When last we left Oregon, John Kitzhaber, the Democratic governor, had been forced to resign because his girlfriend, Cylvia Hayes, had involved him in her green energy get-rich-quick scams.
Hayes, who lived in the governor’s mansion and served as first lady, was said to be steering state consulting contracts for green energy to firms controlled by her and friends of the administration.
The state’s attorney general was mulling criminal charges. Federal prosecutors were looking at some of the issues. Kitzhaber was walking out on difficult interviews.
Meanwhile, Cover Oregon, the state’s attempt to establish its own healthcare exchange, collapsed amid finger-pointing and threats of allegations without a single Oregonian being enrolled.
There was a feeble effort on the part of Kitzhaber’s staffers to erase some emails, and a general consensus, even among Democrats in the state, that “Kitzhaber fatigue” had set in.
Soon, political support collapsed, and, with liberal Secretary of State Kate Brown, who would become the nation’s first openly bisexual governor, waiting in the wings, Kitzhaber was shown the door.
With Kitzhaber on the way out and little left in the way of things he could do to help his well-connected friends, the state’s attorney general sued the software firm that created Cover Oregon, with a Portland law firm and Kitzhaber ally heading the case at $450-per-hour.
This vendor “repeatedly lied and defrauded the state” during the course of its Cover Oregon work, according to Ellen Rosenblum, the state attorney general. “Through this legal action, we intend to make our state whole and make sure taxpayers aren’t left holding the bag,” she said.
Only there’s a problem with that, too. It wasn’t solely Oregon taxpayers on the hook for the lost $300 million. That money came from the federal government, which provided grants to help states set up their own Obamacare exchanges.
And, as Maryland and Massachusetts out recently, Washington wants its money back.
The head of the U.S. Centers for Medicare and Medicaid Services, which has overseen implementation of state exchanges, and two U.S. senators have said in recent days any money recovered by Oregon in court would have to go to the federal government.
“The recoupment of funds form the state-based Marketplace contractors is an area where the federal government has a specific interest,” wrote Andrew Slavitt, acting CMS administrator, in a letter dated Sept. 23 to Sen. Orrin Hatch, R-Utah.