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Fundraiser Jindal also serves as benefactor to political allies

Posted in BESE, Campaign Contributions, Governor's Office, House, Senate, Legislature, Legislators, Transparency on October 19, 2011| 4 Comments »

It seems that Gov. Bobby Jindal is not only skilled at raising money for what appears to be a re-election cakewalk but he also appears to be quite generous in doling out some of that campaign cash to other candidates.

Over the past 12 months, Jindal has written checks totaling $285,000 to 102 candidates for the legislature, the Board of Elementary and Secondary Education (BESE), and to a sitting legislator who is running for parish tax assessor.

It is one thing for a governor to award supporters in the legislature with key committee assignments through a friendly House speaker and Senate president but quite another to spread cash around in an effort to secure support for his programs.

Some of those candidates are running for BESE and Jindal’s agenda for education is every bit as ambitious as any other area of government. Heading his to-do list for education is his appointment of John White as State Superintendent of Education to succeed the departed John Pastorek. BESE has thus far blocked those efforts.

Some might even say it is a not-so-subtle form of vote buying. It’s a bit more sophisticated than passing out five dollar bills to voters before hauling them to the polls, but still an obvious back-door effort to consolidate his power base.

So, what’s so terribly wrong with a sitting governor who is a virtual lock to be re-elected providing assistance to candidates politically aligned with him?

For one thing, some of those to whom he has contributed are not necessary his political allies. A few are (gasp) Democrats. Granted, some of those may be Democrats on whom he may be able to count in a pinch.

Perhaps that is why certain other Democratic legislators running for re-election are noticeably absent from Jindal’s list of recipients; he can’t count on their support.

But consider this:

Donor John Doe gives Jindal a donation for his gubernatorial campaign. Jindal then gives $2,500 to Candidate A who is running against Candidate B for either the legislature or for a coveted BESE seat. But it turns out that donor John Doe is a personal friend and avid supporter of Candidate B.

If donor John Doe is a major Jindal contributor of say, $1,000, $2,500 or $5,000, it could create what Johnny Carson used to call a sticky wicket–especially if donor John Doe also contributed to Candidate B and now feels that contribution has been negated, perhaps with his own money.

Jindal, of course, is free to spend campaign donations for any political purpose he deems worthy. In theory, at least, donations are supposed to be free of any strings or conditions. But we know how that works.

One of the more high-profile recipients is BESE member Chas Roemer, son of former Gov. Buddy Roemer and brother of Caroline Roemer Shirley, executive director of the Louisiana Association of Public Charter Schools.

Jindal made identical $2,500 contributions to Chas Roemer about three weeks apart—on Aug. 15 and on September 6.

Chas Roemer consistently votes on matters involving charter schools that come before the board despite an apparent conflict of interest because of his sister’s position. The Louisiana Board of Ethics has, in fact, issued a ruling that Ms. Shirley is not allowed to appear before the board on matters involving charter schools because of her brother’s membership on the board. The ethics board also has ruled that she should not even communicate with BESE members on matters involving charter schools for that same reason.

Jindal also contributed $5,000 to the campaign of Jay Guillot of Ruston.

Guillot, who is seeking a BESE seat, is a partner in the multi-disciplined engineering firm of Hunt, Guillot and Associates (HGA) that has contracts with the state totaling almost $17 million.

The largest of those, for $16 million, calls for the firm to manage grants for infrastructure “and other projects undertaken as a result of damages incurred as a result of hurricanes Katrina and Rita and to a lesser extent as a result of hurricanes Gustav and Ike,” according to the contract description provided by the Division of Administration.

Jindal also wrote campaign donation checks of $2,500 each to Democrats Jim Fannin of Jonesboro, Rick Gallot of Ruston, Francis Thompson of Delhi, and Sharon Weston Broome of Baton Rouge. Fannin is Chairman of the House Appropriations Committee, which may explain that contribution. Donations to the others would have to be investments in future key legislative committee and floor votes.

He also wrote a $2,500 check back on July 29 to the campaign of State Rep. John Schroder (R-Abita Springs). Schroder, it may be remembered, authored a number of bills in 2010 that would have abolished the State Civil Service Board, the state civil service system, and would have given the legislature final authority on which classified (civil service) employees–if any–would receive merit pay increases.

Schroder did not make a similar effort this year, possibly because it is an election year, but some observers feel he will renew those efforts in next spring’s legislative session.

The most curious contribution, however, was the $2,500 donation Jindal made to the campaign of State Rep. M.J. “Mert” Smiley (R-St. Amant) on Aug. 2. Smiley is not seeking re-election but instead is running for Ascension Parish tax assessor.

It was Smiley who, during testimony about the mass exodus of employees of the Office of Risk Management in the wake of that agency’s privatization, asked if there was not some regulation in place that would prevent employees from leaving for employment elsewhere. “Isn’t there some way you can make them stay?” he asked.

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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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Jindal plays fast and loose with jobs claim TV campaign ad

Posted in Economy, Governor's Office, Jobs, Legislature, Legislators, Transparency on September 29, 2011| 9 Comments »

First of all, an explanation is in order for our lack of diligence over the past two months.

We have been under contract to edit a lengthy book manuscript for a publishing company. By lengthy, we mean 250,000 words that had to be boiled down to 130,000 while leaving the story intact. To give some perspective to word count, the 130,000 would translate to about 350 pages of book text.

Now to the issue at hand.

Gov. Bobby Jindal seems to be a virtual lock for re-election. (Still, the Boston Red Sox went into September with a nine-game lead for the wild card spot in the playoffs and promptly went 7-20 and lost the wild card to Tampa on the final day of the season, so in the words of the old Fats Waller song, One Never Know, Do One?)

A similar scenario is not likely in the October 22 election for several reasons. First, and let’s go ahead and get this out of the way: Jindal is smart, as in politically savvy. Never forget that. He’s also brilliant at remembering numbers and statistics and can recite them with little prompting. That also makes him intelligent. No argument there.

Second, he has a commanding advantage in campaign funds—something like $9 million to about $5,000 for Haynesville schoolteacher Tara Hollis, his nearest competitor.

But intelligence, political smarts and money do not a good governor make.

His biggest asset appears to be the manner in which he twists and distorts numbers and cons Protestant church members in north Louisiana when he sets down in his helicopter on Sunday mornings to dispense federal stimulus checks that he was against before he was apparently for them.

And don’t overlook that clever ploy he pulled off awhile back when he duped the legislature into approving the awarding of special pins to Louisiana military veterans. Legislators thought they were going to get in on the act of handing out the medals in their districts but it wasn’t to be. Jindal very politely hijacked that idea, pre-empted the lawmakers and went around the state handing them out to grateful veterans himself.

As if that weren’t enough, now he is exploiting that seemingly magnanimous gesture by incorporating it into his campaign ads. That’s a new low in campaign tactics, if you ask us. If you’re going to recognize our military veterans, governor, then it should be done in a more dignified manner and certainly should not be used for political gain. But then Jindal has shown he is not above any action so long as it reaps political benefits.

He even has one ad that shamelessly sucks up to the NRA, the robust outdoorsman that he is. But we won’t wade off into those murky waters.

Our personal favorite among his TV campaign ads (we can only surmise he has to spend some of that campaign money for appearance sake) is the one in which he touts all the job gains for the state under his administration. Where he plucked his numbers from is literally beyond the scope of our admittedly limited imagination.

In rapid-fire order, the ad flashes names of companies and the number of jobs “created” by his administration. To get all the numbers, one must constantly stop and restart the Youtube video. So we did. In all, the ad names 17 companies across the state, giving the impression that each one is a new company to Louisiana when in fact many are simply companies already domiciled in the state which announced expansions that they quite likely already had on the planning board. Nothing the governor did had any bearing on those expansions. Not that Jindal had any compunction about claiming full credit, mind you.

But it’s the numbers flashed on the screen that bear closer scrutiny. To verify Jindal’s numbers, we simply went online to the companies’ own web pages, the Louisiana Department of Economic Development web page, or online news accounts.

Let’s start with the chicken plant in Farmerville, way up in Union Parish. Farmerville is only a few miles from the Arkansas border as the pullet flies. Jindal’s ad says the $50 million plant (run by one of his campaign contributors, by the way) is responsible for 3,970 jobs. Does Farmerville even have 3,970 people? Probably more but it’s unlikely they all pluck chickens. In fact, Foster Farms’ own web page puts the employment number at only 1,060. That’s about 2,910 short of Jindal’s inflated number. But perhaps he is counting the owners of the broiler houses where the chickens are raised to maturity. Maybe he’s even including the truck drivers who take the birds to the plucking plant. Of course, there’s the U-Fill-Um convenience store where the truckers purchase their diesel fuel. There must be at least three or four employees in that store. And those truck drivers have to eat on the road sometimes, so add the burger flippers at the hamburger joints to the number. Or would that be the servers at the local Foster Farms Crispy Fried Chicken Shack, Used Lumber Emporium, House of Prayer and Snake Farm?

But here’s the real kicker about that chicken plant: no matter what the actual number is, we’re told on pretty good authority that about 60 percent of the plant’s employees reside in Arkansas and drive in the 10 or 15 miles each day.

Here are some others:

• Nucor Steel in St. James Parish—Jindal’s TV ad says 6,050 jobs. The Nucor website says 650. Whoa. A spread of 5,400 is pretty big, even in gut bucket politics;

• Blade Dynamics in New Orleans—Jindal claims 1,570 jobs. Blade Dynamics says 600 on its website;

• Globalstar moving to Covington—Jindal’s ad says 1,300 jobs. Globalstar says the number is closer to 500;

• LaShip in Terrebonne Parish—Jindal says there will be 2,282 new jobs but news accounts put the number at only 1,000. Moreover, LaShip is owned by the Chouest family and the company was the direct beneficiary of Jindal’s $10 million investment of state funds for the Port of Terrebonne in 2008. Jindal received 18 campaign contributions totaling $85,000 from Chouest family members and Chouest businesses;

• DG Foods in Bastrop—was supposed to produce 1,253 jobs instead of 317 actually realized;

• National Electric Warranty—298 jobs touted were unverified;

• CenturyLink—Monroe company simply expanded, producing 1,150 new jobs, not the 1,970 claimed;

• ConAgra—Sweet potato processing plant in Delhi created 500 jobs which was not nearly as sweet as the 1,920 claimed by Jindal;

• Schlumberger—Shreveport oilfield equipment company expanded operations, which only “secured” 120 existing jobs, far short of the 650 new jobs claimed;

• Ronpak—Shreveport fast food packaging company produced 175 jobs, 500 short of Jindal’s boast of 675;

• Northwest Pipe—446 new jobs claimed by Jindal far exceeded 120 actually realized;

• ADA-ES—Red River Parish activated carbon processing facility announcement made no mention of Jindal’s claim of 280 new jobs;

• Zagis USA—Jefferson Davis Parish cotton yarn company claims it will have one of the lowest production costs (read salaries) in America and its 161 jobs is far short of the 805 claimed by Jindal;

• Aeroframe—Expansion of this Chennault Airport facility in Lake Charles will add 300 new jobs, not the 880 hyped in the TV spot;

• Cheniere Energy—Sabine Pass terminal in Cameron Parish produced 148 new jobs and retained 77 as opposed to new 737 jobs claimed by Jindal.

• Northrop Grumman—This donor to Jindal’s wife’s foundation was supposed to produce 339 new jobs with its Lake Charles expansion but in fact created only 80 while retaining the existing 217 positions. Moreover, those numbers were offset with the June announcement that the company had to refund $35 million in economic incentive money to the state when it failed to meet minimum employment totals at its Avondale facility near New Orleans. Somehow, that little factoid didn’t make it into the TV ad.

Bottom line: the ad claims the Jindal administration created 25,425 new jobs through his Department of Economic Development when in fact only 6,729 new jobs were actually created by the 17 new or expanding industries. That number is a whopping 18,696 shortfall from the number claimed in Jindal’s ad–delivered in typical staccato fashion–and only 26.5 percent of the total claimed.

A quarterback who completes only 26.5 percent of his passes quickly finds himself on the bench.

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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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Jindal’s privatization roadmap pockmarked with potholes

Posted in Charters, Education, Ethics, Governor's Office, Grant, Grants, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Privatization, Transparency on August 24, 2011| 1 Comment »

Gov. Bobby Jindal’s efforts towards privatization of state government can best be summed up in a single word: disastrous.

If a movie were to be made of the manner in which this administration has carried out its perceived mandate to privatize state prisons, education, health care, risk management and the Hazard Mitigation Grant Program, it would almost certainly feature Larry, Moe and Curly playing the parts of Jindal, Commissioner of Administration Paul Rainwater and former Superintendent of Education Paul Pastorek.

Take, for example, the $340 million, 10-year contract awarded by the Department of Health and Hospitals (DHH) to Maryland-based CNSI Corp. It’s difficult to imagine that anything could be botched any worse than the manner in which the contract winner was announced.

The awarding of the contract just happened to coincide with the confirmation hearings on DHH Secretary Bruce Greenstein. Smelling blood in the water, members of the Senate Governmental Affairs Committee asked Greenstein point-blank to name the company awarded the contract.

He refused.

And with good reason, it turned out. It turned out that Greenstein had once worked for CNSI. But, he assured the committee members after finally identifying the CNSI as the winning bidder for the contract to process Medicaid claims for the state he had taken himself out of the selection process and even erected a “firewall” between him and the contract selection.

But wait. There’s more. Turns out that Greenstein did indeed have some contact with his old employer and in fact, implemented changes in the request for bids that allowed CNSI to submit a proposal. That proposal actually ranked third among four bidders on the technical merits of its proposal but won the contract based on the lowest price which is still one of the largest contracts ever awarded by the state.

While it might not be privatization in the truest sense of the word, let’s go back to the 2010 legislative session when Rep. John Schroeder introduced a slew of bills aimed at dismantling state civil service and the Civil Service Board. Had his bills been successful (they weren’t), what would Jindal have replaced civil service with, contract workers? That’s already being done to some extent as we shall see presently.

Schroeder backed off at this year’s legislative session. It is, after all, an election year. But if he and Jindal are re-elected, don’t be surprised to see the civil service bills resurface. Even if Schroeder is not re-elected, Jindal will likely find a friendly legislator to introduce some version of the bills next year.

Then there were the privatization battles fought on two fronts during the 2011 session: prisons and the Office of Group Benefits (OGB). Both were shelved at least until next year but that doesn’t mean either issue is dead. Far from it. In fact, the OGB privatization effort is still simmering and the proposed prison sales will most likely be back on the legislative agenda next year.

But neither Jindal nor Rainwater appear particularly eager to defend the OGB privatization in a public forum. Both managed to be elsewhere recently when the Baton Rouge League of Women Voters held a luncheon to discuss the OGB issue. It would have been the perfect opportunity for Jindal or Rainwater to come clean with the public and explain exactly what the administration’s intent is for the agency and its $500 million surplus. Both men were invited to take part in the forum but Jindal was at yet another Baptist church somewhere in north Louisiana and Rainwater was speaking at a Rotary meeting in Alexandria.

It was the best opportunity yet for the administration to demonstrate its openness, accountability and transparency that Jindal hypes at all his fundraising appearances—in other states, that is.

Could there be a reason for their reluctance to discuss the merits of OGB privatization openly and to accept questions about their motives?

Well, let’s just look at the sequence of events thus far.

First there was the request for proposals (RFP—a term appearing with ever-greater frequency in this administration) that Goldman Sachs was recruited to help draft and then Goldman Sachs was the lone bidder—at a cool $6 million. That was not to take over OGB; that was just to evaluate the agency’s assets and to go out into the marketplace and find a buyer.

In the interim, Jindal had contracted Chaffe and Associates of New Orleans to conduct a quickie evaluation so that he could include the sale of the agency in his proposed executive budget. Chaffe was contracted for $49,999.99—one cent below the amounted that would have required approval of the Office of Contractual Review.

But then, Jindal did not include the OGB sale proposal in his executive budget after all, leading observers to speculate that perhaps Chaffe’s report did not reflect what the governor had anticipated. Requests were made for copies of the report but the governor was not forthcoming, choosing instead to disavow his own edict of openness and accountability.

Meanwhile, word got out that the report specifically said the only advantage to selling OGB would be if the buyer got the $500 million surplus.

When legislators began clamoring for copies of the Chaffe report, it was subsequently “leaked” to the Baton Rouge Advocate. Trouble is, the part about the only advantage of selling OGB was not in that report. Nor were any of the pages of the “leaked” report date stamped. Every document received by the Division of Administration (DOA) is routinely date stamped. Finally, there was a major discrepancy in the purported date that the report was received by DOA.

DOA attorney Paul Holmes, in a May 27 email to LouisianaVoice, claimed that the Chaffe report was received at DOA on May 25 but that it was part of the “deliberative process,” and unavailable for public inspection. Rainwater likewise, on May 31, told legislators that he had received the report on May 25 but again invoked the “deliberative process” excuse for not releasing it.

But when the report was “leaked,” it was noted that Chaffe officials did not sign off on the report’s signature page until June 3.

Is it possible that there were two separate versions of the report? One which didn’t say what the governor wanted to hear that is still being withheld from the public and another, more generic version that was “leaked” to the Advocate? Perhaps we will never know.

One thing we do know, however, is that the administration is determined to privatize OGB, even to the point of dealing with Wall Street bankers with problems of their own.

In rebidding its RFP for a broker, Morgan Keegan was named the contractor to shop around for a buyer for OGB. Morgan Keegan bid only $900,000, considerably less than Goldman Sach’s bid of $6 million on the original RFP.

It turns out, however, that Morgan Keegan has been placed on the auction block by its parent company, Regions Financial Corp., after MK agreed to pay $210 million to settle charges of fraud in the marketing of mutual funds filled with subprime mortgages that artificially inflated the funds’ prices.

Regions retained (who else?) Goldman Sachs to market MK. But Goldman Sachs was fined $587 million a year ago on charges that it misled investors in collateralized debt obligations linked to subprime mortgages.

John Maginnis, in his Louisiana Political Weekly column, more recently has called attention to the mismanagement of the $756 million program for hurricane victims to elevate their homes which was approved near the end of the Kathleen Blanco administration and reluctantly inherited by Jindal’s administration.

The program, administered under a $66 million contract with The Shaw Group has been bogged down with delays, shoddy work, payment disputes and more recently, charges of graft and corruption in the form of a whistleblower lawsuit by two employees of the program who claim that a state official accepted jewelry and meals in exchange for providing confidential information that enabled a contractor to pursue eligible homeowners.

Rainwater, embarrassed into finally acting, announced an investigation in conjunction with the federal Homeland Security inspector general and the state attorney general’s offices. The state official has been placed on leave.

Assuming “full responsibility,” Rainwater said, “I obviously wish we had acted quicker.”

Taking a break from his out-of-state fundraisers and visits to Baptist churches, Jindal paused long enough to issue an executive order to crack down on “incompetent, unscrupulous or predatory contractors and subcontractors.”

Maginnis, however, said Jindal should also be taking a “hard look” at the performance of Shaw, one of the largest of the state’s privatization contractors. He said the administration does not need to repeat its mistakes thus far with the monumental $2.2 billion Medicaid program it is contracting out to five insurance companies next year or with the ever-increasing number of charter schools.

Charter schools represent another blot on the privatization performance record. Abramson in New Orleans and Kenilworth in Baton Rouge, both run by Pelican Education Foundation, have come under intense scrutiny of late.

Operated by Cosmos Foundation out of Pennsylvania, Pelican has already had its Abramson charter revoked by the state. Its sister organization in Texas, Harmony Science academies, as well as similar Cosmos schools in other states, are subject of an FBI investigation into charges that teachers, imported from Turkey to teach, are required to kick back up to 60 percent of their salaries to Cosmos founder Fethullah Gulen.

In New Orleans, a Pelican official is alleged to have offered a state education department investigator a $20,000 bribe to “make problems go away.”

Thos problems included no supervision of students for weeks after a teacher left, sexual activity between students, teachers doing science projects for students, cheating on exams, and other deficiencies.

Perhaps someone should ask how Harmony could justify $7 million in travel expenses over a three-year period in Texas or how it could justify overall payments of nearly $250 million for 38 schools in that state.

More importantly, perhaps someone should ask why teachers are being imported from Turkey when teachers who live here are being laid off because of budgetary cutbacks–cutbacks imposed in order that charter schools might flourish.

More will be forthcoming on this issue in days ahead.

Now for the Office of Risk Management (ORM), the one agency that Jindal has successfully privatized. Or has he?

A year ago, the operations of ORM were taken over by F.A. Richard and Associates (FARA) of Mandeville under a contract that called for the state to pay FARA “not to exceed” $68.2 million to take over ORM over five years.

That was last July. Eight months later, FARA requested and received a $6.8 million amendment to its contract, which now said it would be paid “a maximum amount” of $74.9 million. In a matter of days following approval of the amendment, it was learned that FARA was sold to Avizent, a firm out of Columbus, Ohio. Avizent promptly laid off the only person working in its Baton Rouge office.

Now comes word that Avizent may be selling out to Sedgwick Claims Management Services of Memphis, which had earlier purchased Cambridge Integrated Services Group, Nationwide Better Health’s productivity solutions, Selective Settlements International, and Specialty Risk Services.

Catherine Bennett, communications manager for Sedgwick, said she had not heard reports of the Avizent acquisition and could not comment on the matter.

FARA/Avizent, meanwhile, has informed ORM that because of the backlog of documents to be scanned into its system, it would not be able to take over the Property Section of ORM by Jan. 1 as originally scheduled. That date has been pushed back to April 1.

Because of the delay, two ORM claims adjusters will be out of work as of Jan. 1. ORM has chosen to release the two employees, presently paid in the area of $25 per hour, in favor of retaining contract adjusters who are not state employees. They work for private adjusting firms and the state pays their firms $60 per hour to provide temporary adjusters for ORM.

So why would the state terminate employees making $25 per hour in favor of paying $60 per hour for contractors? Benefits. The state does not provide health coverage, retirement, sick leave, or annual leave for contract adjusters. Nor does it provide job security through civil service protection.

Can you say privatization?

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