Feeds:
Posts
Comments

Another high negative for Louisiana: new report says state ranks third highest in disparity between rich and poor

June 6, 2012 by tomaswell

Add another negative to the list for Louisiana.

While Gov. Piyush Jindal trots all over the country telling everyone who will listen about the state’s robust economy, the low unemployment rate and the incredibly favorable business climate, a national study has revealed that Louisiana has the third widest gap between rich and poor, roughly equivalent to some Third World countries.

The report, by 24/7 Wall Street, employs the widely accepted Gini coefficient which measures income inequality to arrive at its results. The Gini coefficient is a number between zero and one with zero representing perfect income equality and a place with a score of one would have only extremely wealthy and extremely poor people, with no middle class.

The state Gini coefficients range from .419 in Utah to .499 in New York, indicating that all 50 states have relatively high income inequality compared to the rest of the world.

The most alarming aspect of the latest results is the trend toward a widening gap, the report indicates. In 1967, the Gini coefficient for the U.S. was .397. Today, it is .469, evidence that America’s income divide has become greater.

The widening gap between rich and poor has been a growing issue between Republicans and Democrats on both the national and state levels.

Many of Jindal’s proposed programs, critics say, would do much toward widening that breach even further. The privatization of state agencies would result in layoffs of state employees and Jindal’s proposed retirement reforms would have sharply reduced state pensions. Cuts to higher education have resulted in further layoffs.

New York, with a Gini coefficient of .499, had the largest disparity between rich and poor despite having the sixth highest (7.4 percent) percentage of households earning $200,000 or more per year. At the same time, New York’s 14.1 percent of population living below the poverty line was 21st highest in the nation.

Louisiana, with a Gini coefficient of .475, was third behind Connecticut’s .486.

Even though the state’s unemployment rate was lower than the national average and the lowest on the list, Louisianans are limited in other areas that limit upward mobility, the report says. Only 82.5 percent of Louisiana residents older than 25 had a high school diploma and only 21.8 percent had a college degree.

And while the unemployment rate is comparatively low, 15.3 percent of the state’s residents received food stamps and the Louisiana median income is 10th lowest in the nation. The 17.7 percent of the state’s population living below the poverty line was fifth lowest in the U.S., the report shows.

Louisiana’s Gini coefficient of .475 is comparable to those of Ecuador (.469), Madagascar (.475), Nepal (.472) and Rwanda (.468), according to a worldwide ranking of Gini coefficients by the CIA.

Any comparison of Louisiana to those countries in misleading, however, because the Gini coefficient takes into account only the disparity between rich and poor and not median or household income.

Other states named as having income large gaps between rich and poor in the report, in order, include:

• Massachusetts (.475);
• Florida (.474);
• Alabama (.472);
• California (.471);
• Texas (.469);
• Georgia (.468);
• Mississippi (.468)

Posted in Business, Economy, Governor's Office | 12 Comments »

Jindal campaign fund update: 1 bank board member says none were aware of contributions made in their names

June 5, 2012 by tomaswell

At least one of the 11 board members of the failed Central Progressive Bank of Lacombe was unaware that a $5,000 campaign contribution had been made in his name to Gov. Bobby Jindal during his successful run for governor in 2007, LouisianaVoice has learned. He added that he was sure none of the other board members knew of the contributions made in their names as well.

Richard Blossman, Jr., of Lacombe is accused in a federal bill of information of funneling $55,000 through the Lacombe bank into Jindal’s campaign.

Central Progressive, after being designated as a “troubled bank” last year, was taken over in November by First NBC Bank of New Orleans.

The federal Bill of Information says that Blossman, while CEO of Central Progressive Bank, gave each of his 11 board members a $5,000 bonus. In reality none of the $5,000 bonus payments ever went to the board members, according to Raphael Goyeneche, president of the New Orleans Metropolitan Crime Commission.

“The defendant well knew the ‘bonus’ was to funnel illegal political contributions and was not a bonus, as he caused it to be inscribed in the board minutes,” prosecutors said.

“That is a felony,” Goyeneche said.

Immediately after the bonuses were announced by Blossman, federal prosecutors say 11 checks of $5,000 each were sent to Jindal’s campaign in the names of each of the individual board members.

The limit for political contributions is $5,000. But with all of the board members “donating” their $5,000 of Central Progressive Bank funds, the donation came to $55,000.

Additionally, the Louisiana Board of Ethics last month said Jindal received $40,000 in campaign contributions from River Birch, Inc. when the company formed six “straw man entities” to launder illegal donations to Jindal.

River Birch Landfill had its offices in Gretna raided by federal agents in September of 2010 after landing a controversial $160 million garbage disposal contract with Jefferson Parish in 2009.

Curiously, Timmy Teepell, who ran Jindal’s 2007 campaign, said the governor would not return any of the tainted $95,000.

“We accept every contribution in good faith and in accordance with the law,” he sniffed.

So, while there are laws against receiving stolen goods, and even as Louisiana legislators fret over the selling of art by Angola death row inmates, there apparently are no restrictions on politicians keeping laundered campaign money.

When asked if Blossman received anything in return for the donations, Teepell said, “No, absolutely not. Everybody who donates to our campaign gets the same thing and that is good government.”

When LouisianaVoice attempted to question the board members, no one answered phone calls at seven of the numbers called, two numbers had been disconnected and the first board member contacted, Raymond Fontaine of Slidell, said he had no comment.

At another, LouisianaVoice at first reached Douglas Ferrer, Sr., father of board member Douglas Ferrer, Jr. The elder Ferrer referred to Central Progressive as “that no-good bank” and added that his son was unaware of the contribution made in his name.

When contacted, Douglas Ferrer, Jr. of Lacombe at first explained that he had been involved in litigation against the bank and that the settlement agreement contained a non-disclosure clause that prohibited him from commenting. When told that his father had said he knew nothing of the campaign contribution, he then said, “My dad doesn’t lie. You can take that for what it’s worth.” Given the fact his father had already commented, the younger Ferrer finally said, “I think none of the others were aware of the contributions.”

Besides Fontaine, Ferrer and Blossman, the other eight board members who ostensibly made $5,000 campaign contributions to Jindal, all on April 6, 2007, according to Jindal’s campaign finance report, included Welton Brumfield, Jr., address unknown, Charles Law Ponder of Kentwood, Edward Amar, Jr., of Tickfaw, Brandon Faciane of Slidell, Ralph Menetre of Covington, Jim Venezia, Sr., of Pearl River, Henry Powell, Jr. of Lacombe and Mark Perrilloux of Ponchatoula.

The Louisiana Office of Financial Institutions, which provided the names of the board members pursuant to a public records request by CNS, noted that Menetre was elected to the board on January 29, 2007 and that Perrilloux left the board on December 10, 2007.

Jindal paid a $2,500 ethics fine less than a month after taking office in 2008 for campaign violations when his campaign failed to timely disclose more than $100,000 spent on his behalf by the state Republican Party.

Posted in Campaign Contributions, Ethics, Governor's Office, Politics | 4 Comments »

Notable Quotables (in their own words)

June 2, 2012 by tomaswell

“We accept every contribution in good faith and in accordance with the law.”

“Everybody who donates to our campaign gets the same thing and that is good government.”

–Timmy Teepell, advisor and confidant to Gov. Piyush Jindal, responding to questions about $95,000 that federal investigators say may have been laundered illegally into the Jindal 2007 campaign for governor.

Posted in Campaign Contributions, Ethics, Governor's Office, Notable Quotables, Transparency | Leave a Comment »

Piyush may have accepted $95,000 in laundered money for his 2007 campaign, feds claim; but he’s not giving it back

June 2, 2012 by tomaswell

Just as Gannett breaks the scandal of American Legislative Exchange Council influence on Gov. Piyush Jindal, it appears to have missed an even bigger story currently developing in St. Tammany Parish.

It’s taken awhile, but Gannett Louisiana papers have become the first of the metropolitan dailies in Louisiana to finally take notice of the incredible influence that ALEC holds over the legislative process in Louisiana.

Not that Louisiana is the only state in which ALEC’s agenda has surfaced in the form of proposed legislation calling for the privatization of education, prisons and Medicaid as well as radical employee pension “reform,” but it just happens to be the state that LouisianaVoice has been writing about for the better part of a year now.

We were beginning to think no one was listening—certainly not the New Orleans and Baton Rouge dailies.

But in the last few days the Monroe News-Star (and probably sister publications as well) have begun running teasers to that effect that beginning Sunday, Gannett papers in Monroe, Shreveport, Alexandria, Opelousas and Lafayette will launch a weekly series “Education for sale: How big business shapes reforms.”

The promotional blurb went on to say that since Jindal first ran for governor in 2003, he “has been funded by the American Legislative Exchange Council.” It said Jindal’s education reforms “also bear a striking resemblance to ALEC’s model.”

LouisianaVoice, of course, has been saying that all along, even giving examples of model legislation passed at various ALEC conferences from San Diego to Washington, D.C., from Chicago to New Orleans.

We have repeatedly hammered on the tens of thousands of dollars ALEC poured into campaigns of not only Jindal but Louisiana legislators who are members of ALEC. The immediate past president of the national organization is former State Rep. Noble Ellington (R-Winnsboro).

But an even bigger story is that of the possible laundering of as much as $95,000 in illegal money into Jindal’s 2007 campaign for governor.

What’s more, Jindal political advisor Timmy Teepell says Jindal isn’t giving the tainted money back.

Federal prosecutors have charged a Covington businessman in a Bill of Information with bank fraud.

Richard Blossman, Jr., is accused of funneling $55,000 through Central Progressive Bank of Lacombe into Jindal’s campaign.

Central Progressive, after becoming a “troubled bank” last year, was taken over by First NBC Bank of New Orleans in November.

Last month the Louisiana Board of Ethics said Jindal received $40,000 in campaign contributions from River Birch, Inc. when the company formed six “straw man entities” to launder illegal donations to Jindal.

River Birch Landfill had its offices in Gretna raided by federal agents in September of 2010 after landing a controversial $160 million garbage disposal contract with Jefferson Parish in 2009.

The federal Bill of Information says that Blossman, while CEO of Central Progressive Bank, gave each of his 11 board members a $5,000 bonus. In reality, however, none of the $5,000 bonus payments ever went to a board members, according to Raphael Goyeneche, president of the New Orleans Metropolitan Crime Commission.

Immediately after the bonuses were announced by Blossman, federal prosecutors say 11 checks of $5,000 each were sent to Jindal’s campaign in the names of each of the board members.

“The defendant well knew the ‘bonus’ was to funnel illegal political contributions and was not a bonus, as he caused it to be inscribed in the board minutes,” prosecutors said.

“That is a felony,” Goyeneche said.

The limit for political contributions is $5,000. But with all of the board members donating their $5,000 of Central Progressive Bank funds, the donation came to $55,000.

While it was not immediately clear if the board members knew the money was being contributed in their names, there was at least one indication that they were unaware of the contributions.

CNS attempted to put that question to each of the board members. No one answered at seven of the numbers called, two numbers had been disconnected. One board member, Raymond Fontaine of Slidell said he had no comment. At another, CNS at first reached Douglas Ferrer, Sr., father of board member Douglas Ferrer, Jr. The elder Ferrer referred to Central Progressive as “that no-good bank” and added that his son was unaware of the contribution made in his name.

When contacted, Douglas Ferrer, Jr. of Lacombe at first explained that he had been involved in litigation against the bank and that the settlement agreement contained a non-disclosure clause that prohibited him from commenting. When told that he father had said he knew nothing of the campaign contribution, he then said, “My dad doesn’t lie. You can take that for what it’s worth.” Given the fact his father had already commented, the younger Ferrer finally said, “I think none of the others were aware of the contributions.”

Besides Fontaine, Ferrer and Blossman, the other eight board members who ostensibly made $5,000 campaign contributions to Jindal, all on April 6, 2007, according to Jindal’s campaign finance report, included Welton Brumfield, Jr., address unknown, Charles Law Ponder of Kentwood, Edward Amar, Jr., of Tickfaw, Brandon Faciane of Slidell, Ralph Menetre of Covington, Jim Venezia, Sr., of Pearl River, Henry Powell, Jr. of Lacombe and Mark Perrilloux of Ponchatoula.

The Louisiana Office of Financial Institutions, which provided the names of the board members pursuant to a public records request by CNS, noted that Menetre was elected to the board on January 29, 2007 and that Perrilloux left the board on December 10, 2007.

Goyeneche said the fact that Blossman was charged in a bill of information as opposed to being indicted indicates that he has not only agreed to a deal, “but is cooperating with authorities.”

Goyeneche also said that while Jindal does not have a legal obligation to return the money, he feels the governor does have a moral and ethical obligation to do so. “I would say that ethically, if any public official realizes they received inappropriate campaign contributions, the ethical thing would be to return that money,” he said.

Teepell, who ran Jindal’s 2007 campaign, says that ain’t happening.

He said that neither he nor Jindal knew that the donations from the 11 board members might be tainted.

“We accept every contribution in good faith and in accordance with the law,” he sniffed.

When asked if Blossman received anything in return for the donations, Teepell said, “No, absolutely not. Everybody who donates to our campaign gets the same thing and that is good government.”

Really?

Let’s review.

• LaShip, owned by Gary Chouest was a direct beneficiary of Jindal’s $10 million state investment in the expansions of the Port of Terrebonne in 2008. Chouest, his family, and his various business ventures combined to contribute $85,000 to Jindal;

• Lonnie Pilgrim and Foster Farms of California made generous contributions to Jindal’s campaign and when Pilgrim’s Pride decided to close its chicken plan in Farmerville, it was Jindal put up $50 million of state money so that Foster Farms could take over the plant’s operations;

• Former State Rep. Noble Ellington, he of the ALEC national presidency, did not run for re-election last fall after 24 years in the legislature but he did have the presence of mind to contribute to Jindal’s campaign. Upon leaving office, he settled comfortably into a $150,000 position in the Department of Insurance;

• Former St. Tammany Parish President Kevin Davis ran unsuccessfully for lieutenant governor but hedged his bets by contributing a couple of thousand to Jindal and another thousand to the Republican Party. He now serves as Jindal’s $165,000 Director of the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP);

• Former St. Bernard Parish President Craig Taffaro (who lost his re-election bid) contributed $2,000 to Jindal’s choice for lieutenant governor William Nungesser and was appointed the new Director of Hazard Mitigation and Recovery (whatever that is) at $150,000 per year;

• Former State Rep. Kay Katz (R-Monroe) contributed $1,000 to Jindal and $3,000 to the Republican Party. She is now a member of the Louisiana Tax Commission at a salary of $56,000 per year;

• Former State Rep. Jane Smith (R-Bossier City), term limited, was by no means limited in her largesse. She gave $3,000 to Jindal, $2,500 to the ABC Pelican Political Action Committee (PAC), $1,000 to the AT&T PAC, $500 to the Health Agents PAC, $500 to the Louisiana Association of Wholesalers PAC, $1,000 to the Louisiana Realtors PAC, $500 to NORPAC and $2,500 to North PAC, a political action committee controlled by the Louisiana Association of Business and Industry. Her reward? She was appointed Deputy Secretary in the Louisiana Department of Revenue and Taxation at $107,500;

• Former Rep. Mert Smiley (R-St. Amant) did not seek re-election, choosing instead to run for Ascension Parish tax assessor. He was elected but won’t take office until later this year. He contributed $2,000 to the Republican Party and Jindal was grateful enough to appoint him to the part time position on the State Pardon Board at $36,000 per year;

• And, of course, there is the Stelly Plan. One of Jindal’s first acts was to repeal the plan despite warnings that it would cost the state $350 million the first year. His rationale was that the repeal would save single income tax filers up to $500 year on their state income tax and joint filers as much as $1,000. What he did not tell us was that single filers would have to make $90,000 to save the $500 and joint filers would have to pull in $150,000 to reap the $1,000 savings. Louisiana’s median household (that’s household, mind you) income was $43,635 in 2010.

And we haven’t even mentioned the 200 or so who contributed nearly $800,000 to Jindal’s campaigns and were rewarded with plum positions on choice state commissions and boards.

Nor have we mentioned Penny Dastugue’s actions just this past week. Dastugue, president of the Board of Elementary and Secondary Education (BESE), said she conferred with other BESE members and they would urge the Senate to reject the House decision to strip a provision that allows future state funds to pay college tuition for students who graduate early.

What’s wrong with that, you ask? Well, for starters, it is strictly forbidden (as in illegal) to take a straw vote outside of a public meeting.

And finally, there is the little matter of vouchers. The ink had not even dried on Jindal’s signature enacting the voucher law when the Department of Education was rocked with its very first voucher scandal. The New Living Word School in Ruston was approved for 315 vouchers worth about $2.7 million.

The school does not have classroom space, teachers, or computers to accommodate the students but the school’s principal, Rev. Jerry Baldwin, said the school is moving forward “on faith.” Apparently that was the only criteria considered by the department in awarding the vouchers.

Oh, and lest we forget, there’s that matter of a $2,500 ethics fine that Jindal paid less than a month after taking office in 2008 for campaign violations when his campaign failed to timely disclose more than $100,000 spent on his behalf by the state Republican Party.

Could these be the prime examples of Jindal “good government” to which Mr. Teepell alluded?

Posted in Campaign Contributions, Governor's Office | 10 Comments »

Louisiana is following trend of taking ‘State’ out of state colleges in slow move to privatization of higher education

May 31, 2012 by tomaswell

All but lost in the brouhaha over Gov. Piyush Jindal’s overt moves to privatize the Louisiana Office of Risk Management, Office of Group Benefits, state prisons, Medicaid, the Louisiana Office of Student Financial Assistance and K-12 public education is the quiet but steady erosion of state financial support for state colleges and universities that is pushing higher education toward that same precipice.

Once considered sacrosanct, Louisiana’s state colleges and universities no longer are considered untouchable by legislators. Accordingly, administrators find themselves having to seek funding more and more from private endowments and from tuition increases that threaten to push student costs to a prohibitive level for all but the wealthiest.

And Louisiana is by no means the exception. The trend toward pseudo- and outright privatization is becoming more prevalent in all 50 states as state colleges fall victim to cuts in state aid, the depletion of federal stimulus dollars, tuition increases, caps in enrollment and the elimination of positions. Throw in billions upon billions of dollars in corporate tax exemptions and it’s easy to comprehend the fiscal disaster Louisiana has been courting for decades.

Even as this perfect storm gathers momentum, conservative legislators, led by the American Legislative Exchange Council (ALEC) are pushing to recast state universities in the mold of private corporations.

If this sounds somewhat familiar, it is because state colleges across the country are following the same track as K-12 public education in the conversions to charter schools—another of ALEC’s model legislative crown jewels.

In fact, the plan for higher ed was presented at ALEC’s national convention in New Orleans last August. That meeting was hosted by then-State Rep. Noble Ellington (R-Winnsboro), ALEC’s 2011 national president. Ellington, who did not seek re-election, eased from his House seat to a more comfortable position as second in command at the State Department of Insurance at a salary of $150,000 per year.

ALEC, which purportedly espouses increased transparency in government, restricted access to its New Orleans meeting and specifically barred the media.

And, considering Jindal’s dogged determination to privatize everything public and his penchant for secrecy, it must be no coincidence that ALEC bestowed upon him its Thomas Jefferson Freedom Award at last August’s New Orleans closed-door convention.

Alarming examples of this slow trip down Privatization Lane abound in practically any state one chooses to observe.

In Texas, for example, Gov. Rick Perry, whom Jindal backed in his bid for the Republican presidential nomination, has packed the board of regents at all six state college systems with political allies who, like Perry, adhere to the Republican mantra that colleges should be run like businesses whose “customers are students.”

In Arizona, voters in 2010 approved a state referendum banning affirmative action in state universities, replicating the same action taken in Florida in 1999.

At the University of Virginia, the first public college in America and founded by Thomas Jefferson, the state provides less than 8 percent of the school’s operating budget, down from 28 percent 25 years ago. Things are no better at William & Mary and Virginia Tech, prompting Virginia’s three flagship universities to ask the General Assembly to make them “chartered” universities, which would give them freedom to set tuition and to run themselves.

Of the $1.8 billion cost to operate all 27 of Louisiana’s state universities, colleges, junior colleges and technical colleges, only $734.2 million, or 40.2 percent, came from state appropriations but even that figure is deceiving because Jindal has ordered an additional cut of $50 million.

In February, not long after Jindal submitted his executive budget, then-LSU Systems President John Lombardi, no doubt at Jindal’s behest, sent an email to his administrators asking that they not complain about Jindal’s proposed elimination of 2,837 positions in higher education. Lombardi said that Jindal would appreciate it if the administration acknowledged that the budget “gives higher ed special treatment…”

That “special treatment,” it turned out, was a carrot that Jindal dangled before university presidents in the form of a promise of $100 million for higher education should the governor’s retirement package pass.

It didn’t.

Goodbye $100 million.

And on April 27, goodbye Lombardi as the LSU Board of Supervisors, acquiescing to Jindal’s wishes, unceremoniously fired the LSU president.

A spokesperson for the Board of Regents said that the state only a few years ago provided 70 percent of the funding for state colleges and universities with tuition making up most of the balance. That formula is virtually reversed today with the state providing 40 percent and tuition and other resources providing 60 percent.

This trend toward privatization is not new; it has been taking place for more than a decade, but the implications are only now becoming clear.

As state financial support dwindles and colleges begin implementing double-digit tuition increases, the result is that the school’s mission to provide access to higher education for all suddenly becomes a mission more akin to a private university that caters only to those who can afford it.

Sometimes, even that doesn’t work. When Virginia Commonwealth University bumped its tuition by 24 percent to make up for previous cuts in state appropriations, Republican Gov. Robert McDonnell cut the school’s appropriation even more.

Consequently, as flagships gravitate toward the elitism of privatization, poor and middle-class students are priced out of their institutions and into second-tier schools. This then creates the social stratification of higher education in which the elite colleges are filled with kids from upper income families while kids from poorer backgrounds are relegated to less prestigious schools.

What was it again that Romney said about class warfare? Oh, yes, he said that the Occupy Wall Street protests represented class warfare.

So, when state colleges privatize and their tuition, which currently averages around $7,500 a year (not including room and board), escalates to the private college levels of $25,000 to $40,000 a year, many students who do manage get into those schools will do so only by taking out ever-larger student loans and just who will profit from that?

A few clues:

• Sallie Mae currently has $21 billion in student loans on its books;

• Citi Student Loans, part of Citibank: $5.9 billion;

• Wachovia Education Finance: $5.5 billion;

• Bank of America: $4.9 billion;

• JP Morgan Chase (yes, the one that just reported the $2 billion trading loss): $3.5 billion.

And those loans are guaranteed by the federal government so the lenders are betting on a sure thing, which is more than be said of the students. Even taking the low end of $25,000 tuition plus room and board, a student graduating in four years would exit as a 21- or 22-year-old college graduate, possibly with no job, and with a $150,000 debt (Don’t forget the room and board). Add two years of graduate study and presto! His debt is now $200,000. No wonder he moves back home.

ALEC was ostensibly founded to promote the “Jeffersonian principles of free markets, limited government, federalism and individual liberty.”

One has to wonder if this is what Thomas Jefferson had in mind for his school.

Posted in Governor's Office, Higher Education, OGB, Office of Group Benefits, ORM, Office of Risk Management | 13 Comments »

« Newer Posts - Older Posts »