APPEL: LSU’s Shady Utility Contract Mess

I am not sure that anyone has paid much attention to the controversy swirling around LSU. No, it’s not the change in coaching, it is much more important and carries with it a subtle commentary on how our government is operated.

The controversy is over who will get a utility contract for LSU worth $855 million. For months, a company, Bernhard Energy, run by a pal of the governor, had tried to persuade the LSU Board to just award him the contract to produce utilities for the Ole War Skule.

After much public outrage and cry of scandal, the Board decided to put the proposal out to bid.

Then they decided to take only two proposals, one from Bernhard and one from a competitor, Enwave. When proposals came in, Enwave had the best offer, a proposal would net LSU millions more over the life of the deal than Bernhard would have.

That should have been it, right? Well, no.

The controversy is still not over, as Bernhard – who is also tied up in LSU’s sexual assault scandal – is trying every trick in book to get the Enwave proposal thrown out and only time will tell if the Board made up of governor John Bel Edwards’ appointees will magically find a way to award the deal to Bernhard. But this malodorous mess is only a part of the story.

Lying completely buried in this chaos rests a huge indictment on the historic nature of our government processes. There is no doubt that private enterprise can perform the LSU utility function, make a profit, and still deliver a huge payback to the state. No doubt at all.

But if this is so for utilities, why would we not believe that it could not be so for many other functions of government. That is, why do we have a DOTD, an LDH, a DOE, and so many other departments operating pretty much as they have since the late 19th century? Or more succinctly, why do we just allow politicians to trick us into believing that these departments can do so many functions better, cheaper, and faster that private enterprise?

Our state’s budget is north of $30 billion. Vast sums are spent by state bureaucracies which fight with all their might to justify their existence and to keep those that demand reform at bay. If there is validity in the justification for the LSU privatization approach, then the state should investigate privatizing a whole range of programs and sectors of government. Either LSU is going in the wrong direction, or else for as long as anyone can remember the state has been. We know the answer to that. It is why, as I noted, the private companies can make a profit and still return a small fortune to the state.

Oh, the bureaucracy and its politically motivated supporters will rail that government is not like business. I know, I heard that for almost twelve years when I was in the Senate. Clearly what they mean when they say that is that government must protect the status quo and jobs and hide its own inefficiency. To them, government is not intended to deliver the best services for the citizens, at the best cost for taxpayers. Theirs is a belief in the ultimate status quo.


I have bad news for these old school believers that government cannot be run like business. Government is not an employment agency nor a slush fund that politicians use to their best interests.

Here is a suggestion that I and some of my fellow Senators have made repeatedly. Let us do a deep dive into all aspects of state government and determine where and how we could do things better and for less cost. Obviously, our current governor agrees, as he has not said that we should not privatize the utilities at LSU. If he felt that government could do it better and cheaper than private business, don’t you think he would say something? So, the only conclusions are that he is protecting his friends’ interests, he agrees with me, or both.

There is a subtle but valuable lesson to be gleaned from the LSU scandal. No, it is not that favoritism is inherent in everything we do in Louisiana, we already know that. The lesson is that to the greatest extent possible we need to streamline government and to use the technology and efficiency of private business to deliver services better and for less cost.

Instead of trying to do everything for everyone under the direction of political appointees and not highly-trained managers, my vision is of a much smaller and more efficient government acting as the administrator of many private contracts. Of course, this is under the assumption that free and fair competition is jealously protected in the process. I do not propose that we should privatize all of government, but we should make a robust effort to break down entrenched bureaucracy and maximize the areas in which privatization makes sense.

The LSU scandal has the odor of weeks-old crawfish heads rotting in the sun. But that does not mean that we should not do whatever we can to modernize a system of government that has remained largely untouched for well over a century. It is far past time for us to just go along with the absurd notion that government cannot be run like a business. It is far past time to create a new form of government, one run to the benefit of the all the people, beneficiaries, and taxpayers alike.



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