by Treasurer John Kennedy
The Division of Administration wants to circumvent state law and the competitive bid process by calling a meeting next week to hand pick financial advisers and other professionals for a $750 million transaction, according to State Treasurer John Kennedy.
"We're about to plunder our last savings account by selling the remaining portion of the tobacco settlement and spending the money. Even worse, we're going to ignore state law and steer millions of dollars in fees to a group of people handpicked by the Division of Administration," said Treasurer Kennedy. "I wish this was an April Fool's Day joke, but it's not."
La. R.S. 39:99.12 calls for the State Bond Commission to initiate the sale of the state's remaining tobacco settlement revenue stream. The settlement stems from tobacco companies' settlement of lawsuits over states' smoking-related health care costs.
Instead of following state law, the Division of Administration is moving forward with hiring advisers next week to seal the deal through a hastily called meeting of the Tobacco Settlement Financing Corporation. The corporation's members are appointed by the governor, who made key appointments the Friday night before aTuesday vote on the first process in the settlement sale. The hiring also is being done without following the competitive bid process that ensures taxpayers receive the lowest price for services.
"We're about to spend millions of dollars without seeing if we can get these services cheaper," said Treasurer Kennedy. "Is it any wonder that we have budget problems?"