by Mike Smith It may have gone largely unnoticed, but buried in a news cycle that was dominated by the events in Charlottesville, Virginia, came the announcement that the Vermont attorney general’s office had reached a legal settlement with controversial health care consultant and Massachusetts Institute of Technology economics professor Jonathan Gruber.
The state agreed not to pursue charges against Gruber for highly questionable billing practices. Gruber billed the state a total of $290,000. The state found that the hours worked by Gruber’s research assistant were false on two invoices.
“For the invoices to be accurate — that research assistant must have worked almost 12 hours a day for the first period and 16 2⁄3 hours a day for the second period,” according to the attorney general. Looking at this another way, the research assistant had to work from 7 a.m. until 7 p.m. for 42 straight days and then from 7 a.m. until 11:40 p.m. for an additional 30 straight days for the invoices to be accurate. And, of course, they weren’t.
Although the details of the agreement were released only a few weeks ago, interestingly, this agreement had been signed for almost two months.
You may remember Gruber for his infamous comments: He was caught on video bragging about how stupid Americans were and how our collective stupidity allowed him and other proponents of the Affordable Care Act to get it through Congress. “Call it the stupidity of the American voter or whatever, but basically, that was really, really critical for the thing to pass,” Gruber said.
Governor Peter Shumlin hired Gruber and agreed to pay him up to $400,000 for designing economic models for the governor’s signature initiative, his single-payer health care plan. Once Gruber began submitting his bills, state Auditor Doug Hoffer was the first to raise concerns about possible overbilling. He wrote in a hard-hitting memo, “It’s clear that the Agency of Administration failed to exercise due diligence and enforce important provisions of the contract.”
After Hoffer’s memo, the attorney general’s office opened an investigation.
In the settlement Gruber is allowed to keep $160,000 the state has already paid him. He also “denies liability in general and specifically denies that he violated the Vermont False Claims Act or any other state or federal law, regulations, or rules, including common law.” The state will not pay Gruber for any other amounts that may be outstanding, according to the attorney general’s office.
If you’re like a lot of Vermonters, this settlement seems wholly unfulfilling. Why isn’t Gruber, or state officials responsible for overseeing his work, being held accountable? Overbilling the state for hours not actually worked is a serious charge.
The attorney general’s office says it wanted “to avoid delay, expense, inconvenience, and uncertainty of litigation,” according to the settlement.
In addition, Robin Lunge, the former health care reform director, who oversaw much of Gruber’s work, was later appointed by Shumlin to serve on the Green Mountain Care Board, the state entity charged with regulating health insurance rates and hospital budgets. She is one of five board members and is paid an annual salary of $96,678 for 32 hours of work each week.
Just think about this for a moment: The person who led the failed single-payer effort; was involved in the trouble-plagued implementation of Vermont Health Connect; and was lax in the oversight of Gruber’s work and associated invoices is now one of the five individuals with enormous influence and responsibility over one-fifth of Vermont’s economy.
In an editorial on the Gruber settlement, The Caledonian-Record recently concluded: “And, as usual, nobody will be held accountable.”
That newspaper seems to have it right.
Civil and criminal cases are routinely settled for the very reasons the attorney general cited, but many would argue the Gruber case isn’t routine. In fact, it’s a high-profile case.
This settlement could have far greater future ramifications than moving forward with prosecution. For example, what message is sent to other vendors when they see the state not prosecuting alleged overbilling? That it’s OK to try to bamboozle Vermont taxpayers because chances are you will not go to jail if caught? More importantly, what message is sent to taxpayers? That if you’re politically connected and working on a legacy priority of the governor, as Gruber surely was, then you can submit invoices for work not performed and avoid prosecution?
If there are extenuating circumstances surrounding this case that made it impossible to prosecute, then why not share them so Vermonters can be assured their state officials take this issue seriously? Otherwise, why not prosecute, if for no other reason than to demonstrate this type of taxpayer abuse will not be tolerated?
Certainly in this case there are a lot more questions than answers. Vermonters have every right to question this decision by the attorney general’s office, and it would surely be disappointing if the office ignored their concerns. At some point accountability must prevail.
Mike Smith is a regular columnist for VTDigger and Vermont Business Magazine. He hosts the radio program “Open Mike with Mike Smith” on WDEV 550 AM and 96.1, 96.5, 98.3 and 101.9 FM and is a political analyst for WCAX-TV and WVMT radio. He was the secretary of administration and secretary of human services under former Governor Jim Douglas.