Contractor:KitzhaberkeptCoverOregonexchangesiteshuttered

Contractor: Kitzhaber kept Cover Oregon exchange site shuttered for political reasons

posted at 2:41 pm on June 24, 2014 by Ed Morrissey

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There are a few oddities about this claim from Cover Oregon’s prime contractor. Oracle isn’t claiming that the Cover Oregon exchange worked properly out of the gate on October 1. The software giant told a House committee investigating the use of federal funds for the ObamaCare site that they did have it functioning well enough by February 1 to finally enroll individuals into health-insurance plans through the website. The decision to keep it off line came from Governor John Kitzhaber, Oracle alleges, as a political move to help him win re-election (via the Daily Caller):

Oracle went out of their way to accuse Kitzhaber personally for playing politics with the website:

Software vendor Oracle provided information last week to the U.S. House and Energy Committee claiming the website was operational in February, but that the state of Oregon pulled the plug on it for political reasons.

The On Your Side Investigators obtained a copy of the Power Point presentation, which alleges the state deliberately distorted the case for abandoning the Cover Oregon website in favor of transitioning to the federal exchange.

“Cover Oregon executives have stated to Oracle that the application functionality is sufficient to support individual enrollment,” Oracle president Safra Catz wrote in a letter addressed to Cover Oregon interim director Clyde Hamstreet and state CIO Alex Pettit. “However, Cover Oregon has not agreed to give individuals direct access to the application. Thus Cover Oregon, not Oracle, made the decision to keep the exchange closed to individuals even though the functionality has been delivered by Oracle.” …

“Oracle can only conclude that the Governor’s unwillingness to release the website is because doing so doesn’t fit with his re-election strategy of blaming Oracle for his own mistakes,” the presentation reads.

That decision to get personal may have something to do with Kitzhaber’s public direction to the state Attorney General to sue Oracle over the website failure.  There are still plenty of unanswered questions about Cover Oregon’s failures and Kitzhaber’s knowledge of them, too. It’s not clear just who benefits most from lawsuits, or perhaps who benefits least, but both sides are already playing hardball. Discovery should be a blast for observers in this fight.

Here’s the rub with Oracle’s claim, though. What possible reason would Kitzhaber have had to reject a working website?  He and Cover Oregon were getting hammered in the press over Oregon’s complete failure to launch its ObamaCare exchange. Kitzhaber was an ObamaCare advocate, and pledged to deliver a working exchange. If Oracle really had one ready to go, Kitzhaber should have jumped at the change to mitigate the failure with some late success. Kitzhaber still would have had plenty of room for “blaming Oracle for his own mistakes,” plus the modicum of operability would have blunted much of the longer-term political damage.

There’s little doubt that politics played a big role in keeping the Cover Oregon failures from being addressed and made public, and Kitzhaber will have plenty of questions to answer. But this Oracle claim is at least curious, if not implausible.

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Tags: Cover Oregon, health care exchanges, John Kitzhaber, ObamaCare, Oracle

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CoverOregondirectorstillgettingpaid$14Ka

Cover Oregon director still getting paid $14K a month after “resignation”

posted at 3:21 pm on May 22, 2014 by Ed Morrissey

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The lack of ObamaCare accountability extends farther than just the boundaries of the Beltway. In fact, as The Oregonian discovers, it goes from sea to shining sea. The reviled director of Cover Oregon, whose failed web portal has prompted a federal investigation into potential fraud, supposedly resigned his post and got kicked out of his government sinecure. It turns out that he’s just on an extended vacation (via Drudge Report):

Bruce Goldberg, the respected, long-time director of the Oregon Health Authority, offered to resign on March 18. Two days later, with the Cover Oregon tech mess going from bad to worse, Gov. John Kitzhaber announced that he’d shown Goldberg the door.

The resignation was “effective immediately,” said officials in the governor’s office.

Or so we thought.

It turns out, Goldberg never really left and is now drawing a full-time salary from the state. Oregon officials confirm Goldberg returned to full-time status at the Oregon Health Authority on May 15 and will use his accrued vacation pay until July 18.

He’s getting paid $14,425 a month.

Let’s not forget that Oregon taxpayers are footing that bill to pay for exactly zero enrollments through their $250 million web portal. Governor John Kitzhaber laid all of the blame for the failure at Goldberg’s feet over the past few weeks, no doubt hoping to escape culpability himself. Oregon taxpayers already on the hook for hundreds of millions of wasted dollars might have assumed at that point that at least they weren’t paying for Goldberg’s incompetent leadership any longer, and for very good reason.

What happened? Cover Oregon and Oregon Health Authority played a shell game with Goldberg. His resignation didn’t stop his paycheck at the latter until April 10, when Goldberg officially got paid $3600 a month to be a “consultant” to Cover Oregon. Why Cover Oregon needed to have the man Kitzhaber blamed for its utter failure on hand as a consultant is another question Oregon taxpayers should be asking themselves, but that arrangement only lasted five weeks. That’s when OHA brought Goldberg back on at full salary — and full health and pension benefits, which provides knife-twist irony to this story.

Last week, federal investigators issued subpoenas to Cover Oregon, OHA, and its officials in the criminal probe:

The federal criminal investigation of Oregon’s health insurance exchange took a step into public view Tuesday when the U.S. Attorney’s office issued broad subpoenas seeking information from Cover Oregon and the Oregon Health Authority.

While the Federal Bureau of Investigation’s interest in the exchange debacle had beenpreviously reported, the legal demands dated May 13 indicate things may have moved beyond a preliminary inquiry to a full-blown investigation.

The investigation, led by federal prosecutors and the FBI, is seeking documents, memos, and emails between the two state entities that oversaw the botched health exchange with U.S. authorities in charge of dispensing federal money for the project.

At least they’ll know where to find Goldberg. Maybe Kitzhaber can take a page from the Barack Obama playbook and put Goldberg in charge of the state’s investigation into Goldberg’s alleged failures.

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Tags: accountability, corruption, Cover Oregon, John Kitzhaber, ObamaCare, subpoenas

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NewunilateralObamaCarechangegivestaxcreditsto

New unilateral ObamaCare change gives tax credits to private enrollments after state-exchange debacle

posted at 8:41 am on February 28, 2014 by Ed Morrissey

Ho hum — another week, another unilateral change to the ObamaCare law. Without fanfare, HHS changed the way tax credits can be claimed by people who would normally be eligible for subsidies. The Affordable Care Act requires that subsidies only get assigned through ObamaCare exchanges, and there’s even some question as to whether the federal exchange qualifies. That’s to prevent fraud and abuse, but the failures of the state exchanges leaves a lot of Democratic governors who made the mistake of going all-in on ObamaCare in a tough spot. Their state exchanges are largely non compos mentis, which would mean that their voters would miss out on those tax credits.

HHS has waved its magic waiver wand once again:

HHS said state residents who were unable to sign up because of technical problems may still get federal tax credits if they bought private insurance outside of the new online insurance exchanges.

The federal policy change is significant because until now the administration has stressed that the only place to get taxpayer-subsidized insurance under President Barack Obama’s health law is through the new online markets, called exchanges. Previously, people who bought outside the marketplace were not eligible for subsidies, although they benefit from consumer protections in the law.

The White House has come to their rescue, and they’re pretty darned stoked about it, too:

“Today’s news means that many more Oregonians will be able to access better coverage at a more affordable cost,” said Oregon Democratic Gov. John Kitzhaber, whose state is near the bottom on enrollments.

Why is Oregon near the bottom? It’s because Kitzhaber’s administration spent hundreds of millions of dollars to produce a virtual brick in cyberspace, that’s why. Kithzaber keeps trying to claim that he knew nothing of the failure, but that’s getting more and more difficult to sustain. Oh, and let’s not forget that Oregon took a boatload of money from the federal government under arguably fraudulent circumstances.

Remember this when ObamaCare supporters claim that the problem with the program is Republican obstructionism in the states, and that the Democrats who built state exchanges show how well the system can work. If that was the case, HHS wouldn’t be bailing out Democratic governors  today by making a tax-credit change. And by the way, what jurisdiction does HHS have to make a change to tax-credit statutes, anyway?

Tags: Department of Health and Human Services, John Kitzhaber, ObamaCare, Oregon, state exchanges, subsidies

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Video:WhathappenedtotheCoverOregonaudit?

Video: What happened to the Cover Oregon audit?

posted at 10:01 am on February 14, 2014 by Ed Morrissey

How did Cover Oregon blow through more than $120 million and end up with a completely non-functional website? One year ago, when Oregon officials raised questions about the project and the contracts going to Oracle, Oregon Health Authority CIO told other state officials in a Cover Oregon meeting that the Secretary of State’s office had conducted an audit of the contracts, and found no problem. A year later, no one can find any evidence of that audit, which adds yet another dimension to the allegations of fraud involving Carolyn Lawson and Cover Oregon. KATU continues its in-depth investigation of the scandal:

The report goes on to say the issue was resolved, citing an audit by the Secretary of State’s office that “found everything in order.”

But the KATU On Your Side Investigators have learned that that audit – the only piece of evidence used to dismiss major accountability problems surrounding a contract that eventually grew to $119 million – doesn’t exist.

That audit was particularly important because the state’s contract with Oracle lacked the safeguards government’s usually put in place to ensure transparency. ….

The KATU Investigators contacted the Secretary of State’s office to ask for a copy of the audit.

Three different people responded, none of whom had a record of it, and finally it was suggested the Department of Administrative Service might know more.

DAS didn’t know of such an audit either, and referred KATU to the Legislative Fiscal Office.

The LFO didn’t know anything about it, referring KATU back to the Secretary of State’s office.

“I checked with our managers and there is no audit that would substantiate the statement that ‘a SOS audit found everything in order,’” Secretary of State auditor Gary Blackmer wrote to KATU News. “We have not conducted any audits of procurement or accounting practices related to the DHS/OHA Oracle contract.”

The video gives a pretty good overview, but you’ll want to read the full article as well. The QA group Maximus did its own audit, which found exactly the opposite of what Lawson told the rest of the team in that meeting. The problem was that the contracts essentially amounted to “blank checks” because the Cover Oregon team had little documentation about what Oracle was being contracted to produce, and what was provided (Statements of Work, or SOWs) were entirely inadequate. In addition, Maximus found that Oracle used the funds to perform work “outside the scope of the HIX-IT project” — or in other words, it used Cover Oregon money to do other work.

It’s not as if this problem was unnoticed. In that February 2013 meeting, the other Cover Oregon players clearly had concerns about this issue. Lawson put them off by making her claim about the SoS audit, but not everyone was buying it. It also raises the question — again — of what Governor John Kitzhaber knew about the failures of this project and when he knew it. Lawson ended up in tears during the meeting, according to KATU, and at least one of the attendees presumably had a reporting relationship to Kitzhaber (interim state CIO Julie Pearson). It’s difficult to believe that concerns of that depth and at that level eight months before the rollout deadline wouldn’t have reached Kitzhaber’s desk at that time, let alone down the line when the project was clearly derailing.

Don’t be surprised to see fraud investigations at a couple of levels resulting from this scandal.

Tags: Cover Oregon, fraud, John Kitzhaber, ObamaCare, Oracle

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Video:CriminalfraudinOregonObamaCareexchange?

Video: Criminal fraud in Oregon ObamaCare exchange?

posted at 8:41 am on February 4, 2014 by Ed Morrissey

Oregon Governor John Kitzhaber promised that its Cover Oregon web portal for the state ObamaCare exchange would lead the nation. The portal managed to lead the nation in incompetence and failure — but did it also lead it in fraud? One lawmaker has blown the whistle on deceptive reports sent to the federal government that allowed Oregon to get tens of millions of dollars from Washington for the project, allegedly including dummy web pages intended to fool HHS into believing that Cover Oregon development was on schedule. KATU continued its investigative reporting into Cover Oregon with this stunning update:

Former Republican state Rep. Patrick Sheehan told the KATU Investigators he has gone to the FBI with allegations that Cover Oregon project managers initiated the design of dummy web pages to convince the federal government the project was further along than it actually was.

If Sheehan’s allegations are true, those managers could face time in jail for fraud.

“One of the allegations that was made was so alarming that it went way beyond a legislative oversight committee and so I did reach out and contact the FBI,” Sheehan said.

“The issue had to do with federal funding and proving some amount of compliance with the federal regulation in order to get funding.”

The problem was that the project’s CIO, Carolyn Lawson, didn’t know how to build a web portal for a health-insurance exchange, and neither did the people hired for the project. She did, however, know how to make it look like she knew how to build one, at least well enough to fool HHS:

What that meant for the Cover Oregon website was that it was able to paint a picture of a flashy website – imagine a concept car that looks flashy in the showroom but doesn’t actually run.

But documents uncovered by the KATU Investigators show Lawson hadn’t actually figured out how to build the site, even as she was promising the federal government – and her bosses – that Cover Oregon’s website was going to work.

So what, exactly, were the federal and state reviewers being shown?

In a Sept. 27, 2012 email to Bruce Goldberg – Lawson’s boss at the Oregon Health Authority, who is now in charge of Cover Oregon – she sent a link to something called “The Solution Factory,” a site hosted by software contractor Oracle.

Lawson wrote in the email that the link went to a site hosting the same demonstrations the team provided to project stakeholders.

“It demonstrates what we have built to date,” she wrote. “By watching this every month, you can see our progress in real time.”

Let’s make sure to note that this doesn’t appear to be a very effective fraud, except when targeted at the truly ignorant. After all, an agency that’s certifying work for a state exchange should have the wherewithal to check the actual functionality. If a bunch of non-functioning web pages was enough to fool HHS into writing $59 million in checks, then the web pages weren’t the only dummies involved here.

State Rep. Patrick Sheehan called the FBI after discovering the potential fraud, which could result in a large amount of prison time at Club Fed if substantiated. The FBI won’t specifically state whether they’re investigating Cover Oregon officials for fraud, but Sheehan says they have discussed the case on several occasions since his first call. Oregon voters might wonder just what Kitzhaber knew on this issue, and when he knew it, too.

Tags: Cover Oregon, fraud, John Kitzhaber, ObamaCare

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Video:DidOregon’sgovernorlieabouthisknowledge

Video: Did Oregon’s governor lie about his knowledge of state exchange flop?

posted at 1:21 pm on January 31, 2014 by Ed Morrissey

Earlier this month, Democratic Governor John Kitzhaber of Oregon insisted that he and his office got blindsided by the nation’s biggest ObamaCare exchange flop, Cover Oregon. The web portal never successfully launched despite Kitzhaber’s claims that Oregon would lead the nation in ObamaCare implementation and expertise — and staked his reputation as a physician on it. Oddly, though, when the program collapsed, Kitzhaber told everyone, including KATU-TV, that he had not been told of any problems until they arose. When KATU tried to press Kitzhaber on that point, one of his aides brought a quick close to the interview.

That prompted more digging by KATU, which found numerous reports sent to Kitzhaber’s office predicting the collapse of the system long before its rollout. The discoveries make Kitzhaber look a lot less than honest or a lot less than competent, or both:

The claim was incredible because the website had already missed its Oct. 1 launch date. Kitzhaber was, in effect, saying he didn’t know there were problems until weeks after one of the most important projects under his watch had already failed.

It was incredible because mountains of reports from the state’s quality-assurance contractor had been raising glaring red flags for almost two years.

It was incredible because the state had implemented a stringent set of checks and balances for the specific purpose of making sure the project didn’t spiral without people in power knowing.

And it was incredible because the KATU Investigators have unearthed emails and conducted interviews laying out repeated attempts by lawmakers and others involved with the project to get Kitzhaber’s help in righting what was clearly a sinking ship.

KATU’s review of thousands of pages of emails and reports, as well as interviews with many of the key people involved, suggest that either Kitzhaber knew more than he has acknowledged, or that he and his staff somehow remained oblivious to the unfolding disaster despite numerous attempts to bring it to their attention.

The documents also make hash of Kitzhaber’s argument that he had no way of knowing what happened:

From the outset, project oversight was designed to be headed by the governor’s office.

The KATU Investigators obtained an organizational chart illustrating the oversight structure. At the top is the governor’s office, to which several different groups report.

The documents had some odd redactions, which Kitzhaber’s office refused to explain. Instead, KATU simply went around them and talked to the people involved. That produced this smoking gun:

On Sept. 20, 2012, Richardson emailed Kitzhaber to say that he was concerned not only about the alarming findings in Maximus’ reports, but by the fact the warnings seemed to be going unheeded by all involved.

“If you were the investor and I your legal counsel, I would be advising you that the QA report makes it abundantly clear, the HIX-IT project is on a path toward failure and disgrace,” he wrote.

“Since HIX-IT leadership continues to ignore warnings from me, the QA and (the Legislative Fiscal Office), the success of this project and responsibility for the $59 million invested in it rests on your shoulders as Governor and the Executive Branch’s C.E.O.”

Richardson also reached out to Goldberg and Department of Administrative Services COO Michael Jordan.

Goldberg emailed Richardson back on Sept 22: “I have discussed with the Governor’s office this morning and we will be pulling together the staff from both the Health Insurance Exchange Corporation and the IT side of things within the Oregon Health Authority this coming week to address.”

Richardson said he called the governor several days later because he had received no response, and Kitzhaber then returned his call.

“He assured me that he understands the severity of the situation and that he will talk with Goldberg directly and get this taken care of,” Richardson told KATU.

This video runs about 22 minutes, and it’s worth watching all the way through. It’s amazing, mostly so because of the completely inept manner in which Kitzhaber handled both Cover Oregon and the failure itself. One of the biggest lessons from Watergate and a myriad of other political scandals is this: It’s not the crime, it’s the cover-up. The cover-up in this case started well before the rollout of ObamaCare, and continued as late as now even when it became obvious that Kitzhaber had to know more than he admitted.

This video absolutely destroys Kitzhaber’s credibility, and the project itself.

Update: I didn’t notice this at first, but KATU played “Name That Party” in its otherwise excellent report. Kitzhaber is a Democrat, and I’ve edited the opening sentence to reflect that.

Tags: Cover Oregon, cover up, John Kitzhaber, ObamaCare

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