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State Troopers Association issues letter to its membership attacking LouisianaVoice and others who question activities

Posted in Campaign Contributions, Civil Service, Commissions, Corruption, Elections, Ethics, Finances, Governor's Office, Legislature, Legislators, Lobbyist, Politicians, Public Records, Senate, State Agencies, State Police on February 28, 2016| 14 Comments »

The Louisiana State Troopers Association (LSTA) has apparently declared war against LouisianaVoice and two of its own retirees who dared voice their objections to campaign contributions by the association that amounts to little more than money laundering.

On Saturday (Feb. 27) we received a copy of a LETTER TO LSTA MEMBERS which, among other things accuses me of “an abysmal lack of journalistic ethics. (I have redacted the names of the two retirees in order to prevent undue pressure on one in his current employment.) While it was not my intention to get into a verbal exchange with LSTA, I feel I must address certain issues raised in the letter.

First of all, and this is important: I did not choose to re-open the subject of training for Trooper Steven Vincent. Nor was it I who initially raised the issue, but a retired state trooper in a letter to Louisiana State Police (LSP) headquarters. I unwisely wrote about the letter but took down the post at the family’s request. Now it appears that LSTA wants to keep the issue alive which raises the question of just who is the insensitive party here. If LSTA wishes to continue the debate over that story, it will have to do so alone. Out of respect for the family’s wishes, I refuse to be drawn into any further discussion of the subject.

As for any “agenda” the LSTA claims I may have, I can only deduce the association is attempting to deflect attention away from its own actions via the time-worn ploy of going after the messenger. For the record, in 40 years of news reporting for several major daily newspapers, I have enjoyed a healthy and professional working relationship with Louisiana State Police—until July 2014. That seems to be when things started going south.

For those who may not remember, that was when Department of Public Safety (DPS) Deputy Secretary and State Police Superintendent Mike Edmonson, through his friend State Sen. Neil Riser (R-Columbia), attempted to sneak through an amendment to an otherwise benign bill on the last day of the legislative session that would have given Edmonson a retirement income boost of about $55,000, something no other state employee has been allowed to do (except for a lone state trooper in Houma who coincidentally fell under the same qualifications as Edmonson). The bill passed and Edmonson seemed well on his way to enhanced retirement riches despite his having made an “irrevocable” decision years earlier to enter into the Deferred Retirement Option Plan (DROP) which froze his retirement at his then-rank of captain.

Generous retirement benefit boost slipped into bill for State Police Col. Mike Edmonson on last day of legislative session

But a sharp-eyed observer tipped off LouisianaVoice to the deception and we broke the story which was quickly picked up by state and national news publications. http://www.washingtontimes.com/news/2014/jul/16/law-change-boosts-pension-for-state-police-leader/

The letter, most likely written at the direction of State Police Superintendent Mike Edmonson, goes after two retired state troopers who had the audacity to request board minutes, checks, receipts, budgets and tax documents. Edmonson is not on the LSTA board but he nevertheless is closely involved in its activities through board members who work for him.

It is interesting to note that no one person signed off on the letter. It closes with “Respectfully, the LSTA Board of Directors.” So, presumably, every member of the board is a party to the letter which said the board respects the right of members “to question LSTA policies and practices.” At the same time, the letter admitted that the board “voted unanimously not to provide any further information” to the two.

It also said it has not seen a groundswell of support from LSTA membership for the two.

That should seem obvious to anyone who has not been in a coma for the past six months. There has been ample evidence on this blog that LSP administration, rather than addressing serious problems within its organization, has chosen to go after whistleblowers, even to the extent of conducting an audit of state-issued cell phones to determine who has been talking to LouisianaVoice. No active trooper in his right mind would lend vocal support to anyone who questioned activities of LSP or LSTA for fear of reprisals.

The biggest concern to the retirees who have challenged LSTA for its endorsement of John Bel Edwards for governor (the first such endorsement in LSTA’s history), Edmonson’s unsuccessful efforts to get LSTA to write a letter to Edwards after his election pushing for the Edmonson’s reappointment (Edwards did reappoint Edmonson to another term as superintendent, most likely at the urging of the Louisiana Sheriffs’ Association which endorsed him), and the funneling of more than $45,000 in political campaign contributions to several political candidates through LSTA Executive Director David T. Young, who wrote the checks for the contributions on his personal checking account and was later reimbursed by LSTA. https://louisianavoice.com/2015/12/09/more-than-45000-in-campaign-cash-is-funneled-through-executive-director-by-louisiana-state-troopers-association/

Of the more than $45,000 doled out to candidates, $10,500 went to Edwards in 2013, 2014 and 2015. Another $10,250 went to Bobby Jindal in 2003, 2007 and 2011. Edwards has since returned his contributions after his campaign deemed them inappropriate. Jindal has not returned his contributions.

And while the LSTA letter attempts to paint me as lacking in journalistic ethics and while I, as publisher of LouisianaVoice, did report on irregularities within LSP and LSTA, it is important to remember these points:

  • I am not the one who tried to manipulate an illegal increase in my retirement income by having an obscure amendment tacked onto a bill in the final hours of the 2014 legislative session.
  • I am not the one who secretly laundered campaign contributions through the LSTA executive director’s personal checking account only to “reimburse” him for expenses at a later date.
  • I am not the one who denied an accounting of those activities to LSTA members.
  • I am not the one who promoted a lieutenant to captain and commander of Troop F after that lieutenant sneaked an underage woman into a casino in Vicksburg and then tried to use his position as a state trooper to bargain his way out of trouble (it didn’t work; he was fined $600 by the Mississippi Gaming Commission).
  • I am not the one who chose to mete out only token punishment to a state trooper who was found to have twice had sex with a woman while on duty—once in the rear seat of his patrol car.
  • I am not the one who again handed out only a slap on the wrist and then promoted an LSP lieutenant to captain and named him commander of Troop D—after the lieutenant was found to be abusing prescription drugs while on duty and who admitted to flushing extra pills when he learned there was an active investigation into his addiction.
  • I am not the one who lied about the Troop D commander’s refusal to take a complaint about one of his troopers from a citizen; I merely posted a recording of his denial after LSP Internal Affairs exonerated the commander following an intensive “investigation.”
  • I am not the one who asked LSTA to write a letter of recommendation to Gov.-elect Edwards recommending that Edmonson be reappointed.
  • I am not the future State Police superintendent who was disciplined for padding his overtime expenses during a visit to New Orleans by the Pope.
  • I am not the one who refused to provide radio logs of a state trooper in LSP Troop D that revealed he was being paid for working when he was, in fact, asleep at home (I received the radio logs from an independent source but again, the records speak for themselves).
  • I am not the one who took an early retirement buyout of about $59,000 only to return to work for LSP the very next day—with a promotion.
  • Nor am I the one who ignored a directive from then-Commissioner of Administration Angéle Davis to repay the money, only to have the problem mysteriously go away when the daughter of Paul Rainwater, Davis’s successor, was given a job at LSP.
  • I am not the one who is responsible for that same retire/rehire having her son-in-law on LSP payroll as an employee of the State Police Oil Spill Commission—at the very time he was working offshore for a private firm.
  • I am not the one who hired Senate President John Alario’s wife who somehow manages to supervise LSP personnel in Baton Rouge—from her home in Westwego—at $56,300 per year.
  • Nor am I the one who hired Alario’s son, John W. Alario, as director of the DPS Liquefied Petroleum Gas Commission at $95,000 per year.

No, I am not the one responsible for any of these things; I merely reported them. But the LSTA board must possess sufficient intelligence to understand that each of these things is a matter of public record and that I could never have carried out any vendetta, perceived or otherwise, against LSP unless what I wrote was accurate.

LSTA, in its letter to its membership, accuses me of taking “uncorroborated information at face value, never question the motivation of the source, and offer it for public consumption without ever seeking to determine its truthfulness.” They know better.

I invite the LSTA board to cite a single instance of my reporting anything that was “uncorroborated” either by public records or by interviews with multiple sources.

I also invite the actual author if the LSTA letter to come forward and identify himself and not hide behind the anonymous sobriquet of “LSTA Board of Directors.”

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More on that ‘independent poll’ for U.S. Senate and a little background on Rep. John Fleming who wants the promotion

Posted in Elections, Ethics, House, Senate, Legislature, Legislators, Politicians, Senate, Transparency, Vitter on February 27, 2016| 16 Comments »

On Thursday (Feb. 25), we posted a story that contained several news developments. Those included the approval of the one-cent sales tax, Moody’s downgrade of the state’s credit and the announcement of Public Service Commissioner Foster Campbell’s entry into the race for the U.S. Senate seat now held by retiring Sen. David Vitter.

Also mentioned in passing was the call we received from someone conducting a so-called “independent poll” about the upcoming Senate race.

We bracketed the term “independent poll” with quotation marks because it took only a few questions from the “pollster” to realize the questions were quite obviously written on behalf of—and possibly even by—U.S. Rep. John Fleming, the good doctor/UPS store/Subway sandwich shop/payday loan entrepreneur from Minden.

Unfortunately, that is the way virtually all polls commissioned by candidates are conducted: loaded questions intended to steer the respondent’s answers in a certain direction so as to enable the candidate to release the “results” that put him or her in a favorable light.

With Fleming, however, it is more than a little difficult to put him in a favorable light. He is just that repulsive and his candidacy for Senate could well be a blessing in disguise. Should he lose—and at the moment, State Treasurer John Kennedy would appear to be the clear favorite—then the state will be rid of what one blogger called “today’s most hateful Republican stooge.”

http://downwithtyranny.blogspot.com/2009/09/todays-most-hateful-republican-stooge.html

Should Kennedy or any of the other half-dozen or so candidates win, then Fleming can go back to selling foot-longs.

It’s bad enough that Fleming pulled down more than $5 million in 2008 the year he was first elected, but he did so while refusing to contribute to the health care of most of his 500 employees. The precious few who did qualify were forced to pay a $3,300 deductible.

A couple of years ago, Fleming was critical of LouisianaVoice for what he perceived as our position of favoring “redistribution of wealth.” We responded that the only “redistribution of wealth we were able to document was the upward flow of wealth to Wall Street, pharmaceutical companies and big oil and gas. It was at that point that Fleming did what he does best: he blocked us from further correspondence on Facebook. So much for public discourse and accountability to the electorate (yes, we are aware we don’t vote in his district, but he habitually does the same thing to his constituents).

We also wrote about his payday loan company. Payday loan companies, which, by the way, our wonderful legislature has refused to rein in, feed on low-income, unsophisticated citizens by charging impossibly high interest rates that only perpetuate the problem of recurring, increasingly high debt for those struggling to survive. (That same legislature has exacerbated the problem by repeatedly refusing to increase the minimum wage in Louisiana.)

It was at that point that his mouthpiece, aka public relations flak, contacted us, asking if we would print a retraction to the story about his payday loan company, which the mouthpiece claimed was a corporation set up solely for Fleming’s employees (that’s nice, pay low salaries and then take the money back via high interest loans).

Our response was that we would be happy to print a retraction if (a) he could prove the story was untrue and (b) he would reveal to us how many medical malpractice lawsuits had been filed against Fleming’s medical practice.

We never heard from him again.

But back to that poll:

The questions were couched in such a way as to make every other candidate (except for Campbell who at the time, had not announced as a candidate) look like some type of evil predator bent on devouring the livers of the electorate. For instance, were aware that John Kennedy was a Democrat who supported John Kerry for President (in 2004) but later switched to Republican?

Wow! That’s a real killer.

How do you feel about John Fleming, who despite humble beginnings, brought himself up by his bootstraps to become a successful businessman who founded several businesses and who was a successful physician?

Short answer: “He’s an idiot.”

And “even though there has never been a Supreme Court Justice appointed in an election year…..”

Whoa. Hold it right there, lady. That’s a lie.

Nonplussed, she soldiered on: “President Obama intends to fill the vacancy…”

Not true. There have been six Supreme Court justices confirmed during a presidential election year since 1900—two by Nixon, one each by Herbert Hoover, Franklin Roosevelt, Gerald Ford and Ronald Reagan. http://www.vox.com/2016/2/15/10998836/supreme-court-nomination-election-year

Okay, Lewis Powell and William Rehnquist were actually confirmed in December of 1971—a couple of weeks shy of the actual calendar election year, but well within the 12 months leading up to the election. Same for the confirmation of Ford’s nominee John Paul Stevens (December 1975). But Anthony Kennedy, Reagan’s nominee, was confirmed in February of 1988.

Going back a tad further, Franklin Roosevelt nominated Frank Murphy who was confirmed in January of 1940 and Herbert Hoover nominated Benjamin Cardozo who was confirmed in February of 1932.

Let me ask you a question, Ms. Pollster: How do you feel about Fleming’s apparent willingness to tell an outright whopper just for the purpose of obtaining a favorable (to him) answer to a poll question?

For that matter, how do you feel about Fleming’s consistently voting against working families even though he represents a district where the median income is only about $35,000 per year?

  • He opposed a bill whereby small businesses with 25 employees or fewer with wages of less than $40,000 would qualify for tax credits of up to 50 percent of the costs of providing health insurance. (Of course, he favored tax credits for the wealthy and for big corporations).
  • He opposed help for seniors with drug costs in the Part D donut hole that would have cut the costs of brand name drugs by 50 percent and which would have eventually eliminated the donut hole altogether.
  • One of his first votes in Congress was to oppose SCHIP, the proposal to provide medical insurance to 11 million needy children. (Fortunately, that bill passed by a huge margin of 290-135.

So there. Take your little poll and stick it in the same place where Fleming’s head resides.

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PSC member Foster Campbell enters Senate race, Moody’s downgrades state credit as House passes Edwards sales tax

Posted in Budget, Congress, Economy, Elections, Finances, Governor's Office, House, Senate, Legislature, Legislators, Politicians, Senate, Taxes, Vitter on February 25, 2016| 20 Comments »

Thursday (Feb. 25) was an unusually big day in politics, even by Louisiana standards.

The big news in Baton Rouge on Thursday was House passage of Gov. John Bel Edwards’ one-cent sales tax (minus the assessment on manufacturing) but the action was quickly overshadowed by a credit rating downgrade by Moody’s. http://theadvocate.com/news/14993547-79/moodys-downgrades-louisianas-credit-rating

The state also received a “negative outlook” from Moody’s, meaning the state could be downgraded again.

Coupled with the sales passage, which must now go to the Senate for a vote, was additional cuts of $100 million in state spending and the taking of $128 million from the rainy day fund. With the $60 million already cut by the Edwards administration, Thursday’s action will make up about $700 million of the $900 million needed by the end of the current fiscal year on June 30.

The downgrade was the first for the state since Hurricane Katrina and the lower rating means when borrowing money, the state will have to pay higher interest rates.

And just to add a touch of spice to an already politically volatile state, Public Service Commissioner Foster Campbell announced on the Jim Engster Show on Thursday that he will be a candidate for the U.S. Senate seat being vacated by Sen. David Vitter. http://www.jimengster.com/

Campbell, an outspoken PSC member and a former state senator, is the second Democrat to enter the already crowded field of senatorial hopefuls. So far, U.S. Reps. Charles Boustany, Jr. of the state’s 3rd Congressional District and John Fleming of the 4th District, State Treasurer John Kennedy and U.S. Air Force veteran Rob Maness, all Republicans, a second Democrat, New Orleans attorney Caroline Fayard, and, of course, the former director of Louisiana Alcohol and Tobacco Control, the inimitable Troy Hebert, an Independent.

A debate between all the candidates could be reminiscent of the early debates between the 17 original candidates for the Republican president nomination—but without the charm, sparkle and depth of Ted Cruz and Donald Trump, a lot less fun.

Maness was an unsuccessful candidate for the U.S. Senate seat won by Bill Cassidy in 2014 and Fayard was defeated in a special election for lieutenant governor in 2010 by Jay Dardenne.

Campbell, something of a throwback to the populist candidates of another era, is outspoken on issues, particularly with utility companies and the oil and gas industry, and while in the State Senate, he crossed party lines to lend strong support to then-Gov. Dave Treen’s proposed Coastal Wetlands Environmental Levy (CWEL), a $450 million tax on petroleum and natural gas. Campbell today says had CWEL passed, the state would not be in the financial bind in which it now finds itself. But strong opposition by LABI and the oil and gas lobby defeated the proposal.

In a related but relative minor matter, LouisianaVoice received one of those “independent political polls” that was so obviously commissioned by Rep. Fleming that it may as well have been conducted by the good congressman himself.

The questions were prefaced by glowing stories of Fleming’s humble background and how he pulled himself by the bootstraps to not only become a doctor but to establish “numerous businesses,” one of which just happened to be a payday loan company that preys on low-income citizens, hooking them for exorbitant interest rates.

At the same time, the pollster, a woman, set up other questions about the other candidates with disparaging background stories on Boustany, Fayard and Kennedy (Maness was omitted, possibly in deference to his military service) that stopped just short of labeling them as subversives. Also omitted from the verbal flogging was Campbell, obviously only because he was not a declared candidate at the time Fleming wrote the questions for the poll.

Louisiana’s credit rating was not changed by Fitch and Standard & Poor’s, the other two major financial rating agencies.

But Moody’s move, dropping the state from Aa2 to Aa3 leaves Louisiana with better credit ratings than just two other states, New Jersey and Illinois. The downgrade will be applied to the state’s general obligation bonds and gas and fuel tax bonds. That means in turn that when the state issues bonds to finance construction projects such as roads and public buildings, it will have to pay higher interest rates on the borrowed money.

The move came as a surprise as most observers, including Kennedy, though Moody’s would wait until the Legislature completed the current special session, which is scheduled to end March 9.

Kennedy used the downgrade to take shots at both Bobby Jindal and Gov. Edwards. “You can’t spend more taxpayer money than you take in for seven years in a row and not expect a downgrade to your credit rating,” Kennedy said. “You also can’t make public statements about suspending TOPS, ending LSU football, closing Nicholls State University and closing five prisons without scaring the daylights out of the credit rating agencies that grade our debt and the institutional investors that buy our debt. What we tell our children is true: Acts have consequences.” http://theadvocate.com/news/14993547-79/moodys-downgrades-louisianas-credit-rating#comments

Edwards, meanwhile, blamed the downgrade on the seven years of patchwork budgeting by the Jindal administration, calling it “a disappointing development, particularly since we believed that Moody’s would wait until the conclusion of the special session to make any decision on our rating. Unfortunately, the downgrade confirms what we’ve been saying about the structural imbalance of our budget. The overuse and abuses of one-time money and fund sweeps by the Jindal Administration were a major factor in this decision.”

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After 30 years, Louisiana still pursues its failed industrial inducement policy that only serves to empty state treasury

Posted in ALEC, American Legislative Exchange Council, Broadband, Internet, Budget, Business, Economy, Education, Exemptions, Incentives, Finances, Governor's Office, Higher Education, Incentives, Legislature, Legislators, Politicians, Revenue on February 24, 2016| 11 Comments »

As it turns out, that quote was attributed to Einstein in error but the fact that he never said it doesn’t alter the accuracy of the definition.

And for at least three decades, Louisiana along with the rest of the South, has insisted on following the same outdated industrial inducement policies first warned about in a 1986 report by MDC, Inc. (Manpower Development Corp.) of Durham, N.C.

One of the members of the MDC Panel on Rural Economic Development which produced the 16-page report Shadows in the Sunbelt was Dr. Norman Francis, then President of Xavier University and Chairman of Liberty Bank in New Orleans. https://gri.unc.edu/files/2011/10/Shadows-in-the-Sunbelt-86.pdf

That 1986 report was followed up in 2002 when MDC published a 44-page report entitled The State of the South. http://mdcinc.org/sites/default/files/resources/MDC_StateOfTheSouth_2014.pdf

Both reports said much the same thing: that the market had dried up. There were, the reports said, 15,000 industrial inducement committees in the South chasing 1500 industries—and if they relocated at all, it would be whether inducements in the form of tax incentives were offered or not. “At best, the states have assisted businesses in doing what they wanted to do anyway,” the ’86 report said.

“The factors which once made the rural South attractive (to industry) are now losing relevance,” it said. That’s because the South, which once boasted an abundance of low-cost labor, can no longer complete in the global market. Where American apparel workers would earn $6.52 an hour (remember, this was in 1986, but the numbers are still comparable), their counterparts in Korea and Taiwan earned $1 and $1.43, respectively, and Chinese workers made about 26 cents per hour.

Shadows in the Sunbelt called southern states’ tax incentives to lure business and industry a “buffalo hunt,” an analogy to the great buffalo hunts of the 19th century which nearly wiped out the North American bison population. “Yet the hunters (states) continue in their pursuit, hoping to bag one of the remaining hides,” the report said.

The stampede actually started in Mississippi 80 years ago through a program called “Balance Agriculture with Industry” whereby the state used municipal bonds to finance construction of new plants. That practice evolved into tax breaks offered to prospective industries as states began forfeiting property tax revenues to lure new jobs.

Today, Louisiana gives up about $3 billion each year in tax breaks and credits doled out in various programs, all of which are designed ostensibly to attract industry and raise the standard of living through more and better jobs but which in reality, do little of either.

What we’ve received instead are tax breaks for duck hunters, chicken plucking plants, Wal-Mart stores, fast food franchises and for industries that either (a) get the tax incentives but which soon shut down operations (Nucor Steel, General Motors) or (b) claim the creation of great numbers of new jobs but which actually are far fewer than announced.

In fact, the ’86 report said, a long-term study of job promises in South Carolina revealed that only 52 percent of the jobs promised actually materialized. In Louisiana, when Bobby Jindal ran for re-election in 2011, he claimed in TV ads that the Louisiana Department of Economic Development during his first term handed out incentives that brought 25,425 new jobs to Louisiana. The actual number, however, was only 6,729. That’s only 26.5 percent of the jobs promised. https://louisianavoice.com/2011/09/29/jindal-plays-fast-and-loose-with-jobs-claim-tv-campaign-ad/

The ’86 report said as much. “The costs of inducements offered to attract industry are also heavy—and in some cases counterproductive,” it said. Evidence showed that tax breaks did not significantly affect plant location decisions but states nevertheless open up the state treasury for companies to loot even though the benefits do not offset the costs. “Whatever the effectiveness of industrial recruiting in the past, current trends clearly indicate that its value as a tool for economic development is declining,” it said.

That was 30 years ago and we’re still giving away the store by adhering to a faulty ALEC-backed policy of favoring corporations over citizens.

As an alternative, the report recommended that in lieu of spending millions to attract out-of-state industries, states should implement programs to support local development and to encourage entrepreneurship.

The 2002 report, State of the South, only reiterated the recommendations of the study of 16 years earlier. It also should have sent a clear message to the Louisiana Legislature and to Bobby Jindal six years before he came to power. The latter report’s recommendations included:

  • Refocus state agencies responsible for economic development to pursue a broader, more strategic approach;
  • State governments should not measure success simply by the number of new jobs, but also in terms of higher incomes for people and improved competitiveness of regions within the states;
  • Modernize tax systems so that states have the fiscal capacity to provide excellent educatin, widely accessible job training, necessary infrastructure, and community amenities that enrich the soil for economic development;
  • Tighten performance criteria for industrial incentives—and encourage associations of Southern governors and legislators to reexamine the one-dimensional, incentives-driven recruitment strategy in favor of a comprehensive economic development strategy;
  • Dramatically expand efforts to erase serious deficits along the entire education continuum in the South, and bolster the education, health and well-being of children;
  • Draw on universities and community colleges to act as catalysts for state and regional economic advancement.

The 2002 report said high-poverty, sparsely-populated areas are last to get telecommunications infrastructure. More than 60 percent of the zip codes in the Delta areas of Arkansas, Mississippi and Louisiana have no broadband internet provider which further widens the competitive gap for these areas. Yet Jindal rejected an $80 million federal grant to install broadband in Louisiana’s rural areas. http://www.nola.com/politics/index.ssf/2011/11/80_million_grant_for_rural_bro.html

Because Louisiana, along with the rest of the South, made a commitment to low taxes, low public investment, and low education in return for jobs. That strategy trapped the state in a cycle of low-wage, low-skill industry “begetting more low-wage, low-skill industry,” and thus perpetuating the “Wal-Mart Syndrome.”

Mac Holladay, who served as head of economic development for three Southern states summed up the situation. “If we had put the vast majority of our economic development resources into incubators, small business services, export training, and existing business assistance instead of recruitment and overseas offices, it might have made a big difference.”

Tax abatements and other financial giveaways, the 2002 report said, “inevitably drain resources from schools, community colleges and universities—public investments that are crucial to long-term economic advancement. Incentives provide a better return on investment when they build a community’s infrastructure, provide workers with higher skills and attract jobs that pay markedly more than the prevailing wages.”

Even when Mississippi granted $68 million in incentives for Nissan’s assembly plant in Canton, a small town just north of Jackson, the company’s director of human resources told the Jackson Clarion-Ledger that he could not name any Canton resident likely to be hired for one of the 5,300 jobs starting at $12 per hour. He attributed that to the town’s 27 percent poverty rate, 76 percent of out-of-wedlock births and 44 percent of adults without a high school diploma.

Carley Fiorina, former chief executive for Hewlett-Packard and more recently an unsuccessful candidate for the Republican presidential nomination said, “Keep your incentives and highway interchanges. We will go where the highly skilled people are.”

“Not so long ago,” said the 2002 State of the South report, “the South sought to build its economy by enticing companies from afar to relocate with the bait of cheap land, low taxes, and a surplus of hardworking but undereducated workers. That old recipe no longer works to feed families and sustain communities.

“No comprehensive strategy would be complete without further efforts to bolster public schools,” the report said.

“There must be a recognition that the ultimate challenge lies in the educational and economic advancement of people who have gotten left behind,” it said. “We must get the message out to every household, every poor household, that the only road out of poverty runs by the schoolhouse.

“The line that separates the well-education from the poorly education is the harshest fault line of all.”

Yet, Louisiana’s leaders insist on doing the same thing over and over and expecting different results.

And we keep electing the same failed policy makers over and over and over…

Insanity.

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Wal-Mart: feeding at the public trough while underpaying workers, destroying Louisiana’s mom and pop businesses

Posted in Auditor, Business, Corruption, Economy, Ethics, Exemptions, Incentives, Finances, Incentives, Jobs, Legislature, Legislators, Public Records, Revenue, Taxes on February 24, 2016| 6 Comments »

The past is prologue

                                    —William Shakespeare (The Tempest)

In 1936, Mississippi Gov. Hugh White successfully pushed through the state legislature his answer to President Franklin Roosevelt’s New Deal so despised by southern states.

Mississippi could grow and prosper through his landmark “Balance Agriculture with Industry” program, according to Mississippi native Joseph B. Atkins, author of the little-known but important book Covering for the Bosses. The book is an examination of how newspapers in the South refused to give fair coverage to labor unions in their attempt to gain equitable working conditions for workers first in the textile mills and later the automobile industry.

https://books.google.com/books?id=o6AfWT79t2MC&pg=PA237&lpg=PA237&dq=shadows+in+the+sunbelt+1986&source=bl&ots=7Wb_bKCn48&sig=FIjJetyw-Li-lCk0c3zN_muV3MA&hl=en&sa=X&ved=0ahUKEwjL-Ob4k4_LAhWFPiYKHchPD50Q6AEIUDAJ#v=onepage&q=shadows%20in%20the%20sunbelt%201986&f=false

According to Atkins, White figured he could attract industry to Mississippi through the then-radical concept of offering attractive tax incentives and promises of low wages—and, of course, no unions.

The program, Atkins writes, eventually became a model for the entire South and today, Mississippi, in the latest rankings of the best states for business, can be found sitting firmly in….47th place among the 50 states, ranked ahead of only (in order) Kentucky, Louisiana, and West Virginia. In fact, the South can lay claim to six of the bottom 10 spots in the national rankings. They also include Arkansas (42nd) and Alabama (45th). Tennessee was only slightly better at 38th. Virginia (10th) and North Carolina (15th) were the only southern state in the top 20. http://247wallst.com/special-report/2016/02/17/the-best-and-worst-states-for-business-2/

So what went wrong with White’s grand scheme for Mississippi? Simply put, the same thing that doomed Louisiana, Alabama, Arkansas and Tennessee to the bottom one-fourth of the heap. They gave away their tax bases while at the same time condemning their citizens to lives of low wages and poor benefits. And Wal-Mart was first in line to fully exploit the plethora of incentives, be they the 10-year property tax exemptions, Enterprise Zone initiatives or some other inducement.

Wal-Mart, described by Wall Street Journal writer Bob Ortega in his book In Sam We Trust as “an amoral construct with one imperative: the profit motive.”

In October 2005, Atkins writes in Covering for the Bosses, that an internal Wal-Mart memo was leaked which revealed the true, impersonal attitude of the corporate office toward its 1.3 million American workers, 30 percent of whom are part-time workers.

In her memo to Wal-Mart executive vice president M. Susan Chambers complained of the costs of long-term workers. The company, she said, spent 55 percent more on them than on one-year workers even though “there is no difference in (the employee’s) productivity.” She said because Wal-Mart pays an associate “more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart….The least health, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart,” she said.

In plain language, she was advocating throwing older workers to the curb in favor of newer, lower-salaried workers.

Yet Wal-Mart has shoved its way to the public trough, securing some $100 million in economic development subsidies from the state in 20 cities from Abbeville ($1.67 million) to Vidalia ($1.65 million), from Shreveport ($6.3 million) to New Orleans ($7 million), from Monroe ($3.9 million) to Sulphur ($1.8 million).

Nationally, estimated annual subsidies and tax breaks to Wal-Mart and the Walton family total $7.8 billion per year. This for six Walton heirs whose collective net worth of $148.8 billion is more than 49 million American families combined. http://www.americansfortaxfairness.org/files/Walmart-on-Tax-Day-Americans-for-Tax-Fairness-1.pdf

A congressional report estimated that each Wal-Mart store in America generated an average of $421,000 in Medicaid, SNAP and public housing costs to taxpayers. That’s in addition to the estimated $1 billion taxpayers anted up in local and state government subsidies to have a Wal-Mart in their communities. Wal-Mart workers, who earn less than $10 an hour (about $18,000 per year), are offered a family health care plan with a $1,000 deductible costing $141 per month.

And remember that warm fuzzy “Made in USA” advertising campaign of Wal-Mart in which Wal-Mart in 2013 said it was starting a 10-year plan to increase spending on U.S. made products by $250 billion? Well fuggeboutit. It didn’t happen and last October, the company removed the “Made in the USA” logos from all product listings on its Web site after the Federal Trade Commission caught the company (gasp) lying. http://fortune.com/2015/10/20/walmart-made-in-the-usa/

Instead, much of its merchandise, clothing in particular, comes from third-world sweatshops where workers are paid pennies per hour in wages and children work up to 20 hours per day to make the clothing we purchase from Wal-Mart. https://www.dosomething.org/us/facts/11-facts-about-sweatshops

And here’s a real eye-opener.

In her book Cheap, author Ellen Ruppel Shell reveals a dirty little secret most consumers are unaware of: name-brand clothing sold at Wal-Mart aren’t quite what consumers think they are. “Discounting dilutes brands, making it less certain that they are a mark of quality,” Shell writes. http://www.nytimes.com/2009/07/19/books/review/Shapiro-t.html?_r=0

Hundreds of brands “slice and dice their offerings for various markets, selling different products in different types of stores for different prices under the same brand,” she said. “Chains such as Wal-Mart, Best Buy, Target and Home Depot have items manufactured ‘to their specifications,’ meaning that the brand name is almost devoid of meaning.”

That means a television with a model number available only at Wal-Mart is not really a Sony or a Samsung, for example, but a Wal-Mart television.

“Brands have become an end in themselves,” she writes. “…It is not the brand alone that entices discount shoppers; it is the high value we link to the brand versus the low price we pay that is so seductive.”

In recent years, Louisiana taxpayers have subsidized the construction of Wal-Mart stores in two affluent suburbs to the tune of a $700,000 tax credit. A tax credit is a dollar for dollar reduction of a tax liability meaning a $1 tax credit reduces one’s taxes by a full dollar. Bear in mind, these subsidies were Enterprise Zone projects. The Enterprise Zone program is designed specifically to lure business and industry into areas of high unemployment in order to help economically depressed areas. Instead, one of these stores were built in St. Tammany, one of the most affluent communities in the state.

Likewise, $330,000 in Enterprise Zone tax credits were awarded in 2013 to Lakeview Regional Medical Center in St. Tammany Parish for an upgrade to its facilities which created a grand total of five new jobs.

As far back as 2012, then-Secretary of the Department of Economic Development Stephen Moret said the Enterprise Zone program no longer fulfilled its purpose. http://www.nola.com/politics/index.ssf/2012/12/louisiana_economic_development_1.html

A Legislative Auditor’s report agreed, saying that 75 percent of new jobs, 68 percent of new businesses and 60 percent of capital investments were made outside the EZs. http://app1.lla.state.la.us/PublicReports.nsf/92629A33AAE8C55F862579EB0072ACEB/$FILE/00029DFA.pdf

That’s because unlike other states, Louisiana’s Enterprise Zone program allows the generous five-year tax breaks for retail establishments, businesses whose salaries traditionally are at the low end of the pay scale. Those include, besides Wal-Mart, chain stores like Walgreens and Raising Cane’s chicken outlets.

“Most of the projects are larger companies investing in relative affluent areas in Louisiana today,” Moret said in something of an understatement. He said that fact alone underscored the importance of making changes to the program.

Were changes made? No. In fact, in 2013, the year after his comments, the state awarded EZ tax credits totaling $19.6 million for projects that produced 4,857 new jobs which in turn generated about $10 million in state income taxes, or a net loss of more than $9 million to the state.

Meanwhile, Atkins quotes author Bill Quinn as saying Wal-Mart “has done more to stomp out Middle-class America than all other discount houses put together.”

Yet, the official policy of Louisiana has been to continue to give generous tax breaks to a company that underpays its employees, deceives customers into thinking they are “buying American” when in reality, they are propping up third-world sweatshops whose workers churn out second line brand names under slave-like working conditions.

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