequently privatized.

Commissioner of Administration Paul Rainwater promised that Morgan Keegan, which contributed $1,000 to Jindal’s 2007 election campaign, will provide “unbiased advice” in its efforts to help market OGB.

In what is becoming an all-too-familiar refrain, OGB board Chairman James H. Lee attempted to obtain a copy of the Morgan Keegan contract from the administration in November but was told it was not finalized.

The contract, however, was signed by Morgan Keegan’s managing director on Oct. 31 and an OGB representative on Nov. 2.

Something’s a little rotten here. It’s a lot like efforts to obtain the infamous Chaffe & Associates report last year. Jindal hired Chaffe to make a quickie determination of OGB’s book value but then Rainwater refused to make copies of the report available to legislators and the media.

When a copy of the report was finally “leaked,” it had dates that were inconsistent with receipt dates provided LouisianaVoice by Rainwater and the contract was not date-stamped as are all documents received by the Division of Administration (DOA).

Lee said he has been trying since August to obtain a quorum of the OGB board of directors but at least one of the governor’s three appointed members is absent for each meeting. Normally, there are five members appointed by the governor, but two of the appointive positions are currently vacant.

“It is my opinion that they (the Jindal administration) have the full intention of selling off OGB as quietly as possible before anyone realizes what is going on,” Lee said. “Should this happen, the active and retired employees of the state will see reduced benefits and the taxpayers will see increased costs,” he added.

Former State Sen. Butch Gautreaux (D-Morgan City), a former member of the OGB board, said he is unclear as to why Jindal insists on privatizing a state agency that saves the state money. He opined that the governor may want to dismantle OGB and its $500 million surplus in order to more easily criticize President Barack Obama’s national health-care program.

“He needs to destroy it (OGB) for his personal ambitions,” Gautreaux said.

That should come as no surprise to anyone who has watched this governor.

His first agency to privatize was the Office of Risk Management (ORM). The state paid F.A. Richard & Associates (FARA) of Mandeville $68 million to take over ORM. In less than a year, the FARA contract was amended by $6.8 million. Two weeks later, the contract was transferred—without the prior written consent of the state, as required by the contract—to a second firm and months later it was transferred to a third firm, again without the legally required written consent.

ORM was the first of a succession of agencies that Jindal has either tried to privatized or announced intentions to do so. They include state prisons, the state’s Medicaid program, OGB, and education.

The one thing that Jindal has never once explained to the voters of Louisiana is this:

If things are so badly run in this state, if things are so screwed up, if state employees are so stupid and lazy and teachers so pitifully inept and impossible to fire “short of selling drugs in the workplace,” (Jindal’s words, by the way) how did we ever make it this far?

How is it that one day we woke up as a state and realized that only one man had been anointed with the answers to all our ills, just one man who could solve the problems of state retirement, prison costs, Medicaid administration, public education, higher education, employee health benefits, and state agency risk exposure?

How is it that one man is so incredibly blessed with such vision, such gifts of perception, insight, understanding and infinite wisdom? How indeed?

We will probably never know the source of all his wonderful attributes. After all, as the Shreveport Times recently observed, Jindal has spent four years “limiting or avoiding extended interviews about his programs with journalists outside Baton Rouge, not to mention fighting efforts to open his administration’s records to public view.”

Considering the fact that the Times has consistently carried the water for the Republican ideology, those critical words are especially surprising—and harsh. The paper further observed that Jindal made dozens of trips to northwest Louisiana but most of those were controlled settings, so access was limited. “Fortunate is the hometown journalist who can ask a follow-up question before a governor’s aide whisks away his boss,” the paper said.

Earlier this week, the Baton Rouge Advocate noted that the Zachary and West Feliciana Parish school systems, two of the better performing systems in the state, are facing financial disaster because of Jindal’s refusal to increase funding through the Minimum Foundation Program for public education. It’s no secret that public education is subordinate to his obsession with funding charter schools, vouchers and virtual schools.

Only weeks after it was announced last March that ORM would be privatized, an ORM employee was in a restaurant in downtown Baton Rouge around 4:30 p.m. when Jindal aides strode in and informed her that she would have to leave because Jindal had a fund raiser scheduled at the restaurant at 5 p.m.

“I paid for my food and my drink and I’m going to stay right here until I finish,” the defiant employee said.

She did, and on her way out, she met Jindal as he was entering the establishment. Jindal approached her with his hand extended and asked, “How are you today?”

“Not well at all,” was her curt reply. “You just privatized my agency and put some good people out of work.”

Jindal blinked and mumbled, “I’m sorry” before moving past her.

Sorry, Guv, we aren’t buying it. To be truly sorry, one must first be compassionate and one must be sincere. It also helps to have a little class.

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