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Archive for the ‘Office of Risk Management’ Category

Plaintiffs with seemingly valid legal claims against state often victimized second time by delays, costs in litigation

Posted in Courts, Ethics, Exemptions, Governor's Office, Judges, Lawsuits, Office of Risk Management on October 8, 2019| 1 Comment »

Former British Prime Minister William Gladstone (1809-1898) is generally credited with coining the phrase, “Justice delayed is justice denied.”

Anyone who has had the misfortune of navigating our legal system in a civil lawsuit is keenly aware of the relevance of Gladstone’s insightful observation, especially if an individual should find himself pitted against the unlimited financial and manpower resources of, say, state government.

No one knows that better than three individuals who have seen their cases languish for as long as eight years with no resolution in sight. Murphy Painter, Corey DelaHoussaye and Billy Broussard have found the state attempting to ground them into submission through a flurry of legal motions.

The state has taken a page out of the playbooks of Allstate and State Farm in the aftermath of Hurricane Katrina: Delay, deny, defend. Like those billion-dollar insurance companies, the state can afford to drag a case out indefinitely in the hopes of either demoralizing or bankrupting a plaintiff.

For those who insist that every person is entitled to his day in court, there is an equally compelling argument that justice can be bought. In criminal matters, the wealthy defendant who steals millions from his company or the politician who runs off a bridge, killing his female passenger, has a far better chance of avoiding a lengthy jail sentence—or any at all—than, say, some down on his luck individual who has the misfortune to getting caught with a joint. That’s because he can’t afford the legal representation and extracted courtroom fight as can those with greater resources.

LouisianaVoice will examine the legal pitfalls encountered by each of the three persons mentioned above in separate stories beginning today in an effort to show how the state drags out these cases as a tactic to wear down their finances and their will to keep fighting.

In the case of Murphy Painter, Bobby Jindal tried to set him up on bogus charges way back in August 2010 when he wouldn’t bend to the wishes of the late Tom Benson, a major contributor to Jindal’s political campaign, over a licensing issue. In our initial 2013 story about the prosecution, LouisianaVoice was the only media outlet to say publicly—and correctly—that Painter was being SET UP by Jindal.

Subsequent to that, we learned that the WARRANT executed on Painter’s ABC office was illegal in that the raid was carried out three days before the warrant was signed by Judge Bonnie Parker.

But that didn’t stop Jindal from pursuing criminal charges against Painter. He was indicted on 42 separate counts of computer fraud. But despite Jindal’s marshaling all the resources of state government against Painter, he was acquitted and the state had to pay his legal fees of $474,000—and that didn’t even take into account how much the state spent on his prosecution.

We will return to the state’s legal fees momentarily.

But first, let’s move to August 2011. That’s when Painter filed a lawsuit against the state, the Department of Revenue and Taxation, former Secretary of Revenue and Taxation Cynthia Bridges and Inspector General Stephen Street

It’s been eight years now and Painter’s lawsuit is no closer to a trial than it was in 2011.

Attorneys for the state have responded with stalling tactics that have taxed the patience of presiding judge who, out of exasperation, complained that Painter’s lawsuit had become so clouded by the state’s defensive maneuvers, motions, denials, and delays that the case had become impossible for any legal scholar to follow.

Just like the state planned it.

Justice delayed is justice denied.

Lost in all this is the issue of just how much of taxpayers’ money the state is willing to spend in order to break an adversary who was railroaded for political purposes in the first place.

After all, if his lawsuit had no merit, it would seem the state would be eager to go trial and get the matter settled once and for all. That alone would save untold thousands of dollars. But all too often, defense attorneys with political connections are given contracts to defend these lawsuits. It’s a lucrative arrangement: the attorneys contribute generously to political campaigns and they are rewarded with contracts to sit on a case for a few years—all while the meter is running, of course.

Efforts have been made to learned just how much the state has spent in defending Painter’s lawsuit but the state says that information is protected under the public information statute.

For that matter, we have even been unable to learn how much the state spent in legal fees in its criminal prosecution against Painter. We know his legal fees of near half-a-million dollars were awarded but the state had shielded from view the amount it spent in the criminal prosecution on the grounds the ongoing civil suit prohibit the release of that information.

In fact, there is a provision tucked away in the statute [R.S. 44:4 (15)] which exempts divulging current legal fees in litigation to anyone except the chairman and vice chairman of the Joint Legislative Committee on the Budget and that committee litigation subcommittee.

So, basically, the taxpayers who ultimately foot the bill for defending otherwise indefensible litigation are kept in the dark by state statute from learning how their tax dollars are wasted on years of costly legal maneuvers designed to frustrate and short circuit a system supposedly designed to allow the average citizen to seek redress for wrongs committed against them.

The exemption shielding this information notwithstanding, the citizens of Louisiana should have a right to know when the state deliberately draws out litigation in which it is a defendant with definite exposure—all as a ploy to exhaust the plaintiff physically, mentally and financially. A key element in the equation is the right to know how much taxpayer money is being lavished on contract attorneys who happen to have the right political connections,

A New York Appellate Court judge wrote in a 1968 case, “Public opinion, which is the most effective check on official abuse, can never be aroused (if) any and all acts of such an official are protected either by a veil of secrecy or the critic is subjected to costly litigation.”

William Gladstone would probably agree.

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Another judgment against state official who is allowed to walk as taxpayers pick up $400,000 tab–plus legal costs

Posted in ATC, Corruption, Courts, Ethics, Judges, Lawsuits, Office of Risk Management, State Agencies on January 11, 2019| 1 Comment »

He’s been gone from office for three years now but the legacy of Troy Hebert lives on at the Louisiana Office of Alcohol and Tobacco Control (ATC).

Hebert recently prevailed in a federal lawsuit filed for fired ATC agent Brette Tingle and that decision is currently being appealed.

But another suit  by fired agent Randall Kling, tried in state court resulted in a jury award of nearly $400,000, plus legal interest from May 26, 2011, the date Kling filed his suit in 19th Judicial District Court in Baton Rouge.

That decision, which somehow flew under the radar of all Baton Rouge news media, including LouisianaVoice, was rendered just over a year ago, on December 30, 2017 and like the Tingle decision, is currently under appeal.

Baton Rouge attorney J. Arthur Smith represented both Tingle and Kling in their litigation.

In that action, Kling had claimed that when he made official complaints of what he deemed was offensive behavior on the part of Hebert on March 16, 22, and 25 in 2011, Hebert fired him on March 30.

The jury verdict form revealed that jurors determined by a 9-3 vote that Kling “was engaged in protected speech on a matter of public concern” under the Louisiana Constitution. It then said, by an 11-1 vote, that “His termination was substantially motivated by his protected speech.”

The breakdown of the award was $243,045 in lost wages, $75,000 for mental anguish and distress and another $75,000 for loss of enjoyment of life.

Nineteenth JDC Judge William Morvant, in writing the formal judgment, somehow managed to circumvent the usual 6 percent per annum interest the state pays on judgments and set total interest at $9,538.06.

At 6 percent, interest would normally accrue at a rate of about $24,000 for each year since the suit was filed in May 2011 until final resolution, which is still pending.

If applied as in other judgments against the state, that would mean Kling would be entitled to more than $168,000 to date.

In any case, it will be the taxpayers of the State of Louisiana, and not Hebert, who will be called on to pay the judgment should the verdict be upheld by the First Circuit Court of Appeal and, should it advance that far, the Louisiana Supreme Court.

And that $400,000 doesn’t even include the cost of the state’s having to pay a contract attorney to defend Hebert and the Department of Revenue, costs paid through the Louisiana Office of Risk Management.

It’s another example of state officials, in this case, Troy Hebert, not being held personally accountable for their actions and taxpayers having to pick up the tab for their bad behavior.

Morvant, by the way, is the same judge who only yesterday (January 10, 2019) declined to hold Attorney General Jeff Landry personally liable for refusing to allow an Indiana woman access to what were clearly public records.

Unless some real teeth are put into these judgments, Louisiana’s public officials will go on disregarding the law in the knowledge they will suffer no personal consequences.

This needs to change.

 

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More than $100 million approved by legislature in 2016 session to pay lawsuit judgments still has not been paid

Posted in Budget, Courts, DOA, Finances, Governor's Office, Lawsuits, Legislature, Legislators, Office of Risk Management, ORM, Office of Risk Management, Privatization, Revenue on October 20, 2017| 6 Comments »

It’s a plaintiff attorney’s and a legislator’s nightmare.

As an illustration of just how bad the state’s fiscal condition really is, one need only examine the 40 court judgments stemming from litigation against the state in 2016 that have yet to be paid.

As former Speaker of the U.S. House Tip O’Neill once said, all politics is local and when a constituent wins or settles a lawsuit against the state, that person’s legislator is usually prompt in filing a bill in the House to appropriate funds for pay the judgment. That’s important to legislators. The state, after all, has denied classified employees pay raises for the better part of a decade but never missed paying a judgment other than the Jean Boudreaux case—until now.

It’s also a good indication of just how dire the state’s fiscal condition really is.

In all judgments of road hazard cases—cases involving auto accidents where the state is found at fault for inadequate signage, poor road maintenance or improper construction—as well as certain other claims like general liability or medical malpractice, funds must be appropriated via a bill submitted by a legislator.

In past years, with the exception of one major judgment, that has not been a problem. Only the $91.8 million class action judgment resulting from the 1983 flood in Tangipahoa Parish was never paid. In that case, lead plaintiff Jean Boudreaux claimed that construction of Interstate 12 impeded the natural flow of the Tangipahoa River, causing unnecessary flooding of homes and businesses north of I-12.

But in 2016, Rep. Steve Pugh of Ponchatoula submitted a bill to appropriate funds to pay the judgment. He did the same in 2017. It still remains unpaid, along with 36 other judgments totaling another $9.5 million for which bills were approved.

That puts the overall total judgments, including the 34-year-old Boudreaux case at more than $101 million.

And that doesn’t count the cost of attorney fees, expert fees, or court reporter fees, amounts practically impossible to calculate without reviewing the complete payment files on a case-by-case basis.

Twenty-four of the cases had two or more plaintiffs who were awarded money.

In 19 cases, awards were for $100,000 or more and three of those were for more than a million dollars—if indeed the money is ever paid.

In the meantime, judicial interest is still running on some of those judgments, which could run the tab even higher.

A list of those who were either awarded or settled cases in excess of $100,000 that remain unpaid and their parishes include:

  • Michael and Mary Aleshire, Calcasieu Parish: $104,380.82;
  • Kayla Schexnayder and Emily Legarde, Assumption Parish: $1,068,004;
  • Debra Stutes, Calcasieu Parish: $850,000;
  • Peter Mueller, Orleans Parish: $245,000;
  • Steve Brengettsy and Elro McQuarter, West Feliciana: $205,000;
  • Jeffrey and Lillie Christopher, Iberville Parish: $175,000;
  • Donald Ragusa and Tina Cristina, East Baton Rouge: $175,000;
  • Stephanie Landry and Tommie Varnado, Orleans Parish: $135,000;
  • Jennie Lynn Badeaux Russ, Lafourche Parish: $1.5 million;
  • Adermon and Gloria Rideaux and Brian Brooks, Calcasieu Parish: $1.375 million;
  • Theresa Melancon and DHH Medicaid Program, Rapides Parish: $750,000;
  • Rebecca, Kevin and Cheryl Cole and Travelers Insurance, East Baton Rouge: $400,000;
  • Samuel and Susan Weaver, Lafourche Parish: $240,000;
  • Henry Clark, Denise Ramsey and Lady of Lourdes Medical Center, Lafayette Parish: $326,000;
  • Anya and Abigail Falcon and Landon and Nikki Hanchett, Iberville Parish, $946,732.53;
  • Adam Moore and James Herrington, East Carroll Parish: $150,000;
  • Traci Newsom, Gerald Blow, DHH Medicaid and Ameril-Health Caritas, Tangipahoa Parish: $150,000;
  • Michael Villavaso, Orleans Parish: $443,352.51.

Lawsuits against all state agencies are handled by the Office of Risk Management (ORM), which Bobby Jindal privatized in 2011 in order to save the state money.

The privatization didn’t realize the savings Jindal had anticipated but now, at least, it looks as though the Division of Administration has found another way to save money on litigation costs:

Don’t pay the judgments.

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Bobby, you got $34.6 million lying around? That’s what your mismanagement of Northrop Grumman refund cost the state

Posted in Budget, Contract, Contracts, Corruption, DOA, Ethics, Finances, Fraud, Governor's Office, Incentives, Jobs, Legislature, Legislators, Office of Group Benefits, Office of Risk Management, Public Records, State Agencies on January 3, 2017| 10 Comments »

Bobby Jindal, the Rhode Scholar who rode into town on the crest of a billion-dollar surplus nine years ago this month, rode out 12 months ago leaving the state wallowing in red ink and now it is learned that he inflicted even more fiscal carnage on his way out the door.

And knowing the way in which he and his final Commissioner of Administration, Kristy Nichols, juggled the books, it’s not at all unreasonable to think that Jindal’s final example of fiscal irresponsibility may well have been an intentional act of political chicanery carried out to buy him time so that his successor would be left with the mess to clean up. (Of course, Kristy didn’t become commissioner until Paul Rainwater left in 2012, but that does not change the fact that a lot of dollars were moved around—swept—before and after she was promoted.)

Hey! It’s not that far-fetched. He did it with the Office of Group Benefits. He did it with higher education. He did it with the LSU Hospital System. Boy, did he do it with the hospital system—with a contract containing 50 blank pages, yet!

By the time Jindal left office, virtually the only state agency left with a shred of credibility and integrity was the office of the Legislative Auditor—and that’s largely because the office has complete autonomy and is independent from outside political pressure, particularly from the governor’s office.

And now, coincidentally, it is that same Legislative Auditor who has issued a damning AUDIT REPORT that reveals a major SNAFU (if that’s truly what it was) in which the Jindal administration “misclassified” a $34.6 million default payment made by Northrop Grumman Ship Systems made in 2011.

The payment was made to Louisiana Economic Development after the shipyard failed to meet required hiring quotas but instead of using the money to pay off equipment the state had financed for Northrop Grumman, the audit says the Division of Administration “swept” the money when it was balancing the budget. As a result, the state has already paid some $2 million in interest and administrative costs on the equipment, and is potentially on the hook for some $6.2 million more.

Bobby and Kristy loved the process of “sweeping” agencies of excess funds lying around in order to try and plug gaping holes in the state budget that dogged Jindal every single year he was governor. “Sweeping” for funds is something like picking up crumbs off the floor in an attempt to gather enough to make a bundt cake.

“Since the debt could not be immediately defeased (a provision that voids a bond or loan) because of the limited prepayment options, the funds should have been segregated into a sinking account for defeasement of the debt, not a statutorily dedicated fund account that could be swept by legislative action,” the audit report says.

But the Louisiana Office of Economic Development (LED), then headed by $300,000-a-year Director Stephen Moret, failed to do that and, presto! The funds got swept by the Jindal Housecleaning Service and as a result, the state “will continue to incur additional interest and administrative costs until the debt (on the equipment) is defeased,” the audit reads. “If not defeased before the Oct. 2022 … the state will incur more than $6.2 million in additional interest and administrative costs.”

LED entered into a Cooperative Endeavor Agreement with Northrop Grumman in the early 2000s. The company had acquired Avondale Shipyard in Jefferson Parish and Northrop Grumman, under the terms of the deal, agreed to maintain employment levels of some 3,500 jobs a year with an economic impact of $1 billion. In return, the state agreed, among other things, to issue bonds to finance more than $34 million worth of cranes and equipment that would modernize the shipyard.

But dreams and schemes are made of fragile things. Northrop Grumman fell short of its job requirements and LED notified the company in early 2011 that it wasn’t living up to its employment obligations. Northrop Grumman agreed to settle with the state for $34.6 million, which represented the acquisition cost of the equipment. It wired the money to LED in March 2011, the report says.

But the state didn’t use the money to pay off the debt on the equipment, nor did it set the funds aside in an escrow account to pay it off in the future. Instead, it “swept” the money into the Louisiana Medical Assistance Trust Fund, was enacted during the 2011 session to help supplement the state’s Medicaid program.

But don’t worry, folks. It’s just another example of the superb financial management of the state’s resources about which Jindal would boast—in Iowa, certainly not Louisiana—during his comical quest for the Republican presidential nomination in 2015, his final year I office.

And now the state finds itself hanging out to dry while trying to come up with that long gone $34.6 million, plus about $2 million in interest and administrative costs.

In a written response to the audit’s findings, Commissioner of Administration Jay Dardenne pointed out that Jindal’s actions, while ill-advised, were nonetheless legal. “The (Jindal) administration’s decision to use the funds for other purposes was not prohibited by the terms of the (agreement) with Northrop Grumman,” he says, noting that the Legislature approved of the financial maneuver.

Perhaps, but we all know the definitions of the legal thing and the right thing are sometimes poles apart. In this case, those responsible knew what that $34.6 million was for and they chose to do what was legal but not what was right.

The question now is does the Office of Risk Management carry excess coverage that would allow the State to make a claim for recovery of the money on the basis of stupidity? Should Jindal, Nichols, and Moret be asked to dig deep into their pockets to come up with the money?

Nah. It’ll never happen.

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Irony of ironies for pro-business Gov. Bobby, Louisiana hits rock bottom in survey of best and worst states for business

Posted in Business, Economy, Education, Governor's Office, Health Care, Higher Education, Incentives, Jobs, Office of Risk Management, OGB, Office of Group Benefits, Privatization on February 27, 2015| 12 Comments »

In the seven-plus years of his administration, Gov. Bobby has pretty much had his way with the legislature in passing his so-called reform programs. The lone exception is his aborted effort to abolish the state income tax a couple of years ago.

Everything else—education reform, state employee retirement reform, privatization of the Office of Risk Management, the Office of Group Benefits, the state’s charity hospital system, rejection of Medicaid expansion, cutting funding for higher education, the sell-off of state property, and of course, all those generous corporate tax exemptions, credits and incentives for—sailed through the legislature, to borrow a phrase from my formative years, like crap through a goose.

Only the courts were able to restore some degree of sanity to the education and retirement changes.

So how has all that change worked out for the state?

Well, according to Marsha Shuler, writing in today’s Baton Rouge Advocate, the OGB reserve fund, which was already largely depleted since the privatization of that agency, has now fallen below that financial advisers believe to be a “safe” level. Those reserve funds, which were more than $500 million before Gov. Bobby’s meddling, are now at a dismal $102.8 million and at a burn rate (paying out more than it’s taking in) of $14.9 million a month (spending $1.14 for every dollar in revenue), the fund is on a trajectory of hitting less than $30 million by June 30. http://theadvocate.com/news/11705445-123/group-benefits-reserves-continue-to

The privatization of the state’s charity hospital system has resulted in a $190 million state liability to Medicaid even after the privatization deal was approved in part by the Centers for Medicare and Medicaid Services. http://www.thenewsstar.com/story/news/local/2015/01/11/hospital-decision-good-jindal-less-others/21538739/

The ripple effect of the hospital privatization has also resulted in the decision by Baton Rouge General Mid-City to close its emergency room facilities next month because of operating losses generated by the closure of Earl K. Long Medical Center which served the poor community of Baton Rouge.

But never one to pass up an opportunity to put a positive spin on bad decisions, Gov. Bobby, while taking pot shots at the Obama administration for everything from Obamacare to his Mideast policies to the threat of an imminent Islamic coup in Europe, keeps telling us (on those rare occasions when he is in the state) how wonderful things are and how Louisiana continues to outpace the rest of the nation in economic growth and business climate. http://gov.louisiana.gov/index.cfm?md=newsroom&tmp=detail&articleID=4156

His head cheerleader, Rolfe McCollister is right behind him, lending the influence of his publication, the Baton Rouge Business Report, to augment Gov. Bobby’s rosy proclamations.

http://www.businessreport.com/business/columns/la-makes-biggest-leap-in-forbes-rankings

But one should keep uppermost in mind that McCollister was treasurer of Gov. Bobby’s re-election campaign and as Bobby’s appointee to the LSU Board of Stuporvisors, was instrumental in securing the Pete Maravich Assembly Center for that prayer rally attended by about 3,500 people in the spacious 18,000-seat arena.

But let’s look at the latest survey, one which Gov. Bobby undoubtedly will ignore as he traipses about Iowa, New Hampshire and South Carolina in search of enough commitments to get him to even register in polls of likely Republican presidential contenders.

24/7 Wall St. is a corporation which runs a financial news and opinion company. The company publishes up to 30 articles per day which are published throughout the world.

Its latest survey, issued today (Feb. 27) puts Louisiana at the very bottom of its list of the Best and Worst States for Business. http://247wallst.com/special-report/2015/02/26/the-best-and-worst-states-for-business/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=FEB272015A&utm_campaign=DailyNewsletter

That’s right, Mississippi no longer owns the anchor spot in 24/7 Wall St.’s multitudinous surveys of things good and bad. This one belongs to Louisiana.

Here’s what the survey says about Louisiana:

  • No state fared worse on 24/7 Wall St.’s business climate Index than Louisiana. The state is not the worst place to run all businesses, however. The manufacturing sector accounted for more than 20% of Louisiana’s economic output in 2013, the fourth highest such contribution in the country. Despite the strong sector, Louisiana generally provides poor conditions for business.
  • Nearly one in five residents lived in poverty in 2013 — nearly the worst rate in the nation — contributing to both the low quality of the labor force as well as a low quality of life in the state. The working-age population was projected to decline by 3.2% from 2010 through 2020, one of the worst declines in the nation. While nearly 30% of Americans had at least a bachelor’s degree as of 2013, only 22.5% of Louisiana adults had at least such a degree, also nearly the lowest rate. Poor education contributed to poor scores in innovation. The state was one of only a handful of states where the average venture capital investment was less than $1 million.

There were several factors that went into the evaluation of the state’s lowly status as a place to do business:

  • The state’s gross domestic product growth of 1.3 percent was 17th lowest in the nation;
  • Average wages and salaries of $44,828 were 23rd lowest;
  • The percentage of adults with bachelor’s degrees was 5th lowest at 22.5 percent;
  • The 395 patents issued to residents were 13th lowest;
  • The negative 3.2 percent projected working-age population growth was 13th lowest.

The survey also noted that Louisiana ranked:

  • 47th in infrastructure;
  • 48th in the quality of life (the lack of adequate health care for many could be a factor in that statistic);
  • 49th in labor and human capital

Mississippi? As far as Louisiana and Gov. Bobby are concerned, that state is up there in the stratosphere at only the 4th worst in the nation.

Rounding out the bottom five were West Virginia (49th), Kentucky (48th), and Alabama (46th).

The five best, in order, were Utah, Massachusetts, Wyoming, South Dakota and Delaware, according to the survey.

Iowa and New Hampshire ranked 12th and 14th, respectively, which may help explain why Gov. Bobby spends so much time in those places instead of the state that he was elected to govern.

Nah.

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