Posted in Politics on May 20, 2011| Leave a Comment »
Like what you read here? Send a free subscription to a friend or subscribe for yourself. Type in his/her email address in the square at right (beneath “Email Subscription”) and then click on “Sign me up!”
Got a news lead for LouisianaVoice to investigate? Have a suggestion for a story? Your identity will never be revealed. Just send an email to louisianavoice@cox.net
Posted in Auditor, Governor's Office, Politics, Public Records, Transparency on May 5, 2011| 7 Comments »
When a state audit of the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) turned up a number of deficiencies, GOHSEP Director Mark Cooper, judging from his response, must not have gotten the message from Gov. Bobby Jindal.
Among the shortcomings found by the audit were;
Inadequate preparation of the annual fiscal report—for the fourth consecutive year, no less;
Understating the amount reported for the Public Assistance Program by $120 million;
Inaccurate Federal Financial Reports, including a $25 million understatement of the federal authorized amount on the Public Assistance Report for Hurricane Katrina;
Untimely draws and inaccurate reporting of draws to Office of State Reporting and Accounting Policy resulting in delays in state reimbursements and potential lost interest revenue;
The audit report made numerous recommendations to remedy the shortcomings and Cooper responded in classic fashion:
“I have reviewed the finding(s) in (the audit report) which covers activities of the Governor’s Office of Homeland Security and Emergency Preparedness for Fiscal Year 2010,” Cooper wrote.
“Additional staff has been hired and additional training is planned to ensure that multiple layers of review are implemented,” he said.
Wait. What?
“Additional staff?”
What was it that Jindal said a few months back about doing more with less?
Perhaps that doesn’t apply to certain agencies.
Posted in Auditor, Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Politics, Transparency on May 2, 2011| 7 Comments »
Some would call it bureau-speak but to those sitting through Monday’s Senate Retirement Committee hearings on the privatization of the Office of Group Benefits, it was more like gooney-babble.
Commissioner of Administration Paul Rainwater, just as he did last week, tried to convince legislators of the wisdom of privatizing the agency that has amassed a $500 million surplus and which has an administrative cost of only 3.5 percent.
As if that were not enough, Legislative Auditor Daryl G. Purpera testified that Rainwater has refused to provide documents that his office is constitutionally entitled to have in order to conduct proper assessments. “We requested certain documents, particularly those pertaining to the Chaffe contract we were told by Mr. Rainwater that those documents would not be provided,” Purpera said.
“We also tried to get specifics of the proposal but I received a letter from Mr. Rainwater saying those would not be provided under exceptions. My office cannot do its job if we have scope limitations,” he said.
The proposal to which he alluded was the proposal submitted by Goldman Sachs to conduct a financial assessment of OGB and to market the agency for a buyer, according to the RFP. The Chaff contract was a $49,999.99 contract with Chaffe and Associates of New Orleans to conduct an interim assessment. The contract amount was one cent less than the amount that would have required concurrence by the Office of Contractual Review.
Rainwater started his testimony by comparing Louisiana to other states, zeroing in on the staff sizes of the other states as compared to OGB’s 300 employees.
At times appearing to talk down to committee members and once even admonishing committee Chairman Sen. D.A. “Butch” Gautreaux (D-Morgan City) to not interrupt while he was speaking, Rainwater said the $500 million surplus “is not for sale. It will not be diverted for any other use other than to pay claims.”
What he did not say on Monday but did say a week ago was that while the surplus would indeed be used to pay claims, it would no longer be OGB surplus funds paying the claims because the surplus would go over to the buyer who would use the fund to pay claims.
It was only a couple of weeks ago that Rainwater said the OGB $500 million reserves are 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. His own office’s press release of April 26 describing his appearance before the Retirement Committee repeatedly alluded to his testimony on the “potential sale and privatization of the state’s Office of Group Benefits” and of the procurement of a financial advisor “to help the state evaluate a potential sale of OGB….”
On Monday, however, a casual observer would have had difficulty in believing Rainwater was talking about the same proposal. Suddenly, it turns out that OGB is not for sale after all, that the RFP will instead be for a third party administrator of the state’s PPO (Preferred Provider Organization).
“At the end of the day,” he told the committee, “we will still have the Office of Group Benefits with 149 employees.”
“I’m not getting answers to my questions here,” Gautreaux said.
“You are getting answers,” Rainwater shot back.
Gautreaux said if the agency is privatized, “There will have to be rate increases and/or benefit reductions. There’s no way to avoid that with a private company trying to turn a profit.”
Division of Administration (DOA) Chief of Staff Dirk Thibodeaux, who had earlier promised the committee that a new RFP would be completed by week’s end, said Gautreaux was incorrect. “The legislature will have to approve any contract” for a third party administrator, he said, so lawmakers would have the opportunity to examine the rate structure.
Rainwater said there would be a five-year contract with a third party administrator. “At the end of the five years, we’ll take a look at it.”
“What’s going on here?” Gautreaux demanded. “Last week we were talking about selling OGB and now we’re talking about a contract with a third party administrator. You three (Rainwater, Thibodeaux, and OGB newly-appointed CEO Scott Kipper) may know what you’re talking about but the rest of us surely don’t.”
Rep. Hollis Downs (R-Ruston), sitting in as a guest for the second week in a row, said, “The state’s HMO is self-insured but administered by a third party, in this case, Blue Cross/Blue Shield, am I correct?”
“That’s correct,” Rainwater said.
“The state’s PPO is now self-insured and self-administered with the state paying all claims but you’re proposing that it become self-insured but administered by a third party?”
“Yes, sir.”
“And my understanding is you may combine both the HMO and PPO into one, am I correct again?”
“Yes, we could conceivably bundle the two for greater efficiency.”
“So, you’re just selling a block of business and the state would continue to have oversight?” Downs asked.
“That’s correct,” Rainwater said.
Following Rainwater’s departure from the committee room, Travis McIlwain, director of the General Government Section of the Legislative Fiscal Office spoke briefly on efforts by his office to analyze the administration’s proposal.
“Frankly, we have nothing in hand that would allow us to analyze this proposal,” he said. “Until today, we have heard only that the administration wants to sell OGB and now, Mr. Rainwater says it’s not for sale but is for lease to a third party administrator. I’m as confused as you, Mr. Chairman,” he said to Gautreaux.
Posted in Governor's Office, Health Care, ORM, Office of Risk Management, Politics, Transparency on May 1, 2011| 6 Comments »
You have to give it to Gov. Bobby Jindal: he never runs short of ways to insult state employees.
Time and again, he has shown his disdain, his utter contempt for state employees. His mantra of privatization of everything that moves in state government gives little or no consideration as to how it adversely affects state workers.
When he privatized the Office of Risk Management, there were employees with 20 or more years of service who are too young to qualify for retirement benefits and with the current job market so depressed, their prospects of finding meaningful employment are slim. Others who have worked only for the state and are of retirement age, do not qualify for social security or Medicare and are now faced with no medical coverage. Some of those have life-threatening illnesses.
Accordingly, when they lose their jobs, they not only lose their salaries, but their medical coverage as well. Of course they qualify to keep coverage under COBRA but the responsibility for 100 percent of the premiums falls to them and with no job, it’s rather difficult to keep the coverage.
But not to worry: Jindal has found yet one more way to display the extent of his hostility for Civil Service employees and the low esteem in which he holds state workers. It comes in the form of cruel irony that were the circumstances not so dire, it might be laughable.
Apparently it wasn’t enough to publish that nauseating campaign pamphlet four years ago in which he gushed on and on about his love for the state civil service workers. He was so kind as to remind us then that he had worked for the state and that his mother still did (and still does).
Now comes General Circular No. 2011-008 in which he designates May 4, 2011, as “State Employee Recognition Day.” The circular was actually issued by the Department of Civil Service, apparently because Jindal was too busy attending out of state fundraisers.
Turns out he couldn’t even do that right: While the heading correctly says May 4, 2011, the text of the edict proclaims May 4, 2010, as “State Employee Recognition Day in Louisiana.”
The circular is addressed to Heads of State Agencies and Human Resources Directors and reads thusly:
As a part of the nationwide celebration of Public Service Recognition Week (May 2-6), Governor Bobby Jindal has proclaimed Wednesday, May 4, 2010, as State Employee Recognition Day in Louisiana.
We encourage you to use this opportunity to recognize your employees and educate the public about the work state employees are doing to keep our citizens safe, protect our drinking water, provide medical care to the indigent, help abused children, maintain our roads and bridges, and so much more.
Don’t forget to ask your Human Resources Directors and Communications Directors to partner to effectively educate the public on the many quality services your employees deliver to our citizens. Tell the story of how they are making a difference in our communities.
For ideas on activities and community and media outreach projects, there are helpful resources for your review, such as NASPE’s “2010 NASPE (National Association of State Personnel Executives) Guide to State Employee Recognition Day” found at http://www.naspe.net.
One would think they would at least update last year’s circular to reference the 2011 NASPE guide.
Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Politics, Teague on April 23, 2011| 18 Comments »
Rep. Jim Fannin (D-Jonesboro) has authored a bill that would alter current law by allowing Gov. Bobby Jindal to use much of the current $500 million Office of Group Benefits (OGB) surplus to help plug the gaping $1.6 billion state budget deficit.
Fannin is Chairman of the House Appropriations Committee.
Controversy has swirled around Jindal’s attempts to privatize OGB because of the manner in which the administration brought Wall Street banking firm Goldman Sachs in on early efforts to draft a request for proposals (RFP) for a financial assessment of the agency and to marked OGB to potential buyers.
Goldman Sachs, after helping draft the RFP, turned out to be the only company to submit a proposal and now stands to reap up to $6 million for its work in helping to sell the agency.
The law that created OGB stipulates that benefits for about a quarter million state employees, retirees and their dependents may be paid by any provider. That language would allow Jindal to sell the agency without the necessity of legislative approval, said a source within the Division of Administration.
Commissioner of Administration Paul Rainwater said there would be no financial impact on OGB members.
But if OGB is sold, it would eliminate about 150 jobs in the agency and would also allow any purchaser to raise premiums, reduce benefits, or both, contract with a third party administrator or re-sell OGB to another buyer. Either way, once sold, all state control of OGB would be lost.
Besides the $500 million surplus currently on the OGB books, the agency also collects about $1.1 billion per year in premiums. State Sen. Butch Gautreaux (D-Morgan City), chairman of the Senate Retirement Committee and a member of the OGB board, has made no secret of his opposition to the auctioning off of OGB.
He said if premiums are worth $1 billion and the agency has a $500 million surplus, then the selling price should be at least $1.5 billion. “I support getting rid of a state agency that doesn’t work,” Gautreaux said. “But this (OGB) isn’t costing the state. This is a great value.”
Rainwater acknowledged as much when he said the OGB $500 million reserves are 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.
He said the current surplus exists because of initiatives overseen by former OGB CEO Tommy Teague, whom the administration abruptly fired on April 15. No reason has been given by Rainwater for Teague’s firing.
Teague was only six months away from qualifying for retirement when he was shown the door.
Gautreaux said he fears that privatization will drive up costs for state workers who are already facing increased contributions to their retirement plans. He charged that Jindal is targeting state workers, who could lose their jobs if they object publicly to the sale. “I call it predatory politics,” he said. “You go after the weakest of the herd.”
Preliminary estimates indicate that whoever purchases OGB would receive about $300 million to $350 million of the agency’s $500 million surplus with the state receiving the remainder.
But R.S. 42:854(C) has stood between Jindal and his desire to reap any political hay in the form of a cash influx. That statute says, “Not withstanding any other provision of law to the contrary, any money received by or under the control of the Office of Group Benefits shall not be used, loaned, or borrowed by the state for cash flow purposes or any other purpose inconsistent with the purposes of or the proper administration of the Office of Group Benefits.”
Now, Fannin’s bill, if approved by the legislature and signed by Jindal, the governor’s signature being a virtual certainty, would change all that. Jindal’s signature, of course, would be a virtual certainty.
HB-32, already assigned to Fannin’s Appropriations Committee, reads in part:
“After satisfying the requirements of the Bond Security and Redemption Fund as provided in Article VII, Section 9(B) of the Constitution of Louisiana, the (state) treasurer shall, notwithstanding R.S. 42:854-(C), transfer into the Overcollections Fund provided for in R.S. 39:100.21, the proceeds generated as a result of the sale or other transaction by the Office of Group Benefits which has the effect of transforming its operations.
In general layman’s terms, that means the legal prohibition of using OGB funds for the state’s general budget would be removed, making it legal for much of the OGB surplus to be used by the state to plug its budget hole.
Though the two statutes clearly conflict, under rules of construction, the new statute would take precedent, or overrule the older law, according to Terry Hessick, a retired attorney for the Louisiana State Board of Private Investigator Examiners.
Hessick wrote a letter to Richard Manship, manager of the Baton Rouge Advocate, taking the newspaper to task for its lack of coverage of the OGB controversy.
The Baton Rouge paper ran a brief story on April 16 on Teague’s firing but nothing about details of the proposed sale until a week later, on April 23.
The text of Hessick’s letter:
Dear Mr. Manship:
As we edge ever closer to the anticipated privatization of the Office of Group Benefits, with its probable huge negative impact on state employees, retirees, and their dependents, I am amazed that the Advocate, as well as our local television news departments, has given little or no exposure to this potential catastrophe. As a subscriber, each morning I look for any articles on the sale of OGB, but the only thing I found recently was the announcement that Tommy Teague had been fired. The stories about this sale have been available on the internet for weeks, but not in the Advocate.
You may not think that the OGB sale is newsworthy or is of little interest, but the sale would affect about 150,000 state employees and retirees, and another 100,000 or so of their dependents, all of whom depend on OGB for their health, medical and prescription coverage. Also, the attempts of the Jindal administration to put the deal together in relative secrecy; the fact that Goldman Sachs wrote the RFP for doing the deal and was the only bidder for the services; the fact that Goldman Sachs stands to make $6 million for doing who knows what; the fact that the half-billion-dollar surplus or reserve which the OGB has accumulated would be divvied up between the state treasury ($150-200 million) and the eventual purchaser ($300 million); the fact that the OGB members and their dependents can only watch while the monies set aside to pay their medical expenses are plundered and carted off by the administration and some private party; the probability that those members will have to make up the missing monies by paying ever-increasing premiums for what can only be reduced services; and, the probability that increased premiums required by a private insurer will, in the near future, place additional burdens on the state treasury and on all Louisiana taxpayers; should induce the Advocate and other credible news sources to at least investigate, ask questions, and demand answers. In other words, send out your reporters to do their jobs, instead of sitting on this story.
To allow you to catch up with this ongoing story, I have attached several articles from the internet, including those published by TPM, louisianavoice.com, winzerinsurance.com, politicslaforums.com, and devtimessw.com. I have also attached a copy of my recent letter to the editor, which the Advocate chose not to publish. I understand that others have written letters to the editor on this subject, including the Louisiana Retired Employees Association, none of which have been published. It seems that the Advocate thinks it is more relevant to publish the endless bickering about the Baton Rouge to New Orleans passenger railway, which is unlikely to be funded or built in our lifetimes, than to publish letters which would bring to the attention of your readers an event which will impact the lives and health of a quarter of a million Louisiana citizens.
I do not know why the Advocate has chosen to ignore the privatization (sale) of OGB unless it fears the wrath of the Bobby and his henchmen or it actually approves of the disservice which this administration is doing the state employees. For many years, the New York Times has had as its motto, “All the news that’s fit to print.” Maybe the Advocate should adopt a similar motto: “All the news that’s SAFE to print.” I am disappointed in the Advocate.
Very truly yours,
Terry F. Hessick
Attorney at Law
Retired State Employee
