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As feds probe Cover Oregon, state has approved criminal defense costs for five former employees [The Oregonian, Portland, Ore. :: ](Oregonian (Portland, OR) Via Acquire Media NewsEdge) July 30--Five former state officials have taken steps toward hiring criminal defense lawyers at state expense as federal investigators probe the Cover Oregon health insurance exchange fiasco. Triz delaRosa, Bruce Goldberg, Aaron Karjala, Rocky King and Carolyn Lawson have applied for legal coverage under a new state policy adopted as a result of the ongoing FBI investigation, according to documents obtained by The Oregonian. The policy pays up to $35,000 for the legal defense of a current or former state employee accused of a crime. The five are among six officials involved with the failed health exchange that have resigned since December. At least some of them bore a share of the responsibility for its failure, Gov. John Kitzhaber has said. The state already pays for lawyers for current or former state employees sued in civil court for their actions as a state employee. The new policy extends the benefit to criminal cases. The FBI is trying to find out if the state lied to the federal government about progress on the exchange in order to secure funding. The applications for coverage have been accepted. The expense for exchange-related criminal lawyers will come on top of others the state has incurred related to the investigation. Those include retaining former federal prosecutor Bob Weaver, a $500-an-hour criminal defense lawyer, to advise the Oregon Department of Justice on "matters relating to potential criminal investigations of Cover Oregon, Department of Human Services, Oregon Health Authority, and their current or former employees." Weaver's contract with the Oregon Department of Justice pays up to $25,000. Meanwhile, Oregon is preparing to sue Oracle Corp, the lead technology vendor on the exchange project. The California software giant has denied responsibility, saying the state mismanaged the project and failed to hire a contractor to oversee Oracle's work. A federal criminal grand jury issued a subpoena to the state on May 13, demanding emails of 10 current and former state employees who worked on or were involved in the exchange project. "The Assistant U.S. Attorney supervising the investigation has also advised that the FBI would like to interview all of the people named in the Subpoenas," wrote OHA Director Suzanne Hoffman in a letter requesting coverage for Lawson, formerly the agency's top technology official. No indictments have been issued, and retaining a criminal defense lawyer does not indicate culpability. Employees taking advantage of state-funded criminal defense are required to cooperate with state Justice Department lawyers or the coverage will be withdrawn. The policy requires a finding by a review panel that covering their defense costs is "in the best interest of the state and its operations. If convicted, they would have to refund the state. Oregon was one of the first states to begin setting up its own health exchange to help consumers shop for plans and access tax credits. But last fall it was among several states that ran into serious problems. Though a backup manual-enrollment system helped sign up more than 70,000 Oregonians with private insurance, that figure did not reach goals -- in part because the exchange never got off the ground for small businesses as planned. On March 20, Gov. John Kitzhaber released a report that was critical of the state's management of the failed technology project, as well as of its main contractor, Oracle. He portrayed the resignation of the exchange's interim executive director, Goldberg, as holding him accountable for decisions made that contributed to the exchange's failure. Kitzhaber also publicly urged his appointees on the Cover Oregon board to remove Chief Operating Officer Triz delaRosa and Chief Information Officer Aaron Karjala. DelaRosa and Karjala resigned. On May 29 Kitzhaber told lawmakers "I have held accountable those within the Oregon Health Authority and those in Cover Oregon whose decisions contributed to the failure to deliver a website that worked." In addition to paying for the legal defense of those who Kitzhaber says he held accountable, the state has funded soft landings for several of those who resigned. But the resignations have not always been smooth: --Carolyn Lawson, resigned Dec. 19: Though state officials portrayed Lawson's departure as voluntary and praised her leadership, the former top Oregon Health Authority technology manager since said she was forced out as a scapegoat. She's blamed Cover Oregon managers for the fiasco, hired a lawyer and threatened the state with a lawsuit. Rocky King, submitted resignation Jan. 1: The former Cover Oregon executive director went out on medical leave Dec. 2 before resigning effective March 5. Documents show his medical conditions are real -- he's been battling them for years, he's said. But the timing came as tension between board members and King, a Kitzhaber choice, was at an all-time high. King's resignation came the day before the board had scheduled a closed-door meeting concerning his job performance. Bruce Goldberg, submitted resignation March 18: As director of the Oregon Health Authority, Goldberg was part of crucial missteps that set up the exchange for failure. Then he took over as interim director of Cover Oregon after King left. Though Kitzhaber's office on March 20 said Goldberg's resignation was effective immediately, he continued drawing a salary at Cover Oregon until May 15, helping transition to his interim replacement, Clyde Hamstreet. Goldberg then served out his accrued vacation time back at the Oregon Health Authority, collecting full salary and benefits through July 18. Aaron Karjala, resigned March 31: Cover Oregon's top technology officer took over the beleaguered project last spring with scant notice, after the Oregon Health Authority realized it had overspent federal grant funds. In June he signed a $70,000 consulting contract with Cover Oregon -- $160 an hour -- to assist state lawyers with litigation against Oracle Corp. Triz delaRosa, resigned effective May 16: The former chief operating officer for Cover Oregon negotiated her resignation in April. On April 7 she sent Goldberg a letter criticizing Kitzhaber and threatened a lawsuit if she were fired. Instead, she received a $67,000 settlement that required her to not say anything negative about the state or disclose confidential Cover Oregon business. Ironically, the state's new policy will underwrite the costs of Dave Angeli, the criminal defense lawyer for Lawson who is also handling her potential litigation against the state. And even as the state has been sending out investigative demands for documents from contractors to prepare for litigation against Oracle Corp., and the federal government sends its own demands for documents and interviews to the state, Angeli is conducting his own investigation of Cover Oregon. In March, records show, he submitted a wide-ranging records request to Cover Oregon and the Oregon Health Authority. -- Nick Budnick ___ (c)2014 The Oregonian (Portland, Ore.) Visit The Oregonian (Portland, Ore.) at www.oregonian.com Distributed by MCT Information Services |