Carcieri Hits Back at Roberts Over Lucas Group

Governor Carcieri's office has just released a statement hitting back at Lieutenant Governor Elizabeth Roberts for her unusual, high-profile critique of the administration's $370,000 settlement with The Lucas Group, a consulting firm that helped the state apply for a waiver from federal Medicaid rules.

The Carcieri administration had maintained for months that the Lucas Group, which has ties to the governor's recently confirmed chief of health and human services, was doing voluntary work for the state. And last week, the administration suggested that the voluntary work built up to a point that a settlement was justified.

Roberts slammed the governor for pursuing a relationship that led to a "no-bid contract" and made a call for transparency in government.

The battle of the state's top two elected officials has electoral overtones, of course. Carcieri, a Republican, is terming out of office. But Roberts is one of three prominent Democrats who have strongly suggested they will run for the top post. Another likely gubernatorial candidate, Attorney General Patrick C. Lynch, has also hopped in the game: launching a preliminary investigation into the matter.

Here's Carcieri's statement:

Governor Donald L. Carcieri today reacted to irresponsible and erroneous accusations made by the Lt. Governor regarding the settlement with the Lucas Group.  There is no wrong-doing by anyone in the Administration, and to imply such is grossly negligent.

There was never a "no-bid, no-contract agreement" with the Lucas Group. After several months of disagreement with the Lucas Group, a settlement was reached after intensive mediation facilitated by retired Associate Justice and former Attorney General Richard Israel.

The Lt. Governor has always been opposed to the concept of the Global Medicaid Waiver, testifying against it before the Rhode Island House and Senate.  However, the facts show the Waiver will transform the way the State delivers healthcare, and is guaranteed to save the taxpayers more than $100 million.  Without the Waiver, the State would be forced to cut healthcare and critical services to our elderly, disabled and poor. 

The relationship between the Lucas Group and the State began with a series of informal, high level discussions about the various benefits of a Medicaid waiver and the steps that needed to be taken to achieve one. As negotiations heightened and demand for information increased significantly, the relationship moved from informal assistance to a more definitive work plan as it became clear that the expertise and specialized human resources of the Lucas Group were needed to achieve the Waiver. 

In December 2008, DHS submitted a sole source request to the Division of Purchases, setting forth the reasons and justifications supporting the issuance of a Purchase Order for the Lucas Group. 

Under strict time constraints to complete negotiations with the federal government, DHS continued to work with the Lucas Group although the sole source request had not been finalized.

No formal contract was ever signed and or formal purchase order was ever issued to the Lucas Group for payment, and no payment had been made prior to the settlement agreement.  Although the sole source process was not complete and no formal contract was signed by the time the Global Medicaid Waiver was successfully negotiated, the Office of the Governor agrees with Justice Israel that the State did benefit, and payment to the Lucas Group is appropriate under the circumstances.

The work product by the Lucas Group is significant and was instrumental in helping the State obtain the unprecedented Global Medicaid Waiver. The Waiver provided the state with immediate savings of $7 million in FY 2009, and $16 million in projected savings in FY 2010, through securing additional federal revenue for costs not otherwise matched (CNOMs).  Over the five year period, CNOMs will save the State $100 million. In addition, the Lucas Group assisted in securing the $3.5 million information technology planning grant, which has the potential to grow to several million dollars over the agreement.

This story is, among other things, a testament to a diminished ProJo's continuing ability to stir things up - the paper's chief State House reporter, Kathy Gregg, has driven this story with the dogged reporting that is her trademark.

It's also a coming out party for Roberts, whose post as lieutenant governor can relegate her to the sidelines. And Lynch, with his preliminary investigation, continues his brand of aggressive politics. That leaves one major Democratic gubernatorial candidate on the sidelines - Treasurer Frank Caprio. As the early frontrunner, he can afford to sit these things out - for now.