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Archive for the ‘Transparency’ Category

By John Sachs

Hypothetically speaking, what would you think if you read the following newspaper article?

Ruston, LA – The Mineral Ridge Development Commission announced that an agreement had been inked with HydroFrac, Inc., a Delaware corporation.

HydroFrac intends to drill a Sparta Aquifer water well in Lincoln Parish. The company will then pump 20 million gallons of water daily to supply the Haynesville Shale fracturing programs in Desoto, Caddo, and Bossier parishes utilizing retrofitted existing gas transmission pipelines.

Seven construction jobs and one permanent part-time maintenance job will result from this operation. To entice HydroFrac to locate in the Mineral Ridge area, 4 acres of industrial park land were donated, and a ten-year property tax and parish and school sales tax exemption on revenue generated from sales of water was granted. Projected ten- year cost to Lincoln Parish approximates $325 million.

Questions posed to HydroFrac with their responses follow:

1. Q: 20 million gallons of water taken from the Sparta Aquifer daily are more than we are told the aquifer can sustain. Current overuse primarily by paper mills in West Monroe and Hodge are already endangering the level and purity of the aquifer. Won’t your operation just add to the problem?

A: 71% of the Earth’s surface is covered by water. That equates to trillions of gallons of water. To imply that 20 million gallons would somehow put in jeopardy the earth’s supply of water is, frankly, foolish.

2. Q: You didn’t address my question. Please be more specific.

A: We have discussed our operations with Governor Jindal. He assures us that he is committed to providing a business-friendly environment, especially in light of our creating jobs in Louisiana. Governor Jindal personally contacted the State Water Resources Commission on our behalf and received assurances that the quantities of Sparta Aquifer water that we propose to extract will receive expedited approval.

3. Q: Again, you haven’t addressed my question, but I will move on. If, as experts on the subject have stated, your 20 million gallon per day extraction leads to salt water intrusion and the ultimate death of the Sparta Aquifer as the fresh water supply for a region populated by almost 1 million people, and their homes, farms, businesses, schools, churches and everything else dependent upon fresh water, what happens then?

A: This has already been discussed. The earth has adequate surface water to meet the demands you have noted. We don’t share your alarm concerning the Sparta Aquifer. The aquifer can recharge itself. with a few unseasonably wet years. You have Lakes D’Arbonne, Claiborne, and Caney and the Ouachita River to draw from in the interim. That water is pure and clean and probably should have been your primary source of fresh water all along. That leaves the pure aquifer water available to the paper mills to make cardboard boxes and beer cases.

4. Q: Why can’t the shale gas formations be fractured using the abundance of available salt water? That leaves the purest water for human consumption. As everyone knows, without abundant fresh water a society cannot exist. It absolutely, indisputably dies. Without a society, there is no need for gas. Water clearly comes before anything. To forget this fact is to drive the last nail in society’s coffin. Can’t you see this?

A: It is this very attitude that puts America’s safety and freedom from threats of foreign terrorism at risk. Constraints placed on the free enterprise system are what led to the disruptions on Wall Street, to less-than- ideal petroleum company profitability, to escalating health care costs, to high unemployment, and wars in Iraq and Afghanistan. Fortunately we have business-friendly Congressional representatives for this area who see past these alarmist, anti-business statements of concern They understand the value of a strong Congressional/private enterprise partnership.

Does this seem farfetched to you? It shouldn’t. This is what is happening to us. We have representatives, most of whom are well-intended, making pacts with greedy, insensitive, out-of-state headquartered corporations as described above. A few corporate top executives, probably living in Connecticut, won’t authorize spending the money to efficiently utilize and protect clean water, the earth’s most precious resource. Why? Because it MIGHT temporarily reduce their annual bonuses.

In the long run, it would pay great dividends to them and certainly to us whose very existence depends on the sustainability of the Sparta Aquifer. Proof of this is in El Dorado where good corporate citizens Lion Oil and Great Lakes Chemical built a steam cogeneration system over 10 years ago that increased profitability and saved approximately 3 million gallons per day of Sparta Aquifer water. That act alone fixed El Dorado’s water shortage problems.

Let’s welcome good corporate citizens, but banish bad ones. You know the difference. Insist that our representatives and responsible officials act NOW in the best interests of the vast majority, not the selfish interests of a select few.

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Earl Long is generally credited with the following quote:

“Don’t write anything you can phone. Don’t phone anything you can talk. Don’t talk anything you can whisper. Don’t whisper anything you can smile. Don’t smile anything you can nod. Don’t nod anything you can wink.”

And so it came to pass that one day just before the Christmas season in the year of our Lord 2010, Louisiana Gov. Bobby Jindal and his Chief of Staff Little Timmy Teepell were sitting across from one another at a table heavily laden with seasonal food winking at each other.

It was the governor who, breaking political protocol, interrupted the silence first.

BJ: I’m bored.

Little TT: Bored?

BJ: Yes, bored. I’ve been stuck here in the state for three whole days now.

Little TT: What do you suggest, Governor?

BJ: A road trip.

Little TT: But governor, all the elections are over. There’s no one to campaign for. And we’ve done the book tour thing.

BJ: Well, I’m bored. What can we do?

Little TT: Well, Governor, the natives are pretty restless. They think you should remain in the state a couple of weeks and work on the budget deficit.

BJ: TWO WEEKS!!!!?? Bor-ring!

Little TT: Seriously, Governor, we need to discuss ways to raise revenue for the state to offset an anticipated $1.6 billion budget deficit next year.

BJ: Isn’t there a hurricane or an oil spill or some other disaster that can give me face time on the TV cameras so I can act governorential?

Little TT: Governorential?

BJ: Yes. You know, where I go on TV and blame the federal government for everything.

Little TT: No there isn’t anything like that right now. Let’s talk about the budget.

BJ: I know! I can take the state helicopter to a little Baptist Church up in Shongaloo and give ‘em a stimulus check.

Little TT: We can do that on Sunday. Today’s Tuesday. Let’s talk about the budget until then.

BJ: All right. But it’s boring. There’re no TV cameras.

Little TT: That’s okay. You’ll get all the TV coverage you want if you solve the budget crisis.

BJ: Really? Oh, boy! What do we have to do?

Little TT: We need to take measures to raise cash to erase next year’s budget deficit.

BJ: That should be easy. I’m a Rhodes Scholar and (laughing) you’re a Roads Scholar. Isn’t that what you said in your interviews, you’re a Roads Scholar?

Little TT: That’s right, Governor, but remember, we were both absent on pothole day.

(Laughter.)

BJ: That’s funny. A Roads Scholar. Pothole day. I get it. What does that mean?

Little TT: Don’t worry about it. It was just a joke. Now to generate some revenue, we need to sell off some state assets.

BJ: Like what?

Little TT: Well, we can sell all those new state buildings that Governor Foster built and then lease the space back. That should gives us about a hundred million or so up front.

BJ: But didn’t I read somewhere once that selling any fixed asset on a sale-leaseback basis is an act of desperation triggered by cash flow problems?

Little TT: But that’s precisely where we are: We’re desperate because we have cash flow problems.

BJ: But it would place us, the seller, in the position as a long-term lessee. Isn’t that the same as a debtor or bond obligor? That seems like a quick fix to a long-term problem. It’s just deferring a permanent resolution to a problem and not fixing the underlying problem.

Little TT: Governor, you’ve been reading your old campaign literature again, haven’t you? You need to eighty-six that. Drop the rhetoric; you won the election.

BJ: Oops, I forgot.

Little TT: We can also sell a couple of state prisons—those in Winn and Allen parishes. That should bring in about $64 million or so.

BJ: Won’t the buyer just work the mortgage payments back into what he charges the state to house state prisoners?

Little TT: Governor, have you been talking to legislators and not telling me?

BJ: Sorry.

Little TT: Governor, you’ve got to stop that. Legislators aren’t your friends. Now focus. We can also draw against future lottery revenue to get another infusion of cash.

BJ: But what if somebody living in a trailer park wins the lottery? I don’t want him knocking on the front door of the governor’s mansion asking for his money.

Little TT: Don’t worry about that. Listen to me. These are all short-term solutions. It will give us one-time money to cover recurring expenditures but it doesn’t matter. By the time those people in north Louisiana who elected you figure it out, you’ll be well on your way to running for president.

BJ: And you’ll be my little Karl Rove. TT, I see where you’re going with this and I like it. Hell….I mean heck, we can sell the state police cars and put them on bicycles. That should work. When I was in Oxford doing my Rhodes Scholar bit, they had Bobbies on foot. We can call ‘em Bobbies on bicycles. Voters will love that.

Little TT: That would be pretty drastic. The state police would probably need cars….

BJ: How ’bout if I just sold my soul?

Little TT: You already did that to get elected.

BJ: How about selling some of the state golf courses?

Little TT: That’d probably look pretty bad. We just bought the Tournament Players Club in New Orleans and took over the Poverty Point club up in Delhi and we’re in the process of building a couple of others. How could we explain the sudden change? Those golf courses are viable investments. Even as we speak, we’re in the process of taking bids on the construction of a miniature golf course at City Park in New Orleans. What I’m saying, Governor, is we’re committed on these expenditures.

BJ: How about selling the Pentagon Barracks?

Little TT: Can’t do that, either. We have legislators living in them and the new owners might raise their rent from the $300 they’re paying now to a level comparable to other apartments. The legislature is already mad enough. We can’t risk that.

BJ: How about cutting higher education and health care benefits then?

Little TT: Now you’re thinking like the governor I know and respect. Let’s sing some nice Christmas carols:

Jindal Bells, Jindal Bells,
Jindal all the way;
Oh how sad
Is his wishy-washy way—HEY!

Jindal Bells, Jindal Bells,
On another flight
Oh how nice we all do feel
When he is out of si–ight.

Away at a fund raiser
No one does he dread;
Not running for president,
At least that’s what he said.

But from afar
We know what they say,
Move over Obama,
Jindal’s on his way.

Oh, little state of Louzian
How sorry is your plight;
With Bobby selling all our jails,
Citizens now feel pure fright.

While in our dark streets linger
A refracted gleam of light;
From guns and knives will lives
Be lost in thee tonight.

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The United States has the highest per capita rate of incarceration in the world. Louisiana has the highest incarceration rate in America. Ergo, Louisiana has the highest incarceration rate in the world, according to a report by the U.S. Justice Department.

On the other hand, more than 17,000 of Louisiana’s 40,000 prison inmates are being held in parish prisons and the local sheriffs who receive $24.39 per prisoner per day love the arrangement. The total cost of local housing of adult offenders is a staggering $158.4 million with the state’s adult release program costing an additional $20.2 million, according to budget figures contained in HB-1 of this year’s legislative session.

The $158.4 million includes $152.6 million for actual housing, $3.7 million for inmate medical payments, $1.6 million for law enforcement district debt retirement in Morehouse and Natchitoches parishes, and $600,000 for additional payments of $3 per day per inmate for the Intensive Supervision Program.

The 17,000 state prisoners housed in parish jails in Louisiana is more than double the next two highest number—the 7,900 state prisoners held in county jails in Tennessee and 7,300 Kentucky prisoners held in county facilities.

Local sheriffs relish the opportunity to house state prison inmates because it infuses needed cash into the local coffers. One state official said the actual cost to sheriffs to house the state prisoners is only a fraction of the $24.39 daily income per prisoner. “It’s a big bonus for the sheriffs,” he said.

Nineteen parishes and four municipalities have contracts with the state to house state prisoners while others are paid under interagency agreements. Regardless, the pay to the local law enforcement agencies is the same and some sheriffs also operate work release facilities and pre-release/re-entry programs.

Work release reimbursement rates differ, depending on certain factors and rates range from $12.25 to $16.39 per prisoner per day and prisoners pay part of their salaries to the sheriffs to further offset the cost of the program.

Last July, a panel of judges, attorneys, and law enforcement officials convened to study why Louisiana sends more people to prison than any other state. They might have asked state legislators and saved themselves the trouble of a protracted study.

Each legislative session, dozens of bills are introduced by Louisiana lawmakers to either create new criminal statutes or to increase penalties for existing laws. Only rarely does a bill attempt to reduce penalties for crimes. In the 2010 regular session alone, for example, 68 of 93 bills addressing criminal procedure and crime, called for jail time for new crimes or longer sentences for existing laws. Those included crimes ranging from “unlawfully wearing clothing which exposes undergarments or certain body parts” to cyberbullying, and terrorist acts.

“Legislators wonder why the budget for the Department of Corrections is so large,” said one state employee who is familiar with the department. “As long as they keep trying to criminalize everything they find personally offensive in the name of law and order for the benefit of the folks back home, the budget is going to keep growing.”

Legislators last week criticized Gov. Bobby Jindal’s tentative proposal to sell prison facilities in Winn and Allen parishes to raise revenue to help cut a projected $1.6 billion budget shortfall next year.

The state currently pays Corrections Corp. of America of Nashville and GEO Group of Boca Raton, Florida, $18 million per year each to manage the Winn and Allen facilities, respectively. Department of Corrections Secretary Jimmy LeBlanc said selling the facilities could net the state about $64 million.

Some members of the Senate Finance Committee said they feared that new prison owners would include the mortgage costs in what they would charge the state to feed, clothe, and tend to the prisoners. Sen. John Alario (R-Westwego) said new owners would increase the operating costs charged the state in order to absorb the cost of purchasing the prisons, thereby resulting in the state’s paying for the prisons twice.

Current housing contracts with local parishes and municipalities and the contract amounts include:

• LaSalle Parish ($1,246,329);
• Morehouse Parish ($1,099,905.60)
• St. Charles Parish ($2,136,564);
• St. Mary Parish ($1,789,470);
• East Feliciana Parish ($335,343.75);
• Claiborne Parish ($1,424,376);
• Town of Jonesboro (Jackson Parish) ($1,780,470);
• Town of Richwood (Ouachita Parish) ($1,424,376);
• Town of Wisner (Franklin Parish) ($1,780,470);
• Village of Epps (West Carroll Parish) ($1,281938.40);
• West Feliciana Parish ($268,275);
• Bossier Parish ($1,958,517);
• Catahoula Parish ($1,246,329);
• Concordia Parish (two contracts: $1,780,470 and $500,000);
• Iberia Parish ($478,423.75);
• Madison Parish (two contracts: $1,139,500.80 and $4,780,561.95);
• Natchitoches Parish ($1,145,735);
• Rapides Parish (three contracts: $1,246,329; $603,618.75, and $491,837.50);
• Sabine Parish ($1,068,282);
• St. Tammany Parish ($389,637.50);
• Vernon Parish ($1,068,282);
• Webster Parish ($1,228,524.30);
• West Baton Rouge Parish ($827,181.25)
Parish contracts for work release, pre-release services, and offender re-entry services and contract amounts include:
• Lafourche Parish (inmate work release: $968,527.50);
• Caddo Parish (pre-release services: $550,000);
• Madison Parish (female offender re-entry: $431,550)
• Orleans Parish (re-entry services: $366,667).

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An Alabama firm that provides security for about 20 state offices buildings in Baton Rouge and other Louisiana cities has threatened retaliation against employees who complained of not receiving paychecks from the company or who received checks that bounced.

A December 6 one-page memorandum from JAT Bureau of Protective Services of Montgomery, Alabama, began by instructing employees on when to submit their timesheets and then noted that the firm’s current pay calendar was incorrect. “The next pay date will be December 23, 2010. A new pay calendar will be distributed to each employee within the next few weeks,” it said.

The memo then said the Department of Public Safety (DPS) “has had several complaints by building tenants (employees of state agencies, ostensibly) and DPS officers of JAT employees complaining about issues they have with the company.”

The “issues” weren’t identified but the reference was apparently to complaints about late payroll checks and payroll checks that bounced. One employee showed Capitol News Service his check of November 17 that was returned by his bank because of insufficient funds.

“This behavior WILL NOT BE TOLERATED,” the memorandum said in all capital, bold letters. “If any employee has a complaint, it can be expressed to (supervisors). If the complaint cannot be handled by the supervisor, he or she will pass (it) on to the appropriate manager to be handled. DPS does not want employees calling their officers or office with complaints. Complaints will be handled by JAT management.”

The final admonition said, again in bold lettering: “Any employees found to be in violation of this policy will be given a written warning. Further violation(s) will result in termination.

Another memorandum to JAT employees, dated the following day from JAT Chairman Arthur Coleman, III, said the company is current with employee salary payments but it appeared to conflict with the Dec. 6 memo which said the next pay date will be Dec. 23. “All employees will receive a check on Friday, January 7, 2011,” the Dec. 7 letter said, again in all-bold letters. “The next pay date will be February 7, 2001.” Coleman said the 30-day notice of changes in pay dates is in compliance with Louisiana law

JAT, of Montgomery, Alabama, was awarded the contract, effective Oct. 1, on the basis of its low bid of $1,061,866.11 at bid openings last August. The contract runs through June 30, 2011 and stipulates that unarmed guards receive a minimum of $8.50 per hour with armed guards receiving one dollar more per hour. Supervisors are to receive at least $12 per hour.

The firm employs 74 guards in 15 Baton Rouge state office buildings, plus employees in other state buildings scattered across the state, from New Orleans to Shreveport.

Attempts by Capitol News Service to contact Coleman were unsuccessful.

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An online dictionary defines the essential feature of irony as “the indirect presentation of a contradiction between an action or expression and the context in which it occurs.”

A good example of irony would be the State of Louisiana’s legal position in joining with 45 other states several years ago in suing the big tobacco companies. Louisiana, then-Attorney General Richard Ieyoub claimed, was spending inordinate amounts of state revenue treating tobacco-related illnesses among indigent citizens at the state’s charity hospitals.

Joining in the lawsuit was a logical and justified means of recovering some of the state’s costs of treating heart and lung disease, diabetes, cancer, tooth and gum disease, and various other ailments afflicting the state’s poor smokers. It even made sense when state buildings established designating smoking rooms in the early 1990s and then later abolished smoking altogether, forcing those unwilling to kick the habit to trudge outside in heat, cold, and rain to get their nicotine fix.

The 46 states and several U.S. territories eventually reached a settlement of about $206 billion with Louisiana slated to receive $4.6 billion as its share of the settlement.

Louisiana received its first check of $104 million in December of 1999. Last year the state’s share was $175.5 million and the 2010 payment of an as yet undetermined amount is due later this month.

That would explain the justification. Now for the irony.

On June 16 of this year, the Louisiana Department of Corrections (DOC) awarded contracts to three separate vendors for the purchase of more than $6.1 million in tobacco products for re-sale to prison inmates across the state.

And that was only for a six-month supply.

Of the three vendors who were awarded contracts, two are from Texas. Rudy Love Distributing Co. of Huntsville, Texas, had a low bid of $1,002,450 and Price & Co. of Beaumont, Texas, submitted a low bid of $84,631.75. Lyons Specialty Co. of Port Allen tied with an out-of-state firm with its bid of $5,025,220, but was awarded the contract because it is a Louisiana firm, according to DOC spokesperson Pam LaBorde.

The three firms were low bidders on 16 separate items on which bids were opened on June 14, two days before the contracts were awarded, she said.

LaBorde said that DOC and Prison Enterprises (PE) recoups the full amount of the tobacco items purchased off the bids by selling the products to prisoners at a markup, “plus the applicable sales taxes by parish and city or town where the correctional center is located.” She added that prices will vary somewhat because of local taxes.

“When placed out for bid, the amounts reflected in the bid are estimates of usage for the six-month contract period,” LaBorde said. “The amount purchased fluctuates based on the demand.” She said that items are delivered on an as-needed basis and facilities are not required to purchase the full amount as estimated in the contract.

“These proceeds are used to offset the cost of the items, the bidding of the items, the storage, warehousing, other overhead, and delivery to each facility as well as to recoup the necessary salary funds of the correctional officers who provide the canteen service. These canteen services are provided to the offender population as self-generated program(s),” she added.

So much for recovering the costs of purchasing tobacco products for the prisoners. Every contingency, it seems, is covered.

Except….except, oh yes, medical care for the state’s indigent population.

And who in Louisiana is more indigent than prison inmates?

No one. And bear in mind that Louisiana has the largest prison population in the U.S.

And where are prison inmates treated for their smoking-related illnesses?

At the state’s charity hospitals, that’s where.

And who pays for their treatment?

Since the cost of medical treatment is not factored into the equation, i.e. the price prisoners pay for tobacco products, that would be you and me, the Louisiana taxpayers.

Irony.

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