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Archive for the ‘State Agencies’ Category

FBI investigation prompts Jindal to cancel controversial CNSI contract: but now who will be thrown under the bus?

Posted in Computers, Contract, Contracts, Governor's Office, Health Care, State Agencies, Transparency on March 21, 2013| 34 Comments »

At the risk of sounding a bit smug, regular readers may remember that we had serious misgivings about that $194 million CNSI contract with the Department of Health and Hospitals (DHH) from the outset.

And so, it turns out, does the FBI.

And Gov. Bobby Jindal, much like another governor of some 2,000 years ago, thinks by washing his hands, he can absolve himself of any blame in the entire matter.

Let’s review.

In early June of 2011, DHH Secretary-designate Bruce Greenstein appeared before the Senate Governmental Affairs Committee for his confirmation hearing and things quickly went south as Greenstein and Undersecretary Jerry Phillips became involved in the old irresistible force-immovable object standoff over the identity of the winning contractor to replace a 23-year-old computer system that adjudicated health care claims and case providers.

The contract is scheduled to go into effect in 2014 but that could change now.

Greenstein and Phillips contended that because of a state statute which required the official awarding of the contract by the House and Senate Health and Welfare Committees, they were prohibited from divulging the name of the winning contractor.

Then-Sen. Rob Marionneaux (D-Livonia), who has since retired from the legislature because of term limits, told Greenstein, “One of the questions is about the company you used to work for (CNSI). Who is the company who is going to receive the contract?”

Greenstein and Phillips contended that because of a state statute which required the official awarding of the contract by the House and Senate Health and Welfare Committees, they were prohibited from divulging the name of the winning contractor.

Marionneaux argued that the statute “does not say you shall not divulge, just that shall not award the contract. We’re not here to award the contract; we just want to know who the contractor is. So, who is going to receive the contract?”

Greenstein again attempted to invoke the statute but Marionneaux interrupted him. “Are you telling me right now, today, that you’re refusing to tell this committee who’s going to receive that contract?”

“We believe that the law states that we should call on the (joint) committee and then make the announcement to that committee,” Greenstein said.

“I read the statute,” Marionneaux said. “Are you refusing to tell this committee who is going to be recommended by DHH to receive the award? Yes or no.”

“I’m not going to be able to say today,” Greenstein said.

“We’re sitting here trying to decide if you, the leader of DHH, are going to be confirmed and we have a headline in Monday’s paper that you want to keep a secret and a direct question is being asked and you refuse to answer.”

“I just don’t understand why this administration does this,” said Sen. Ed Murray (D-New Orleans). “You are, I suppose, just following directions.”

Sen. Jody Amedee (R-Gonzales) then laid the issue at the feet of Jindal when he 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.

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

Phillips tried to intervene, saying that once the contractor’s name is made public, “it’s the equivalent of an announcement.”

“Do you make the law?” Peterson asked.

“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).”

Greenstein eventual acquiesced and admitted that his former employer, CNSI, was the winner but he insisted that he had built a “firewall” between himself and the selection process and that he had no contact with anyone from CNSI during the selection.

As the committee wound down its questioning, Peterson said, “I hope the governor is listening because what has been happening is not in the best interest of the people nor is it consistent with his purported policy of transparency.

“This gives the appearance of your wanting to hide something, particularly since we now know the contractor is your former employer and you wanted to keep that from us.”

The subsequently learned, despite Greenstein’s assurances to the contrary, that Greenstein indeed did have some contact with his old employer and in fact, implemented changes in the request for bids that allowed CNSI to submit a proposal—a proposal that actually ranked third among four bidders on the technical merits of its proposal but which won the contract based on the lowest price.

The low bid prompted howls of protests from CNSI competitors who accused the Maryland firm of low-balling its bid in order to win the contract. There was no way the company could perform terms of the contract for the amount it bid, they said.

CNSI bid $184.9 million on the 10-year contract. ACS was second with a $238 million bid and Hewlett Packard ES came in at $394 million. A fourth bidder, Molina Medicaid Solutions did not score high enough on the technical front to warrant consideration.

It turns out that the claims that CNSI low-balled its bid may have had merit. Earlier this month, state officials held up a proposed $40 million change to the contract, which had already increased to $194 million. And now we learn that the FBI has launched an investigation into the manner in which the contract was awarded

But on Thursday, only hours after word that the FBI had served a four-page subpoena on DOA was made public, word came down from the fourth floor of the State Capitol that the CNSI contract was being cancelled.

Actually, the administration has known of this probe into the proposal and the CNSI contract for some time now. The subpoena was served on DOA and signed for by DOA counsel Lesia Batiste Warren on Jan. 7.

That means that our open, transparent and accountable administration has known of this probe for nearly three months and chose to say nothing until March 21 and then only after word leaked out about the investigation.

The subpoena called upon DOA to produce:

• All documents submitted by ACS State Healthcare, Client Network Services, HP Enterprise Services, and Molina Medicaid Solutions;

• All financial information (including but not limited to financial statements, income statements, balance sheets, and statements of profit and loss) submitted by ACS, Client Network Services, HP Enterprise Services and Molina, and

• Documents sufficient to show the date and time at which each response to the proposal was received by the state.

Perhaps Jindal, remembering stories about Earl Long shouting to Leander Perez at the height of legislative debate over desegregation, “Whatcha gonna do now, Leander? The feds have the A-bomb,” realized that he would not be able to invoke his beloved deliberative process exception with the FBI and so decided on Plan B: cancel the contract.

“Based on consultation with the Attorney General’s office, today I am terminating the state’s contract with CNSI, effective immediately, announced Commissioner of Administration Kristy Nichols. “The state will work with the current contractor, Molina Medicaid Solutions, to provide services during this transition and until a new RFP (request for proposal), overseen by the Division of Administration, is completed,” she said.

“We have zero tolerance for wrongdoing, and we will continue to cooperate fully with any investigation,” she added.

Yeah, that ought to do it. Cancel the contract and everything will be okay.

The only course of action to decide on now is who to throw under the bus—Greenstein or Phillips

But it might be wise to heed the advice of one sage political observer who says to ignore what the administration says and play closer attention to what was not said.

The fact that the contract was cancelled so quickly tells us two things:

• The administration knew this was coming because you can’t simply cancel a contract of this magnitude on the spur of the moment;

• The administration is scared.

“I don’t think this is over,” our unpaid consultant said.

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DOA hires Jan Cassidy, sister-in-law of Cong. Bill Cassidy, at $150,000; previous employers’ records are less than stellar

Posted in Civil Service, Contract, Contracts, Education, Governor's Office, Health Care, Jobs, Legislature, Legislators, Lobbyist, OGB, Office of Group Benefits, Politicians, Privatization, State Agencies, Transparency on March 15, 2013| 20 Comments »

Copyright Tom Aswell 2013

It’s interesting to watch legislators beat their breasts over pay raises that some state agencies awarded to classified (civil service) employees in light of their past ambivalence when the Jindal administration pumped up the payroll with highly-paid unclassified political appointees.

Commissioner of Insurance Jim Donelon and Commissioner of Agriculture Mike Strain, for example, gave 4 percent raises to their rank and file classified employees—$540,000 in raises in the case of the Insurance Department that Donelon said came from self-generated funds from his office.

Strain and Donelon said they gave the raises because he had the money in his budget and that he was required to either give the raises or sign a civil service letter certifying that there were no funds available.

That didn’t stop Reps. Simone Champagne (R-Erath) and John Schroder (R-Covington) from criticizing the pay bumps because there have been no across the board merit increases in state government for more than four years now. http://www.nola.com/politics/index.ssf/2013/03/la_statewide_elected_officials.html

But where have they been the past couple of years as Jindal appointed one washed-up legislator after another to six-figure deadhead jobs in state agencies like Insurance, Revenue, Veterans Affairs, Home Security and others while rank and file employees—the ones who do the work— continue into their fifth year with no raise at an average salary of a little under $40,000? https://louisianavoice.com/2012/02/

For that matter, where have any of the legislators been as the Department of Education has continued unabated in its relentless drive to pad its payroll with six-figure sycophants?

Are Gov. Jindal and Superintendent of Education John White so arrogant or so out of touch that they feel they can continue to load the state payroll with top-heavy, largely out-of-state political appointees—many of whom, it turns out don’t even bother to register to vote in Louisiana or comply with state law that requires that they change their vehicle registrations within certain specified deadlines—without the public or media noticing?

A quick peek indicates that some of the unclassified salaries seem to proliferate in the Department of Education:

• John White, Superintendent: $275,000;

• Michael Rounds, Deputy Superintendent: $170,000;

• Howard Drake and Gayle Sloan, Liaison Officers: $160,000 each;

• Kerry Laster, Executive Officer: $155,000;

• David Lefkowith, precise title still a mystery: $146,000;

• Kunjan Narechania, Chief of Staff to John White: $145,000;

• Gary Jones, Executive Officer: $145,000;

• Deirdre Finn, part time PR Director (working from home in Tallahassee, FL.): $144,000;

• James P. Wilson, Director (of what?): $142,000;

• Melissa Stilley, Liaison Officer: $135,000;

• Elizabeth Scioneaux, Deputy Superintendent: $132,800;

• Debra Schum, Executive Officer: $132,000;

• Hannah Dietsch, Assistant Superintendent (someone please explain the difference between an assistant superintendent and a deputy superintendent.): $130,000;

• Nicholas Bolt, Deputy Chief of Staff (as opposed to assistant chief of staff): $105,000.

Perhaps you may have noticed in that lengthy laundry list of high-paying position, there was not a single name followed by the title “Instructor” or any other title that would indicate classroom experience.

But even with all the featherbedding at DOE, there’s one appointment in particular in the Division of Administration (DOA) that stands out as the poster child for Jindal cronyism.

Last Dec. 3, Jan Cassidy was hired by DOA as Assistant Commissioner in Procurement and Technology at an annual salary of $150,000. http://www.linkedin.com/pub/jan-cassidy/6/4aa/703

It was not immediately clear what she is supposed to procure since a statewide expenditure freeze was in place at the time of her hiring. Moreover, technology, in theory at least, is handled by the Office of Computing Services.

The fact that Cassidy is the sister-in-law of Congressman Bill Cassidy is enough to raise eyebrows in some quarters. Bill Cassidy last year hired Jindal aide and former campaign manager Tim Teepell and his company, OnMessage, for his re-election campaign. Teepell was hired by the Washington-area political consulting firm to head up its Southern Office which Teepell appears to run out of the governor’s office on the fourth floor of the State Capitol. Cassidy later terminated his relationship with Teepell and OnMessage. No explanation was given.

Jan Cassidy worked for Affiliated Computer Services (ACS) for 20 months, from June 2009 to January 2011 and for 23 months, from January 2011 to November 2012 for Xerox after Xerox purchased ACS.

As Xerox Vice President—State of Louisiana Client Executive, her tenure was during a time that the company held two large contracts with the state.

The first was a $20 million contract with the Department of Health and Hospitals (DHH) that ran from July 1, 2009 to June 30, 2011. That contract called for Xerox to provide “assessment, reassessment and care planning to individuals seeking and receiving long term personal care services.” The contract, which paid Xerox $834,000 per month, also required the company to disseminate “appropriate notices to recipients relative to these aforementioned services.

The contract was funded 50 percent by the state and 50 percent from federal funds—despite Jindal’s professed disdain for federal funds.

The second contract of $74.5 million, 100 percent of which was funded by a federal community development block grant and which ran from March 27, 2009 to March 26, 2012,, required ACS/Xerox to administer a small rental property program to help hurricane damaged parishes recover rental units.

Cassidy’s responsibilities while at Xerox called for her to “facilitate development and progress of ‘Louisiana Model’ into other states,” according to information contained in her internet biography.

During her 20 months with ACS, from June 2009 to January 2011, she was Regional Vice President of Business Development. Her web page says that while at ACS, she “generated new business in state governments within the central region of the United States.”

A search of the state contract data base by LouisianaVoice turned up four contracts with ACS totaling $45.55 million and campaign finance reports revealed ACS political contributions of $17,500 to Louisiana candidates, including three contributions totaling $10,000 to Jindal.

One of those contracts, which expired on Dec. 31, 2012, called for ACS to provide actuary and consulting services to the Office of Group Benefits (OGB) and Buck Consultants during the administration’s efforts to privatize OGB at a contract cost of $2 million. That is in addition to what the state paid Buck for its work which in the final analysis, did not support the administration’s efforts which were nevertheless successful.

Current state contracts with ACS/Xerox include:

$600,000 with between DOA and ACS Human Resources Solutions and Buck Consultants to assist in advising DOA with regard to public retirement systems and insurance benefits for public employees (June 1, 2011 to June 1, 2013);

$13.95 million with the Department of Social Services to provide electronic benefits transfer system (July 1, 2010 to June 30, 2009);

$28.9 million with DHH to provide information and referral services to people seeking long term care services (July 1, 2011 to June 30, 2014; 50 percent federal, 50% state funding).

But while Jan Cassidy’s work for a company with more than $120 million in state contracts and her relationship as Bill Cassidy’s sister-in-law might be enough to raise eyebrows among observers of Louisiana politics, the track record of ACS in other governmental contracts beyond the state’s borders should certainly prompt hard questions:

• Texas Gov. Rick Perry, a vocal critic of Obamacare as a “failed program,” had his Health and Human Services Commission contract with ACS for that state’s Medicaid dental program. That contract quadrupled to $1.4 billion as Texas Medicaid spent more on braces in 2010 ($184 million) than did the other 49 states combined. But an audit found that 90 percent of reimbursement requests involved procedures not covered by Medicaid, which does not fund cosmetic dentistry. The Wall Street Journal said statewide fraud reached hundreds of millions of dollars. ACS spent more than $6.9 million in lobbying Texas politicians from 2002 to 2012 and contributed $150,000 to Perry. Because ACS contracts to process Medicaid claims for several states, including Louisiana, one investigator indicated the problem may run much deeper than that found in Texas. http://info.tpj.org/Lobby_Watch/pdf/MedicaidDentalFraud.pdf
http://www.wfaa.com/news/investigates/Texas-Medicaid-Problems-May-Apply-To-Country–133719543.html

• In Alabama, Carol Steckel, then the director of the state Medicaid agency, awarded a $3.7 million contract to ACS in 2007 even though the ACS bid was $500,000 more than the next bid. ACS, however, had a decided edge: it hired Alabama Gov. Bob Riley’s former chief of staff Toby Roth. And Carol Steckel? She now works as chief of Louisiana’s DHH Center for Health Care Innovation and Technology. http://www.ihealthbeat.org/articles/2007/8/22/Alabama-Contract-for-Medicaid-Database-Sparks-Controversy.aspx
http://harpers.org/blog/2007/09/the-inside-track-to-contracts-in-alabama/

• In Washington, D.C., the Department of Motor Vehicles reimbursed $17.8 million to persons wrongly given parking tickets. The contractor that operated the District’s ticket processing? ACS. http://www.questia.com/library/1G1-86379580/overbilled-drivers-to-get-cash-back-dmv-plans-to

• In June of 2007, ACS agreed to pay the federal government $2.6 million to settle allegations that it had submitted inflated charges for services provided through the U.S. Departments of Agriculture, Labor, and Health and Human Services. ACS admitted that it had submitted inflated claims to a local agency that delivered services to workers using funds provided by the three federal agencies. http://washingtontechnology.com/articles/2007/07/11/acs-settles-federal-fraud-case.aspx

• In 2010, ACS settled charges by the Securities and Exchange Commission that it had backdated stock option grants to its officers and employees. http://www.sec.gov/litigation/litreleases/2010/lr21643.htm
Jan Cassidy also worked for 19 years, from 1986 to 2005, with Unisys Corp. where she led a team of sales professionals marketing hardware and systems applications, “as well as consulting services to Louisiana State Government,” according to her website.

Unisys had five separate state contracts from 2002 to 2009 totaling $53.9 million, the largest of which ($21 million) was with the Louisiana Department of Public Safety and which was originally signed to run from April 1, 2008 through Nov. 30, 2009, but which the state cancelled in April of 2009.

The contract was for work to upgrade the state computer system that dealt with driver’s licenses, vehicle titles and other related issues within Louisiana’s Office of Motor Vehicles. http://www.wafb.com/global/story.asp?s=10152623

State Police Superintendent Col. Mike Edmonson cancelled the contract, telling legislators that he was dissatisfied with the work and that he believed his staff could complete the project.

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DOA’s ‘Leadership Academy’ falls woefully short of goal of boosting state employee morale (does overload B.S. meter)

Posted in Civil Service, Contract, Contracts, ORM, Office of Risk Management, State Agencies on March 2, 2013| 10 Comments »

As analogies go, something called the Leadership Academy, offered to state employees by the Division of Administration (DOA), could best be described as Nero fiddling while Rome burns.

Did we say offered? Of course, we meant to say mandated, as in employees had no choice but to attend. And what they got was reminiscent of motivational courses offered a few years back to employees of the late Office of Risk Management. In those ORM classes, motivational speaker Ron Jackson of Baton Rouge offered employees the opportunity to build structures out of plastic drinking straws as some kind of motivational exercise.

And for his trouble, Jackson was awarded a $49,000 contract by ORM. In another of Jackson’s sessions, employees were asked to draw an energy-efficient automobile.

It is not known if Toyota, Kia, Nissan, GM, Ford or any other carmaker has moved to incorporate any of the revolutionary automotive designs that came out of that little exercise. And to our knowledge, no architectural firms have inquired about plastic straw building designs.

Jackson did hold one-on-one sessions with ORM employees to receive “confidential” thoughts, suggestions and complaints but few employees placed their full trust in the word “confidential,” and thus did not participate.

One reason for that lack of trust was the name of one of board members of his company, LEAD Training Resources Group. Before the contact information was removed, the LEAD website contained the name of a board member who, coincidentally, just happened to be an employee of DOA. And as if that were not enough, her contact information contained her state email address.

So now DOA is following that example by offering its Leadership Academy, complete with handouts of a book entitled Leadership Challenge by James Kouzes and Barry Posner.

The list price of the book is $24.95 but it’s likely that DOA got a steep volume discount. Total cost for all copies of the book was only $448.80, which computes to only about 18 copies at full price and considerably more copies than that were passed out.

Another $565.45 was spent by DOA on the reproduction of handouts and binders, bringing the total cost of leadership to $1,014.25 for the undetermined number of DOA employees assigned to attend the academy. Of course, the time spent by employees away from their duties to attend the lectures was not computed into the equation so that cost is undetermined.

And while no one was asked to construct a building of plastic straws or to design an energy-efficient car, attendees were given a list of six pairs of choices, or preferences, printed on a sheet of paper. That list is as follows:

• Beach or Mountains;
• Hamburger or Hot dog;
• Hotel or Camping;
• Fiction or Non-fiction;
• Pie or Cake, and
• Movie Theater or DVD.

Participants were asked to circle one preference on each line and then to visit other employees in attendance to compare lists to see who came closest to their choice of preferences—to what end we’re not entirely sure. Perhaps it was a test of compatibility for some new type of dating service.

The academy consists of five sessions. The first was held on Feb. 13 and the final session for the last group of employees is scheduled for next Wednesday (March 6), according to the itinerary provided employees.

We’re also not certain what happened last Wednesday but following that session, Vincent Miholic, Ph.D., training and development program manager for DOA, sent a somewhat curious email in which he apologized to attendees.

“My apologies, again, for miscalculating and running out of time,” he wrote. “Was really looking for a robust discussion, rather than the failed timing. Thought I could ‘power’ through it…very dangerous, drag-racing without enough pavement. Hope you’ll let me chalk this one up to success as ultimately a product of failure.”

“…chalk this one up to success as ultimately a product of failure”?

Can someone please tell us what that means?

The handbook contained a letter to attendees from DOA Chief Staff Steven Procopio, Ph.D. ($122,000 a year).

“On behalf of the Office of the Commissioner, (Commissioner Kristy Nichols ($162,700), thank you for your attendance in this valuable professional development activity,” Procopio wrote. “Your participation is an investment in professional growth and evidence of a strong commitment to the mission of the Division.”

Excuse us, Dr. Procopio, just how is required attendance indicative of a “strong commitment” to anything?

And as for the “mission” of the division, that’s a little difficult to quantify considering the mission of the governor’s office seems to be a little vague these days. It’s virtually impossible to discern any mission when Gonenor Jindal never seems to be around to look in on little things like an ever-expanding sinkhole in Assumption Parish that just happens to be leaking toxic gases.

It’s hard to define a mission when efforts to overhaul retirement and schemes to pay for school vouchers are shot down either by the Legislature or the courts.

Where’s the mission when an agency like the Department of Health and Hospitals, which has more than $650 million in assets and more than $7 billion in annual revenue is allowed to decimate its audit section in favor of a single contract auditor (who subsequently walked away from that contract) only to see an employee misappropriate some $800,000 in state funds before being caught?

Sorry, but having sat through a few of them ourselves, we really do not see the value of these touchy-feely sessions that may be intended to spread a warm fuzzy message throughout an agency but which accomplish little more than provoke derisive ridicule from the very ones the sessions are intended to benefit.

Where’s the mission in a campaign hell-bent on gutting higher education, handing out lucrative contracts to political supporters as public education is offered up as a sacrifice to the god of charters and vouchers and systematically dismantling the state’s public health programs?

From our perspective, this “Leadership Academy” is nothing more than meaningless lip service and an empty gesture designed solely to convince employees that someone up the food chain actually cares about them.

Sadly, the reality is nothing could be further from the truth.

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Notable Quotables (in their own words)

Posted in Civil Service, Layoffs, Notable Quotables, State Agencies, Transparency on March 2, 2013| 5 Comments »

“Can you imagine a department having no IT staff? Can you imagine their human resources department being across town? Revenue is bing picked apart and more sections are to be dissolved.”

—Confidential source in email to LouisianaVoice.

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More layoffs imminent? Reports have DEQ, DNR merging HR and IT sections; other changes may also be proposed

Posted in Civil Service, Jobs, Layoffs, State Agencies on March 2, 2013| 5 Comments »

While the Jindal administration has said nothing publicly, more major changes may be in the offing with the merger of departments of three major agencies as a means of further reducing the number of state employees, according to confidential state sources.

A public meeting was held two weeks ago among workers in one of the agencies to be affected by the proposed merger of human resources, the Department of Natural Resources (DNR), the Department of Environmental Quality (DEQ) and the Louisiana Department of Wildlife and Fisheries (LDWF).

The immediate goal is apparently to lay off about one-third of the staff of the agencies being merged. Initial reports indicate that DEQ and DNR will merge their human resources and information technology sections.

The move is anticipated to save about $3 million, one source told LouisianaVoice.

Other changes as yet unconfirmed have the human resources section of the Louisiana Department of Revenue (LDR) being moved under the Division of Administration along with five departments of the Office of Group Benefits (OGB).

Efforts at creating a state Environmental Protection Agency in 1972 failed and much of the enforcement of environmental violations was left to LDWF and DNR. It wasn’t until 1984 that DEQ was officially created during former Gov. Dave Treen’s administration to relieve the other two agencies of their enforcement responsibilities and moved its offices from the DNR building.

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