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.
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