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Former DHH Secretary Greenstein indicted on nine counts of perjury over $183M CNSI contract; can prosecutors flip him?

September 23, 2014 by tomaswell

Former Department of Health and Hospitals (DHH) Secretary Bruce Greenstein has been indicted by the Louisiana Attorney General’s Office on nine counts of perjury stemming from a lengthy investigation of his involvement in the awarding of a $183 million contract to a company for which he once worked.

Greenstein is accused in four counts of lying under oath to the Senate and Governmental Affairs Committee during his confirmation hearings of June 8 and June 17, 2011 and five counts of lying to an East Baton Rouge Parish Grand Jury on June 3 of this year.

Greenstein was appointed head of DHH in September of 2010 and was terminated by the governor’s office on May 1, 2013 when it was learned that the FBI had begun an investigation of the state’s contract with Client Network Services, Inc. (CNSI) as far back as January, 2013 when records of the state’s contract with the company were subpoenaed.

When the FBI probe became known in late March, Jindal immediately cancelled the CNSI contract and Greenstein announced his “resignation” a short time later, though he was allowed to remain on the job until May 1.

The indictment that came down on Tuesday (Sept. 23) is the first time that it was revealed that Greenstein did not resign, but was terminated and apparently allowed to announced that he had resigned.

There was no immediate word of the status of the federal investigation of CNSI and Greenstein but legal observers said Tuesday that pressure will most likely be applied to Greenstein to cooperate with the investigation.

Assistant Attorney General David Caldwell said that while the indictment is for perjury, “it really stems from the entirety of the activity in the awarding of this contract” and the grand jury will remain empaneled to do additional work on the case.

At his confirmation hearings, Greenstein first refused to tell legislators who had won the contract to provide Medicaid billing services for the state but under unrelenting pressure and scolding from legislators, as well as threats of his not being confirmed, he finally admitted that CNSI, his old employer from Washington State, was awarded the contract.

Greenstein, however, insisted that he had built a “firewall” between himself and the selection process and had not intervened in the deliberations, nor had he had any contact with CNSI officials.

It was subsequently learned from emails and text messages subpoenaed by the committee that he had had thousands of text messages and hundreds of phone calls from CNSI officials during the bidding and selection processes.

It was also learned that Greenstein had learned that CNSI was initially not qualified to bid on the contract and that he had added addendums to the bid requirements that made the company eligible.

Counts 1and 2 of the indictment cited his testimony under oath in a response to a question from Sen. Rob Marionneaux that he did not know if CNSI was unqualified under the original request for proposals and became eligible only after the addendum was added to the bid specifications.

Counts 3 and 4 involved his responses to Sen. Karen Carter Peterson about his emails to and from CNSI founder Adnan Ahmed relative to the addendum that made CNSI bid eligible.

The remaining five counts, all for lying to the grand jury, involved charges that he lied about email communications with CNSI, about a directive to DHH personnel forbidding contact with bidders and whether or not the directive applied to Greenstein himself, about his false testimony regarding legal advice he said he received from DHH staff attorney Stephen Russo, and his false testimony regarding his confrontation with DHH and administration officials prior to his June 17 Senate testimony and their efforts to learn the truth about his contacts with CNSI.

Interestingly, none of the counts was for bid-rigging or public corruption, leaving observers to speculate while waiting to see what other charges might be forthcoming as the grand jury continues its investigation.

For the full text of the indictment, go here: INDICTMENT

Of course, he has not been convicted of any of the charges as yet but if prosecutors are able to flip Greenstein, things are going to get pretty interesting around the State Capitol and in Washington State in the coming weeks and months.

And it’s not very likely that he will take the full brunt of the charges if he has committed any wrongdoing. That is, if he can implicate others further up the line.

Posted in Contract, Contracts, Corruption, Courts, DHH, DOA, Governor's Office, Legislature, Legislators, RFP, Request for Proposals, Senate, State Agencies | 16 Comments »

Smackdown! Attorney General opinion on OGB proposals hands Jindal administration another stinging legal setback

September 23, 2014 by tomaswell

As legal setbacks begin to mount for Gov. Bobby Jindal with the indictment of a former Jindal cabinet member coupled with an attorney general’s opinion that recently announced changes to state employee group health plans are most probably illegal, one political observer intimated to LouisianaVoice that Jindal’s political career “may be coming unraveled” even as he remains fixated on the White House.

The attorney general’s office on Tuesday (Sept. 23) released a legal opinion that could signal a devastating blow to the administration’s plans to overhaul health benefit plans offered through the Office of Group Benefits (OGB) to some 230,000 state employees, retirees and dependents.

The opinion was requested on Sept. 9 by State Rep. John Bel Edwards (D-Amite), who wrote, “…The Office of Group Benefits proposes to make major plan changes, effective Jan. 1, 2015, which changes conflict with existing provisions contained in the Louisiana Administrative Code.”

LouisianaVoice has learned that word of the request was leaked to the administration after seeking and receiving a copy of the request through a public records request and Jindal dispatched Executive Counsel Thomas Enright to Attorney General Buddy Caldwell’s office to lobby the state’s chief legal officer to issue an opinion favorable to the administration.

When it became evident that Caldwell’s opinion would not be favorable to the administration, Commissioner of Administration Kristy Kreme Nichols capitulated in advance when she said last Friday that the state would go through the rule-making process spelled out in the Administrative Procedure Act (APA).

“But they’ve already put the changes out there,” Edwards said. “They implemented changes in the prescription drug co-pay in August without observing the proper legal procedure and would be deemed null and void if challenged in court. It will be impossible to do this (the remaining proposed OGB changes) by Jan. 1. The process would have had to have been started as early as June and as late as July of this year in order to become effective by the time the new plans will go into place.

Edwards was not the only legislator to voice criticism of the administration just two days before the House Appropriations Committee is scheduled to meet on Thursday to hear comments on the proposed health care coverage changes.

State Rep. J. Rogers Pope (R-Denham Springs), a member of both the Appropriations Committee and the Joint Legislative Committee on the Budget, said he has consistently opposed the governor’s intervention into the operations of OGB both in committee and on the House floor.

“The heavy hand and somewhat sleight of hand of the Jindal administration to make such a drastic change to the health care benefit program that will impact some 230,000 people in Louisiana is a disgrace and a slap in the face for the many who have contributed to this health care program and expected it to provide basic healthcare coverage,” he said.

Pope urged those affected by the proposed changes to attend Thursday’s 10 a.m. meeting in the State Capitol to provide comments and to ask questions.

Former State Sen. Butch Gautreaux (D-Morgan City) also weighed in on the latest development. Gautreaux, who served on the OGB board of directors during his final term in the Senate, said he felt as though Jindal privatized the agency because he “couldn’t be embarrassed by the best managed and most cost effective health insurance department in all 50 states.”

Gautreaux said the OGB board began asking for answers as soon as Jindal indicated his desire to privatize the agency. “When the board couldn’t get the administration to a board meeting, I called a special meeting of the Senate Retirement Committee, again asking the governor to inform us of his intentions,” he said. “Paul Rainwater (then Commissioner of Administration) attended reluctantly but could only tell us that government had no business in running a health insurance agency. He couldn’t tell us why because the logical answer would be cost savings but the opposite was the truth. Our complaints fell on deaf ears because the business was already promised.”

Gautreaux said the “corruption began when Timmy Teepell (Jindal’s original Chief of Staff) instructed Tommy Teague (the OGB Executive Director until teagued by Jindal when he balked at the privatization of OGB) to write a tightly written RFP (request for proposal)…for northeast Louisiana so that only one company could meet the (bid) criteria.”

“Jindal’s OGB mess goes much deeper than we thought,” Edwards said. “The mismanagement of the $500 million OGB fund balance is just the beginning. Jindal’s mean-spirited solution to this self-created is being forced down the throats of state workers illegally.

“I believe this failure to comply with the APA speaks volumes about the quality of the plans. This administration knows that they are unfairly shifting the costs to state workers and teachers. Why else would they go to such great lengths, even breaking the law, to avoid public input and legislative oversight?”

Of the belated decision by the administration to comply with the law, Edwards said, “It’s too little, too late, from an administration that has consistently disregarded its legal obligations and fiscal duties to the people of our state.”

Under the APA, the procedure for the adoption of rules requires a minimum of 100 days which puts the administration under the gun to meet a tight deadline. Other requirements include:

  • Notice of the intended action and a copy of the proposed rules at least 90 days prior to taking action on the rule;
  • A statement, approved by the Legislative Fiscal Office, of the fiscal impact and the economic impact of the intended action;
  • The name of the person within the agency who has responsibility for responding to inquiries (in this case, Ansafone temporary phone bank workers in California and Florida);
  • The time when, the place where, and the manner in which interested persons may present their views;
  • A statement that the intended action complies with statutory law, including a citation of the enabling legislation;
  • A statement concerning the impact on family stability, on child, individual or family poverty;
  • Publication of a notice at least once in the Louisiana Register containing the full text of the proposed rule at least 100 days prior to the date the agency will take action on the rule;
  • Upon publication of the notice, copies of the full text of the proposed rule shall be made available upon written request within two working days;
  • Notice of the intent to adopt, amend or repeal any rule and the approved fiscal and economic impact statements shall be mailed to all persons who make timely requests of the agency no later than 10 days after the date the proposed rule change is submitted to the Louisiana Register;
  • All interested persons must be afforded a reasonable opportunity to submit data, views, comments or arguments—orally or in writing.

For a complete list of requirements of the APA, go here: apa

The attorney general opinion said the significant changes proposed by the administration “constitute a modification of the health care plans set forth in Title 32 and also has the effect of repealing and/or rendering many of the rules contained in Title 32 obsolete without following the required procedures established by the Louisiana Administrative Procedure Act.”

The APA “requires that agencies comply with the rulemaking procedures set forth in the act when adopting rules,” it said, adding if OGB failed to follow APA procedures which specify that no rules adopted on or after Jan. 1, 1975, is valid unless adopted on substantial compliance with APA, “then the validity of the plans becomes questionable.”

Additionally, the opinion said, “Louisiana jurisprudence has found that rules unlawfully adopted are invalid and unenforceable.”

The opinion noted that the Legislative Fiscal Office found that significant changes to the health plans include:

  • Increasing out-of-pocket maximum for health plan options;
  • Increasing deductibles for all health plan options;
  • Increasing co-pays 100 percent for proposed health plans with co-pays;
  • Increasing the out-of-pocket maximum for the prescription drug benefit by $300—from $1,200 to $1,500 (a 20 percent increase);
  • Subjecting the prescription drug benefit to categories that will result in an increased cost for preferred and brand name drugs and a decreased cost for generic drugs;
  • Implementing other various prescription drug benefit changes including high compound management, over utilization management and the exclusion of medical foods;
  • Requiring prior authorizations for certain medical procedures;
  • Eliminating the out-of-network benefit for some health plan options;
  • Application of standard benefit limits for skilled nursing facilities, home health care services and hospice care services;
  • Removing all vision coverage;

For a copy of the complete attorney general opinion, go here: ATTORNEY GENERAL OPINION

While we have not been in discussion with Gov. Jindal or Kristy Kreme regarding the latest legal setback, we feel we can safely predict that Jindal will call the opinion “Wrong-headed,” while Kristy Kreme will put on a happy face and assure us that everything is just fine and there’s nothing to worry about.

Posted in ALEC, American Legislative Exchange Council, Attorney General, DOA, Ethics, Governor's Office, Office of Group Benefits | 47 Comments »

If Jindal can distort simple language of Common Core audit, how would he do as POTUS? LouisianaVoice gives a preview

September 22, 2014 by tomaswell

Regardless of how you might feel about Common Core, Gov. Bobby Jindal has shown in no uncertain terms that he is either a liar willing to twist facts to his own political advantage or that he is just too dense to comprehend the English language.

As our friend Stephen Sabludowsky over at Bayou Buzz noted in his blog post today (Monday, Sept. 22), Jindal, having crashed and burned in state court (for what seems like the umpteenth time) has now filed a “frivolous” lawsuit in federal court challenging Common Core and by some extension as yet undefined, President Barak Obama. http://www.bayoubuzz.com/buzz/item/748889-jindal-misleads-in-his-legislative-auditor-common-core-spin

Jindal, Sabludowsky noted, said in a press release following the release of an issue brief by Legislative Auditor Daryl Purpera’s office that the report “declared that Common Core Standards are driving curriculum in the classroom.” http://gov.louisiana.gov/index.cfm?md=newsroom&tmp=detail&articleID=4678

Jindal added that while the report says that standards are not synonymous with curricula, “the report clearly declares that standards drive curriculum.”

The report, however, says nothing of the sort.

That sent Sabludowsky into orbit. “The word ‘drive’ does not even appear in the report, nor does the word ‘drives’ or even ‘driving.’”

Jindal filed his lawsuit against the Obama administration, saying the federal government (read: Obama) “has hijacked and destroyed the Common Core initiative.”

That, of course is the only tact he could have taken, given the fact that he once was an ardent proponent of Common Core

Yet, blaming Obama for the Common Core standards is more than a little misleading. Our friend Gregory DuCote correctly pointed out that the standards were adopted by the National Governors Association and the Council of Chief State School Officers. “I do not see Barak Obama’s name” in the report. “I do not see him credited with the standards.”

All of which got us to wondering what would happen should Jindal somehow, against all odds, be elected POTUS and attempt (either by misinterpreting or by manipulating) to skew the meeting of an international communique or a clause in a peace treaty or trade agreement?

With that in mind, we take you to the White House Oval Office sometime in say, 2018 or 2019:

President Jindal: I’ve just read the report on the Chinese economy and I don’t like what I see.

Press Secretary Mike Reed: Why is that, Mr. President?

Jindal: Well, it says here in black and white they want to initiate an “aggressive tirade mission aimed at exploding western markets. It’s obvious they’re planning to bomb Wall Street.”

Reed: No sir, it says “aggressive trade mission aimed at exploiting western markets.”

Jindal: Don’t correct me. I’m POTUS. Get me the Joint Chiefs of Staff, the NSC, Homeland Security and CIA Director Edmonson. Where’s my Budget Office director?

Kristy Kreme Nichols: I’m right here, Mr. President. I’ve been practicing my half-truths, distortions and denials.

Jindal: Kristy Kreme, where do we stand on Social Security and Medicare?

Kristy Kreme: It’s just Kristy, Sir. Some jerk in Louisiana hung that stupid name on me. Our program to cut Social Security and to offer less coverage under Medicare at higher premiums has resulted in 93 percent of senior citizens having to go back to work to supplement their retirement income. And eliminating the funding for unemployment certainly was effective. We have handicapped military veterans and homeless people cutting lawns and doing landscaping now. By the way, Susan West is doing a great job running Medicare under DHH Secretary Greenstein.

Jindal: Excellent. More people working. That’s what we wanted. Mike, put out a press release about our full employment program. How does Attorney General Faircloth feel about the legal issues involved?

Executive Counsel Thomas Enright: I spoke with him on this and he thinks it’s a slam dunk.

Jindal: Good. I knew I could rely on Jimmy. Always there when I need him. Oh, I need to talk to Secretary of State Teepell about that Russian threat to deploy its nuclear missiles.

Teepell: I’m here, Mr. President. That communique from Putin said he was offering to destroy his nuclear weapons, not deploy them.

Jindal: Destroy, deploy. Whatever happens, we know it’ll be Obama’s fault. Is the Secretary of the Interior here to give his report?”

Scott Angelle: Yes sir, Mr. President, I’m here. I’m happy to report that we have finalized contracts with Exxon/Mobil to open up oil and gas drilling in all the National Forests. Of course, we may have to cut down a few redwood and sequoia trees. Fracking in Yellowstone, however, could pose a problem with the geysers. Especially Old Faithful.

Jindal: Frack it. Those tree huggers probably believe in global warming, too. Do we have a report from Treasury?

Secretary of Treasury Tim Barfield: Everyone on Wall Street sends their best, Mr. President. The Dow set an all time record yesterday, thanks to our sweeping deregulation programs.

Jindal: You’re doing a heckuva job, Barfee. How’re we doing on our legislation to create a new cabinet position?

Chief of Staff Kyle Plotkin: It looks good, Mr. President. I believe we have the votes for the Secretary of Morality position.

Jindal: How does Gene Mills feel about his nomination to the post?

Plotkin: He’s warming up to it, sir. He’s taking a page from the Koran and informing senators and congressmen that if they adhere to a strict monogamous marriage, they will go to heaven where they will be rewarded with 70 virgins.

Jindal: How’s that working out?

Plotkin: We have complete bipartisanship in the House and Senate on this. And ALEC is seriously considering it for their model legislative package for state legislatures next year. We’ve never seen such enthusiasm. It’s a breakthrough of historic proportions.

Jindal: Well, I fail to see the hysterics in that but I’m glad they’re receptive.

Reed: Sir, it seems to me that you spent eight years as governor beating up on the federal government for trying to run our lives and now you’re trying to get it to monitor America’s bedrooms.

Jindal: But don’t you see, now I am the federal government. And you’re fired. This is great! I really do have the job I want.

Posted in ALEC, Congress, Education, Governor's Office, Health Care, House, Senate | 11 Comments »

Notable Quotables (in their own words)

September 20, 2014 by tomaswell

“It is to the credit of Col. Mike Edmondson (sic) and Master Sgt. Louis Boquet, of Houma, that they declined to accept the raise because of irregularities in its passage.”

—From a Baton Rouge Advocate editorial on Friday, Sept. 19, in an effort to paint Edmonson as a dedicated and noble public servant for “refusing” a $55,000 yearly increase in his pension resulting from a Senate bill amendment that he and his staff helped orchestrate—with assistance from State Sen. Neil Riser (R-Columbia), Gov. Bobby Jindal and Jindal’s executive counsel.

Posted in Corruption, Ethics, Finances, Legislature, Legislators, Media, Retirement, State Police, Transparency | 3 Comments »

Baton Rouge newapaper’s praise of Edmonson’s ‘refusal’ of retirement raise is disingenuous and an insult to its readers

September 20, 2014 by tomaswell

It’s seldom that I disagree publicly with members of the fourth estate. Besides preferring to focus my energy on reporting on the myriad ways state government falls short of its number one priority of protecting the interests of the state and its citizens, I generally have a deep professional respect for our peers in the media.

I worked for 30-plus years in various capacities—sports reporter, news reporter, copy editor, investigative reporter and managing editor—for several newspapers all over the state, including Monroe, Shreveport, Donaldsonville, Baton Rouge and four separate stints at the Ruston Daily Leader where I began almost 50 years ago. I kept returning at a higher position mostly because of my loyalty to my mentor, Publisher Tom Kelly. I even managed to pick up a few reporting awards along the way, including three for investigative reporting.

A news reporter will never get rich working for a newspaper; the pay just isn’t that good. Those who spend their time sitting through endless hours of city council, police jury, school board and even legislative committee meetings, mind-numbing courtroom testimony and who climb out of bed in the middle of the night to cover a shooting or a fire do so for the love of the profession.

So yes, I do maintain an abiding respect for these dedicated individuals.

But when I see facts deliberately being glossed over and key points ignored in order to protect or project a favorable image of a public official who has deliberately and blatantly attempted to use his position or to manipulate the political system to his financial advantage, I cannot in good conscience keep quiet.

The Baton Rouge Advocate editorial of Friday, Sept. 19, stands out as one of the most unabashedly transparent attempts to pin a bouquet on a state official who recently condoned one of the most underhanded attempts at abusing the legislative process in recent memory.

That attempt, of course, was the amendment by State Sen. Neil Riser (R-Columbia) to Senate Bill 294 in the closing hours of the recent legislative session. The bill, authored by State Sen. Jean-Paul Morrell (D-New Orleans) originally addressed procedures to follow in disciplinary cases for law enforcement officers but was amended to give State Police Superintendent Mike Edmonson special treatment in awarding him an unconstitutional increase in retirement income of somewhere between $30,000 and $55,000 per year.

Riser added the amendment during a conference committee meeting on the bill. Riser was one of three senators and three House members on the conference committee and on the final vote for passage, House members were told, incorrectly, the bill’s passage would create no fiscal impact.

Bobby Jindal’s executive counsel Thomas Enright, Jr., whose job it is to review bills for propriety and constitutionality, gave the bill his blessings and Jindal promptly signed it into law as Act 859.

LouisianaVoice broke the initial story about how the bill allowed Edmonson to revoke his decision years ago to enter into the state’s Deferred Retirement Option Plan (DROP) which froze his retirement benefits at his then-pay level of $79,000 at his rank of captain. By allowing him to renege on his decision which was supposed to be irrevocable, it allowed him to retire at a rate based on his current colonel’s salary of $134,000. Because he has 30 years of service, he receives 100 percent of his salary as his retirement. Thus, the amendment gave him an instant yearly increase in retirement of something between $30,000 and $55,000.

The amendment inadvertently just happened to include one other person, Master Trooper Louis Boquet of Houma, though he was unaware of the amendment and its implications until the public outcry erupted.

A state district judge, ruling on a lawsuit brought by State Sen. Dan Claitor, said the amendment was unconstitutional on several grounds, thereby killing Edmonson’s retirement windfall.

The four-paragraph Advocate editorial on Friday noted that the matter had been “laid to rest” and noted that such furtive bills are common in the Louisiana Legislature. http://theadvocate.com/news/opinion/10299405-123/our-views-a-lesson-for

But it was a single sentence in that editorial that set me off:

“It is to the credit of Col. Mike Edmondson (sic) and Master Sgt. Louis Boquet, of Houma, that they declined to accept the raise because of irregularities in its passage.”

What?!! Besides the misspelling of Edmonson’s name, the editorial completely (and apparently purposefully) omitted key elements of this sordid story.

  • Edmonson defended the amendment and his additional retirement on Public Radio’s Jim Engster Show;
  • He admitted on that same show that “a staff member” had approached him about the possibility of increasing his retirement benefits via the amendment and he personally okayed that staff member to proceed with the legislative maneuver;
  • Neil Riser first denied any knowledge of how the amendment originated but later confessed that it was he who inserted the language into the bill;
  • The legislative fiscal notes (which detail the potential financial impact of pending bills) were not submitted until three days after the session adjourned, evidence that the entire episode took place on the down low, hidden from public view;
  • During a hearing on the amendment by the State Police Retirement System Board, it was revealed that the board’s actuary was initially approached about the amendment “a few weeks” before the close of the session, further evidence that the move was in the works long before that fateful final day of the session;
  • At that same hearing, it was also revealed that the “staff member” who initiated efforts to pass the amendment was State Police Lt. Col. Charles Dupuy, Edmonson’s chief of staff;
  • Edmonson did not reject the raise until the heat from the public and from retired state police officers became so intense that it was politically impossible for him to go through with the charade. The added threat of a lawsuit by retired state troopers and the attacks on the amendment by State Treasurer John Kennedy only served to ensure the foolhardiness of any continued attempts to claim the money;
  • The way the entire affair played out implicated everyone concerned—Jindal, Enright, Riser, Dupuy and Edmonson—in a pathetic attempt to conceal the deed from public view.

In short, Edmonson’s decision was anything but magnanimous. Quite simply, it was forced upon him by the glaring light of public scrutiny—the one thing he feared most.

This silly effort by the Advocate to make Edmonson’s decision seem noble and to make it appear to be anything other than the hands in the cookie jar scenario that it was is a disservice to its readers and an insult to their intelligence.

Perhaps the Advocate should stick to its previous hard-hitting editorials about how nice sunshine is and how lovely the Spanish moss-laden oak trees on the Capitol grounds are.

When John Georges purchased the Advocate from the Manship family, he went before the Baton Rouge Press Club where he made the utterly bizarre statement that he was focused on “not making people angry.”

I’m sorry Mr. Georges, but when you establish a policy of attempting to publish as little offending reporting as possible, that’s a cowardly decision and you’re simply not doing your job.

It was Thomas Jefferson who said, “If I had to choose between government without newspapers and newspapers without government, I wouldn’t hesitate to choose the latter.”

Georges has obviously chosen the former.

And that decision has made the Advocate less of a newspaper, good only for crawfish boils and housebreaking a puppy.

Posted in Corruption, Ethics, Judges, Lawsuits, Legislators, Legislature, Media, Retirement, Revenue, State Police | 19 Comments »

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