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Archive for the ‘Privatization’ Category

“It seems to me like we’re selling prisons to cover a hole this year but we haven’t addressed covering the hole next year.”

—Rep. Page Cortez (R-Lafayette) on Gov. Bobby Jindal’s proposal to sell state prisons.

“Until the day I was arrested, I never knew there were ‘for-profit’ prisons.”

—Unidentified writer commenting on nola.com story on prison privatization.

“If the sheriffs don’t want to participate, we’ll go back to the original plan, go back to the private sector.”

—Gov. Bobby Jindal, reacting to Avoyelles and Rapides sheriffs Doug Anderson and Charles Wagner, Jr. who denied Jindal’s announcement that they had agreed to purchase state prisons in their parishes.

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Deep Throat , during the cloak and dagger pursuit of the Watergate story by Washington Post reporters Bob Woodward and Carl Bernstein, at one point advised Woodward to “follow the money.”

Nearly four decades later, that’s still good advice for any reporter attempting to develop a cause and effect angle to any political story.

That’s what LouisianaVoice has been doing for some time now with Gov. Bobby Jindal’s campaign finance reports and it’s a long, convoluted path with numerous twists and unexpected changes of direction. But a pattern does appear to be emerging from this work in progress.

Take for example Jindal’s oft-repeated stand on gay rights.

He has consistently opposed expanded adoption rights for gays and way back in 2003 he made it clear he had no time to meet with a gay rights group.

As governor, he even created the Louisiana Commission on Marriage and Family which was designed to “propose programs, policies, incentives, and curriculum regarding marriage and family by collecting and analyzing data on the social and personal effects of marriage and child-bearing within the state of Louisiana.” One of his first appointees to the commission was Tony Perkins of Baton Rouge, president of the anti-gay advocacy group known as the Family Research Council.

But there’s that $5,000 campaign contribution in August of 2008 from Paul E. Singer of New York.

Singer is an enormously wealthy New York City hedge fund manager and prominent Republican donor.

Together, he and two other right-wing Republican donors from the financial district contributed nearly $1 million to a new coalition of gay rights organizations in New York.

Politics, it seems, does indeed make for strange bedfellows. Okay, that was too easy but you knew someone was going to say it.

In last fall’s congressional elections, Jindal campaigned vigorously for Republicans in other states but avoided U.S. Sen. David Vitter like the plague.

Some felt that Vitter’s admitted trysts with prostitutes did not square with Jindal’s family value core beliefs. How then, does he explain the $19,000 he accepted from former Congressman Bob Livingston between April 2003 and February of this year?

Perhaps he calculated that Livingston was flying well below reporters’ radar. But remember, Livingston admitted his own dalliance with another woman just prior to the impeachment proceedings of President Bill Clinton.

At the time Livingston was poised to become House Speaker but resigned from Congress instead.

Not that Jindal goes to any great lengths to vet his contributors.

We’ve already seen that he accepted $11,000 from the Louisiana Horsemen’s Benevolent and Protective Association (LHBPA) in apparent violation of state and federal prohibitions against political contributions by non-profit taxpayer-supported bodies.

Actually, that $11,000 figure is from the Legislative Auditor’s office but CNS has documented $22,000 in LHBPA donations from November of 2003 through March of 2009. Apparently, the state auditor only more recent contributions.

The top two administrators of the association at the time are now awaiting trial on 29-count federal indictments of fraud, election rigging, and other charges.

Then there is the $2500 donation made to Jindal in December of 2008 by HCA of Nashville.

In 1997, eleven years prior to that donation, HCA became embroiled in the largest Medicare fraud investigation in history. HCA ultimately paid a record $1.7 billion in criminal and civil fines.

The CEO of HCA at the time was a man by the name of Rick Scott.

Rick Scott is now the Republican governor of Florida for whom Jindal campaigned extensively last fall.

Just last Saturday, the Florida legislature passed a $69.7 billion budget that included Scott’s sweeping program to privatize at least 16 prisons, numerous annexes, juvenile correction facilities, road camps, and work-release centers in 18 counties.

The Florida privatization plan will result in the loss of 1700 jobs in the state prison system as well as reduced benefits for those lucky enough to keep their jobs—all for a promise by the private companies of an annual savings of $40 million, a promise State Sen. Mike Fasano finds vague and unconvincing.

State Rep. Paige Kreegel said the core mission of government is to protect good people from bad ones. “When we shirk our core mission, we lost our legitimacy to govern,” he said.

Both Kreegel and Fasano are Republicans.

Scott had his reasons for wanting to privatize, of course: 25,000 reasons, to be precise. GEO Group, a Boca Raton-based company, contributed $25,000 to Scott’s campaign in January, about the same time he took office.

GEO is the nation’s second-largest private prison operator is currently contracted to run the Allen Correctional Center in Kinder in Allen Parish.

The company contributed $10,000 to the Jindal campaign in separate $5,000 payments in 2007 and 2008.

Other private prison firms contributing to Jindal’s campaign include:

• Corrections Corp. of America (CCA) of Nashville, TN., the nation’s largest private prison firm–$13,000;

• Wackenhut Corrections of Palm Beach Gardens, FL.,–$10,000;

• LaSalle Management, formerly of Rayville but now headquartered in Ruston–$10,000;

• Emerald Correctional Management of Shreveport–$10,000;

• Waterproof Correctional of Shreveport–$2500;

• LCS Corrections Service of Baton Rouge–$2500;

• Richwood Correctional Center of Ruston–$2500, and

• Joseph Russell of Nashville, a member of the CCA board of directors–$2500.

CCA presently operates the state’s Winn Parish facility on a contractual basis while LaSalle runs state lockups in Claiborne Parish (Homer), Ouachita (Richwood), Catahoula (Harrisonburg), Jackson (Jonesboro), LaSalle (Urania), Lincoln (Ruston), and Concordia (Ferriday).

Emerald operates the West Carroll Detention Center in Epps and also operates facilities in Texas, New Mexico, and Arizona.

Wackenhut once ran the state juvenile detention facility in Jena but subsequently returned the facility to the state following claims of brutality by guards.

Abuse of juveniles by private prison concerns is not limited to Louisiana, of course.

Pennsylvania has been rocked by a scandal in which two judges funneled juveniles with only minor offenses into privately-run detention centers in exchange for monetary kickbacks from the companies.

All the controversy swirling around the private companies is of little apparent concern to Jindal, Scott, and Republicans in general, who appear determined to privatize state agencies.

If a little campaign money helps grease the skids, so much the better.

Prison privatization appears dead for this year’s legislative session but it’s pretty much a certainty that it will remain a high priority on Jindal’s agenda.

As we have observed before, he is half-right about his administration’s being the most transparent and ethical in state history.

He is certainly transparent enough but we’re still looking for the ethics.

And we’re continuing to follow the money.

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“A sale and privatization of the Office of Group Benefits will have no negative impact for those covered.”

“We’re not selling the Office of Group Benefits.”

“Let me say that again: A sale and privatization of OGB will have no negative impact for those covered.”

“At the end of the day, the state will still have the Office of Group Benefits.”

“The procurement of a financial adviser to help the state evaluate a potential sale of OGB was undertaken in accordance with applicable law.”

“We’re not selling OGB.”

—Commissioner of Administration Paul Rainwater at various times in testimony before the Senate Retirement Committee on the proposed privatization of the Office of Group Benefits.

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Opponents of the proposed privatization of the Louisiana Office of Group Benefits (OGB) got two major boosts last week, first when Wall Street international banking firm Goldman-Sachs appeared to be having second thoughts about its involvement and later when state judges weighed in to oppose the sale.

Both developments could pose major jolts to Gov. Bobby Jindal’s efforts to place OGB on the auction block.

As opposition to the sale of the agency, along with its $500 million accrued surplus grows, Jindal is encountering ever-mounting opposition to his plan. Virgil Orr, retired vice president at Louisiana Tech University in Ruston and a former state representative, has fired off a letter to Attorney General Buddy Caldwell seeking legal guidance in fighting the sale.

Judges from across the state attended a two-day conference at the Hilton Lafayette and Towers in Lafayette on Thursday and Friday of last week and the judges, who are themselves members of Group Benefits, adopted a formal resolution that was forwarded to Jindal asking him to reconsider the sale.

Earlier in the week, Goldman-Sachs appeared to balk at accepting a $6 million contract to assess the value of OGB and to find a buyer for the agency after having helped to write the specifications for a request for proposals (RFP) and subsequently becoming the only bidder on the RFP.

Formal opposition, of course, is no guarantee of success with the Jindal administration. In 2008, both the Louisiana Municipal Association and the Louisiana Police Jury Association objected to Jindal’s signing Act 433 into law. The Consumer Choice for Television Act allowed AT&T to sell cable television service without the necessity of obtaining local franchises from city councils, parish councils or police juries. In effect, the act removed from local and parish governmental entities their authority and responsibility to negotiate cable franchise agreements with companies that relied on locally-owned public infrastructure such as utility poles.

Despite the fervent opposition from the municipal and parish associations, Jindal signed the act into law.

AT&T subsequently contributed $250,000 to Jindal’s wife’s charitable foundation, the Supriya Jindal Foundation for Louisiana’s Children.

Louisiana Supreme Court Chief Justice Kitty Kimball reportedly was in attendance at the judges’ Lafayette conference.

Members of the judges association’s Legislative Committee include Chairman Bob Morrison of the 21st Judicial District Court (Livingston, Tangipahoa, and St. Helena), Raymond Childress of the 22nd JDC (St. Tammany and Washington), Rosemary Ledet of the Orleans Civil District Court, Mary Becnec of the 40th JDC (St. John the Baptist), Ford Stinson, Jr. of the 26th JDC (Bossier and Webster), Jay McCallum of the 3rd JDC (Lincoln and Union), Toni Higginbotham of the East Baton Rouge Parish Family Court, Scott Crichton of the 1st JDC (Caddo), Harry Randow of the 9th JDC (Rapides), and Mike Canaday of the 14th JDC (Calcasieu).

The wording of the resolution was not immediately available but Capitol News Service has submitted a formal public records request of Commissioner of Administration Paul Rainwater and Jindal’s office for a copy of the resolution and any letter that may have accompanied it to the governor’s office.

A similar request was made for any reports generated by Chaffe and Associates of New Orleans after it was awarded a contract for $49,999.99 (one penny less than the amount that would require approval of the Office of Contractual Review) to provide preliminary figures about OGB assets in time for Jindal to submit his proposed 2011-2012 budget.

Despite reports that Chaffe submitted a report draft, Rainwater’s office has twice denied that any such documents have been received by his office. One report also said that the legislative auditor’s office had also been denied access to the Chaffe report if it does, in fact, exist.

Goldman-Sachs, after news stories about its involvement in both writing the specifications for the RFP and then submitting the only proposal, reportedly told the Division of Administration (DOA) during a conference call last Monday that it would opt out of the $6 million contract unless the state agreed to indemnify the banking giant from liability from any litigation arising from the proposed sale of the agency.

Such an agreement would expose OGB to legal liability and require the state on the one hand to spend money to defend an agency that, on the other hand, the state is trying to dismantle.

When told the state would not agree to those terms, representatives of Goldman-Sachs said they would have to check with their legal department and get back to DOA officials.

As of Friday, Goldman-Sachs had not called state officials back.

There are reports circulating around the state that at least two groups, possibly three, are considering filing class action lawsuits against Jindal, Commissioner of Administration Paul Rainwater, the Legislature, and OGB to stop the planned sale. One of those is the Retired State Employees Association of Louisiana.

Orr, contacted in Ruston, said he had sent a letter to Attorney General Buddy Caldwell to explore legal options open to members of Group Benefits.

“I asked the attorney general to advise us on three questions:

“What is the legality of Jindal’s proposal to sell Group Benefits? What course of action is open to us if Jindal’s proposal is not legal? And what should we do if it is legal?”

R.S. 42:854.5(A) says, in part, “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.” (emphasis added.)

Under Jindal’s plan, the state would take $150 million to $200 million of OGB’s $500 million surplus to help plug the gaping $1.6 billion state budget deficit with the purchaser of the agency getting the remainder.

Orr said he was concerned with the direction Jindal is taking the state in his efforts to privatize state prisons and OGB. The Office of Risk Management was privatized last July at a contract cost of $68 million to the state but F.A. Richard and Associates, the firm that submitted the winning bid and was awarded the contract, has already requested a $7 million contract amendment.

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Events in Baton Rouge appear to be spinning out of control these days with legislative efforts at mandated reapportionment appearing to crater coupled with growing discontent among state employees over the proposed privatization of the Office of Group Benefits and three state prisons.

Probably the most appropriate metaphor would be that Emperor Nero (Gov. Bobby Jindal) fiddled (attended yet another out-of-state fundraiser) while Rome (the Legislature) burned.

On Thursday, both houses of the Louisiana Legislature abruptly and simultaneously said to heck with it and adjourned until Monday as the deadline loomed for reapportioning the House, Senate, the Board of Elementary and Secondary Education, the Public Service Commission, and redrawing the state’s congressional districts from seven to six to accommodate the state’s loss of population from 2000 to 2010.

When they return, they will have only three days to agree on all of those issues, a virtual impossibility in the eyes of some observers. They’ve been in special session, after all, since March 20 and now must try to accomplish in three days what they haven’t been able to do in the past three weeks.

In all probability a second special session will have to be wedged in between Wednesday’s adjournment and the April 25 start of the 2011 regular session. If that occurs, the first order of business should be that the 39 Senators and the 105 House members pass by unanimous vote a resolution that will not accept one penny of per diem. Legislators currently are paid $159 per day for each day they are in Baton Rouge. That’s over and above their regular salary, so a second special session of, say 10 days would cost the state almost $230,000 for doing what it should accomplish in the current special session.

So at a time when a steady hand was desperately needed to steer the ship, when some semblance of leadership and guidance was sorely needed, where was Gov. Bobby Jindal?

Why in San Antonio trying to raise still more funds to get him re-elected to the job he wants, of course.

Jindal, who already has upwards of $12 million in his campaign coffers and no opposition in sight, appears focused on just two things (we know, the governor usually begins his responses to questions with, “Three things….): his re-election and his obsession with privatizing everything he possibly can in state government.

Edwin Edwards, his legal shenanigans notwithstanding, and despite his weakness for women and gambling, would never have let what happened on Thursday occur on his watch. You can take that to the bank.

Smooth Eddie would have taken Jim Tucker (R-Terrytown) and Joel Chaisson (D-Destrehan) to the woodshed that is the fourth floor of the Capitol and given them an attitude adjustment. He would have said something like, “If you want to remain Speaker of the House and President of the Senate, you better get back down to chambers and get this thing resolved.”

And Tucker and Chaisson would have left the governor’s office with their tails between their legs and would have proceeded to follow the governor’s directions to the letter. That’s real leadership.

And therein lies the rub, as ol’ Billy Wayne Shakespeare once said. There was, is no governor around who commanded that kind of respect. Heck, the governor wasn’t even around, respect or no respect. And the legislature wasn’t about to take its marching orders from Timmy Teepell.

The only thing one can find in abundance on the fourth floor is the abyss that is a gaping leadership void. The current situation makes the title of Jindal’s book, Leadership and Crisis, nothing more than a cruel, very unfunny joke.

On another front, Jindal appears oblivious to growing discontent among employees of three prisons, the Office of Group Benefits (OGB), and state retirees who have brought about a resurgence of the Gray Panthers of a few decades ago.

Reports surfaced Friday that at least two and perhaps three separate groups are considering class action lawsuits against Jindal, OGB, and the Legislature to halt the proposed sale of OGB. One of those groups is the Retired State Employees Association of Louisiana.

Meanwhile, Jindal is plunging ahead with his plans to privatize the two agencies despite the appearance at the House Appropriations Committee Thursday of more than 100 corrections employees from Avoyelles Parish, a former congressman, and a former commissioner of administration during the Edwards administration, all of whom were vehemently opposed to the sale of state prisons in Allen, Winn, and Avoyelles parishes.

As regards OGB, a letter has started making its rounds among state employees and retirees.

It is not known who authored the letter but whoever wrote it urges others to send copies to legislators to remind them that R.S. 42:854.5(A) says quite clearly that revenue under control of OGB “shall not be used, loaned, or borrowed by the state for cash flow purposes,” precisely the intent of Gov. Jindal.

Under his plan, if OGB is sold, the state would get $150 million to $200 million of OGB’s $500 million surplus with the purchaser getting the balance.

The trick for Jindal would be to remove the $500 million surplus from OGB’s control. That would require cunning and guile, diabolical characteristics that should never be confused with leadership.

Here is the full text of that letter:

As a state retiree I would like to make it known in the strongest possible language my dissatisfaction with Governor Jindal’s plan to privatize the Office of Group Benefits. This includes any plan he has to “outsource” the PPO. Either of those actions will cost the state much more money than it now pays, not to mention the horrible financial hit it would mean for state retirees.

It is an open secret that he hopes to simply GIVE most of OGB’s $500 million surplus to whichever of his rich cronies end up buying OGB. Not all of it, of course. He hopes to confiscate a portion of the $500 million for budgetary reasons. This money is, by law*, for OGB’s use in properly administering the plan. GIVING away money obtained from the state’s employees and taxpayers is reprehensible and is entirely politically motivated. It is only in a love-the-rich and hate-the-poor universe that such a thing could be considered moral.

The sale of OGB, resulting in a one-time monetary benefit, or the outsourcing of the PPO, will not save the state one penny. Either action would, in fact, end up costing the state more money. The reason for this lies in the fact that OGB’s administrative costs (which includes all aspects of running the agency, including premium increases) is an incredibly low 4% (compare this to the for-profit industry average). If another company, of necessity a for-profit company, takes over the operation of the PPO, this cost will rise by a minimum of 10%. This translates into higher premiums for both the state (since it is the state’s responsibility to contribute up to 75% of the cost of the premiums for state retirees) and the state’s retirees. Would someone please tell me HOW increasing premiums will save either the state or its retirees any money? Whatever money is made (the figure bandied about is $125 million) by a one-time sale of OGB will quickly be lost in increased state expenditures. If the PPO is outsourced, the increase in premiums for the replacement plan will land the state in even more dire financial straits.

*Louisiana State Law La. R.S. 42:854.5(A)
C. Notwithstanding 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. – Acts 2001, No. 1178,§ 5, eff. June 29, 2001.

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