Federal officials to review legality of Alexander Group report

Posted May 28, 2014, at 6:57 p.m.

LEWISTON, Maine — The state of Maine may have a difficult time recovering any of the more than $500,000 it already paid a private consultant to develop a study and analysis of Maine’s welfare system following the revelation that parts of the study contained plagiarized material, a Maine law professor said Wednesday.

At the same time, federal investigators plan to review the state’s contract with the Alexander Group to determine if the federal funds used to pay the consultant were used appropriately.

Gov. Paul LePage said the state stopped paying Rhode Island-based welfare consultant Gary Alexander, and his administration may ask Alexander to refund the state’s money for the work his firm was contracted to do.

In September 2013, the LePage administration authorized a $925,200 no-bid contract to a group headed by Alexander, the former public welfare director for Pennsylvania and Rhode Island, on the basis Alexander was “uniquely qualified” to do the work.

Under Maine law, state agencies can issue no-bid contracts when the vendor doing the work has a unique capability or experience to do work no other entity is capable of doing.

On Wednesday, Gerry Petruccelli, a University of Maine Law School professor who specializes in contract law, said the language in the contract between Alexander and the state was “fuzzy” enough that the state may have little legal recourse.

Stopping any additional payments and terminating the state’s contract with Alexander may be the state’s best option, he said.

“The language defining what he was supposed to do was not particularly tidy,” Petruccelli said of the contract with Alexander.

But the state’s ability to legally demand a refund would depend on whether it could show the work provided by Alexander and his consulting firm was essentially without value, Petruccelli said.

The plagiarism issues with the report may be a basis for arguing the Alexander Group did not do what it said it would do, he said.

Petruccelli is a Democrat but said he based his opinion that the state’s position is problematic on his legal studies, not his political affiliation.

Under the contract, the Alexander Group was paid monthly installments with additional payments being made after specific portions of the study were delivered to the state, but the contract allowed the state to withhold up to 40 percent of those additional payments until it was satisfied with the work turned in.

The contract was also amended in April to give the Alexander Group an additional two months to complete the final portions of its report, pushing a May 15 target due date to July 15.

The contract was administered by Maine’s Department of Health and Human Services but was authorized by LePage’s office.

The Alexander Group delivered its second installment of the study earlier this month. But despite the consultant meeting the due date of May 15, it was soon discovered large portions of the report had been lifted from previously published studies conducted by organizations other than the Alexander Group.

Alexander acknowledged problems with the report, noting the consulting firm would resubmit the report to correct what he characterized as attribution errors.

“Specifically a failure to ensure intended footnotes were included,” Alexander wrote. “We regret the error and offer our sincere apologies. Such usage is never acceptable, and appropriate checks are being put in place to ensure that this unfortunate outcome is never repeated.”

LePage, who in January refused to make public the first installment of the report — after it was delivered days past its “target” date of Dec. 1, 2013 — has since said he’s looking into recovering some of the payments already made.

John Martins, a spokesman for DHHS, confirmed Wednesday that half of the $501,760 — or $249,185 — already paid to Alexander was federal funds.

At the federal level, officials with the Centers for Medicare and Medicaid Services in Boston referred all questions on the use of federal funds to pay Alexander to the Office of the Inspector General.

Phil Coyne, Assistant Special Agent in Charge of the federal OIG, HHS regional office in Boston, said investigators would be reviewing the state’s contract with the Alexander Group to determine if the federal funds used to pay the consultant were used appropriately.

Tim Feeley, a spokesman for Maine Attorney General Janet Mills, said Wednesday that Mills’ office did not assist the administration in drafting the contract and had not been asked for advice on how to proceed but was standing by to assist the governor’s office upon request.

Meanwhile, Democratic leaders in the Legislature sent a letter to LePage Wednesday asking him to spell out the state’s legal options.

Co-signed by House Speaker Mark Eves, D-North Berwick, and Senate President Justin Alfond, D-Portland, the letter also reiterates concerns the contract should have had greater public scrutiny prior to being inked.

“From day one, the Alexander contract has been highly questionable. The no-bid contract received no public review, no opportunity for legislative oversight and no adequate vetting of this contractor. Worse, it used federal funds intended to help struggling families and hungry children,” Eves and Alfond wrote in part.

LePage spokeswoman Adrienne Bennett said in a written statement Wednesday afternoon Eves and Alfond were trying to politicize the issue just days in advance of the Democratic State Convention.

“President Alfond and Speaker Eves are a week late to the party. … The governor will not allow politics to interfere with getting to the bottom of these allegations,” Bennett wrote. “As the governor has stated previously, he immediately suspended payment one week ago. Proper follow-up is being conducted, looking into the validity of these accusations, and appropriate action will be taken, including and up to termination of the contract, if warranted.”

Senate Minority Leader Mike Thibodeau, R-Winterport, also issued a statement Wednesday saying he had reached out to LePage’s office and had been “reassured they are taking these allegations very seriously, are taking appropriate steps to look into their validity and considering the appropriate course of action going forward.”

House Minority Leader Ken Fredette, R-Newport, on Wednesday urged Democrats to show “some patience in terms of letting the chief executive deal with evaluating the report in light of the contract and make a determination as to what his course of action is going to be.”

BDN State House Bureau Chief Christopher Cousins contributed to this report.

 

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