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First, there’s no report; then, the report is not finalized; DOA just can’t seem to keep its Chaffe stories straight

April 18, 2011 by tomaswell

The Division of Administration (DOA) has for the third time denied the existence of a report from a New Orleans company. The third denial, however, was more ambiguous than the previous two, stopping just short of saying outright that it does not exist, instead saying the report “has not been finalized and sent to the Division of Administration.”

At the same time, the Louisiana District Judges Association (LDJA) has made good on its decision of two weeks ago to adopt a resolution in opposition to Gov. Bobby Jindal’s proposed privatization of the Louisiana Office of Group Benefits (OGB).

DOA also used somewhat confusing language in denying a request to provide the names of four representatives of Goldman Sachs who met with OGB and DOA officials last fall.

“The Public Records Law does not require the creation of new records to respond to a request,” General Counsel Lesia Batiste said in an April 18 letter emailed to CNS. “Therefore, the Division of Administration has no record which is responsive to this request.”

CNS, in its request, never sought records, only the names of the four Goldman Sachs representatives.

While DOA would not even acknowledge that such a meeting took place, Tommy Teague, who was fired as OGB’s CEO last Friday, said the meeting did indeed take place. “I was called downtown and wasn’t even told why they wanted to see me. When I walked into (Deputy Commissioner of Administration Mark) Brady’s office, there were four Goldman Sachs representatives from New York sitting there,” Teague said.

Chaffe and Associates of New Orleans was contracted to work up last minute figures on OGB for Jindal to plug into his proposed budget in time for its release on March 19. That contract was for $49,999.99—one penny less than the minimum amount requiring approval of the Office of Contractual Review.

In her letter to Capitol News Service, Batiste also said, “The Division has previously provided you the contract, billing documents, and all other supporting documents pursuant to your prior requests.”

In fact, DOA has provided CNS only a single copy of the Chaffe contract. No billing documents or “other supporting documents” were ever provided.

The resolution opposing OGB’s sale was accompanied by a cover letter to Rep. James R. “Jim” Fannin (D-Jonesboro), chairman of the House Appropriations Committee and chairman of the Joint Legislative Committee on the Budget (JLCB) and to Sen. Michael J. “Mike” Michot (R-Lafayette), chairman of the Senate Finance Committee and vice-chairman of the JLCB with copies also sent to Gov. Jindal and Louisiana Supreme Court Chief Justice Catherine “Kitty” Kimball.

The letter, signed by LDJA President Judge Sharon Marchman of the Second Judicial District (Ouachita and Morehouse), said that the association’s membership learned of Jindal’s wishes to auction OGB at the LDJA annual spring judges conference in Lafayette on April 7.

“Because of the lack of details available, as well as the importance of keeping employee and employer health insurance costs as stable as possible, the members of the LDJA voted unanimously to oppose any effort to privatize OGB,” the letter said.

State district judges, like all state employees, are eligible for health insurance benefits through OGB.

“While district judges understand the fiscal challenges currently facing state government, the LDJA is also concerned with any plan to change health insurance plans for our members, their dependents, and all state employees,” Judge Marchman said in her letter.

“OGB has kept rates relatively stable over the years while keep(ing) overall administrative rates low. At a minimum, the LDJA is requesting more time to examine the administration’s proposal as well as a full vetting of such enormous changes through the legislative process, including consideration of a legislative instrument.

“Only through a transparent and open process and careful consideration of the proposal’s effect on all employees will the members of LDJA reconsider its position of full opposition to the proposal,” Judge Marchman said.

Jindal has repeatedly touted his administration as “transparent and open.”

The resolution also said that the proposed sale may eliminate as many as 150 jobs at OGB and “there have been no assurances that the sale would not unduly increase health insurance rates or reduce benefits for thousands of state employees and their dependents.”

Below is the full resolution passed by the LDJA:

RESOLUTION

OF

THE LOUISIANA DISTRICT JUDGES ASSOCIATION

WHEREAS, like all state employees, district judges in Louisiana are eligible for health insurance benefits through the Office of Group Benefits, Division of Administration;

WHEREAS, in a presentation of the Executive Budget on March 11, 2011 to members of the Legislature, Commissioner of Administration Paul Rainwater stated the Governor’s preference to sell the PPO and HMO plans currently administered by the Office of Group Benefits to a private health insurer who would then be directly responsible for administering the plans for the benefit of state employees;

WHEREAS, the proposal may eliminate as many as one hundred and fifty Louisiana-based employees of the Office of Group Benefits;

WHEREAS, there have been no assurances to district judges or others that the proposal would not unduly increase health insurance rates or reduce benefits for thousands of state employees and their dependents;

WHEREAS, the Office of Group Benefits has kept administrative costs low and provided professional and courtesy service to state employees;

WHEREAS, in past years, efforts to reform health insurance benefits for state employees were only followed after careful studies and consideration of all the effects;

NOW, THEREFORE, BE IT RESOLVED that the members of the Louisiana District Judges Association express their opposition to the Governor’s proposal to privatize the Office of Group Benefits and that, at a minimum, the Governor and the Legislature should carefully study privatization proposals before taking action.

BE IT FURTHER RESOLVED that this Resolution be inscribed in the minutes of this Association and that a copy of this Resolution be sent to Chairs of the House Appropriations Committee and Senate Finance Committee and Governor Jindal.

s/ Sharon Marchman
Judge Sharon Marchman, President

Posted in Governor's Office, OGB, Office of Group Benefits, Transparency | 3 Comments »

Conflict? What conflict? The charter school blitzkrieg

April 17, 2011 by tomaswell

Chas Roemer could be in violation of state ethics laws governing conflicts of interest every time he votes on any matter coming before the Board of Elementary and Secondary Education (BESE) pertaining to any of the state’s charter schools.

Roemer, the son of former Gov. Buddy Roemer, represents BESE District 8 which includes all or parts of the parishes of Avoyelles, Evangeline, Lafayette, St. Landry, Pointe Coupee, East and West Feliciana, East and West Baton Rouge, Iberville, Ascension, St. James, and St. John the Baptist parishes.

He is the former co-chair of the School Innovation & Turnaround Committee which addresses charter school performance and oversight and which also manages the Recovery School District (RSD) in New Orleans.

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 board as charter authorizers. Act 477 defined four 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 RSD).

In 2003, ACT 9 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 into 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.

Caroline Roemer Shirley, Chas Roemer’s sister is executive director of the Louisiana Association of Public Charter Schools and therein lies the potential for a conflict of interest and possible ethics violations.

Almost a year ago, on April 21, 2010, the Louisiana Board of Ethics issued an opinion at the request of attorney Richard Easterling of the law firm Adams and Reese of Baton Rouge that said Shirley was prohibited from appearing before BESE and from representing the associations in matters before BESE.

A partial text of the opinion reads as follows:

The Louisiana Board of Ethics, at its April 16, 2010 meeting, considered your request concerning Caroline Roemer Shirley’s employment with the Louisiana Charter School Association while her brother Charles Roemer, IV serves as an elected member of the Louisiana Board of Elementary and Secondary Education (BESE). Caroline Roemer Shirley is the Executive Director of the Association.

In 2000, the board concluded that Section 1113A of the code would prohibit Ms. Shirley from discussing with individual members of BESE matters or positions of the Association and that the Code would prohibit Ms. Shirley from interacting with the staff of the Department of Education on matters that are under the jurisdiction of BESE.

With respect to the following specific questions raised, the Board concluded and instructed me to inform you of the following:

• If the Association and the Louisiana State Director of Charter Schools partner to host a meeting pertaining to the future of the Recovery School District, may the director and Ms. Shirley speak to one another to discuss the date, time, location, invitees, agenda, etc. for this event? May Ms. Shirley speak at such a meeting?

The Code prohibits Ms. Shirley from 1) appearing before BESE; 2) representing the Association in matters before BESE; 3) discussing with individual members of BESE matters or positions of the Association, and; 4) from interacting with the staff of the Department of Education on matters that are under the jurisdiction of BESE. However, Ms. Shirley is not prohibited from discussing with individual members of BESE or the staff of the Department of Education issues that do not involve matters or positions of the Association on matters that are under the jurisdiction of BESE such as those items involving the incidentals of a planned event.

• When legislation is pending that will have an impact on charter schools, may Ms. Shirley bring charter school leaders together for discussions with BESE and/or the Louisiana Department of Education (LDE) on these matters?

Ms. Shirley is not prohibited from contacting charter school leaders for discussions with BESE and/or LDE on pending legislation. However, she is prohibited from discussing with individual members of BESE matters or positions of the Association involving the proposed legislation and from interacting with the staff of the Department of Education on issues involving legislation on matters that are under the jurisdiction of BESE.

• May Ms. Shirley be a member of and participate in a Charter Advisory Board created to work with and provide the Superintendent of Education, the Louisiana Recovery School District Superintendent and/or the Louisiana State Director of Charter Schools information on matters involving charter schools? This Advisory Board would be a volunteer group of charter leaders representing all five types of charter schools that would meet every other month.

Ms. Shirley is not prohibited from being a member of a Charter Advisory Board created to work with and provide the Superintendent of Education, the RSD Superintendent and/or the Louisiana State Director of Charter Schools information on matters involving charter schools. However, she is prohibited from discussing with individual members of BESE matters or positions of the Association involving those matters and from interacting with the staff of the Department of Education on issues involving matters that are under the jurisdiction of BESE.

• As Executive Director, may Ms. Shirley organize and participate in charter school meetings, bringing together the principals and board members of the charter schools to hear from the Superintendent of Education, the Louisiana Recovery School District Superintendent and the Louisiana State Director of Charter Schools? Such meetings would serve as a means for the charter schools to be both better informed about policies and regulations, as well as having the opportunity to discuss other related issues.

Ms. Shirley is not prohibited from organizing and participating in charter school meetings as long as she does not discuss with individual members of BESE matters or positions of the Association and does not interact with the staff of the Department of Education on matters that are under the jurisdiction of BESE.

• If Ms. Shirley is invited by the LDE, BESE or the RSD to attend workshops, meetings, discussions, etc. that pertain to charter schools, may she attend and participate in these meetings, such as a meeting with the RSD hosted for principals and board members of the charter schools and the staff from BESE to discuss Bulletins that outline policies regulating charter schools.

Ms. Shirley is not prohibited from attending workshops, meetings, discussions, etc. that pertain to charter schools. However, she is prohibited from participating in the discussion and her participation in those events are restricted by the Board’s conclusions in BD 2008-122 prohibiting her from 1) appearing before BESE 2) representing the Association in matters before BESE 3) discussing with individual members of BESE matters or positions of the Association, and 4) from interacting with the staff of the Department of Education on matters that are under the jurisdiction of BESE.

• As one of the leading advocates for charter schools in the state, Ms. Shirley is often called by the Superintendent of Education, the Louisiana Recovery School District Superintendent, BESE members, BESE staff, and LDE staff to provide information about charter schools, contact information for national charter leaders, best practices of other states, etc. May she respond to these requests?

Ms. Shirley is prohibited from discussing with individual members of BESE matters or positions of the Association and from interacting with the staff of the Department of Education on matters that are under the jurisdiction of BESE. It is the conclusion of the Board that Ms. Shirley is prohibited from handling these type of requests for information.

While that opinion addressed only Caroline Shirley’s interaction with BESE members, there have been numerous opinions by the Ethics Board that cite Section 1112B(1) which specifically addresses the participation of a public service or elected official in a vote on any matter “in which a member of 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 112 of the code.

A review of minutes of BESE meetings over the past year reveal that Chas Roemer consistently made motions on agenda items dealing with charter schools and then voted on each one.

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, Politics, Transparency, Vouchers | 6 Comments »

No dissent allowed: DOA trying to block access to our posts

April 16, 2011 by tomaswell

The Division of Administration (DOA), apparently unhappy with frequent posts here that have exposed some of the questionable tactics of the Jindal administration, have attempted to block state computer access to LouisianaVoice.

Never mind eBay.com, amazon.com, Drudge Report, solitaire games, news sites, and all those other internet pages that employees access on a regular basis. Just don’t dare read anything on louisianavoice.com because it doesn’t parrot the Jindal administration party line.

Only one problem with the blocking strategy: it won’t stop those who want to find out what’s really going on in state government.

Louisianavoice.com, after all, is the place to go to read about state government waste of hundreds of millions of dollars—while the administration poor-mouths about deficits and revenue shortfalls.

It’s the place to go to read about just about anything the administration would rather you didn’t know.

But wait. As long as you have a free subscription to louisianavoice.com, they can block access to the blog all they want but it won’t block your access to our posts.

Whenever a new story is posted, subscribers automatically receive an email that contains the complete text of the post.

So all you have to do is access your home email account to access our posts.

Gee, that’s almost too easy.

They wouldn’t block access to your home email accounts, would they?

Don’t bet on it.

These guys just don’t tolerate dissent.

Posted in Governor's Office, Teague, Transparency | 5 Comments »

Better than Trump: disagree with Jindal? You’re fired!

April 15, 2011 by tomaswell

Chalk up another victim to the Petulance of Piyush. This time it’s Office of Group Benefits (OGB) CEO Tommy Teague, the man who refused to throw his employees under the bus to satisfy the governor’s gargantuan ego.

Teague, asked to resign or be fired late Friday by Deputy Commissioner of Administration Mark Brady, refused to step down voluntarily and was terminated. Teague told the Baton Rouge Advocate that Brady gave no reason for his action. The locks to Teague’s office door were changed and his computer seized after he left OGB Friday.

He was six months away from qualifying for retirement.

The latest development is clear evidence of the high stakes in this game. There is an OGB surplus of $500 million on the table and Jindal wants it to help plug a hole in his budget.

What will he do next year, install parking meters in all the state employee parking garages?

Only 18 months ago, Teague’s wife, Melody Teague, a Department of Social Services contract grants reviewer, was canned one day after she had the temerity to publicly criticize the Piyush Push (yeah, we like that phrase) to privatize everything that moves in state government.

Her remarks were made during an Oct. 1, 2009, state Commission for Streamlining Government forum in Jefferson Parish.

Tommy Teague was shown the door after word leaked out that Brady apparently brought in the international investment banking firm of Goldman Sachs last fall to help plan the privatization of OGB and that Brady had ties to Goldman Sachs from a previous position as executive director of the Arab Banking Association of North America.

OGB, or perhaps more accurately, the Division of Administration, enlisted the aid of Goldman Sachs to write specifications for a request for proposals (RFP) for a firm to conduct financial assessment of OGB and to market the agency to a private buyer that would keep as much as $350 million of OGB’s $500 million surplus as part of the purchase of assets that would also include premiums to be paid by state employees for health coverage.

When proposals were opened a few weeks ago, voila! Goldman Sachs was the only bidder. In most circles, public and private, that would be considered a glaring conflict of interests. A Senate report released Thursday roundly criticized Goldman Sachs for helping to bring about the financial crisis of 2008. Now the firm stands to net $6 million for doing a financial assessment of OGB and for trying to find a buyer. The $6 million will be paid whether or not Goldman Sachs is successful in its efforts.

Firing people seems to be Jindal’s favorite way of dealing with a problem. Some others leave to cash in on their connections established and some others leave voluntarily, out of disgust.

Like Richard Sherburne, who resigned as State Ethics Administrator after Jindal gutted the Ethics Board’s adjudicatory authority and gave it to administrative law judges. That couldn’t have been because Jindal had been fined by the State Ethics Board for campaign violations.

Then, there was Jim Champagne, executive director of the Louisiana Highway Safety commission for 12 years, whose passion was driver safety. Champagne made the fatal mistake of disagreeing with Jindal’s decision to repeal the state’s motorcycle helmet law and poof! He was gone.

Jindal tried to get Tammie McDaniel to resign her seat on the Board of Elementary and Secondary Education because she refused to go along with some of his education reform programs. She refused at first but finally stepped down.

Ann Williamson “resigned” her position at the Department of Social Services after complications were experienced with assistance programs following Hurricane Gustav.

William Ankner was Secretary of the Department of Transportation and Developments but after a $60 million highway construction contract was awarded to the high bidder, he was shown the door.

Most recently, Roland Toups of Baton Rouge, the longest-serving member of the Louisiana Board of Regents, resigned under not-so-subtle pressure from Jindal so that he could appoint vascular surgeon Dr. Albert Sam, II, an African-American to the board.

Toups showed a lot of class in stepping down, saying he felt a “responsibility.” Jindal denied the move had anything to do with a lawsuit filed by students at Southern University over the all-white makeup of the Regents. Yeah, right.

Ironically enough, in Sam’s first vote as a member of the board, he voted against Jindal’s proposal to merge the University of New Orleans and Southern University-New Orleans. So much for strategy.

So now, apparently it was Tommy Teague’s turn.

Terague’s wife, by the way, was reinstated after she filed legal action against the state. Tommy Teague might not be so lucky. He was an unclassified employee who served at the pleasure of the Division of Administration.

State Sen. Butch Gautreaux (D-Morgan City), a member of the OGB board of directors, is an outspoken opponent of the sale of the agency, even going so far as to write a letter to his fellow legislators to ask their support in opposing the sale. “Help me let everyone know that we are not afraid and we are not for sale,” he wrote.

He attributed Jindal’s rise to power to what he called “predatory politics.” He said Jindal’s mindset appears to be “Let’s take out the weakest in the herd, employees who are afraid of losing their jobs. The general public loves it.”

Indeed, Jindal has consistently shown that he holds state employees in utter disdain by selling off their jobs, raising the employee contributions to retirement and health benefit programs while denying civil service workers merit raises for the second year in a row.

Not satisfied with that, he displayed the height of arrogance and contempt on Thursday by issuing a “State Employee Appreciation Day” proclamation.

Employees could almost see the smirk on this face as he signed it.

Posted in Governor's Office, OGB, Office of Group Benefits, Teague, Transparency | 28 Comments »

Was that Goldman Sachs behind the grassy knoll?

April 13, 2011 by tomaswell

The involvement of Goldman Sachs in the proposed privatization of the Louisiana Office of Group Benefits (OGB) is such that even conspiracy theory skeptics might want to take a second look.

Details that are slowly becoming known only serve to raise more questions than they answer and at the same time, feed the anxieties of those who distrust government at all levels.

Capitol News Service has learned that Goldman Sachs has been active in the planned privatization of OGB for much longer than was first thought—as far back as last October or November.

Reports first surfaced a few weeks ago that the Wall Street banking firm, a major player in international financial circles, helped write the specifications for a request for proposals (RFP) from reputable financial institutions to conduct a financial assessment of OGB and to help find a buyer for the agency that currently carries a surplus of more than $500 million.

When it came time to open the proposals for the project, Goldman Sachs was the only bidder and stood to rake in a $6 million fee for its services, whether it was successful in finding a buyer or not.

Now it has been learned that Deputy Commissioner of Administration Mark Brady floated the idea of selling OGB to OGB CEO Tommy Teague in a meeting between Brady, Teague, and four representatives of Goldman Sachs last fall. Brady was reported to have asked Teague if he was on board with the proposal. If not, he was told, Brady “would find someone” who was. Teague is an unclassified employee appointed by the Commissioner of Administration and Brady is his supervisor.

Neither Teague nor Brady returned telephone calls from CNS. To date, neither man has commented on Goldman Sachs’s involvement.

As a result of that meeting, the fiscal staff at OGB was directed to compile financial data with the main thrust being a breakdown of the financial statements of the agency into separate components from OGB preferred provider organization (PPO), exclusive provider organization ( EPO), and health maintenance organization ( HMO), represented by United Health Care, Vantage Health Plan, and Blue Cross/Blue Shield.

Speculation among key OGB employees is that the data was turned over to Goldman or Chaffe and Associates of New Orleans.

Chaffe was given an under-the-radar $49,999.99 contract to crunch some OGB numbers for Jindal in time for him to include the OGB proposal in his proposed budget for the coming year. The budget proposal was presented on March 11, but no mention was made of OGB, leading to speculation that Chaffe’s draft report did not reflect numbers favorable to implementation of Jindal’s plan to sell OGB. The amount of Chaff’s contract was exactly one cent below the amount that would have required approval of the Office of Contractual Review.

When sent requests for copies of the report under the state’s public records act, Commissioner of Administration Paul Rainwater twice denied that any such report exists. But those knowledgeable about events at OGB said there was a report and that Teague was given express orders not to release it to state auditors who also have requested a copy.

Under terms of Gov. Bobby Jindal’s proposal to sell OGB, the buyer would receive between $300 million and $350 million of OGB’s $500 million surplus with the remainder being used to help plug a gaping $1.6 billion deficit for the upcoming fiscal year.

The main hurdle to the implementation of that plan is a state law, R.S. 42:854.5(A), which says, in part, “Any money received by or under the control of the Office of Group Benefits shall not be used, loaned, or borrowed by the state for cash flow purposes” (emphasis added).

The involvement of Brady in the discussions is particularly interesting. Brady was brought into the Division of Administration (DOA) about two years ago. Prior to moving to Baton Rouge from New Hampshire, Brady served as Executive Director of the Arab Bankers Association of North America (ABANA).

Though no direct link between Brady and Goldman Sachs was immediately evident, representatives of Goldman Sachs were featured speakers at ABANA functions and Goldman Sachs was listed as an “institutional member” in ABANA’S 2005 annual report.

One of the speakers was David M. Leuschen, who was a partner and managing director at Goldman Sachs and who was instrumental in advising Mobil Oil on its $81 billion merger with Exxon before moving on to found the Carlyle Group, an international investment firm, and Riverstone Holdings. Both companies are also listed as institutional members in the ABANA annual report.

It was through Carlyle that Leuschen became actively involved in technology investments in the Middle East.

Carlyle and Riverstone partnered in using political connections to solicit the business of public retirement funds from all over the country. Moreover, Leuschen, who owns Switchback Ranch, a 200,000-acre spread in Montana, serves on the board of the Buffalo Bill Museum in nearby Cody, Wyoming. Other members of the board include former Vice President Dick Cheney, former Montana Sen. Alan Simpson, and Ray Hunt of the Texas Hunt Oil family.

State funds that invested in Carlyle included $40 million from the New Mexico State Investment Council, $100 million from the Connecticut State Pension Fund, and $100 million from the Texas teachers’ pension fund (whose board was appointed by then-Gov. George W. Bush), and hundreds of millions more from the California Public Employees’ Retirement System, the Retirement System of the State of Illinois, the Delaware Public Employees Retirement System, the San Francisco Employees’ Retirement System, and Ohio State University. Carlyle and Riverstone also retained a third firm tied to them and that firm, Searle & Co., received $530 million in investment commitments from the New York State Pension Fund.

The latter transaction resulted in an extensive investigation of both Carlyle and Riverstone by New York Attorney General Andrew Cuomo. His prosecution resulted in Leuschen and his two firms having to repay the New York fund $50 million—$30 million by Riverstone and $20 million by Carlyle.

Additionally, the Nevada Public Employees Retirement system only last month fired Goldman Sachs and Quantitative Management Associates as its portfolio managers.

Goldman Sachs managed $600 million and Quantitative Management handled $500 million of the system’s total holdings of $2.5 billion.

Among those who have worked in the employ of the Carlyle Group are former President George H.W. Bush, former Secretary of State James Baker, former British Prime Minister John Major, a member of the Bid Laden family of Saudi Arabia, former BP chief executive John Browne, and former Louisiana Senator John Breaux, now a Washington, D.C. lobbyist.

Lest OGB employees consider themselves unique, the move to privatize government agencies is by no means limited to Louisiana. Texas billionaire Thomas Hicks, who contributed $25,000 to George W. Bush’s gubernatorial campaign, was appointed to the University of Texas Board of Regents following Bush’s election.

Hicks then pushed for the privatization of the university’s assets and eventually created the University of Texas Investment Management Co., so that its dealings would be concealed from public scrutiny. Only a massive public outcry forced the management company to reopen its holdings.

Typically, a high-ranking government official directs a substantial amount of government business to the Carlyle group with the taxpayer often being the source of the money. Then, upon leaving public service, the high-ranking official joins the Carlyle group and cashes in.

With Goldman Sachs searching for a buyer, the question was whether the buyer might ultimately be Carlyle and would any “high-ranking” Louisiana officials subsequently leave state government to join Carlyle?

There are reports that at least two groups are considering class action lawsuits to halt the proposed sale of OGB.

Reports also surfaced last week that Goldman Sachs was having second thoughts about the $6 million contract to find a buyer. Representatives of the banking firm, in a conference call on April 11, demanded that the state indemnify the firm from any legal liability stemming from lawsuits. When Division of Administration (DOA) officials balked at that demand, the Goldman Sachs representatives said they would have to talk to their legal department and get back with state officials. They had not called back by the end of last week.

Posted in Governor's Office, Health Care, OGB, Office of Group Benefits, Teague, Transparency | 6 Comments »

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