Political Horizons: Transparency for the state’s privatization contracts

State Rep. Kenny Havard says he thought of hamburgers when he read a legislative audit last week that blistered the state’s contract that turned over management of state behavioral health programs to a private company.

The Jackson Republican says he began wondering how closely state officials looked at the fine print earlier this year when his phones started chiming with complaints from family members of patients at Eastern Louisiana Mental Health System. They complained that the Pennsylvania-based private “nutritional services” company ran out of food and sent out for 400 McDonald’s hamburgers to feed hospital patients.

He testified before legislative committees that the incident prompted him to look further, and he found hundreds of deficiencies.

The actual state “Contract Surveillance Findings” for January and February show meals to patients were sometimes delivered late, often without vegetables, frequently without meat, and occasionally with spoiled milk.

Havard sought to pass the “Privatization Review Act,” which would give legislators a look before the state signs contracts worth more than $5 million. His bill was spiked during the last session by the acolytes of Gov. Bobby Jindal, the self-proclaimed champion of transparency.

Havard is reluctant to talk of these things now, pointing instead to his testimony for House Bill 240. But he did allow that last week’s legislative auditor’s findings of confusion, problematic payments, inadequate processes and lack of performance controls would be “Exhibit 1” when he renews the argument next year for the need of legislative review of private contracts.

Anthony Speier, the assistant secretary of the state Department of Health and Hospitals, officially responded with a three-page letter that basically said, we’re working on it. DHH Secretary Kathy Kliebert phoned reporters to say the auditor’s findings exaggerated the experience of only a few providers and that the private contractor provides better services to more patients.

Nevertheless, with at least 12,000 active contracts paid by taxpayers, Havard says the branch of government constitutionally bound to oversee government finances should, at least, read the contracts before they’re signed.

The first words out of Havard’s mouth on May 6 at the first committee hearing on HB240: “I want to make it clear to the committee and to the administration, this is not an attempt to stop privatization.”

Aides from Jindal’s Division of Administration countered that adding another layer of bureaucracy to an already burdensome process would kill the privatization effort. “This is a pro-status quo bill,” testified Steven Procopio, chief of staff at the division.

Pro-Jindal bloggers and columnists likened the legislation to a measure in, gasp, Massachusetts! Havard’s bill, specifically, was “designed to place significant hurdles in front of routine, sensible privatization efforts,” wrote Leonard Gilroy of the Reason Foundation, a Los Angeles-based group that says it promotes libertarian principles, in a national article published May 9.

HB240, which was merged with a similar measure sponsored by state Rep. Cameron Henry, R-New Orleans, cleared two committees and the full House, on May 21, without a single “no” vote cast. It died May 27 in the Senate Finance committee.

“The Jindal administration had consistently been trying to privatize a lot of the services in the state, which members are not opposed to. What we’re opposed to is the fact that we weren’t seeing what the contracts look like,” Henry said last week, pointing to problems such as those outlined in the audit to suggest the vetting behind closed doors isn’t working.

State Treasurer John N. Kennedy, a longtime advocate of more transparency for state contracts, says proper procedures would require a careful analysis, in public, along with the same accountability and oversight provisions that accompany state employees.

“A lot of these contracts can’t survive in the sunlight, and we have so many of the dad-gum things,” Kennedy said.

“There’s a lot of politics in this. A lot of these vendors lobby hard for their contracts,” Kennedy said, adding that he endorses the concept of privatization when appropriate and with the proper evaluation. But it seems to him that the present drive to privatize relies, instead, on a faith that it’ll all work out.

“Gov. Jindal worships at the altar of privatization,” Kennedy said.

Mark Ballard is editor of The Advocate’s Capitol news bureau. His email address is mballard@theadvocate.com