LePage calls bill to cancel Alexander contract unconstitutional

Gary Alexander (from left) and Eric Randolph of Rhode Island-based Alexander Group and Maine Department of Health and Human Services Commissioner Mary Mayhew in January.
Gary Alexander (from left) and Eric Randolph of Rhode Island-based Alexander Group and Maine Department of Health and Human Services Commissioner Mary Mayhew in January. Buy Photo
Posted March 26, 2014, at 1:28 p.m.
Last modified March 26, 2014, at 7:07 p.m.

AUGUSTA, Maine — Gov. Paul LePage says an effort by Democrats to nullify a state contract with controversial welfare consultant Gary Alexander violates the U.S. and Maine constitutions.

The Senate on Wednesday gave initial approval, 21-14, to a bill by Rep. Dick Farnsworth, D-Portland, to stop all future payments by the state to the Alexander Group, a Rhode Island-based consulting firm awarded a $925,000, no-bid contract for welfare consulting work in September. The House gave initial approval to the bill Tuesday.

Alexander has come under constant fire from Democrats and advocates for the poor since the contract with his company was made public in November.

On Tuesday, LePage spokeswoman Adrienne Bennett blasted the effort to cancel the contract, saying it violated provisions of both the Maine and U.S. constitutions.

It was the first time the administration had spoken publicly about the effort to kill the contract.

“This bill is nothing more than an unabashed attempt to punish the governor for uncovering the true cost of welfare,” Bennett said. “It is short-sighted, politically motivated and does nothing to help the people of Maine. Furthermore, this senseless attempt is yet another example of extreme overreach by the legislative branch. Mainers deserve elected officials who are working for their best interests, rather than using the majority of their time in Augusta to attack the governor simply because it’s an election year.”

The constitutional question revolves around clauses regarding the “impairment of contractual obligations” found in Article 1, Section 10 of the U.S. Constitution and its companion in Article 1, Section 11 of the Maine Constitution.

The “contract clause” has been interpreted by the Supreme Court to mean that state legislatures may not pass laws that retroactively interfere with the obligations set forth in state contracts. The court has held that such interference is only allowed when it is “reasonable and necessary.”

Rep. Drew Gattine, D-Westbrook, a member of the Health and Human Services Committee, said Wednesday that he views the Legislature’s action as an appropriate response to a consultant that has failed to live up to its end of a contract.

“I think [the Alexander Group] is in breach of contract anyway,” Gattine said. “The work has not been on time. The quality has been bad. … The Legislature, as guardians of the purse strings, is well within its rights to pass this law.”

Regardless of constitutional questions, the contract between the state and the Alexander Group appears to include a clause that may give the Legislature a means to withhold funds.

The “non-appropriation” clause of the contract states that “if funds are deappropriated” — as Farnsworth’s bill would do — “or if the state does not receive legal authority to expend funds from the Maine State Legislature or Maine courts, then the state is not obligated to make payment under this agreement.”

Alexander has been besieged for missing deadlines and had his objectivity questioned after releasing a study that said expanding Medicaid in Maine, known as MaineCare, would cost the state more than $800 million over 10 years — findings far out of line with most other analyses.

An AARP analysis said the report contained a half billion-dollar mathematical error, and many others raised questions about Alexander’s other prediction that Maine’s poverty rate would skyrocket if the publicly funded insurance plan expanded enrollment.

The contract also requires Alexander to meet several other deadlines for additional reports on Maine’s welfare system. Those deadlines so far have been missed, but DHHS officials say extensions have been granted. Payments to Alexander continue to be made.

LePage and legislative Republicans have stood by Alexander, saying his consulting firm deserved the no-bid contract because Alexander — a former public welfare chief in Rhode Island and Pennsylvania — is “uniquely qualified” to help the state obtain a global Medicaid waiver, which would give Maine near-total flexibility in administering its Medicaid program.

Alexander obtained such a waiver in Rhode Island, the only state so far to do so.

Questions about the legality of the contract-killing bill may turn out to be academic: Neither the House nor Senate have approved the bill with numbers big enough to sustain a near-certain veto by LePage. But that reality has done little to stem the march by legislative Democrats to see the contract nullified.

“This contract with the Alexander Group was a mistake from the start, and continuing to fund it only compounds the error,” Sen. Margaret Craven, D-Lewiston, said during a floor speech Wednesday. “If we continue paying for this contract, we’ll be throwing good money after bad.”

Follow Mario Moretto on Twitter at @riocarmine.

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