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Is the bloom fading from the rose that is Bobby Jindal? Perhaps so. Let’s take a look at a few recent developments

Posted in Campaign Contributions, Contract, Contracts, Governor's Office, Health Care, ORM, Office of Risk Management, Privatization on January 17, 2012| 2 Comments »

BATON ROUGE (CNS)—Gov. Bobby Jindal’s façade of invulnerability appears to be, if not crumbling, then at least in dire need of some major touch-up work.

Barely past steamrolling an opponent who had only about $39 in campaign funds and who yet somehow still managed 17 percent of the vote, Jindal finds himself:

• at odds with the state’s attorney general;

• joined at the hip with a loser in the presidential primaries;

• linked to a firm with contracts in Louisiana that is under scrutiny for cost overruns on a contract with the State of Texas;

• seeing his Medicaid privatization program, being run by several campaign contributors, get off to a less than auspicious start.

All that without re-hashing the ongoing shell game of just who is administering his first privatization project—the Office of Risk Management—at any given time. ORM has been handed off to the third company in just over a year since initially being taken over by F.A. Richard and Associates (FARA).

Nor have we, or anyone else, for that matter, bothered to mention the undercurrent of resentment between Jindal and Lt. Gov. Jay Dardenne.

It’s a poorly-kept secret that Jindal wanted ally Billy Nungesser as the lieutenant governor so that Jindal could privatize the Office of Culture, Recreation and Tourism in order to get his hands on that agency’s $30 million in statutory dedications. Jindal, in fact, hosted a $5,000-a-pop fundraiser on Tuesday to help Nungesser pay off his $1 million campaign debt. It was one of the few fundraisers Jindal attended in-state.

Which brings up another bone of contention between Jindal and Dardenne: Jindal over the past two years has spent an extraordinary amount of time out of state—and continues to do so—attending fundraisers for himself, for other candidates, and to hawk his book.

Yet, not once has he extended the courtesy to Dardenne the second in line for the governor’s office should something happen to Jindal, of informing the lieutenant governor on those occasions when he was out of the state.

His endorsement of Texas Gov. Rick Perry for the Republican presidential nomination—along with the candidate—is in the tank. After a contentious round of debates, caucuses, primaries and millions of dollars spent by PACs by nearly all the GOP hopefuls, it appears that the nomination, barring a major misstep, is Mitt Romney’s to lose.

Speaking of Texas, the Texas General Land Office has placed tighter controls on Kansas City engineering firm HNTB which encountered cost overrun problems with its contract to manage federal grants to Texas communities hit by hurricanes Ike and Dolly.

Gary Hagood, deputy commissioner for financial management at the Texas General Land Office, last week testified before the Texas Senate Committee on Intergovernmental Affairs that HNTB’s no-bid contract may have been improperly procured and that an amendment more than doubling the contract from its original $69 million to $144 million may also have been improper.

The land office assumed responsibility for the contract after the former agency in charge, the Department of Rural Affairs, was dissolved. If an audit determines that funds were improperly spent, the state could be required to repay millions of dollars to the Department of Housing and Urban Development (HUD).

HNTB was also was the lead consultant for Perry’s proposed Trans-Texas toll road system. Since 2007, the firm was paid $112 million by the Texas Department of Transportation for various projects, including $38 million for the toll road project, which was scrapped in 2009.

Ray Sullivan, Perry’s former chief of staff who now works with his presidential campaign, is a former lobbyist for HNTB, which has made nearly $35,000 in political campaigns to Perry since 2007.

The company has at least three contracts totaling $4 million with the State of Louisiana and while it has made several political contributions under its corporate name—$10,000 to the Republican Party of Louisiana, $1,900 to Jindal, and $2,500 to Nungesser, among others—it appears to prefer making its contributions through corporate officers:

• Paul Yarossi, a director in HNTB’s New York corporate offices—$5,000 to Jindal in February of 2011;

• Michael McGaugh of Baton Rouge, a manager for a HNTB-ABMB joint venture—$2,500 to Jindal in June of 2007 and $5,000 in November of 2010;

• John Basilica of Baton Rouge, a manager for a HNTB-CPE joint venture—$2,500 to Jindal in February of 2011;

• Mary D. Hinkebein of Carmel, Indiana—$1,000 to Jindal in February of 2011. Mary Hinkebein is the wife of Keith Hinkebein, a director with HNTB Holdings, Ltd.

HNTB contracts with Louisiana include one for $750,000 with the Department of Natural Resources to provide geotechnical assistance for coastal restoration projects on an as-needed basis; $300,000 with the Department of Transportation and Development to serve as an expert witness “with specialized knowledge of professional engineering fields,” and $3 million with the Office of Coastal Protection and Restoration “to provide the means for engineering assistance for coastal restoration projects on an as-needed basis.”

The $3 million contract is a joint venture with CPE, Inc.

As if that were not enough, barely a month after being hailed as a “hallmark moment,” the first phase of the rollout of the state’s new “Bayou Health” privatized health care system for the state’s poor and uninsured has been plagued by delays, technical difficulties and unanswered questions.

On Dec. 12, Department of Health and Hospitals (DHH) Secretary Bruce Greenstein said all five health plans contracted to manage care under the Bayou Health program were ready to begin operations in nine southeast Louisiana parishes. By mid-2012, he said, the plan would cover two-thirds of the state’s 1.2 million Medicaid recipients.

“This is a hallmark moment in our state’s journey toward improved health outcomes,” Greenstein said.

Instead, callers have complained of long wait times, incorrect information and technical difficulties in dealing with DHH and health-care providers have bombarded DHH with so many questions about how the new privatized system works that DHH has begun holding daily conference calls to address concerns.

The five companies participating in the Bayou Health system include Amerigroup, LaCare, Louisiana Health Connections, Community Health Solutions and United Healthcare.

All five have made campaign contributions to Jindal either directly or indirectly:

• United Healthcare made seven contributions totaling $25,000 to Jindal between November 2003 and December 2009 and $5,000 to the Republican Party of Louisiana in December of 2010;

• Louisiana Healthcare Connections Vice-President Jesse Hunter of St. Louis, MO., contributed $1,500 to Jindal in October of 2008 and McGlinchey Stafford law firm, Louisiana Healthcare’s agent of record, made six contributions totaling $22,000 between September 2003 and March 2011;

• Amerigroup made three contributions totaling $5,500 to Jindal in November of 2003 and in February and September of 2011;

• Community Health Solutions contributed $5,000 to Jindal in January of 2011 and John Fortunato, Jr., vice-president of the corporation’s agent of record, contributed $1,000 to Jindal in May of 2007;

• Neither LaCare nor any of its officers were found to have made any direct contributions to Jindal but the company’s agent of record, Adams and Reese law firm of New Orleans, made five contributions totaling more than $19,000 to Jindal between September of 2003 and December 2008.

Both Adams and Reese and McGlinchey Stafford law firms, it should be noted, also served as registered agents for other corporations, making it impossible to tie their contributions directly to the Bayou Health participating companies.

Recently, when LouisianaVoice made a formal request of the Division of Administration (DOA) for copies of the state contract report provided the Louisiana Civil Service Commission at its monthly meeting, DOA legal counsel David Boggs replied that no such report existed.

The same request was then made to Civil Service and that agency complied immediately.

The report from Civil Service shows that the contracts with LaCare (through its parent company, Amerihealth Mercy of LA., Inc.), Louisiana Health Connections and Amerigroup are for $985.8 million each while Community Health Solutions and United Healthcare have contracts for $68 million each.

The combined amount of the five contracts is almost $3.1 billion.

Finally, there is the simmering rift between Jindal and the state’s elected legal representative, Attorney General Buddy Caldwell, over procedural differences in the ongoing litigation over the BP Gulf oil spill.

Caldwell accuses Jindal of interfering with his handling of the case while Jindal’s chief of staff Stephen Waguespack, himself an attorney, claims the governor has every right to involve himself as the state’s chief executive officer.

At issue is the method in which each prefers to pay attorneys representing the state. Caldwell wants to pay the lawyers a set rate as work is performed while Jindal wants to pay a percentage of the final judgment.

The difference could mean millions of dollars to the state.

Federal Judge Carl Barbier of New Orleans has ordered plaintiff states, of which Louisiana is one, to set aside 4 percent of what could be billions of dollars in settlement money.

Jindal, to the outrage of Caldwell, signed off on a legal document in which he agreed not to appeal any awards made for legal fees.

It is rare, if not virtually unheard of, for one to sign away rights to appeal a verdict. Such action locks the party in on whatever unpredictable decision might come down.

Caldwell said that by agreeing to the 4 percent set-aside for lawyers, Jindal is in violation of both state law and the state constitution to direct money away from the state treasury to private lawyers.

He said his attempts to settle the dispute met with accusations by Jindal’s aides that Caldwell was trying to intimidate the governor.

Waguespack countered that Jindal is not afraid to meet Caldwell.

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A business climate survey that Jindal won’t be talking about

Posted in Business, Economy, Governor's Office, Health Care, Transparency on December 6, 2011| Leave a Comment »

It’s no big secret that Gov. Bobby Jindal is not above skewing statistics in order to achieve the results he needs to put him and his administration in the most favorable light.

To that end, he is a gifted spinmeister. For evidence of that, one need look no further than his recent campaign ads that so inflated the number of jobs created by his administration that the numbers became laughable.

If you are prone to listening to his self-promoting braying, you would swear that Louisiana is some kind of utopia for education, bond ratings, accountability, ethics, transparency, and business rankings. Maybe even for curing the heartbreak of psoriasis.

For the correct answer, however, you would need to check the box marked None of the Above.

While it is true that the state’s bond rating was upgraded from AA- to AA back in May, all it did was move the state into a tie for 26th place—a position shared by 19 other states. Because of the cluster of 19 states tied for 26th, the next spot on the rankings ladder was 46th—or in a 19-way tie for fifth-lowest rating. (Jindal’s PR machine would no doubt insist that the state improved its bond rating 20 places in one quantum leap but in reality, it was an advancement of only one place.)

Eleven states were tied for first with AAA ratings. Among those eleven were four southern states: Florida, Georgia, North Carolina and Virginia.

An internet research company, 24/7 Wall Street, has published its survey of the “Best and Worst Run States in America,” and Louisiana was listed as the fifth-worst state, ranking ahead of only Michigan, Arizona, California and Kentucky.

Among the factors considered in ranking the states, 24/7 Wall Street took into account the state’s $7,098 debt per capita (24th), its unemployment rate of 7.6 percent (31st) and median household income of $42,492 (41st).

The report noted that Louisiana ranks in the bottom 20 percent for most categories considered, including the violent crime rate, percentage of people below the poverty rate and percentage of people 25 years and older who have completed high school.

It ranked Louisiana the second most miserable state, right behind Michigan, largely because of the state’s poor physical health (an obesity rate of 30.3 percent tied for sixth highest and nearly four percentage points higher than the national average of 26.6 percent).
The report noted that Louisiana not only has the eighth highest level of diabetes (13.2 percent) and the fifth lowest “frequent consumption of produce” on average with only 54.1 percent of the population regularly eating vegetables, but also has the third highest percentage of people without health insurance (23.7 percent).

Finally, the report by 24/7 Wall Street ranks Louisiana with the sixth lowest ranking in the all-important area of environmental issues. The report puts the state at 45th, just ahead of Pennsylvania, West Virginia, Indiana, New Jersey and Ohio.

Louisiana, the report indicated, generated 3.8 million tons of toxic waste, third highest in the nation. Hawaii, with only 987 tons, had the lowest amount of toxic waste while West Virginia, noted for its coal mining industry, had only 92,000 tons.

With the sixth-smallest alternative energy budget in the nation, Louisiana ranks 46th among the states in energy-saving policies and programs, the report said.

“The state ranks horribly in water pollution, falling into the bottom five for releasing carcinogenic toxins, total water pollution, and chemicals which can cause birth defects,” the report said. At 3.8 million tons, “Louisiana also produces the third-most toxic waste each year,” it said.

If Jindal holds true to form, he will in all probability not attempt to address the state’s poor rankings in these areas. Instead, if he even acknowledges the report, look for him to attempt to put some type of positive spin on the statistics.

After all, he has already told us that “The business world is taking note of our work to expand and diversify the state’s economy while pursuing reforms to make government more fiscally responsible.”

If that’s not enough to convince you, Jindal, speaking just last month, said of the state’s robust business climate, “Since day one, we have made economic development our top priority by cutting taxes, revamping workforce training, and reforming our ethics code. These changes have helped transform the way businesses view Louisiana and that’s why our economy is out-performing the South and the nation. The bottom line is that Louisiana has become one of the best places in the country for businesses to create jobs…but we will not rest until Louisiana is the number-one place in the world for businesses to create jobs for our people.”

Chew on that for awhile, 24/7 Wall Street.

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With re-election all but a certainty, Jindal now turns attention to an ambitious agenda for second term

Posted in Civil Service, Education, Governor's Office, Health Care, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Retirement on October 16, 2011| 4 Comments »

BATON ROUGE (CNS)—With the outcome of this year’s gubernatorial election all but final heading into the last days of the 2011 campaign, it might be good to look ahead at what’s in store as Gov. Bobby Jindal prepares for his second term.

He has already partially unveiled his agenda for the next four years to trusted top staff. And not all staffers—including some cabinet members—are within his circle of trust.

If you think he was a bit ambitious with his agenda to reduce the role of government during his first term, you might want to find something to hold onto during the next four years. It’s going to be quite a ride. That’s provided, of course, he sticks around that long. There’s no guarantee of that because he does harbor national ambitions despite his comforting assurances to the contrary.

Details of Jindal’s plans for the coming four years remain sketchy but there are a few moves that can be predicted with relative ease. Others might be considered improbable if one chooses not to observe what conservative Republican administrations have managed to do in other states.

There is the privatization of the Office of Group Benefits (OGB), of course. That’s a no-brainer. It’s an emotional issue and those emotions are not likely to subside as the administration steps up its efforts to sell off what is arguably the most efficient agency in state government. But Jindal and his Commissioner of Administration Paul Rainwater have already sent signals that privatization of the agency is high on their bucket list.

Opponents point out that OGB currently has an administrative overhead of about three percent. That is because it is not required that the agency turn a profit nor does OGB pay taxes on premiums. A private concern would require an administrative cost of about 15 percent to allow for profits and tax liabilities. That would translate to a substantial premium increase for state employees and retirees.

OGB currently has a surplus of about $500 million but those funds are for the payment of benefits only and are off-limits to the administration. If OGB is sold for somewhere in the neighborhood of $150 million to $200 million, however, that money would go straight into the state’s general fund and that’s money Jindal wants desperately.

A recent development is more than a little telling on this issue. OGB has proposed a rate increase of about three percent but the administration has insisted on at least a five percent bump. A bigger premium increase would allow the $500 million surplus to remain intact, thus making the agency far more attractive to potential buyers.

Another nagging issue that Jindal is likely to address is the cost of the various state retirement plans, which currently are saddling the state with an unfunded liability of about $18 billion.

State employees presently have a defined benefit plan as opposed to a defined contribution plan. Look for the administration to take a long, hard look at changing that.

Defined benefits mean that employees pay premiums with the knowledge that their benefits are locked in. That benefit is computed by multiplying the average of an employee’s three highest years of earnings by 2.5 percent by the number of years of service. An employee who earned an average of $60,000 in his three best years over a 30-year career would multiply $60,000 by 2.5 percent, which is comes to $1500. That $1500 is then multiplied by the number of years of service (30) which computes to an annual pension of $45,000.

Under a defined contribution plan, contributions would be set and the money would be invested in much the same way as a 401(K) plan works. There would be no guarantee of benefits because that would depend on market fluctuations. That’s not a change desired by state employees after the recent Wall Street crisis.

State employee sentiments aside, one state legislator, Sen. D.A. “Butch” Gautreaux (D-Morgan City), outgoing chairman of the Senate Retirement Committee, pointed out that should the state convert to a defined contribution system, the state would then be required to begin paying Social Security premiums on state employees. State employees do not presently participate in Social Security.

“Going to a defined contribution system would not save the state any money,” Gautreaux said.

Jindal is almost certain to renew his efforts to privatize several state prisons. He tried earlier this year but backed off those efforts in the face of vocal opposition from prison employees, legislators, and local citizens. With no concerns about being elected to a third term, he is likely to make a harder push next year in an effort to pull in a few million more into the general fund.

Remember Rep. John Schroder (R-Abita Springs)? He’s the legislator who, in 2010, introduced four bills designed to abolish Civil Service and the Civil Service Commission and to give the legislator authority to decide which state employees would receive merit raises.

Those efforts failed and he did not renew his efforts this year, probably because it’s an election year. Those efforts are quite likely to resurface in next year’s legislative session as are attempts by Rep. John LaBruzzo (R-Metairie) to force welfare recipients to undergo drug testing. Previous attempts have never made it out of committee.

Though both measures by Schroder and LaBruzzo have gotten nowhere, consider Gov. Scott Walker who has effectively defanged the state employee union in Wisconsin. And in Florida, Gov. Rick Scott has signed into a law that requires adult welfare recipients to undergo drug screening.

Since day one, Jindal has worked nearly as hard on education reform as he has on political fundraising.

His penchant for replacing public schools with charter schools has incurred the wrath of public school teachers who are forced to accept all comers, to take the bad students with the good. Jindal’s charter schools, they say, have operated under the guise of open admissions when in reality, practicing selective admissions.

The recent school grades released by the State Department of Education would seem to bear that out. All but one of the top performing schools (24 of 25) were schools with selective admissions while 19 of the lowest 25 were alternative schools—those schools into which the poorest performing students are shunted.

Jindal’s efforts to privatize the state’s Medicaid program are likely to continue unabated. The Department of Health and Hospitals already has approved a $300 million contract to CNSI to implement the state’s Medicaid Management Information System. The contract raised eyebrows in the legislature because DHH Secretary Bruce Greenstein once worked for CNSI and Greenstein attempted to conceal from a legislative committee the identity of the contract winner.

With only token opposition in Saturday’s election, the only obstacle for Jindal’s agenda is the legislature itself. But with a solid Republican majority in both the House and Senate, any opposition there is likely to no less token.

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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 Ethics, Governor's Office, Health Care, Notable Quotables, Transparency on July 14, 2011| 8 Comments »

“My background is in health care.”

“When I ran for Congress I promised to help make health care affordable again.”

—Gov. Bobby Jindal, somewhere in a parallel universe, pontificating on health care. (He’s not a doctor, but maybe he’ll play one on TV when he’s through playing governor.)

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