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Here’s how Jindal’s privatization works: OGB fund balance to be broke by fiscal year ’15 after $500M balance in 2012

Posted in Audit Reports, Budget, Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, State Agencies, Transparency on July 17, 2014| 29 Comments »

To probably no one’s surprise except a clueless Gov. Bobby Jindal, the takeover of the Louisiana Office of Group Benefits (OGB) by Blue Cross Blue Shield of Louisiana 18 months ago has failed to produce the $20 million per year in savings to the state.

Quite the contrary, in fact. The OGB fund balance, which was a robust $500 million when BCBS took over as third party administrators (TPA) of the Preferred Provider Organization (PPO) in January of 2013, only 18 months later stands at slightly less than half that amount and could plummet as low as an anemic $5 million a year from now, according to figures provided by the Legislative Fiscal Office.

OGB is one of the main topics to be taken up at today’s meeting of the Joint Legislative Committee on the Budget (JLCB) when it convenes at 9 a.m. at the State Capitol.

OGB is currently spending about $16 million per month more than it is collecting in revenue, said Legislative Fiscal Officer John Carpenter.

The drastic turnaround is predicated on two factors which LouisianaVoice warned about two years ago when the privatization plan was being considered by the administration:

  • Jindal lowered premiums for state employees and retirees. That move was nothing more than a smokescreen, we said at the time, to ease the state’s share of the premium burden as a method to help Jindal balance the state budget. Because the state pays a percentage of the employee/retiree premiums, a rate reduction would also reduce the amount owed by the state, thus freeing up the savings to patch gaping holes in the budget.
  • Because BCBS is a private company, it must return a profit whereas when OGB claims were processed by state employees, profits were not a factor. To realize that profit, premiums must increase or benefits decrease. Since Jindal had already decreased premiums, BCBS necessarily found it necessary to reduce benefits.

That, however, still was not enough and the negative income eroded the fund balance to its present level and now legislators are facing a severe fiscal crisis at OGB.

And make no mistake: this is a man-made crisis and the man is Bobby Jindal.

In a span of only 18 months we have watched his grandiose plans for OGB and the agency’s fund balance dissolve into a sea of red ink like those $250 million sand berms washing away in the Gulf of Mexico in the wake of the disastrous BP spill.

There is no tactful way to say it. This Jindal’s baby; he’s married to it. He was hell bent on privatizing OGB and putting 144 employees on the street for the sake of some hair-brained scheme that managed to go south before he could leave town for whatever future he has planned for himself that almost surely does not, thank goodness, include Louisiana.

So ill-advised and so uninformed was Jindal that he rushed into his privatization plan and now has found it necessary to have the consulting firm Alvarez and Marcel, as part of their $5 million contract to find state savings, to poke around OGB to try and pull the governor’s hand out of the fiscal fire. We can only speculate as to why that was necessary; Jindal, after all, had assured us up front that the privatization would save $20 million a year but now cannot make good on that promise.

In the real world, the elected officials are supposed to be the pros who know that they’re talking about while those of us on the sidelines are mere amateurs who can only complain and criticize. Well, we may be the political novices here, but the results at OGB pretty much speak for themselves and we can rightfully say, “We told you so.”

Are we happy or smug? Hell, no. We have to continue to live here and raise our children here while Jindal will be taking a job with some conservative think tank somewhere inside the D.C. Beltway (he certainly will not be the Republican candidate for president; he isn’t even a blip on the radar and one former state official now residing in Colorado recently said, “No one out here has ever even heard of him.”)

In a five-page letter to JLCB Chairman Rep. Jim Fannin (R-Jonesboro), Carpenter illustrated the rate history of OGB going back to Fiscal Year 2008 when premiums were increased by 6 percent. The increase the following year was 3.7 percent and the remained flat in FY-10. In FY-11, premiums increased 5.6 percent, then 8.1 percent in FY-12 when the system switched from a fiscal year to calendar year. but in FY-13, the year BCBS assumed administrative duties, premiums dropped 7 percent as Jindal attempted to save money from the state’s contributions to plug budget holes. For the current year, premiums decreased 1.8 percent and in FY-15 are scheduled to increase by 5 percent.

OGB Report_July 2014 FOR JLCB

Carpenter said that since FY 13, when BCBS took over the administration of OGB PPO claims, OGB’s administrative costs began to shift to more third party administrator (TPA) costs as the state began paying BCBS $23.50 per OGB member per month. That rate today is $24.50 and will increase to $25.50 in January of 2015, the last year of the BCBS contract.

That computes to more than $60 million per year that the state is paying BCBS to run the agency more efficiently than state employees who were largely responsible for the half-billion-dollar fund balance.

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Jindal administration spiraling out of control with absurd Alvarez & Marsal recommendations for saving state money

Posted in Budget, Contract, Contracts, Finances, Governor's Office, Legislature, Legislators, State Agencies, Waste on May 13, 2014| 25 Comments »

Just when you thought the news coming from this administration couldn’t possibly get any more dysfunctional…it does.

In fact, whatever semblance of logic this administration had remaining is fast circling the drain even as our governor attempts to push his agenda onto a national stage while leaving it to high-priced consultants and amateurs like Kristy Nichols to find solutions to mounting problems at home.

This is the same governor, Bobby Jindal, who recently told the graduating class at Jerry Falwell’s Liberty University that the entertainment industry’s intolerance is eroding the very foundation of America’s freedom—even as his Department of Economic Development continues to give away the store in the form of hefty tax incentives to….that very same entertainment industry.

As the Church Lady from Saturday Night Live would say, “Well now, isn’t that special?”

Earl Long might say it another way. He well may have been describing Jindal’s flexibility in spewing his political rhetoric to play to the views of his audience when he told Ruston Daily Leader fledgling reporter Wiley Hilburn in July of 1959 (only a couple of months before Long’s death) that Hilburn’s uncle, former Lt. Gov. C.E. “Cap” Barham, could “talk out of both sides of his mouth and whistle out of the middle at the same time.”

But bizarre as Jindal’s performance has been over the past six-plus years, he would be hard-pressed to surpass the downright preposterous laundry list of proposed cuts in spending rolled out on Monday by Nichols, serving as his proxy while he campaigns to be the Second Coming of Alfred E. Neuman.

All that was missing from Nichols’ theater of the absurd were the orange wig, red nose, big shoes and a seltzer bottle.

To say this administration is delusional is to be overly kind.

To refresh, you will remember that back in January, the administration signed a $4.2 million contract (quickly amended to $5 million in violation of state law requiring legislative concurrence on initial amendments greater than 10 percent) with the consulting firm of Alvarez & Marsal, charging the firm with finding $500 million in savings by April. Well, April has come and gone and now Nichols says the firm’s report will be a month late, now expected at the end of May.

Alvarez & Marsal (A&M), to further refresh the old memory banks, is the same firm that offered up the sage advice to the Orleans Parish School Board in December of 2005, only months after Hurricane Katrina, to fire 7,500 teachers, effective Jan. 31, 2006.

That little bit of economic wisdom may wind up costing the state $1.5 billion following a court decision in favor of the teachers who filed suit after being summarily fired.

A&M also is the same firm that recommended the privatizing of the LSU Medical Center in New Orleans (formerly Big Charity Hospital) in the voluminous Streamlining Commission report initiated during Jindal’s second year in office, thus sowing the seeds of Jindal’s ambitious privatization plan for LSU’s statewide system of hospitals.

And we all know how well that fared, don’t we?

According to friend and fellow blogger C.B. Forgotston, the preliminary report submitted by A&M last Thursday (May 8) was a whopping two and one-half pages in length ($2 million per page—by comparison, this post alone should be worth $10 million) and contained recommendations for only $74 million of the $500 million goal.

And now Nichols has come before the Senate Finance Committee to inform senators that “Every (cabinet) secretary signed off on the savings.”

Well, DUH! Of course they signed off on the proposals. They may be sycophants but they ain’t stupid. We know what happens to anyone in the state employ who might dare adopt a viewpoint at odds with Jindal. Obviously, these people who could never command comparable salaries in the private sector want to cling to their jobs like so many ticks in a hound dog’s ear.

But enough of the ancient history; let’s allow Jindal and A&M to demonstrate in their own words just how inane the future leader of the free world can be. Among the innovative ideas for saving the taxpayers $74 million are these jewels of pure brilliance:

  • Cutting back the hours of operation of the Cameron Parish ferry;
  • Circling employment ads for prison inmates;
  • Decreasing the thickness of asphalt on roadways;
  • Requiring pregnant women on Medicaid to use midwives or doulas for delivery;
  • Treating the partners of pregnant women in government health care programs for STDs.

Oh, we get it. Very funny. Kristy, you’re quite the card.

What? You’re serious?!!!?? No way! C’mon, guys; a joke’s a joke but now you’re starting to scare us. We’d rather hear something a little less scary—like finding the hook from the one-armed killer in the car’s door handle or about the water skier falling into a nest of water moccasins.

Okay, now sit back, Kristy, and take a reality check here. Where’s the proposal to prohibit offering six-figure salaries to washed-up politicians so they can occupy a desk for a few year to fatten their state pensions? We mean, even with motion sensor lighting, these guys are so useless that they inhabit darkened offices.

You want to cut the hours of operation of the Cameron Ferry from 24 to 16 or 18 hours and you want to cut the thickness of asphalt overlay in half—from two inches to one-inch? You say the two would save the Department of Transportation and Development (DOTD) $10.9 million?

Have you ignored the fact that the only detour along Highway 82 in Cameron Parish would require a drive of 120 miles?

You say Texas has already adopted a new material that allows that state to overlay roadways with one-inch-thick asphalt? Wonderful. Have you taken into account that the soil composition and consistency in Louisiana, particularly South Louisiana, is vastly different than that of Texas? To implement this foolish proposal would place an added onus on already over-burdened DOTD maintenance units when the thinner asphalt produces thousands of potholes that are certain to occur as the base beneath the asphalt deteriorates. If DOTD Secretary Sherri LeBas did agree to this idiocy as Nichols claims, she is grossly unqualified to head up the agency responsible for the construction and maintenance of the state’s roads and bridges.

Circling employment ads for prisoners? Gawd. For this, we’re paying A&M $5 million. We could have suggested that for a buck-fifty.

Nichols explained that the state intends to implement the program whereby low-risk prisoners in Orleans and Jefferson parishes would earn their keep by working by serving the latter portions of their sentences in minimum-security facilities such as parish prisons run by sheriffs and giving part of their paychecks to the prison operators to help pay for their room and board. She said that would save the state $9.4 million. How do you propose to keep the sheriffs honest in reporting actual salaries against what they report to the state? Just a thought.

Midwives and doulas for deliveries for pregnant women on Medicaid? Interesting concept. Has anyone thought of bringing back leeches? How about electric shock for mental illness? And willow bark for treating fever? And now, simply because they are on Medicaid, we propose to deny these expectant mothers the same childbirth facilities to which people like Kristy Nichols or Sherri LeBas or Kathy Kliebert might be privy?

And you propose to treat the sexual partners of pregnant women for STDs after the fact?

Beautiful, just bleeping beautiful.

This aberration of an administration, as we (borrowing a line from Three-and-a-Half Men) have said before, has all the emotional stability of a sack full of rats in a burning meth lab.

Even sadder is the fact that the legislature, in allowing this spoiled brat of a child Jindal to get away with his shenanigans, for failing so miserably to hold him accountable, isn’t far behind.

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Contractor claims in lawsuit that DOTD official attempted ‘shake down’ for cash and equipment during Monroe work

Posted in Contract, Contracts, Corruption, Ethics, State Agencies on April 9, 2014| 5 Comments »

A six and one-half-year-old lawsuit has taken a dramatic turn following a Mangham contractor’s claim that the Louisiana Department of Transportation and Development (DOTD) denied payments for work performed by his company because he resisted shake-down efforts by a DOTD inspector.

Jeff Mercer owner of the now-defunct construction company that bears his name, worked as a subcontractor to several prime contractors on six different projects for which he says he has not been paid. He first filed his lawsuit against DOTD on Sept. 7, 2007, in state district court in Monroe, claiming that the state owes him nearly $9 million for actual work done for which he was never paid, plus interest and delay costs which bring the total to more than $11.6 million.

He raised the stakes when he and three of his employees filed sworn affidavits with the court in which all four say DOTD inspector Willis Jenkins demanded that Mercer either “put some green” in his hand or that Mercer place a new electric generator “under his carport” the following day, Mercer’s affidavit says.

Foreman John Sanderson, carpenter Bennett Tripp and traffic control supervisor Tommy Cox, all employees of Mercer at the time, signed similar affidavits attesting to the same sequence of events in which they each say Jenkins tried to extort either cash or equipment from their boss.

The incident, all four said, occurred in 2007 when Mercer was contracted to perform work on a $79,463 project on Louisville Avenue in Monroe.

“While working on that project,” Sanderson said in his sworn statement, “I was approached by Willis Jenkins. Mr. Jenkins informed me at that time that he could make things difficult on Jeff Mercer, LLC.

“He indicated that this burden would not necessarily be on the Louisville Avenue project but on future jobs awarded to Jeff Mercer, LLC,” Sanderson said. “I replied, ‘You didn’t mean to say that,’” whereupon, Sanderson said, Jenkins repeated his threat. “During that conversation, I heard Willis tell Jeff that he ‘wanted green,’” Sanderson said.

Tripp, in his signed statement which was notarized by Baton Rouge attorney Jennifer Dyess, also said he heard Jenkins tell Mercer he “wanted some green.” He said he also heard Jenkins tell another Mercer employee that Jenkins, pointing to a generator in Tripp’s truck, said he “wanted one of those under his carport.”

Following complaints from Mercer, Jenkins was subsequently removed from the project but Tripp said the shakedown continued when another state official told Mercer employees, “Y’all had my buddy removed and we’re going to make the rest of the job a living hell.”

Cox likewise said he heard Jenkins tell Mercer employees he wanted a generator in his carport. “Willis (Jenkins) further indicated that he “wanted his generator to be new,” or “this could be a long job.”

Mercer, who founded his company in 2003, said that Jenkins approached him and said he needed “to put some green in his hand.” Mercer says in his affidavit that he asked Jenkins to repeat himself, and he did so. “I then replied that ‘I don’t do that,’” Mercer said.

Jenkins responded that Mercer “better do that or you won’t finish this project or any other project in this area.”

During their exchange, Mercer said that Jenkins told him, “This is going to be a long job if I don’t get the green or the generator.”

Mercer said in his sworn statement that he call Jenkins’ supervisor Marshall Hill and advised him of Jenkins’ action. “Marshall advised that he would remove Willis from the Louisville Avenue project,” Mercer said, adding, “Marshall also stated, ‘Off the record, this doesn’t surprise me.’ Shortly thereafter, (Jenkins) was removed from the …project.”

It was after that incident that Mercer’s problems really began, he says. After receiving verbal instructions on the way in which one project was to be done, it was subsequently approved but several days later, DOTD officials, including defendant John Eason, advised that the work was not acceptable.

Work for which Mercer says he has not been paid includes:

  • Two projects on I-49 in Caddo Parish ($1.6 million);
  • A Morehouse Parish bridge project ($7.1 million);
  • Louisville Avenue in Monroe ($79,463);
  • Well Road in West Monroe ($50,568);
  • Airline Drive in Bossier City ($57,818);
  • Brasher Road in LaSalle Parish ($70,139).

Mercer claims in his lawsuit there was collusion among DOTD officials to “make the jobs as costly and difficult as possible” for Mercer.

He claims that DOTD officials provided false information to federal investigators; that he was forced to perform extra work outside the contract specifications; that a prime contractor, T.J. Lambrecht was told if he continued to do business with Mercer, closer inspections would result, and that job specifications were routinely changed which in turn made his work more difficult.

DOTD interoffice emails obtained by LouisianaVoice seem to support Mercer’s claim that he was targeted by DOTD personnel and denied payment on the basis that the agency was within its rights to “just say no.”

One email from DOTD official Barry Lacy which was copied to three other DOTD officials and which stemmed from a dispute over what amount had been paid for a job, made a veiled threat to turn Mercer’s request for payment “to the U.S. Department of Transportation’s Office of Inspector General.”

Still another suggested that payment should be made on a project “but never paid to Mercer.”

“I did everything they told me to do,” Mercer told LouisianaVoice. “But because I refused to allow one DOTD employee to shake me down, they put me out of business. They took reprisals and they ostracized me and broke me but now I’m fighting back.”

Both Mercer and his Rayville attorney David Doughty indicated they had reported the events to the governor’s office but that no one in the administration had offered to intervene or even investigate his allegations.

It was not immediately clear if the Louisiana Office of Inspector General had been notified of the claims.

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Baton Rouge attorney represents two state boards; suing two others, plus a state agency and apparently there’s no conflict

Posted in Boards, Commissions, Contract, Contracts, Courts, Ethics, House, Senate, Politicians, State Agencies, Taxes, Transparency, Waste on April 2, 2014| 5 Comments »

 

An interesting civil trial is transpiring at the 19th Judicial District Court. Though estimates vary, if the plaintiffs prevail, about one taxpayer in five in the Greater Baton Rouge area may eventually wind up with a surprise check in the mail.

The trial involves a group of taxpayers, now represented as a class, who have sued the Amite River Basin Commission (ARBC) over what they claim are vastly overpaid property taxes covering construction of the Comite River Diversion Canal. The project was originally envisioned after the massive 1983 flood which resulted in significant backwater flooding long after rains had stopped. The concept behind the project involves providing a sort of relief valve (the Canal) to divert water from the Comite River into the Mississippi River. By lowering the water level of the Comite River, water levels would also be lowered in the Amite River basin in flood-prone areas such as Port Vincent and French Settlement.

What is in dispute is the amount of funding for which the ARBC (through local property owners) is responsible. The original estimate of the project’s construction costs was approximately $120 million (the current estimate is $199 million). Of that $120 million, the Army Corps of Engineers (through the Federal government) was to be responsible for 70% of the construction costs, or $84 million. The remaining $36 million cost was originally designated to be $30 million to the State of Louisiana, and $6 million to the ARBC.

A sidebar to the whole affair is how a Baton Rouge lawyer is legally or ethically able to represent ARBC when he also served as the plaintiff attorney in litigation against the state that could ultimately cost the state from $60 million to $70 million.

Plaintiffs’ attorneys have indicated that $6 million was the full extent of the construction costs for which the ARBC was responsible. To date, by way of a 3-mill property tax approved by voters in the District in 2000, combined with a renewal (at 2.65 mills) of that tax in 2010, plaintiff attorneys say about $24.5 million has been collected to date. The suit seeks a refund of the alleged $18.5 million overpayment.

At various stages in the trial, plaintiff attorneys have accused ARBC Executive Director Deitmar Rietschier of financial mismanagement and voter deception in order to “keep a project alive that is on life support.”

The attorneys have argued that Rietschier has an ulterior motive for over-collecting on the tax in order to fund his own $93,000+ annual salary along with his executive secretary’s $38,000 salary.  The board’s executive secretary, Toni Guitrau, also happens to be the Mayor of the Livingston Parish Village of French Settlement.

So, basically, the trial boils down to the claim that taxpayers of the district have been tricked into paying around $1.1 million in salaries for Rietschier and Guitrau during a period for which no funding has been appropriated for the project’s continued construction.

Plaintiff attorney Steve Irving argued that it is virtually impossible to accurately estimate the final cost of the project or if, it may even be completed.

Defense attorney Larry Bankston says there never was any intent to cap the ARBC’s contribution to construction costs at $6 million. He argues that the Canal project remains viable and is fully ongoing. He indicated that he has eight more witnesses to call.

Bankston’s roles as both plaintiff and defense attorney in cases involving the state would appear to pose a conflict of interests. Currently, he is:

  • Legal counsel to the State Auctioneer Licensing Board under a $25,000 contract;
  • Defense attorney for ARBC in its ongoing litigation over the overpayment of taxes to that board;
  • Plaintiff attorney in ongoing litigation against the Louisiana Department of Agriculture, and the state’s Rice Promotion Board and Rice Research Board over claims of excessive assessments against the state’s rice farmers.

Employing the doctrine that “the state is the state is the state,” it would appear that Bankston may have a conflict of interests under the code of ethics which governs attorney representation.

But as we discovered years ago, nothing is ever cut and dried in the legal world. And it’s obvious those in charge of attorney ethics or either ignorant of the subject or protective of their peers—or both.

And so it is with this question. We contacted a number of organizations, including the Attorney Disciplinary Board, the Louisiana Civil Justice Center, and the State Bar Ethics Council and each one punted. Eric K. Barefield of the State Bar Association’s Ethics Council did finally respond to our email question about the propriety of working both sides of Litigation Street but his answer did little to shed light on the issue:

“Thank you for your inquiry. The Louisiana State Bar Association’s Ethics Advisory Service is designed to provide eligible Louisiana-licensed lawyers with informal, non-binding advice regarding their own prospective conduct and/or ethical dilemmas under the Louisiana Rules of Professional Conduct (the “LRPC”).  According to limitations set by the Supreme Court of Louisiana, we are not permitted to evaluate contemplated disciplinary complaints, to serve as the catalyst for potential complaints or even to comment on the conduct of lawyers other than that of the requesting lawyer. 

“As such, regrettably, we are not permitted to help you evaluate whether the lawyer in your scenario has or may be violating the LRPC nor are we permitted to give you legal advice on matters such as those contained in your e-mail. 

“In addition to the foregoing, if you are concerned about protecting and/or asserting your rights and interests in this matter, perhaps you should strongly consider consulting another lawyer as soon as possible with regard to getting an evaluation of your facts and a legal opinion about your rights, interests and options.  Regrettably, no one on the staff at the LSBA is permitted to offer legal assistance and/or legal advice.”

That rendition of the Bureaucratic Shuffle would easily get a “10” rating on Dancing with the Stars.

Bankston, you may remember, is a former staff attorney for the Louisiana Attorney General’s office, was assistant parish attorney for East Baton Rouge Parish and a member of the Baton Rouge City-Parish Commission before his 1987 election to the Louisiana State Senate.

In 1994, while serving as chairman of the Senate Judiciary Committee, Bankston met in his law office with Fred Goodson, owner of a Slidell video poker truck stop. The FBI later said Bankston and Goodson discussed a plan to manipulate the legislative process in order to protect the interests of video poker companies in exchange for providing key legislators secret financial interests in video poker truck stops.

Bankston was subsequently indicted and convicted on two racketeering counts, one of which was a scheme whereby Goodson would pay Bankston “rent” of $1,555 per month for “non-use” of Bankston’s beachfront condo in Gulf Shores, Alabama—a bribe, according to prosecutors.

Bankston was sentenced to 41 months in prison in 1997 and ordered to pay a $20,000 fine.

Released on Nov. 6, 2000, Bankston was subsequently disbarred by the Louisiana Supreme Court on Mar. 9, 2002, retroactive to Nov. 19, 1997, but was re-admitted to practice law on Feb. 5, 2004.

So, now he represents two state boards and is suing two others and a state agency.

And there apparently is no one who can—or will—call a foul in this game.

 

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A refresher course on the CNSI contract and why would two administrative officials leave just before legislative session?

Posted in Contract, Contracts, DOA, Ethics, Finances, Governor's Office, Health Care, House, Senate, Legislature, Legislators, Politicians, Public Records, State Agencies, Transparency on February 27, 2014| 5 Comments »

With the 2014 regular session of the legislature less than two weeks away, there have already been a couple of interesting developments that could prevent lawmakers from learning how a federal investigation of a major contract came about in the first place.

There already is speculation that two recent resignations in the Jindal administration may have something to do with avoiding testimony before legislative committees that may wish to look into the controversial $284 million contract between the Department of Health and Hospitals (DHH) and CNSI.

Subpoenas could be issued for Paul Rainwater, Jerry Phillips, and Bruce Greenstein but if they choose to ignore subpoenas, the legislature has options in that legislative subpoenas carry the same weight as a court subpoena provided a legislative subpoena meets certain criteria.

It is, to say the least, curious that former Commissioner of Administration Paul Rainwater (more recently, Gov. Bobby Jindal’s Chief of Staff), and DHH Undersecretary Jerry Phillips resigned only a few days apart and less than a month before the legislature convenes at noon on March 10.

Apparently timing in politics, like in comedy, is everything. Phillips, while giving no specific date for his retirement, did say he would retire “before the start of the session.”

DHH Secretary Kathy Kliebert said Phillips, who has worked for DHH for 25 years, will pursue “other employment options with the state following his retirement.” She said he would be replaced by DHH Deputy Director Jeff Reynolds on (drum roll, please…) March 10.

That, or course, raises the obvious question of whether Phillips will remain conveniently retired until the session adjourns on June 2 before becoming the latest retire-rehire, a popular trend among executive level state employees these days.

Phillips, you may recall was seated next to Greenstein back in June of 2011 when the Senate and Governmental Affairs Committee was considering the confirmation of Greenstein as Jindal’s choice for DHH Secretary.

It was Phillips who repeatedly advised Greenstein and defended his boss’s refusal to identify to the committee CNSI as the winner of the 10-year, $30 million-a-year contract to replace DHH’s 23-year-old computer system that adjudicates health care claims and case providers.

Greenstein has previously worked for CNSI and when he refused to identify the contract winner, then-Sen. Rob Marionneaux (D-Livonia) asked, “Are you telling me right now, today, that you’re refusing to tell this committee who’s going to receive that…contract?”

After several more exchanges between Greenstein and Marionneaux, Green said, “I’m not going to be able to say today.”

Sen. Jody Amedee (R-Gonzales) then asked Greenstein, “Who made the decision not to tell us this information under oath?”

“This was from my department…”

“You are the department,” Amedee interrupted. “Who is the person above you? Who is your boss?”

“The governor,” said Greenstein.

“Can you tell me if this company you used to work for—whether or not they got the contract?”

“I can’t discuss the matter.”

“You can, you just choose not to,” Amedee said.

At one point after Greenstein and Phillips repeatedly alluded to the “process and procedure” employed by DHH in awarding contracts, Amedee, in apparent frustration, tossed his pencil over his shoulder and turned away from the witnesses.

Committee Vice-Chair Karen Carter Peterson said, “You don’t want me to know, but you know. Is this what we call transparency?”

Phillips said once the contractor’s name is made public, “it’s the equivalent of an announcement.”

“Do you make the law?” Peterson shot back.

“I interpret the law,” said Phillips, who is an attorney.

“Then you’re not doing a good job. Mr. Secretary (Greenstein), I hope you’re paying attention. How many lawyers do we have on this committee? We make law and yet you choose to follow this gentleman (Phillips).”

“It’s all part of the process,” Phillips said. “It’s (the selection process) done in conjunction with consultation and direction from the procurement folks.”

“In conjunction with whom?” asked Peterson.

“They’re part of the Division of Administration,” he said for the first time, implicating DOA—and Rainwater—in the controversy.

Committee Chairman Robert “Bob” Kostelka (R-Monroe) finally broke in to say, “I don’t know the difference between firewalling and stonewalling but this committee’s concern is whether or not to recommend to the full Senate that these people should be confirmed for the jobs for which they’ve been nominated.

“The much larger issue here is the integrity of the entire DHH. We don’t care about your procedures. We’ve got to determine if we trust the integrity of the people before us. We’re asking you to put aside your procedures and protocol and answer our questions. Knowing that, I don’t see why
you cannot make this committee aware if a former employer of this man is going to win a multi-million dollar contract from the state.”

When Phillips again attempted to invoke “respect for the statute,” Kostelka interrupted. “Again, sir, this has nothing to do with making the award. We’re asking who got the contract. It’s pretty obvious to us that they’re (CNSI) the one getting the contract.”

At that point, Phillips asked if he could confer with Greenstein. The two left the room for 16 minutes and upon their return, Greenstein, after a few more questions, said, “It is CNSI.”

Rainwater, who on Feb. 17, unexpectedly announced his resignation as Jindal’s Chief of Staff, effective Mar. 3, a week before the legislature convenes. He served as Commissioner of Administration from Aug. 9, 2010, until October 15, 2012, when he moved across the street to the governor’s office.

As chief of staff, Rainwater has been in charge of the policy advisors and strategists and supposedly enjoys a close day-to-day working relationship with Jindal—though probably not nearly as close as Timmy Teepell through whom Jindal has funneled nearly $3 million from his campaign ($1.27 million), and his non-profit organizations Believe in Louisiana ($1.22 million) and America Next. (No payments have been listed for America Next, Jindal apparently having learned his lesson when he listed contributions and payments to Believe in Louisiana.)

It’s difficult to believe that Rainwater, in overseeing Jindal’s advisors and strategists, would have been unwise enough to advise his boss to go off the way he did at the National Governor’s Conference on Monday. He is far too intelligent for such foolishness.

Even the Baton Rouge Advocate saw Jindal for what he really is—a spoiled brat who, if he can’t have his way, pouts or throws a tantrum—as depicted in one of the best editorial cartoons we’ve seen in a long time:

http://theadvocate.com/multimedia/walthandelsman/8477684-123/walt-handelsman-for-feb-26

That was plain idiotic and inappropriate and in the world of political faux pas, ranks right up there with his college exorcism and his Republican response to President Obama’s 2009 State of the Union address.

The suggestion of a tactic to make Jindal look that silly in front of a national television audience could only have come from someone like Teepell. Unless, of course, Jindal simply ad-libbed it which is certainly not out of the question, given his propensity of letting his alligator mouth overload his jaybird backside.

But back to the resignations of Greenstein, Phillips and Rainwater.

Greenstein announced his resignation on Mar. 29, 2013 immediately after word of a federal investigation into the CNSI contract was announced. Even then, for reasons no one has yet explained, he was allowed to remain until May. At about the same time as Greenstein’s resignation announcement was made, it was learned that a federal grand jury in Baton Rouge had subpoenaed all records dealing with the CNSI contract from the Division of Administration (DOA) as early as January of 2013.

That would mean that Jindal had to know about the investigation as much as three months before Greenstein’s resignation but said nothing about the probe and only cancelled the CNSI contract after the Baton Rouge Advocate broke the story of the four-page subpoena.

And now, only days—and in one case, only hours—before the opening of the 2014 legislative session, two other prominent figures in the CNSI story will be gone, out of reach of any curious legislative committee which might wish to question them about their knowledge of events surrounding the awarding of the contract.

Legislative committees and subcommittees have the authority under legislative rule to conduct studies, administer oaths to witnesses and to seek subpoenas and punishment for contempt although subpoenas require the approval of the Speaker of the House or President of the Senate upon the request of the committee chairman or by a majority of the standing committee members.

Louisiana Revised Statute 24:4 through 24:6 provides that a person is guilty of contempt of the legislature “if he willfully fails after subpoena to appear or produce materials.” Initiation of prosecution for criminal contempt is by certification to the district in the proper venue, in this case East Baton Rouge Parish.

The legislative subpoena and contempt provisions have been upheld in a number of court cases, most notably a 1972 case involving a state legislator who claimed to have tape recordings of an attempt to bribe him and a 1979 case against then-Insurance Commissioner Sherman Bernard and his deputy commissioner.

The two men, who appeared subject to subpoenas, interrupted committee hearings on insurance regulations and left the meeting room despite warning that their actions subjected them to being held in contempt. The two were subsequently held in contempt and fined $500 each.

 

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