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Archive for the ‘Legislators’ Category

As Rep. Steve Scalise story grows, sordid details emerge about dark underside of the white supremacy movement

Posted in Fraud, Governor's Office, House, Judges, Legislators, Legislature, Media, Politicians, Senate on January 2, 2015| 43 Comments »

U.S. Rep. Steve Scalise’s claim that he did not know who he was talking to when he spoke to that meeting of the Workshop on Civil Rights hosted by the European-American Unity and Rights Conference (EURO) back in May of 2002 is coming unraveled like a cheap suit.

And so too, are the cover stories concocted by participants of that meeting who are trying to pull Scalise’s fat out of the fire.

And those accounts, with their unsavory associations and bizarre twists, constitute some of the most sordid stories imaginable, complete with bombing plots, pornography, escort services, mailing lists and dozens of politicians who subsequently went into scramble mode.

Mark Twain once said, “If you tell the truth, you don’t have to remember anything” and because of conflicting memories of those involved, the coverups appear to be spinning out of control.

Thanks to stellar investigative reporting by blogger Lamar White, Scalise’s position as House Majority Whip could go the same way as that of former Sen. Trent Lott (R-MS) who resigned his post as Senate Majority Leader following his association with a similar white supremacy group, the Council of Conservative Citizens (CCC). Lott resigned from the Senate five years later and now works, along with former U.S. Sen. John Breaux (D-LA) in the powerful Washington lobbying firm Squire Patton Boggs.

CCC and EURO have cross-pollinated over the years to the point where it’s difficult to distinguish one from the other with certain individuals having been—and remaining—members of both organizations.

One of those with just such dual membership is Kenny Knight of Prairieville.

Knight has publicly taken credit for issuing the invitation to Scalise to speak to the Jefferson Heights Civic Association at the Landmark Hotel in Metairie 12 years ago, but not, he said, to EURO, which was scheduled to meet in the same room later that day.

There are several problems with that story.

One, Scalise himself has made no such claim, choosing instead to plead ignorance that he was addressing a white supremacy group in 2002 while he was a member of the Louisiana House of Representatives. He makes no mention of any such civic association. http://www.businessreport.com/article/scalise-defending-amid-rising-scandal-regarding-2002-speech-white-supremacist-event

But claiming ignorance is a pretty weak defense given his comment years ago to New Orleans Times-Picayune reporter Stephanie Grace that he was “like David Duke without the baggage.” http://www.theneworleansadvocate.com/news/state/11213737-123/stephanie-grace-scalises-pitch-to

Duke, of course, was—and is—President of EURO and also addressed the Landmark gathering via teleconference hookup from Europe.

The second inconvenient snag in the failure to communicate (with apologies to the late Strother Martin of Cool Hand Luke) occurred when Knight told the Times-Picayune that he was not a member of EURO http://www.nola.com/politics/index.ssf/2014/12/david_duke_adviser_kenny_knigh.html

Barbara Noble, whom the Times-Picayune  said “was dating Knight” at the time of Scalise’s address (the implication being they might no longer be dating), backed up his claim. “Neither of us were members of EURO,” she said.

But while technically, Knight may not have a member of EURO, a quick check of the Louisiana Secretary of State’s corporate records reveals that he was not only a member of the organization’s predecessor, the National Organization for European American Rights (NO FEAR), he was the organization’s treasurer. (Duke changed the name to EURO after being sued for trademark infringement by No Fear, Inc.)

And what would be Noble’s motivation in having his back if she is a former girlfriend?

A further check of the Secretary of State’s web page also reveals that she and Knight both were officers of or affiliated with five separate corporate entities, three of which are still in good standing with the Secretary of State’s office.

All-American Health & Life Insurance of Metairie is not in good standing for failure to file its annual report with the Secretary of State, records show but both were listed as officers. Knight was the firm’s president she was vice president.

Southeast Solar Distributors likewise is listed as inactive by the Secretary of State. She was the company’s president and Knight its vice president when it was active, records show.

While she is not listed as an officer of T-Mart, Inc. of Prairieville, a telephone call to the business by LouisianaVoice reached her voice mail. Other active businesses in which the two are involved include Axcess Medical Clinic, Inc., of Prairieville (Knight is Director and she is Secretary) and Louisiana Men’s Clinic, Inc. of Mandeville (both are directors).

Louisiana Men’s Clinic is a facility that specializes in the treatment of erectile dysfunction http://louisianamensclinic.com/ while Axcess Medical Clinic appears to be an office complex for physicians owned by the pair.

Two months following Scalise’s address to EURO, Knight was on the Mississippi Gulf Coast representing CCC in its celebration after the Gulfport City Council voted to keep flying the confederate flag.

KENNY KNIGHT

(That’s Kenny Knight in the middle with the white shirt, brown shorts and white beard.)

Accompanying Knight at that rally was Vincent Breeding, one-time resident of Duke’s home and keeper of the EURO flame as its president while Duke served a federal prison term for fraud and tax evasion.

VINCE BREEDING

(Vincent Breeding is on the right wearing the slacks and tie. Kenny Knight is at the far left. And as one reader pointed out, these aren’t Ole Miss frat boys waving the Rebel flag.)

But Breeding, it turns out, had a much darker side. In addition to espousing the virtues of white supremacy, Christian beliefs and conservative values, he hosted an internet website which, in addition to offering graphic pornography, also provided an escort service that catered to all tastes, including black women. That would seem rather difficult to square with the EURO philosophy.

But then Duke himself once published a sexual self-help book for women entitled Finders Keepers under the pseudonym Dorothy Vanderbilt.

In 2003, Breeding was ousted from his leadership role in EURO and was succeeded by Knight but four years later, on Aug. 2, 2007, both Knight and Breeding, along with Barbara Noble, would participate in ribbon-cutting ceremonies for the Ascension Parish Chamber of Commerce.

Breeding, in addition to his porn web page and escort service and his previous employment at a Tampa strip club, once shared an apartment with one Todd Vanbiber who authorities thwarted in his plot to place 14 bombs along two major highways, I-4, the major access route to Walt Disney World, and U.S. 441. The bombings were planned for April 19, 1997, the second anniversary of the Oklahoma City bombing.

Another Duke associate, Don Black, was once shot while attempting to steal the mailing list of the National States’ Rights Party. The man who shot him was Jerry Ray, brother of James Earl Ray. Ironically, Black not only survived the gunshot, but later worked closely with Duke through his web page Stormfront and along the way, married Duke’s ex-wife.

Mailing lists, it turns out, constitute the life blood of organizations such as EURO, CCC, and the KKK. It is those mailing lists that allow the leaders of the organizations to solicit funds from those of like minds and it was just such a list that supported Duke’s lavish lifestyle that finally caught up with him.

And it was that same list that was sold to then-gubernatorial candidate Mike Foster in 1995 for $150,000. Foster failed to report the purchase as a campaign expenditure and would become the first Louisiana governor to be fined for violating the state’s code of ethics for elected officials.

But Foster was not the first by any stretch—nor the last—to be linked to such white supremacy groups. Louisiana Congressman John Rarick and Georgia Gov. Lester Maddox both were members of the old White Citizens Council, forerunner to the CCC.

Former Mississippi Supreme Court Chief Justice Kay Cobb addressed CCC on two occasions and Trent Lott five times, once telling its members that they stood “for the right principles and the right philosophy,” only to later claim he had “no idea” what the organization stood for (we’re beginning to detect a trend here). As nice saves go, Senator, not so much.

Lott also spoke at the 100th birthday celebration of Sen. Strom Thurmond of South Carolina, proclaiming that if the rest of the country had followed Mississippi’s lead in voting for the segregationist “Dixiecrat” when he ran for president in 1943, “we wouldn’t have had all these problems over all these years…” When Lott later apologized for his remarks, the CCC labeled him as “little more than a political prostitute.”

Former Mississippi Gov. Haley Barbour was elected largely on the strength of support from CCC and his photo even appeared with CCC officers on the organization’s website and former Georgia Congressman Bob Barr delivered the keynote speech at the CCC national convention in June of 1998.

Byron De La Beckwith, the man who in 1963 murdered civil rights activist Medgar Evers, was a CCC member as was Charles Sharpe. While serving as South Carolina’s Commissioner of Agriculture, Sharpe was arrested for accepting $20,000 in bribes to protect an illegal cockfighting ring.

And then there is Tony Perkins who, like Lott and Judge Cobb, addressed the Louisiana CCC. His appearance was on May 19, 2001 (almost exactly a year before Scalise’s appearance), when he was serving as a Republican state representative from Baton Rouge. Perkins currently serves as President of the Family Research Council in Washington, D.C.

These are only the more prominent public officials who have affiliated themselves with these groups. There are others. http://www.splcenter.org/get-informed/intelligence-report/browse-all-issues/2004/fall/communing-with-the-council

So we have the CCC, EURO, and the KKK, which are pretty much synonymous with their interchangeable memberships, rubbing shoulders with right-wing, family-values politicians who run for cover the moment the glare of public scrutiny is shone upon them. The only thing missing from the picture are the 30 pieces of silver.

All of which must, by necessity, raise this burning question: Is the price of political fraudulence worth the wear and tear on an elected official’s integrity?

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LouisianaVoice 2014 year in review Part Dieu; it just gets weirder and weirder as we barrel with abandon into 2015

Posted in ATC, Budget, Cartoons, Contract, Contracts, Courts, DHH, DOA, Elections, Ethics, Governor's Office, Health Care, Higher Education, House, Lawsuits, Layoffs, Legislators, Legislature, LSU, Media, Office of Group Benefits, Office of Risk Management, OGB, ORM, Privatization, Retirement, Senate, State Police, Veto, Vitter on December 31, 2014| 8 Comments »

In our lowlights review for the first six months of 2014, we were reminded by State Rep. Jerome “Dee” Richard (I-Thibodaux) that we had omitted a major low point in Louisiana politics.

Accordingly, we will preface our second half with the June veto by Gov. Bobby Jindal of HB 142 by Richard and Sens. Francis Thompson (D-Delhi) and Mack “Bodi” White (R-Central) which was pass unanimously by both the House (84-0) and Senate (37-0).

Called by Richard as the only “piece of legislation that would’ve done anything in the form of reform,” HB142 called for a reduction in consulting contracts. Richard said the bill also “would’ve provided transparency in the way the state hands out contracts” and would have provided savings that would have been dedicated to higher education.

“It just made too much sense to Bobby,” Richard said.

Jindal, on the other hand, said the bill would “hinder the state’s efforts to continue to provide its citizens with timely, high-quality services.”

Such high-quality services as paying $94,000 to a firm to assistant students to learn to play during recess; paying consulting fees to Hop 2 It Music Co. or to the Smile and Happiness Foundation.

Jindal also said the bill would “cause significant delays and introduce uncertainty to executing a contract” and would “discourage businesses from seeking opportunities to provide services to the people of Louisiana.”

Which now brings us to the second half of political news that could only occur in Louisiana.

JULY

Troy Hebert back in the news:

Three former ATC supervisors, all black, have filed a federal lawsuit in the Baton Rouge’s Middle District claiming a multitude of actions they say Hebert took in a deliberate attempt to force the three to resign or take early retirement and in fact, conducted a purge of virtually all black employees of ATC.

Baton Rouge attorney J. Arthur Smith, III filed the lawsuit on behalf of Charles Gilmore of Baton Rouge, Daimian T. McDowell of Bossier Parish, and Larry J. Hingle of Jefferson Parish.

The lawsuit said that all three plaintiffs have received the requisite “right to sue” notice from the U.S. Department of Justice pursuant to Equal Employment Opportunity Commission (EEOC) complaints.

So, where are all those savings we were promised?

To probably no one’s surprise except a clueless Gov. Bobby Jindal, the takeover of the Louisiana Office of Group Benefits (OGB) by Blue Cross Blue Shield of Louisiana a scant 18 months ago has failed to produce the $20 million per year in savings to the state.

Quite the contrary, in fact. The OGB fund balance, which was a robust $500 million when BCBS took over as administrators of the Preferred Provider Organization (PPO) in January of 2013, now stands at slightly less than half that amount and could plummet as low as an anemic $5 million a year from now, according to figures provided by the Legislative Fiscal Office.

There is no tactful way to say it. This Jindal’s baby; he’s married to it. He was hell bent on privatizing OGB and putting 144 employees on the street for the sake of some hair-brained scheme that managed to go south before he could leave town for whatever future he has planned for himself that almost surely does not, thank goodness, include Louisiana.

So ill-advised and so uninformed was Jindal that he rushed into his privatization plan and now has found it necessary to have the consulting firm Alvarez and Marcel, as part of their $5 million contract to find state savings, to poke around OGB to try and pull the governor’s hand out of the fiscal fire. We can only speculate as to why that was necessary; Jindal, after all, had assured us up front that the privatization would save $20 million a year but now cannot make good on that promise.

We can save, but we have to let you go…

The Jindal administration announced plans to jettison 24 more positions at the Office of Group Benefits (OGB) as a cost cutting measure for the cash-strapped agency but is retaining the top two positions and an administrator hired only a month ago.

Affected by layoffs are eight Benefits Analyst positions, three Group Benefits Supervisory spots, one Group Benefits Administrator, seven Administrative Coordinators, an Administrative Assist, two Administrative Supervisors, one IT Application Programmer/Analyst and one Training Development Specialist.

All this takes place at a time whe OGB’s reserve fund has dwindled from $500 million at the time of the agency’s privatization in January 2013 to about half that amount today. Even more significant, the reserve fund is expected to dip as low as $5 million by 2016, just about the time Jindal leaves town for good.

Completing the trifecta of good news, we also have learned that health benefits for some 200,000 state employees, retirees and dependents will be slashed this year even as premiums increase.

Neil Riser helps Edmonson revoke the irrevocable:

One of the single biggest state political stories of the year was the surreptitious attempt of State Sen. Neil Riser to slip an amendment into an otherwise nondescript bill ostensibly addressing procedures in handling claims against police officers that would have given State Police Superintendent Mike Edmonson an illegal $55,000 per year retirement boost.

Events quickly began to spin out of control after Riser first denied, then admitted his part in the ruse and as retired state police opposed the move and public opinion mounted against the move, Edmonson, after first claiming he was entitled to the raise, finally relented and said he would not accept the increase.

Meanwhile, Jindal, who signed the bill, was eerily quiet on the issue despite speculation he was behind the attempt to slip the increase into the bill.

State Sen. Dan Claitor, just to make sure Edmonson didn’t go back on his word, filed suit to block the raise and a Baton Rouge judge agreed that the bill was unconstitutional.

The bill, which quickly became known as the Edmonson Amendment, along with the Office of Group Benefits fiasco, constituted the most embarrassing moments for a governor who wants desperately to run for president.

AUGUST

Selective—and hypocritical—moral judgments

Gov. Bobby Jindal weighed in early on the kissing congressman scandal up in Monroe. When rookie U.S. Rep. Vance McAllister was revealed on video exchanging amorous smooches with a female aide, Jindal was all over him like white on rice, calling for his immediate resignation.

Jindal’s judgmental tone was dictated more by the philosophical differences between the two (McAllister wanted the state to expand Medicaid, Jindal most assuredly did not) than any real issues based on morals as Jindal’s silence on the philandering of U.S. Sen. David Vitter who did a tad more than exchange affectionate kisses.

Edmonson Amendment spawns other state police stories:

LouisianaVoice, in its continuing investigation of the Department of Public Safety (DPS), learned that a number of DPS employees enjoy convenient political connections.

  • Dionne Alario, Senate President John Alario’s daughter-in-law, is a DPS Administrative Program Manager;
  • Alario’s son, John W. Alario, serves as a $95,000 per year director of the DPS Liquefied Petroleum Gas Commission.
  • DPS Undersecretary Jill Boudreaux retired on April 28 from her $92,000 per year salary but the day before, she double encumbered herself into the position and reported to work on April 30 in the higher position of Undersecretary. Commissioner of Administration Angéle Davis ordered her to repay the 300 hours of annual leave (about $46,000) for which she had been paid on her “retirement,” but Davis resigned shortly afterward and the matter was never pursued.
  • DPS issued a pair of contracts, hired the contractor as a state employee, paid her $437,000 to improve the Division of Motor Vehicles and ponied up $13,000 in airfare for trips to and from her home in South Carolina. The contractor, Kathleen Sill, heads up a company called CTQ but the company’s web page lists Sill as its only employee.
  • Boudreaux’s son-in-law Matthew Guthrie was simultaneously employed in an offshore job and was on the payroll for seven months of the State Police Oil Spill Commission.
  • Danielle Rainwater, daughter of former Commissioner of Administration Paul Rainwater was employed as a “specialist” for State Police.
  • Tammy Starnes was hired from another agency at a salary of $92,900 as an Audit Manager. Not only was her salary $11,700 more than state trooper Jason Starnes, but she is in charge of monitoring the agency’s financial transactions, including those of her husband.

Thanks, retirees; here’s your bill for medical coverage:

LouisianaVoice was first to break the news that the Jindal administration was planning to force retirees out of the Office of Group Benefits by raising premiums astronomically and slashing benefits.

The news sparked waves of protests from employees and retirees alike, prompted legislative hearings at which Commissioner of Administration Kristy Nichols looked more than foolish in their attempts to defend the ill-conceived plan.

The entire fiasco was the result of the Jindal administrations foolish decision to cut premiums, which allowed the state to be on the hook for lower contributions as well. The money the state saved on matching premiums went to help patch those recurring holes in the state budget. Meanwhile, because of the lower premiums, the $500 million OGB reserve fund shrank to about half that amount as OGB spent $15 million per month more than it received in premiums.

All this occurred just three years after then-Commissioner of Administration Paul Rainwater, in a letter on the eve of the privatization of OGB, promised the continuation of quality service, rates that would be “unaffected” with any increases to be “reflective of medical market rates.” More importantly, he emphatically promised that benefits “will NOT change.”

HHS_2013_SNPS_35_Day

OCTOBER

What premium decrease?

Contrary to the testimony of Commissioner of Administration Kristy Nichols that Buck Consultants recommended that the Office of Group Benefits reduce premiums for members, emails from Buck Consults said exactly the opposite. State Rep. John Bel Edwards (D-Amite) had asked Nichols during legislative committee hearings who recommended the decrease and she replied that the recommendation came from Buck. All witnesses before legislative committees are under oath when they testify.

Surplus, deficit, tomato, to-mah-to:

Nichols “discovered” a previously unknown “surplus” of $320 million in mystery money that set off a running dispute between her office and State Treasurer John Kennedy—an argument that eventually made its way before the Joint Legislative Committee on the Budget.

With a tip of our hat to cartoonist Bud Grace, we are able to show you how that surplus was discovered:

JINDAL SURPLUS SECRET

(CLICK ON IMAGE TO ENLARGE)

Murphy Painter vindicated, Jindal humiliated:

Jindal’s attempted prosecution persecution of fired Director of the Office of Alcohol and Tobacco Control Murphy Painter blew up in the governor’s face when Painter was first acquitted of criminal charges, costing the state nearly half a million dollars in reimbursement of Painter’s legal fees, but Painter subsequently won a defamation suit against his accuser.

Secret survey no longer a secret but “no one” more popular than Jindal:

A survey to measure state employee satisfaction in the Division of Administration (DOA) should be an eye opener for Commissioner of Administration Kristy Kreme Nichols and agency heads within DOA.

Meanwhile, LouisianaVoice has learned that Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana) received some exciting news this week when a new poll revealed that no one was more popular among Republican contenders for the GOP presidential nomination.

The excitement was short-lived, however, when the actual meaning of the numbers was revealed.

It turns out that in a CNN poll of New Hampshire voters, Jindal tied with Rick Santorum with 3 percent, while “No one” polled 4 percent, prompting Comedy Central’s Stephen Colbert to joke that Jindal should adopt the slogan “Jindal 2016: No one is more popular.”

To shred or not to shred:

The controversy surrounding the sweeping changes being proposed for the Office of Group Benefits just got a little dicier with new information obtained by LouisianaVoice about the departure of Division of Administration executive counsel Liz Murrill and the possibly illegal destruction of public records from the Office of Group Benefits (OGB) and the involvement of at least two other state agencies.

While it was not immediately clear which OGB records were involved, information obtained by LouisianaVoice indicate that Murrill refused to sign off on written authorization to destroy documents from OGB.

We first reported her departure on Oct. 14 and then on Oct. 22, we followed up with a report that Murrill had confided to associates that she could no longer legally carry out some of the duties assigned to her as the DOA attorney.

But now we learn that the issue has spilled over into two other agencies besides OGB and DOA because of a state statute dealing with the retention of public documents for eventual delivery to State Archives, a division of Secretary of State Tom Schedler’s office.

Reports indicate that Schedler became furious when he learned of the destruction or planned destruction of the records because records should, according to R.S. 44:36, be retained for three years and then delivered to the state archivist and director of the division of Archives, records management and history.

NOVEMBER

Secret grand jury testimony of Greenstein made public:

The Louisiana Attorney General’s office, in an unprecedented move, released the 100-plus pages of testimony of Bruce Greenstein, former Secretary of the Department of Health and Hospitals but the testimony did little in revealing any smoking gun related to the state’s $180 million contract with CNSI. About the only thing to come out of his testimony was the indication of an incredible bad memory in matters related to his dealings with his former bosses at CNSI and a razor-sharp recall of other, more insignificant events.

Approval? We don’t need no stinkin’ approval:

The very first state agency privatized by Gov. Bobby Jindal was the Office of Risk Management (ORM) and after the state paid F.A. Richard and Associates (FARA) $68 million to take over ORM operations and then amended the contract to $75 million after only a few months, the agency was subsequently transferred three times to other firms. The only hitch was a specific clause in the original contract with FARA that no such transference was allowable without “prior written approval” from the Division of Administration. The problem? When LouisianaVoice made an FOIA request for that written approval, we were told no such document existed.

Edwards’ Last Hurrah:

Former Gov. Edwin Edwards, one of the most successful, colorful and charismatic politicians in Louisiana history, lost—decisively. Republican Graves Garrett rode the Republican tide to easily hand Edwards his first political defeat, dating back to his days on the Crowley City Council. Some may remember when Buddy Roemer led the field in 1987, forcing Edwards into a runoff. Technically, though, Edwards did not lose that election because he chose not to participate in the runoff, thus allowing Roemer to become governor. But he would return in 1991 to win his unprecedented fourth term.

DECEMBER

Friends of Bobby Jindal seeking donations:

A new web page popped up seeking donations for the Friends of Bobby Jindal, raising speculations of an attempt at a higher office (president?) since Jindal can’t run for governor again.

The new web page cited a speech by Jindal at a foreign policy forum at which he called for increased military spending.

Gimme the keys to the cars:

The Public Service Commission (PSC) became the second state agency (the State Treasurer’s office was the first) to openly defy Jindal when the administration demanded that the PSC relinquish possession of 13 vehicles as part of the administration’s cost-cutting measures.

We have already examined State Rep. Jerome “Dee” Richard’s attempt to cut consulting contracts which was passed unanimously by both the House and Senate but vetoed by Jindal.

But there was another veto that should be mentioned in context with Jindal’s penny wise but pound (dollar) foolish fire sale approach to state finances.

Earlier this year, State Sen. Jack Donahue (R-Mandeville) managed to get overwhelming passage of a bill that called for more oversight of the tax break programs by the state’s income-forecasting panel.

But Jindal, who never met a tax break he didn’t like, promptly vetoed the bill, saying it could effectively force a tax increase on businesses by limiting spending for the incentive programs.

Only he could twist the definition of removal of a tax break for business into a tax increase even while ignoring the fact that removal of those tax breaks could—and would—mean long-term relief for Louisiana citizens who are the ones shouldering the load. And for him to willingly ignore that fact borders on malfeasance.

Another (yawn) poor survey showing:

24/7 Wall Street, a financial news and opinion company, released a report which ranked Louisiana as the 11th worst-run state in America.

Louisiana, in ranking 40th in the nation, managed to fare better than New Jersey, which ranked 43rd, or eighth worst, something Jindal might use against Gov. Christ Christie if it comes down to a race between those two for the GOP nomination.

Louisiana had “one of the lowest median household incomes in the nation,” at just $44,164, the report said “and 10.7 percent of all households reported an income of less than $10,000, a higher rate than in any state except for Mississippi. Largely due to these low incomes, the poverty rate in Louisiana was nearly 20 percent (19.8 percent) and 17.2 percent of households used food stamps last year, both among the highest rates in the nation. The state’s GDP grew by 1.3 percent last year, less than the U.S. overall.

May we pray?

Meanwhile, Jindal prompted more controversy by having his favorite publisher and LSU Board of Supervisors member Rolfe McCollister run interference in securing the LSU Maravich Center for a political prayer event in January of 2015. The event will be sponsored by the controversial American Family Association and will not (wink, wink) be a political event, Jindal said.

And that, readers, is where we will leave you in 2014.

For 2015, we have an election campaign for governor to look forward to.

Just when you thought it couldn’t get any worse.

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With vouchers at stake, Fire Marshal ignores building’s deficiencies, zoning violations, OKs school construction

Posted in Corruption, Earl Long, Huey Long, Education, Ethics, Governor's Office, Legislators, State Fire Marshal, Vouchers on November 7, 2014| 9 Comments »

When State Fire Marshal Butch Browning isn’t busy defending his wearing of unauthorized military decorations and ribbons or trying to shift blame for a carnival ride that malfunctioned only seven hours after his office inspected it, injuring two children in the process, he apparently can play the political game as well as any state appointed official.

Remember the New Living Word School in Ruston? That’s the facility that had only 122 students in 2012, yet was approved for more than 300 vouchers by the Louisiana Department of Education (DOE) even though the school lacked teachers, classrooms, desks or other supporting facilities to handle the increased numbers.

In fact, construction was started on New Living Word’s school without anyone bothering to obtain the requisite building permits or to hire a licensed contractor. In fact, no zoning variance was even obtained to operate the school on property that was zoned for a church.

Moreover, the building itself had so many deficiencies that Ruston building inspector Bill Sanderson refused to approve the structure. Those shortcomings included partitions made of flammable materials and multiple electrical cords lying on the floor between wall outlets and computer equipment.

New Living Word, looking to lose tuition of $6,300 per student (an amount later determined by auditors to be excessive and all the vouchers for the school were pulled), could not afford to wait until all the requirements had been met.

Enter State Sen. Rick Gallot.

It certainly didn’t hurt that Gallot is a member of New Living Word Church and sits on the school’s governing board.

Suddenly, all those deficiencies and procedural violations went away after State Fire Marshal Butch Browning became involved.

Browning subsequently issued an amended approval letter, giving the school the green light to proceed with constructing classrooms in the upper floor of the church gymnasium. He said the school had not requested approval to build the classrooms but that “after further review and as a point of clarification, the upper floor…is included in the scope of the review and is acceptable.”

http://archive.thenewsstar.com/article/20120810/NEWS01/130110033/Fire-marshal-gives-school-go-ahead

The late John Hays, then-publisher of the Ruston weekly newspaper the Morning Paper, wrote on Aug. 27, 2012:

“Lobbying never fails, especially when Louisiana’s controversial school voucher program is the issue. After the state fire marshal fell I line, so, to, did the City of Ruston, approving a jury-rigged private school after a quickie inspection.

“Inspections were scheduled for Monday morning. But with 167 state vouchers (the number by then had been reduced from more than 300—before those, too, were yanked) at $6,300 each, New Living Word wasn’t willing to wait—just as it was not willing to apply for a zoning permit or a building permit or to hire a licensed contractor.”

Hays, holding both Browning and Sanderson responsible for bending the rules, went on to say that Neither Sanderson nor Browning had bothered to explain “why they didn’t pull the plug after New Living Word started construction without the required building permit and without a licensed contractor. Under Ruston 21 master plan, New Living Word was also required to obtain a zoning variance to operate a school on property presently zoned for a church,” Hays wrote.

“What Sanderson cannot change to anyone’s satisfaction is the fact that (church minister Jerry) Baldwin renovated two buildings without the benefit of a land use variance or a building permit, with a complete set of plans by a licensed architect or engineer, and without the use of a licensed general contractor and a licensed trade contractors,” the acerbic Hays said.

“Contrast this treatment of a politically-connected entity to that of a business that dared to ask that it be allowed to put up a sign slightly larger than the rules allowed,” said Ruston’s Walter Abbott on his Lincoln Parish Online blog.

Abbott, also writing about the New Living Word building permit controversy, then attached a link to an earlier story about a local realtor named Brandon Crume who wished to install a 32-square-foot sign in a location where such signs are limited to 16 square feet.

Bound by the rules, since there were no state politicians or appointees to intervene, the Ruston Planning and Zoning Commission denied Crume’s request outright, prompting Abbott to observe that a new business recently announced for Ruston “is showered with incentives, grants and glowing press coverage” and the press conference announcing its coming was attended “by numerous political dignitaries” while an “established Ruston business is encumbered with endless red tape just to remodel a building and put up a sign.”

“Maybe Brandon Crume needed a state senator on his payroll instead of facts and logic in his argument,” Abbott concluded.

The immediate question is why did Browning become involved when the local building inspector had already moved to halt work on the building? The obvious answer is that his intervention was on behalf of Baldwin and the school and not to support the local building inspector. It is equally evident that political pressure was brought to bear upon Sanderson to get him to ease up on the school which at the time, was held in high favor by DOE and by extension, Gov. Bobby Jindal.

And just what did Gallot promise Jindal in return for support from Baton Rouge via Browning’s involvement?

Shortcuts with safety regulations and procedures often can come back to bite you.

We can only hope there will not be a New Living Word incident reminiscent of the horrific school tragedy from the Robert Penn Warren’s All the King’s Men, the thinly-disguised Pulitzer-Prize winning novel about Huey Long which became the basis of two movies of the same name.

Or of the very real 2011 accident with the carnival ride in Greensburg that injured two siblings only hours after a State Fire Marshal’s inspection failed to shut the ride down because of the removal of an emergency brake on the ride.

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Like Wal-Mart price roll back TV ads, legislative committee likely to force OGB to roll back co-pay, duductible increases

Posted in DOA, Ethics, Governor's Office, Health Care, Legislators, Legislature, Office of Group Benefits, OGB, Privatization, Public Records, State Agencies, Teague on November 6, 2014| 19 Comments »

Two legislative committees charged with oversight of the Office of Group Benefits (OGB) are expected to demand that OGB roll back dramatic increases in health care co-payments and deductibles the agency is attempting to impose on hundreds of thousands of state employees to make up for the Jindal administration’s mismanagement of the agency when they meet in tandem on Friday.

The Senate Finance Committee and the House Appropriations Committee will meet at 10 a.m. on Friday but will not take testimony from the public.

The two committees are expected to instruct Nichols and OGB CEO Susan West to slash the increases in deductibles—some couples’ deductibles increased from $300 to $3,000 under the new plan being proposed by OGB–and co-pays.

OGB has already announced a two-month delay in the implementation of steep increases in prescription drug costs and will refund about $4.5 million in overcharges to state employees.

The Jindal administration is attempting to impose the co-pay and deductible increases as a way to recover hundreds of millions of dollars the administration managed to squander as a cost-savings to the state’s own contributions to employees’ premiums as a means to cover huge gaps in Jindal’s state budget.

The entire scenario reads like the script from an old I Love Lucy sitcom as everything the administration had done with OGB has blown up in its face in an improbable comedy of errors. How more insulting to legislators could it get than for Commissioner of Administration Kristy Nichols to provide false testimony to the Joint Legislative Committee on the Budget on Sept. 25 shortly before abruptly leaving the JLCB meeting to take her daughter to a boy band concert in New Orleans?

When asked point blank by State Rep. John Bel Edwards at that Sept. 25 hearing–before heading out to the Smoothie King Arena to settle into the governor’s luxury box seats for the concert—which actuary recommended that OGB reduce premiums by nearly 9 percent, she testified that Buck Consultants made the recommendation.

But Buck reportedly responded by email within days that it never made any such recommendation and that Nichols’ testimony was in direct contradiction to its recommendations.

A July report from Buck reinforces its claim that it never made any such recommendation. “We did not recommend a decrease of 7% effective August 1, 2012, or an additional decrease of 1.77% effective August 1, 2013. Further, we were not asked to provide any recommended rate adjustments for any fiscal years beyond what we provided for Fiscal Year 2012/2013,” the report says.

When witnesses sign cards prior to speaking before a legislative committee, they are certifying that they understand that their testimony is considered as being given under oath.

Edwards also asked at the hearing that Nichols or West provide him with a copy of that recommendation but he said on Wednesday (Nov. 5) that he still had not received that information. “I still have not received any actuarial recommendations for the 2013 and 2014 premium reductions at OGB,” he told LouisianaVoice. “Nor have they told me that such recommendations do not exist. Clearly, they do not.”

If someone were to set out to demonstrate how incompetent an administration could be, he would be hard pressed to find a better example than the manner in which it has handled the Office of Group Benefits—from firing an effective CEO who built up a $500 million reserve fund in favor of a revolving door approach to subsequent CEOs, to firing experience claims handlers with whom OGB members were comfortable, to hiring a California firm with no knowledge of Louisiana’s medical coverage program to handle telephone inquiries because experienced OGB staff were also fired, to attempting to implement emergency rules to enact the cost increases in co-pays and deductibles without the legally required public hearings, to having to refund $4.5 million in prescription drug overcharges for the same violation of the emergency rules procedures, to first claiming that it was not necessary to invoke the emergency rule and then deciding to do just that, to lying to legislators about actuarial recommendations of premium reductions.

The FUBARs and SNAFUs of OGB are so many and so irreversible that they should give pause to anyone who would entertain even the fleeting notion that Gov. Bobby Jindal is capable of leading the free world when, through his inept surrogates, he has, in less than two years, destroyed a relatively small but viable, efficient state agency.

Jindal and Nichols, of course, have a ready explanation for the OGB financial woes: medical costs have risen and it’s all Obamacare’s fault—never Jindal’s.

It’s the same arrogance level as that was demonstrated by Nichols in another appearance before a legislative committee when, trying to explain budget figures, she said somewhat condescendingly, “Let me dumb it down for you.”

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Jindal’s latest accounting ploy bolsters disturbing perception that his administration is quickly mutating into ‘Enron East’

Posted in Book Review, Budget, Business, Contract, Contracts, Corruption, DOA, Ethics, Finances, Fraud, Governor's Office, Legislators, Legislature, Office of Group Benefits, OGB, Politicians, Privatization, Public Records, Revenue, State Agencies, Teague, Transparency on October 12, 2014| 33 Comments »

When Jeff Skilling took over as President and Chief Operating Officer of Enron in June of 1990, he did so only after insisting that the company convert from conventional accounting principles to a method preferred by his former employer, McKinsey & Co.

In 2001, hedge fund manager Richard Grubman said to Skilling, “You are the only financial institution that can’t produce a balance sheet or cash flow statement with their earnings.” By October of that same year, Enron had begun its death spiral in a historic collapse that would pull the giant accounting firm Arthur Andersen down with it.

The key to Enron’s failure was the mark-to-market accounting method, where anticipated revenues and profits are entered into the company’s books before they are ever received. The system allowed Enron to conceal losses and to inflate profits for nearly 11 years before its house of cards came crashing down.

On Thursday (Oct. 8), nearly seven years into his administration, Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana) rolled out a new accounting formula with an alarmingly familiar ring to it.

Jindal, like Skilling, is a McKinsey alumnus.

Commissioner of Administration/Surrogate Gov. Kristy Kreme Nichols announced that the state, instead of having a deficit of $141 million as claimed by State Treasurer John Kennedy, will suddenly have a surplus of $178.5 million, a gaping difference of $319.5 million.

Nichols did not reveal how the $178.5 million was arrived at but Kennedy said the administration is switching to a cash balance form of accounting instead of the modified accrual basis employed by state governments. “If we use the methodology we have always used,” he said, “we don’t have a surplus. We have a $141 million deficit.

“The commissioner says the calculation has been inaccurate for years and it needs to be changed,” he said. “They have to explain why we have been doing it wrong all these years and why the Revenue Estimating Conference is doing it wrong.”

Nichols, an appointed state employee, was less than deferential to Kennedy, a statewide elected official when she sniped back at Kennedy, saying, “I’m surprised the treasurer is not reporting this.” She added that Kennedy is obligated to report available revenue. “He should probably do a review of the accounts to ensure there are no more outstanding revenues he is not reporting.”

Kennedy and Jindal have been at odds for years over fiscal policy, so it was no surprise to see Kristy Kreme, with her super-sized ego, get a little mouthy with the state treasurer. After all, she bolted from a House Appropriations Committee hearing on the Office of Group Benefits on Sept. 25 to take her daughter to a One Direction boy band concert at the New Orleans Smoothie King Arena where she watched from the comfort of Jindal’s executive suite.

Just as Enron misrepresented its finances for years, it now appears that the Jindal administration may be attempting the same tactic, prompting one political observer to say, “If cooking the books isn’t malfeasance, what is? The bond rating agencies and others rely on the CAFR (Comprehensive Annual Financial Report), where the year-end position is officially reported in decision making and they are not going to like this.”

Another Jindal critic asked rhetorically, “What happens when a state ends a fiscal year with a deficit of $141 million but the administration of the day pretends that there is actually a surplus of $178 million? I don’t think there is any precedent for such a thing ever happening anywhere. This is starting to sound like Enron!”

Odd as it may seem to make that comparison, the similarities between Jindal and Enron run much deeper than the latest developments surrounding the new accounting methods. Here are some points about Enron lifted from The Smartest Guys in the Room: the Amazing Rise and Scandalous Fall of Enron (Penguin Books, 2003), a probing book by Bethany McLean and Peter Elkind about the failed energy company: http://www.goodreads.com/book/show/113576.The_Smartest_Guys_in_the_Room

  • The Deutsche Bank once described Enron as “the industry standard for excellence.” Jindal boasted of instituting the “gold standard for ethics” in Louisiana.
  • When the chief accounting officer of Enron Wholesale expressed concern about wholesale electricity sales, she was reassigned. When another employee questioned Skilling on his claim that Enron was going to make $500 million, she was laid off that same day. When state employees or legislators complain or do not vote with the administration, they are teagued.
  • Pollster Frank Luntz said instability and chaos were defining features at Enron and the six company reorganizations in just 18 months were a “running joke” and that Enron’s lack of discipline was “destructive and demoralizing.” Jindal’s penchant for reorganization and reform has created a similar atmosphere within state government.
  • Enron sold assets and booked the one-time proceeds as recurring earnings. Nearly 40 percent of Enron’s 1998 and 1999 earnings came from sales of assets rather than from ongoing operations. Jindal over the past several years has sold state property, buildings, and entire agencies and turned state hospitals over to private entities.
  • Both Skilling and Jindal are alumni of the blue-chip consulting firm, McKinsey & Co., which wrote the Enron business plan and as far back as 1986, advised AT&T there was no future in the market for cell phones. McKinsey also was an advocate of mark-to-market accounting practices.
  • Both Skilling and Jindal thought—and think—like a consultant. Skilling felt that a business should be able to declare profits at the moment of the signing of an agreement that would earn those profits. But just because traders were reporting earnings under mark-to-market accounting, it did not necessarily follow that the money was in hand. See this link: http://theadvocate.com/news/10494146-123/jindal-budget-surplus-questioned
  • A Wall Street banker said of Skilling: “He’s either compulsively lying or he’s refusing to recognize the truth.” Another banker worried that Enron executives were not carrying out their fiduciary duties and questioned “sweetheart deals” negotiated by them.
  • Skilling believed that social policies designed to temper the markets were “wrongheaded” and counterproductive. “Wrongheaded” has been a favorite term invoked by Jindal whenever he has suffered setbacks at the hands of the courts on issues ranging from education reform to a revamp of state retirement plans.
  • When asked a question he didn’t like, Skilling, in a tactic learned from his days at McKinsey, responded by dumping “a ton of data on you.” Jindal’s one outstanding skill is to spew statistics and factoids in rapid-fire fashion that can overwhelm and confuse challengers.
  • Skilling, like Jindal, was considered brilliant and extremely articulate. He, like Jindal, always seemed to have the right answer and whenever he was asked about problems it was always someone else’s fault.
  • Skilling displayed no remorse for his own actions, nor did he have any sense that he hired the wrong people or emphasized the wrong values. (See above.)
  • Enron founder Ken Lay saw himself as a business visionary, much as Jindal portrays himself as a policy guru. Lay traveled the world to offer his wisdom on everything from energy deregulation to corporate ethics to the future of business. (Ditto)
  • At the end, Enron employees’ accounts were frozen even as top executives were walking away with fortunes.
  • Efforts by Enron and Arthur Andersen to avoid reporting $500 million in losses “only pushed the problem further off and added another tangle to the fragile web of accounting deceptions.” Do we really need to elaborate here?
  • Enron executives accepted the argument that wealth and power demanded no sense of broader responsibility which in turn led them to embrace the notion that ethical behavior requires nothing more than avoiding the explicitly illegal, that refusing to see the bad things happening in front of you makes you innocent and that telling the truth is the same thing as making sure no one can prove you lied.
  • Enron’s mission was nothing more than a cover story for massive fraud, much as Jindal’s administration is being exposed almost daily as a sham. The story of Enron, like that of Jindal, was a story of human weakness, of hubris and greed and rampant self-delusion, of ambition run amok, of a business model that didn’t work and of smart people who believed their next gamble would cover their last disaster—and most of all, of people who couldn’t—or wouldn’t—admit they were wrong.
  • Enron once aspired to be “the world’s greatest company” but rather became a symbol for all that was wrong with corporate America, exposing Lay’s flaws as a businessman that could no longer be hidden behind Enron’s impressive but misleading façade and Skilling’s glib rhetoric.
  • Despite Enron’s efforts to camouflage the truth, there was more than enough in the public record to raise the hackles of any self-respecting analyst (read: reporter). Analysts (read: reporters) are supposed to dive into a company’s financial records, examine footnotes and even elbow their way past accounting obfuscations. Their job, in short, is to analyze (re: report).

In the end, of course, Enron crumpled under the weight of its own corruption and mismanagement, destroying thousands of lives and even taking down one of the big five accounting firms in the process.

The Jindal administration with each passing day, with every revelation of some new scandal (the Edmonson Amendment, CNSI, the Murphy Painter fiasco, et al) and with each new flawed policy (the Office of Group Benefits debacle), is looking more and more like a train wreck that will adversely affect Louisiana citizens for years to come.

Just call it Enron East.

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