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Archive for the ‘Public Records’ Category

LouisianaVoice launches May fundraiser to help defray costs of legal battle with Jindal administration over public records

Posted in DOA, Finances, Governor's Office, Lawsuits, Legislature, Media, Public Records, State Agencies, Transparency on May 1, 2015| 5 Comments »

LouisianaVoice is launching its third fundraiser during the month of May and while past support has been appreciated more than you could ever know, this one has a greater sense of urgency to it than before.

Where the previous fundraisers helped defray the costs of travel and paying for public records, etc., this one will be used for an even more expensive—and more important—endeavor: covering mounting legal costs.

We are currently engaged in a court battle with the Division of Administration (DOA) over DOA’s pattern of delay in complying with the state’s public records laws (R.S. 44:1 et seq.).

To illustrate DOA’s tactics, here is one glaring example:

Last October 14, we made an official FOIA request for information pertaining to the $350 million contract between the Office of Group Benefits and a California company called MedImpact.

Believing DOA was deliberately stalling in complying with our requests, we had a friendly (but unidentified) legislator make the identical request through the House Legislative Services Office. That request was submitted the same day (Oct. 14, 2014) as our request.

On Oct. 21, 2014, we received the following response to our request:

  • Pursuant to your public records request, we are still searching for records and/or reviewing them for exemptions and privileges. Once finished with the review process, all non-exempt records will be made available to you. It is estimated the records will be available on or before October 31, 2014.

The House Legislative Services Office spokesperson received the following response to its request from DOA two days later, on Oct. 23, 2014:

  • You requested the MedImpact contract, Notice of Intent to Contract, ratings, and recommendations for awarding the contract. Please note the contract contains some proprietary and/or confidential information that has been redacted under La. R.S. 44:3.1. We have scanned these records. They are too large to email, so I can bring a CD over. I heard you’re out of the office. Do you want me to drop it off for you or wait until you get back?

So we were promised the records eight days later than the House Legislative Services Office and while that illustrates a deliberate delay on DOA’s part, it was not completely unreasonable and was hardly a basis for litigation. It didn’t even upset us that DOA would hand deliver the records to the legislature but require that I drive in from Denham Springs to review them.

But the fact is we never received the records—until, that is, after we filed our lawsuit in January of 2015. Once the lawsuit was filed, of course, they were immediately delivered to our attorney’s office—nearly three months after they had been delivered across the street to the legislature.

That was just the most egregious case, but we actually filed our lawsuit on the basis of  shorter but nevertheless unnecessary—and purposeful—delays in compliance with other several other requests.

The records we have requested are for actions by agencies of the state which affect you, the taxpayer. Because most media outlets are concerned with only the surface treatment of news stories, we attempt to pry deeper into the cause and effect aspect of state government—relationships between vendor and vendee, between elected officials and campaign donors, between contributions and contracts and board appointments. In short, we follow the money.

Government in general is uncomfortable with this and this administration in particular abhors scrutiny. That’s why DOA had instituted a deliberate strategy of delay when it comes to complying with our records requests. One former employee of DOA told us that it was common practice for DOA to get the records we request and then simply let them sit in a corner for weeks at a time before finally allowing us to inspect them. This is not the way to build trust between the government and the governed.

And it is not acceptable to us.

That is the reason we filed suit.

Our lawsuit is scheduled for trial this month and no matter which way the judge rules, the decision is quite likely to move to the First Circuit Court of Appeal. It’s that important to us if we lose and apparently, it’s equally important that the administration hide its actions from public examination.

Either way, it has already cost us a lot of money in terms of legal fees. And an appeal is going to cost a lot more. If we win, DOA will appeal in an attempt to make it cost-prohibitive to fight them by forcing us to continue paying legal costs until our resources are exhausted and we allow the case to abandon. That’s what happened with the case of a dentist who was pursuing legal action against the State Dentistry Board. DOA has attorneys on staff being paid with your tax dollars; it’s not costing Kristy Nichols a dime to stay in the game.

That is why we need your help now more than ever.

Please click on the Donate Button with Credit Cards button near the top right part of our web page to donate by credit card.

If your receive e-mail notices to our posts, you will need to click on Read more of this post or pull up the full web site by clicking on https://louisianavoice.com/

If you prefer to mail checks or money orders, please make payable to:

Capitol News Service/LouisianaVoice

P.O. Box 922

Denham Springs, LA. 70727

Whichever way you choose to contribute, your help in our fight to make state government more transparent and accountable is both needed and appreciated.

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Looting Louisiana in the Broad Daylight (with apologies to Emmylou Harris): Who audits LA severance tax payments?

Posted in Audit Reports, Auditor, Corruption, Ethics, Exemptions, Fraud, Governor's Office, Legislature, Louisiana Purchase, Public Records, Revenue, Taxes on April 28, 2015| 27 Comments »

By MIKE STAGG (Independent filmmaker, citizen activist, political strategist – Special to LouisianaVoice)

For the past seven years, as Louisiana has lurched from one fiscal crisis to another, the State of Louisiana has paid the oil and gas industry $2.4 Billion in severance tax exemptions. Despite that massive transfer of public wealth into private hands, the oil and gas industry used its influence inside the Department of Natural Resources and the Jindal administration, to limit—and for three years shut down—audits that would have revealed whether the industry’s severance taxes and royalty payments to the state were accurate.

These facts have been hiding in plain sight, contained in five performance audits of the Department of Natural Resources and the Louisiana Department of Revenue conducted by the Legislative Auditor since 2010. Two of those audits focused on royalty collections from oil and gas produced on state-owned lands and water bottoms. Another focused on severance tax collections; yet another dealt with mineral leases handled by the State Mineral and Energy board, while the fifth audit examined how the Office of Conservation has handled the orphaned and abandoned well cleanup program.

The cozy relationship between DNR and the oil and gas industry is explicit in the department’s regulation of the industry. That coziness, when extended to state finances, has proven disastrous for the Louisiana treasury and its residents. DNR is responsible for collecting oil and gas royalties, which account for roughly seven percent of state General Fund dollars, or approximately $800 million per year.

For a three-year period, between July 2010 and July 2013, DNR had jurisdiction to determine the accuracy of severance taxes and royalty payments.

And DNR let industry have its way.

Audits on royalty revenue dropped. Audits on severance tax revenue all but stopped, even as the state’s financial condition continued to worsen. In short, when it came to providing rigorous oversight to ensure that the royalty and severance tax payments were accurate, DNR’s Office of Mineral Resources deferred to the oil and gas industry while programs that serve the citizens of Louisiana were cut, primarily in healthcare and higher education, the unprotected portions of the state General Fund.

DNR’s relationship with the oil and gas industry is a blatant example of regulatory capture. Regulatory Capture is a form of political corruption that occurs when an agency, created to act in the public interest, advances instead the special concerns of the industry it is charged to regulate.

Severance taxes are the constitutional expression of our, as Louisiana citizens, shared claim on our state’s vast mineral wealth. Exempting severance taxes negates the public claim on that mineral wealth and undermines our ability to invest in ourselves as a state.

Severance tax exemptions are direct payments from the state to the oil and gas producers after the companies have submitted their exemption certificates. Royalties are the property owners’ share of the proceeds from the sale of oil and gas produced from wells on their land. For purposes of this story, royalties are the state’s share of the revenue from oil and gas produced on state-owned lands and water bottoms after severance taxes have been paid.

Since the mid-1980s, Louisiana Department of Revenue has published an annual report on tax exemptions called “The Tax Exemption Budget.” In that document, the department identifies each tax exemption and quantifies the cost of each exemption to the state.

It makes clear that tax exemptions are in fact a spending of state funds — here’s how the LDR explains it in every report: “Tax exemptions are tax dollars that are not collected and result in a loss of state tax revenues available for appropriation. In this sense, the fiscal effect of tax exemptions is the same as a direct fund expenditure.”

Between 2008 and 2014, according to the Tax Exemption Budget, the State of Louisiana paid oil and gas companies more than $2.4 Billion in severance tax exemptions. Those checks went out at the exact same time that our legislature cut funding for programs like aid to families of children with disabilities, behavioral health programs, home health care, and programs that assisted victims of domestic violence. During that same period, state funding for higher education was also cut by more than $700 million as the tuition and fees paid by those attending technical colleges, community colleges, and state universities were jacked up to cover the difference.

The first performance audit on royalty collections was released in July 2010. Royaltieshttps://app.lla.state.la.us/PublicReports.nsf/B6B5DE331E9D48818625776E005CFDA5/$FILE/00018070.pdf The Legislative Auditor found that DNR’s Office of Mineral Resources took a lackadaisical approach to verifying the accuracy of royalty payments from the 1,888 active mineral leases on state-owned lands and water bottoms.

The Legislative Auditor noted that severance taxes and royalties are connected, that both are dependent on the amount of oil and gas produced, as well as the price of the resource.

Desk audits compared the volume of oil and gas sold to the volume of oil and gas produced, which ensures that royalty payments are properly calculated. These audits also help ensure that production wells on state lands are submitting properly calculated royalty payments.

The Legislative Auditor found that the Office of Mineral Resources (OMR) had not conducted a single such audit in a decade. Despite the Auditor’s recommendation that it resume these audits, OMR waited another three years before getting around to doing so.

The Legislative Auditor also found that OMR did not compare royalty reports against severance tax reports filed with the state Department of Revenue, nor did it compare royalty reports to production reports submitted elsewhere in DNR.

In its response to the Legislative Auditor’s Royalty performance audit findings, on June 24, 2010, DNR announced that “As part of the Streamlining Commission’s recommendations, OMR will take over LDRs severance tax field audit program and the two audits will be integrated beginning July 1, 2010.”

In September of 2013, the Legislative Auditor released a follow-up performance audit on royalty collections. https://app.lla.state.la.us/PublicReports.nsf/DB918AD8E33411F286257B490074B82A/$FILE/00031C97.pdf

The auditors were dismayed to find that the revenue produced by OMR’s audits had fallen below the levels reported in 2010.

The Auditor also found that that the State Mineral and Energy Board had waived 45% of the $12.8 million in penalties that were assessed against companies by OMR for late payment of royalties.

Neither the Office of Mineral Resources nor the State Mineral and Energy Board seemed at all concerned about the fiscal impact their indifference to generating revenue had on the programs that Louisiana residents depend on. Their primary concern was with not inconveniencing their friends in the oil and gas industry.

The Legislative Auditor conducted an audit on severance tax collection procedures in the

Louisiana Department of Revenue in 2013 but, because severance tax audit functions had been transferred to the DNR in 2010, auditors had to return to the Office of Mineral Resources close on the heels of the second royalty collections audit. https://app.lla.state.la.us/PublicReports.nsf/AC044A6D3709B90C86257BE30065348B/$FILE/000351F7.pdf

In this audit, the Legislative Auditor found that oil and gas industry complaints about the LDR’s use of GenTax software (which identified possible nonpayers of severance taxes) led first, to LDR shutting off the software, and second, audit power being transferred to DNR.

The scale of the oil and gas production not audited as a result of that shift was staggering. DNR’s field audits ignored oil and gas production on private lands — which comprises 98.1% of all oil and gas leases in Louisiana — for a three-year period.

Revenue from severance tax audits fell 99.8% from the levels produced by the Department of Revenue once responsibility was transferred to the Office of Mineral Resources. The actual dollar amount fell from $26 Million in 2010 to $40,729 in Fiscal Year 2012.

For the three-year period that DNR’s Office of Mineral Resources had responsibility for severance tax audits, the industry essentially operated under an honor system.

Prior history shows why this was a problem. In the late 1990s, the Mike Foster administration filed lawsuits against more than 20 oil and gas companies claiming they had shortchanged the state by as much as $100 million on severance tax payments. Now, for three years as recurring revenue shortfalls continued, the Office of Mineral Resources ignored that history.

During this time, the Haynesville Trend emerged as the most productive shale gas field in the country.

Even though the severance tax exemption on horizontal drilling meant that the state was denied severance tax revenue for much of that play, companies still managed to game the exemption system at taxpayer expense.

Under the rules for severance tax exemptions, the state pays back the taxes already paid once it receives the exemption certificate from the company — plus “Judicial Interest” which in the period covered by the audit averaged about 4.5%.

That is, the state had to dip into non-exempt severance tax payments in order to cover the interest costs on those certificates that the companies chose to sit on for several months.

The Audit found that over the course of four fiscal years running from 2009 through 2012, the Department of Revenue issued 13,818 severance tax refund checks totaling $360,190,583. An extra $23,859,012 in interest was tacked on to that. https://app.lla.state.la.us/PublicReports.nsf/CF6244B77E3A958686257C30005E80B1/$FILE/000368DA.pdf

In addition, the Auditor found that the Department of Revenue overpaid severance tax exemption refunds by $12.9 million between July 2010 and May 2012.

The decline in audit revenue, the interest paid to companies on the gaming of the severance tax exemption process, the overpayment of severance tax exemption refunds, the decision by the State Mineral and Energy Board to waive 45% of fines for late payment of royalties combined to benefit the industry at taxpayer expense to the tune of $68 million.

These gifts to the oil and gas industry were made at a time when the industry was already receiving $2.4 Billion in tax exemptions and at a time when every dollar the state did not collect translated into a cut to programs that Louisiana residents depended on.

The Auditor also pointed out that hiring additional auditors within DNR and LDR would produce a great return on the state’s investment. Each auditor costs a department between $50,000 and $60,000 per year, but they bring in an average of $1.3 million per year. LDR said it had requested additional auditors in its budgets but they were never approved by the Jindal administration.

Oil and gas companies control all of the information used in the severance tax and royalty payment process. The industry has used this power to its advantage and to the state’s detriment.

Vigilant auditing can close that information gap.

The Office of Mineral Resources has shown little interest in that kind of work. DNR’s abdication of its oversight role on royalty revenue has had an outsized impact on Louisiana because of the role that revenue plays in state finances. When added to the three-year period when DNR failed to perform severance tax audits, the agency has likely cost the state hundreds of millions of dollars over the past seven years.

That is corruption.

Not all of this went unnoticed. In the 2014 legislative session, Sen. Rick Gallot (D-Ruston) and Rep. Joe Harrison (R-Gray) introduced concurrent resolutions to order LDR, DNR and the Legislative Auditor to agree upon a means to conduct a thorough audit of oil and gas production, severance taxes and royalty payments. Gallot’s resolution passed the Senate by a vote of 35-0. https://app.lla.state.la.us/PublicReports.nsf/D6A0EBE279B83B9F86257CE700506EAD/$FILE/000010BC.pdf

But by the time the resolution reached the House floor in early June, the oil and gas industry and the Jindal administration recognized the threat the audit posed, so they joined forces to kill it. SCR 142

The resolution had to be killed to keep the secret.

In the midst of a prolonged and deepening fiscal crisis, the Jindal administration and the industry did not want legislators and the public to question whether the severance taxes and royalties paid to the state were accurately calculated.

The Department of Natural Resources betrayed the trust of the people of this state. It failed its fiduciary responsibility twice; first, as collector of royalty payments, and again during the time it served as chief auditor of severance tax collections. It has repeatedly put the needs of the industry above the needs of the people of this state.

For the oil and gas industry, $2.4 Billion in severance tax exemption payments were not enough. Its greed is so great that, in a time of fiscal constraints on state government, it went out of its way to cheat the state out of still more money. It used its power and influence in the Department of Natural Resources and its ties to the Jindal administration to do so.

By these acts, the oil and gas industry has shown itself to be unworthy of the trust we have placed in it.

For Looting Louisiana in our time of fiscal need, the oil and gas industry must be stripped of its severance tax exemptions. Under the Louisiana Constitution, we are entitled to the full benefits of this state’s mineral wealth.

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LSU Board member Rolfe McCollister plays publisher while working to conceal board records from public examination

Posted in Boards, Campaign Contributions, Courts, Education, Ethics, Finances, Governor's Office, Higher Education, Lawsuits, LSU, Media, PACs, Politicians, Public Records on April 27, 2015| 9 Comments »

You have to love Rolfe McCollister, Jr. The man has done the following:

  • Was an unsuccessful candidate for mayor-president of Baton Rouge;
  • Contributed $17,000 to the campaign of Bobby Jindal in 2003, 2006, and 2008;
  • Served as treasurer for Jindal’s 2007 gubernatorial campaign;
  • Served as chairman of Jindal’s transition team following Jindal’s 2007 election;
  • Served as a director of Jindal’s first fundraising organization Believe in Louisiana;
  • Currently serves as treasurer of Jindal’s super PAC Believe Again;
  • Been appointed by Jindal as a member of the LSU Board of Supervisors.

Moreover, McCollister’s Louisiana Business, Inc. partner, Julio Melara has:

  • Contributed $7,500 to Jindal’s campaigns in 2007, 2010, and 2011 (his wife also contributed $1,000 in 2007);
  • Been appointed to the Louisiana Stadium and Exposition District (Superdome Board).

At the same time, McCollister, apparently with a straight face, attempts to pass himself off as an objective news executive as Publisher of the Baton Rouge Business Report, even publishing a story by his staff today (Monday, April 27) on the long-running court battle by real news organizations to obtain the names of 35 candidates for the LSU presidency. https://www.businessreport.com/business/along-alexander-lsu-board-considered-candidates-texas-alabama-east-carolina-presidential-search-2012

Before the finger-pointing begins, let’s set the record straight. While McCollister carries the water for Jindal on such issues as protecting what should obviously be public records, firing an LSU president (thus, making the new hire necessary) and giving away LSU hospitals to a foundation run by a fellow LSU board member, he also purports to be an objective chronicler of political news.

We at LouisianaVoice, on the other hand, make no pretense at objectivity. We are opinionated and we freely express those opinions—and invite readers to do the same, both pro and con. We spent a quarter-century working for the so-called objective publications. But a political blog is very much like an op-ed opinion piece. McCollister should be familiar with those; he’s certainly seen enough of them from Jindal in the New York Times, Washington Post, and Wall Street Journal.

Louisiana Business, Inc., led by McCollister and Melara, is the parent company of the Business Report, so both men are in the news business but nevertheless have continued to curry favor from the man they apparently believe will one day occupy the big house at 1600 Pennsylvania Ave. in Washington, D.C.

What is so particularly galling about Monday’s story about the release of the documents by the LSU board attorney is that a reader unfamiliar with the story would have no way of knowing that the publisher was complicit not in attempting to shine the light of transparency on a secretive board, but in participating in the board’s harboring of the information. Nowhere was a single word devoted to revealing that the piece’s publisher was a party to attempting to hide information from the public—an effort, by the way, that cost the state tens of thousands, if not hundreds of thousands, of dollars in legal costs and fines.

As if that were not enough, McCollister, in his ever-diligent vigil to defend the public’s right to know, turned his guns on an LSU faculty member who was bold enough to criticize the LSU board in print over its efforts to keep its business away from the public’s prying eyes.

On April 1, McCollister, in a column titled The Two Hats of Bob, attacked LSU journalism professor Bob Mann who also writes a political blog called Something Like the Truth, which is also published in the New Orleans Times-Picayune. “Man is one to take full advantage of free speech and faculty tenure as he pontificates in his columns on all that’s evil,” McCollister sniffed. https://www.businessreport.com/politics/rolfe-mccollister-survey-reveals-contradictions-confusion

He was writing about Mann’s blog and the accompanying column that ran in the Times-Picayune in which Mann said the LSU Board was more loyal to Jindal than to the students at LSU and that the entire board needed to resign or be fired. In that column, Mann quoted from another McCollister essay in which McCollister “chided those in the news media who ‘sound like Chicken Little. Let me predict here and now, the world will not end for Louisiana or higher education during the upcoming session. Solutions will be found.’ What those magic solutions are, McCollister does not say,” Mann wrote.

“I asked a former seasoned journalist about the ethics of a faculty member who has a second job as a journalist and (who) writes about his university,” the publisher continued in that April 1 column. “He said, ‘Every good journalist knows that you cannot ethically cover the institution that pays your salary and the people who supervise the work you do for that salary.”

Oh, really? And just who was that “former seasoned journalist”? And was he a former journalist or just formerly seasoned?

As for ethically covering “the institution that pays your salary” (or in this case, appointed you and your business partner to two of the more prestigious boards in state government), doesn’t McCollister provide Jindal glowing press coverage at every opportunity? (Of course, whether that can accurately be called real “coverage” is still open to debate. There’s another word for it in the reporting business. It’s called fluff.)

“The ethical equation doesn’t change if a reporter vilifies those people (for whom he works),” McCollister continued. “Who is to say the reporter’s self-interest isn’t involved. When journalists don’t recognize this fundamental aspect of journalism, everything they write, on any topic, lacks credibility.”

Wait. We’re confused. Is McCollister still talking about Mann—or about himself? It’s really impossible to tell, considering all the self-interest and conflicts of interests involved in everything McCollister writes about Jindal.

But let’s review. McCollister, it seems, was also a member of the LSU Board back in 1992 when the state was in the throes of another financial crisis and cutting budgets. At that time, McCollister, indignant over the cuts to LSU, called for the arrest of the governor.

The governor? Edwin Edwards. http://www.nola.com/opinions/baton-rouge/index.ssf/2015/03/higher_education_budget_cuts_l.html

Mann responded to McCollister, of course. Anyone would. But rather than delve into their “he said, she said” exchange, let’s look at what others are saying.

The Hayride blog, which is somewhere off to the right of Rush Limbaugh, trumpeted its headline: “Bob Mann goes after Rolfe McCollister, but doesn’t have the numbers on his side.”

http://thehayride.com/2015/03/bob-mann-goes-after-rolfe-mccollister-but-doesnt-have-the-numbers-on-his-side/

Repeating the Chicken Little quote by McCollister, it added a quote by him which it accused Mann of omitting: “Business is strong in Louisiana and getting even better. I hear from many company CEOs who had a record year and look to grow and expand in 2015.”

(Perhaps that’s why Louisiana continues to rank third in the nation in our poverty rate and why Louisiana’s colleges and universities are looking seriously at declaring financial exigency.)

We’ll get back to The Hayride momentarily.

Red Shtick, a Baton Rouge publication that specializes in parody, took its turn at lampooning McCollister for his obvious double standard. http://theredshtick.com/2015/04/03/jindal-crony-who-pens-pro-jindal-editorials-accuses-professor-of-unethical-journalism/

Likewise, the Independent of Lafayette, one of the state’s better political publications, noted with some irony that McCollister found it necessary to reach out “to an anonymous source” to obtain an opinion about journalistic ethics—after all, “hasn’t he run a newspaper for more than 25 years?” the Independent asked somewhat rhetorically, adding, “I’m sure that untenured, junior faculty at LSU will take note that one of the governor’s best friends, who serves on the LSU Board, has this opinion of academic freedom. http://theind.com/article-20612-rolfe-mccollister-faculty-who-criticize-lsu-in-print-are-unethical.html

“Did McCollister threaten my LSU job? The Independent quoted Mann as asking. “Not really. He just finds some gutless anonymous source to call me unethical for criticizing a group of public officials.”

As promised, we now return to The Hayride and one of its regular columnists who seems to fit comfortably in Jindal’s back pocket and who slings darts and arrows at anyone who dares criticize his governor.

We’re talking, of course, about one Jeff Sadow who works as…(ahem), ah…well, as a full time political science professor at LSU-Shreveport. Correction. Make that associate professor. And one who has (gasp!) a political blog.

Rather than go into a lot of Sadow’s qualifications to speak his opinion in a blog as opposed to those who would censure Mann, we’ll let yet another blogger lay it out for us.

https://lahigheredconfessions.wordpress.com/2015/04/02/biting-the-hand-that-pays-you/

But at the end of the day (to borrow a phrase from Bobby Jindal), we still believe in tolerance and we will defend with our last breath the First Amendment rights of McCollister, Sadow, and Mann. They have every right to voice their opinions, though two of those three do not appear to agree.

To sum it all up, it appears we have an LSU Board member who is a Jindal operative in every sense of the word and who just happens to own a news publication. But that board member/journalist steadfastly refuses to advocate for openness on the board (as would just about any member of the Fourth Estate), who votes to fire an LSU president only because the governor wants him to, who votes in favor of giving away teaching hospitals to a fellow board member, and who calls for the censuring of free speech by a journalism professor and newspaper columnist. And, coincidentally, we have an associate professor who does the same thing as Mann, but who gets a free pass because his opinions happen to dovetail nicely with those of  McCollister, Jindal, et al.

Okay, as long as we understand the ground rules.

But, Chicken Little, it appears the sky really is falling. And as for those solutions McCollister promised “will be found,” they now appear more distant than ever.

And meanwhile, he calls Bob Mann unethical.

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Shades of Greenstein: OGB administrator once employed by BCBS heads evaluation committee for new contract proposals

Posted in Contract, Contracts, DHH, DOA, Ethics, Health Care, Lawsuits, OGB, Office of Group Benefits, Public Records, RFP, Request for Proposals on April 24, 2015| 5 Comments »

One might think the Jindal administration and the Office of Group Benefits (OGB) might have learned something from the Bruce Greenstein fiasco over at the Department of Health and Hospitals (DHH).

Greenstein, you will remember, was the DHH secretary when that $280 million contract was awarded by his agency to his former employer, CNSI.

That scenario could be repeated at OGB.

Even though Greenstein insisted he had established a “firewall” between himself and CNSI, it was subsequently revealed that Greenstein had hundreds of email and text message exchanges with his old bosses during the contract selection process.

That eventually led to Greenstein’s forced resignation and criminal indictment and a civil suit by CNSI the entire messy episodes are slowly making their way through the Baton Rouge District Court system.

Which brings us to OGB and its $35 million-a-year contract with Blue Cross/Blue Shield of Louisiana (BCBS) to administer OGB’s Preferred Provider Organization—a task that apparently proved somewhat daunting to BCBS during the first year of its contract, costing the contractor more than $3.1 million in performance penalties.

One of five contracts with the state totaling $1.2 billion, that three-year contract will end on Jan. 1, and OGB is currently accepting proposals for a new three-year contract.

OGB issued its request for proposals (RFP) on March 13, giving an April 20 deadline for proposals but that deadline was extended to April 30 in an addendum issued on Wednesday (April 22). OGB RFP

LouisianaVoice, however, has learned that OGB Administrator Elise Cazes has been put in charge of the evaluation committee which will make recommendations on awarding a winner of the new contract.

The problem? Cazes was appointed Group Benefits Administrator on June 23, 2014.

Cazes was previously employed by BCBS of Louisiana, raising the possibility of a conflict of interests. https://louisianavoice.com/2014/07/26/ogb-laying-of-24-more-blow-softened-when-ceo-assures-affected-employees-losing-their-jobs-not-like-losing-a-child/

She earns $106,000 per year in her current position.

Not only does she head up the evaluation committee, but she also was given the responsibility of naming other members of the committee. To date, the name of only one other evaluation committee member, OGB Interim Deputy Director Bill Guerra, has been revealed.

At the same time, LouisianaVoice has learned that BCBS in 2013 was fined more than $3.1 million for performance deficiencies in connection with its contract with OGB. BLUE CROSS PENALTIES

BCBS was paid slightly more than $32.2 million to administer the PPO plan for calendar year 2013, the first year of its current contract.

Under terms of its contract with OGB, BCBS could be fined up to $9.7 million for failure to meet a variety of standards. Those include:

  • General Standards (10 percent of total medical administrative fees): $3.52 million;
  • Data Submission Standards: $10,000 per day, or a maximum of $20,000;
  • Mental Health & Substance Abuse (MH&SA) Standards (17.5 percent of total medical administrative fees): $6.2 million.

The actual penalties imposed for 2013, according to OGB’s own report, and the breakdown included:

  • Average speed to answer phones (39 seconds against an industry standard of less than three seconds): $352,325;
  • Claims Accuracy: $352,325
  • Membership Identification Cards Timeliness: $352,325;
  • Data Submission Timeliness: $20,000 (the maximum amount allowed);
  • MH&SA Appeals: $528,487;
  • MH&SA Ambulatory Follow-Up: $528,487;
  • MH&SA Medical Integration: $528,487;
  • MH&SA Member Satisfaction Survey Score: $528,487

TOTAL: $3.19 million.

In explaining the deficiency report, OGB noted that the contract between BCBS and OGB “contains 26 performance goals (called service level agreements, or SLAs) related to customer service and claims processing. During 2013 Blue Cross experienced challenges in meeting a handful of these goals.”

The report indicated that “all issues” had been resolved and that OGB and BCBS were “fully prepared for excellent performance during the 2014 calendar year.”

But LouisianaVoice recently received the following email from a retiree which would seem to indicate otherwise:

“Here’s a laugh; Look at the insurance health cards my wife and I received thus far:

  • Received 3/6/15:  deductible—$300
  • Received 03/09/15: insured deductible—$600
  • Received (date unknown): insured deductible—$600
  • Received 03/20/15: insured deductible—$1800
  • Received 03/20/15: spouse deductible—$600
  • Received 03/27/15: spouse deductible—$600
  • Received 03/27/15: insured deductible—$1800
  • Received 04/04/15: insured deductible—$600. 

“Do I get to pick our deductible from these cards?  You can tell that BCBSLA and OGB are on top of this matter, right? I plan to make a personal visit to the OGB office probably next week and show them this trash and find out what our deductible(s) really are. Do you think they know? I will ask while I am (at the OGB office) for the real executive director at OGB (to) please stand up.

“Our online monthly premium is a different figure from the letter received in the mail today from OGB. I am ready for someone to figure out what’s going on, and do something logically and correctly.  Health insurance is a serious matter for people and they are playing with us. Everything needs to be corrected and cleaned up for all state employees (retirees and actives).

“OGB use to be correct on these technical matters and they had in the past straightened out BCBSLA for me several times on what was to be paid, etc. Now OGB has gone crazy too! I guess it’s from all the new executives at the top.” 

 

 

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Tomorrow’s selection of EBR Parish Attorney described as a public show but a private quid pro quo sham as ‘the fix is in’

Posted in Corruption, Ethics, Judges, Lawsuits, Public Records, Transparency on April 21, 2015| 6 Comments »

By Robert Burns (Special to LouisianaVoice)

Last May, a political firestorm surfaced on the EBR Parish Metro Council over then-Parish Attorney Mary Roper. Some council members asked Baton Rouge attorney Jack Whitehead to gather evidence. Later, in early September 2014, the Metro Council called a special meeting to discuss Ms. Roper’s termination. That meeting exposed what some leaders described as the complete dysfunction within the parish attorney’s office.

After the council’s special counsel, Murphy Foster, presented the case for Roper’s termination and Roper’s attorney, Wade Shows (Roper’s predecessor as Parish Attorney), presented her defense, EBRP Mayor Pro-Tem Chandler Loupe provided a laundry list of alleged wrongdoing by Roper. In the preceding video link, Loupe goes into great detail. A few of Loupe’s allegations against Roper include:

  • Often working no or very minimal hours even though she was paid as a full-time employee;
  • Failing to ensure that basic functions of the office were being performed, resulting in thousands of DWIs being dismissed and adjudicated properties experiencing a huge backlog;
  • Improperly providing an internally-developed software code to her husband, an information technology expert.

Another employee with the EBR Department of Public Works, Kyle Jones, subsequently attempted to sell the Parish its own software back to it for $500,000 which led to the discovery of Roper’s husband’s actions.

After Loupe made his presentation, a hostile and bitter exchange took place between Loupe and Councilwoman Chauna Banks-Daniel, with two of Banks-Daniel’s colleagues, Donna Collins-Lewis and C. Denise Marcell, becoming so furious with her over remarks she directed at Loupe that they exited the meeting. The council ultimately voted 8-3 to terminate Roper’s employment. Roper’s first lieutenant, Lee Anne Batson, assumed the position on an interim basis.

Several sources have expressed their concerns to LouisianaVoice that the selection process for the council naming Roper’s replacement is a sham. They claim the “fix has been in from day one” for Batson to obtain the position on a permanent basis. These sources have indicated that the process will become “Mary Roper, Chapter Two,” and they say morale within the parish attorney’s office is worse under Batson than it was under Roper. Further, these sources have said that the few dedicated attorneys serving in the office are frustrated that Batson has even worse supervisory skills than Roper and permits the majority of attorneys who work under her to “goof off most of the days on their iPHONEs and iPADs looking at new cooking recipes and other mindless activities.” These attorneys also have private practices and spend their time between “two masters,” thus placing the public in an inherent conflict.

It was that very office management style that permitted the huge backlog of DWIs to pile up which went unprosecuted and which had to be dismissed. Loupe, in the video clip, said one of the things that frustrated him most was for Shows, with whom he used to practice, to assert that no harm was done by Roper’s managerial style. Loupe countered that, beyond the stockpile of DWIs and adjudicated properties, in one instance which was particularly galling, the City of Baton Rouge was sued. The parish attorney’s office never provided a defense for the suit, refused a $20,000 settlement offer, and the result was a $550,000 judgment. Several attorneys said they felt that even a token defense would have resulted in the City not having been found liable. The attorney responsible for that case, Rick Nevels, recently retired.

Another indication of inadequate oversight occurred when Assistant Parish Attorney James Hilburn, failed to file an answer in Federal Court. Federal Court Judge Brian Jackson, who presided over the case, was livid at Hilburn’s failure and Hilburn was also reprimanded by the Louisiana State Supreme Court for filing a lawsuit for defamation against a party who had filed a complaint against him with the Office of Disciplinary Counsel.

The private-practice attorneys with whom LouisianaVoice has consulted for this article agree that, of the Parish Attorney’s $7.37 million budget, around $800,000 – $1 million of taxpayer funds could be saved simply by insisting that attorneys in the office perform their jobs. One source familiar with the Parish Attorney’s operations said, “The problem is most of them simply want free money with health insurance and a lucrative retirement as they engage in their private practice. They want the check, but they don’t want to work for it. Taxpayers have a right to expect that people are paid to perform a job and not to let things fall through the cracks while cookbook recipes are discussed all day.”

Loupe’s investigation revealed that one attorney was paid $89,000 for a year yet worked only eight files during that year. Another was found to be part-time yet paid $127,000 for working 23 active files. Additionally, Batson is permitting her sister-in-law, Gwen Brown to collect $85,000 as a full-time Assistant Parish Attorney while simultaneously earing $96,000 a year as a supervising attorney for another public agency, the Louisiana Appellate Project, which represents indigent criminal defendants who file appeals to the Louisiana Courts of Appeal and Louisiana Supreme Court. Roper never raised any concern because Roper, who supervised Brown, also earned $56,000 annually as a brief writer for the Louisiana Appellate Project. Similarly, Batson is not expected to interfere with her sister-in-law’s collecting $181,000 a year from the two positions, plus retirement benefits and health insurance. Moreover, all inquiries of whether these setups entail dual office holding have been summarily brushed aside.

It’s not as if these arrangements haven’t been reported. In this July, 2014 Advocate article, Assistant Parish Attorney Tedrick Kinghtshead is cited as maintaining a demanding criminal defense practice, while working full-time with the parish attorney’s office. These arrangements have raised the obvious question of potential conflicts of interest.

Each private-practice attorney consulted for this article said that maintaining an accurate tabulation of hours worked on a given client’s casefile is critical and that it would be unthinkable for any attorney to practice and not maintain such an accurate log. Nevertheless, there appears to be zero accounting for time on cases within the Parish Attorney’s Office. One private attorney described the present operations of the office as being nothing short of “irresponsible and a slap in the face to the taxpayers.” Another said that the parish attorney’s office should maintain a bank of briefs, but no such bank is maintained by the office.

Several sources have predicted that the process for choosing Roper’s successor is a mere formality and that Batson has the position locked up and that Batson has fired attorneys on her staff and replaced them with friends of members of the selection committee (the composition of which is outlined in these minutes of their April 6, 2015 meeting) who have indicated their quid pro quo support of Batson.

Roper and Hilburn, meanwhile, seemed to have landed on their feet. Both are now employed by Shows’ office. Shows serves as Attorney General Buddy Caldwell’s campaign treasurer for this fall’s AG race. Further, in a report by WWL in New Orleans, Shows was identified as a huge beneficiary of Caldwell’s propensity to award lucrative multi-million-dollar contracts to his close friends and associates. LouisianaVoice readers may also recall Shows Cali attorneys, including Shows himself, came within an inch of receiving sanctions in the Angola prisoner lawsuit for a “lack of candor” (a polite phrase for lying) to Federal Judge Brian Jackson.

The EBR Parish Council is set to discuss the status of the selection of Roper’s replacement at Wednesday’s (April 22) meeting; however, if LouisianaVoice sources are accurate, the two other finalists, Lon Norris and Michael Adams, are only in the mix for public consumption purposes. Further, the selection committee deemed “unqualified” two private-practice attorneys, Jack Whitehead and Jerry Pepper, who received the highest possible rating (AV) from Martindale-Hubble, an attorney peer review rating agency. Whitehead and Pepper’s piers have placed their legal ability in the top ½ of 1% of attorneys in the United States. The votes are reportedly in and accounted for to anoint Batson as the new Parish Attorney and thereby continue the time-honored style of “good ol’ boy” politics that got the office in the position in which it finds itself today.

 

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