Dispatch from the doom: Every single thing is on fire

Where to even begin today?

Let's try here.

With the coronavirus crisis having already affected large swaths of American culture and the economy, there's no real reason to think that the world's largest retailer will be spared. Amazon is facing pressure from three different sides: Increased demand from consumers, the very real potential of coronavirus spreading through a warehouse, and supply chain interruptions.

Ports that receive goods from overseas have seen major slowdowns as the Chinese stall manufacturing. While Trump’s European travel ban does not currently include trade, imports from Europe could come to a halt if things change as they already are overnight. Already, Amazon is seeing shortages of basic supplies like toilet paper, hand sanitizer, and disinfectant wipes.

Every single thing in the world is on fire now and it's only beginning to sink in.  The American luxury consumer life runs on extracting maximum value out of poor people on a global scale while ignoring the misery imposed by that system.  The pandemic interrupts all of this.  It has a power that workers have long been deprived of. The power to shut it all down.  Perhaps you are tempted to think this is an "opportunity" to build a better world. It isn't. The virus, having no agenda beyond self replication, hasn't stopped the world to make demands. Like all preceding disasters of the 21st Century, this one only promises to bring new hardships.

Right now the entire economy is seized up.  This seizure is different even from the 2008 financial meltdown where a speculative market based on creating fake value out of whole cloth could be propped back up by inserting trillions of newly printed fake dollars.  But to be clear what "propped back up" means, the fake dollars went right to the bankers who caused the problem in the first place and allowed scores of criminals to cash themselves out of their schemes while leaving ordinary Americans ruined for decades. So hurray for that.  The crisis we're looking at now is and will be... worse. The response to this needs to be immediate. It needs to be massive. And it needs to be directed to people and not to banks or corporations. Unsurprisingly it is taking American politics a very long time to figure this out.

A relief package in the House supposedly aimed at providing American workers with sick leave will, in fact, cover only about 20% of them. Tuesday morning we read that Nancy Pelosi, after scolding reporters about the importance of means testing things, has negotiated with the Trump Administration to further scale back the scope of bill. Kamala Harris is tweeting out a previous plan of hers to give *some* people virtually nothing.  The presumptive Democratic nominee for President said during a debate on Sunday that free health care is still a bad idea because countries that have it also have the virus. Democrats are so corrupted by their corporate donors and confounded by their own resigned ideology of better-things-aren't-possible have none of the tools necessary to deal with the problem realistically.  They can't even make hollow promises that capture anyone's attention anymore.

This makes them quite different from the huckster Donald Trump, unfortunately, who is all too happy to step in with Great Big Checks For Everybody.

WASHINGTON — President Trump called on Congress on Tuesday to quickly approve a sweeping economic stimulus package that would include sending checks directly to Americans within weeks, as large sections of the economy shut down in the face of the coronavirus pandemic.

“We want to go big,” Mr. Trump said at a news conference at the White House, adding that he had instructed Steven Mnuchin, the Treasury secretary, to introduce measures that would provide more immediate economic support over the payroll tax cut holiday that he had been promoting.

Thank goodness they've talked him out of the payroll tax thing... for now.  It's a terrible idea that a) won't help anybody who is not receiving a paycheck and b) is a direct stab at Social Security, Medicare and what remains of the federal social safety net that most of us are going to have to rely on now more than ever.  Ultimately we know the Republicans will come back for all of that. But right now they are outflanking the Democrats to the left which is something that should never happen in the midst of a worldwide crisis when there is also a national election pending.

Sure, we all know that Republicans are going to insist on ridiculous corporate bailouts for the airlines, for the oil industry, and for anyone who puts money in their, or especially Trump's, pocket. On Friday, Trump presided over a nightmare scene at the Rose Garden where he presented the CEOs of Walmart, CVS, Target as well as medical industrialists including, of all people, disgraced former Louisiana head of Health and Human Services Bruce Greenstein to talk about the "public-private partnerships" by which they all expect to get rich off of the pandemic disaster. Senate leader and greatest villain of the 21st Century, Mitch McConnell is saying it will take "significant and bold new steps" to pass the next relief bill. That doesn't necessarily bode well either.

In the meantime, there is an election to win. So Trump is going to send everyone a much needed relief check (it won't be enough but it will be welcome) and cruise to a win over the guy who has spent his whole career trying to cut your Social Security. The punchline is, afterward, Trump will then come back and cut your Social Security.  Because the "liberal" party is so helplessly moribund, the only direction for the country to go now is further into a populist fascism. Offer people some bread up front, turn the whole state over to the oligarchs next.

It didn't have to be like this. If only Democrats could have backed a campaign proposing a major overhaul of the entire US economy based on eliminating stifling debts, expanding social services like health care and mobilizing all resources to fight climate change. If only they didn't mobilize their entire corrupt party infrastructure to stop that from being their platform.  Unfortunately some people were mean to some well to do liberals on Twitter and so now this is what we get. Seems fair.

Hey speaking of oligarchs, meanwhile in New Orleans....

Mayor LaToya Cantrell's director of economic development, Jeff Schwartz, led a Monday morning conference call with about 40 leaders from business and economic development organizations, including the Business Council of New Orleans, New Orleans Business Alliance, GNO Inc., economic agencies from parishes in the metropolitan area, as well as the black, Hispanic and other chambers of commerce.

The problem in New Orleans, much like the problem in Washington, is the people who will have the ear of government leadership throughout and after the crisis are the ownership class. This is why, for example, the rules for keeping bars and restaurants open the mayor issued Sunday were written by the Louisiana Restaurant Association's lobbyists. Those rules were quickly obsoleted by the Governor's subsequent shutdown order. But it's clear where the local policy is being drawn up.

In the same way Trump's policy is directed by cronies like those assembled in the Rose Garden last week, Cantrell's is dictated by the "business and economic development organizations" like those listed above as well as the tourism promotion entity known as New Orleans and Company which, along with the Convention Center, pulls down something like $20 million dollars a year in public funds.

The tourism cabal has more than $200 million in surplus sitting around in a slush fund recently legitimized by Cantrell's #FairShare deal. Given the current state of the tourism market, they will be needing exactly zero of those dollars for any of their pet projects. It should all be spent on emergency relief for displaced hospitality workers.  Of course that isn't what's happening. Instead the interchangeable plutocrats who populate all of these organizations have set up "philanthropic" funds like this one run by the New Orleans Business Alliance. Its conditions are absurdly restrictive and its expected benefits are miserly. But all the right people get to manage it and cover themselves in glory in the process. They've thrown in $100,000 so far so congrats on that.

But it's not only a corrupt deference to ruling class influence that parallels Cantrell's emergency response with Trump's. She's also continues to emulate his authoritarian sneer in her rhetoric.  On Sunday, she took time out from her aggressive lecturing of everybody about the "social distancing" directives to also yell at the news media for... asking her questions in order to confirm information?

Cantrell is now talking about journalism. "Quality journalism matters," Cantrell said. She's upset about journalists calling the office trying to get confirmation about what sources have said.

— Della Hasselle (@dellahasselle) March 15, 2020

The context of that was never explained. It was bizarre to say the least.  The next day, she bristled at a reporter's perfectly reasonable question about whether or not NOPD should be throwing people in jail for non-violent offenses given the health hazards of crowding into confined spaces. The public defender's office has already asked them to cease such arrests in a letter this week. If you watch the presser you can hear the contempt in Cantrell's immediate response, "Uh no."  She then invited Police Chief Ferguson to give everyone a brief lecture about "law and order."

Today it was announced that future press conferences won't have any press at all. Instead the mayor will retreat to a bunker and send out a recorded message.

... Moving forward, future City Hall news conferences will be videoed with a single pool camera. Copies will be distributed to all media.

— Tegan Wendland (@TeganWendland) March 17, 2020

But that will be the case after one last hurrah today where Cantrell appeared, flanked by CAO Gilbert Montano and representatives of the NO & Co brain trust to announce that the tourism related businesses were getting a tax holiday.

Despite worries about the city’s bottom line, Cantrell announced on Tuesday that the city would waive all penalties for late sales tax payments from businesses for the next 60 days. That measure is intended to make sure businesses have the money on hand to keep paying their employees while state and city closures are in place during the height of the outbreak.

Cantrell, again in her now standard aggressively condescending tone, emphasized that these tax breaks, which, realistically, can only be expected to keep some businesses afloat for a few weeks at best, were being granted in the full knowledge that they will drastically alter the way the city operates for months and years into the future.

Decisions on how to cut government expenses could be made in the coming days, Cantrell said. That could include everything from cutting contracts or other expenses to furloughs or layoffs for city workers, she said.

“We’re looking at how this will impact the city and our operations, we’re looking beyond not just the next six months but the next 12 months,” Cantrell said. “The impact to our bottom line will be significant and will be felt even a year from now.”

This is a deliberate structural change intended to affect the way the city operates in the years after the virus crisis has passed. By that time, the current crop of hospitality workers Cantrell falsely claims to care about will have been long fired and displaced.  But the ownership class will remain largely intact. And at that point they will be expected to support even fewer of the paltry services the city can offer residents on its current shoestring budget.  It's a classic austerity strategy written up by the very owners who will benefit from it.  "Shock Doctrine" seems like such a cliche at this point but, once again, here we are. No crisis ever goes to waste.

When asked by a reporter why, given the entire history of everything, why anyone should expect to trust that just handing over more money and power to the already rich and powerful with no accountability will work out well for everybody this one time, Cantrell was again characteristically curt. 

Asked about concerns that businesses would simply pocket the money, not turning it over to their workers or to the government, Cantrell said she choose to look at the situation from an optimistic perspective.

“I’m not being negative at all and thinking that our businesses or employers will not do the right thing,” Cantrell said. “This is all with the expectation that they’ll do the right thing.”

In Cantrell's impossibly small conception of politics, if there is ever economic or class based conflict at all, it is forever subsumed by the greater imperative of personal deference. The worst offense is "being negative" enough to ask that authority be held to account.

The corona crisis is already a staggering calamity. But it's the authoritarian quality of our local and national governments that makes it uniquely dangerous. Every shock of the past twenty years has left the changed world a few degrees harsher in its wake. But this is the one that really feels as though it threatens to break us. It's already broken so much. 

No one can produce anything. No one can consume anything. The world economy is shuttered. The grifters are picking apart its bones. We are all holed up in isolation. The oceans are rising. The city of New Orleans is physically sinking into the sea. The system has glitched out. And our concluding communication, the clanging yawp of our death reflex is a stream of recommended local eateries spammed out from the social media of our office holders.

It's comforting to know that when a global crisis pushes civilization to the very brink local government converts to spam advertising mode pic.twitter.com/F8yJrvD6iT

— skooks (@skooks) March 18, 2020

 

We can't sustain ourselves like this. Nobody has any money. Nobody has any answers. Stop asking the mayor for any. She will only yell at you.

Something something something #DrainTheSwamp

Comically corrupt businessman's administration hires comically corrupt businessman.  (Again.)

Bruce Greenstein, the former Louisiana health official who fought charges that he perjured himself during a state contract investigation, has landed a job in President Donald Trump's administration. He's been appointed chief technology officer at the Department of Health and Human Services, Politico reports.

It's possible that "saving money" was beside the point

We've pretty much decided that privatization is better because.... well, just because.

Medicaid privatization is a hallmark of Jindal’s administration , which pushed the move as a way to both save taxpayer money and improve health by better managing care. Medicaid is a joint state and federal program that provides health care to the poor.

The audit looked at cost savings since February 2012, when the state launched Bayou Health. The privatized Bayou Health insurance program serves two-thirds, or about 900,000, of Louisiana’s Medicaid recipients — mainly children and pregnant women.

Department of Health and Hospitals Undersecretary Jeff Reynolds said the agency is generally pleased with the auditor’s report.

“They say, in auditor speak, there may be savings there,” Reynolds said. “At the end of the day, they can’t quite be sure what that is.”

Who knows what the point of all this was.  Must have been something. 

What did Bobby Jindal know and when did he know it?

Grace:

Sure, Jindal fired Greenstein and canceled the contract when a federal subpoena arrived last year, but in this case, he’s not going to be able to brush past questions so easily.

Not only did Greenstein’s alleged misdeeds happen on Jindal’s watch and his old turf. They also call into question the administration’s commitment to, and mastery of, another professed priority: ethics.

Back when Jindal won his first term in 2007, that’s about all he talked about. He promised to create a “gold standard” and used his post-election honeymoon to muscle through a legislative package that increased disclosure, tightened lobbying rules and revamped enforcement.

The changes weren’t an end in themselves, supposedly. The ultimate aim, Jindal always said, was to send a message to companies looking to do business in Louisiana that they’d get a fair shake. That’s a particularly important goal for an administration so bent on privatization.

But long before the subpoena happened, the State Attorney General's Office and many state legislators already had reason to suspect that Greenstein wasn't quite up to that "gold standard" for ethics.  What took the Governor so long?

Also, occasionally I like to remind folks of how gullible the media can be.

What did Bobby Jindal know and when did he know it?

Gill:

What does he know, and is he gonna squeal on anyone?

Those questions will be all the more pointed when an indictment is handed up against a public official. In the case of Bruce Greenstein, who allegedly perjured himself nine times during and after a relatively brief stint as Gov. Bobby Jindal’s Health Department secretary, we have the prosecution’s word for it that there is more to come.

“We are continuing our investigation into other aspects of the case,” Attorney General Buddy Caldwell’s son and assistant, David, said last week. “These lies are part of the cover-up of the whole process.”

Interesting that he uses the phrase, "cover-up."  That's the sort of thing that makes bosses and bosses of bosses nervous in these situations.

Speaking of the boss,

Jindal finished fifth in the Value Voters Summit presidential straw poll, garnering around seven percent of the vote. Texas Sen. Ted Cruz finished first (25 percent), followed by neurosurgeon Ben Carson (13 percent), former Arkansas Gov. Mike Huckabee (12 percent) and former Pennsylvania Sen. Rick Santorum (10 percent).

Bobby Jindal: Health care expert

Remember back when Bobby Jindal was a young up-and-comer in the Mike Foster administration?  Former Governor Duck Hunter* appointed Jindal to be Secretary of Health and Hospitals at the precocious age of 24.  The young whiz kid didn't make too many waves during his tenure there.  But he did a pretty good job of figuring out where all the money was.  This would be useful later when, as Governor, he helped people steal much of it.

We've already talked about this a few times this week.  First there's the slow-motion obviousness of the Bruce Greenstein directed grift of Medicaid privatization.  Later in the week we saw that Jindal's hospital privatization scheme was causing rape victims in New Orleans to be billed for their examinations.

Finally, there's yet another health care related Jindal grift in the news.  The State Office of Group Benefits, which manages health care and retirement benefits for state employees, is going bankrupt.

Group Benefits will soon go broke if changes to its health insurance offerings aren’t made, Commissioner of Administration Kristy Nichols warned legislators Thursday.

“If we do not make the changes now the Office of Group Benefits will not have the money to pay for the health care of its members,” Nichols said.

But some legislators and insurance plan members said other options are available that won’t be as financially devastating to the 230,000 state employees, teachers, retirees and their dependents who are members of Group Benefits, especially retirees on fixed incomes, and time should be given to pursue those options.

“It’s an economic catastrophe for thousands of citizens of Louisiana who do not deserve this,” said Peggy Schwarz, of Braithwaite.

Some blamed the Jindal administration for creating the crisis because of poor management and “reckless decisions.”

"Some blamed the Jindal administration." 

Well, yeah. "Some" have been blaming Jindal for this since the outset.  It's a lot like the Greenstein situation in that regard. It's another one of these Jindal privatization schemes that divide the spoils amongst cronies at the expense of both taxpayers and people who depend on the services provided.

Let's see how far back we can go to explain this one.   Sometime in the spring of 2011, Tom Aswell started writing about this. Here is a post he wrote about the request for proposals for privatizing OGB.  It was picked up by TPM. 

But critics of the governor's plan contend that any financial benefit will be a one-time thing. In the long run, they charge, privatizing will result in higher costs for employees, the state and, therefore, the taxpayer. Some have even suggested that the plan is a way for the state to get its hands on part of the agency's sizeable surplus, which Louisiana law prohibits from being used for "cash flow purposes" or any other purpose "inconsistent" with the administration of the department that generated it.

A few days after Jindal unveiled his budget, blogger and local reporter Tom Aswell, who was at the time still an employee of the state's Office of Risk Management (which was itself privatized last year), reported that investment bank Goldman Sachs had helped write the OGB's Request for Proposals. He says the only bid that came back for the advisory role -- and the $6 million fee -- was from Goldman. Among the questions TPM has posed to DoA, with no response so far, is what, if any, involvement Goldman Sachs had in the request for proposal. TPM has also reached out to Goldman for comment. Aswell also wrote that an employee at the DoA, who did not want to be identified, had informed him that, as part a sale of the OGB, the state would receive $150 million to $200 million of the surplus, with the rest going to the purchaser.

So you've got a stable department that provides a vital service for state employees and runs a budget surplus. Sounds great... but what if we break it open and suck out all the money! This is a running theme of Bobby Jindal's tenure in office.

Also a running theme, Bobby Jindal knows and cares a lot about health care so it's ok.

Jindal, meanwhile, noted that he is also a state worker whose coverage is provided through the benefits office.

Noting that one of his two sons was born with a heart condition, Jindal said, "I'm not going to do anything that jeopardizes health-care coverage for my family or other state employees."

"Some" raise objections.  But then "some" get fired for that.  

"Should the state of Louisiana be an insurance company or do you provide it to a private company to run?" Commissioner Of Administration Paul Rainwater told the committee. Rainwater said privatizing would "unleash some of the value" of the agency, potentially net the state $150 million in up front cash, and "create something that's much more efficient."

(Former CEO Tommy) Teague was fired from OGB on April 15, just as questions about the potential sale of the agency were getting louder. And when he testified Tuesday, he appeared much less convinced than Rainwater about the financial benefits of the proposed plan. By many accounts a popular and competent administrator, Teague referred to OGB as "we" several times during his testimony.

"Fully-insured [insurance] plans are simply more expensive than self-insured plans," he said.

Teague also said the agency's large surplus fund -- which was accumulated during his tenure -- would be part of any sale, but expressed bewilderment at the math of such a deal.

"You give up 520 [million dollars], and you're going to get back 150 [million dollars]?" Teague said. "I don't understand how that works."

How it works is you "unleash some of the value" so that the state and the contracting management company and the consultants can take it all, of course.  Teague didn't get that. So they fired him and brought in someone who.. sort of did.  

Early in the hearing, State Sen. Edwin R. Murray (D) wanted to know if Kipper had seen the report, but had a hard time getting Kipper to even acknowledge that a report exists.

"Senator Murray, I have not seen that report," Kipper said at one point. "I have not seen that report."

"So it does exist?" Murray asked.

"I have no knowledge that it exists--" Kipper responded.

A little later on, when the existence of the report had been firmed up, Murray wanted to know, more specifically, if Kipper himself had asked to see the report. Kipper said that he had not, because he does not want his "judgment jaded" by the report while he evaluates bids currently coming in from financial advisers that want to help the state with OGB's privatization.

"The report might tell you there's no need to privatize it," Murray said.

"That might be the case," Kipper admitted. 

The report that Teague's replacement, Scott Kipper, did not want his "judgment jaded"by did, in fact, suggest that privatization might not be the way to go.

The Legislative Auditor’s Office issued a report Monday that predicts the Jindal administration’s plans to privatize a health insurance plan could increase costs for state employees.

The 17-page report characterizes the possible increased premiums as an issue that should be deliberated before decisions are made on the future of the Office of Group Benefits.

“The sale/lease may result in higher insurance premiums to state employees under a private insurer because of an increase in marketing costs, premium taxes, necessary profit margin, and reinsurance costs,” the report states.

In his response, Commissioner of Administration Paul Rainwater, the governor’s top budget adviser, dismissed the possibility of higher premiums purely as a result of privatization as speculative.

In any event, Kipper's bungling was bad enough that he resigned shortly after his appearance at this hearing.  The process of selecting a contractor moved on. Soon, state employees would wonder if a 5 percent raise in their premium was part of a scheme to make the plan more attractive to bidders.

In 2012 the Legislature approved the outsourcing plan.  The contract went to Blue Cross/Blue Shield.  As, we've seen them do throughout this story, "some" criticized this entire plan as stupid and short sighted grifting.  "Some" were fired.

Opponents of the measure have questioned whether those savings will actually materialize and argued that switching to a private company to administer health benefits will lead to increased problems for employees filing claims.

Lawmakers have been able to delay the privatization effort for months. Initially the Jindal administration sought to sign the contract without the input of legislators, but that was blocked by an opinion from the Attorney General's Office saying state budget committees would have to sign off on the move.

The measure then appeared on track to be rejected by the Appropriations Committee during a joint meeting last week. Administration officials pulled the item from the agenda before representatives could take that vote.

Reps. Cameron Henry, R-Metairie, and Joe Harrison, R-Napoleonville, lost their spots on the Appropriations Committee shortly after that meeting. While both men said they believed their opposition to the privatization at the Office of Group Benefits played a role in their ouster, they also suggested they were being punished for their past clashes with the Jindal administration over budget policy and their support for a special legislative session.

Fast forward a few years and it turns out that "some" may have been right about this stuff.  By July 2014, the agency is already struggling to maintain stable financing.   

The administration’s management firm — Alvarez & Marsal — recommended changes to Group Benefits that are projected to save $1.1 billion over five years.

Johnson defended the premium reduction, saying there was no need to keep a $500 million reserve. Group Benefits officials have said a responsible target is between $120 million and $220 million. She said it was inappropriate “taking employees money and banking it.”

But state Sen. Ronnie Johns, R-Lake Charles, who is in the insurance industry, disputed Johnson’s statement.

“You honestly think that was too large for 230,000 employees?” Johns asked. “I personally believe there’s been some decision made at the Office of Group Benefits that’s not in the best interest of the overall stability of the program.”

Johns said he was a member of a legislative committee that had to deal with Group Benefits finances when it was in shambles previously. “We worked hard to get it back into a positive position,” he said.

State Rep. Rob Shadoin, R-Ruston, said the administration has a definite “PR problem.”

He said Group Benefits members point to increased premiums and benefit reductions that are on the way and blame it squarely on the program’s privatization.

“They say it was running great until we privatized this thing. Whether it’s true or not, it’s the perception of some,” Shadoin said.

Johnson and McIlwain agreed that the privatization was not the culprit in the diminishing reserves but rather an intentional act by the administration when it reduced premiums.

Some understood from the outset that this scheme mostly amounted to an attack on an efficient and important department of state government for the benefit of  favorites and corporate raiders. "Some" wrote letters to the editor about it.

The Attorney General’s Office said before privatization could go into effect, the legislators had to approve it. The Appropriations Committee, by a 16-10 vote (after two members were removed from the committee and two new ones who would vote for it were put in), approved privatization; the Senate Finance Committee voted 10-3, and the Jindal administration had won. State Group Benefits was privatized.

After privatization of the Office of Group Benefits, health benefits are being cut, premiums are being raised and the $500 million trust fund has been raided. They gave a 1.5 percent pay increase to retirees that starts in July, and the same month a 5 percent rate increase on insurance premiums, at a loss of 3.5 percent for the year.

This Jindal administration should be held accountable as to where the $500 million trust fund went. Workers worked so hard to build this up, and it’s nearly gone after two years with higher rates and less benefits to the 250,000 families insured. This is a shame, and someone needs to be held accountable.

No one will be held accountable.   Well, state workers and retirees will, in a way.  They're going to be asked to give up some benefits and pay higher premiums now in order to resolve this entirely manufactured crisis.

And, as we've already seen, this is just one of several crises our technocratic health care expert Governor has managed to leave us with.  Maybe next time we'll elect "Some" instead.


*Buddy D used to call him that. It wasn't a compliment.

Medicaid privatization scam is scam

News today from the biggest, and also least surprising, Louisiana corruption story of the decade.

A special state grand jury in Baton Rouge Tuesday morning indicted former Jindal administration health chief, Bruce Greenstein, on nine counts of perjury related to his involvement in award of a nearly $200 million state government contract.

Greenstein’s alleged untruths occurred during sworn testimony before a state Senate confirmation hearing and at a grand jury investigation. Greenstein lives in Seattle and his attorney was not available. The grand jury returned the charges to 19th Judicial District Judge Louis Daniel.

“The grand jury is not closed so we are continuing our investigation into other aspects of the case,” Assistant Attorney General David Caldwell said. “These lies are part of the coverup of the whole process.”

The action came some 18 months after the Jindal administration abruptly canceled the contract with Maryland-based Client Network Services Inc., citing among other things “improper contact” by then state health secretary Greenstein throughout the bid and award process.

This has been a fun process to watch unfold. It was so obvious and out in the open from the very beginning that everyone knew something was wrong almost immediately. Someday they will teach it in schools.

It began when Bobby Jindal dragged his feet telling the legislature which firm had been selected for the newly privatized Medicaid claims processing contract; "the most lucrative contract in state government".

Then we found out that the contract was going to CNSI which (dramatic music) was the former employer of Jindal's newly named head of Health and Hospitals, one Bruce Greenstein.  This seemed fishy... even to members of the Louisiana State Senate.. who questioned Greenstein about his dubious claim that he had recused himself from the selection process.

In nearly three hours of testimony that took on the appearance of a courtroom drama, lawmakers challenged Greenstein's previous assertions that he erected a "firewall" to keep himself removed from the selection process.

The secretary has acknowledged that he met with officials at CNSI and other companies shortly after taking his state job last September, including a lunch with a CNSI executive during his second day on the job. Greenstein said he could not recall any conversation about the contract.

But Greenstein also has said he was aware that the state's bid requirements were changed after his arrival in a way that made CNSI eligible to apply for the job.

Sen. Karen Carter Peterson, D-New Orleans, asked Greenstein about contradictions between his earlier testimony about a firewall and emails in which Greenstein discussed the bid requirements. "The integrity and the character issues are what we're here about today," Peterson said. "I believe that you have not been truthful."

Greenstein said he had forgotten about some of the contacts until he reviewed the subpoenaed documents, but that his limited involvement did nothing to compromise the selection process. "I was not trying to mislead anyone," he said. "I was a bit nervous at the time. I know for sure that I had no conversations about how the proposals were evaluated."

 He was nervous.  Ok. He wasn't the only one.

Although the winning bidder was selected weeks ago, agency officials had refused to tell lawmakers, citing a state statute that said the contract award had to first be disclosed to a joint meeting of the health-care committees in the House and Senate. That committee might not meet until after the Legislature adjourns June 23.

That brought a torrent of criticism from senators, including allies of Gov. Bobby Jindal, who accused the administration of stonewalling and called Greenstein's integrity into question.

"It seems like somebody is trying to cover something up," said Sen. Jody Amedee, R-Gonzales.

The competing bidders also protested claiming that CNSI had lowballed its estimate. As it happened, that protest fizzled quickly.  But a month later another protest was filed against Greenstein's selections to run the managed care networks that would replace traditional Medicaid fee-for-service payments. 

The difference between the service delivery models is, in the privatized version, the contractor has a bigger black box from which to extract profit while denying services to patients. That's the big grift. It's important to remember that that is still in place.

But the CNSI thing didn't go away either.  In 2013 a Federal grand jury started looking into it prompting Jindal to cancel the contract.

The Baton Rouge-based federal grand jury subpoenaed documents related to the state’s awarding of the contract to the Gaithersburg, Md.-based Client Network Services Inc. Greenstein was a vice president with CNSI from 1995 to 1996.

The company got the contract for Medicaid claims processing in 2011 amid some complaints that the firm “low balled” the price and made erroneous assumptions in its proposal.

The contract was awarded by the state Department of Health and Hospitals and signed off on by the Jindal administration amid complaints from other vendors.

At the time, Greenstein said he took himself out of the contract dealings. Documents revealed Greenstein influenced a change in the solicitation for proposals that allowed CNSI to compete.

Recall, though, that Legislators also had evidence that Greenstein acted improperly at the time the contract was awarded and that they said so.  It was only two years after the fact that the feds finally forced Jindal to stop backing him anyway.  Greenstein resigned shortly afterward.

CNSI still sued the state for wrongful termination of the contract... because now they're left out of the grift and want to get paid somehow.  But, lo and behold, court filings in that case revealed that CNSI are, in fact, some pretty bad dudes.

In the 2009 FBI interviews, former corporate counsel Matthew Hoffman and ex-CNSI controller Jeffrey Weisenborne allege that CNSI owners lied on documents about the company’s financial health to a syndicate of banks that held lines of credit with the firm in the Maryland suburbs of Washington, D.C.

Weisenborne and Hoffman were interviewed in 2009 as part of probe by the U.S. attorney in Maryland’s Southern District.

The FBI reports are a synopsis of interviews with Weisenborne and Hoffman.

Both recount knowledge of anonymous letters received by Bank of America and M&T Bank in fall 2008 that stated CNSI employees were “being threatened for trying to report the company’s true income and that the owners were overstating revenue to the banks” or outlined “a number of fraudulent acts by CNSI. These letters also said the owners had made death threats to employees not going along with the way things were being done.”

Hoffman told the FBI he was threatened on March 7, 2009 during a meeting at CNSI offices in Rockville, Md., according to the report of a Sept. 11, 2009 interview.

The four owners were in the meeting when one of them said that if Hoffman “ever disclosed the misconduct at the company, they would have him killed.” Another owner “stepped in and said they should move on.”

So the firm Bobby Jindal and Bruce Greenstein wanted to put in charge of weighing its own profits against the health and well being of Medicaid recipients already had a history of ... allegedly.. threatening to kill people in order to protect its bottom line.

To be fair, nobody has alleged that Bruce Greenstein was involved in the death threats.  But, it turns out, that the feds did know that he was involved in rigging this contract and that "state officials" were informed of this.

The email shows that federal regulators had alerted state officials of the potential issues with the nearly $200 million contract prior to its award to a company that formerly employed the state’s health agency chief. As secretary of the state Department of Health and Hospitals, Bruce Greenstein was in charge of the agency that oversaw the contract.

Greenstein repeatedly has said he was not involved in the decision to award the contract to his former employer, Client Network Services Inc., the Maryland-based technology firm known as CNSI. But phone records and other data included in the released documents show at least 2,882 contacts between Greenstein and CNSI executives and the company’s lobbyist.

The federal Centers for Medicare and Medicaid Services, called CMS, took the whistleblower’s allegations seriously enough to pass them on to the state attorney general’s Medicaid fraud unit.

Greenstein's attorney responded to that story by saying the constant contact between Greenstein and CNSI's lobbyist was no big deal seeing as how they were both, "prolific texters." 

Neither Greenstein, who returned to Seattle, nor Creighton agreed to interviews. Attorneys for Greenstein and CNSI said the men are longtime friends who stay in close contact.

“The vast majority of the text messages and phone calls are of a personal nature and have nothing to do with the contract,” said John McLindon, Greenstein’s Baton Rouge attorney. “Bruce is a prolific texter, and I’m told that Carroll Creighton texts a lot, too.”

You really gotta like that "vast majority" bit.  If I prolifically text you a bunch of soup recipes and baseball scores but happen to slip like maybe one or two nuclear launch codes in there then what have you got?

Anyway now Greenstein is being indicted for lying under oath about all of this stuff.  But there's one thing that still sticks out and it is this.

Jindal did not respond to a request for comment. Instead, his press office released a prepared statement from Jindal’s executive counsel Thomas Enright: “We have zero-tolerance for any wrongdoing, which is why we immediately acted to terminate the contract when we learned from the AG that improper behavior might have occurred.” He said the office also asked the inspector general to conduct an independent investigation.

According to CMS, the state Attorney General's office was informed about improper behavior in 2011 before the contract was even awarded.  Bobby Jindal cancelled the contract in 2013.  Did the AG just sit on this information for 2 years?  Or did the Governor decide to just ram this thing through anyway?  In other words, what did Bobby Jindal know and when did he know it? 
 

Prolific texter

Documents released by the Governor's office confirm a bunch of stuff we all pretty much suspected from the beginning.  Bobby Jindal's hand-picked Sec. of Health and Hospitals steered the state's Medicaid privatization scheme to his former employer.

An anonymous whistleblower warned federal officials about problems “dangerously close” to fraud in connection with the state award of a lucrative, now-scrapped state Medicaid claims processing contract, according to recently released documents that the Jindal administration used in making its decision to cancel the largest contract the state lets.

The email shows that federal regulators had alerted state officials of the potential issues with the nearly $200 million contract prior to its award to a company that formerly employed the state’s health agency chief. As secretary of the state Department of Health and Hospitals, Bruce Greenstein was in charge of the agency that oversaw the contract.

Greenstein repeatedly has said he was not involved in the decision to award the contract to his former employer, Client Network Services Inc., the Maryland-based technology firm known as CNSI. But phone records and other data included in the released documents show at least 2,882 contacts between Greenstein and CNSI executives and the company’s lobbyist.

Everyone who cared enough to even read a little bit said this was happening the entire time.  Legislators opposed Greenstein's appointment.  PAR raised objections to the privatization plan.

But all of this went right on through anyway. Even now Greenstein says there's nothing inappropriate about his relationship with the firm receiving this huge contract from the office he oversaw.  

The emails by CMS and the whistleblower were among those recently released by the Jindal administration in response to a public-records request. The administration provided thousands of pages of mainly text-message logs revealing frequent communication between Greenstein and CNSI executive Carroll Creighton before, during and after the selection process and subsequent bid award. Creighton is CNSI’s vice president of government affairs and business development. The records cover a June 2010 to June 2012 time frame and indicate a higher volume of activity around key events in the selection process.

Neither Greenstein, who returned to Seattle, nor Creighton agreed to interviews. Attorneys for Greenstein and CNSI said the men are longtime friends who stay in close contact.

“The vast majority of the text messages and phone calls are of a personal nature and have nothing to do with the contract,” said John McLindon, Greenstein’s Baton Rouge attorney. “Bruce is a prolific texter, and I’m told that Carroll Creighton texts a lot, too.”

Creighton, who lives in Seattle, started work at CNSI a few months after Greenstein in 2005.

Yeah ok fine.  By this point in the Jindal administration we're all pretty much used to the cynical cronyism and political calculation that guides policy on every issue from education to flood control to health care.   So, weary as well all are, maybe "prolific texting" is as good a reason as any to just shrug it off.

But remember Bobby Jindal ran for Governor pledging to wage a "War On Corruption" and his campaign was greatly aided by the propagandists who provide us with our professional news services.  Maybe they'll be less credulous when the next LABI, Louisiana Family Forum,  and oil industry backed "reformer" comes along. But probably not. 

De La Salle High illuminati

This week's Gambit cover story (not yet online.... also not really a story so much as a series of blurbs from the staff) is one of those, Are You A Native Or A Transplant gimmicks that transplants tend to be so over-sensitive about.

Unsurprisingly, the "Where'd you go to high school?" issue comes up. But this has kind of fallen into the realm of the cliche' lately. It's one of many myths we still like to tell each other about New Orleans that doesn't quite reflect reality.

When it did exist, the high school question was a quirky means of making small talk with strangers.  New Orleans is an overgrown small town and most of us are socially separated by two to four degrees at most. Beginning a conversation with, "Where'd you go to high school" used to be a pretty reliable key to figuring out how you might know a new person or which people you know in common with them.

People still try to do this, of course.  But they're less likely to try and figure you out by way of your high school because, for one thing, the school system in New Orleans has been in such flux that it's no longer the static identifier it once was and, for another, post-Katrina times have brought such an influx of people from other cities that it wouldn't matter anyway.  If you're new to town, you're much more likely to hear someone warn you you'll be asked about your high school than you are to have the question put to you in earnest.

So I was all set to write that nobody actually cares about where you went to high school anymore. But then here's an Advocate feature on incoming U.S. Attorney Ken Polite where we learn,

He was born to teenage parents and raised, early on, in the Calliope and Lafitte housing projects of New Orleans and then in the Lower 9th Ward. He went on to become the first African-American valedictorian of De La Salle High School in New Orleans before going to Harvard University.

Polite's accomplishment there is noteworthy in and of itself, of course. But there's something else about this that's pretty remarkable. Jim Letten, the man Polite is replacing, is also a De La Salle grad.  As is Orleans Parish District Attorney Leon Cannizaro. As is Senator David Vitter whose (somewhat whiny) decision to not object to Polite's nomination has cleared the way for his appointment. The school clearly holds some mystical "Skull & Bones" type influence over the local criminal justice apparatus.

Cedric Richmond went to Ben Franklin. But he supports Polite anyway. In particular he supports Polite's stated intention to beef up his office's focus on prosecuting street crime even if this means a drop-off in the emphasis on public corruption. At least, Vitter strongly implied that it might mean that. Richmond disagrees but also takes the argument a step further.

“The last time I checked, public corruption didn’t kill a damn person in the city of New Orleans,” Richmond said. “Having 200-plus murders is absolutely unnecessary. And if the senator doesn’t have that concern, then that’s his problem.”

Please don't take this as a defense of David Vitter's catty remarks. But Richmond's statement here is not exactly true.  Public corruption can and does at the very least endanger lives. It can lead to the subversion of environmental protections, flood control structures, as well as the delivery of services that directly impact the lives and health of citizens.

Oh and sometimes public corruption just shoots people and burns their bodies in a car behind the levee.

But Richmond is telling us, in kind of a New Orleans way, that we shouldn't focus on that stuff because we're too busy fighting the war on terror, or something like that anyway. New Orleanians may not ask each other where they went to high school anymore but they're probably not as worn out on wanting to know who is stealing what from them. Or, at the very least, that question does still retain its relevance.

Ethicsyness

Bobby Jindal has run the most ethicsy administration ever.  Thank goodness the voters responded to his 2007 campaign's call to slay the dragon of non-ethicsyness. The state continues to reap the bounty of that movement.

The state Department of Education’s heavy reliance on contracts rather than
doing the work in-house merits scrutiny, the chairman of the Louisiana House Appropriations Committee said Tuesday.

“I am wondering where the oversight comes,” said state Rep. Jim Fannin, D-Jonesboro.

The issue, which Fannin has raised in the past, surfaced during a budget review of the state Board of Elementary and Secondary Education, which sets policies for more than 700,000 public school students statewide.

Slow motion Medicaid wreck

June 2011: Bobby Jindal crams Bruce Greenstein into the office of Secretary of Health and Hospitals despite controversy stemming from obvious conflicts of interest.

The confirmation of Health and Hospitals Secretary Bruce Greenstein ran into trouble Wednesday in a Louisiana Senate committee after he acknowledged that his former employer had won a $34 million contract to process state Medicaid claims. 

July 2012: It's looking even obviouser.

Greenstein said he distanced himself from the contract award process. But Greenstein said he suggested a change in the solicitation requests that made CNSI eligible to participate. He said it was aimed at getting more competition, not to help his former firm.

In its latest filing, Molina alleges that DHH’s “solicitation for proposals” violated federal civil rights law by disqualifying certain people from performing work.

March 2013: Federal grand jury gets involved.

This afternoon: Bye, now.

The head of the state department overseeing Louisiana's publicly-run hospitals and other health concerns resigned on Friday. Bruce Greenstein's run as Secretary of Health and Hospitals will end May 1, according to a statement from Gov. Bobby Jindal's office. Greenstein's bow-out follows the state's move to cancel a Medicaid contract that came under federal investigation.

Better call the linguistic analyst

You know how much I hate to say I told you so.

A federal grand jury is investigating the Jindal administration’s award of a $185 million contract, according to a subpoena.

The Baton Rouge-based federal grand jury subpoenaed documents related to the state’s awarding of the contract for Medicaid claims processing to a company for which the state’s health chief once worked.

Client Network Services Inc., called CNSI and based in Gaithersburg, Md., was awarded the contract in 2011 amid some complaints that the company “low balled” the price and made erroneous assumptions in its proposal.

The contract was awarded by the state Department of Health and Hospitals and signed off on by the Jindal administration amid complaints from other vendors.

At the time, state health secretary Bruce Greenstein, a one-time CNSI executive, said he took himself out of the contract dealings. Documents revealed Greenstein influenced a document change that allowed CNSI to compete.

But some of us certainly thought the thing looked suspicious at the time. 

Jindal's legal team is diligently trolling the NOLA.com comment forums for a defense.

Adding: Again, totally don't mean to say I told you so

Thinking of a number between "bullshit" and "tell me how much you want"

Jindal's Medicaid privatization scheme goes into effect today.

The move overhauls much of the traditional fee-for-service system in which the state makes direct payments to health care providers who treat Medicaid patients and puts Louisiana alongside dozens of states that have implemented some kind of managed-care system for Medicaid. As of today, beneficiaries enrolled in the new system will receive their care from providers within their specific network, rather than selecting from among any provider that accepts Medicaid. The networks each won three-year contracts.

When implemented statewide, the system will affect more than 800,000 people and shift $2.2 billion in Medicaid insurance spending — about a third of the total $6.7 million budget that comes mostly from the federal treasury — to the private firms.

The network providers are due to make a significant profit for reasons that will be clear in a minute. But first note that the process by which they were selected was contentious and slightly marred by the fact that Jindal's DHH secretary Bruce Greenstein had awarded a separate claims processing contract to his former employer, CNSI.

In December a PAR study criticized the plan for several reasons including lack of legislative oversight, concern that the private networks may not be subject to open records laws, and this.

Managed-care networks, as the descendants of unpopular health management organizations that proliferated more than decades ago, are sometimes accused of producing those savings through denying needed treatments, rather than by improving care.

David Hood, a former DHH secretary who now leads PAR’s health care policy efforts, noted that Bayou Health will include, generally, the healthiest portion of the existing Medicaid population: the children and non-disabled adults. Among that population, Louisiana has among the lowest per-patient Medicaid spending in state-by-state comparisons. That, Hood said, could leave little room for the network managers to find savings -- and, thus, generate profit -- without denying needed care.

Oh but I'm sure they'll figure something out. And even if they don't, it doesn't mean we can't figure out a way to pay them. At least if I'm reading this correctly.

The network’s profit will be a management fee that is a portion of what the state calculates is saved through reducing unnecessary diagnostic tests, hospitalizations or other treatment.

And so we refer you back to the title of this post.