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Archive for the ‘Privatization’ Category

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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It’s been more than 16 months and still there is no word as to the disposition of a Union Parish case involving a prisoner already awaiting sentencing for aggravated rape who, inexplicably, was not only allowed out of his cell, but also given admittance into an isolation cell where he raped a 17-year-old girl not once, but twice.

The Ruston Daily Leader first reported the story on May 3, 2016, but the rape had occurred earlier, on April 19. LouisianaVoice posted its first story on May 10. (See that story HERE.)

Demarcus Shavez Peyton of Homer, then 28, was being held in the Union Parish Detention Center pending his sentencing in Claiborne Parish after his conviction there of aggravated rape. Union Parish officials were informed by the Claiborne Parish Sheriff’s Office that Peyton was known as a serial rapist and that he had already been convicted of aggravated rape. He has since been sentenced to live imprisonment for the Claiborne Parish rape.

The Union Parish Detention Center is a public-run facility overseen by an operation committee comprised of District Attorney John Belton, Union Parish Sheriff Dusty Gates, the Union Parish Police Jury and the Farmerville Police Chief. Because no one individual has authority over the way in which the detention center is run, Gates was unable to adequately see to it that the girl, who had been placed in an isolation cell because she was under the influence of meth, was protected from Peyton.

Gates told LouisianaVoice on Wednesday (Aug. 30) that it was his understanding that the guard on duty that night has been disciplined. “The guard wasn’t paying attention,” Gates said. “When the call button was pushed, he just opened the cell without paying attention.”

The operational structure of the detention center and Gates’s explanation also brought into sharp focus the problems inherent with private prisons which are little more than money trees for the local sheriffs or private operators who run them. LouisianaVoice addressed that problem in a follow-up post on May 31 (click HERE).

In that story, three questions were posed:

  • How was it that the girl was being held in proximity to a convicted aggravated rapist?
  • Who (and this is the most important question of all) was the Union Parish Detention Center staff member who allowed Peyton out of his cell and into the girl’s?
  • Who is responsible for operations of the detention center?

The third question has already been answered. We’re still awaiting answers to the first two as well as a few other questions we put to the Attorney General’s Office in the form of a formal public records request because the AG was asked (rightly) by Belton to take over investigation of the matter in consideration of the DA’s involvement in running the prison (in itself, a curious arrangement):

  • Where does the attorney general’s investigation stand at this point?
  • Has a trial of Demarcus Peyton been scheduled for this alleged rape? If so, what is the scheduled date of that trial?
  • What disciplinary action was—or is anticipated to be—taken against the guard?
  • For Demarcus Peyton to have committed this act, two cell doors would have had to have been opened: his and the cell to the victim. Why was Demarcus Peyton allowed to leave his cell and even more egregious, why was he admitted to the victim’s cell when he was already awaiting sentencing for aggravated rape?
  • Are any measures being recommended by the attorney general’s office relative to the future operation of the Union Parish Detention Center?

Our questions were forwarded to the Attorney General’s Office at 10:09 a.m. Wednesday. At 11:25 a.m., we got out answer from Press Secretary Ruth Wisher: “This matter is under investigation; therefore, I cannot comment on the specifics or answer questions at this time.”

Sixteen months and it’s still “under investigation.”

How long does it take to investigate a rape in a confined area like a jail cell?

Another seemingly unrelated but nonetheless important question that we could be justified in asking is: To what end are sheriffs seeking bigger detention centers to house more prisoners? The answer to that, of course, is power, purely and simply. If the sheriff can build detention centers to house more prisoners, it brings in additional state money (the state pays about $26 per day per prisoner housed). With that extra income, the sheriff can shore up his power with bigger and more impressive weaponry arsenals.

That theory was underscored just this week when President Trump announced plans to remove the restrictions on military gear for local police departments (click HERE). That announcement must have local sheriffs and police chiefs salivating over the prospects of having a Humvee or a mine resistant ambush protected vehicle.

There will be those who will be just itching for the slightest provocation so they can roll out their military weapons to put down the insurrection and to haul anyone who might object off to their locally-run jails so they can keep the beds full and the payments rolling in from the state. It’s a self-perpetuating ATM.

Meanwhile, someone forgot to check the cell door, leaving a teenage girl vulnerable.

And now, 16 months after the fact, it’s still “under investigation.”

Perhaps Attorney General Jeff Landry has more important matters on his plate than bringing such a trivial matter as a sexual assault on a teenage girl to a close after more than 16 months. After all, she was on meth and in jail.

And we have to protect decent, upstanding citizens first, right?

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It may not be as furtive as Sen. Neil Riser’s 2014 amendment to sneak a hefty retirement raise for State Police Superintendent Mike Edmonson through the legislature, but something doesn’t seem quite right about a request for proposals (RFP) due to be issued by the Division of Administration by the end of the month (Thursday).

And this time the legislature has nothing to do with it; curiously, the project was initiated by Bobby Jindal and continues to be pushed by John Bel Edwards despite two separate studies that have said it is a bad deal for the state.

A request for information (RFI) for a “public-private partnership related to the State of Louisiana’s Central Chilled Water Facilities” was issued by the Division of Administration on March 17, 2015. The Jindal administration as part of its privatization push, was exploring the feasibility of entering into an agreement whereby a private entity would take over operation of the facilities which provide chilled water to air-condition state buildings in the Capitol Complex and elsewhere.

The state currently operates two such facilities, one in South Baton Rouge and the other in North Baton Rouge.

Only two companies, Bostonia Group of Boston and Bernhard Energy of Baton Rouge, submitted proposals in May 2015 but on June 23, 2015, Glenn Frazier, director of the Office of State Buildings, issued a letter which said in part, “After thorough review of the two proposals by an evaluation committee, Bostonia Group’s proposal was rejected and Bernhard Energy was asked to present an oral presentation. After hearing Bernhard Energy’s oral presentation and reviewing there (sic) subsequent follow up information, the committee has determined that due to the exceptionally high cost, it is clearly not in the state’s best interest to enter into a public-private partnership with Bernhard for the proposed services.” OSB Review Team Report

Apparently not satisfied with that recommendation, the Jindal administration then entered into a $25,000 contract with Assaf, Simoneaux, Tauzin & Associates (AST) Engineering Consultants of Baton Rouge on October 20, 2015, for the “Evaluation and Feasibility Study” of Bernhard’s proposal.

The state currently owns all the equipment and piping for both plants. Bernhard proposed extending the piping to other non-state entities and to market the chilled water with 38 percent of the sales being credited to the state.

AST, in a June 29, 2016, letter to Bill Wilson of the Office of State Buildings (OSB), said the proposed 38 percent credit to the state “appears to be low given the fact that the state currently owns all the equipment and is producing and distributing the chilled water.”

Despite acknowledging that Bernhard had “tweaked” its initial offer to come up with a more attractive proposal, AST said the “adoption of this agreement would not be advantageous for the State of Louisiana in its current form.”

AST called the revised formula submitted by Bernhard “cumbersome,” adding that “Based on our assessment and analysis, we recommend the current response to the RFI not be accepted by the State of Louisiana as a final proposal/contract.” AST Review Team Report

Bernhard submitted four options: one calling for a 20-year contract, two for 30-year durations and the fourth for 99 years. Under terms of its proposal, Bernhard would pay the state cash up front, depending upon which option was agreed upon. Under Option One, the state would receive $9.1 million for the 20-year agreement. The state would receive $12 million under Option Two and $12 million under Option Three, each for a 30-year contract. For the 99-year agreement, the state would receive $14.5 million up front.

Bernhard would invest some $13 million in expanding the piping system in order to serve private entities in downtown Baton Rouge. The state, in turn, would purchase its chilled water from Bernhard Energy. Additionally, the state would continue to own all piping and equipment but would “retain the obligation to operate, maintain, repair, renew, and replace the Central Chilled Water Facilities (CCWF) including any improvements or new equipment installed by Bernhard.”

In an email exchange with the state, Bernhard was told, “The concept of having a State entity, i.e., Office of State Buildings contract with Bernhard Energy and then have the state pay for the services back to Bernhard Energy does not appear to be logical from the State’s perspective. This would additionally place a state entity (Office of State Buildings) serving both a private contractor at the same time as providing services to its State tenants. Doing so could would likely result in not providing the expected service levels to the agencies we serve and it (could) direct (sic) conflict with achieving the agency mission.” StateofLACCWF.BernhardResponses.12.19.15[1852].docx.0001

Bernhard’s response was immediate and significant in that the wording of the company’s response hinted that the entire RFP process may have been rigged to benefit Bernhard:

“Bernhard is confused by the response of the State on this item. During a meeting with Bernhard representatives on September 29, 2015, the State indicated that it could operate the facilities cheaper than Bernhard. To decrease the rates under the Thermal Services Agreement, Bernhard agreed to offer a proposal whereby it subcontracted the operation and maintenance of the facilities back to the State. If the State does not wish to have the operation and maintenance of the facilities subcontracted back to it, Bernhard can retain the operation and maintenance and the costs associated with the operation and maintenance of the facilities would be recovered through the rate structure previously proposed.

“In contrast, if the State does not wish to have Bernhard operate and maintain the facilities, which was, in large part the basis of the RFP, and it is unknown why the State would have issued the RFP, and allowed Bernhard and other respondents to expend substantial sums in pursuit of this project if the State had no intention of having a third party operate and maintain the facilities.”

But if you thought the project was dead, think again.

LouisianaVoice has obtained an email from Commissioner of Administration Jay Dardenne dated April 19 of this year in which it was made evident that the governor’s office wants the public-private partnership to become reality.

Here is that email:

I have assured the Gov that we will have the RFP on the street no later than May 31. My understanding, which I communicated to him, is that we anticipate that the statewide proposal (including Capitol Park and the DOA controlled properties across the state) will probably be the first one out of the chute based on the delays created by defects in the Southern proposal which has been sent back to the school. I want to make sure that we meet or beat the May 31 deadline. I know that everyone’s focus has been on the SFO (solicitation for offers) for the PM (prescription marijuana) (properly so) but this now needs to be a top priority. Please make sure your folks understand. Thanks. Jay (emphasis ours).

Just in case you don’t believe us: DARDENNE MEMO

Jim Bernhard, who heads up Bernhard Energy, previously served as Chairman of the State Democratic Party and was mentioned as a possible candidate for governor in 2007. He built and headed the Shaw Group before it was sold to Chicago Brick & Iron (CB&I) a few years ago for $3 billion.

He and his assortment of companies have been major players in the state’s political field, contributing more than $85,000 to Gov. John Bel Edwards in 2015 and 2016 and $56,000 to former Gov. Kathleen Blanco in 2003. By contrast, campaign finance records show that he and his companies gave only $3,000 to Jindal in 2003 ($1,000) and 2007 ($2,000).

But his generosity to Blanco apparently paid huge dividends in the aftermath of Hurricane Katrina in 2005.

The Shaw Group was contracted to place tarpaulins over damaged roofs at a rate of $175 per square (one hundred square feet per square). That’s $175 for draping a ten-foot-by-ten-foot square blue tarpaulin over a damaged roof. Shaw in turn sub-contracted the work to a company called A-1 Construction at a cost of $75 a square. A-1 in turn subbed the work to Westcon Construction at $30 a square. Westcon eventually lined up the actual workers who placed the tarps at a cost of $2 a square.

Thus, the Shaw Group realized a net profit of $100 a square, A-1 made $45 dollars per square, and Westcon netted $28 dollars a square – all without ever placing the first sheet of tarpaulin. Between them, the three companies reaped profits of $173 per square after paying a paltry $2 per square. The real irony in the entire scenario was that the first three contractors – Shaw, A-1, and Westcon – didn’t even own the equipment necessary to perform tarping or debris hauling. By the time public outrage, spurred by media revelations of the fiasco, forced public bidding on tarping, forcing tarping prices down from the $3,000-plus range to $1,000, Shaw and friends had already pocketed some $300 million dollars.

The state threatened prosecution of those who it felt overcharged for a gallon of gasoline in Katrina’s aftermath but apparently looked the other way for more influential profiteers.

Any odds on who gets the contract for the water chiller?

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There was a popular game about 40 years ago called “Whack-a-mole.” (For all I know, it may well still be around.) Anyway, the object of the game was for a player to “whack” a rodent with a rubber mallet each time it appeared out of one of five holes. The problem was each time a mole was “whacked”, it invariably popped up again from one of the remaining four holes.

So it is with certain news stories that just when you think you’ve written about all there is to say on the subject, up pops another angle to pursue.

This time though, two separate—and seemingly unrelated—stories that have been covered extensively in the past by LouisianaVoice have now converged to warrant a fresh look at old news.

Before I go any further, I should acknowledge the ever-sharp eyes of my bronchitis-infected friend and Ruston High School classmate John Sachs (Class of ’61). It is he, after all, that brought an otherwise routine local news story in the Farmerville Gazette to my attention. (I guess I’m going to have acquiesce and give him that honorary Deputy Ace Reporter badge he’s been clamoring for.)

Eagle-Eye John called me about efforts to hire a private prison management company to take over management of the 380-bed Union Parish Detention Center. You may recall that LouisianaVoice had a couple of stories about the facility last year, on MAY 10 and MAY 31 about a convicted rapist who was allowed out of his cell to rape a female prisoner. Twice.

That incident, deplorable as it certainly was, is not what this is about, however.

The Gazette story recounted the reason for the decision by LaSalle Corrections to decline Union Parish’s offer. Those reasons dealt with the potential shortage of prisoners if Gov. John Bel Edwards is successful in reducing the number of state inmates and the financial impact of such a move.

Another factor, said LaSalle Chief of Operations Johnny Creed, was the size of four other facilities in north Louisiana managed by LaSalle: Richwood Correctional Center (1,129 inmates), Jackson Parish Correctional Center (1,285), LaSalle Correctional Center (785) and Catahoula Correctional Center (835).

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And then Creed said the thing that caught Sach’s eye, prompting him to call me with his croaking voice and rattling cough: “As small as (Union Parish Detention Center) is, we would need to bring our work release inmate that work for Foster Farms from our Richwood facility.”

Wait. What?

Foster Farms has 100 work release inmates working at its cotton-pickin’ chicken-pluckin’ plant in Farmerville?

Isn’t this the same plant that Bobby Jindal, with the support of State Sen. Mike Walsworth (R-West Monroe), gave $50 million to in order to get Foster Farms to take over the plant from Pilgrim’s Pride back in 2009?

Wasn’t Foster Farms supposed to provide up to 1,100 jobs with that $50 million?

Does Foster Farms get a $2,400 tax credit for each inmate it employs in the work release program?

And aren’t work release programs something of a cash cow for sheriffs and private prisons farming out prisoners to work for just a smidgen more than minimum wage?

Yes,

Uh-huh.

Yep.

Hell, yes.

You mean to tell me Foster Farms gets a $240,000 tax credit (that’s credit, not a deduction, meaning that’s $240,000 income on which Foster Farm pays no taxes) for hiring 100 prisoners at $7.75 per hour (about 60 percent of which goes to the local sheriff), jobs that should be going to local folks?

Very perceptive, Grasshopper.

This, folks, is yet another lingering smell that hits our olfactory like a pair of dirty socks but which we affectionately call the Jindal Legacy.

The work release program is such a golden egg that sheriffs all over the state, reading the tea leaves shaped like dollar signs, rushed to build their own programs, complete with barracks and vans for workers. And to make sure the beds stayed filled, which is the only way they can get the maximum state dollars, the accommodating Louisiana Sheriffs’ Association lobbied (read parties, booze, women and campaign contributions) Louisiana’s law and order legislators to be more law and order-oriented and pass stiffer penalties for even the most insignificant crimes.

To see just how lucrative this could be for a small parish like Union, let’s run the numbers.

State law allows the sheriff or operator of the private prison to take up to 62 percent of a prisoner’s earnings. One hundred prisoners working 40 hours per week for 50 weeks per year at $7.75 per hour. That comes to $1.55 million earned by the prisoner.

The Union Parish Detention Center is unique in that it is the only such facility in the state in which neither the sheriff nor a private company has operational controls. It is operated by committee comprised of a member of the Union Parish Police Jury, the district attorney and parish police chiefs. Lincoln Parish at one time was run in the same manner but it is now run by the sheriff.

If the parish takes “just” 60 percent, that’s $930,000 per year for the sheriff/operator. And that’s over and above the rate the state pays the sheriff/operator to house the prisoners. More than six years ago, LOUISIANA VOICE published a story that examined some of the housing contracts between the state and several Louisiana parishes.

Despite the money generated by the work release program, the Union Parish Detention Center has continued to lose money. That is the reason for the unsuccessful attempt to lure LaSalle into managing the center.

We followed our December 2010 post with a story in AUGUST 2015 that illustrated the abuses that can occur when someone with the right connections can use that advantage to manipulate a system like work release for his own monetary gain.

Jail operators, be they sheriffs or private corporations, love the money the work release program brings in to augment that paid by the state for housing the prisoners.

And businesses like Foster Farms love being able to hire 100 prisoners at near-minimum wage and receive a $240,000 tax credit in the process.

It’s a win-win for everyone but the taxpayers.

So, bottom line: Thar’s gold in them thar jails.

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In the parlance of the criminal justice system, money laundering is sometimes called “washing” or “scrubbing.”

But dirty money is always dirty money, no matter what efforts are taken to make it appear legitimate.

The same is true of politics. Having just gone through a gut-wrench senatorial campaign, we’ve seen up close and personal how political ads come in all manner of misleading half-truths and outright lies. Case in point: the absurd promises of State Sen. Bodi White (R-Central), who ran ads during his recent unsuccessful campaign for Mayor-President of Baton Rouge about how he was going to improve schools, cut the dropout rate, and attract better teachers.

The problem? Neither City Hall nor the mayor have squat to do with public education; that’s the East Baton Rouge Parish School Board’s turf. What’s more, White was fully aware of this, so his ads amounted to nothing more than pure B.S., or, to be more blunt: bald face lies.

And now, thanks to Stephen Winham, our human Early Warning System who often tips us off to interesting stories, we have the laundering of Bobby Jindal’s image by some groupie/writer for the National Review named Dan McLaughlin.

The scrubbing, however, comes a tad early; even in Louisiana, the citizens aren’t likely to forget the carnage wreaked by Jindal so quickly.

McLaughlin, it seems, is an attorney who practices securities and commercial litigation in New York City. He also is a contributing columnist at National Review Online (Go figure). He is a former contributing editor of RedState (No surprise there), a columnist at the Federalist and the New Ledger. During his spare time he is a baseball blogger at BaseballCrank.com.

McLaughlin has written at least a dozen or so insipid pro-Jindal pabulum-laden claptrap-filled columns, all of which could just as easily have been written by Timmy Teepell.

In his most recent contribution to National Review (the entire story is not contained at this link because I’m too cheap to subscribe), McLaughlin WRITES that “Jindal took on the enormous challenge of cutting government in a state that is culturally deep-red but economically populist, and he paid a great political cost for his efforts.”

Apparent, he wrote that garbage with a straight face.

There’s more from McLaughlin who wrote in an earlier column for RedState that Jindal was the BEST CANDIDATE for the Republican presidential nomination and that (get this) Jindal ruled in one of the presidential debates (never mind Jindal never got past the undercard debates in which all participants were weak also-runs).

McLaughlin wrote that Jindal’s low approval ratings “and the desperate wails of his Democratic successor over the condition of the state’s budget seem to support” the view that Jindal left the state in financial disarray.

Seriously? McLaughlin conveniently overlooks the fact that the “view” that Jindal’s leaving the state in disastrous shape took shape long before John Bel Edwards and long before Jindal abandoned his post for his delusional pursuit of the presidency.

McLaughlin made no mention of Jindal’s administration coming up with a contract to give away two of the state’s learning hospitals that contained 50 blank pages.

He ignores the matter of how Jindal doled out plum board and commission positions to big contributors to his campaign, how he rolled over anyone who disagreed with him by either firing or demoting them, how he took tainted campaign contributions from felons and refused to return the money, or how he gutted the reserve fund of the Office of Group Benefits in order to try to close gaping budget deficits that occurred every single year of his governorship.

“The path to smaller government requires persistence, backbone, and a willingness to accept compromises and a lot of defeats,” he wrote.

Correction, Mr. McLaughlin: the path to Bobby Jindal’s version of smaller government requires ruthlessness, vindictiveness, and unparalleled selfishness.

While one might justifiably think that Jindal’s political career is dead and buried, is it even remotely possible that he might be plotting a comeback?

Already, there are the first rumblings that Jindal is eying the 2019 gubernatorial campaign.

Just in case, perhaps someone should send McLaughlin a copy of my book, Bobby Jindal: His Destiny and Obsession. Not that he would change his mind, but at least he would have no excuse for not knowing.

And just in case you’ve not ordered your copy yet, click on the image of the book at upper right and place your order immediately.

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