Exposing a Hoax: New unemployment claims in Louisiana, April 5 to September 3

Opponents of the Obama administration's moratorium on deep water drilling have bemoaned the economic impact of the pause on employment in Louisiana. In June, Governor Bobby Jindal ordered that an amicus brief be filed in the lawsuit against the moratorium. In that brief, the governor's attorneys claimed that thousands of jobs had been lost to the moratorium at that point (less than a month after it was imposed) and that thousands of jobs were threatened by allowing the moratorium to stand.

The feared job losses have not come. And, Louisiana Workforce Commission (LWC) weekly reports show that Jindal's brief was wrong about the thousands of jobs that the governor's attorneys claimed had already been lost due to the moratorium by late June. Did the Governor and his attorneys not know what LWC's weekly reports were showing? Or, was this like his berms project, where (in that case the scientific) evidence was willfully ignored?

On page 4 of the state's 17-page brief, Jindal's attorneys declared:

The Louisiana Workforce Commission (LWC) administers Louisiana's unemployment compensation system, its workers' compensation program and its workforce programs, including job training and work search services. Because of the moratorium, many thousands of Louisiana workers have lost their employment and many more are at risk of losing it in the near future. All of the programs administered by LWC have been and will be heavily impacted by its effects. (Emphasis added)

Every Friday, the LWC issues a news release containing the number of new unemployment filings and puts the number in context: LWC compares that week's number to the previous week; compares the number to the same week of the previous year; provides a four-week moving average; and provides a total number of active unemployment claims in the state and compares that number to the previous year, and a four-week moving average for total claims.

Nowhere in the LWC weekly reports issued between the Department of the Interior's declaration of the moratorium (May 27) and the June 20 court filing by Jindal's attorneys is there any mention of any impact on new unemployment claims filings related to the moratorium. Other issues are mentioned at times, like seasonally increased claims resulting from the end of the school year or a transportation equipment disruption which led to a one-week spike. But, the moratorium is not mentioned in that period of time.

Nor has it been mentioned in any of the LWC weekly reports issued since the Jindal court filing.

In fact, based on the numbers generated by the LWC — not the rhetoric coming from Jindal, top LWC management, and other opponents of the moratorium — the deep water drilling moratorium has been a non-event in terms of Louisiana employment.

Follow the Numbers

What follows is a listing of the numbers in each weekly report issued by LWC, starting on April 5 and running through September 3. This provides information on new unemployment claims in the weeks leading up to the Deepwater Horizon explosion, through the May 28th imposition of the moratorium, through the dates of the court hearings, through the Rally for Economic Survival, up to the most current report issued by LWC.

A link to each announcement is included. The image at the top of this page charts the numbers for new claims and the moving average.

The weekly reports make clear that there has been no surge of job losses attributable to the moratorium. In fact, while other causes for new unemployment claims are mentioned in some reports, the LWC reports are notable for what they do not mention — the deep water drilling moratorium.

It also needs to be noted that since July 2, the number of people collecting unemployment benefits in Louisiana in 2010 has been lower than the number of people collecting benefits in 2009.

If the deep water drilling moratorium was causing unemployment in Louisiana, these are where the numbers would first appear.

LWC April 5 report: New claims — 4,120; four-week average — 3,988 (This report was filed on the Monday after Easter based on numbers from the previous week).

LWC April 9 report: New claims — 3,689; four-week average — 3,908.

LWC April 16 report: New claims — 4,661; four-week average — 4,067.

LWC April 23 report: New claims — 3,989; four-week average — 4,115.

LWC April 30 report: New claims — 4,982; four-week average — 4,330.

LWC May 7 report: New claims — 4,574; four-week average — 4,552.

LWC May 14 report: New claims — 4,480; four-week average — 4,506.

LWC May 21 report: New claims — 4,584; four-week average — 4,655.

LWC May 28 report: New claims — 4,645; four-week average — 4,571.

LWC June 4 report: New claims — 5,166; four-week average — 4,719. (LWC: "The largest over-the-week increases in initial claims were in educational services and health care and social assistance industries as part of the usual summer seasonal pattern.")

LWC June 11 report: New claims — 5,188; four-week average — 4,896. (LWC: "The largest over-the-week increase in initial claims was in the health care and social assistance industry as part of the usual summer seasonal pattern.")

LWC June 18 report: New claims — 4,902; four-week average — 4,975.

LWC June 25 report: New claims — 4,450; four-week average — 4,927.

LWC July 2 report: New claims — 4,456; four-week average — 4,749.

LWC July 9 report: New claims — 4,750; four-week average — 4,640.

LWC July 16 report: New claims — 4,533; four-week average — 4,547.

LWC July 23 report: New claims —5,237; four-week average — 4,744. (LWC: "The largest over-the-week increase in initial claims was due to a temporary shutdown in the transportation equipment industry.")

LWC July 30 report: New claims — 4,395; four-week average — 4,729. (LWC: "The largest over-the-week decrease in initial claims was in the transportation equipment industry.")

LWC August 6 report:  New claims — 4,109; four-week average — 4,569.

LWC August 13 report: New claims — 4,305; four-week average — 4,512.

LWC August 20 report: New claims — 3,987; four-week average — 4,199.

LWC August 27 report: New claims — 4,149; four-week average — 4,138.

LWC September 3 report: New claims — 4,120; four-week average — 4,140.

While the LWC leadership is an active participant in the politically driven, anti-moratorium hysteria, the numbers the commission produces on a weekly basis tell a starkly different story. The numbers don't have a dog in this fight. They are just the numbers; they don't have a political agenda.

The LWC numbers are saying that the impact of the moratorium has been negligible.

Why the Job Loss Claim Matters 

Judge Martin Feldman, who ruled on the request for the injunction two days after Jindal's attorneys filed their brief, signaled in his decision that the economic impact of the moratorium weighed heavily in his ruling.

The effect on employment, jobs, loss of domestic energy supplies caused by the moratorium as the plaintiffs (and other suppliers,  and the rigs themselves) lose business, and the movement of rigs to other sites around the world will clearly ripple throughout the economy in this region. (Page 22 of Feldman's ruling PDF).

 The Times-Picayune, which has steadfastly opposed the moratorium, cited the role of the economic impact of the moratorium on the development of Judge Feldman's ruling.

But, what if the job losses were imaginary, or worse, part of a hoax?

There can be no doubt that a total shutdown of deep water drilling would have a significant economic impact on Louisiana. But, that is not what has been proposed, despite the fact that this is precisely how some opponents of the moratorium have tried to frame the issue. What has been proposed is tighter safety, environmental and liability regulation on an industry that has called the shots in the Gulf of Mexico for several decades. The moratorium was used to allow new rules to be set and to determine what had gone wrong on the Deepwater Horizon.

The suit against the moratorium, though, was not brought by the companies that own the leases and are responsible for the drilling activity in the Gulf. That would be the big oil companies.

Instead, the suit was brought by essentially three groups of service companies who have bet their respective banks on deep water drilling. Those are Hornbeck Offshore Services, and companies controlled by the Bollinger and Chouest families.

These companies and those families have gotten rich helping the energy companies exploit the Gulf and Louisiana's offshore waters. In their view, no ecological or environmental cost has ever been too high a price to pay to enable them to continue their work.

Not even the largest oil spill in U.S. history.

What is equally tragic is that most of Louisiana's political class feels exactly the same way about the price the state pays for the few thousand jobs, the pittance of oil revenue (compared to, say, third world countries), and political contributions through which the industry controls the state.

The Jindal Tragedy

No politician exemplifies this craven attitude more so than Bobby Jindal. Confronted with the ruin of Louisiana's seafood industry, Jindal sided with the Bollingers, the Chouests, the Louisiana Oil and Gas Association and others in the 'no price is too high' crowd.

There was a moment after the Deepwater Horizon explosion where Jindal nearly appeared to appreciate the importance of Louisiana's coast. It proved fleeting. When he began prattling publicly for permits to build berms, it was nearly over. Any and all thoughts that Jindal cared about Louisiana's environment (other than as a backdrop for press conferences) were obliterated on June 20 when his attorneys added his voice to those of his patrons' voices in challenging the moratorium. Jindal was back 'home.'

The irony is that this so-called reformed governor is more deeply committed to protecting the interests that have dominated this state for decades than any governor in modern history, including Edwin Edwards. Edwards first came to office in the 1970s while oil and gas were still booming and jobs in the industry were plentiful.

Jindal is governor at a time when the industry has pulled its best jobs out of the state, leaving a few thousand drilling jobs. The refineries are still here. Today, the oil and gas industry in Louisiana has the distinct look and feel of a colonial power. A few tokens are thrown to the locals in the form of jobs and money for politicians, but the wealth is shipped out of state.

President Obama recognized that the interests of Louisiana and the interests of the industry are separate and distinct. He chose the interests of the state in allowing the Department of the Interior to proceed with the moratorium.

Jindal, who dreams of replacing Obama in the White House one day, either does not grasp that divergence, or he does get it but does not have the courage to act on that knowledge. Either way, it's a pretty damning assessment of the governor who is supposed to be the smartest guy in the room.

Waritorium: The Deep Water Moratorium Threatens Two of the State's Republican Oligarchs

Any chance for good cooperation between the federal government and the state of Louisiana in the response to the BP Gulf Gusher died on May 30 when the U.S. Department of the Interior declared a six-month moratorium on deep water drilling in the Gulf of Mexico in the wake of the then month-old disaster.

Although the New York Times reported that Governor Bobby Jindal's personal dissatisfaction with the federal response to the disaster had gone public by May 3, the moratorium ratcheted up the pressure in the already tense situation by threatening losses in the industry that had caused the disaster.

The logic of the moratorium was impeccable. Here was an on-going gusher on the floor of the Gulf of Mexico from a well that was owned by one of the major energy companies, BP, and it was out of spewing ever larger quantities of oil into the Gulf. The best minds in the industry were helping BP develop strategies to cap the well, but nothing appeared to be working. And, in fact, nothing has worked yet.

There were published reports of at least one other deep water rig with safety issues. The emergency response plans of the other major operators in the deep water areas open to drilling looked suspiciously like BP's which mentioned the need to protect walruses that might be impacted by a potential spill. Walruses in the Gulf of Mexico, remember?

So, the moratorium looked like the prudent call until the cause of the BP Gulf Gusher could be identified, the well capped, and a new set of safety rules issued based on what was learned from this incident.

But, alarm about the potential impact from the moratorium quickly went up along the coast and from within state government. Tens of thousands of jobs were threatened if the moratorium was allowed to stand. The job loss numbers fluctuated but trended downward in the first weeks after the moratorium was announced.

Jindal assigned his newly minted Lieutenant Governor Scott Angelle the task of heading up the effort to generate public opposition to the moratorium. Angelle formed a coalition and had an online petition created. He traveled across the southern part of the state rallying opposition. He met with federal officials, parroting dire predictions of the impact of the moratorium. He followed Jindal's lead and bashed the President.

"Mr. President, I get the fact that you don't like big oil and gas," said Jindal's recently appointed interim lieutenant governor, Scott Angelle. "But this is not about the stockholders of BP and Shell and Exxon and Chevron. This is about the Cheramises and the Callaises and the Boudreauxs and the Thibodeauxs!"

Still, the moratorium stuck.

Oligarchs In The Open

Then Hornbeck Offshore Services, LLC, of Covington, announced its intention to file suit challenging the moratorium. It was assigned to Federal District Court Judge Martin Feldman in New Orleans and the rest is history. Feldman overturned the moratorium.

Hornbeck was joined in the challenge by 37 other companies in the challenge, giving the impression that a broad swath of the industry opposed the moratorium. The governor's office filed a brief in support of Hornbeck's claim.

In retrospect, it was something of a charade. The 37 companies that joined Hornbeck in the suit were owned by two families, both headed by second-generation scions to empires that their fathers built from scratch. Donald T. Bollinger (21) and Gary Chouest (16) and their families controlled all 37 companies that joined the Hornbeck challenge. The companies are mostly based in Louisiana with one Bollinger company in Texas, a Chouest company in Mississippi and one in Florida. All but two of the companies at limited liability corporations, meaning that they are personally controlled by the people heading the LLCs.

For the relevant corporate documents (PDFs) on each of the Bollinger companies that took part in the challenge, click on the name: Bee Mar-Worker Bee LLC; Bee Mar LLC; Bollinger Algiers, LLC; Bollinger Marine Fabricators, Inc.; Bee Mar-Bayou Bee LLC; Bollinger Amelia Repair, LLC; Bee Mar-Bee Hive, LLC; Bee Mar-Queen Bee, LLC; Bollinger Shipyards, Inc.; Bee-Mar-Honey Bee LLC; Bee Mar-Busy Bee LLC; Bee Mar Crews LLC; Bee Mar-Bumble Bee LLC; Bollinger Texas City, LP; Bollinger Calcasieu, LLC; Bollinger Shipyards Lockport, LLC; Bollinger Quick Repair, LLC; Bollinger Morgan City, LLC; Bollinger Gretna, LLC; Bee Mar-Bee Sting LLC; and Bollinger Fourchon, LLC.

Here are the names of the Chouest companies (click names for corporate details): North American Fabricators, LLC; Offshore Support Services, LLC; Martin Holdings, LLC; Sea Fluids, LLC; C-Port 2, LLC; C-Port, LLC; Fourchon Heavy Lift, LLC; C-Innovation, LLC; Clean Tank, LLC; North American Shipbuilding, LLC; Alpha Marine Services, LLC; Nautical Solutions LLC; Nautical Ventures, LLC; and Reel Pipe LLC. Two other Chouest companies took part in the challenge: Tampa Ship, LLC and Gulf Ship, LLC. Those links take you to pages on the Chouest web site.

The involvement of these 37 companies did not constitute a broad industry response. It was, instead, a shriek of anger at the federal government that had thrown into jeopardy the empires of two of the key members of the new Republican oligarchy that has been ascendant in Louisiana politics in recent years. The Bollingers and the Chouests were reliable heavy hitters for the party and its causes.

In trying to prevent another blowout in the hazardous deep water environment, President Obama had unwittingly delivered would could prove to be a lethal blow to some of some of the wealthiest arch conservative activists in the state. If the President did not realize the full extent of the in-state political implications of the moratorium, it did not take too long to become evident.

Joining the lawsuits either constituted political theater on the part of Bollinger and the Chouests, or significant parts of their compartmentalized empires are in real financial jeopardy if the moratorium stands. Their respective empires are segmented into numerous limited liability corporations which enables the owners to derive significant tax breaks from profitable ventures and to confine losses to under-performing companies in the event of an industry slow down — or a deep water drilling moratorium.

The companies owned by these men and their families generate huge sums of money. They have facilities scattered across south Louisiana. Their customers of their offshore supply vessels are the largest energy companies in the world. Increasingly, the companies compete against one another. Bollinger began as a boat building company and has now gotten into the offshore supply vessel business (the Bee Mar companies listed in the suit are mostly individual companies based on specific boats). Bollinger has built boats for Chouest. Now, Chouest has entered into the ship building business and competes against Bollinger. He's also chasing the deep water expansion getting ready to take place off the coast of Brazil.

Both companies have ventured out beyond the state line, but the bulk of their business is in this state. Chouest became a minority owner in the New Orleans Hornets a couple of years ago and has announced his intention to buy the team. One indicator of the severity of the impact on Chouest operations would be if the already-delayed was pushed further back or called off.

Party Animals

Both Donald Bollinger and Gary Chouest and their families have been major players in the Republican Party in recent years. Chouest was a $100,000 contributor to the Louisiana Committee for a Republican Majority back in the 2007 statewide campaign cycle. Bollinger was one of the original contributors to the group and went in for $77,500 over the 2006-07 span. LCRM head Joseph Canizaro named Bollinger to the board of directors of his bank at least in part in recognition of their political work together.

Bollinger also made numerous contributions to individual candidates through his various LLCs. Chouest and his family and various LLCs they control have made large financial contributions to the state Republican Party and to various campaigns and candidates.

In fact, with Bollinger and Chouest leading the way, the southeast Louisiana oil patch has become the money pot for Republican politicians in the state. In state and local elections, in particular, the Bollinger and Chouest method of making maximum legal political contributions through multiple LLCs has enabled them to amplify their influence in political campaigns across the state.

Jindal's 2007 gubernatorial campaign tapped heavily into this means of circumventing the spirit if not the letter of state campaign finance laws. Jindal drew big bucks out of the southeast Louisiana oil services industry during that campaign.

Jindal Gives Something Back

The Chouest family and their companies were solid supporters of candidate Bobby Jindal and all things Republican in the 2007 statewide election cycle, giving Jindal and others in the party more than $132,000.

Governor Bobby Jindal went right to work to repay the Chouests' largesse as soon as he took office.

A Chouest project at the Port of Terrebonne was the first new economic development project to receive funds from the new governor in 2008. First, there was a $10 million grant to the port for a portion of Chouest's LaShip project and immediately added $4 million to that total. The ethical questions raised about the self-proclaimed 'Ethics Governor' giving tax payer dollars to one of his biggest contributors were not the last raised by the project.

The project itself was delayed by ethics questions when one of the Chouest companies (North American Ship) submitted the low bid for a portion of the construction work on the LaShip project. Ethics flags were again raised, with this matter going to the State Board of Ethics, which ruled that giving the bid to Chouest's North American Ship to build a state funded project for Chouest's LaShip would constitute a conflict of interest. Gary Chouest did not see any problem with the original bid.

According to a story in the Houma Courier in 2009, the entire deal was set up so that the Chouest LaShip project had access to about $20 million in state funds through a combination of allocations, grants and low-interest loans. There are local dollars at work on the project as well, according to the Terrebonne Port Commission.

To The Barristers!

When Hornbeck filed their challenge to the deep water moratorium and the various Bollinger and Chouest companies joined in, they were acting on old industry loyalties as well as seeking to stave off potential financial ruin. Bollinger once built barges and boats for both Hornbeck and Chouest. Bollinger had also built boats for Tidewater, Inc., where two officers of Hornbeck had served prior to moving to that company in 1997.

When Jindal's office filed an amicus brief in support of Hornbeck, Bollinger and Chouest, the circle was closed legally and politically. Here was the governor allied with his biggest financial backers and party loyalists lined up in court to fight a drilling moratorium imposed by an administration they all opposed.

Interestingly, despite the public pronouncement of tens of thousands of potential job losses resulting from the moratorium, in their court filing Jindal and Attorney General Buddy Caldwell say the immediate losses would amount to 3,336 Louisiana jobs with an additional loss in support jobs totaling 7,656 jobs within five months. Job losses approaching the range of 20,000 are projected 12-to-18 months out by Jindal's Department of Economic Development, but no basis for that number is provided.

The bottom line is that when confronted with court standards for truth, Jindal had to ratchet down his job loss numbers.

Judge Feldman's court was not the only place the political stars aligned to cast the Louisiana Republican oligarchy in stark relief.

Jobs, Jobs, Jobs

Jindal appeared at an anti-moratorium rally at Port Fourchon on June 10 which, appropriately enough, was held in an Edison Chouest facility at the port. The event was rightly called a rally as that's how it was staged and its focus was purely political. Jindal was in his element. He was on friendly ground, in a facility owned by one of his stalwart patrons. The Governor was preaching to blue collar workers to unite to save their jobs by defending the interests of their common patrons — the Chouests, the Bollingers and the other oil service millionaires whose wealth were built on servicing the industry that is killing Louisiana's coast and fisheries.

Jindal took part in another anti-moratorium rally on June 24, this one in the Port of Terrebonne in Houma, next door to the Chouest LaShip project into which he's poured so many state dollars.

The potential job losses are real and not to be lightly dismissed. But, Jindal and his administration have destroyed as many public sector and healthcare jobs over the past two years than will be lost to the moratorium in the coming months and he exercised those cuts with a certain detachment that failed to indicate that he connected in any way with those workers or the impact of those job losses on their families or their communities.

On the moratorium, though, Jindal is fully engaged because he's got a skin in the game, namely his own. Despite the fact that he's got a fat campaign war chest, he's bored with governing and faces another big budget shortfall next year. His adamant refusal to consider tax increases has locked the state into a pattern of continuing cuts of service that are building a backlash against those policies among some of his base, particularly those in healthcare and those who value higher education.

Even with no Democrat making noises about opposing him, Jindal will have a rough year next year if he decides to stick around. He will need every campaign dollar he can get his hands on in order to convince state voters that his sow's ear policies are actually silk purses.

If the oil service oligarchs are wounded, so too will Jindal's campaign coffers. That explains why he's passionate about fighting the moratorium. His job could well be at stake.

So, too, will be the coffers of Republican candidates down the ballot next year, particularly in legislative races. Although the LCRM is coming to play again, its method in 2007 was to supply nearly over-power media resources to Republican candidates and against Democrats in selected races. They use a lot of direct mail and a lot of radio. If Bollinger, Chouest and other oligarchs are wounded, they might take a more restrained approach to their participation in state elections next year.

That could work to the benefit of Democrats, particularly if Jindal tries to ram through another year of draconian budget cuts.

The BP Gulf Gusher was unexpected and has had a lot of unexpected consequences. That it could have a dramatic impact on the state's political landscape would be another one of those unanticipated consequences. If the moratorium stands either officially or because companies are hesitate to resume drilling because of the regulatory uncertainty, big changes could roll through Louisiana politics in the coming year, courtesy of the gang that could not drill straight and the people who enabled them.