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Can Jindal be right and all those Fortune 500 corporation CEOs somehow be wrong on the benefits of self-insurance?

July 13, 2011 by tomaswell

Most of what has been written here in recent months about the proposed privatization of the Louisiana Office of Group Benefits (OGB) has been in the nature of political discourse laced with emotional banter.

Such is the nature of the beast when people’s lives are being toyed with by elected and appointed officials insulated in their detached bubble of infallibility—even in the face of growing evidence that their grandiose plans are skewed with false data.

This time, though, Gov. Bobby Jindal may well have overplayed his hand. It’s one thing when the rank and file employees, helpless to fight back, are opposed to his proposed sale of OGB. It’s quite another when you raise the hackles of the state district judges who voted unanimously to approve a resolution in opposition to the sale.

Perhaps it’s time for the State Inspector General, the East Baton Rouge District Attorney, and the Legislative Auditor to begin investigating the very real possibility of the existence of two separate reports by Chaffe & Associates of New Orleans.

That’s the report, in case you don’t recall, that Commissioner of Administration Paul Rainwater and Division of Administration (DOA) attorney Paul Holmes both said on separate occasions was received by DOA on May 25. When Rainwater first balked on his promise to make the report available to legislators, it was subsequently “leaked” to the Baton Rouge Advocate. The only problem with that was the “leaked” report was signed by its authors on June 3—ten days after Rainwater and Holmes said it was received by DOA.

Lending even greater credence to the theory of the existence of two reports is the fact that all documents are date stamped when they are received at DOA. The “leaked” report contained not a single date stamp on any of its 42 pages.

Did the original report, received on May 25, not say what Jindal wanted to hear?

That’s a question for investigators to ask.

In the meantime, DOA and Jindal are moving forward—but oh, so quietly. A second request for proposals (RFP) was issued when the first one fell through after LouisianaVoice broke the story about the administration’s intent to sell the agency that presently carries a $500 million surplus.

That story said that Goldman Sachs was recruited in October of 2010 to help draft the RFP and then was the only company to submit a proposal to conduct a financial analysis of OGB and then market the agency to a private sector buyer. Goldman Sachs subsequently withdrew when negotiations over legal indemnification broke down.

Rainwater and Brady were called before the Senate Retirement and Senate and Governmental Affairs committees. It was before the Retirement Committee that Rainwater said the state would maintain control over OGB because it was not selling the agency despite the first RFP that clearly said otherwise.

Rainwater said the administration was seeking a third party administrator to run the PPO, thus necessitating a second RFP seeking a firm to conduct a financial analysis and find a buyer.

A strange sense of déjà vu set in when it was learned that Goldman Sachs again submitted a proposal, one of three firms to do so. DOA, in that second RFP, said a contractor likely would be named on June 15—nearly a month ago—but as yet, no one has been awarded a contract.

Meanwhile, LouisianaVoice has been doing a little research of its own since the Division of Administration has chosen to operate secretively, in violation of the state’s public records law by ignoring numerous inquiries from us.

Even as Jindal, Rainwater, and Deputy Commissioner of Administration Mark Brady plunge ahead with their privatization plans for the OGB Preferred Provider Organization (PPO), perhaps it is time to take a look at national trends in the health insurance industry, something this administration, like a spoiled child who prefers tantrums as a means of getting its way, has refused to do.

Self-funded health insurance plans continue to grow in popularity in the U.S., according to the Society for Human Resource Management which said that 64 percent of workers in PPOs are in a self-funded plan, compared to those in conventional “fully insured” plans in 2008. That compared to only 5 percent in 1974.

With major incentives that include exemption from state taxes on insurance premiums, the ability to design their own plans, and invest money previously paid as premiums until it is needed to pay health expenses, it’s no wonder that Fortune 500 corporations have long been self-insured.

“The largest insurer in America is not Blue Cross/Blue Shield, but the nation’s employers,” said Jon R. Gabel, associate director of research and statistics at the Health Insurance Association of America. Gabel called the self-insurance trend “a quiet revolution in health care.”

Just who are some of the Fortune 500—and other companies—that have opted for self-insured health plans? Well two dozen of those have contributed $224,000 to Jindal’s political campaign and two have nine contracts with the state totaling $46.4 million.

Here is a partial list with contributions to Jindal in parenthesis:

• Johnson Controls—six contracts totaling $37.4 million;

• CH2M Hill ($8,500), plus three contracts with the state totaling $9 million;

• Pinnacle Entertainment ($8,000);

• Wal-Mart ($24,000);

• Delta Airlines ($1,000);

• Walgreen’s ($5,000);

• U.S. Marine, Inc. ($14,100);

• United Parcel Service ($15,000);

• Eli Lilly & Co. ($18,000);

• Citigroup ($15,000);

• McKesson Pharmaceuticals ($15,000);

• Georgia Pacific ($11,700);

• Hospital Corp. of America ($10,000);

• United Health Care ($10,000);

• Comcast ($3,500);

• Waste Management ($10,000);

• ExxonMobil ($6,330);

• Chevron ($5,000);

• Coca Cola ($5,000);

• Hewlett Packard ($5,000);

• Pepsico ($5,000);

• GMRI Food & Beverage ($2,500);

• Microsoft ($2,500);

• Amgen Pharmaceuticals ($2,000);

• Occidental Chemical ($2,000);

• Target;

• AT&T;

• Bank of America;

• Starbucks.

So, just what is that Jindal, Rainwater, and Brady know that the CEOs of these corporations are not smart enough to know–many of whom had sufficient wisdom to contribute to his campaign and two of whom are apparently intelligent enough to have multiple contracts with the state? That’s the question that the administration should answer, and soon.

Oh, we almost forgot. There was one more Fortune 500 corporation that has chosen to go the self-insured route as the most financially desirable method of providing health insurance for its employees.

The company?

Goldman Sachs.

Posted in Campaign Contributions, Contract, Contracts, Governor's Office, Health Care, Privatization, Transparency | 4 Comments »

Notable Quotables (in their own words)

July 11, 2011 by tomaswell

“The institution will require reimbursement for the associated costs for conducting this research and for preparation of documents necessary to satisy your request. To perform the research and to compile the information, we estimate that the task will take a MSU employee approximately two hours to complete. We estimate the total cost to the university to be approximately $36.”

—Eddie P. Meche, CPA and Vice President of Business Affairs for McNeese State University, in reply to LouisianaVoice request for records of the number and costs of state cell phones issued to McNeese personnel. After some rather intense negotiations over principle (not one other state agency tried to extract funds for compliance with our request), the powers that be at McNeese acquiesced and provided the information at no charge.

Posted in Higher Education, Notable Quotables, Public Records, Transparency | 1 Comment »

Even in fiscal hard times, state cell phones still abound

July 11, 2011 by tomaswell

BATON ROUGE (CNS)—State agencies paid nearly $3.4 million, an average of more than $282,000 per month for cell phone usage for more than 3,900 state employees during FY-2010, according to public records obtained by LouisianaVoice.

LouisianaVoice initiated the inquiry into state cell phone usage when it was learned that California Gov. Jerry Brown ordered state employees to turn in some 48,000 cell phones.

Only one state agency, Louisiana Tech University in Ruston, was found to have issued no cell phones to university employees, though it did issue four air cards for campus police, three for Rehabilitation Science field engineers for off-campus use, and one for an employee whose job duties require extensive travel.

Louisiana State University in Baton Rouge more than made up for Tech’s lack of communication devices, however.

LSU shelled out more than $492,000 for 688 taxpayer-funded cell phones, Blackberries, Smart Phones, I-Phones, and air cards from June 30, 2009 through May 31, 2010, records show.

One has to wonder how LSU can justify the need for 688 university employees to have cell phones at taxpayer cost.

The $41,038 average monthly cost for LSU cell phones was more than the $40,624 annual costs for the University of Louisiana at Lafayette ($12,920), Grambling State University ($10,859), Southern University New Orleans ($10,797), and Louisiana Tech’s eight air cards ($6,048) combined.

LSU’s monthly cell phone costs also compared with the annual rates of eight other institutions of higher learning: Southeastern Louisiana University ($33,885); Baton Rouge Community College ($32,167); University of New Orleans ($36,733); Southern University ($52,728); McNeese State University ($33,333); Nicholls State University ($27,776), University of Louisiana-Monroe ($57,978) and Northwestern State University ($35,240).

The governor’s office and the Division of Administration (DOA) combined to spend $245,969 for cell phones for 402 employees of the governor’s office (61), DOA (107), the Office of Telecommunications Management (32), the Office of Risk Management (18), and the Office of Group Benefits (6).

DOA, it should be noted, while keeping the same number of phones, cut its cell phone costs by more than $100,000 from Fiscal Year 2010 ($250,000) to FY-2011 ($145,000).

Along with the request on the number and costs of agency cell phones, LouisianaVoice also asked agencies to justify the need for the number of cell phones being used. While most agencies were quick to provide date on numbers and costs of the phones, only a few attempted to justify their usage.

Michael Ferrell of LSU-Shreveport said the university operates a police department that uses cell phones only as part of the university’s emergency notification system. He also said computer maintenance and information technology personnel need the cell phones in case of any technical problems.

Likewise, Louisiana Educational Television Authority (LETA) operates a network of six transmitters on a 24-hour basis, making it essential that LETA be able to contact engineers in the event of transmitter problems, according to Steve Graziano, chief operating officer for Louisiana Public Broadcasting.

Lt. Col. Louis Thompson said the Office of Alcohol and Tobacco Control employees 50 law enforcement agents who are assigned throughout the state and that it is crucial that each agency have access to instant communication.

The lieutenant governor’s office appeared to have the most creative explanation: law enforcement, personal safety, and public welfare—duties more often assigned to the Department of Public Safety than the lieutenant governor’s office.

The issuance of a cell phone in the lieutenant governor’s office apparently would depend on whether or not “the job duties of the individual require the performance of duties that could impact the protection of life and property,” said Julia George Moore, general counsel for the lieutenant governor’s office.

Since the lieutenant governor heads up the Office of Culture, Recreation and Tourism, it’s conceivable that that office would have the responsibility for the safety of tourists during, say, a hurricane. It’s also conceivable that those duties would require 60 cell phones.

Jan Jackson, responding for the Louisiana Community Technical College System, said, “All employees with LCTCS issued mobile devices are expected to be in communication with this office while traveling to our sites around the state and to be available by phone or Blackberry on a 24/7 basis. We conduct a considerable amount of business with our employees remotely by phone or email,” she said. “It is necessary for our employees to travel to our many sites around the state to conduct audits, to troubleshoot IT problems, to manage construction projects, to oversee our adult education and grant programs and to provide assistance and training for our college and grant personnel.”

The University of New Orleans, with 15 cell phones, nevertheless is picky in issuing the devices to personnel. “No department head, dean, vice chancellor or like position has a university-paid cell phone or wireless connection,” said Deborah K. Bridges, director of purchasing for UNO.

Other state agencies, the number of cell phones, Blackberries, Smart Phones, or I-Phones and the annual cost to each of the agencies include:

• Department of Public Safety—865 ($349,080);

• Department of Corrections—304 ($249,842);

• Department of Education—236 ($273,160);

• Department of Revenue—154 ($138,102);

• Department of Transportation & Development—489 (337,435);

• Department of Economic Development—48 ($37,447);

• Treasury Department—56 ($22,016);

• Lieutenant Governor—60 ($54,017);

• Louisiana Public Broadcasting—20 ($15,060);

• Inspector General—2 ($1,534);

• Office of Financial Institutions—16 ($13,769);

• Wildlife & Fisheries—80 (40,000);

• Department of Justice (Attorney General)—71 ($44,815);

• Department of Insurance—20 ($13,559);

• Secretary of State—9 ($3,720);

• Department of Natural Resources—16 ($12,300);

• Department of Agriculture—22 ($13,543);

• Department of Environmental Quality—144 ($56,113);

• Office of Alcohol and Tobacco Control—55 ($48,900);

• State Board of Ethics—4 ($3,244);

• House of Representatives—20 ($12,904);

• State Senate—17 ($16,795).

Posted in Computers, Contract, Contracts | Leave a Comment »

Jindal, like Diogenes, needs lamp to find common sense in his absurd decision to sign bill into law at Baptist church

July 11, 2011 by tomaswell

BATON ROUGE (CNS)—A few random notes worth sharing in the wake of the most recent legislative session and Gov. Jindal’s ongoing love affair with north Louisiana:

Because Jindal and the legislature have seen fit to play fiscal shell games with education in Louisiana, considerable but unnecessary—and certainly unfair—financial strain has been placed on local school boards around the state.

Even as Jindal, when he was not drumming up campaign contributions in other states by telling Republican supporters in Wisconsin, Illinois and elsewhere what a fine job he has done in Louisiana, was telling actual constituents and state workers they would have to “do more with less.”

Except when it came to golf courses.

Ah, yes, the golf courses, that old bugaboo we talked about last year.

And let’s not forget the other sports venues and pet projects that took priority over education in Priority 1 capital outlay appropriations this year:

• City Park Golf Complex improvements in New Orleans—$6.6 million;

• Junior Golf training facilities for Jerry Tim Brooks Lakeside Golf Course in Caddo Parish—$200,000;

• Golf course development in Calcasieu Parish—$6.1 million;

• Zephyrs baseball facilities in Jefferson Parish—$1.2 million;

• Professional sports facilities and lease hold improvements in Jefferson Parish (provided that $8.5 million is used to improve the New Orleans Hornets’ training center—$17.5 million;

• Recreational complex in Iberia Parish—$1 million;

• Baseball stadium Improvements in Baton Rouge (which has no baseball team)—$1.4 million;

• Louisiana Sports Hall of Fame/Natchitoches State Museum—$7.7 million;

• Bayou Segnette sports complex improvements in Jefferson Parish—$9.2 million;

• West Ouachita Youth Sports Association site renovations—$25,000;

• Poverty Point Reservoir State Park conference center in Richland Parish—$250,000;

• Poverty Point Reservoir (real estate acquisition)—$1.7 million;

• Washington Parish reservoir feasibility study—$2.6 million.

Meanwhile, in Livingston Parish, the local school board has found it necessary to freeze all salaries and to eliminate three work days from the 2011-12 school year in an effort to cut costs.

Three days may not seem like much but why would we want to cheat our kids out of even 10 minutes?

Union Parish schools operated on a four-day week last year and at least one school district, Caldwell Parish, will follow suit this year.

But the state somehow found the money for $50 million in projects for golf courses, reservoirs and recreational facilities.

And we barely scratched the surface. Local projects were down from last year, but they still could be found crammed into this year’s budget.

Jindal, meanwhile, makes use of the tax-supported state web page to post what comes dangerously close to being a political ad for his re-election.

Go to http://www.louisiana.gov and then move your cursor to “Government,” click first on “Executive Branch,” and then on “Governor,” and voila! Up pops a series of photos of Jindal shaking hands with truck drivers, construction workers, National Guardsmen, etc. The accompanying text to the side reads:

“More than 39,500 new direct and indirect jobs will be created from the economic development wins we have announced since taking office in 2008, along with more than $8.5 billion in capital investment in our state. These figures represent thousands of opportunities for generations of Louisianians—Louisianians who will not have to leave our state to secure a great education or find a rewarding career.”

Like plucking chickens in Farmerville, perhaps?

Not that we have anything against chicken pluckers but it seems the really good jobs were handed out by Jindal to folks from out of state—including his Deputy Commissioner of Administration (New Hampshire), his press secretary (New Jersey), the Secretary of Health and Hospitals (Washington State).

Well, you get the picture.

Of course, it’s going to be rather difficult to remain in the state when programs of study at colleges and universities have been cut to the bone, college tuition increased, teacher pay cut, and state agencies privatized, forcing state workers into a virtually non-existent job market.

Our friend Don Whittinghill observed recently that Jindal convinced local school boards that the 2.75 percent growth factor of the Minimum Foundation Program (MFP—the formula used to fund public education in Louisiana)—would not be funded for the third straight year; that the state passed to the local school boards the cost of transporting private and church school students; that the state-promised $5,000 stipend for teachers who achieve the rigorous National Board Certification would have to be absorbed by the already-shrunken MFP, and that local school boards’ state retirement system contributions would jump to 22 percent.

But, hey! We got our golf courses and Baton Rouge has its baseball park improvements, just no team to play on it.

And Jindal continues to commandeer the state helicopter to fly to north Louisiana churches to give testimonials that are really little more than thinly-disguised efforts to raise still more campaign funds.

In something like five months, Whittinghill tells us, Jindal spent more than $45,000 flying to exotic places like Downsville, Dry Prong, and Shongaloo to give witness to adoring Protestant congregations.

As recently as Friday, July 8, he boarded that helicopter and flew north to the First Baptist Church of West Monroe. There, he took the occasion of signing into law HB-636 by Rep. Frank Hoffmann (R-West Monroe).

If something as blatantly political as that single action doesn’t cost the First Baptist Church of West Monroe its IRS tax-exempt status, nothing should.

How the governor could do something so ill-advised as to put the church’s tax-exempt status in jeopardy or why the church officials would allow it is a mystery.

Moreover, it’s another of those mindless laws that is almost certain to be contested in the courts at considerable cost to the taxpayers of Louisiana and it’s just as certain that the state ultimately will lose the case.

What is this bill? It’s a measure that would require women to be informed of their specific legal rights and options before they undergo an abortion procedure.

Whatever your position on this emotional issue, a church is no place to be holding a ceremony signing it—or any other bill, for that matter—into law.

Abortion providers will be required to post signs around their clinics stating that “it is illegal to coerce a woman into getting an abortion, that the child’s father must provide child support, that certain agencies can assist them during and after the pregnancy, and that adoptive parents can pay some of the medical costs.”

The law also creates a Department of Health and Hospitals (DHH) website and a mobile platform to deliver information “about public and private pregnancy resources” for avoiding abortions.

The first question that comes to mind is how are fathers going to be forced into providing child support given the current deadbeat dad caseload backlog?

Second, just who is going to be around to enforce the child support laws after Jindal gets through gutting DHH as part of his far-reaching obsession with privatization of state agencies?

The most bizarre statement yet was uttered by Jindal while signing the bill into law when he compared women who receive abortions to criminals:

“Now if we’re giving criminals their basic rights and they have to be informed of those rights, it seems to me only common sense (that) we would have to do the same thing for women before they make the choice about whether to get an abortion,” he said.

Common sense?

Indeed.

That would seem to be the rarest of commodities with this governor.

Posted in Campaign Contributions, Economy, Education, Governor's Office, Higher Education, House, Senate, Legislature, Legislators, Transparency | 1 Comment »

Ethics ruling on local school board could affect Chas Roemer’s participation in BESE charter school actions

July 10, 2011 by tomaswell

A ruling written specifically for the St. Landry School Board by the Louisiana Board of Ethics could have far-reaching repercussions for Chas Roemer should the ruling be applied to the Board of Elementary and Secondary Education (BESE).

Board of Ethics staff member Tracy Barker directed the ruling to Josie Frank, hearing officer for the 27th Judicial District Court in Opelousas.

Frank, also a member of the St. Landry parish School Board, requested a ruling on whether or not it was permissible for her to participate in votes on approval or disapproval of charter school applications submitted to the school board on behalf of a nonprofit organization on which her son serves as a board member.

She said in her request that her son receives no monetary benefit for his service on the organization’s board.

Barker wrote that Frank was not prohibited of participation in votes on charter school matters since her son does not have a substantial economic interest. “Since your son does not appear to have a substantial economic interest in the nonprofit organization, your participation on its charter school application is not prohibited by Section 1112B(1) of the Code” of Governmental Ethics.

“However, the board concluded that Section 1113A of the code would prohibit your son from appearing before the St. Landry Parish School Board on behalf of the nonprofit organization while you serve as a member of the school board,” she said. “Section 1113A prohibits a public servant, a member of his immediate family or a legal entity in which either owns a controlling interest, from bidding on or entering into a contract, subcontract or transaction that is under the supervision or jurisdiction of the public servant’s agency.”

Roemer represents BESE from District 6, which includes all or parts of the parishes of East Baton Rouge, Ascension, Livingston, Tangipahoa, and Washington.

His sister, Caroline Roemer Shirley, is executive director of the Louisiana Association of Public Charter Schools and the ethics board previously ruled that she could not appear before BESE on behalf of charter school matters pending before the board. She also was prohibited from interacting with the staff and Department of Education on matters under BESE jurisdiction.

The State Ethics Board, however, has never addressed the legal ramifications of Chas Roemer’s participation in discussions and votes affecting charter schools under the jurisdiction of BESE.

Section 1112B(1) specifically addresses the participation of a public servant or elected official in a vote on any matter in which a member or his immediate family has a substantial economic interest. “Section 1120 of the code provides that an elected official shall recuse himself when the vote would be a violation of Section 1112 of the code.”

Louisiana’s Charter School Law was enacted as Act 192 of 1995 as a pilot program to allow up to eight school districts to participate on a voluntary basis. The law was expanded in 1997 by Act 477 to establish BESE and local school boards as charter authorizers.

Act 477 defined five types of charter schools: Type 1, a charter with local school boards (new start-up); Type 2, charter with BESE (new start-up or conversion; Type 3, charter with local school board (conversion), Type 4, school board charter with BESE (new start-up or conversion), and Type 5, charter with BESE (pre-existing public school under the jurisdiction of the Recovery School District (RSD).

In 2003, Act 9 of the legislature created a new type of charter for the operation of pre-existing schools that were transferred to the jurisdiction of RSD.

RSD was charged to take underperforming schools and transform them in to charter schools. Since Hurricane Katrina in 2005, the number of public schools in New Orleans has dropped from 123 to four while the number of charter schools has ballooned from seven to 31.

Charter schools operate as independent public schools under five-year contracts granted by BESE or a local school board.

A review of minutes of BESE meetings for 2010 revealed that Chas Roemer often made motions on agenda items dealing with charter schools and then voted on those motions.

In December of 2010 alone, he made motions to approve charter school contracts of $50,000 and under, made motions to approve Crescent City School, the NET Charter High School, the Collegiate Academy Charter School, the Sarah T. Reed Charter Middle School, the ReNEW K-8 Charter School, The ReNEW Alternative High School, and in one case, made the motion to deny an application to commence operation of Joseph A. Craig Charter School in New Orleans.

Posted in BESE, Charters, Education, Ethics, Transparency, Vouchers | 2 Comments »

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