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ORM, an unwanted orphan, taken over by third company; could this be the future of OGB, prison privatization?

November 21, 2011 by tomaswell

BATON ROUGE (CNS)—The crown jewel of Gov. Bobby Jindal’s privatization drive has taken yet another bizarre turn.

Well, maybe the Office of Risk Management (ORM) is not the crown jewel, but it his first effort at a move toward privatizing any state agency that shows up on his radar.

And if the path that ORM has followed since being taken over by private industry little more than a year ago is a fair example, legislators would do well to take a long hard look at any future moves in that direction—particularly as it might pertain to the Office of Group Benefits (OGB).

The $400 million agency, it was recently learned, will be transferred to its third operating company within 15 months. This time ORM is going to be run for a while by York Claims Service of New York City.

York operates as an independent adjustment company and third party administrator and is a subsidiary of York Insurance Services Group of Parsippany, New Jersey.

On March 15, 2010, ORM Director J.S. “Bud” Thompson, in a gathering of agency employees, broke the news that the agency was to be taken over by F.A. Richard and Associates (FARA) of Mandeville. It was at that same meeting that he laughingly informed his subordinates, “I still have my job.”

It wasn’t his last attempt at inappropriate humor. During a legislative committee hearing held to consider the approval of the transfer, he joked that he deserved a raise. That remark drew a sharp rebuke from State Sen. Ed Murray (D-New Orleans) who reminded Thompson that a serious matter was being considered and that he should treat it as such. Thompson did not return for the afternoon committee session.

Under terms of the contract that went into effect on July 1, 2010, the state was to pay FARA an amount “not to exceed” $68.2 million. FARA was to phase in its takeover over a five-year period.

The actual transfer began in September of 2010 when ORM Loss Prevention and Worker’s Compensation sections went over to FARA.

In May of 2011, less than eight months after the first units were transferred, FARA and Thompson were back before the committee seeking an additional $6.8 million that would bring the new contract to “a maximum amount” of $74.9, according to language in the amendment document.

Committee members were surprised to learn that the amendment was actually already a done deal because under law, the Office of Contractual Review may approve contract amendments of up to 10 percent one time without legislative approval and the amendment was exactly—10 percent.

Both ORM and the Office of Contractual Review are under the supervision of Commissioner of Administration Paul Rainwater.

Rep. Jim Fannin was somewhat miffed that the House Appropriations Committee, which he chairs, was circumvented by the 10 percent rule. It didn’t help that Patti Gonzales, assistant director of ORM informed Fannin that the full $6.8 million wasn’t really necessary because it was expected that only about $2 million of that would actually be spent.

Left unasked was the question of why it was deemed necessary to ask for the full $6.8 million.

The nearest thing to an explanation was a memorandum to Rainwater dated Feb. 28, 2010, in which Thompson requested Division of Administration (DOA) approval of the contract amendment.

“Since the implementation (of the FARA takeover) began, ORM has begun experiencing difficulty in retaining our experienced adjusters, as many are seeking employment elsewhere in state government,” Thompson said. “We are currently utilizing contract adjusters to supplement our in-house staff for lines not yet transitioned to FARA, at considerable expense to the state and with a significant loss of efficiency.”

Only about a week after Thompson weathered that committee hearing and the $6.8 million amendment was approved (the committee legally had no choice), it was learned that FARA had been sold to Avizent, a national claims and risk management company in Columbus, Ohio, that had an office in Baton Rouge staffed by only one employee.

Considering the complexities involved in such a transaction, it would seem reasonable to think negotiations had been ongoing for some time before the $6.8 million amendment was approved. Yet, not once was the pending sale revealed to committee members.

FARA’s senior management, including CEO Todd Richard “will also assume executive leadership positions in the parent company,” according to an announcement on FARA letterhead dated May 20, 2011.

On Oct. 26, an email from Gonzales to remaining ORM personnel announced that Cherie Pinac, manager of FARA’s Baton Rouge office, had submitted her resignation to accept a position with Hammerman and Gainer Claims Adjusters.

Now, less than month later, it has been learned that FARA has been sold to York and ORM will be handed off to yet another third party administrator.

This could mean one of two things:

• Private firms are finding that they cannot run the agency more cost efficiently than can the state;

• Once privatization takes place, the state loses all control of what happens to the agency down the road.

Or it’s entirely possible that both could—and will—occur.

This should be something for the Jindal administration to ponder carefully and with all due caution before plunging headlong into additional moves at privatization of OGB, prisons, public schools and Medicaid.

But don’t bet on it.

Posted in Contract, Contracts, Governor's Office, House, Senate, Legislature, Legislators, ORM, Office of Risk Management, Privatization | 1 Comment »

Notable Quotables (in their own words)

November 17, 2011 by tomaswell

“The health, safety and best interests of our children is of paramount concern…”

–Gov. Bobby Jindal, in announcing his executive order that anyone employed by a public Louisiana college who witnesses child abuse or neglect must report it to law enforcement within 24 hours.

Posted in Education, Governor's Office, Higher Education, Notable Quotables | 3 Comments »

Jindal out front on Penn State scandal: strangely quiet on Michigan Matt’s Safe School Law and Louisiana’s HB112

November 17, 2011 by tomaswell

Perhaps we were a bit hasty in our last blog in which we accused Gov. Bobby Jindal of finding a parade, jumping out in front and yelling, “Follow me!”

That was written after Jindal issued his executive order directing any employee of a public college or university who witnesses child abuse or neglect to report it to law enforcement within 24 hours.

In typical Jindal grandstanding, the governor was attempting to jump aboard the bandwagon of understandable public fury over the sex scandal swirling around former Penn State defensive coach Jerry Sandusky and young boys left in his care.

It must be pointed out, however, that the indignant outrage he apparently felt over the mess at Penn State University did not carry over to the abhorrent behavior of his fellow Republicans in the Michigan State Senate.

In Michigan, Matt Epling was a child who was subjected to constant bullying in middle school in East Lansing. His last day of eighth grade, he was given a “Welcome to high school” beating. When school officials did nothing, his parents went to police. Matt, fearful of retribution from the bullies, committed suicide.

Over the next nine years, another 10 students subjected to regular bullying killed themselves—all while the Michigan legislature did nothing because Republican lawmakers repeatedly blocked attempts to pass an anti-bullying law.

This year another attempt was made and Republican State Sen. Rick Jones tacked on an amendment that said torment is not bullying if “a sincerely held religious belief or moral conviction” is behind the bully’s actions.

That’s right, it’s not bullying if the bully says he has a moral or religious hatred of Jews, Muslims, gays or blacks.

The law as amended by Republicans also specifically addresses cyber bulling—but only if the bully uses “a device owned or under control of a school district”—not a student’s personal cell phone. Finally, Republicans withheld support of the bill until it was agreed that school officials would not be held accountable for failing to act.

Matt’s father, Kevin Epling described the bill as “government-sanctioned bigotry.”

The bill passed with 26 Republicans voting in favor and 11 Democrats voting no.

Democratic State Sen. Gretchen Whitmer called the amendment a “blueprint for bullying.” She told her fellow lawmakers, “Here today, you claim to be protecting kids, and you’re actually putting them in more danger.” Her speech on the senate floor went viral last week and the resulting pressure forced Smith to back off on his amendment, all while Jindal remained strangely quiet.

No bandwagon there.

Nor, apparently has the governor displayed any moral outrage over the failure of the Louisiana Legislature to pass HB 112 earlier this year.

HB 112, by Rep. Austin Badon (D-New Orleans), would have prohibited “harassment, intimidation, and bullying of students by students” and further defined such terms as including “intimidating, threatening, or abusive gestures or written, verbal or physical acts motivated by actual or perceived characteristics including race, color, religion, ancestry, national origin, sexual orientation, gender, gender identity or expression, physical characteristic, political persuasion, mental disability, and physical disability, as well as attire or association with others identified by such categories.”

Actually, such a law is already on the books in Louisiana. The law, R.S. 17:416.13(B), for some inexplicable reason, however, exempts six parishes: East and West Feliciana, East Baton Rouge, St. Helena, Tangipahoa and Livingston. Badon’s bill would have removed those exemptions.

HB 112 also would have further defined the terms “harassment,” “intimidation,” and “bullying” to include “any intimidating, threatening, or abusive gesture or written, verbal, or physical act by a student directed at another student occurring on school property, on a school bus, or at a school-sponsored event.”

So, how did the vote come down on HB 112?

It failed by a vote of 43-54—even after the bill was watered down with amendments that deleted references to “race, color, religion, ancestry, national origin, sexual orientation, gender, gender identity, or physical disability.” In other words, even after the bill was rendered toothless, it still couldn’t pass the smell test of the Louisiana Legislature.

More importantly, how did the vote fall in the six affected parishes, which are still exempted from R.S. 17:416.13(B)?

As might be expected, the vote was split right down party lines with six Democrats voting in favor of bringing their parishes into compliance and seven Republicans voting against the measure.

The Democrats voting in favor of HB 112 included Reps. Regina Barrow, Stephen Carter, Dalton Honore, Michael Jackson and Patricia Smith, all of Baton Rouge, and John Bel Edwards of Amite.

Republicans voting against the bill were Reps. Franklin Foil, Hunter Greene, Erich Ponti and Clifton Richardson of Baton Rouge, Mack “Bodi” White and Rogers Pope of Denham Springs, and Tom McVea of Jackson.

Rep. Alan Seabaugh (R-Shreveport) said, “This bill was intended to promote an agenda and force teaching alternative lifestyles to our children.”

Excuse me? At precisely what point did protecting children become a teaching tool for alternative lifestyles? How did someone this delusional ever get elected?

Incredibly, Seabaugh didn’t know when to shut up. He continued: “Every person who testified (on behalf of the bill) was either gay or testifying on behalf of someone who is gay, so let’s not delude ourselves about the intent of this bill. This language (in the bill) is straight out of the lesbian, gay, transgender playbook.” So just how was it that he came to be such an authority on that particular playbook?

And is this really where the governor wishes to align himself politically? Where was Bobby Jindal’s outrage, his moral indignation, his concern for the “health, safety and best interests of our children” that he trumpeted in issuing his executive order in reaction to the higher-profile Penn State scandal when this bill came up for consideration?

You would find those emotions hiding behind the Louisiana Family Forum, which called HB 112 part of the “homosexual agenda.”

Where was Jindal’s apprehension for the children of Michigan?

Apparently it could be found cowering in the same dark shadows as those 26 Michigan Republicans.

No parade for Piyush to lead there.

Posted in Governor's Office, House, Senate, Legislature, Legislators, Transparency | 5 Comments »

Jindal finds a parade to jump front of and yell, ‘Follow me!’

November 16, 2011 by tomaswell

Leave it to Piyush, aka Bobby Jindal, to find a parade, jump out in front and yell, “Follow me!”

On Wednesday, Jindal, indignant over the Penn State juvenile sexual abuse scandal, issued an executive order that requires anyone employed by a public Louisiana college who witnesses child abuse or neglect to report it to law enforcement within 24 hours.

Atta boy, Guv, you’re right out front, as always. Nothing like being reactive as opposed to proactive.

“The health, safety and best interests of our children is of paramount concern for all Louisianians, and it is appropriate and necessary that the state do everything within its means to ensure that suspected cases of abuse and neglect of our children are reported to the proper authorities,” he said in issuing the directive.

This is just the kind of grandstanding that he loves, similar to his presentation of all those federal checks at the church meetings all over north Louisiana and all those veterans pins he passed out earlier this year.

What he didn’t say in announcing his executive order was what will he do about the growing caseloads at the Department of Children and Family Services? The caseworkers are already overworked and, with no pay increase for more than two years now, underpaid.

For that matter, if he really wants to demonstrate how serious he is about protecting the rights of individuals–juveniles and adults alike–he could do what both Penn State University and his office have steadvastly refused to do:

He could remove his office from the self-imposed exemptions to the state’s public records laws.

That would be a meaningful show of good faith.

Posted in Governor's Office | 1 Comment »

Hold on: Jindal gets another chance to lose federal money; this time it’s $390 million more in FEMA money–maybe

November 16, 2011 by tomaswell

U.S. Sen. Mary Landrieu says Gov. Jindal “fumbled” on two grants that cost the state $140 million but in fairness to Jindal, he now has a chance to dwarf those losses by blowing an additional $390 million in FEMA money to mitigate damage caused by two major hurricanes in 2005.

The word out of Baton Rouge this week is that the state will receive an additional $389.6 million from FEMA for flood prevention of homes, levees and public buildings.

But don’t hold your breath.

The state has received $1.4 billion in hazard mitigation money already after FEMA assessed damages from hurricanes Katrina and Rita.

The state might yet receive the money, however, despite the loss of two earlier federal grants of $60 million and $80 million. That’s because this money was secured through the efforts of the state’s congressional delegation and was not hampered by the Jindal administration.

The additional hazard mitigation money can be used by property owners to elevate or retrofit homes with additions such as hurricane-proof windows and storm shutters and local governments may use the money to repair levees, improve drainage and strengthen school buildings and other public facilities.

Most of that money is expected to be used in the parishes of Cameron, St. Bernard and Orleans, areas especially hard-hit by Katrina and Rita in 2005.

“As we did after Hurricane Gustav and Hurricane Ike, we are sending these dollars directly to parishes because local leaders know how to best protect our communities from future losses in the event of another natural disaster,” Jindal said.

That would represent something of a departure for the Jindal administration which has thus far fought, at least publicly, to resist federal funding but has never shied away from taking credit when he passes out checks during Sunday morning visits to north Louisiana protestant churches.

Jindal no doubt hopes the $390 million bonus will help him save face after his rumblin’, bumblin’, stumblin’ performances with two other grants.

The first, $60 million in early childhood education funding was lost when the administration simply decided not to apply for the money.

The second was an $80 million grant from the U.S. Department of Commerce to fund a project to install 900 miles of cable to bring broadband internet connection to 21 rural parishes.

The $60 million grant would have been the third round of Race to the Top dollars and was to have been used to improve the quality of early learning and closing the achievement gap for children with high needs resulting largely from poverty.

Commissioner of Administration Paul Rainwater called U.S. Sen. Mary Landrieu’s criticism of Jindal “disappointing.” Rainwater once worked with Landrieu but now is the mouthpiece of the administration. He said the state punted on the $60 million because the state studied the grant and decided that it would not have expanded early childhood education but rather would have targeted programs the state has already been addressing. He neglected to say what those programs were.

Rainwater also said the money would have had strings attached that would have meant more federal control over the education system.

The state, of course, is far above that. No control over local school systems by the state with this administration. Just pull funding from the public school systems and divert it into charter schools. No control there. All the local systems have to do to compensate for the lost funds is layoff teachers. What control?

Landrieu disagreed. “All the federal government is doing is offering them money with virtually no strings attached except for basic accountability,” she said.

The truth probably lies somewhere in between the two positions, but so what? If you borrow money from the bank, there are usually strings attached, such as for what purpose the money will be used and how it will be repaid. That’s life.

Basic accountability is something the state has found lacking in some areas, most notably with payment for the $239 million Jindal sand berms built at the governor’s insistence as an effort to stem the flow of oil from the April 2010 BP Deepwater Horizon explosion and subsequent blowout. That failed effort was monumental in scope. Not only did the berms wash away but so too did the heavy dredging equipment brought in to construct the berms—all swallowed up in the Gulf waters.

That was bad enough but then along came the Legislative Auditor’s office that issued a report earlier this month that the state overpaid Shaw Environmental and Infrastructure, Inc. by nearly $495,000 to build the oh-so-temporary and oh-so-useless berms.

It’s not the first time Shaw’s name has surfaced in questionable costs.

Immediately after Katrina devastated New Orleans, Shaw was awarded a no-bid contract to cover storm-damaged roofs across New Orleans with those familiar blue tarps. Each tarp covered 100 square feet, meaning the average home would require 15 tarps to fully protect its roof. There were literally tens of thousands of those homes in and around New Orleans.

Shaw’s contract called for it to receive $175 per square (one tarp, or 100 square feet). That did not include the cost of the tarps because they were provided by FEMA. The $175 was just for labor. (That, by the way, comes to about $2,600 per house—not much below what it would cost to simply re-roof the home.)

Shaw promptly hired a subcontractor to install the tarps at $75 per square. That meant Shaw would net $100 per square for doing absolutely nothing. Multiply that by 15 per house ($1,500 net per house) times the thousands of houses getting the tarps and well, you get the picture.

The subcontractor then found his own subcontractor and paid him $35 per square, leaving the first subcontractor with a neat profit of $40 per square, or roughly $600 per house for doing zilch.

The second subcontractor then found laborers who actually installed the tarps—at $2 per square. Is this what they meant by trickle-down economics?

But back to the grants.

When the Public Service Commission demanded answers it got the typical bureaucratic shuffle from Rainwater and Board of Regents President Jim Purcell.

The blame, they said, lay alternatively with the legislature which took too long to approve spending, a contractor whom they said was late with his work (the contractor denies that) and the Obama administration, which Rainwater said “wants to run the car companies, the banks, our entire health care system, and now they want to take over the broadband business.

“We won’t stand for that in Louisiana,” he sniffed.

That little bit of defiance resurrected echoes of Leander Perez in his efforts to defy the federal government’s insistence on school desegregation more than a half-century ago. At the time, Gov. Earl K. Long reminded Perez in not-so-gentle terms of the realities of the day when he bellowed to the arch-segregationist, “What you gonna do now, Leander? The feds have the A-bomb!”

Probably Jindal’s frittering away the $80 million has more to do with campaign contributors than any philosophical differences over federal influence.

The broadband project would have connected to the Louisiana Optical Network Initiative (LONI), a 1,600-mile fiber-optic network that connects Louisiana and Mississippi research universities to National LambdaRail and Internet2, which would connect 100,00 households, 15,000 businesses and 150 schools, libraries and hospitals.

A Jindal campaign contributor whom the governor appointed to the Board of Regents, Ed Antie of Carencro, was forced to resign earlier this year amid revelations during Senate confirmation hearings that he had a $531,000 contract with the Regents through one of his companies to provide fiber-optic cables to LONI, which is overseen by the Regents.

“Straight baloney,” said Public Service Commissioner Foster Campbell of Rainwater’s contention that the broadband internet project would result in unfair competition with private providers.

“We’ve been begging the private providers to build broadband infrastructure in the rural areas of the Delta and they won’t do it,” Campbell said. “I don’t give a damn if the companies object. If they won’t do it on their own, then does that mean we should just sacrifice these poor parishes’ and people’s chance to be connected?”

Campbell said he wants the state’s major telecoms, Rainwater and Purcell to attend the next PSC meeting. “I want to know the providers who objected,” he said.

At one point in the hearings, Campbell, whose position is not appointive but elective, found it necessary to remind Rainwater, “I don’t work for you.”

That must have come as quite a shock to both Jindal and Rainwater who, without Timmy Teepell to hold their hand, were probably unable to locate a copy of the State Constitution that would verify Campbell’s unexpected revelation.

Posted in Broadband, Internet, Campaign Contributions, Charters, Contract, Contracts, Education, Governor's Office, Grant, Grants, Privatization, Transparency | 1 Comment »

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