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Archive for the ‘Privatization’ Category

A handful of distinguished retired journalists (and me) meets once a month at a Baton Rouge Piccadilly Cafeteria (I told you we were retired) to solve the ills of the state, nation, and the world. Occasionally, we even delve into local Baton Rouge politics.

One of those, Ed Pratt, with whom I had the pleasure of working at the old Baton Rouge State-Times back in the ‘70s, is an occasional attendant but because he is still gainfully employed (unlike the rest of the over-the-hill-gang), he doesn’t join us each month.

But several months ago, at a lunch he did show up. The subject that day was the future of the Taylor Opportunity Program for Students (TOPS) and the legislature’s failure to adequately address the looming fiscal cliff that will see about a billion dollars fall off the books with the expiration of a temporary sales tax.

On March 9, Pratt, who still does a regular op-ed column for the Baton Rouge Advocate, WROTE a piece that accurately illustrated the direct connection between the continued funding of TOPS and the return on investment of apartment developers and restaurant owners, investments that exist in the immediate orbit of the state’s institutions of higher learning.

And while Pratt’s analysis singled out the spurt in apartment, condo, and restaurant development, primarily in the immediate proximity of LSU, other colleges and universities have also witnessed similar private investment, particularly in student housing.

Those investments could be in peril if the legislature continues to shirk its responsibility in setting the state on firm fiscal footing.

Take my alma mater, Louisiana Tech, for example, and Grambling State University, just five miles from Tech. There has been an explosion of housing construction around those two campuses. And because Tech has embarked on an ambitious program of student recruitment to bump its enrollment to something like 20,000 or so over the next few years, construction workers have been particularly busy in Ruston. (The enrollment at Tech when I was there was something like 4,000. But they had rotary dial pay phones, Cokes in 61/2-ounce glass bottles, manual typewriters, carbon paper, and 8 p.m. weeknight curfews for female students back then, too.)

But the way they’ve gone about with their student housing construction at Tech is quite creative and is being emulated by every other campus in the state, according to Ruston political consultant Dr. Gary Stokley, a retired Tech professor.

The Tech Alumni Foundation approaches alumni and other supporters with an “investment opportunity” that, as long as TOPS is maintained, is virtually risk-free. (And no, it’s not a Ponzi or pyramid scheme.)

Tech, despite having torn down some of its dormitories, is growing and with an increase in enrollment, students need housing. And, of course, students would prefer a home environment with private baths and kitchens as opposed to dormitories with a community bath and no kitchen.

By working with the school’s foundation, which actually negotiates the construction contracts, investors enjoy a generous tax write-off, plus they will own a percentage of the apartments or condos. The school takes care of filling the housing units and collecting the rent and is also responsible for the maintenance of the buildings. The dollars generated by student rent pays off the debt. The advantage to the school is that it is relieved of the burden of having to go through the State Bond Commission to obtain funding for the construction. The alumnus or supporter who ponies up the money does nothing but sit back and reap the rewards of his investment.

If you have the funds to sink into the project, it’s a win-win proposition.

“Tech is one of the first schools to come up with this method of financing construction of student housing,” said Stokley. “Other schools have since replicated that method.

“Tech and Grambling have a tremendous impact on the economy of Ruston and Lincoln Parish as do others schools on their communities,” he said.

“A four-year student at Tech has an economic value of a million dollars on Ruston,” he said, “so the retention of students is critical. If TOPS craters, enrollment will drop and these apartments will sit empty.

“It’s a domino effect. If TOPS is cut or eliminated, it affects not only students’ families, but the ripple effect impacts colleges and the community as well.” Stokley said it was not unrealistic to envision some universities actually shutting down or converting from public to private schools with even higher tuitions—which could further reduce enrollment.

There are already all those extra fees that students voted to impose on themselves—before tuition began rising so sharply seven or eight years ago. “At Tech, we have the $62 million Davison Center that students voted to pay a portion of by assessing themselves fees totaling $8 million,” Stokley said. “That’s an added fee tacked onto already rising tuition. If TOPS is cut, that’s money that will have to be made up by students’ parents or by students taking out student loans. If that happens, the money for private apartments and condos just won’t be in the budget.”

Combined with the threat to TOPS, banks are lobbying Congress to cap the amounts of government student loans which could place additional financial hardships on students.

With federal student loans, the interest rate is fixed and often lower than private loans which can have variable interest rates of more than 18 percent. Plus, with federal loans, students are not required to begin repayment until they graduate, leave school or change their enrollment status to less than half time. Private loans require payments while still enrolled.

For other advantages of federal over private loans, click HERE.

If you are a parent with a kid enrolled in a Louisiana public university who is on TOPS, you may wish to turn your attention from March Madness long enough to give your House and Senate members a call to suggest that they take time away from campaign fund raising long enough to do the job they were elected to do.

Better yet, here are the links to the HOUSE and SENATE. Scroll down and click on the name of your members to get their email addresses to contact them that way.

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A three-judge panel of the First Circuit Court of Appeal in Baton Rouge has scheduled arguments for Tuesday in the state’s appeal of a DECISION by a 19th Judicial District Court judge last March that knocked down much of the Jindal administration’s arbitrary rule changes in the approval of medical treatment for state employees injured on the job.

The decision was another in a long line of “reform” movements by Jindal—and pushed by the American Legislative Exchange Council (ALEC)—that were subsequently found to be unconstitutional or simply fell apart. Some of those included public education funding, group medical coverage for state employees, public-private partnerships in the operation of state hospitals, prison privatizations and tax proposals.

In his March 30 seven-page REASONS for JUDGMENT that followed a Feb. 7 bench trial, District Judge Don Johnson noted that:

Because the legislature did not authorize OWC to create a new rule creating a “tacit denial” when the provider simply ignores a request for treatment, “the Office of Workers Compensation exceeded its legislative authority as (it) lacks the authority to create and implement procedural regulations that authorize the ‘tacit denial of requested medical treatment which is statutorily obligated to the injured worker by the employer pursuant to (state statute).”

Johnson also found that OWC promulgated rules requiring injured workers to meet a higher burden than the state statute for any variance in an injured worker’s treatment schedule are “vague and the regulations are arbitrary, denying injured workers’ medical treatment that Louisiana employers are statutorily obligated to provide…”

Johnson also found that the “scheme” for determining whether an injured worker can receive medical treatment outside the Louisiana medical treatment guidelines (MTG) “is unduly burdensome.”

Special Assistant to the Director Carey Holliday testified that he was hired to help “bring the judges into conformity,” according to the answer to the state’s appeal filed by attorney J. Arthur Smith III on behalf of several plaintiffs. Holiday did that by implementing judicial performance evaluations. While he acknowledged he could not tell judges how to rule, he could “put them together and let them talk” and that “there will be some conformity…to come out of that,” Smith said in his answer.

The most damning revelation to come out of last February’s trial was testimony of improper Ex Parte communication between insurance carriers and defense attorneys about the merits of injury claims pending before OWC judges. Those communications were usually in the form of emails.

For example, one such email from a workers’ compensation defense attorney to former OWC Director Wes Hataway, Holliday, and the OWC chief judge contained complaints that one judge had ruled against an employer. The email went on to say of the judge, “He should be fired immediately,” and implied that the judge’s skills were less than those of a first-year law student. “He will do as he pleases no matter what,” the email said. “If this isn’t grounds to fire a judge, I don’t know what is.” The defense attorney ended his email by saying, “I think it’s time for the W.C. judges to become accountable for their actions.”

Judge Johnson took a dim view of this disregard for judicial independence by the 2011 decision to remove of the decision-making authority of the OWC judges and place it in the hands of the OWC Medical Director, Dr. Christopher Rich.

Johnson ruled that OWC “has violated the separation of powers doctrine by compromising judicial independence” by giving unpreceded powers to Dr. Rich, who was awarded a $500,000 contract to serve as medical director.

Rich, if nothing else, is consistent. Previously involved in ethical problems with another state contract, LouisianaVoice wrote about an apparent conflict of interest. In March 2011, the State Ethics Board ruled that he was prohibited, in his capacity as Medical director of OWC from participating in any matter involving Central Louisiana Surgical Hospital, a facility in which he owned an interest and which provided medical treatment to injured workers.

As OWC Medical Director, he could deny coverage to a state employee and then refer the employee to Central Louisiana Surgical Hospital for private treatment.

And did he ever deny coverage to state employees once ensconced as medical director. He even testified in February that he ignored the clinical judgment of treating physicians, even specialists, giving no weight to the recommendations of treating physicians. Moreover, according to his own testimony, he never examined an injured worker even though he made the final decision on what, if any, medical treatment the employee would receive. He even overruled a neurosurgeon’s recommendation that an employee undergo a cervical fusion because he, Rich, did not deem it necessary.

Attorney Janice Valois Barber testified in February that Rich had denied 100 percent of her clients’ requests for medical treatment variances. Dr. John Logan also testified by deposition that 100 percent of his variances likewise had been denied by Dr. Rich. Dr. Logan said that many of his patients simply gave up, knowing they would never get approval for the medical treatment they needed.

Dr. Pierce Nunley testified that he performs spinal surgery on almost a daily basis. He said he has attempted to contact Dr. Rich regarding Rich’s repeated refusals of request for treatments that vary from the MTG but was never able to get through to Rich nor did Rich return his calls.

So now, the state is continuing to pour good money after bad by appealing the decision of the lower court in an effort to uphold what was—and is—a very bad policy in dealing with people’s lives.

To us, it doesn’t seem quite right that one man, who never even once examined a patient would deny 100 percent of all requests for variances in the normal medical treatment guidelines. Surely there were a couple of valid claims in all of that.

But by consistently rejecting each and every claim, Dr. Rich was enforcing the Bobby Jindal code of justice and fair play.

It might be fine for Jindal to sell his books to his foundation in order to divert money from his non-profit into his pockets but no injured worker had a right to receive treatment for his injuries.

It might be fine for a legislator to lease luxury automobiles, pay ethics fines or even income taxes from campaign funds or for legislators to place relatives in state employment, but we just can’t have judges giving these deadbeat state employees a decent break.

And why not? The money-sucking appeals aren’t costing elected officials and bureaucrats anything. The tab is being picked by those clueless taxpayers. And besides, the state has plenty money.

The three-judge panel hearing the case includes appeal court judges John Michael Guidry, John T. Pettigrew and William J. Crain.

 

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It’s funny how a change in bosses can bring about an almost seamless change in philosophy on the part of subordinates who harbor a desire to keep their jobs.

Take Jimmy LeBlanc, Secretary of the Louisiana Department of Public Safety and Corrections, said in May of this year that he didn’t believe it would be worth it in terms of any cost savings to privatize five state PRISONS.

Yet, only five years earlier, on May 8, 2012, LeBlanc was quoted in New Orleans’ GAMBIT magazine as saying he hoped the $8 million per year in savings from the privatization of just a single state prison—Avoyelles Correctional Center (AVC) in Cottonport—could be reinvested into rehabilitative programs. He even said AVC was an ideal candidate for the plan because it was similar to the privately-run facilities in Winn and Allen parishes.

What’s the reason behind LeBlanc’s position change?

Well, for openers, in 2012, he was serving as head of corrections as an appointee of then-Republican Gov. Bobby Jindal. Today, he is serving in the administration of Democratic Gov. John Bel Edwards, who reappointed him in January 2016.

The contrasting positions appear to be classic examples of political hacks swaying with the prevailing winds. Jindal wanted to privatize prisons so he could get an infusion of quick cash to smooth over annual gaping holes in his budget. Edwards, not so much. In fact, Edwards is downright opposed to the idea of privatization, leaning instead toward reducing the state’s prison population by freeing non-violent offenders. Jindal preferred keeping the prison beds full in order to keep a continuous flow of cash to private prison operators who are paid on the basis of head counts.

But the contrast doesn’t end there.

As pointed out in the 2012 Gambit article, LeBlanc said AVC was an ideal candidate for privatization because it was so similar to those private facilities in Winn and Allen. At that time, they had been downgraded to “jail” status, thereby allowing state officials to eliminate education and rehabilitation programs.

Well, guess what?

Last May, LeBlanc was singing a different tune about the attributes of those facilities, saying that he was in favor of restoring the Winn and Allen facilities to “prison” status, a move that would necessarily bring the state back into the picture. Apparently, what was “ideal” under the Jindal administration didn’t quite measure up under Edwards. But LeBlanc is nothing if not flexible.

It’s probably that flexibility that has allowed LeBlanc and others in the Department of Public Safety to survive when appointees in other agencies were shown the door with the ushering in of a new administration.

Survival. It’s a great motivator.

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Oral arguments are scheduled to be heard on Nov. 7 in the First Circuit Court of Appeal in Baton Rouge on a three-year-old matter that a layman unfamiliar with the way in which judges can manipulate and interpret laws to keep the meter running would think should have been settled two years ago.

But settling cases quickly and decisively is not the way the courts work and because of that, the case involving the unconstitutional closure of Huey P. Long Medical Center (HPLMC) in Pineville in 2014 rocks on, continuing to rack up fees for contract attorneys for the state—all paid for thanks to the generosity of Louisiana taxpayers.

Meanwhile, the fate of some 570 employees has been held in abeyance since the hospital’s closure on June 30, 2014.

And the manner in which its closure was approved prompted the lawsuit by plaintiffs Edwin Ray Parker, Kenneth Brad Ott and the American Federation of State, County, and Municipal Employees (AFSCME).

Here’s the way it all went down:

At 4:07 p.m. on April 1, 2014, a notice of the April 2 meeting at 9 a.m. of the Senate Health and Welfare Committee to consider Senate Concurrent Resolution (SCR) 48 which “Provides for legislative approval of and support to the Board of Supervisors of Louisiana State University for the strategic collaboration with the state in creating a new model of health care delivery in the Alexandria and Pineville areas.”

A “new model of health care delivery” was a clever way of wording the SCR so as not to tip the hand of the Jindal administration’s intent to shutter the doors of HPLMC. Who could possibly be expected to discern from that goony-babble that in less than 24 hours, the decision would become final to close the facility?

There were only two key things wrong, either of which should have been sufficient grounds to stop closure of HPLMC.

First, the Senate’s own rules promulgated in accordance with the Louisiana Open Meetings Law LA 42:19(B), which says that notice of all such meetings must be posted no later than 1:00 p.m. the day prior to the meeting and if notice is posted after 1:00 p.m., the agenda item may not be heard the next day. (emphasis added)

Second, in a 1986 case, the U.S. Supreme Court held that:

A concurrent resolution…makes no binding policy; it is ‘a means of expressing fact, principles, opinions, and purposes of the two House (House of Representatives and Senate).” (emphasis added)

Attorney J. Arthur Smith, III of Baton Rouge argues that Article III, Paragraph 14 of the Louisiana Constitution provides that the style of a law “shall be ‘…enacted by the Legislature of Louisiana’” and Paragraph 15(A) which says rather bluntly, “The legislature shall enact no law except by a bill introduced during that session…” (emphasis added)

Smith said, “The Legislature cannot amend Louisiana statutes by resolution” because an enacting clause “distinguishes legislative action as law rather than a mere resolution” as held in First National Bank of Commerce, New Orleans v. J.R. Eaves in that “failure to include a significant portion of the enacting clause renders the law unconstitutional.”

To put all that in plain English, Smith is simply pointing out case precedents which hold that a concurrent resolution is not the same as a legislative bill and therefore, is not binding.

That’s pretty straightforward and something that a first-year law student should be able to comprehend.

Yet, when the state appealed the ruling of State Judge Pro-Tem Robert Downing of June 23, 2014, which granted plaintiff’s request for a preliminary injunction because the Senate committee violated the Open Meetings Law and provisions of Article III of the Louisiana Constitution, the First Circuit managed somehow to overlook the violations.

Instead, it ruled the state’s appeal as moot since HPLMC closed on June 30, 2014, seven days after Downing’s ruling and the First Circuit did so without even bothering to address the issues on which Downing’s ruling was based.

Moreover, the state appealed directly to the Louisiana Supreme Court on the basis of the declaration of the unconstitutionality of SCR 48. On Jan. 13, 2017, the Supreme Court denied the state’s appeal as moot but on Feb. 24 of this year, granted a rehearing to the First Circuit.

So now, a three-judge panel comprised of Judge John Michael Guidry, Judge John T. Pettigrew and Judge William J. Crain will hear arguments on the constitutionality of SCR 48 and of violations of the Open Meetings Law.

Interestingly, the state argues that notices to the public “need not contain anything other than a bill number” and that the Senate “has no obligation to inform the public of the nature or substance of the legislative proposals it will be considering.”

Now that’s a damned interesting concept. Who knew we, the public, had no right to be informed of what our elected representatives are up to? Who knew the people we elect and send to Baton Rouge have “no obligation” to let us know what they’re cooking up in the House that Huey built? Who knew the Bobby Jindal administration could push a concurrent resolution through the Senate and call it a law? Who knew such upright public servants as Jindal and members of the Senate committee would flim-flam us?

Louisiana R.S. 42:24 authorizes the courts to void “any action taken in violation” provided a lawsuit to void any action “must be commenced within 60 days of the action.”

The Baton Rouge firm of Taylor, Porter, Brooks & Phillips is representing the State in the HPLMC litigation.

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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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