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Wasted money! Chaffe report fails to support sale of OGB

Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Transparency on June 14, 2011| 4 Comments »

Commissioner of Administration Paul Rainwater holds a bachelor’s degree in government, a master’s in international relations, and is certified as a local government manager. But there are still things he needs to learn.

For example, keeping a secret at any level of government is about as easy as trying to whisper in a sawmill.

Rainwater, under considerable duress from legislators, including Sen. Butch Gautreaux (D-Morgan City), Sen. Karen Peterson (D-New Orleans) and Sen. Ed Murray (D-New Orleans) finally provided Senate President Joel T. Chaisson, II (D-Destrehan) with a copy of the long sought report on the Office of Group Benefits (OGB) provided by Chaffe & Associates of New Orleans.

Chaffe had been retained in March to produce a financial overview of OGB in time for Gov. Bobby Jindal to plug his anticipated sale of the agency into his executive budget. The budget was submitted on March 19 but with no mention of OGB or the study, leading observers to believe Chaffe’s findings did not support Jindal’s agenda to sell OGB and cut OGB staff by 149 employees.

After negotiations with Goldman Sachs on an initial request for proposals (RFP) fell through (Goldman Sachs submitted the only proposal), a second RFP was issued and proposals were taken from three firms last week. Goldman Sachs again submitted a proposal, one of three firms to do so.

Both RFPs invited proposals from financial analysts to conduct a full-blown financial assessment of OGB and then to assist in marketing the agency on the private sector market.

When Rainwater finally did submit the Chaffe report, after first going back on his word to produce it, he did so with an unusual caveat: that senators refrain from making the report public.

“A critical part of this effort will entail issuing a competitive Solicitation for Offers (SFOs) from health insurance companies, which the financial advisor will help devise,” Rainwater wrote. “It’s essential that we protect the taxpayers’ interest by not prejudicing the outcomes of the SFO process and contract negotiations by giving the Chaff’s preliminary analysis to potential bidders. In other words, we want the best offer we can get.”

Oops. Too late. Remember: you can’t whisper in a sawmill.

An unknown senator released the report late Monday. The Baton Rouge Advocate published the full report on its website on Tuesday.

“Again, we have significant concerns that premature disclosure of the report will prejudice the SFO and negotiation process,” Rainwater said in his letter to Chaisson. “This is not a matter of secrecy, but a basic component of our ability to make decisions that are within our purview, to protect the integrity of a successful procurement, while providing the legislature full details at the appropriate time.”

Not a matter of secrecy? Protect integrity?

What part of integrity does Mr. Rainwater not understand after first promising Sen. Peterson a copy of the report and two days later instructing OGB CEO Scott Kipper not to make the report available to anyone?

What part of integrity does he not get after letting Kipper suffer under the withering questioning of Senate and Governmental Affairs Committee members while he, Rainwater, sat at the same table texting?

Kipper did the only honorable thing he could under the circumstances. He resigned, effective June 24, giving him tenure of just over two months.

Chaisson, for his part, tried to play along. He forwarded the report to Sen. Robert W. “Bob” Kostelka (R-Monroe), chairman of the Senate and Governmental Affairs Committee. Along with the report, he attached a three-paragraph letter saying the delivery of the report eliminated the need for a subpoena which had been requested by Murray and approved unanimously by the committee.

He also attached a copy of the statute he said protected the document from disclosure. To the layman’s eye, however, the statute seemed to do nothing of the sort.

Both Rainwater’s letter to Chaisson and Chaisson’s letter to Kostelka were initially posted on the Advocate web page along with a copy of the Chaffe report. The letters, however, were quickly removed from the Advocate website.

The report, just as had been speculated, said premiums paid by the state and by state employees would increase should the agency be privatized.

That conclusion flies in the face of Rainwater’s oft-repeated claims that the privatization of OGB would have “no negative effect” on services now provided. Some would consider premium increases at a time when state employee salaries have been frozen for two consecutive years a negative effect.

The report noted that under the current format, the state does not seek to make a profit and OGB does not have shareholders. A private company’s number one objective would be to make a profit for its shareholders.

Another point brought out in the report said that the state does not pay any taxes on its premium income but a private company would be subjected to taxes, forcing it to raise premiums even higher in order to make a pre-tax profit of 4.5 to 7 percent.

Rainwater testified before the Retirement Committee that he would not support a spike in premiums.

The report’s conclusions also appeared to answer a key question: Why would the administration be so determined to prevent the release of the report if its contents supported the position of the administration?

Much of the 42-page report, which was done under a $49,999.99 contract, appeared superfluous. Besides biographical information on Chaffe associates who compiled the report, it contained boilerplate data that could easily be downloaded from the internet. Those included stock market performances, public, industry and statistical information, consumer spending, consumer prices and inflation, business and manufacturing inventory, housing market and affordability, industrial production, unemployment and personal income, and health care industry statistics.

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The best political disinfectant is still a little sunshine

Posted in Civil Service, Education, Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Prison, Privatization, Taxes, Transparency on June 12, 2011| 9 Comments »

At the risk of being accused of being a one-trick pony because of all or our posts about attempts to privatize the Office of Group Benefits (OGB), we thought we would offer a quick overview of Gov. Bobby Jindal’s policies, of which OGB is but one facet.

Besides OGB, Jindal has already sold off one state agency, the Office of Risk Management. That privatization left many ORM employees years short of retirement age, thus jeopardizing not only their livelihoods, but medical benefits as well.

The sale agreement stipulated that the buyer was required to hire ORM employees for a “minimum” of 12 months. Of course the ORM director was sure to remind his employees who had just had their job security unceremoniously yanked away that he still had his job and, what’s more, would be eligible for retirement in 2012. That must have given everyone there a warm fuzzy.

Jindal tried unsuccessfully to sell several state prisons but was resisted by the legislature. But odds are he will be back next year with another attempt.

A campaign brochure published by candidate Jindal in 2007 touted his love for state employees and his dedication to hard-working civil servants of which, he reminded us, he was one. Maybe so, if you consider Secretary of the Department of Health and Hospitals and head of the University of Louisiana System as fitting the description of civil servant.

Nevertheless, in 2010, he tried unsuccessfully to push through legislation to abolish the Department of Civil Service and to dissolve the Civil Service Board, the only protection, such as it is, available to civil service employees.

He was successful in freezing classified (civil service) pay that same year and extended that freeze in 2011. The reasoning was the opposition to the myth of something referred to as “automatic” pay increases. No one bothered to mention that once an employee maxes out at a particular pay level, there are no more raises unless he or she is promoted. Nothing automatic there.

Many of those civil service workers have college-age children and didn’t help when Jindal endorsed an $84 million college tuition increase. Fortunately for them—and for the rest of parents with college kids—that measure died in the legislature.

This year, Jindal, who has taken the ridiculously entrenched position of no new taxes (not even a routine renewal of cigarette taxes, already one of the lowest rates in the nation), nevertheless tried to push a bill down the throats of those civil servants he so loves that would require that they pony up an additional 3 percent of their frozen paychecks to their retirement contributions.

That idea might actually have had some merit if the extra 3 percent would have been dedicated to paying down the state retirement system’s unfunded liability, but it wasn’t. Instead, the money would have gone directly into the State General Fund to help Jindal look like a financial wizard in using the money to close the $1.6 billion gap in the state budget, a situation civil service employees had no part in creating.

But keep in mind the proposals to increase tuition and civil service employees’ retirement contributions weren’t taxes: they were simply fee increases. But when you’re writing the check, the distinction could be difficult to make.

Bear in mind, too, that Jindal did all this while advocating more and more corporate tax incentives (read: exemptions) for well-heeled campaign contributors.

The governor also laments the loss of our best and brightest college and university graduates to other states but when it comes to his own appointees, he doesn’t seem quite as committed to the concept of hiring Louisiana first.

His first Recovery School District Superintendent was Paul Vallas. Vallas came here from Chicago by way of Philadelphia. His replacement, John White, is from New York. [And who could think it was coincidence that two weeks after White was brought in to replace the departing Vallas as head of RSD, State Superintendent of Education Paul Pastorek resigned and Jindal immediately endorsed White for Pastorek’s job? Who could possibly believe the entire sequence of events was not orchestrated from Jindal’s fourth-floor State Capitol office?]

But we digress. Jindal’s Secretary of the Department of Health and Hospitals (DHH) is Bruce Greenstein of Washington State by way of Maryland.

His Deputy Commissioner of Administration is Mark Brady of New Hampshire and his own press secretary is Kyle Plotkin of New Jersey.

Certainly, there must have been a sufficient pool of Louisiana talent from which to hire for these positions.

But that should come as no surprise, considering his campaign expenses. Of 670 campaign expenditures in 2008, only 219 were paid to Louisiana companies. It seems the governor prefers companies from Virginia, Texas, Maryland, and elsewhere.

And contracts issued to out of state firms throughout the administration number in the hundreds, many of which were issued to campaign contributors. But that’s another story for another day later this week. We promise.

While boasting at every opportunity of his dedication to transparency, openness, and accountability, he saw to it that ethics legislation passed early in his administration would exempt the governor’s office.

When a legislator introduced a bill that would have forced elected officials to publicly report the names of campaign contributors whom officials subsequently hire or appoint, it appeared to have Jindal’s endorsement.

Key administration officials worked the legislator over a period of five months and helped draft the language of the bill, which easily passed both houses.

Jindal promptly vetoed the bill.

Could that have been because Jindal appointed more than 200 contributors to some of the state’s most influential boards and commissions? Those appointees contributed more than $784,000 to his campaign in 2007 and 2008.

While no governor could be expected to appoint political opponents to these positions, the campaign contributions do tend to raise eyebrows. “Appointments to boards and commissions are based strictly on an individual’s experience, recommendations, and suitability for the position,” sniffed Jersey Boy Plotkin.

Jindal’s “transparency and accountability” mantra takes on something of a hollow ring when official actions are examined more closely.

When DHH selected a winner for a 10-year, $34 million-per-year technology contract, DHH Secretary Greenstein did everything possible to resist divulging the name of that contractor to the Senate and Governmental Affairs Committee that was considering his confirmation as secretary of the agency. Only after 90 minutes of back and forth bantering, did Greenstein finally admit that the winner was CNSI of Gaithersburg, Maryland, a firm for whom he once worked and one that outsources much of its work to its Technology Development Center—in India.

During his repeated refusals to name the contract, he was asked by senators who his boss was, to whom does he answer.

His answer: “The governor.”

Jindal’s Secretary of the Louisiana Office of Economic Development flatly refused to provide documents to the Legislative Auditor’s office during a routine state audit. This, even though state law clearly directs all agencies to provide all requested materials to state auditors so as not to restrict them in their duties.

Commissioner of Administration Paul Rainwater also attempted to deny auditors access to a report by Chaffe & Associates of New Orleans on the financial assets of OGB.

Rainwater went even further in first approving release of the report to the Senate and Governmental Affairs Committee member Karen Peterson and then doing an about-face and to instruct OGB CEO Scott Kipper to not release the report to anyone.

Kipper subsequently resigned, effective, June 24, which will give him tenure of a little more than two months after replacing former CEO Tommy Teague, who was fired on April 15.

Rainwater has repeatedly made the claim of “deliberative process” in denying access to the report. The deliberative process term emanates from that same State Capitol fourth floor.

Only one question needs to be asked about the Chaffe report that should put everything in perspective as regards Jindal’s efforts to privatize OGB:

If Chaffe & Associates said in that report things that the governor wanted to hear, that supported his unrelenting efforts to sell an agency with a $500 million surplus, is it even remotely possible that the administration would be attempting to withhold the document?

Put another way, if the report supported Jindal’s desire to sell OGB, what possible reason would he have to keep the report secret?

Put still another way, who among you believes Gov. Bobby Jindal has the best interest of state employees at heart? Indeed, who even believes he has the best interest of Louisiana at heart?

Who believes that all those out-of-state trips to support congressional and gubernatorial candidates in Florida, Missouri, Wisconsin, and other states were for the benefit of Louisiana? Why would he support a Florida gubernatorial candidate who headed a company hit with the largest Medicare fraud fine in history?

That candidate, Rick Scott, incidentally, won election.

Who can stretch credulity to the point of believing his frequent trips to other states to promote his book was for the benefit of Louisiana and its citizens?

Who can believe all those out-of-state campaign fundraising trips were for the overall benefit of Louisiana?

All these, the campaigning, the book tours, the fundraisers, occurred during a time of unprecedented financial crisis at home. And security details and aides who travel with him must be fed and housed on those trips—all on the state dime.

If you are a Louisiana public employee or simply a Louisiana citizen and you don’t stand up right now and defend this state from the encroachments and abuses of this governor, then you are part of the problem.

It should be clear by now that Gov. Jindal is oblivious to the plight of this state’s citizenry. This is your future. This is your government. This is your state. It does not belong to the Jindals, the Pastoreks, the Rainwaters.

It certainly does not belong to those who have been brought in from other states like Mark Brady, Bruce Greenstein, Kyle Plotkin, and Goldman Sachs.

Our governor has no right to operate behind a curtain of secrecy, to push his agenda with no input from the governed. He is answerable to the Legislature and he is certainly answerable to the citizens of this state.

His first responsibility is not to the big dollar contributors.

That distinction rightly belongs to you.

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Gautreaux calls for federal probe of OGB, DHH ‘and other’ contracts approved by Jindal during his term as governor

Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Transparency on June 10, 2011| 19 Comments »

Copyright LouisianaVoice (2011)

State Sen. D.A. “Butch” Gautreaux (D-Morgan City) has asked the U.S. Justice Department to conduct an investigation into contracts issued during the administration of Gov. Bobby Jindal.

Specifically, Gautreaux, chairman of the Senate Retirement Committee, is targeting the so-called Chaffe report but also wants investigators to take a look at the proposed 10-year, $34 million-per-year contract between the Department of Health and Hospitals (DHH) and CNSI of Gaithersburg, MD.

The Chaffe report was prepared as part of the administration’s efforts to privatize the Office of Group Benefits (OGB). Chaffe & Associates of New Orleans was retained in March to perform a preliminary assessment of OGB so that Jindal could have the information to plug into his executive budget by the March 19 deadline.

That information was not contained in the budget, however, leading to speculation that the report, or at least preliminary data, did not support privatization of the agency.

At the same time, the Division of Administration issued a request for proposals (RFP) from financial analysts experienced in the sale of multi-million dollar insurance entities to conduct an in-depth financial analysis of OGB and then to take an active role in marketing the agency to buyers. Wall Street banker Goldman Sachs was the only bidder to submit a proposal for the $6 million contract to perform the analysis and promote the sale.

When it was revealed by LouisianaVoice that Goldman Sachs met with Deputy Commissioner of Administration Mark Brady and OGB CEO Tommy Teague in Brady’s downtown office last fall to discuss the sale of the agency and then helped in the drafting of the RFP on which it subsequently submitted a proposal, Teague was summarily fired. Goldman Sachs then pulled out when the state balked at the banking firm’s demand that it be indemnified from any litigation stemming from the privatization of ORM.

The Division of Administration (DOA) on several occasions denied any knowledge of the identities of the Goldman Sachs representatives but LouisianaVoice earlier this week obtained their names and even offered to provide the information to Brady and his boss, Commissioner of Administration Paul Rainwater. There has been no response from either of them.

A second RFP was issued and proposals received on Monday. Goldman Sachs again was one of three firms submitting proposals.

Meanwhile, Rainwater resisted repeated efforts from legislators and LouisianaVoice to obtain copies of the Chaffe report. “Deliberative process” was the reason given most often in denying requests to make the report available.

Rainwater, however, under pressure from members of the Senate and Governmental Affairs Committee during his confirmation hearing on May 31, promised to make a copy of the report available to Sen. Karen Peterson (D-New Orleans). He subsequently changed his mind and instructed Teague’s successor, Scott Kipper, not to make the report available to anyone, including legislators. Kipper then resigned, effective June 24, over Rainwater’s decision to go back on his promise, becoming the second OGB CEO to leave within six weeks.

Gautreaux and members of the Senate and Government Affairs Committee were given copies of the Chaffe report on Thursday but only after signing confidentiality agreements, ostensibly because the Legislative Auditor’s office is conducting its own investigation of the events surrounding OGB and its $500 million surplus.

It is uncertain from whom senators received copies of the report. Gautreaux said he went directly to Rainwater but was refused a copy saying confidentially prohibited its release. Gautreaux then pushed through a unanimous Senate concurrent resolution calling for release of the report but Rainwater persisted in withholding the document.

Gautreaux even had a subpoena ordered to require the release of the study but with the same results. Sen. Ed Murray, a member of the Senate and Governmental Affairs Committee, got unanimous approval of his motion on Wednesday to subpoena the report.

Gautreaux appeared to validate speculation that the report said the only advantage to privatizing OGB would be if the purchaser retained the agency’s $500 million surplus.

Saying that he could not go into detail on the report’s contents, he did concede somewhat cryptically that after reviewing the Chaffe report, “I can say that I know why the administration didn’t want it released.”

That the administration persists in pursuing privatization of OGB despite the Chaffe report which apparently advises against privatization has become a sticking point with Gautreaux who also is a member of the OGB board of directors.

Gautreaux has indicated that he intends to add an item or items to the agenda for next Wednesday’s OGB board meeting. The Chaffe report and the current RFP are expected to take center stage at that meeting.

DOA, which has been evaluating responses to the latest RFP, is also scheduled to announce the name of the contractor for the fiscal analysis of OGB on Wednesday, June 15.

The attempt by DHH to conceal the identity of the contractor for the installation and operation of an extensive Medicaid Management Information System did nothing to ease tensions between senators and DOA.

When it was finally learned after more than 90 minutes of sparring between Senate and Governmental Affairs Committee members and DHH Secretary Bruce Greenstein Wednesday that the contractor was the former employer of Greenstein, those feelings only intensified.

“Not unlike the DHH Coordinated Care contract, the Jindal administration continues to operate under a shroud of secrecy,” Gautreaux said. “In all my years of legislative service, I have never seen such blatant acts of disregard for the legislative process and now, obviously, the law.

“I have requested the Justice Department to look into these two contracts and others signed by the Jindal administration since the governor has taken office,” he said by email on Thursday morning.

Gautreaux, asked to confirm the contents of that email, replied, “Yes, I’ve made a request that all contracts….during this administration be looked at.”

He said he had not received a reply as of this writing.

“To paraphrase the words of Commissioner of Administration Paul Rainwater, ‘Releasing the Chaffe report will be detrimental to getting the best possible price in the sale.’” Gautreaux said.

“I agree completely,” he added.

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Senators receive Chaffe report, but can’t release contents; looks like Déjà vu all over again for LouisianaVoice efforts

Posted in Health Care, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Transparency on June 9, 2011| 1 Comment »

Members of the Senate and Governmental Affairs Committee received copies of the report of Chaffe & Associates of New Orleans that the Division of Administration, through Commissioner of Administration Paul Rainwater, has attempted to withhold from release.

It was only a partial victory for the committee, particularly Sen. Ed Murray who had moved successfully on Wednesday for the committee to subpoena the report on the financial assets of the Office of Group Benefits (OGB).

Conflicting reports said Rainwater reportedly was served with the subpoena late Wednesday but still refused to turn the report over to the committee, maintaining that the subpoena was not signed by a judge. Another source said Rainwater gave the report to senators before actually being served with the subpoena.

One report said the report was provided by the Legislative Auditor’s office which had, after several attempts of its own, been provided with a copy of the report but that could not be confirmed. That same report said that because the report came from the auditor’s office which is conducting an investigation, senators were required to sign a confidentiality agreement not to divulge the contents of the report.

Rainwater, when turning over the report, reportedly asked that senators not to divulge the contents because of sensitive information contained in the report.

Another source said the report was released to the members of the committee for investigative purposes relative to committee confirmation hearings only.

Confirmation hearings for Rainwater and Deputy Commissioner of Administration Mark Brady were held by the committee last week.

Apparently, the only thing know for certain is that senators have the report in hand but won’t release it themselves.

LouisianaVoice has tried unsuccessfully on five separate occasions to get DOA to release the report but DOA first said the report had not been received, then said the report was not final but on May 29, said it had received the report on the 25th but because it was part of the “deliberative process,” was not public record.

DOA attorney Paul Holmes further cited two court cases in which the Public Service Commission and the Louisiana Department of Insurance each prevailed in efforts to keep records from being made public. Those cases, however, in no way pertained to LouisianaVoice’s request for the report.

Chaffe had been retained to produce the report by the March 19 deadline for Gov. Bobby Jindal to submit his executive budget but nothing from such report was included in the budget. That led to speculation—and actual reports—that Chaffe reported that the only advantage to privatizing OGB would be for the purchaser to retain the agency’s $500 million surplus.

The Senate and Governmental Affairs Committee elicited a promise from Rainwater during last week’s confirmation hearing that he would make the report available to Sen. Karen Peterson (D-New Orleans) vice-chairperson of the committee.

When Rainwater backed out on that promise and instructed OGB CEO Scott Kipper not to produce the report, Kipper tendered his resignation, effective June 24. It was the second time within six weeks that OGB had lost a CEO.

Last week’s confirmation hearing also included Kipper, who was named to replace former CEO Tommy Teague on April 15, the same day Teague was fired just six months short of his qualifying for retirement.

The committee peppered Kipper with a withering barrage of questions about his disavowal of any knowledge of the contents of the Chaffe report. That led to Murray’s motion on Wednesday to subpoena the report.

Brady received and read the latest request by LouisianaVoice for the public record on Thursday but did not respond.

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Jindal’s appointees: bumbling bureaucrats or merely misguided, misunderstood, misbehaving miscreants? (apologies to WKRP’s great newsman, Les Nessman)

Posted in Governor's Office, Health Care, House, Senate, Legislature, Legislators, Transparency on June 9, 2011| 6 Comments »

The Department of Health and Hospitals, after more than an hour and a half of back and forth bickering with the Senate and Governmental Affairs Committee, on Wednesday finally relented and admitted that the winning contractor on a 10-year, $34 million-per-year contract was CNSI the same company that formerly employed the DHH Secretary.

[LouisianaVoice missed the call on that one. Everyone in the know said it would be CNSI but we thought the contract would go to ACS, a subsidary of Xerox which already has six contracts totaling $148.3 million and which contributed $10,000 to the Jindal campaign. We didn’t think that even this administration was brazen enough to give the contract to the department secretary’s old employer. Guess we underestimated the stones of this administration.]

The committee was meeting to conduct confirmation hearings on DHH Secretary Bruce Greenstein who has been serving as secretary since his appointment last July. All cabinet members must be confirmed first through the committee hearing process and then by majority vote of the Senate.

Similar hearings were held last week for Commissioner of Administration Paul Rainwater, Deputy Commissioner Mark Brady and Office of Group Benefits CEO Scott Kipper. Kipper has since tendered his resignation, effective June 24, and his nomination withdrawn.

Just as last week with Kipper and to a lesser extent with Rainwater and Brady, Wednesday’s hearings quickly became contentious when Greenstein and Undersecretary Jerry Phillips became embroiled in a standoff with the committee over release of the name of the winning contractor pending formal approval by the joint House and Senate Health and Welfare Committees.

At stake is the contract to replace the 23-year-old computer system that adjudicates health care claims and case providers, Greenstein said. He said a state statute that requires the official awarding of the contract to be done by the joint health committees prevented him from divulging the name of the winning contractor.

Sen. Rob Marionneaux (D-Livonia) reminded Greenstein that the committee had run into refusals to release information by the Division of Administration (DOA) in the case of a report prepared by Chaffe & Associates of New Orleans on the financial assessment of the Office of Group Benefits (OGB).

Rainwater, at last week’s hearing, promised to make the report available but later backtracked and instructed Kipper to release the report to no one. Kipper subsequently resigned over that issue.

One of the first orders of business of the committee on Wednesday was to unanimously adopt a motion by Sen. Ed Murray (D-New Orleans) to subpoena the Chaffe report.

“On Monday, we picked up the paper and see where DHH refuses to release the name of the successful contractor,” Marionneaux said. “You cited a statute but the statute you cited does not say you shall not divulge, just that you shall not award the contract. We’re not here to award the contract, we just want to know who the contractor is. So, who is going to receive the contract?”

Greenstein answered that DHH had requested a joint committee meeting to hear its recommendation but Marionneaux interrupted him in mid-sentence. “One of the questions is about the company you used to work for (CNSI). Who is the company who is going to receive the contract?”

Again Greenstein tried to invoke the statute governing the awarding of the contract but was again interrupted by Marionneaux. “You said the administration of DHH, and that’s you as we stand here today. So you’ve made that decision not to divulge. Are you telling me right now, today, that you’re refusing to tell this committee who’s going to receive that $34 million contract?”

“We believe that the law states that we should call on the (joint) committee and then make the announcement to that committee,” Greenstein replied.

“I read the statute,” Marionneaux said, his patience beginning to wear thin. “Are you refusing to tell this committee who is going to be recommended by DHH to receive the award? Yes or no?”

“I’m not going to be able to say today.”

“We’re sitting here trying to decide if you, the leader of DHH, are going to be confirmed and we have a headline in Monday’s paper that you want to keep a secret and a direct question is being asked and you refuse to answer,” Marionneaux said.

“I just don’t understand why this administration does this,” said Murray. “You are, I suppose, just following directions. I just don’t understand it.”

It was Sen. Jody Amedee (R-Gonzales), however, who really laid the issue at the feet of Gov. Bobby Jindal when he asked Greenstein who made the decision “not to tell us this information under oath?”

“This was from my department….”

“You are the department,” Amedee interrupted. “Who is the person above you? Who is your boss?”

“The governor,” said Greenstein.

“Can you tell me if this company you used to work for….whether or not they got the contract?” Amedee asked.
“I can’t discuss the matter.”

“You can, you just choose not to,” Amedee said. “It’s not against the law. Can you tell me they didn’t get it (the contract)? That’s what everyone here wants to know. We want to know if the former employer of the Secretary of DHH got the contract for $34 million. If they didn’t get it, this will probably all go away. The more that this goes on, the more we think they got it.”

Greenstein did say that he erected a firewall between himself and the bidding process once the request for proposals (RFP) was issued so that he would not be involved in the selection process. He admitted that he not only had worked for CNSI, but also had past professional relationships with the other three bidders.

At one point after Greenstein and Phillips repeatedly alluded to the “process and procedure” employed by DHH in awarding contracts, Amedee, in apparent frustration, tossed his pencil over his shoulder and turned away from the witnesses.

Committee Vice-Chair Karen Carter Peterson said, “You don’t want me to know, but you know. Is this what we call transparency?”

Phillips said once the contractor’s name is made public, “it’s the equivalent of an announcement.”

“Do you make the law?” Peterson shot back.

“I interpret the law,” said Phillips, who is an attorney.

“Then you’re not doing a good job. Mr. Secretary (Greenstein), I hope you’re paying attention. How many lawyers do we have on this committee? We make law and yet you choose to follow this gentleman (Phillips).”

“It’s all part of the process,” Phillips said. “It’s (the selection process) done in conjunction with consultation and direction from the procurement folks.”

“In conjunction with whom?” asked Peterson.

“They’re part of the Division of Administration,” he said for the first time, implicating DOA in the controversy.

Committee Chairman Robert “Bob” Kostelka (R-Monroe) finally broke in to say, “I don’t know the difference between firewalling and stonewalling but this committee’s concern is whether or not to recommend to the full Senate that these people should be confirmed for the jobs for which they’ve been nominated.

“The much larger issue here is the integrity of the entire DHH. We don’t care about your procedures. We’ve got to determine if we trust the integrity of the people before us. We’re asking you to put aside your procedures and protocol and answer our questions. Knowing that, I don’t see why you cannot make this committee aware if a former employer of this man is going to win a multi-million dollar contract from the state.”

When Phillips again attempted to invoke “respect for the statute,” Kostelka interrupted. “Again, sir, this has nothing to do with making the award. We’re asking who got the contract. It’s pretty obvious to us that they’re (CNSI) the one getting the contract.”

At that point, Phillips asked if he could confer with Greenstein. The two left the room for 16 minutes and upon their return, Greenstein, after a few more questions, said, “It is CNSI.”

Marionneaux then asked about communications between Greenstein and CNSI. Greenstein admitted meeting with CNSI representatives as well as lobbyists for the other bidders and to speaking on the phone and exchanging emails with all four bidders but insisted all communications occurred prior to issuance of the RFP.

Marionneaux then offered a motion that was approved unanimously that the committee issue a subpoena for all written and oral communication records between Greenstein and the four bidders “as they relate to the contract for services with CNSI.”

As the committee wound down its questioning, Peterson said, “I hope the governor is listening because what has been happening is not in the best interest of the people nor is it consistent with his purported policy of transparency.

“This gives the appearance of your wanting to hide something, particularly since we now know the contractor is your former employer and you wanted to keep that from us. The behavior of you and Mr. Kipper (in last week’s confirmation hearing) is unacceptable. We need to do better.

“Do not let anyone or this administration do anything to taint you as a person or your integrity,” she said to Greenstein, whom she said she respected. “There are those who will attempt to do that to people. They’ll serve ‘em up and throw ‘em under the bus. Don’t let that happen to you.”

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