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Archive for the ‘ORM, Office of Risk Management’ Category

There is an interesting story in today’s Baton Rouge Advocate (click HERE to read the story) about former Secretary of State Tom Schedler.

It seems that in addition to being forced from office by his settlement of a sexual harassment lawsuit, his successor, Kyle Ardoin, diverted $90,000 in state funds earmarked for computer upgrades to pay Schedler’s portion of the settlement.

That’s questionable use of public funds by practically any definition I know but beyond that little indiscretion lies a more fundamental question and that is just why was the state on the hook for the bulk of the payout for his behavior in the first place?

Schedler resigned in May of this year in the wake of accusations that he had sexually harassed a female employee for years.

The woman filed suit against Schedler and the state and the case was settled in August for $167,500, plus another $35,000 in attorney fees.

Of that $202,500 total, Schedler personally paid only $18,425 with state taxpayers picking the remaining $184,075–$90,450 covered by the secretary of state’s office and $93,625 by the Office of Risk Management, the state office that insures all state agencies in cases of legal liability.

But why would taxpayers be called upon to foot the bill for nearly $185,000 for personal actions committed by Schedler?

That was the question posed by a reader who said, “We need somebody to pass a law that anybody settling a sexual harassment case related to their employment with the state has to pay ALL of it from their own pockets. If Schedler wasn’t 100 percent responsible for this, who was, the state? And who, in this case, is the state?

Good questions all and an observation that cuts the heart of the legal issue.

To our reader’s advocacy that a law needs to be passed, he’s correct—except the law is already in place. It’s just not applied by judges who preside over these cases.

There is even a legal term (Latin, what else?) that addresses this very case.

RESPONDEAT SUPERIOR is the Latin phrase for “Let the master answer.” While it is an English Common Law doctrine (Louisiana’s laws are based on the Napoleonic Code), it would still apply in Schedler’s—and others’—cases if only the judges would apply the principle.

Established in the 17th century, the doctrine was adopted in this country and has been broadly applied in agency law. Literally, Respondeat Superior means the employer (in this case, the state) is liable for the injuries caused by an employee who is working within the scope of his employment relationship (emphasis mine). The person who does the work for the employer is the agent and the theory behind the law says the principal (employer, or agency) controls the agent’s behavior and must then assume some responsibility for the agent’s actions.

It means that if, as a state employee, your supervisor or legal counsel directed or advised you to do something later determined to be illegal, then the state would be liable for any fines, courts costs, etc. If, however, you did something illegal at work that was not work-related (harassment or assault of a subordinate, stealing from the coke machine, extortion, etc.), then you and you alone should be held liable for any damages imposed. If, the first case, the court had imposed a $50,000 fine, the Office of Risk Management would be responsible for paying the penalty. In the second case, if you were fined (whatever amount), the full responsibility for payment should fall upon you because what you did was not job-related, or within the scope and authority of your job responsibilities.

The question then becomes was the employee (Schedler) acting within the scope of employment during his off-the-rails behavior. The answer, of course, is certainly not.

That is the sticking point here and, in a case involving LouisianaVoice a few years back. We sued Commissioner of Administration Kristy Nichols over her failure to provide public records in the time prescribed by law. LouisianaVoice won the case and Nichols was personally assessed financial penalties. But she appealed, lost and eventually settled with LouisianaVoice. But the state paid for all her attorney fees at the state and appeal court levels as well as for the settlement itself.

The judge held her personally liable because she did not rely on the advice of the DOA legal counsel in dragging out her response to our records request. She was not, the court deemed, acting “within the scope of her employment” by delaying production of the records. Still, when push came to shove, it was the state, i.e. taxpayers, that paid in the end.

Same with Schedler. Sexual harassment certainly is never within the scope of anyone’s employment. Therefore, what Schedler did, he did as a freelancer, not as part of his duties as an employee (or in this case, the very head of the agency). Accordingly, he should have been held personally liable for all damages and legal costs.

That he was not speaks to the inexcusable laxity exercised by the court system in this case. This was the ideal chance for the judiciary to send a clear message to public servants—and employees in the private sector—that acting outside the boundaries of their job descriptions has consequences.

Sadly, that opportunity was missed.

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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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Title 44 of the Louisiana Revised Statutes is designed to guarantee citizens the right to examine copies of public documents at no cost and, if they wish, the right to purchase copies of documents at a “reasonable” cost, generally not to exceed 25 cents per page.

All that sounds well and good but for the unsuspecting activist or muckraker venturing off into these uncharted waters, there are undercurrents and unseen obstacles that can quickly throw you off course.

When perusing Title 44 and you scroll down to 44.4, you begin to see the subtle way lawmakers, in their infinite wisdom, managed to protect bureaucrats—and themselves—from the prying eyes of those who would hold them accountable.

R.S. 44.4 begins somewhat ominously in saying, “This Chapter shall not apply:”

There follows page upon page of exceptions.

We would expect information containing addresses, phone numbers, social security numbers, medical information, student information, pending litigation and proprietary information to be off limits. It’s easy enough, after all, for scammers to obtain that information for the purposes of identity theft, without opening the doors for them.

But we did not expect to see exempted:

  • All risk-based capital reports filed with the Department of Insurance;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice medicine or midwifery;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice as a registered nurse; however, any action taken by the Louisiana State Board of Nursing, and any legal grounds upon which such action is based, relative to the fitness of any person to receive, or continue to hold, a license to practice as a registered nurse shall be a public record;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice as a dentist or as a dental hygienist; however, any final determination made by the Louisiana State Board of Dentistry, and any legal grounds upon which such action is based, relative to the fitness of any person to receive or continue to hold a license to practice as a dentist or a dental hygienist shall be a public record;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice as a veterinarian; however, any final determination made by the Louisiana Board of Veterinary Medicine, and any legal grounds upon which such action is based, relative to the fitness of any person to receive or continue to hold a license to practice as a veterinarian shall be a public record;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice as a chiropractic; however, any final determination made by the Louisiana Board of Chiropractic Examiners, and any legal grounds upon which such action is based, relative to the fitness of any person to receive or continue to hold a license to practice chiropractic shall be a public record;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice social work; however, any final determination made by the Louisiana Board of Social Work Examiners, and any legal grounds upon which such action is based, relative to the fitness of any person to receive or continue to hold a license to practice social work shall be a public record;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice as a medical psychologist; however, any final determination made by the Louisiana State Board of Medical Examiners, and any legal grounds upon which such action is based, relative to the fitness of any person to receive or continue to hold a license to practice as a psychologist shall be a public record;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice as a practical nurse; however, any action taken by the Louisiana State Board of Practical Nurse Examiners, and any legal grounds upon which such action is based, relative to the fitness of any person to receive, or continue to hold, a license to practice as a practical nurse shall be a public record;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice or assist in the practice of pharmacy; however, any action taken by the Louisiana Board of Pharmacy, and any legal grounds upon which such action is based, relative to the fitness of any person to receive, or continue to hold, a license to practice or assist in the practice of pharmacy shall be a public record;
  • Any documents concerning the fitness of any person to receive, or continue to hold, a license to practice optometry; However, any final determination made by the board after an adjudication hearing, other than by consent order, agreement, or other informal disposition shall be a public record.
  • Any records, writings, accounts, letters, letter books, photographs, actual working papers, or copies thereof, any of which is in the custody or control of any officer, employee, or agent of the Louisiana Cemetery Board and which pertains to an investigation of the business of a cemetery authority that is under investigation; however any such record shall be public record and subject to the provisions of this Chapter when introduced as evidence before an administrative or other judicial tribunal or when the investigation is complete.

You will notice that in the cases of the practice of medicine or midwifery, there is no provision to open records once any action is taken on a complaint. Those records are closed regardless of the outcome of any complaints lodged against a doctor of midwife.

As for the Department of Insurance, it would seem in the public’s interest that we be able to examine these risk-based capital reports. After all, quite a few Louisiana policyholders were left high and dry when companies have gone under in the past because someone obviously wasn’t minding the store. Risk-Based Capital is merely a method whereby the minimum amount of capital appropriate to support a company’s business operations is determined so as to protect it from insolvency.

Just as it is important to parse any public information request precisely as to the record you wish to examine because state agencies will not assist you by opening up their records carte blanche, it is also important to notice that the various boards’ complaint records are public if—and only if—formal action is taken. That means if there are scores of complaints against, say, a pharmacist or a dentist, or a nurse, you don’t get to see the complaints unless action is taken. So: no action, no public record. The door is closed. Please go away and don’t bother us.

Unless the complaint is against a cemetery authority. In such cases, the records become public at the moment they are introduced as evidence.

That can mean only one thing: The Cemetery Board has a weak lobby.

As for the rest of them and your right to know what’s going on, fuggedaboutit.

And if you persist, there is always the growing trend toward SLAPP (Strategic Lawsuits Against Public Participation) actions which LouisianaVoice will be examining tomorrow.

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High school civics classes taught us about the checks and balances of government. You know, the three branches: the executive, the judiciary, and the legislative, each of which is supposed to serve as a safeguard against abuses by the other two.

In addition to those, at the state level at least, we have the Office of Inspector General, the Legislative Auditor, and the Attorney General—except that the Constitutional Convention of 1974, thanks to the muscle-flexing of the district attorneys, hamstrung the attorney general from intruding on the turf of the DA’s unless specifically invited to do so.

Another little-known fact about the attorney general is that the office is set up to defend, not prosecute, state agency heads who run afoul of the law. That’s why you see enormous expenditures on the part of the Louisiana Office of Risk Management when an agency head is sued for, say, failure to provide public records when requested or even when an agency head is accused of criminal wrongdoing. ORM, the state’s insurance agency, pays defense attorneys who are contracted by the attorney general’s office. Thus, as long as someone else is footing the bill, the incentive is for the public official to duke it out in court.

So, with all these safeguards in place, how is it that a quiet amendment was sneaked through the legislature 11 years ago that gives legislators control over the expenditure of tens of millions of dollars most folks, including the Legislative Auditor’s Office and those whose job it was to draft bill amendments, didn’t even know existed?

Well, we gave you the answer when we said “sneaked.” These types of bills are done very quietly, with zero fanfare but with laser-like efficiency.

Here’s the wording of that amendment:

R.S. 24:39(D) is amended and reenacted to expand the uses of the monies in the Legislative Capitol Technology Enhancement Fund to include supporting all other operations and activities consistent with the authorized mission of the Legislative Budgetary Control Council. This provision is effective June 7, 2012.” (Emphasis ours.)

The Legislative Capitol WHAT fund?!!!?

Legislative Budgetary Control Council?!!?

What is the Legislative Capitol Technology Enhancement Fund and who are the members of this Legislative Budgetary Control Council?

The members of the Budgetary Control Council are:

  • Sen. John Alario, Co-chair;
  • Rep. Taylor Barras, Co-chair;
  • Rep. Michael Danahay;
  • Rep. Cameron Henry;
  • Rep. Walt Leger, III;
  • Rep. Gregory Miller;
  • Sen. Eric LaFleur;
  • Sen. Gerald Long;
  • Sen. Karen Carter Peterson;
  • Sen. Gregory Tarver.

We also found the 2008 act that created the Legislative Capitol Technology Enhancement Fund which gives legislators a helluva lot of discretion over funds no one knew existed—especially with the slipping in of that 2012 amendment that gives them carte blanche control over a helluva lot of money.

Here is the wording of R.S. 24:39, including the key Section D:

RS 24:39     

Legislative Capitol Technology Enhancement Fund

  1.  There is hereby created in the state treasury, as a special fund, the Legislative Capitol Technology Enhancement Fund, hereinafter referred to as the “fund”.
  2.  The state treasurer is hereby authorized and directed to transfer ten million dollars from the state general fund to the Legislative Capitol Technology Enhancement Fund on June 30, 2008, and on July first of each fiscal year beginning July 1, 2009.  The legislature may appropriate, allocate, or transfer additional monies to the fund if it deems necessary to accomplish the purposes of the fund.
  3.  Monies in the fund shall be invested by the treasurer in the same manner as monies in the state general fund and any interest earned on the investment of monies in the fund shall be credited to the fund.  All unexpended and unencumbered monies in the fund at the end of the fiscal year shall remain in the fund.
  4.  Monies in the fund shall be available for appropriation to and use by the Legislative Budgetary Control Council, hereinafter referred to as the “council”.  Such appropriations shall be used by the council solely to fund construction, improvements, maintenance, renovations, repairs, and necessary additions to the House chamber, Senate chamber, legislative committee meeting rooms, and other legislative rooms, offices, and areas in the Capitol Complex for audio-visual upgrades and technology enhancements and for supporting all other operations and activities consistent with the authorized mission of the council.

In 2010, Clifford Williams, who said he worked as a legislative staffer in the Legislature’s Amendment Room where his job was to draft amendments to bills, said, “I was not even aware of this provision until I was asked to do an amendment involving this provision one day.”

He said a legislator came in that day and requested the transfer of $5 million to some other long-forgotten project. “To tell the truth, I not only don’t remember what he said he wanted the money for, I don’t even recall the legislator’s name. But this was the first time I ever heard of this fund, which is nothing more than a slush fund for legislators’ use with virtually no oversight. It’s money that exists outside the regular legislative budget,” he said.

In 2012, just four short years after the initial $10 million appropriation, the fund had a balance of more than $32 million. Here is an analysis of the fund for the fiscal year ended June 30, 2012:

FINANCIAL HIGHLIGHTS

The Council’s net assets increased by $20,161,763. This resulted primarily from significant increases in appropriations in the current year for the Legislative Capitol Technology Enhancement Fund and the State Capitol HVAC Replacement and Renovations project, as well as decreases in expenditures due to the completion of various projects.

 The general revenues of the Council were $32,749,917, which is an increase of $16,741,476 from the prior year. The significant increase is a result of additional appropriations received in the current year for projects and renovations. Prior year revenues did not include appropriations for the Technology Enhancement projects and Capitol renovations.

The total expenditures/expenses of the Council were $11,577,183, which is a decrease of $7,173,036 from the prior year. The decrease is a result of capital outlay expenditures for the Technology Enhancement projects and Capitol renovations decreasing due to project completions in the current year.

The other financing uses of the Council were $1,010,971, which is an increase of $283,007.

So, as the state struggles with budgetary shortfalls, looming deficits and near-certain budget cutbacks, it’s comforting to know the Legislature has solidified its financial future through legislation sneaked through the process with such skill that even Legislative Auditor Daryl Purpera was caught unaware Monday when asked about the fund.

Just another way, folks, that your legislators continue to look out for their own interests (parties, fine dining, campaign cash) while leaving you and your concerns choking in the dust.

As the late C.B. Forgotston would’ve said, you can’t make this stuff up.

And the party goes on.

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LouisianaVoice is having a birthday. We are now five years old.

The onset of Bobby Jindal’s privatization crusade (employees of the Office of Risk Management were the first casualties) in 2011 was the defining moment that gave birth to this blog.

In the ensuing quinquennium, we have logged 1.5 million words, not counting the upcoming book Bobby Jindal: His Destiny and Obsession, which will be available in mid-April. We have made several elected officials and appointed officials angry and uncomfortable—angry and uncomfortable because in the past, they had been unaccustomed to having to account for their actions.

No agency has been exempt from scrutiny, from the governor’s office to various state agencies, boards and commissions, and sheriffs’ offices.

Along the way, our efforts were recognized by the Washington Post which, in 2014, named LouisianaVoice and Bob Mann’s Something Like the Truth as two of the top 100 political blogs in the nation.

But after all is said and done, we have an admission to make.

We should never have been necessary but sadly, we were and we are.

Like it or not, we get the kind of government we deserve. We have the power of the ballot but when only 40 percent of voters exercise that right, what does that tell us about our state, our country? And when that 40 percent responds by marching like so many robots into the voting booths to obediently choose who the lobbyists, PACs, the blaring TV ads and slick campaign mailers tell us without so much as an whimper of protest or an independent thought as to the actual merit of those for whom we are voting, then we have abdicated our right to expect good government.

That’s also why we are faced with dreadful choices in this year’s presidential fiasco. Contrary to most pundits, it’s not voter anger that has created the current political atmosphere.

It’s voter apathy and just take a look who those who have stepped into the leadership void to proclaim themselves as the protectors of democracy. And we did it to ourselves on a national level just as we did it to ourselves on the state level first in 2007 and again in 2011.

And don’t for a moment think this is limited to Bobby Jindal. He had enablers. They called themselves legislators. With few exceptions, we call them leeches.

Try this: Attend any House or Senate committee meeting and watch the members of the committee as witnesses testify. If more than two or three members are actually listening, I’ll eat my Louisiana Tech baseball cap. They’re sitting up there, elevated above the audience, laughing and talking, leaving the hearing room to take a call or get a cup of coffee—just going through the motions of hearing public concerns.

We (and this is a collective “we,” as in just about every citizen in this state) have done a lousy job of holding our elected officials to a high standard of ethical behavior.

And as they say, the sewage flows downhill because those elected officials in turn have failed just as miserably in holding their subordinates to any kind of standards at all.

And we have no one to blame but ourselves.

At first, it came as something of a surprise to learn that two members of the State Police Commission and eight members of the Board of Dentistry had never taken the annual one-hour online ethics course required by law of every public servant, elected or appointed, salaried or not.

It’s not as though they can claim ignorance. They are told of the requirements and they each sign an oath of office.

Franklin Kyle Oath of Office

Freddie Pitcher Oath of Office

William Goldring Oath of Office

Nor have six members of the Louisiana State Board of Medical Examiners (LSBME) bothered to take the simple one-hour course, according to records provided by the State Board of Ethics. They include Drs. Michael Burdine, Kenneth Farris, Kweli Amusa, Joseph Busby, Roderick Clark, and former Board President Mark Henry Dawson who said LouisianaVoice was being “played for a fool” by plaintiffs in a lawsuit against the board.

Informed of the Board of Medical Examiners members who have not taken the course, one reader said, “As a physician, if I didn’t complete my required 40 hours of CME for the previous year, the LABME would not allow me to renew my medical license. Shouldn’t the members of the LSBME be held to the same standards they hold us to? And if they profess ‘ignorance’ on this matter, shouldn’t that be even more of a reason to have them removed?”

But wait. There’s more.

Also failing to take the course are Auctioneer’s Licensing Board Chairman Tessa Steinkamp, Secretary-Treasurer Darlene Levy, and licensing board legal counsel Larry Bankston.

And you also get recently retired (following a State Police “investigation” that cleared him of any wrongdoing) Angola Warden Burl Cain. http://theadvocate.com/news/15271102-172/former-angola-warden-burl-cain-cleared-of-misconduct-allegations-reports-say

Those having contracts with the state also are required to take the online ethics training.

Wade Shows, senior partner of Shows, Cali, & Walsh, a Baton Rouge firm with more than $3.4 million in contracts, has never taken the course and another attorney who has profited greatly from contracts with the Jindal administration, Jimmy Faircloth, took the course in 2012, but has not taken it since.

It should be pointed out that physicians and attorneys are required to take their own ethics courses provided by their professions.

But that does not change the fact that the State of Louisiana since 2012 has required that all public servants (elected officials, appointed officials, board and commission members, and contractors) take the on-line, one-hour course on an annual basis.

From time to time, we will be taking looks at other officials and state contractors to check for compliance with the requirement.

It may seem like a small thing but it becomes a very big thing when these people are not held to the same standards that rank and file state employees must meet.

We have not held the politically powerful accountable and they have not held those answerable to them accountable.

But most of all, we have not held ourselves accountable.

 

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