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Archive for the ‘Revenue’ Category

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Bloomberg News Service on March 1 published a STORY that said global megabanks have paid $321 billion in fines for such non-banking-like practices as money laundering, market manipulation and even terrorist financing since the market crash of 2008.

And while $321 billion may sound impressive, Bloomberg failed to mention that because of those same banks, President George W. Bush had little choice but to sign the Emergency Economic Stabilization Act of 2008 that pumped more than twice that amount, $700 billion of taxpayer bailout funds, into the failed banks that precipitated the Great Recession of 2008.

Most financial advisers would describe that as a negative return on investment.

Adding insult to injury, $1.6 billion of that $700 billion was used to award multi-million dollar bonuses to CEOs of the very firms that got us into the mess to begin with. http://www.cbsnews.com/news/16b-of-bank-bailout-went-to-execs/

Bloomberg also failed to mention that those fines had little effect on those who perpetuated the crimes but did have a significant impact on stockholders and retirees, those, in other words, who had nothing to do with the massive fraud carried out on such a grand scale.

In fact, in 2010, former Countrywide Financial CEO Angelo Mozilo was fined $22.5 million and ordered to pay another $45 million in restitution as his penalty for reaping a profit of $141.7 million from stock sale, according to Mary Kreiner Ramirez and Steven A. Ramirez, authors of The Case for the Corporate Death Penalty (New York University Press, 2017). So, despite the penalties, he walked away with a net gain $74.2 million, or a 52 percent return, sending a clear signal his peers that “crime does in fact pay,” the authors wrote.

There are also two questions Bloomberg neglected to address:

  1. What the total cost of the runaway greed and reckless actions of firms like AIG, Lehman Brothers, Merrill Lynch, Goldman Sachs, Citigroup, Countrywide, and J.P. Morgan to stockholders, retirees and American taxpayers in general?
  2. How many top tier officers at these firms who condoned, encouraged and/or actively participated in the illegal practices went to jail?

The answer to the first question is an eye-popping $15 trillion, according to Ramirez and Ramirez.

The answer to the second question is just as unbelievable: ONE.

In fact, as of Jan. 28, that last date that STATISTICS were updated by the Bureau of Prisons, there were exactly 555 people serving federal jail sentences for banking, insurance, embezzlement and counterfeiting. That comes to .3 percent (three-tenths of one percent) of the total federal prison population.

By contrast, there were 82,109 in federal prison for non-violent drug offenses (46.4 percent of the total), and 14,853 imprisoned on immigration charges (8.4 percent).

At this point it might be fair to ask just who did the most lasting damage to the nation’s economy?

It would also be fair to question why, if only one Wall Street banker went to jail, how is that there are 555 imprisoned for banking- and insurance-related offenses? The answer to that is those offenders, situated on Main Street instead of Wall Street, lacked the political clout in Washington that the leaders of the megabanks enjoyed.

Is that an over-simplification of the circumstances? Probably, but it’s interesting to compare the actions of different White House administrations in handling financial crises.

President Obama’s first Attorney General, Eric Holder, in his “too big to fail” proclamation, said, “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications…it (prosecution) will have a negative impact on the economy.”

Obama, for his part, said, “One of the biggest problems about the…financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless.”

Wasn’t necessarily illegal? Both statements stretch credulity to its breaking point and are in themselves, disgraceful because federal laws were clearly broken knowingly and willfully.

It wasn’t always that way. For example, in the wake of the savings and loan crisis of the 1980s and 1990s, more than 1,100 bankers were indicted and 839 were convicted.

Enron, the seventh-largest company in the U.S. at the turn of the century, is another example of how the feds went after those who played fast and loose with the rules. President George H.W. Bush called on Enron CEO Kenneth Lay to run the World Economic Summit in Houston in 1990 and in 1992, Lay co-chaired the reelection campaign of Bush the First.

Enron and its affiliates also contributed more than $888,000 to the Republican National Committee in 2000, the year that George W. Bush was elected President and another $1.3 million to the Republican Party. Lay and his wife personally contributed $238,000 to George W. Bush campaigns and inauguration celebrations and raised another $100,000 from friends. To the younger Bush, Lay was known as “Kenny boy.”

Still, Enron and its top executives were not immune from prosecution by Bush the Second.

Despite the access to the highest levels of government enjoyed by Enron and Lay, he and Jeff Skilling, his successor as Enron CEO, were indicted by the Department of Justice in 2004 and though the two combined to spend some $60 million on their defense, Lay was convicted on all counts and Skilling on 19 of 28 counts of securities fraud.

George W. Bush’s Attorney General John Ashcroft recused himself from the Enron investigation because Enron and Lay both were major financial supporters in Ashcroft’s Missouri unsuccessful Senate re-election campaign. His chief of staff, David Ayers, also took himself out of the investigation of Enron. That was as it should have been.

Enron’s accounting firm, Arthur Andersen, was convicted of shredding Enron documents and both Enron and Arthur Andersen soon ceased to exist.

The same fate befell CenTrust Savings Bank, Drexel Burnham Lambert investment bank, and WorldCom—all because of flagrant violations of federal securities laws and each was prosecuted by the administrations of the two Bushes. WorldCom, in fact, was the largest bankruptcy in history when it went under in 2002.

Evidently, those firms were not considered too big to fail.

By contrast, Obama’s Attorney General Holder and Lanny Breuer, chief of the Department of Justice (DOJ) Criminal Division, did not remove themselves from DOJ’s investigation of the investment banks that brought on the Great Recession of 2008. This despite the fact that both men had worked for the same law firm of Covington & Burling which included among its clients such eminent Wall Street banking firms as Bank of America (Countrywide’s successor), Citigroup, and JP Morgan Chase.

In fact, at the time Holder was tapped as attorney general, he was co-chairing Covington & Burling’s white-collar defense unit. Good training in case you’re ever called on to investigate your former bosses.

Breuer returned to Covington & Burling in 2013 followed by his boss Holder in July 2015, giving Holder at least a reason for his strained, if not borderline unprincipled logic for not pursuing criminal indictments against the megabanks.

Following Holder’s departure, Deputy Attorney General Sally Quillian Yates (Remember her? She’s the one President Trump fired after she refused to enforce his illegal immigration order) issued a DOJ memo (turns out she was pretty good at memos that cut right to the chase) on Sept. 9, 2015, that reversed Holder and Breuer’s DOJ policy toward pursuing individual accountability, both criminally and civilly, for corporate wrongdoing. The memorandum said the policy change was to maximize DOJ’s “ability to deter misconduct and to hold those who engage in it accountable.”

The comparison between the approaches of two Bushes and Obama to bankers’ disdain for securities laws to the detriment of the entire country represents a stark role reversal for the perceived political philosophies of the Republican and Democratic administrations.

And now, President Trump has expressed his determination to roll back the Dodd-Frank bill passed after the 2008 recession for the express purpose of preventing a recurrence of the runaway greed that nearly wrecked the world economy.

In fact, he wants to remove all regulation of Wall Street banks, quite possibly the most dangerous single cartel in American society.

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It’s a classic political maneuver whenever a public figure is in trouble: get out in front of the story and release it yourself to make yourself either the good guy or a sympathetic figure—whichever the situation dictates.

Take Superintendent of State Police Mike Edmonson, for example.

First, he yanks a national award intended for a former Trooper of the Year and gets himself nominated instead, which by most standards, is a really shoddy way to treat a subordinate.

The he invites 15 of his best friends, also LSP subordinates, with him to San Diego to watch him bask in the moment—at the International Association of Chiefs of Police (IACP) 123rd Annual Conference and Exposition held on October 15-18, 2016.

And he dispatches four of those to drive to California in an unmarked State Police SUV permanently assigned to his second in command, Charles Dupuy.

But when he realizes that LouisianaVoice, which has been working on this story for a couple of months now, and New Orleans TV investigative reporter Lee Zurik are planning to release a fairly critical story Monday night about his little escapade, he decides to beat them to the punch by going PUBLIC with his version of events.

But in doing so, this so-called “leader” callously tosses the four who drove the state vehicle under the bus while professing none too convincingly to be “embarrassed” by the whole affair. I mean, it’s a little difficult to be embarrassed when one of the four’s expenses for the trip was approved by Dupuy.

So much for the Loyalty part of that “Courtesy, Loyalty, Service” motto of the Louisiana State Police. If you’re going to give permission (as Edmonson did) for four men to drive to California and they take a state vehicle permanently assigned to your second in command, and that same second in command (Dupuy) signs off on the expenses of the senior member of the four (Williams), then it necessarily means that the top brass of Louisiana State Police (Edmonson, Dupuy, et al) were complicit and Edmonson can hardly discipline the four without coming down on Dupuy as well.

charles-dupuy

Sour grapes? You bet. No one likes being scooped on a story in which so much time and effort has been devoted. And this is not to be taken as criticism of The Advocate. In their shoes, I would not have done things any differently. And it’s certainly obvious that reporter Jim Mustian he did more than a little digging on his own as evidenced by his interview with a spokesman for the Metropolitan Crime Commission in New Orleans. We don’t begrudge participation of other media in a story such as this. Indeed, we welcome it. News is the exclusive domain of no one.

But it’s also just as evident that Edmonson had his PR machine cranked up full tilt in a desperate act of damage control.

He allowed those four State Troopers to make the trip in a State Police vehicle, a Ford Expedition—because, he said, it represented a savings to State Police. That was less than two months before he testified before members of the House Committee on Appropriations on December 6, 2016, that his department was in dire need of 658 additional VEHICLES (Scroll to the 7:40 point in the proceedings).

And he did it all on the state dime.

717,200 state dimes, to be precise, or as close as we can come, given the information provided by LSP was incomplete. That comes to at least $71,720 in taxpayer funds as the LSP assemblage partied even as the state barreled headlong toward yet another budgetary shortfall.

Gov. John Bel Edwards only last week issued a call for a 10-day SPECIAL SESSION of the legislature in an attempt to address a projected $304 million budget hole. That session began Monday at 6:30 p.m. and is scheduled to end by midnight, Feb. 22.

It’s not as though Edmonson needed validation badly enough to yank the honor from one of his subordinates. He has, after all, won other major awards:

  • FBI Washington DC, Top 25 Police Administrators Award, 2009
  • Sheriff Buford Pusser National Law Enforcement Officer of the Year Award, 2013
  • Human Trafficking, Faces of Hope Award, 2013
  • Inner City Entrepreneur (ICE) Institute—Top Cop Award, 2013
  • American Association of Motor Vehicle Administrators Martha Irwin Award for Lifetime Achievement in Highway Safety, 2014
  • New Orleans Convention and Visitors Bureau, Captain Katz Lifetime Award for Outstanding Achievement in Public Safety, 2015.

Edmonson’s expenses were paid by IACP as the organization’s “honored guest,” according to LSP Maj. Doug Cain, and the travel and lodging expenses of Lafargue, who submitted expense claims only for $366 in meals (though he did turn in a time sheet so he could be paid for attending the event), were apparently picked up by the Louisiana State Troopers Association (LSTA) as best we can determine.

Cain said the reason so many personnel made the trip was because there were two other national conferences being held simultaneously: the Association of State Criminal Investigative Agencies (ASCIA), and the National Safety Council Annual Conference. Edmonson said the conference is an annual event and was included in the LSP budget.

But that didn’t prevent everyone involved from taking time to party hardy. This happy hour group photo was snapped at a San Diego watering hole.

san-diego-happy-hour

That’s Mike Edmonson right up front, on the left. Third from left is his wife and standing behind him on the third row in the yellow shirt is his brother, State Police Maj. Paul Edmonson. When LouisianaVoice requested a list of those who traveled to San Diego, Paul Edmonson’s name was conveniently omitted from the list. Yet, here he is.

The entire affair more closely resembled a frat party than a professional function, given the side trip to Vegas and the barroom fellowship.

Here is the announcement of Edmonson’s award from the Louisiana State Police Facebook page:

Following a nomination process that included numerous highway and public safety leaders from across the country, Louisiana State Police Superintendent Colonel Mike Edmonson was awarded the “J. Stannard Baker Award for Highway Safety.” Colonel Edmonson was honored with the prestigious award during the International Association of Chiefs of Police (IACP) Annual Conference which was held from October 15-18, 2016 in San Diego, CA. The IACP Annual Conference has a reputation for providing quality education on pressing law enforcement topics, and at this year’s conference Colonel Edmonson served on a panel of law enforcement leaders from across the nation to discuss topics such as community and training.

At each year’s IACP Annual Conference, the J. Stannard Baker award is presented to recognize law enforcement officers and others who have made outstanding lifetime contributions to highway safety. The award is sponsored by the IACP, the National Highway Traffic Safety Administration (NHTSA), and the Northwestern University’s Center for Public Safety. For an individual to receive this award, they must be nominated by a law enforcement agency or other traffic safety group or official. They must also be a full time law enforcement officer of a state, county, metropolitan, or municipal agency or be an individual who has made a significant lifetime contribution to highway safety.

The IACP is a professional association for law enforcement worldwide. The IACP actively supports law enforcement through advocacy, outreach, and education. By establishing partnerships across the public safety spectrum, the IACP provides members with resources and support in all aspects of law enforcement policy and operations. The organization helps members to perform their jobs safely and effectively, while also educating the public on the role of law enforcement to help build sustainable community relations.

The glowing news release, however, does not tell the complete story.

Sources close to the story have told LouisianaVoice that New Orleans State Police Maj. Carl Saizan, a 33-year State Police veteran and former Louisiana State Trooper of the Year, was originally nominated for the award but that the nomination had to pass through Edmonson for his stamp of approval. Instead, Saizan’s nomination was mysteriously scratched in favor of….Edmonson. Department of Transportation and Development (DOTD) Secretary Dr. Shawn Wilson ultimately signed off on Edmonson’s nomination.

Repeated efforts to contact Saizan for a comment were unsuccessful but LouisianaVoice was told he was not a happy camper about Edmonson’s snub. In fact, he may well have voiced his displeasure to Edmonson because he has since been removed as Region One Patrol Commander over Troop A (Baton Rouge), Troop B (New Orleans) and Troop L (Mandeville) and placed over only Troop N, which is exclusively New Orleans.

Edmonson, for his part, denied any knowledge of Saizan’s nomination. “I don’t know anything about anyone else being nominated,” he said in a telephone interview on February 13. “This was a lifetime achievement award based on my 37 years with State Police, mainly my last nine years as Superintendent,” he said.

Maj. Doug Cain, LSP Public Information Officer, told LouisianaVoice that he submitted Edmonson’s name for nomination for the award in “early May” of 2016 but a chain of emails received by LouisianaVoice indicates that saizan’s nomination was in the works as early as April 7. That timeline coincides with the story we received that upon receiving communication that Saizan was being nominated, Edmonson, or someone on his behalf—and certainly with his blessing—decided that he and not Saizan should be the nominee.

Here is Cain’s email:

From: Doug Cain
Sent: Saturday, February 18, 2017 9:28 PM
To: Tom Aswell
Subject: Re: QUESTION

I submitted app early May.  Don’t know exact date off the top of my head.

For those who may not recall, remember in June of 2014, State Sen. Neil Riser (R-Columbia) tried to sneak an amendment onto a bill literally during the closing minutes of the regular legislative session that would have pumped up Edmonson’s retirement benefits by about $55,000 per year. In case you don’t remember, Edmonson feigned ignorance of that maneuver as well, saying he had no knowledge of any such attempt only to later admit differently that he gave the go-ahead to the attempt in the full knowledge he had chosen to lock in his retirement years earlier and that that decision was supposed to be “irrevocable.”

So someone acts on Edmonson’s behalf to benefit him and he then attempts to distance himself from the action by claiming ignorance.

Does anyone see a pattern here?

LouisianaVoice received corroboration of the Saizan story from six independent sources, all from law enforcement veterans—three active and three of whom are retired.

The 15 “guests,” along with their salaries, who traveled to California to witness the presentation at the three-day International Association of Chiefs of Police convention in San Diego on October 16-18 were:

  • Derrell Williams, of Internal Affairs, $132,800 per year;
  • Col. Jason Starnes, recently promoted into the newly-created $150,750 per year unclassified position of Chief Administrative Officer (CAO) to assist the Undersecretary in the administration of all programs and sections within the Office of Management and Finance. The job description states Chief Administrative Officer shall exercise the duties and responsibilities of the Office of Management and Finance in the absence of the Undersecretary at the direction of the Deputy Secretary. Perk – he receives Free housing at the State Police Headquarters compound (dorm) because he is separated;
  • Special Assistant Superintendent Charles Dupuy, Edmonson’s $161,300 per year alter-ego;
  • Paul Edmonson, Command Inspector of Special Investigations Section ($136,800). He is Mike Edmonson’s brother and was not included in the list provided by LSP of those making the trip but somehow showed up in a group photo of the contingent in a San Diego bar;
  • John W. Alario, son of Senate President John A. Alario, Jr., who pulls down $115,000 per year as Executive Director of the Louisiana Liquefied Petroleum Gas Commission;
  • Layne Barnum, Command Inspector, Criminal Investigations Division ($132,800);
  • Greg Graphia, Operational Development Section consists of the Planning, Public Affairs, and Research Units. The Section functions as staff for Mike Edmonson ($124,100);
  • Special Deputy Superintendent over Bureau of Investigations Murphy Paul ($150,750). The Bureau of Investigation is responsible for the investigation of criminal activity, intelligence gathering, and case and technical support in the State of Louisiana.
  • Chavez Cammon, Criminal Investigations Unit, New Orleans ($96,900);
  • Stephen Lafargue, Secretary-Treasurer of the Louisiana State Troopers’ Association (LSTA) and Bureau of Investigations for Troop D in Lake Charles ($112,300);
  • Rodney Hyatt, HQ President of the Louisiana State Troopers’ Association (LSTA) and Lt. of Operational Development Section ($99,800);
  • Master Trooper Thurman Miller, President of the Central States Troopers Coalition of Louisiana ($72,600);
  • Trooper Alexandr Nezgodinsky, Insurance Fraud Section, Baton Rouge ($50,900);
  • Charles McNeal, Investigative Support Section (ISS) LA-SAFE Director ($124,100);
  • Brandon Blackburn, an $18,700-per-year unclassified student/intern who is the son of the late Frank Blackburn who served as legal counsel to the Department of Public Safety (DPS). The younger Blackburn, along with his mother, Cindy Kreider Blackburn, and Mike Edmonson’s wife, Suzanne, paid their own expenses, records show.

With Edmonson, Dupuy and Starnes all in San Diego, it’s a good thing no major emergencies like floods, shootings or petro-chemical plant explosions occurred during their absence. But it nevertheless raises questions as to the wisdom of having the top three LSP administrators out of state at the same time. Cain, however, defended the decision, saying, Command and control is maintained 24/7.”

Yeah, like Bobby Jindal continued to run the state while campaigning for President in Iowa.

The decision to have LSP pay the salaries of such a large group of attendees, as well as travel, lodging, meal and conference registration expenses via state LaCarte credit cards, seems questionable enough. But the justification of having four troopers—Derrell Williams, Rodney Hyatt, Thurman Miller and Alexandr Nezgodinsky—drive a state vehicle from Baton Rouge to San Diego (with an overnight stopover in an expensive Las Vegas casino hotel)—was the most puzzling.

Miller is a member of the Retirement Board and President of the Central States Troopers Coalition of Louisiana, Inc. 

Traveling via Interstates 10 and 8 from Baton Rouge, the four would have had to go northwest from Phoenix about 250 miles for an overnight stay in Vegas and from there, 260 miles southwest to San Diego. The straight-line distance between Phoenix and San Diego via I-8, on the other hand, is 350 miles. That means the 510-mile detour taken by the four was about 160 miles longer than necessary.

The four logged seven days for the round trip—four days driving to California and three days on the return trip—plus the four days at the conference itself.

Not only did fuel for the trip cost $610.98, but the four troopers combined to log 249 total hours during the trip (12 hours per day each for three of the men except for the final day, when 11 hours were claimed by the same three) on their time sheets. Each man was paid for 56 regular hours (224 hours total) for the seven days on the road and for 27 hours each (81 total hours) in overtime pay for the trip. Each also was paid for attending the four-day conference, according to time sheets submitted by the troopers.

Maj. Derrell Williams was the only one of the four to claim no overtime for the 11 days that included the trip and the conference. That’s because those with the rank of captain or above cannot earn overtime pay. They can, however, earn straight compensatory time. His salary and expenses still came to $5,730.

Cain was asked for the justification for taking the vehicle and his email response was: More cost effective to transport 4 individuals and also provide local transportation in San Diego for departmental personnel.”

Edmonson likewise said by the time the cost of flying to San Diego and renting a car was tabulated, it was more economical to have the men drive.

But when their travel time (regular and overtime hours), meals and hotel bills were totaled, the cost of driving the vehicle came to more than $21,000, which does not appear to fit the “cost effective” justification given by Cain or Edmonson. In fact, each of the four could have flown first class for less than that. Edmonson said he would re-calculate the cost of driving the vehicle to California.

On Friday, he heaved the four men under the bus when he announced that they would be required to repay overtime claimed as well as hotel expenses for their overnight stay in Las Vegas. He said Maj. Catherine Flinchum who formerly worked in Internal Affairs, the section Williams now heads up, would conduct an investigation of the trip by the four men.

Interestingly, Williams’s supervisor who signed off on his $2,297.42 expense report was Lt. Col. Charles Dupuy, to whom the vehicle they drove is permanently assigned. That leaves unanswered the question of whether Edmonson’s investigation would extend to his second in command for approving the use of his vehicle and for approving the expenditures.

The bottom line here is that Edmonson knew of and approved taking the vehicle to San Diego and knew of the Las Vegas trip. His signature may not be on the approval for the expenses, but his fingerprints are all over this entire sordid affair. He owns it and no amount of public contrition can change that.

As for others who made the trip by auto, Capt. Gregory Graphia, who also was in San Diego, signed off on time sheets (including the overtime logged) of both Rodney Hyatt and Thurman Miller while Hyatt signed off on Alexandr Nezgodinsky’s time sheet even though he is not Nezgodinsky’s supervisor. A tight little incestuous circle of responsibility, to be sure.

Nezgodinsky, by the way, presents an interesting question in his own right. It seems he has been a State Trooper only since May 2014. So how did a trooper with so little seniority rate a free trip to San Diego? The answer to that may lie in the fact that he was a San Diego city police officer as late as 2012. Perhaps the Louisiana crowd needed a tour guide to the tourist hot spots.

As far as Cain’s somewhat questionable explanation of “local transportation for departmental personnel” goes, Enterprise, which has a contract with the state for discounted rates, still rents cars in San Diego.

One law enforcement official offered a third possible reason for taking the vehicle. “Any way you can check to see if booze for their private parties was transported out there?” he asked.

Cain denied that the Expedition transported anything other than the four troopers.

The total breakdown of costs to the state was almost evenly split between salaries and expenses, records show. Altogether, the salaries for all attendees came to nearly $34,800 and expenses for travel, lodging, registration and meals were $36,233, plus whatever unreported expenses were incurred by Paul Edmonson, according to incomplete records provided by LSP as a result of LouisianaVoice’s public records requests.

Among those costs were hotel bills far exceeding the maximum allowed by state travel guidelines. While several hotel bills were submitted for as much as $299 per night, state guidelines set a maximum limit of $126 per night for several listed cities, including San Diego.

Likewise, the $68-per-day limit for meals ($13 for breakfast, $19 for lunch and $36 for dinner) was routinely exceeded, sometimes just for breakfast. Three examples included meal expense statements of $60 and $72 for breakfast, $68 and $102 for lunch and $96, $120 and $193 for dinner.

redacted-starnes-invoice

redacted-edmonson-invoice

nezgodinsky-original-expenses

nezgodinsky-amended-expenses

hotel-bill

hyatt-expenses

Note the redaction of costs on several of the documents provided by LSP and the overtime hours charged.

The trip could prove embarrassing for the governor who recently posted on his office’s web page his PLAN to “stabilize the FY17 budget deficit of $304 million.”

Included in that plan:

  • No money in the FY17 budget for inflation or merit pay for state employees (so many years now that we’ve actually lost count but a good guess would be seven or eight years—but State Troopers have fared a little better, getting two recent raises that gave some officers increases as much as 50 percent. Those raises, by the way, did not apply to officers of the Department of Public Safety.);
  • No funds for flood related expenses.

Proposed cuts to specific programs included:

  • Louisiana Commission on Law Enforcement—$251,674. The costs of the San Diego trip represented 28.5 percent of the cuts to this one program.
  • Louisiana Emergency Response Network Board—$27,625 (the San Diego trip cost two-and-one-half times this amount).
  • Office of State Police, Operational Support Program—$7.38 million;
  • Office of State Fire Marshal, Fire Prevention Program—$900,503;
  • Office of Juvenile Justice—$4.46 million;

Granted, $71,720 doesn’t represent a lot in the overall scheme of things when talking about a $304 million total deficit. Certainly not in any defense of Edmonson, but what if this is not an anomaly? What if this kind of fiscal irresponsibility is typical throughout state government?

If you have wastes of $71,720 here and $71,720 there, and $71,720 somewhere else, to paraphrase the late U.S. Senator from Illinois, Everett Dirksen, pretty soon you’re talking about real money.

And remember, that $71,720 doesn’t include airfare, lodging and meals for Paul Edmonson since LSP failed to include him on the list of individuals who traveled to San Diego. Moreover, LSP initially provided expense records that redacted purchase amounts charged to the state LaCarte cards but later, pursuant to LouisianaVoice’s follow-up request, provided copies that were not redacted. But there were still no itemized receipts provided that showed what those purchases were.

Asked for the total cost of the trip, Cain responded, “I don’t have this figure; you have all the relevant documents.”

Well, given the deletion of Paul Edmonson from the guest list, not quite all.

Given the timing of this, the incredible waste of state resources, and the fact that the state continues to grapple with budgetary shortfalls, perhaps the time has finally come for Gov. Edwards to take somebody to the woodshed for a lesson in discretion.

Because, Governor, we’re all “embarrassed” by Edmonson’s repeated lapses in judgment.

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

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

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

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

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

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

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

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

image-13

(CLICK ON IMAGE TO ENLARGE)

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

Wait. What?

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

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

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

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

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

Yes,

Uh-huh.

Yep.

Hell, yes.

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

Very perceptive, Grasshopper.

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

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

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

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

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

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

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

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

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

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

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

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

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All those rabid LSU fans who find themselves in the unusual position of backing a team virtually buried in the 19th position among AP’s football elite can take heart; at least the Tigers aren’t 44th.

And those equally insane ‘Bama fans looking to secure another crystal football for their school’s trophy case can be glad the Tide isn’t ranked 46th.

As both teams head into their respective post-season games, 24/7 Wall St., a research firm that publishes some 30 ARTICLES per day on economy, finances, and government, has come out with its rankings of the best- and worst-run states in the country.

And it ain’t pretty.

Alabama is no. 46 out of 50 states but that’s okay. Never mind that it is one of the poorest states in the nation with 18.5 (5th highest) of its citizens living in poverty). The Tide is in the playoffs for the national championship.

Don’t worry about the state’s unemployment rate of 6.1 percent, which is tied for 8th highest in the country. Alabama, which proclaims itself to be the Heart of Dixie, pays the coaches of its two major college football teams, ‘Bama and Auburn, combined SALARIES of $11.67 million—$4.73 for Auburn’s Gus Malzahn and $6.94 million for ol’ Nicky Boy.

(Les Miles, before being unceremoniously cut loose by LSU’s Athletic Director Joe Alleva, himself the possessor of somewhat dubious talent, was pulling down a cool $4.3 million per annum. But all of these salaries pale in comparison to Jim Harbaugh’s $9.004 million salary at Michigan.)

LSU, meanwhile, is headed to this Friday’s Citrus Bowl in Orlando to take on the juggernaut Cardinals of Louisville—without the services of Leonard Fournette who has played his last game for the Tigers. (On that note, now that Fournette has declared himself draft eligible, retained an agent and opted not to participate in Friday’s game, has he, or any other player deciding to go pro, also opted out of attending classes for the remainder of the semester as well? If not, are any of them continuing to reside in free housing, enjoying free meals or using school training equipment for workouts? Just a thought.)

Meanwhile, back home, Louisiana ranks as the 44th best-run (or the seventh worst-run) state, just two notches ahead of Alabama. The two are sandwiched around Kentucky in the rankings while the state geographically wedged between them, Mississippi, is ranked 47th best, or fourth-worst with the fifth-highest unemployment rate at 6.5 percent and the highest poverty rate at 22.0 percent.

Louisiana’s unemployment rate of 6.3 percent (sixth-highest, right behind Mississippi) and its third-highest poverty rate of 19.6 percent (New Mexico’s 20.4 percent is second-highest) are nothing to brag about. Nor is its $4,067 debt per capital (16th highest).

The question, at least in Louisiana’s case, is: Why?

  • Louisiana has some of the highest crude oil and natural gas reserves in the nations;
  • Louisiana is one of the top crude oil producers in the country;
  • More crude oil is shipped to the Louisiana Offshore Oil Port (LOOP) than to any other U.S. port;
  • Louisiana has several of the nation’s largest ports with exports totaling $10,530 per capita in 2015, second highest of all states, behind only Washington;

So with this abundance of natural resources, why is it that Louisiana continues to struggle with high poverty, low educational attainment and high violent crime.

Well, for starters, you can tie the first two of those to the third: high poverty and low education rates equal high crime. Every time.

All that notwithstanding, however, the overriding question is how can a state with such an abundance of the world’s most valuable commodity fail to profit?

Market news has been replete with stories lately about how the poor oil companies are taking hits with some reporting net profits down by as much as 37 percent. Still, even with lower earnings, some, like SHELL, reported net profits of a paltry $2.24 billion for the second quarter of 2016. That’s three months’ profits, folk. Three months.

Yet, Louisiana continues to give away the store to big oil through more than generous tax breaks while allowing them to walk away from the ravages they have inflicted on our coastal marshes.

With so much revenue derived by the oil and chemical industries through these tax breaks, there is no reason why this state’s citizenry continues to wallow in the depths of financial despair and desperation.

With a more reasonable tax structure in which big oil, big chemical plants, and their related industries (ports, trucking, and rail) could be asked to bear more responsibility for wrecking our coastline, polluting our air and water, and tearing up our highways, Louisiana could forge ahead of most of those states ranked ahead of them.

Yet we continue to place the greatest burden on the backs of those who can least afford it: the middle and low income groups through the most inequitable form of taxes. Louisiana has the third-highest average (9.01 percent) in state and local SALES TAXES in the nation.

Ever wonder why that is? For starters, the average taxpayer doesn’t have the time or resources or a PAC to generate organized opposition to this rigged tax structure or to purchase legislators’ votes. Big oil, Big Pharma, and Big Banks do.

Do you think it was sheer coincidence that former State Sen. Robert Adley was appointed by Gov. John Bel Edwards as Executive Director, Louisiana Offshore Terminal Authority? http://gov.louisiana.gov/news/governorelect-edwards-announces-cabinet-executive-staff-bese-board-appointments

Think again. Here is LouisianaVoice’s overview on why Big Oil has the influence it exercises in this state: https://louisianavoice.com/2016/08/28/ag-jeff-landry-joins-jindal-legislators-in-protecting-big-oil-from-cleanup-responsibility-follow-the-money-for-motives/

(Be sure to click on Copy of Campaign Contributions)

But at least the NCAA playoffs and the Citrus Bowl—and national signing day—will keep the natives content for a while longer.

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Attention State Civil Service employees:

·       There’s no money available for your pay raises for what now, the fifth straight year? The sixth? I’ve lost count.

·       The Office of Group Benefits, by the way, will be increasing your monthly health premiums again.

Attention State Troopers:

·       Gov. John Bel Edwards has signed the necessary documents clearing the way for pay increases as much as 8 percent for you—this in addition to last year’s two pay increasing totaling some 30 percent.

·       And by the way, Gov. Edwards’ signature also clears the way for annual guaranteed pay increases of 4 percent per year for State Police.

The State Police Commission (LSPC) will meet on Thursday (Oct. 13) to make it official.

Attention Department of Public Safety police officers:

·       You are not included.

·       Meanwhile, State Police Superintendent Col. Mike Edmonson’s hunt continues to identify the DPS malcontents who have the audacity to complain about being repeatedly left out in pay raises. Keep your heads down, guys.

The commission also will consider stripping away some of the duties of the commission executive director, according to the commission agenda published on its Web page. This is an obvious effort for Edmonson to seize more power through his puppet, Commission President/State Trooper T.J. Doss. http://laspc.dps.louisiana.gov/laspc.nsf/b713f7b7dd3871ee86257b9b004f9321/0449c2895409d86986258027004fff12/$FILE/10.12.16%20Revised%20Agenda%20(October%2013,%202016).pdf

LouisianaVoice also has learned that the Louisiana State Troopers Association (LSTA) is actively considering amending its by-laws to give it authority to purge its rolls of certain of its members, namely a couple of state police retirees who have questioned certain association activities.

And why not? Obviously pumped by the sham “investigation” of the association leadership’s decision (in open violation of state law) to contribute to political campaigns, including those of former Gov. Bobby Jindal and current Gov. Edwards, the LSTA is feeling pretty confident that it can do whatever the hell it wants with complete impunity.

The commission, you will recall, hired Natchitoches attorney Taylor Townsend, a former legislator, to conduct an in-depth investigation into the decision of certain LSTA leaders to become actively involved in political campaigns by having the LSTA executive director make the contributions in his name and then reimbursing him for his “expenses.” The action, nothing other than money laundering, was cleared by Townsend after he apparently got his marching orders from Edwards who didn’t want any embarrassment after reappointing Edmonson after becoming governor.

Townsend, a major supporter of Edwards and who helped head his transition team after he was elected, subsequent to his quiet recommendation of “no action” regarding the LSTA campaign contributions, was rewarded with appointment to the legal team pursuing legal action against the oil industry to force it to restore the state’s wetlands damaged by drilling. http://www.theadvocate.com/baton_rouge/news/politics/article_354f2c5c-8cc9-11e6-8564-5bb2846bb2e6.html

Townsend, instead of submitting a written report as most investigations require, simply told the commission he recommended “no action,” and the commission complied with no comment. Townsend even admitted he did not admit a recording of an LSTA chapter meeting in which is was admitted that the LSTA violated the law into evidence.

So now that the LSTA has survived that mini-scandal, it wants to rid its membership of retirees who dared question the association’s activities.

One of those retirees, Bucky Millet of Lake Arthur, has become a real burr under the commission’s and the LSTA’s saddles and the LSTA officers desperately want him out. He has attended every commission meeting for nearly a year now and is scheduled to attend Thursday’s meeting. Even worse than attending the meetings, he asks questions and that’s something the State Police hierarchy doesn’t particularly like. 

If the LSPC follows form, it will retreat into yet another executive session where it can discuss a course of action out of earshot of the public.

LouisianaVoice will be there.

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