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

ORM TPA downsizes only long time Baton Rouge employee

Posted in Contract, Contracts, Governor's Office, ORM, Office of Risk Management, Transparency on June 30, 2011| Leave a Comment »

Chalk up another casualty to Gov Bobby Jindal’s drive to privatize.

It was one year ago on July 1 that F.A. Richard & Associates (FARA) began its phased-in takeover of the Louisiana Office of Risk Management under a contract whereby the state was to have paid FARA an amount “not to exceed $68,119,710” to assume operations of the agency. Normally, we would round that off to $68.1 million in the interest of brevity but the reason we don’t here will become evident soon enough.

Approximately 10 months later ORM and FARA came before the House Appropriations Committee to explain the Division of Administration’s approval of a contract amendment of $6,811,971, bring the new contract total to “a maximum amount of $74,930,868.

For those adept at math, that equates to precisely 10 percent of the original contract amount. ORM Assistant Director Patti Gonzales, when questioned as to why approval of the Appropriations Committee was not sought for the amendment, informed members that The Office of Contractual Review may approve a one-time amendment of up to 10 percent without committee approval.

That was bad enough, but then Gonzales let slip that it was anticipated that only about $2 million of that $6.8 million amended amount would actually be spent.

Apparently no one on the committee had the presence of mind to ask why the contract would be amended by $6.8 million if only $2 million was to be spent. The answer became apparent a week later when it was learned that FARA had been bought by an Ohio company named Avizent.

Could it be that $6.8 million amendment bolstered FARA’s bottom line sufficiently to make the company more attractive to Avizent?

Better yet, why did ORM Director Bud Thompson and FARA CEO Todd Richard sit in that committee hearing with Gonzales and never open their mouths about the pending sale that had obviously been in the works for weeks, if not months? With another $6.8 million at stake, lawmakers deserved to know that.

A plea of confidential negotiations is a cop-out. By the time of that hearing, the sale was all but final, needing only the extra $6.8 million to sweeten the deal.

Avizent has 35 offices in 25 states but its Baton Rouge office had only one employee at the time of the purchase of FARA.

That employee was Ramsey Horn, a claims adjuster with both adjusting and supervisory experience dating back 19 years to when he was originally employed by ORM in 1992.

On several occasions, Horn informed Avizent’s home office that he needed more personnel in the Baton Rouge office to assist him with the office workload. His pleas went unanswered. On Thursday, one day before the one-year anniversary of FARA’s takeover of ORM, Horn was sacked.

No reason was given for Horn’s being given his walking papers other than the pending merger of FARA with Avizent. In short, his salary, likely higher than those being offered incoming ORM employees, was a distraction the new owners didn’t need. After all, why pay Horn X dollars when he can be replaced by an incoming ORM adjuster at X minus 15 or 20 percent?

Perhaps FARA and/or Avizent were listening when Jindal said state to “do more with less.” Perhaps they wish to carry that philosophy over into the private sector. After all, with two years of frozen salaries, the Jindal administration has certainly made the idea work in the public sector.

With more of ORM’s coverage lines due to be taken over by FARA/Avizent, it would seem there would be a need for more, not fewer, employees to efficiently make the transition.

But, if one adheres to the administration mantra of doing more with less and doing it without salary increases for two consecutive years, perhaps Ramsey Horn was simply expendable.

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The best political disinfectant is still a little sunshine

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Jindal promptly vetoed the bill.

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

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

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

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

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

His answer: “The governor.”

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

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

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

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

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

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

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

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

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

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

That candidate, Rick Scott, incidentally, won election.

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

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

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

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

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

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

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

His first responsibility is not to the big dollar contributors.

That distinction rightly belongs to you.

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

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

Copyright LouisianaVoice (2011)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“I agree completely,” he added.

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Jindal consistent on transparency: reveals little, redacts contract amount. Is ACS the secret DHH contractor?

Posted in Governor's Office, Health Care, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Public Records, Transparency on June 8, 2011| 2 Comments »

When attorneys for the Louisiana Department of Health and Hospitals last week refused to disclose the name of the firm awarded a multi-million-dollar contract, it wasn’t the first time the Jindal administration has withheld key information normally considered to be public record.

There is, of course, the infamous Chaffe Report prepared by Chaffe and Associates of New Orleans in March under a $49,999.99 contract to conduct a quickie financial assessment of the Office of Group Benefits so that Gov. Bobby Jindal could factor the information into his executive budget submitted on March 19.

Contents of that report, however, were not included in the executive budget, leading many to believe the report did not provide data that the administration wanted to hear. Refusal by Commissioner of Administration Paul Rainwater to release the report to legislators after first promising he would do so also fueled speculation that the administration was not satisfied with the report’s recommendations.

But even before that, the administration which touts itself at every opportunity as the “most transparent” and “most ethical, most accountable” administration in Louisiana history, has shrouded its contractual and financial machinations in a cloak of secrecy.

In 2009, DHH entered into a contract with ACS State Healthcare, a subsidiary of Xerox. That contract was to have run from July 1, 2009 through Dec. 31, 2009. It called for ACS to provide information and eligibility screening to individuals seeking services through the DHH Office of Aging and Adult Services (OAAS). The contract also called for ACS to provide assessment and care planning to individuals seeking and receiving long term care and personal care services, and to operate a telephone hotline for the office.

A copy of the contract is contained on the DHH web page but the amount of the contract and monthly payment terms are redacted, or blacked out. No reason was provided for censoring the contract amount in the document. There certainly no legal basis for the action.

An online search turned up the same contract information in another document, however, and while the contract number (679532) was the same on each document, the dates of the contract were not.

What began as a six-month contract turned into two years (July 1, 2009 through June 30, 2011) and the contract amount is $20 million. It has since been renewed at a higher contract amount.

ACS is one of four firms that submitted proposals for the most recent (but anonymous) DHH contract, expected to go for something in the neighborhood of at least $34 million. That’s what it now costs the state to operate its Medicaid Management Information System. It’s one of the nicest neighborhoods in the state, contractually speaking.

Other firms submitting proposals were HP Enterprise Services, Molina Medicaid Solutions, and CNSI.

DHH Secretary Bruce Greenstein served as vice president of Health Care for CNSI from June 2005 to September 2006, leading some to believe that CNSI will be named as the contractor. Greenstein said he took himself out of the selection process because of his past connection to the company.

LouisianaVoice, however, isn’t buying into conventional wisdom. To choose CNSI would simply be too obvious. We’re going with ACS—for eight reasons. That’s eight as in six contracts totaling $148.3 million and two contributions of $5,000 each to Jindal from ACS.

Besides that $20 million contract already alluded to, there is another contract with OAAS (July 1, 2011through June 30, 2014), which is simply a renewal of the present contract, for $26.6 million.

Other contracts include:

• $74.5 million with the Division of Administration (DOA), Office of Community Development that runs from Mar. 27, 2009 through Mar. 26, 2012 to assist hurricane damaged parishes recover rental units;

• $14 million with the Department of Children and Family Services from July 1, 2010 through June 30, 2016 to prepare ad-hoc reports;

• $7.2 million to provide management services to several DHH programs, including Community CARE, KidMed, and long term personal care;

• $6 million with the Office for Coastal Restoration for environmental science consulting services.

The latter two contracts each ran from July 1, 2009 through June 30, 2010.

The decision by DHH to withhold the identity of the contractor who, in all probability, will be handling claims processing and information systems for the state’s $6.6 billion Medicaid health insurance program for the indigent, remains unclear.

Former DHH Secretary David Hood said the decision sounded like an administrative one to him. “I’m not aware of any provision in the law that prevents release of a name,” he said.

Likewise, Sen. Willie Mount, chairperson of the Senate Health Committee, calling the DHH interpretation “weird,” said the law cited by DHH attorneys does not indicate to her that the selection, once made, cannot be announced. “If you have already made the decision, why can’t you disclose it?” she asked.

She and Hood agreed that springing the name of the successful bidder on legislators at a public hearing would give committees no time for vetting the selection.

When F.A. Richard was chosen as the successful bidder to take over the state’s Office of Risk Management (ORM) in March 2010, not only was the announcement made before legislative approval, the announcement was actually made before (ORM) employees were told.

The refusal to divulge the identity of the contractor, the contents of the Chaffe report, and the amount of the ACS $20 million contract with DHH are consistent with the refusals by the Louisiana Office of Economic Development and DOA to provide information required by state statute to the Legislative Auditor.

If nothing else during his first term of office, the Jindal administration has shown beyond any doubt that it is unwavering in its resolve to flaunt its peculiar brand of transparency.

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Rainwater & Thompson need to answer this: What did you know about the sale of FARA and when did you know it?

Posted in Governor's Office, House, Senate, Legislature, Legislators, ORM, Office of Risk Management, Privatization, Transparency on May 20, 2011| 13 Comments »

During the Watergate hearings nearly 40 years ago, U.S. Sen. Howard Baker (R-Tenn.) asked that now-famous question, “What did the President know and when did he know it?”

That question today could be addressed to Commissioner of Administration Paul Rainwater, Office of Risk Management (ORM) Director J.S. “Bud” Thompson, and F.A. Richard & Associates (FARA) CEO Todd Richard after revelations on Thursday that FARA had been sold to Avizent, a national claims and risk management company in Dublin, Ohio.

FARA last year was the winner of a bidding contest to take over ORM’s claims, loss prevention, and subrogation operations in the first of Gov. Bobby Jindal’s ambitious plan to privatize everything in state government that moved and to cut funding for those that remained stationary.

Under the contract, “not to exceed” $68.2 million, that went into effect on July 1, 2010, FARA was to phase in its takeover of ORM over a five-year period.

The Loss Prevention, Subrogation, and Worker’s Compensation units were the first to go over to FARA and General Liability was scheduled for the transfer later this year.

In the meantime, only eight months into its contract, FARA, with the blessings of Thompson, requested a contract amendment of $6,811,971, bringing the new contract to “a maximum amount of $74,930,868.

Under law, the Office of Contractual Review may approve contract amendments of up to 10 percent without legislative approval.

The contract amendment was conveniently requested—and approved by Contractual Review—for precisely 10 percent.

The Office of Contractual Review is under the direct supervision of Rainwater, also convenient.

Both facts were not lost on Rep. Jim Fannin (D-Jonesboro), who chairs the House Appropriations Committee. He was understandably miffed that neither ORM nor DOA requested approval of the amendment from his committee, choosing instead to circumvent the intent of the legislation by keeping the amendment to exactly 10 percent.

Adding insult to apparent injury, Patti Gonzales, assistant director of ORM and who works immediately under Thompson, calmly informed Fannin that the full $6.8 million amendment wasn’t even necessary because it was anticipated that only about $2 million of that would actually be spent.

That could have been because the 10 percent clause is a one-time Get Out of Jail Card. Any subsequent amendment requests, no matter the amount, must come before the Appropriations Committee. Gonzales knew that and admitted as much to Fannin and the committee at its May 12 hearing on the contract amendment. It was a classic case of ORM hedging its bets.

Thompson sat behind Gonzales at that hearing, choosing not to speak. That was probably advisable, considering the near disaster last year in allowing him to testify before the same committee when it was considering the privatization proposal.

Thompson was dressed down by Sen. Ed Murray (D-New Orleans) during the morning session of the committee when Thompson, with many of his soon to be out-of-work employees sitting behind him in the hearing room, quipped that once the privatization took place, he would remain in his job to oversee operations and would “probably need a raise.”

That comment came on the heels of a legislative decision to forego civil service merit salary increases beginning on July 1, 2010—a policy that has been carried over into 2011 because of the state’s fiscal crisis.

Murray delivered a withering reprimand to Thompson that the committee was considering a serious matter and that he should act accordingly. Thompson did not attend the afternoon committee session after that public relations fiasco.

He apparently learned his lesson because at last week’s hearing, he allowed only one ORM employee to attend, citing in an email to ORM employees the rising Mississippi River and preparations for the transfer of the General Liability section to FARA as his reasons.

In a Feb. 28 memorandum to Rainwater, Thompson requested Division of Administration (DOA) approval of the contract amendment.

“Since the implementation (of the FARA takeover) began, ORM has begun experiencing difficulty in retaining our experienced adjusters, as many are seeking employment elsewhere in state government,” the memo said. “We are currently utilizing contract adjusters to supplement our in-house staff for lines not yet transitioned to FARA, at considerable expense to the state and with a significant loss of efficiency.”

So, what did he expect “experienced adjusters” to do? Their jobs and benefits were being yanked from beneath them. Did he realistically expect them to quietly remain on their jobs until the final shoe fell? ORM, as of last July 1, was a sinking ship and rats, as the expression goes, are predisposed to leave. Did he not take that into account when ORM and DOA first issued the request for proposals (RFP) or later when the contract with FARA was negotiated?

All that would seem surreptitious enough but now comes word that FARA is selling out to Avizent, which presently has 35 offices in 25 states. Its Baton Rouge office has one employee.

One has to wonder, in retrospect, about that $6.8 million contract amendment. Was it truly essential for FARA to continue its takeover, which it now turns out, was fairly short-lived? Or was it necessary to bolster the revenue side of FARA’s ledger in order to make the firm more attractive to a buyer?

Did Rainwater know of the impending sale when he signed off on the amendment request? Most probably.

Was Thompson aware of what was taking place when he made the request for the amendment? If not, he should be fired. No one in the position of running a multi-million dollar agency should operate in a total vacuum and be allowed to remain.

If he did know, he should be fired. If he knew, he had an obligation to so inform Fannin and his committee last week. Instead, he sat quietly by and said nothing.

Did Richard know the formal announcement of the sale of his company was merely days away as he sat next to Gonzales at last week’s committee hearing? Of course he did.

These transactions don’t take place over a matter of a few days or weeks. It takes months, sometimes years, of poring over books, reviewing clients, debts, and staffing for such decisions to be made.

Of even greater importance, what does the sale mean to the remaining ORM employees? Or for that matter, what does it mean to those who have already gone over to FARA?

The original contract called for FARA to retain ORM employees for at least a year at salaries comparable to the industry standard.

Will that requirement be carried forward in a new contract with Avizent? Or will a new contract even be required? Most likely. Avizent, after all, now has only a one-person office in Baton Rouge. It will need to obtain employees from somewhere. As to salaries and benefits, those remain unanswered questions.

Rainwater, asked by email to address the sale, has instead chosen to ignore LouisianaVoice inquiries. FARA also has been strangely silent. Only Avizent, through a spokesperson for Avizent CEO Tom Watson even so much as acknowledged that company was “in the process” of acquiring FARA.

Of course, since FARA contributed $10,000 to Gov. Bobby Jindal’s 2003 gubernatorial campaign, all is quite likely to be forgiven.

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