Feds probe Cover Oregon debacle

A federal criminal investigation has been opened in Oregon, trying to determine if state officials lied to the federal government about the progress of their Obamacare website, Cover Oregon.

The site never signed up a single person for insurance, despite spending more than $300 million in state and federal funds.

The Oregonian:

While the Federal Bureau of Investigation's interest in the exchange debacle had been previously reported, the legal demands dated May 13 indicate things may have moved beyond a preliminary inquiry to a full-blown investigation.

The investigation, led by federal prosecutors and the FBI, is seeking documents, memos, and emails between the two state entities that oversaw the botched health exchange with U.S. authorities in charge of dispensing federal money for the project.

Oregon has spent $250 million and three years on an ambitious IT project that failed to produce a fully functional exchange. Instead, what was produced was bug-ridden and largely unfinished, documents show.

State officials say they'll cooperate with the federal grand jury subpoenas. Cover Oregon and the Oregon Health Authority issued a joint statement: "The agencies take this request seriously and will cooperate fully with federal officials. We will work collaboratively with the US Attorney's Office to provide any and all information we have and make any and all staff available to assist."

The subpoenas were released in response to Oregon Public Records Law requests by The Oregonian.

Among other things, the FBI seems to be interested in whether state officials misled their federal counterparts about progress on the exchange in order to get more federal funding. The FBI has asked for all communications between the state and the Center for Medicare and Medicaid Services, the so-called "gate reviews," in which federal officials supposedly quizzed state officials about the status of the IT project.

The FBI is also seeking communications with Exeter Systems, another technology company that approached the state saying it had a cheap, off-the-shelf technology that would meet the state's needs.

Documents obtained through Oregon's public-records law have shown that the Legislature's IT oversight analyst, Bob Cummings, felt the state misled federal officials about the status of the project. He related that Exeter felt the same, and that a Cover Oregon demonstration to the feds that was "little more than what" an Exeter executive – formerly with Oracle -- "had built as a 'demo' for Oregon."

Oregon has since scrapped the site and will adopt the federal healthcare.gov website for enrollments next year.

One of the major issues is whether Cover Oregon officials lied on their reports to CMS about how such great progess was being made in getting Cover Oregon up and running. It could be that officials responsible for those reports were misled by the company building the site - Oracle - or those under them.

Meanwhile, the Cover Oregon official most responsible for the mess is still drawing $14,425 a month in salary despite resigning "effective immediately" on March 18:

It turns out, Goldberg never really left and is now drawing a full-time salary from the state. Oregon officials confirm Goldberg returned to full-time status at the Oregon Health Authority on May 15 and will use his accrued vacation pay until July 18.

He's getting paid $14,425 a month.

In a March 20 press conference, Kitzhaber blamed Goldberg's decisions as major reason for the Cover Oregon debacle, and portrayed his resignation as a measure of accountability. "Those were his calls," Kitzhaber said.

State officials at the time said Goldberg would provide some help with a transition at Cover Oregon. But they said flatly that Goldberg would not be returning to the Oregon Health Authority, where he served as director before taking the Cover Oregon interim director post.

But Goldberg never stopped drawing a paycheck and will continue to do so until July 18, The Oregonian has learned. He continued drawing a full director's salary at Cover Oregon for nearly a month after Kitzhaber announced his "resignation," until April 10. That's when the Cover Oregon board formally accepted his resignation at a board meeting.

When you reward incompetence, what do you expect to get in return?