Audit: Lack of ‘ethics’ enabled $110M no-bid state contract

AUSTIN (AP) — A state contracting scandal that has cost top Texas health officials their jobs and dealt new Republican Gov. Greg Abbott an early test was enabled by a lack of ethics and accountability, a state audit concluded Thursday.

The report is another black eye for the Texas Health and Human Services Commission, which has spent months getting ripped by lawmakers over a $110 million no-bid contract to an Austin tech company that was hired to root out Medicaid fraud. That deal has since been canceled.

Earlier this week, a separate investigation ordered by Abbott urged changes at the top of the 56,000-employee health commission but stopped short of calling for the removal of Commissioner Kyle Janek, who was appointed by then-Gov. Rick Perry in 2012. Janek, who makes $260,000 a year, signaled that he has no intention of stepping down.

Public corruption prosecutors are also investigating. No officials have been accused of wrongdoing.

Auditors repeated many of the accusations about the 2014 deal with 21CT that have been swirling for months: how the lucrative contract skirted a competitive bidding process, was “predestined” to land with 21CT and that high-ranking state officials promoted the company to other potential customers.

The commission “failed to establish and maintain a working environment that emphasized ethics, integrity, and accountability,” the report read.

The report put much of the responsibility on Jack Stick, the agency’s former inspector general who brokered the deal. Attempts to reach Stick, who resigned last year, were not immediately successful Thursday.

Stick has previously defended the contract in interviews with the Austin-American Statesman, which first raised questions about the deal.

Responding to the report, Texas health commission spokeswoman Stephanie Goodman referred to the findings about Stick directing the contract. She declined further comment, citing the criminal investigation.

21CT executives have repeatedly denied that the contract was improperly won. Mike Rosen, a spokesman for company, said in a statement that 21CT followed contracting protocols and has offered the state help with the company’s findings at no cost.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

KXAN.com provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Users who violate these terms, including use of vulgar language or racial slurs, will be banned. If you see an inappropriate comment, please flag it for our moderators to review.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s