Jindal cancels contract under review by grand jury
BATON ROUGE, La. (AP) — Gov. Bobby Jindal’s administration announced Thursday it is scrapping a lucrative state Medicaid contract that is the subject of a federal grand jury investigation.
Commissioner of Administration Kristy Nichols issued a statement announcing the cancellation of the more than $185 million contract with Maryland-based CNSI, which was supposed to take over Medicaid claims processing next year.
“Based on consultation with the Attorney General’s office, today I am terminating the state’s contract with CNSI, effective immediately,” Nichols said.
A Baton Rouge-based federal grand jury is investigating the Jindal administration’s award of the contract, which went to a company where the governor’s health secretary, Bruce Greenstein, once worked.
The investigation was first reported Thursday by The Advocate. The subpoena obtained by the newspaper through a public records request revealed that the administration has known about the investigation since early January but did not move to cancel the contract until Thursday, within hours of the story being published online.
Louisiana DHH Secretary Bruce Greenstein
The grand jury’s subpoena issued to the governor’s Division of Administration requested all documents submitted by companies that bid for the work and documents that show the date and time each response was received by the state.
Though Nichols didn’t cite the grand jury review, she said in her statement, “We have zero tolerance for wrongdoing, and we will continue to cooperate fully with any investigation.”
Greenstein, secretary of the Department of Health and Hospitals, worked for CNSI from 2005 to 2006, but denied any involvement in CNSI’s selection.
CNSI got the 10-year contract in 2011, beating three other companies for the work, but critics said the company underestimated the true cost of the contract and made incorrect assumptions to win the bid. CNSI submitted the lowest bid but didn’t get the best technical score among applicants.
After CNSI was chosen for the Medicaid work, state lawmakers criticized Greenstein’s handling of the contract. Greenstein acknowledged a change he pushed in the bid solicitation made CNSI eligible for the Medicaid contract, and he met with a top CNSI official within days of coming to the health secretary’s job.
State Inspector General Stephen Street said his office was asked by Nichols to look into the contract award. He offered no further details, saying he’ll coordinate with federal and state authorities for any investigation.
Greenstein’s office directed all questions about the investigation and contract cancellation to the Division of Administration and refused further comment.
And just in case you forgot how sparks were flying when this went down in 2011, including how Greenstein refused to divulge the name of the winning contractor, why competitors were crying foul and legislators were ticked off, blogger Tom Aswell filed this today to remind you.
MAY 24 Blogger Robert Mann posts this entry about the Baton Rouge Chamber's recent report on Louisiana's higher education system. It's critical to economic development, and yet our system is facing a "funding crisis" with no way to resolve it, the report says. The Chamber says control of tuition and fees must be returned to the higher ed governing boards.
MAY 24 Here's a NBC33 story about Tyrann Mathieu. He has signed with the Arizona Cardinals, inking a $3 million, four-year deal. He gets a signing bonus of $265K, but gets another, larger bonus if he doesn't get cut from the team for doing drugs. The deal reportedly includes mandatory tests and meetings for the player.
MAY 24 Jarvis DeBerry posts here about the redonkulus rhetoric that would have us believe NOLA is a safe city with a murder problem. Maybe the city's crime stats don't compare with its murder stats because you can't manipulate a murder, he says: a dead body's a dead body. It just doesn't make sense, he says, and his readers agree: a poll asks if they believe the city is safe, and more than 90 percent say no.
MAY 24 Jindal administration officials announced Thursday that the privatization of public health care is going to cost a lot more than they budgeted for, the Advocate reports here. "I'm so surprised," said no one. Anywhere. The cost they're projecting now is more than $1 billion - a lot more than the $626 million budgeted for it. And, it's more than it cost the state to operate those hospitals. So why are we doing this again?
MAY 24 Blogger CB Forgotston ridicules the recent PR campaign by the state GOP in the wake of a legislative auditor's request to both major parties. The GOP (apparently unaware that the Dems got the same request) started yammering about being targeted because it had "killed" a tax increase. CB finds that laughable, but it's also pretty funny that the GOP was comparing this episode to the IRS scandal (Because the President has so much to do with our state auditor. Right?).
MAY 24 Politico details some recent fund-raising efforts by Sen. David Vitter, which have raised the question of his future political plans. This time, it is a $5,000 per head "bayou weekend" that includes "Cajun cooking" and an all-caps "alligator hunt," the story reports. Funds raised go to a super PAC that can spend money to support Vitter in federal or state races, the story points out.
MAY 24 The pink building on Royal in the quarter was sold at a sheriff's sale Thursday, this Picayune story reports. An injunction that would have halted the sale wasn't enforced because the family failed to post a $150,000 bond, the story reports. So the owner of the mortgages on the building bought it, for nearly $7 million. Now the feuding family will have to negotiate with that company to get a lease on the building that has housed their business for close to 60 years.
MAY 23 This post in Louisiana Voice tells us about a bill by a Winnsboro lege that would require all public high school students to take at least one Course Choice online class in order to graduate. (What?) Blogger Tom Aswell says it's a monument to "waste and corruption," especially in light of the problems he's exposed with the program in recent weeks. Idaho had a similar program, but voters removed it by a 2-1 margin, Aswell says.
There will soon be a whole lot of shakin’ going on at Benny’s Sportshack Supplement Depot, a new concept by Opelousas native Benny Nele. Located at 2002 Johnston St., the supplement shop, smoothie bar and café, featuring hot off the press paninis and wraps, plans to open in late May.
Philip deMahy Sr., a once respected New Iberia ad exec, was sentenced May 2 to spend the next two years (he faced up to 100 years) in a state penitentiary after state and federal investigators found dozens of images depicting children engaged in lewd sexual acts on his personal computer.