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Louisiana Republican congressional delegation vote in lock step with Kochs, big oil interests on environmental issues

March 23, 2015 by tomaswell

The American Legislative Exchange Council (ALEC), the Koch brothers and big oil won quiet but major victories in the U.S. House last week and five of Louisiana’s six-man congressional delegation were complicit in efforts to thwart efforts to protect the environment.

Republican Reps. Steve Scalise, Charles Boustany, John Fleming, Ralph Abraham and Garrett Graves voted in lock step on three separate measures dealing with environmental issues the outcomes of which were certain to please ALEC and corporate interests opposed to issues important to environmentalists. Rep. Cedrick Richmond was the lone holdout on each of the bills.

The five Republicans voted in favor of two House resolutions detrimental to environmental proponents and against two bills opposed by those same interests.

The two resolutions supported by Scalise, Boustany, Fleming, Abraham and Graves included:

  • A proposal to restructure the Environmental Protection Agency’s 52-member Science Advisory Board. Included in that restructuring was a proposal to reduce academic representation on the board while expanding corporate membership. The vote to give corporations a stronger voice in denying climate change was 236-181 in favor of HR 1029 which now goes to the Senate.
  • Approval of HR 1030 by a 241-175 vote to kill certain environmental rules unless all data from supporting studies is made public so that the study could be independently replicated—including confidential health information about participants.

The five Republicans joined with the majority to defeat one other provision contained in the two House resolutions cited above as they defied all logic in voting down by 179-237 an amendment to HR 1029 by Democrats that would have denied seats on the EPA Science Advisory Board to scientists whose research is funded by firms convicted of major environmental crimes.

It was recently revealed that one scientist, Dr. Willie Soon, who has denied evidence of climate change, received $1.25 million to underwrite his research denying climate change from ExxonMobil and Koch Industries. Koch alone has funneled some $73 million to groups denying climate change.

It would certainly appear that big oil has invested heavily in the futures of a certain five Republican congressmen from Louisiana and that those investments are paying huge dividends.

Posted in ALEC, Congress, Transparency | 12 Comments »

Jindal appointee to State Auctioneer Licensing Board (who was subsequently teagued) recommends auctioneer boycott

March 22, 2015 by tomaswell

By Robert Burns (Special to LouisianaVoice)

In 2001, I attempted to sell my home via the traditional means.  My listing was with ReMax, but I wasn’t happy with the snail’s pace everything seemed to move at.  It was not the fault of my agent but rather a simple reflection of the reality of traditional real estate listings in that they do not create any urgency to buy.

About five weeks into my listing, I noticed an ad in the real estate section of the paper for an upcoming real estate auction.  The ad got my attention, so I called the owner of the real estate auction company.  Thereafter, I attended four of his auctions before deciding that was the route I wanted to go.  My auctioneer, at that time, had a 20-year stellar record of successful auctions (it’s now nearly 35 years).  I was impressed by his professionalism and how the auction method could generate a firm, unconditional offer accompanied by a 10% liquidated damages deposit on a definite date and time that was within only about 30 days of executing the auction listing.  I utilized his services (even keeping my ReMax agent in the mix), and I was pleased with the results.  Consequently, within days of us closing, I called him and asked if I could join his company.  He blew me off in saying, “Sure, but you have to get your real estate license first.”  He later said he thought that was the last he’d ever hear from me, but I surprised him when I called only three weeks later indicating I’d procured the real estate license and asking what I needed to do next.

Over the next two years, he taught me everything one needs to know to be a successful real estate auctioneer.  His honesty, his integrity, and his ethics are beyond reproach, and they’re reflected in his auction results.  He instilled such confidence in me that I even formed my own auction company and began auctioning real estate properties myself.  I enjoyed helping solve people’s problems more than anything I’ve done in my entire professional career.

As many Louisiana Voice readers are aware, Gov. Jindal’s office contacted me within months of his taking office about serving on the Louisiana Auctioneer Licensing Board (LALB).  I would later learn I was contacted only because other applicants had felony convictions or other problems and were ineligible to serve.  I figured I had zero chance of being selected because I never contributed a dime to Jindal’s campaign and, except for 2003 (the year he lost), I didn’t even vote for him.  Nevertheless, I completed the application and figured that would be the end of it.  To my bewilderment, his office called me about six weeks later congratulating me on being selected to serve on the board.  I should have known something was wrong right then because it just didn’t make sense to be selected to serve on a board with no political allegiance to the governor.  Nevertheless, I naively felt honored to have been selected and anxiously looked forward to improving the auction experience for Louisiana consumers.

What I didn’t know was that I would encounter rampant racism on the board and that corruption was so prevalent that I had trouble believing any board could conduct itself in such an anti-consumer, auctioneer-biased manner.  I’ve written several articles already on this blog regarding what I encountered in my early days on the board, so I won’t repeat them here.

Even with all I encountered, however, I never dreamed the LALB could stoop as low as it has in the last six months.  Readers may recall the post entailing 84-year-old widow LALB complainant Betty Jo Story.  That case stands out as the most egregious abuse of any auction victim I’ve seen, yet LALB members found the auctioneer guilty of nothing and merely advised him to “go out in the hallway and work this out.”  Instead, he proceeded straight past Ms. Story and headed back to his home in DeRidder.  Thereafter, he refused to try and make things right with her, so she sued him in 36th JDC in DeRidder.  On October 29, 2014, serving in a pro-se capacity (and doing so quite well I might add), she obtained a judgment of $4,102.29, which the auctioneer paid within a week.

Even more disconcerting, however, was the preferential treatment granted to Brant Thomson, son of State Sen. Francis Thompson.  In that case, the LALB closed its investigation (finding no auctioneer wrongdoing), only to reopen it and find the auctioneer guilty and even file Thompson’s bond claim for him after he drafted a scathing letter to the LALB and had the presence of mind to copy to Ms. Holly Robinson, Gov. Jindal’s then-head of Boards and Commissions.  That incident is covered in this post.

Another complainant, Ms. Judy Fasola, claimed she was victimized by auctioneer Ken Buhler, who happens to have Marvin Henderson as his lead cheerleader with the LALB.  Henderson, a substantial contributor to Jindal campaigns, has historically exerted control over the board which, for whatever reason, is intimidated by him and his self-proclaimed (and no doubt accurately stated) ability to have members removed from the board with a mere phone call to the governor.  The LALB is afraid to assist any person, and that most certainly includes Fasola, in an auction complaint when such assistance may alienate Henderson (as pursuing a bond claim entailing Buhler or any affiliate of his would).

LALB cited a number of reasons for refusing to file a bond claim for Fasola at its November 5, 2014 meeting.  Thereafter, on January 13, 2015, Fasola refuted the LALB members’ November statements as being factually incorrect (a claim substantiated by prior videos).  That fact notwithstanding, at its March 10, 2015 meeting, the LALB, via a prepared statement drafted by legal counsel Larry S. Bankston, but read by his associate, Jenna Linn, stated that the board has “total discretion” regarding whom it wishes to file bond claims for and whom it wishes to decline to do so.  That is not a joke. That’s what Linn read from Bankston’s letter.

Given this public statement, perhaps it would be appropriate that consumers refrain from using the services of auctioneers.  The rationale is simple.  If a primary source of consumer protection is the auctioneer bond, and the LALB is now publicly asserting that it can cherry pick whom it will file bond claims for, that leaves consumers at the whim of political connections affiliated with the board.  When combined with the board’s demonstrated history of filing a claim for a politically connected alleged victim like Brant Thompson but declining to do so when it may alienate political powerhouse auctioneer Henderson, why should any consumer have faith and confidence in an auctioneer?  It’s time to face reality.  Though there are exceptions, the auction industry is corrupt and the board designed to protect consumers is even more corrupt.

I conclude by providing a webpage of Fasola’s three-meeting ordeal, complete with links for documents and video coverage.  Additionally, I provide this webpage of video highlights of the March 10, 2015 LALB meeting.  Linn rudely cut off my public comment when I referenced “FBI investigations,” so I provide an off-site assessment of why she likely recoiled when I uttered those words.

I have no idea if the next governor will do anything to clean up the mass of corruption, nepotism, and cronyism that exists on the LALB.  If he doesn’t, I would recommend a continued boycott of auctioneer services.  To do otherwise would be an injustice to the many clients and bidders I fought so hard to ensure access to experienced honest, open, and transparent auctions.

Posted in Boards, Corruption, Governor's Office, Guest Columnist, Lawsuits, Politicians, Public Records, Teague, Transparency | 10 Comments »

State fiscal cupboard bare but 80 NGOs seek $241 million; which campaign contributors will Jindal, legislators fund?

March 21, 2015 by tomaswell

By now, everyone who isn’t emotionally involved with Dancing with the Stars or Bachelor, is acutely aware that the state, going into the 2015 legislative session, is flirting with a $1.6 billion budget deficit.

And that doesn’t even take into consideration the growing backlog of sorely needed infrastructure repairs for state highways and universities totaling well over a billion dollars. Nor does it include previous deep cuts to health care and higher education.

Things are so bad that an increasingly desperate Bobby Jindal, running out of state buildings, vehicles and hospitals to sell or agency funds to raid, is even looking to sell the remainder of the state tobacco settlement money and the State Lottery in order to generate yet even more one-time revenue to cover recurring expenses.

And remember, this is the man who told the Monroe News-Star he was leaving the state in better shape than he found it. http://www.thenewsstar.com/story/news/politics/2015/03/13/gov-jindal-want-finish-strong/70262992/

Still, every year those non-government organizations (NGOs) make the obligatory trek to Baton Rouge with hands out, asking that legislators appropriate funding for their organizations. This year is no exception as 80 individual entities have submitted requests for funding of 89 separate projects totaling nearly $241.3 million.

Of that amount, $116 million, or 48 percent, were for NGOs in the greater New Orleans area.

Many of the requests are from the usual worthy organizations like councils on aging, youth groups and charitable organizations.

Among the larger requests:

  • $26 million for the Foundation for Science & Math Education in New Orleans;
  • $17.2 million for the Girl Scouts of Louisiana East in New Orleans;
  • $4.4 million for Kingsley House in New Orleans;
  • $1.6 million for the Louisiana Arts & Science Museum in Baton Rouge (two projects);
  • $8 million for the Louisiana Children’s Museum in New Orleans;
  • $5 million for the Louisiana Food Bank Association in Baton Rouge;
  • $4 million for the Louisiana Regional Leadership Council in Lafayette;
  • $27.7 million for a National Hurricane Museum and Science Center in Lake Charles;
  • $1.4 million for renovations to VFW Post 8852 in Alexandria;
  • $14.9 million for the North Desoto Water System in Stonewall;
  • $4.1 million for the Ogden Museum of Southern Art in New Orleans;
  • $1.2 million for Sci-Port (Louisiana’s Science Center) in Shreveport;
  • $10.7 million for repairs at the State Fair of Louisiana in Shreveport;
  • $2.1 million for Administrators of the Tulane Education Fund in New Orleans;
  • $4.3 million for Lighthouse for the Blind in New Orleans;
  • $4.9 million for the Louisiana Association for the Blind in Shreveport;
  • $3 million for the Baton Rouge Empowerment Foundation;
  • $10 million for the Gulf Coast Restoration and Protection Foundation in Baton Rouge;
  • $7 million for the Second Harvest Food Bank of Greater New Orleans and Acadiana;
  • $2 million for the New Orleans Jazz Orchestra;
  • $2.6 million for Loyola University in New Orleans;
  • $1.1 million for WYES Educational Television in New Orleans;
  • $11.8 million for University Hospital & Clinics in Lafayette (two projects);
  • $37.3 million for the Audubon Nature Institute in New Orleans;
  • $5.68 for the Biomedical Research Foundation Northwest in Shreveport;
  • $4.5 million for the NOLA Motorsports Hospitality Committee in New Orleans.

The last four warrant particular attention.

While all such organizations are barred from making political contributions because of their non-profit status, officers and members of their boards of directors are not bound by such restrictions. Jindal received $167,000, various members of the Louisiana House and Senate got $65,650, and the Louisiana Republican Party was the beneficiary of another $26,000 from seven principals connected with those four organizations.

University Hospital in Lafayette has been taken over by Lafayette General Medical Center in Jindal’s sweeping state hospital privatization scheme which raises immediate question of why the state should be funding projects at that facility.

Same for the Biomedical Research Foundation of Northwest Louisiana, which last year assumed operation of LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe. The foundation received $5.7 million in state largesse last year.

The Audubon Institute receives millions of state dollars every year, much of which goes to the upkeep of the institute’s golf course. Last year, for example, Audubon Institute received $16.8 million in legislative appropriations.

But for sheer audacity, we give you the NOLA Motorsports Hospitality Committee. Here is its summary justifying its request for $4.5 million:

  • NOLA Motorsports Park in Jefferson Parish, through a competitive process, has been selected as the site for an INDYCAR event to be part of the championship Verizon INDYCAR Series. The selection was made, in part, because of the availability of a venue for the Event and related activities, transportation infrastructure, personnel, commitment to comply with the required specifications, and because of the collaborative relationships that have been established with other support entities. The Nola Motorsports Host Committee, Inc., a non-profit corporation, has committed to host a first-class Event and to plan and provide a unique and entertaining visitor experience for all which will include live music from Louisiana artists, regional cuisine, and demonstrations of Louisiana’s culture to enhance the visitor experiences for all participants including drivers, team owners, team supporters, corporate sponsors, family and guests, media, and other attendees; and
  • The public purpose of the Event is to provide supplemental funding to the Nola Motorsports Host Committee, Inc. to host the inaugural Indy Grand Prix of Louisiana which will support the expansion and promotion of tourism by producing an event that is projected to stimulate substantial growth in the Louisiana tourism industry, resulting in job creation and other increased economic activity, including the generation of tax revenue for state and local governments. Nola Motorsports Host Committee has secured a preliminary economic impact analysis from Formula, LLC which indicates an estimated economic impact of $27.8 million annually from the Event. INDYCAR has guaranteed a 3-year lifecycle of the Event with the goal of the Event being an annual occurrence. The goal is to attract visitors to Louisiana and to maintain awareness and a positive image of Louisiana as a unique and desirable travel destination. It is anticipated that the public benefit is proportionate to the obligations undertaken by the State. The State will receive tourism publicity and recognition for its support through verbal acknowledgements, media events, and in other related publicity associated with promoting and publicizing the Event.

But wait. Didn’t this same organization receive $4 million from the state just last year for track improvements after Jindal made a commitment to the track owners to come through with the money?

Well, yes and no.

This is where things get a bit murky.

You see, last year, when Jindal yanked a $4.5 million appropriation away from the developmentally disabled, it was to give the money to NOLA Motor Club (The NGO got $4 million, not the $4.5 it requested), a corporation that was established in September of 2009 and which remains in good standing.

This year, however, the $4.5 million request came from a corporation calling itself NOLA Motorsports Host Committee, established last June.

Both corporations listed their addresses at 11075 Nicolle Blvd. in Avondale, however, but had different officers, according to corporate records on file with the Secretary of State’s office.

But wait. There is a third entity: NOLA Motorsports established in May of 2008 and located at 2251 Drusilla Lane, Suite B in Baton Rouge. But that corporation is listed as inactive and records show its corporate status was revoked on Aug. 16, 2013.

One of the officers of NOLA Motor Club was Laney Chouest.

While Laney Chouest was listed as an officer for NOLA Motor Club, he is not listed among the officers for NOLA Motorsports Host Committee. It is nevertheless interesting to note that he, other members of the Chouest family and their many business enterprises have made $166,300 in campaign contributions since 2003. They include $43,800 to various legislators, $26,000 to the Louisiana Republican Party and $96,500 to Jindal.

What best illustrates the arrogance of that fiscally irresponsible appropriation, the thing that pushed it to the status of virtual malfeasance, is the fact that the Senate Finance Committee, taking its cue from Jindal, ripped $4.5 million from the budget for Louisiana’s developmentally disabled in order to free up the money for the racetrack. The lone dissenting vote was that of State Sen. Dan Claitor (R-Baton Rouge). https://louisianavoice.com/2014/05/26/senate-finance-committee-craters-to-jindal-rips-4-5-million-from-developmentally-disabled-for-racetrack/

But what compounds that unconscionable act was the motivation behind Jindal’s action.

The man who for his entire term of office has railed against government encroachment (see: federal stimulus funds, Common Core, medical care, prisons, etc.), obviously based his justification on political expedience and using state government to take care of his contributors.

Though Laney Chouest is not listed among the officers for NOLA Motorsports Host Committee, it is nevertheless interesting to note that he, other members of the Chouest family and their many business enterprises have made $166,300 in campaign contributions since 2003. They include $43,800 to various legislators, $26,000 to the Louisiana Republican Party and $96,500 to Jindal.

Two members of the Senate Finance Committee, Robert “Bret” Allain (R-Franklin) and Norbert “Norby” Chabert (R-Houma), received $2,500 each from Gary Chouest in 2010 and 2011.

Isn’t it interesting how a state so broke as to find itself unable to fund things like highway and bridge repair, health care, higher education, and a host of other essential services, can find $4 million for a race track, $7.7 million for golf courses across the state, $35.1 million for professional sports facilities, $10.1 million for local sports complexes, and another $3 million for baseball stadiums (including $1.4 million for a baseball stadium in Baton Rouge, when we don’t even have a team here)?

It will certainly be interesting to follow the outcome of some of these NGO requests.

Especially those last four on the list.

Posted in Budget, Campaign Contributions, Corruption, DHH, Economy, Education, Ethics, Finances, Golf Courses, Governor's Office, Health Care, Higher Education, Legislature, NGOs, Politicians, Privatization | 17 Comments »

Administration’s cover story is Louisiana too broke to afford presidential primary: only LouisianaVoice has the real story

March 20, 2015 by tomaswell

The state is so broke that the budget for the coming fiscal year failed to include an appropriation to fund the 2016 presidential primaries.

That was the gist of the story in the Washington Post on Thursday. http://www.washingtonpost.com/blogs/govbeat/wp/2015/03/19/louisiana-is-so-poor-that-it-cant-afford-to-hold-presidential-primaries-in-2016/?postshare=1031426855232281

Yeah, right.

The story goes on to say that Bobby Jindal signed a law last year that moved up the state’s primaries by two weeks in order to give Louisiana a jump on some other presidential primaries in order to attract more national attention to the state—and, presumably, to Jindal’s own presidential aspirations.

And therein lies the real story.

Legislators on Wednesday discovered that money to fund the primaries was absent from Jindal’s budget proposal for the coming year. “I have no funding for elections past the fall elections,” Secretary of State Tom Schedler told the House Appropriations Committee.

Washington Post reporter Jeff Guo, either playing along or oblivious to the political realities, dutifully wrote that it was “something of a mystery” how such an important budget item managed to be deleted.

LouisianaVoice, of course has the real story.

Guo noted accurately that Commissioner of Administration Kristy Nichols is responsible for the executive budget, adding that her staff annually meets with state agency heads to arrive at the appropriate funding levels to be recommended by the administration.

Schedler said he left his final budget meeting with Jindal’s people under the impression that the $3.5 million necessary to finance the primary elections next March was there, only to later learn it wasn’t.

And of course, Jindal’s people, never known for accepting responsibility when things go south, pointed the finger at the Secretary of State. “Ultimately, the discretion on cuts comes from the head of the agency,” sniffed Meghan Parrish in speaking for Nichols who doubtless was off to another boy band concert in New Orleans.

“He (Schedler) decides…what’s funded and what’s not,” she added.

Schedler had originally requested a budget of $52.6 million for his office but got only $47 million. That budget will be necessary to fund the governor’s race this fall and legislative races.

The dialog quickly degenerated into a he said, she said exchange.

Schedler said he gave a heads-up to Jindal’s people (aka whiz kids without the whiz) in his reports that the primary elections would be among the things that would be deleted if his budget continued to shrink.

Parrish, however, (again speaking for Nichols who must have been enjoying the concert) said her boss doesn’t remember any such conversation during budget talks.

Budget or no budget, state law mandates that the primaries be held—and that they be paid for. It would require a legislative vote to skip the 2016 primaries and that’s not unprecedented.

In fact, legislators did skip the 1984 primary, claiming there were insufficient funds to finance the primary anticipated to cost between $1.3 million and $2 million.

So what is that real story that LouisianaVoice has the exclusive on?

A 28 percent approval rating for Jindal in Louisiana.

Jindal may be a lot of things: an idiot, a delusional egoist, a ruthless politician who would—and will—do whatever it takes to promote Bobby Jindal, but one thing he is not: stupid. He can read the numbers and while he still harbors a passionate belief that he can con voters outside Louisiana, he knows that after nearly eight years of his mismanagement, aimless policies, and quid pro quo favors for benefactors, the people of this state have seen quite enough of Bobby Jindal.

Robert Mann, in his blog Something Like the Truth, today had one of the best articulated arguments in favor of Jindal’s immediate resignation. http://bobmannblog.com/2015/03/20/gov-jindal-its-time-to-resign/

To bring the picture into focus, let’s review the chronology of events as reconstructed in the fertile minds of the staff of LouisianaVoice:

  • A year ago, Jindal was really beginning to ramp up his presidential campaign. He had begun his repeated trips into Iowa and New Hampshire and appearing on TV and radio shows and writing op-eds to talk up the “Louisiana Miracle.” So when the bill came sliding across his desk as he, Timmy Teepell and Kyle Plotkin were mapping out his presidential strategy, it seemed only natural that the Louisiana primary would be his opportunity to make a decisive statement to the rest of the country.

Jindal: “Here’s that presidential primary bill, Timmy. What do you think?”

Teepell (as he fills out a bank deposit slip for his political consulting fee through OnMessage): “Bobby, look what you’ve done for Louisiana. Now you have the chance to show the world what you’re made of.”

Bobby (as he writes another check to OnMessage): “You’re right, of course. I mean, we’ve cut 300,000 deadbeats from state payrolls, we’re on our way to depleting that fat surplus at Group Benefits, we’ve rid the state of those pesky state hospitals that provided health care for people who wouldn’t vote for me on a bet, and we’ve brought the university and college presidents to their knees.”

Teepell (calculating to himself how long he can milk this cash cow): “That’s all true, Bobby, but you know you’re going to have to broaden your horizons by addressing national issues.”

Jindal: “Well, I guess I could attack Obamacare, Common Core, immigration, and radical Islam.”

Teepell: “Now you’re talking.”

  • Now, we fast forward to 2015 as Jindal and Teepell discuss the proposed budget.

Jindal: “Timmy, what the hell happened?”

Teepell (making out deposit slips from both Jindal and Scott Angelle): “I dunno, Bobby. I really thought you’d show up in the polls in Iowa, New Hampshire and South Carolina by now but you’re still flat-lining in all three states.”

Jindal: “I know, right? I didn’t want to peak too early but I’d sure like to see some spike in the polls. But damn! I thought bringing the preachers to the Maravich Center would show the folks in Louisiana how sincere I am about my religious convictions. So, what’re we gonna do about the Louisiana primary next year? I can’t afford to tank in Louisiana.”

Teepell (speaking into his cellphone): “Could you hold on a sec, Scott?” To Jindal: “Bobby, I just don’t know what happened. You should be making a dent in the polls by now. But you’ve got to get your numbers up in Louisiana before you can be taken seriously on the national stage.”

Jindal: “But the primary is already on the schedule. This isn’t good.”

Teepell (speaking into his cellphone): “Let me call you back, Scott.” To Jindal: “Bobby, what does it cost to hold a presidential primary?”

Jindal: “How should I know? I’m never in the state. A couple of million, I guess.”

Teepell: “Well, there you go. Just call Kristy at the concert and tell her to leave funding for the primary out of the budget. No money, no primary.”

Jindal: “Timmy, you’re a genius! That’s why I pay you $30,000 a month.”

Posted in Budget, Elections, Finances, Governor's Office, Media, Politicians | 9 Comments »

Jindal goes bat guano crazy by entertaining Goldman Sachs, Citigroup proposals to sell LA. State Lottery for quick cash

March 19, 2015 by tomaswell

 

There’s nothing left to be said other than to say Bobby Jindal is bat guano crazy.

The Louisiana Office of Group Benefits (OGB) was cruising along in 2011, providing virtually complaint-free quick turnarounds on medical claims for state employees, retirees and their dependents.

But then Bobby Jindal saw a way to undercut premiums in his privatization scheme which allowed the state to be obligated for less in its share of matching premiums so that Jindal could rake in some extra cash to cover his backside, aka budget deficit.

The result, as just about everyone who follows this sham of an administration knows, was that the $500 million reserve fund was all but wiped out.

Bobby Jindal, after having first jerked $40 million in funding for state colleges and universities, reversed himself again by taking $30 million from a federal hurricane recovery fund.

Bobby Jindal has shrunk the state’s rainy day fund from $730 million when he took office to $460 million and a $450 million fund to subsidize companies for investing in the state has evaporated as is the $800 million balance in the Medicaid Trust Fund for the Elderly.

And after giving away billions of dollars in tax breaks, incentives, rebates and exemptions for business and industry in an effort to spur economic development, we learned today (March 18) that Louisiana’s unemployment rate was third highest in the nation. http://www.politico.com/magazine/story/2015/02/bobby-jindal-campaigning-114948_Page2.html#.VQoeJ005Ccw

The one constant in all this is the Louisiana State Lottery, which since a 2004 Constitutional amendment has dedicated proceeds to the Minimum Foundation Formula (MFP) for public education.

Since the lottery’s approval by voters in 1990 and its implementation in 1991, the lottery, which is mandated to transfer 35 percent of proceeds to the state treasury, has contributed $2.8 billion to the state.

In 2014, sales were $450 million and $161 million of that was transferred to the state.

Also, 2014 marked the 13th consecutive year that the lottery has transferred more than $100 million to the state.

Why do we tell you all this?

Well, only because the administration of Bobby Jindal is currently entertaining the notion of selling bonds that guarantee future State Lottery profits in order to raise some $467.7 million in one-time money to help plug a $1.6 billion hole in the state budget.

Wait. What? Sell the State Lottery?

Yup.

State Treasurer John Kennedy tells LouisianaVoice that the administration is “seriously considering” two separate proposals to take over the lottery and to pay the state one time money.

The two proposals were from Wall Street banking firms Goldman Sachs and Citigroup. While Citigroup did not specify an amount, Goldman Sachs said, “Based on lottery revenue growth of at least 1.5 percent annually, the state could raise approximately $428 million and preserve a minimum contribution to the MFP of $160.2 million.” Goldman Sachs Presentation – March 2015

Citigroup Presentation – March 2015

With 13 consecutive years of receipts of more than $100 million and total receipts of $2.8 billion since 1992, $428 million in quick cash appears to be a terrible deal for the state—not that Bobby Jindal gives—or ever gave—a flying fig about this state.

Let’s first take a look back at the history of lotteries in Louisiana.

In 1868, the Louisiana Lottery Co. was authorized and granted a 25-year charter after a carpetbagger criminal syndicate from New York bribed the Legislature into approving the lottery and establishing the syndicate as the sole lottery provider.

Because it was an interstate venture, 90 percent of the syndicate’s revenue came from outside Louisiana. Because it was so profitable, when efforts were made to repeal the charger, bribes to legislators ensured the effort’s failure.

Ten years after it was approved, Louisiana had the only legal lottery remaining in the company. When Congress passed a prohibition against operating lotteries across state lines, the Louisiana Lottery was finally abolished in 1895. When it was disbanded, reports of ill-gotten gains and bribery surfaced. http://www.library.ca.gov/crb/97/03/chapt2.html

But even more worrisome are the histories of the two Wall Street banking firms who submitted proposals for taking over the Louisiana Lottery.

And even though Kennedy said Commissioner of Administration Kristy Nichols has said the lottery won’t be sold, the mere fact that two proposals for just that scenario have been simultaneously submitted by Goldman Sachs and Citigroup cannot be considered as coincidence. Both investment banking firms pointed that similar actions have been taken by Oregon, Florida, Arizona and West Virginia.

And what about the integrity and professional ethics of the two companies?

That’s a fair question, so let’s look at the records.

Goldman Sachs:

Citigroup:

So now the administration suddenly receives “unsolicited” proposals for the sale of the Louisiana State Lottery from two Wall Street banking firms with checkered backgrounds. (But admittedly, it would be difficult to find a Wall Street bank—or banker—these days that is not under a similar cloud.)

A Division of Administration (DOA) source said Bobby Jindal feels that, unlike his desire to sell the remainder of the tobacco settlement in yet another desperate effort to raise one-time revenue, he would not need legislative approval to sell the State Lottery. “We feel legislative approval would be required, but the governor apparently feels otherwise,” Kennedy said.

The State Treasurer added that he felt if Bobby Jindal does intend to sell the State Lottery, “he will wait until after the legislative session has adjourned and then direct the Lottery Corporation to take the action.”

The nine lottery corporation members are appointed to staggered terms by the governor. Kennedy serves as an ex-officio member. Three members, Christopher Carver ($2,000), Heather Doss ($1,000), and Lawrence Katz, combined to contribute $8,000 to various Jindal campaigns since 2003.

 

Posted in Budget, Corruption, DOA, Economy, Education, Ethics, Finances, Fraud, Governor's Office, Legislature, Legislators, Office of Group Benefits, Politicians, Privatization, Revenue | 19 Comments »

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