Obamacare’s ‘ground zero’

Obamacare’s ‘ground zero’
Image: Sergey Nivens/Shutterstock

The ground zero of waste, fraud and abuse of taxpayer money in Obamacare might be Cover Oregon, the state’s ill-fated effort to create its own health care exchange. A new report by the House Committee on Oversight and Government Reform has uncovered a series of potential illegalities and has referred the matter to the Department of Justice for prosecution.

Oregon’s was supposed to be the crown jewel of state exchanges. Then-governor John Kitzhaber (D) was an emergency doctor who was praised in the media as the man who would “save” American health care. The federal government flooded the state with over a quarter of a billion dollars to establish Cover Oregon, and the state spent another $100 million promoting the exchange with television ads reminiscent of the Woodstock generation.

Despite the generous cash infusion, the web portal did not work. Kitzhaber was by told computer experts and contractors that the website needed more time. Ignoring their advice, Kitzhaber flipped the “on” switch. The exchange was unable to sign up even one person, and the pressure on Kitzhaber began to mount. As his re-election neared, Cover Oregon was becoming an anvil around his electoral neck.

He then tasked his political operation to oversee the health care exchange. Ultimately, the decision was made to shut down the site altogether and roll into the federal exchange. $300 million was tossed aside as a sort of in-kind contribution to the governor.

The committee’s findings show state officials knowingly misused taxpayer funding and “collaborated to such an extent that the lines between official and political activities became blurry.”  Kitzhaber’s staff is accused of having used taxpayer dollars toward his re-election campaign rather than its intended purpose: to aid Oregonians in purchasing health insurance.

The corruption did not end there, however, as documents and testimony obtained by the committee show that state officials used back-channel emails to discuss issues regarding Cover Oregon in an attempt to cover their trail of squandering millions in taxpayer dollars.

Bruce Goldberg, the Cover Oregon Executive Director, routinely contacted the Governor’s Chief of Staff, Michael Bonetto, via personal email to discuss various issues. Kitzhaber’s top political advisers led multiple official decisions related to Cover Oregon, including deciding to abandon the state exchange and return to the federal program. In addition to utilizing questionable lines of communication, Kitzhaber’s office also ordered “anything that is in the email account [Kitzhaber’s account] removed from archive,” according to an email obtained by “Willamette Week” and 101.9 Kink/FM News 101 KXL. Kitzhaber’s promise to be “open and honest” with Oregonians was clearly a campaign promise that he had no intention of fulfilling.

The multifaceted scheme to take federal taxpayer funding for personal gain shows that corruption existed on several levels within the Oregon government, while all roads pointed to Kitzhaber and his inner circle. Among those in the inner circle is his fiancée, Cylvia Hayes. Hayes is now facing increased scrutiny over claims she manipulated her close position to the governor to grow clientele for her environmental consulting business. According to reports, “Emails show Hayes directed state employees how to implement a new policy while she was being paid $25,000 by an advocacy group to promote it.” Additional emails show payment records from the governor’s office to Hayes and her company, 3E Strategies. Further earnings Hayes allegedly garnered did not match those on her tax returns, fueling the growing calls for a criminal investigation.

Former John Kitzhaber and Cylvia Hayes
Former John Kitzhaber and Cylvia Hayes

The committee’s report and accompanying demand that Kitzhaber and all those involved with the fraudulent mishandling of Cover Oregon face a criminal investigation now awaits a response. While it is clear an investigation is warranted, it remains to be seen whether the Department of Justice will attempt to sweep this tale of corruption under the rug alongside numerous other cases of a similar nature. The taxpayers’ needs and well being should be the primary concern of the DOJ, not protecting corrupt politicians who actively undermine those principles which they swore to uphold.

Edward Woodson

Edward Woodson

Edward Woodson is a lawyer, now host of the nationally syndicated Edward Woodson Show, which airs daily from 3 to 6 pm EST on gcnlive.com.


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