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Archive for the ‘OGB, Office of Group Benefits’ Category

With re-election all but a certainty, Jindal now turns attention to an ambitious agenda for second term

Posted in Civil Service, Education, Governor's Office, Health Care, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Retirement on October 16, 2011| 4 Comments »

BATON ROUGE (CNS)—With the outcome of this year’s gubernatorial election all but final heading into the last days of the 2011 campaign, it might be good to look ahead at what’s in store as Gov. Bobby Jindal prepares for his second term.

He has already partially unveiled his agenda for the next four years to trusted top staff. And not all staffers—including some cabinet members—are within his circle of trust.

If you think he was a bit ambitious with his agenda to reduce the role of government during his first term, you might want to find something to hold onto during the next four years. It’s going to be quite a ride. That’s provided, of course, he sticks around that long. There’s no guarantee of that because he does harbor national ambitions despite his comforting assurances to the contrary.

Details of Jindal’s plans for the coming four years remain sketchy but there are a few moves that can be predicted with relative ease. Others might be considered improbable if one chooses not to observe what conservative Republican administrations have managed to do in other states.

There is the privatization of the Office of Group Benefits (OGB), of course. That’s a no-brainer. It’s an emotional issue and those emotions are not likely to subside as the administration steps up its efforts to sell off what is arguably the most efficient agency in state government. But Jindal and his Commissioner of Administration Paul Rainwater have already sent signals that privatization of the agency is high on their bucket list.

Opponents point out that OGB currently has an administrative overhead of about three percent. That is because it is not required that the agency turn a profit nor does OGB pay taxes on premiums. A private concern would require an administrative cost of about 15 percent to allow for profits and tax liabilities. That would translate to a substantial premium increase for state employees and retirees.

OGB currently has a surplus of about $500 million but those funds are for the payment of benefits only and are off-limits to the administration. If OGB is sold for somewhere in the neighborhood of $150 million to $200 million, however, that money would go straight into the state’s general fund and that’s money Jindal wants desperately.

A recent development is more than a little telling on this issue. OGB has proposed a rate increase of about three percent but the administration has insisted on at least a five percent bump. A bigger premium increase would allow the $500 million surplus to remain intact, thus making the agency far more attractive to potential buyers.

Another nagging issue that Jindal is likely to address is the cost of the various state retirement plans, which currently are saddling the state with an unfunded liability of about $18 billion.

State employees presently have a defined benefit plan as opposed to a defined contribution plan. Look for the administration to take a long, hard look at changing that.

Defined benefits mean that employees pay premiums with the knowledge that their benefits are locked in. That benefit is computed by multiplying the average of an employee’s three highest years of earnings by 2.5 percent by the number of years of service. An employee who earned an average of $60,000 in his three best years over a 30-year career would multiply $60,000 by 2.5 percent, which is comes to $1500. That $1500 is then multiplied by the number of years of service (30) which computes to an annual pension of $45,000.

Under a defined contribution plan, contributions would be set and the money would be invested in much the same way as a 401(K) plan works. There would be no guarantee of benefits because that would depend on market fluctuations. That’s not a change desired by state employees after the recent Wall Street crisis.

State employee sentiments aside, one state legislator, Sen. D.A. “Butch” Gautreaux (D-Morgan City), outgoing chairman of the Senate Retirement Committee, pointed out that should the state convert to a defined contribution system, the state would then be required to begin paying Social Security premiums on state employees. State employees do not presently participate in Social Security.

“Going to a defined contribution system would not save the state any money,” Gautreaux said.

Jindal is almost certain to renew his efforts to privatize several state prisons. He tried earlier this year but backed off those efforts in the face of vocal opposition from prison employees, legislators, and local citizens. With no concerns about being elected to a third term, he is likely to make a harder push next year in an effort to pull in a few million more into the general fund.

Remember Rep. John Schroder (R-Abita Springs)? He’s the legislator who, in 2010, introduced four bills designed to abolish Civil Service and the Civil Service Commission and to give the legislator authority to decide which state employees would receive merit raises.

Those efforts failed and he did not renew his efforts this year, probably because it’s an election year. Those efforts are quite likely to resurface in next year’s legislative session as are attempts by Rep. John LaBruzzo (R-Metairie) to force welfare recipients to undergo drug testing. Previous attempts have never made it out of committee.

Though both measures by Schroder and LaBruzzo have gotten nowhere, consider Gov. Scott Walker who has effectively defanged the state employee union in Wisconsin. And in Florida, Gov. Rick Scott has signed into a law that requires adult welfare recipients to undergo drug screening.

Since day one, Jindal has worked nearly as hard on education reform as he has on political fundraising.

His penchant for replacing public schools with charter schools has incurred the wrath of public school teachers who are forced to accept all comers, to take the bad students with the good. Jindal’s charter schools, they say, have operated under the guise of open admissions when in reality, practicing selective admissions.

The recent school grades released by the State Department of Education would seem to bear that out. All but one of the top performing schools (24 of 25) were schools with selective admissions while 19 of the lowest 25 were alternative schools—those schools into which the poorest performing students are shunted.

Jindal’s efforts to privatize the state’s Medicaid program are likely to continue unabated. The Department of Health and Hospitals already has approved a $300 million contract to CNSI to implement the state’s Medicaid Management Information System. The contract raised eyebrows in the legislature because DHH Secretary Bruce Greenstein once worked for CNSI and Greenstein attempted to conceal from a legislative committee the identity of the contract winner.

With only token opposition in Saturday’s election, the only obstacle for Jindal’s agenda is the legislature itself. But with a solid Republican majority in both the House and Senate, any opposition there is likely to no less token.

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State audit shoots down OGB privatization but this time administration unable to prevent its release à la Chaffe

Posted in Auditor, Governor's Office, OGB, Office of Group Benefits, Privatization on August 30, 2011| Leave a Comment »

BATON ROUGE (CNS)—A state audit of the Office of Group Benefits (OGB) released Monday by the Legislative Auditor’s Office would appear to validate fears expressed by opponents of privatization of the agency.

The 22-page audit report represents a substantial setback to the administration’s plan to sell off the agency and its $500 million surplus even though it’s not likely to change its position on selling off OGB, state prisons and Medicaid operations.

Among the findings of the audit:

• A private company may incur marketing costs that are higher than OGB;

• As a state agency, OGB is exempt from paying premium taxes while other (private) health insurance companies are required to pay premium taxes according to R.S. 22:838(B);

• OGB does not have a profit motivation because it is a state agency whose goals are to provide a service and pay claims. A private company will most likely build a profit margin into the premium structure;

• If the contractor assumes all risk (fully insured), the contractor will most likely purchase reinsurance. Currently, OGB does not have reinsurance. These cost considerations are dependent on the premium and/or benefit structure restrictions that are placed on the contract;

• If the state sells the business, the incurred liabilities, up to the date of the sale, must be paid by either the state or the new owner. If the state remains responsible for the incurred liabilities, there should be a provision in the contract to address payment of these liabilities. If not, there would be no revenue stream after the sale to pay the outstanding claims;

• The sale of the business would diminish the legislative and/or state administrative control over cost, benefits, or changes to the plans;

• Cost savings may result from the efficiencies gained by using an established health care provider with well-structured administrative processes. The contract would be the vehicle for establishing cost parameters.

The audit also mentioned the administration’s contract with Chaffe and Associates to establish the fair market value of the operations of OGB as of Jan. 31, 2011, apparently so that Gov. Jindal could include the proposed sale of the agency in his Executive Budget.

“According to the 2012 OGB Executive Budget initially submitted, OGB estimated a savings of $10,155,906 resulting from personnel reductions of 149 positions,” the audit report said. “It was explained to us that the reduction would be result of the PPO (Preferred Provider Organization) being privatized. Those positions were restored in the budget process.”

The audit also mentioned the administration’s contract with Chaffe and Associates to establish the fair market value of the operations of OGB as of Jan. 31, 2011, apparently so that Gov. Jindal could include the proposed sale of the agency in his Executive Budget. That information, however, was not included in the Executive Budget, leading many to believe the report did not contain information the administration desired.

Fueling that speculation was the reluctance of the administration to release the Chaffe report, even in a faceoff between Commissioner of Administration Paul Rainwater, Assistant Commissioner Mark Brady and the legislature.

A report was eventually leaked to the media but that only prompted more skepticism because Rainwater on May 31 and Division of Administration (DOA) attorney Paul Holmes four days earlier, on May 27, each indicated the Chaffe report was received by DOA on May 25 but could not be release because it was still in the “deliberative process.”

Chaffe officials, however, did not sign off on the report’s signature page until June 3. Moreover, none of the leaked report’s pages were date stamped even though all documents received by DOA are routinely date stamped.

There was speculation that there may have been two reports—one that said the only advantage to selling OGB would be if the buyer retained the agency’s $500 million surplus (a clause that at least one person who saw the report prior to its being leaked said it contained) and the leaked report which did not contain such language.

Moreover, the report said, the Chaffe report, which was performed under a $49,999.99 contract—one cent below the amount requiring statutory review—placed a value of $217 million on OGB, assuming a five-year privatization term.

The report, however, failed to take several considerations into account, according to the audit report. “The valuation range:

• does not assume any increased costs as a result of the Patient Protection and Affordable Care Act;

• does not consider the impact, if any, of increased premium costs incurred by the state as a result of the privatization;

• does not consider the value of the existing fund balance, which was $499.2 million as of the valuation date of Jan. 31, 2011.

In effect, the audit report indicated the $49,999.99 paid Chaffe was money wasted.

The audit report did not address the discrepancies mentioned above nor did it attempt to reconcile the significant difference in bids on two separate but virtually identical requests for proposals (RFPs) issued by DOA.

The first RFP was issued on Feb. 4 that called for the services of a financial advisor to determine OGB’s assets and determine a fair market value and to actively recruit bidders to purchase the agency.

Prior to the date of that RFP, as early as October of 2010, Goldman Sachs was brought in to help draft the RFP. Goldman Sachs subsequently was the lone bidder on that RFP with a bid of $6 million. Negotiations broke down over Goldman Sachs’s insistence on the state’s indemnifying the Wall Street banking firm in any ensuing litigation.

A second RFP was then issued on May 6 and three firms submitted bids. They were Goldman Sachs, Barclays Capital and Morgan Keegan. On July 15, Rainwater announced that Morgan Keegan had been chosen for the contract on the basis of its bid of $900,000–$5.1 million lower than Goldman Sachs’s bid on the first RFP.

In the interim between the issuance of the first RFP and the acceptance of Morgan Keegan as the contractor on the second RFP, OGB lost two directors.

On April 15, Tommy Teague, who had taken the agency from a $60 million deficit to the $500 million surplus in a period of only six years, was terminated by Rainwater, who never gave any reason for Teague’s firing.

Teague was replaced on that same day by Scott Kipper, who was brought over from the Louisiana Department of Insurance. Kipper resigned on June 24, just over two months after his appointment.

The audit report says any plan to sale OGB must be approved by the Legislature under the provisions of R.S. 49:968(C). “Any substantial changes to the function and role of OGB in regard to the administration and management of group insurance policies would require legislative action to amend applicable substantive laws addressing the resulting reorganization of the Executive Branch,” the report said. “This reorganization is, by Constitution, with the exclusive authority of the Legislature.”

State Sen. Butch Gautreaux (D-Morgan City) said he had not fully reviewed the audit “but it appears that the auditor agrees that there are a lot of unanswered questions and that the buyer would have to agree to keeping the plan pretty much as it is. I seriously doubt that a for-profit (company) would agree to those terms,” he added.

Rainwater, in his response to the audit, fell back on the same argument the administration has used throughout the debate: the number of employees at OGB–309–which he insists is excessive.

He also denied that the wholesale privatization of OGB is under consideration. even though he expressly listed that as an option in testimony earlier that that was indeed an option, even going so far as to say in April that that the OGB surplus would be “an attractive selling point” because the private company that ultimately purchases the agency would not have to dip into its own capital to pay claims initially.

Rainwater noted that the report said state auditors were unable to identify any states that had “fully” privatized their state employee health insurance agencies. “Given that this administration itself has never proposed the complete privatization of OGB, the relevance of this research point is not exactly clear,” Rainwater said.

In April, however, he expressly listed that as an option in testimony before the Senate Insurance Committee that full privatization was indeed an option, even going so far as to say that that the OGB surplus would be “an attractive selling point” because the private company that ultimately purchases the agency would not have to dip into its own capital to pay claims initially.

Rainwater took the same stance with auditors’ observation that the “wholesale privatization” of OGB would require approval by the full Legislature. “I wonder, again, about the practical usefulness of the point since it is based on a premise—the ‘full’ or ‘wholesale’ privatization of OGB—that is not even under consideration.

In his testimony before the Senate Insurance Committee, however, he said, “We’re taking OGB out of the day-to-day business of running an insurance company.”

He downplayed speculation in the audit that privatization might result in higher insurance premiums, saying such speculation cannot be supported based on the research contained in the report.

Despite a record of fast turnaround of claims payments, Rainwater said, “The possibility of providing quality service in a manner that’s also more efficient is precisely why we have begun this evaluation of OGB, and we owe it to the taxpayers to evaluate it fully.”

Even though he has stated publicly that OGB was being taken “out of the day-to-day business of running an insurance company,” he said in his letter, “OGB’s administrative oversight will continue, securing the continued success of all the plans.”

Administrative oversight has already resulted in DOA’s approval in May of this year of a $7 million amendment to the $68 million paid F.A. Richard and Associates (FARA) by the state a year ago to take over the operations of another state agency, the Office of Risk Management. A week after that contract was amended, FARA was sold to an Ohio company.

So much for administrative oversight.

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Jindal’s privatization roadmap pockmarked with potholes

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

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

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

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

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

He refused.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

More will be forthcoming on this issue in days ahead.

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

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

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

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

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

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

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

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

Can you say privatization?

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Notable Quotables (in their own words)

Posted in Governor's Office, Notable Quotables, OGB, Office of Group Benefits, Privatization, Transparency on July 16, 2011| 3 Comments »

“This is an important first step in what will be a lengthy, careful and thorough evaluation process to arrive at the best possible policy for plan members and taxpayers alike.”

—Commissioner of Administration Paul Rainwater, on announcing the hiring of troubled Morgan Keegan, recently fined $210 million for fraud by the SEC, to advise the Jindal administration on the disposition of the Office of Group Benefits and its $500 million surplus.

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Jindal hires Morgan Keegan to market OGB; Regions hires Goldman Sachs to sell M-K; SEC fines G-S, M-K $800 million for fraud; can it possibly get any better than this?

Posted in Contract, Contracts, Ethics, Governor's Office, OGB, Office of Group Benefits, Transparency on July 16, 2011| 7 Comments »

BATON ROUGE—Follow closely because this gets complicated.

Retired state employees haven’t gotten through to Gov. Bobby Jindal.

Retired teachers likewise failed in efforts to get his attention.

Not even state district judges by adopting a unanimous resolution have managed to convince Jindal that the sale of the Office of Group Benefits is a bad idea.

It is easily the most universally opposed proposal by Jindal since he took office but yet he plunges ahead, apparently oblivious to the will of the electorate. On Friday, the day of the week any savvy politician takes controversial action because of the lack of media coverage, he quietly approved Morgan Keegan & Co. of Memphis to determine “the proper administrative structure” of OGB.

Morgan Keegan was the low bidder of the three firms submitting proposals to conduct the financial analysis of the agency with a bid of $900,000, far below the $6 million the state was prepared to pay Goldman Sachs on the basis of an earlier request for proposals (RFP).

Goldman Sachs was brought in last October to help draft the initial RFP and subsequently was the only bidder at a reported cost of $6 million. Negotiations broke down over demands by Goldman Sachs that the state indemnify the Wall Street banking firm from any potential litigation.

Goldman Sachs submitted a bid of $3.5 million on the latest RFP and Barclays Capital had a bid of $5.5 million.

Commissioner of Administration Paul Rainwater said no changes will take place before Jan. 1, 2013, but that Morgan Keegan will include contract offers from health providers in the final evaluation.

But wait. Reuters News Service is reporting that Regions Financial Corp. may sell Morgan Keegan after agreeing to pay $210 million to settle allegations that its Morgan Keegan brokerage fraudulently marketed mutual funds filled with subprime mortgages and artificially inflated the funds’ prices.

What’s more, Regions has hired Goldman Sachs to explore “strategic alternatives” for Morgan Keegan, sending signals that Regions may be trying to unload Morgan Keegan.

So, what we have is this incredibly incestuous tangle whereby the Jindal administration has hired Morgan Keegan to explore the possible sale of OGB even as Regions has retained Goldman Sachs to explore the possible sale of Morgan Keegan even though Goldman Sachs less than a year ago was fined $587 million over claims that the bank misled investors in collateralized debt obligations linked to subprime mortgages.

What the hell is this administration thinking?

Well, it just stands to reason. After all, the only real job that Jindal has ever held in his 40 years is a brief stint with McKinsey & Company of Washington, D.C.

McKinsey & Company’s crowning resumé-padding achievement was its work as a consultant for Allstate Insurance. The consulting firm trained Allstate in how to minimize its losses after Hurricane Katrina by denying policyholders’ claims and to treat its policyholders with “boxing gloves” rather than its trademark “good hands.”

That should shed some light on what this administration is all about.

The latest development is another in a growing pattern that defines the Jindal administration: privatize state services in favor of private businesses, some of whom have become generous contributors to Jindal’s political campaign, as well as to key legislators and the Republican Party.

Corrections Corp. of America (CCA), for example, has contributed $13,000 to Jindal, $1,000 to House Appropriations Committee Chairman Jim Fannin (D-Jonesboro), $1,000 to Rep. Gerald Long of (R-Winnfield), and $6,000 to the Republican Party of Louisiana.

Jindal may have dropped his efforts to sell off state prisons, but he isn’t likely to ignore CCA’s generosity. You can expect him to renew those efforts nest year once he is re-elected in October.

He privatized the Office of Risk Management (ORM) a year ago but rather than sell that agency, the state actually paid F.A. Richard & Associates (FARA) $68 million to take over ORM. FARA then came back earlier this year and got approval on a $7 million amendment to that contract, bringing the state’s cost to $75 million. A week later, FARA announced it had been purchased by an Ohio firm.

One condition of the ORM takeover was that FARA was required to take ORM’s employees for a minimum of one year. Two ORM employees who went over to FARA were terminated long before that one-year moratorium and a third, the only Baton Rouge employee of the Ohio firm, was also terminated shortly after the sale.

That’s what state employees have to look forward to when their agencies are sold out from under them. The only way a private entity can justify taking over a state agency is to set fees high enough to realize a profit. State agencies do not pay taxes, something a private firm will have to do, nor are they required to turn a profit.

So how will a private firm turn a profit with a takeover of OGB? Two ways: increased premiums and massive layoffs. Rainwater has already said 149 OGB employees will be terminated.

In the ‘50s, ‘60s, and ‘70s, management would not dare trifle with employees’ lives they way they do in such a cavalier manner today. Men like Victor Bussie, Gordon Flory, and John “Red” Bourg and the AFL-CIO simply would not have allowed it.

Those were men of honor who knew what it meant to struggle or to fight for what was right. The so-called leadership ensconced on the fourth floor of the State Capitol has never had to labor for anything. The Gang of Jindal has never faced the prospect of unemployment, or having to make a mortgage payment, a car payment, or tuition payment with no income. They’ve never had to feed a family when there was no job.

With the present administration, there is no honor—and that’s about the worst thing that can be said of anyone. The slight cuts even deeper when it’s true.

What’s worse is state employees have brought it upon themselves; they let it happen, even encouraged it. They have become fat and lazy (read: comfortable and complacent), willing to sit back and allow the administration to chip away one brick at a time (ORM, OGB, state prisons), thinking it won’t happen to them.

But let’s turn the clock back just a year to 2010.

Remember those five bills introduced by Rep. John M. Schroder (R-Abita Springs)? Probably not, because people by their nature, have short memories. But they represented still another brick being chipped away by the administration. Here they are, just in case you need a reminder going into the October elections:

HB-752 called for a constitutional amendment to grant the legislature sole authority to provide for pay increases for persons in state civil service. Remember that one?

What about HB-755? That one called for a constitutional amendment that would have required the legislature to determine prior to each fiscal year if a pay increase may be granted to persons in state civil service and if so, the manner and amount of the increase. Can you say “Political Patronage?”

HB-757 would have required that reports regarding state civil service employees be submitted to the legislature instead of the Department of Civil Service. Can you say “Big Brother?”

Then there was HB-754, which would have prohibited pay increases to state civil service employees when there is a budget deficit.

Like this year? When there was a projected deficit of $1.6 billion? When the legislature nevertheless managed to pass a balanced budget? We’ll just call it the smoke and mirrors deficit.

That would mean that in any given year, the administration could “project” a deficit, and just as was the case for the past two years, there would be no pay raise for state civil service workers.

Finally, there was HB-753 which would call for a constitutional amendment to abolish the State Civil Service Commission altogether, as well as the Department of State Civil Service, effective Jan. 9, 2012.

If you think for one minute that Schroder was acting on his own with these half-baked proposals, think again. Never doubt that he got his marching orders from Jindal. And Jindal gets his orders from the National Republican Party. All you have to do is look around and see what other red states are doing to employee and teachers unions.

And even though neither of the bills passed, if you think the issue is dead, you tend toward self-deception or naiveté. If Jindal wins re-election and carries a Republican majority back into the legislature, you can bet some, if not all of these bills will back on the table next spring.

It’s all part of Jindal’s “do more with less” mantra.

Layoffs mean more responsibility for state workers. Of course, the governor’s office is exempt from being called upon to make painful sacrifices.

No pay raises for two years, coupled with increases in the prices of fuel, food, housing, clothing, college tuition, medical care, electricity, and other essentials, certainly translates to less in terms of net pay and job security.

Jindal’s policies are not unique by any means. They’re all part of a national Republican plan explained in minute detail in Naomi Klein’s eye-opening book The Shock Doctrine. But that’s another story for another day.

Perhaps state employees are finally beginning to awaken from their slumber and to say, in the immortal words of Peter Finch in the movie Network, “I’m mad as hell and I’m not going to take it anymore.” The American Federation of State, County, and Municipal Employees (AFSCME) recently paid a visit to OGB to recruit members. Several employees reportedly signed up with the union, affiliated with the AFL-CIO.

State law does not prohibit civil service employees from unionizing, though it does prohibit strikes.

Nor does state law allow civil service employees to participate in partisan politics or to participate in political action committees. But Louisiana Attorney General Opinions have ruled that it is permissible for civil service employees to participate in Committees on Political Education (COPE).

There is no prohibition against the formation of a Positive Action Coalition, Professional Assistance Cooperative, or some other organization with the PAC acronym.

Such a PAC would keep state employees abreast of developments affecting them in both the administration and the legislature. There would be no political endorsements, just ongoing educational bulletins and updates. There would be no membership dues, just voluntary contributions.

But there would be quite a few frustrated, concerned politicians who would think twice before trying to steamroll policies adverse to the welfare of state employees.

And that could only be a good thing.

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