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Archive for the ‘Privatization’ Category

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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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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