The Department of Health and Hospitals, after more than an hour and a half of back and forth bickering with the Senate and Governmental Affairs Committee, on Wednesday finally relented and admitted that the winning contractor on a 10-year, $34 million-per-year contract was CNSI the same company that formerly employed the DHH Secretary.
[LouisianaVoice missed the call on that one. Everyone in the know said it would be CNSI but we thought the contract would go to ACS, a subsidary of Xerox which already has six contracts totaling $148.3 million and which contributed $10,000 to the Jindal campaign. We didn't think that even this administration was brazen enough to give the contract to the department secretary's old employer. Guess we underestimated the stones of this administration.]
The committee was meeting to conduct confirmation hearings on DHH Secretary Bruce Greenstein who has been serving as secretary since his appointment last July. All cabinet members must be confirmed first through the committee hearing process and then by majority vote of the Senate.
Similar hearings were held last week for Commissioner of Administration Paul Rainwater, Deputy Commissioner Mark Brady and Office of Group Benefits CEO Scott Kipper. Kipper has since tendered his resignation, effective June 24, and his nomination withdrawn.
Just as last week with Kipper and to a lesser extent with Rainwater and Brady, Wednesday’s hearings quickly became contentious when Greenstein and Undersecretary Jerry Phillips became embroiled in a standoff with the committee over release of the name of the winning contractor pending formal approval by the joint House and Senate Health and Welfare Committees.
At stake is the contract to replace the 23-year-old computer system that adjudicates health care claims and case providers, Greenstein said. He said a state statute that requires the official awarding of the contract to be done by the joint health committees prevented him from divulging the name of the winning contractor.
Sen. Rob Marionneaux (D-Livonia) reminded Greenstein that the committee had run into refusals to release information by the Division of Administration (DOA) in the case of a report prepared by Chaffe & Associates of New Orleans on the financial assessment of the Office of Group Benefits (OGB).
Rainwater, at last week’s hearing, promised to make the report available but later backtracked and instructed Kipper to release the report to no one. Kipper subsequently resigned over that issue.
One of the first orders of business of the committee on Wednesday was to unanimously adopt a motion by Sen. Ed Murray (D-New Orleans) to subpoena the Chaffe report.
“On Monday, we picked up the paper and see where DHH refuses to release the name of the successful contractor,” Marionneaux said. “You cited a statute but the statute you cited does not say you shall not divulge, just that you shall not award the contract. We’re not here to award the contract, we just want to know who the contractor is. So, who is going to receive the contract?”
Greenstein answered that DHH had requested a joint committee meeting to hear its recommendation but Marionneaux interrupted him in mid-sentence. “One of the questions is about the company you used to work for (CNSI). Who is the company who is going to receive the contract?”
Again Greenstein tried to invoke the statute governing the awarding of the contract but was again interrupted by Marionneaux. “You said the administration of DHH, and that’s you as we stand here today. So you’ve made that decision not to divulge. Are you telling me right now, today, that you’re refusing to tell this committee who’s going to receive that $34 million contract?”
“We believe that the law states that we should call on the (joint) committee and then make the announcement to that committee,” Greenstein replied.
“I read the statute,” Marionneaux said, his patience beginning to wear thin. “Are you refusing to tell this committee who is going to be recommended by DHH to receive the award? Yes or no?”
“I’m not going to be able to say today.”
“We’re sitting here trying to decide if you, the leader of DHH, are going to be confirmed and we have a headline in Monday’s paper that you want to keep a secret and a direct question is being asked and you refuse to answer,” Marionneaux said.
“I just don’t understand why this administration does this,” said Murray. “You are, I suppose, just following directions. I just don’t understand it.”
It was Sen. Jody Amedee (R-Gonzales), however, who really laid the issue at the feet of Gov. Bobby Jindal when he asked Greenstein who made the decision “not to tell us this information under oath?”
“This was from my department….”
“You are the department,” Amedee interrupted. “Who is the person above you? Who is your boss?”
“The governor,” said Greenstein.
“Can you tell me if this company you used to work for….whether or not they got the contract?” Amedee asked.
“I can’t discuss the matter.”
“You can, you just choose not to,” Amedee said. “It’s not against the law. Can you tell me they didn’t get it (the contract)? That’s what everyone here wants to know. We want to know if the former employer of the Secretary of DHH got the contract for $34 million. If they didn’t get it, this will probably all go away. The more that this goes on, the more we think they got it.”
Greenstein did say that he erected a firewall between himself and the bidding process once the request for proposals (RFP) was issued so that he would not be involved in the selection process. He admitted that he not only had worked for CNSI, but also had past professional relationships with the other three bidders.
At one point after Greenstein and Phillips repeatedly alluded to the “process and procedure” employed by DHH in awarding contracts, Amedee, in apparent frustration, tossed his pencil over his shoulder and turned away from the witnesses.
Committee Vice-Chair Karen Carter Peterson said, “You don’t want me to know, but you know. Is this what we call transparency?”
Phillips said once the contractor’s name is made public, “it’s the equivalent of an announcement.”
“Do you make the law?” Peterson shot back.
“I interpret the law,” said Phillips, who is an attorney.
“Then you’re not doing a good job. Mr. Secretary (Greenstein), I hope you’re paying attention. How many lawyers do we have on this committee? We make law and yet you choose to follow this gentleman (Phillips).”
“It’s all part of the process,” Phillips said. “It’s (the selection process) done in conjunction with consultation and direction from the procurement folks.”
“In conjunction with whom?” asked Peterson.
“They’re part of the Division of Administration,” he said for the first time, implicating DOA in the controversy.
Committee Chairman Robert “Bob” Kostelka (R-Monroe) finally broke in to say, “I don’t know the difference between firewalling and stonewalling but this committee’s concern is whether or not to recommend to the full Senate that these people should be confirmed for the jobs for which they’ve been nominated.
“The much larger issue here is the integrity of the entire DHH. We don’t care about your procedures. We’ve got to determine if we trust the integrity of the people before us. We’re asking you to put aside your procedures and protocol and answer our questions. Knowing that, I don’t see why you cannot make this committee aware if a former employer of this man is going to win a multi-million dollar contract from the state.”
When Phillips again attempted to invoke “respect for the statute,” Kostelka interrupted. “Again, sir, this has nothing to do with making the award. We’re asking who got the contract. It’s pretty obvious to us that they’re (CNSI) the one getting the contract.”
At that point, Phillips asked if he could confer with Greenstein. The two left the room for 16 minutes and upon their return, Greenstein, after a few more questions, said, “It is CNSI.”
Marionneaux then asked about communications between Greenstein and CNSI. Greenstein admitted meeting with CNSI representatives as well as lobbyists for the other bidders and to speaking on the phone and exchanging emails with all four bidders but insisted all communications occurred prior to issuance of the RFP.
Marionneaux then offered a motion that was approved unanimously that the committee issue a subpoena for all written and oral communication records between Greenstein and the four bidders “as they relate to the contract for services with CNSI.”
As the committee wound down its questioning, Peterson said, “I hope the governor is listening because what has been happening is not in the best interest of the people nor is it consistent with his purported policy of transparency.
“This gives the appearance of your wanting to hide something, particularly since we now know the contractor is your former employer and you wanted to keep that from us. The behavior of you and Mr. Kipper (in last week’s confirmation hearing) is unacceptable. We need to do better.
“Do not let anyone or this administration do anything to taint you as a person or your integrity,” she said to Greenstein, whom she said she respected. “There are those who will attempt to do that to people. They’ll serve ‘em up and throw ‘em under the bus. Don’t let that happen to you.”