[StBernard] Blanco's 'transparency' was absent in tobacco board's vote

Westley Annis westley at da-parish.com
Sun Feb 18 18:44:26 EST 2007

The Associated Press
BATON ROUGE, La. (AP) - Gov. Kathleen Blanco has long said she's keen on
"transparency in government," the idea that the public should be informed
when her office makes decisions about the public's money.

That idea went AWOL last week when the Blanco administration shoved forward
a plan to sell off what's left of Louisiana's 1998 settlement with the
cigarette industry, aiming to get a lump of cash instead of collecting
annual installments from tobacco firms. The plan would involve roughly $1
billion in state revenue.

The public had no way of knowing, but a state board controlled by Blanco
voted to approve selling that settlement soon - a proposal that's full of
variables and has plenty of skeptics, including the state treasurer and
quite a few legislators.

The board's meeting was not transparent - it was invisible. Neither the
public nor the press was told it would take place.

By law, state public meetings must be announced in advance. In practical
terms, that means e-mails sent to the press and other interested parties,
meeting announcements posted on state Web sites, press releases with the
date, time and location of the meeting.
Normally, the Blanco-controlled Tobacco Settlement Financing Corp. Board
publicizes its meetings with plenty of notice.

Not last week, even though the meeting featured the most important decision
the board can make. If that tobacco money is sold, the board's reason for
existence will steadily fade away.

An aide to Jerry Luke LeBlanc, chair of the tobacco panel and Blanco's top
financial adviser, insisted that the public had been notified about the
meeting: announcements had been tacked up in the building where the meeting
was held.

No e-mails, no press release, no Web posting, no warning.

The semi-secrecy gave ammunition to Blanco's critics, who didn't really need
any: they were already primed to attack the idea of selling the tobacco
money. Noting that the state already has $1.9 billion that hasn't been spent
yet, Rep. Jim Tucker voiced his opposition to the plan and called the
governor a sneak.

"It looks like they're trying to do this in secret, and without any reason
for the need of the money," Tucker told The Times-Picayune newspaper. "We're
awash in money."

Transparency would have also been helpful because the issue at hand is
complicated. Most taxpayers will need some help understanding whether a
tobacco bond deal is the right thing, right now, for Louisiana. Only a
handful of financial wizards understand the ins and outs of how these deals
get done; to explain it, they speak the language of market saturation,
escrow accounts, fluctuating interest rates and cigarette companies' fiscal

Opponents of a tobacco sale warn that such a deal means Louisiana would be
trading the regular payments it now gets from cigarette companies for a
smaller sum of upfront cash. In fiscal year 2005-06, the state took in $52.7
million in payments from the tobacco firms.

State Treasurer John Kennedy, a member of the tobacco panel, was the lone
opponent when the board voted 6-1 to approve going ahead with the tobacco
sale. Afterward, he complained that the board voted after hearing minimal
testimony from the investment bankers who - if the deal goes through - would
get paid millions.

"I don't know why we're moving so fast. I don't know why the governor is
moving so fast," Kennedy said.

Kennedy has the power to slow things down. Along with approval from the
Legislature, the deal can't go through without a vote from the state Bond
Commission, of which Kennedy is chairman.

Kennedy said he plans days or weeks of hearings, with testimony from
disinterested investment pros, financial analysts and others who should know
Louisiana's tobacco bonds might be worth. The goal, he said, is to determine
whether now is the right time to sell; or if the state would get more money
by selling later.

But once Kennedy's hearings are over, the governor will have her say: like
the tobacco board, the Bond Commission is packed with Blanco allies.

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