By Robert Burns (Special to LouisianaVoice)
LouisianaVoice readers may recall a December 15, 2014 post outlining state defense attorneys desperately fighting to block a deposition of Stephen Russo, Secretary of the State Department of Health and Hospitals (DHH), to be conducted by Lewis Unglesby, lead plaintiff attorney in the Client Network Services Inc. (CNSI) civil lawsuit against the state. CNSI alleges that Gov. Jindal’s office, in “consultation” with AG Caldwell’s Office, unjustly cancelled its contract to provide Medicaid processing services to DHH after news of a federal grand jury having convened to consider potential improprieties in the awarding of the contract broke. The federal grand jury probe went nowhere, but Caldwell nevertheless continued a probe with a state grand jury. Ultimately, that state grand jury indicted former DHH Secretary Bruce Greenstein for nine counts of alleged perjury entailing testimony to that grand jury or statements made at his senate confirmation hearing.
At that December hearing, Judge Kelley ruled that Russo could be deposed and that any attorney-client privilege had clearly been waived. The AG’s Office filed an immediate appeal writ with the First Circuit (notwithstanding the fact Judge Kelley stated, “There’s nothing to appeal because this matter is clear,”). The First Circuit upheld Judge Kelley’s ruling and denied the appeal. During that December hearing, Unglesby stated AG Caldwell’s Office had “quite likely acted illegally” in publicly releasing Greenstein’s grand jury testimony. A hearing to quash that testimony transpired in Greenstein’s criminal trial on March 20, 2015.
At that hearing, Greenstein criminal defense attorney, John McLindon, argued for protection of the grand jury “body” not only for the Greenstein case but for all future criminal trials. He stated that denying his motion to quash the grand jury testimony would send a horrible signal that grand jury secrecy was a “sham” in Louisiana. He also stated that AG Caldwell’s Office essentially engaged in an ex-parte maneuver in that the AG’s motion to file the grand jury transcript into the public record was “buried” at the end of the order. McLindon also argued that David Caldwell had been deceptive in describing the motion in court on the day it was presented as a “routine procedure” to enable McLindon to obtain a copy of the testimony, which McLindon indicated he was entitled to anyway. Judge Daniel ruled that the AG’s office acted properly in filing the transcript into the public record, but McLindon indicated he may likely appeal Judge Daniel’s ruling.
Louisiana Voice has now reviewed extensive court filings in the civil case in which CNSI attorneys lodge even more allegations of serious wrongdoing on the part of Caldwell’s Office. Those allegations entail the testimony of CNSI whistleblower Stephen Smith.
Smith is the CNSI employee who sent an anonymous email to Jeffrey Branch with the Center for Medicare/Medicaid Services (CMS) under the alias of “Kunego.” The email was sent sometime after a meeting which Smith had with Norm Nichols, President of Molina Medicaid Services, and the company which has managed Louisiana’s Medicaid processing for decades and which filed a protest after CNSI won the contract. Smith testified that Nichols indicated that, although Molina lost the protest, “there were still things in the process that were questionable.” Smith has moved on to Orlando, Florida where he serves as Vice President for Sellers Dorsey, LLC, which is a health policy consulting company.
On May 1, 2014, CNSI attorneys conducted a video deposition of Smith in Orlando. During the deposition, Unglesby presented Smith with a copy of what the AG had supplied as the “Kunego report.” That report, which was filed under seal soon after CNSI’s lawsuit was initiated, contained notations of AG investigator Scott Bailey’s interview of Smith (but identified as “Kunego”) on May 10th and May 11th of 2012. Unglesby then asked Smith to take a pen and underline those portions of the interview notes for which he wished to claim were his words and recollections of the interview and to refrain from underlining those items for which he did not wish to assess as having originated from him. As readers can readily tell from reading the 7-page report, Smith was only willing to claim responsibility for between 50-60% of it as evidenced by what is underlined. Nevertheless, the report contains some rather intriguing allegations, not the least of which is contained on page five. On that page, the report states: “Bobby Jindal has what Kunego calls an India to India ancestor driven background and network of connections that brought CNSI and Jindal together.”
The deposition continued for an extended period, so the parties agreed to recess and reconvene on a later date, which turned out to be July 8, 2014. Upon reconvening the deposition, Unglesby made an inquiry of Smith regarding whether he’d had any communication with anyone from the AG’s Office. Smith responded that Scott Bailey, the AG investigator who had interviewed him for the Kunego report, had telephoned him twice and had flown to Orlando to meet with him on June 28, 2014. Smith indicated that Bailey stated that he needed to clarify the timeframe of the meeting with Nichols and also to inform him that the AG’s office had provided CNSI attorneys with the “wrong version” of the Kunego report. Smith testified that Bailey informed him that, on May 1, 2014, he’d been provided with the “unedited” Kunego report when he should have been provided with the “edited” report, which is the report the AG’s Office intended to supply to CNSI attorneys.
Smith then explained that the unedited report, which CNSI attorneys provided at the May 1, 2014 deposition, was what had confused him so much because it had statements in the report which he knew he hadn’t made and therefore caused confusion as to how such statements were in a report of an interview of him. When Unglesby pressed Smith on whether he asked Bailey how such allegations, including that of Jindal’s “India to India ancestor driven background” and that being responsible for bringing CNSI and Jindal together, got in his interview report, Smith indicated that he did not press Bailey for any explanation.
CNSI attorneys, upon learning of these phone conversations between Bailey and Smith, the in-person meeting between the two on June 28, 2014, and the fact that two reports of Smith’s interview responses even exist, prompted strong accusations of witness tampering on the part of AG Caldwell’s Office. CNSI attorney Michael McKay of the law firm Stone Pigman, in a Motion to Conduct Discovery Regarding Certain Activities of the AG’s Investigator, accuses AG investigator Scott Bailey of “outrageous witness tampering,” and seeks to depose Bailey about his conduct and actions and also have the AG surrender documents, including the “edited” Kunego report, which were shared between Bailey and Smith, along with documents and dates of correspondence between Smith and Nichols.
CNSI attorneys allege that the AG’s Office filed the “unedited” version of the “Kunego report” under seal with the full knowledge that it contained material not attributable to Smith as a means to “influence the public” and to justify a six-month stay being sought by the AG’s Office for all proceedings. Although the motion to stay was denied (and the First Circuit upheld the denial on June 7, 2013), the AG’s Office filed a motion to limit discovery and a motion for Judge Kelley to recuse himself on the basis Unglesby had previously represented him. Judge Caldwell denied the recusal motion on July 1, 2013; however, Judge Kelley granted a motion to stay all proceedings on July 30, 2013. CNSI attorneys asserted that Kelley’s decision was based largely on the “unedited” Kunego report which they contended the AG’s Office knew full well contained material not supplied by Smith and for which the foundation is unknown. CNSI attorneys also expressed frustration that, as of the date of their filing, August 22, 2014, they still had not been provided with the “edited” Kunego report.
The hearing on CNSI’s motion to depose Bailey was argued before Judge Kelley on October 7, 2014, and he granted the motion. At a bare minimum, CNSI attorneys have already exposed a high level of ineptitude on the part of AG Caldwell’s Office in that it provided the wrong “version” of the Kunego report given how critical that report is to both the civil and criminal trials. It is mind boggling that a document that critical wouldn’t be triple checked as being the one the AG’s Office wanted to ensure CNSI attorneys received. The mere fact they would later have to admit to Smith that “we gave the CNSI attorneys the wrong version” speaks volumes as to the AG Office’s ineptitude. Of course, as CNSI attorneys argued in their support memorandum, it begs the question as to why two versions of the report even exist at all.
It remains to be seen how successful CNSI’s attorneys may be in exploiting their allegation of witness tampering by the AG’s Office. Obviously, their ultimate goal is to have Smith’s testimony at trial declared inadmissible based on inconsistency and the actions of AG Caldwell’s Office. If they succeed, a huge defense to CNSI’s alleged wrongful contract termination may go by the wayside and expose Louisiana taxpayers to a substantial monetary award. Further, if Smith’s testimony is ruled inadmissible, a spillover benefit to Greenstein’s criminal trial may also arise.
When combined with the recent scathing WWL investigative report on AG Caldwell, one can only question if the biggest beneficiary of all of the extensive focus of the ineptitude and controversies of Gov. Jindal has been AG Caldwell himself. It certainly appears that for an extended period, he was able to fly below radar on his office’s ineptitude and potential serious wrongdoing. Perhaps recent revelations of his actions may provide an excellent source of campaign fodder for the October election for Louisiana’s next attorney general.