Memphis-based Morgan Keegan & Co. has been selected to advise the Jindal administration on privatizing a major health insurance plan for state employees and their dependents.

The Office of Group Benefits provides health plans for nearly a quarter million Louisiana residents. Morgan Keegan was the low bidder among three firms — Goldman Sachs and Barclays Capital were also in the running. MK will earn $900,000 to help determine whether privatizing the PPO portion of OGB would be fiscally advantageous to the state. The OGB is running a half billion dollar surplus, one of the main reasons Jindal’s push to privatize the agency ran afoul of lawmakers during the recent legislative session. The plan has also run into stiff opposition from the Retired State Employees Association.

Read more in The Advocate.

Capitol News Service’s Tom Aswell weighed in on the controversy, pointing out, among other things, the role two of the firms — Morgan Keegan and Goldman Sachs — had in the near collapse of the U.S. economy, and the twisted relationships among Morgan Keegan, it’s corporate parent, Regions Financial Corp., and Goldman Sachs. Regions, according to a Reuters report, is considering selling Morgan Keegan, and hired Goldman Sachs to explore “strategic opportunities of such a sale:

[W]hat we have is this incredibly incestuous tangle whereby the Jindal administration has hired Morgan Keegan to explore the possible sale of OGB even as Regions has retained Goldman Sachs to explore the possible sale of Morgan Keegan even though Goldman Sachs less than a year ago was fined $587 million over claims that the bank misled investors in collateralized debt obligations linked to subprime mortgages.

Read Aswell’s blog here.

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