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Vermont State Auditor Seeks Billing Details of Gruber Contract That’s Lacking in Oversight and Transparency

Vermont State Auditor Seeks Billing Details of Gruber Contract That’s Lacking in Oversight and Transparency

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Vermont State Auditor Doug Hoffer wants more details about controversial MIT professor Jonathan Gruber’s billing practices. 

To date, the administration of Governor Peter Shumlin (D-VT) has provided little evidence that it has exercised any accounting oversight of the $280,000 contract it signed with Gruber in July. Nor does it appear eager to provide the documentation Hoffer has requested that would make the contract more transparent to the public.

The Vermont State Auditor is a constitutional officer elected every two years. Hoffer, a graduate of Williams College and the University of Buffalo School of Law, was first elected to the office in 2012 and re-elected last month. Under Vermont law, the State Auditor has broad authority to review and audit most aspects of the state government’s activities.

For one thing, Hoffer wants to know who’s been paid as part of Gruber’s contract. “That’s just standard procedure for monitoring any contract,” Hoffer told the Vermont Digger when it broke the story on Wednesday. The Vermont Digger reported that Hoffer’s request “but was made in response to incomplete documentation of the work being done” by Gruber. The contract calls for Gruber to provide financial and economic modeling assistance to the Shumlin administration as it develops a report on the financial viability of the proposed Green Mountain Care single-payer health care system.

In an exclusive interview with Breitbart News on Thursday, Hoffer confirmed the details of the Vermont Digger report.

Hoffer told Breitbart News that he initiated the request for more information on the details of the Gruber contract, specifically the names, employment status, and contact information for the research assistants Gruber says he is paying $100 per hour to assist him in conducting the work of the contract because “there’s a lot of concern in the community for the information that has not yet been provided about this contract.”

Under the terms of the contract, the State of the Vermont pays Gruber personally for every invoice billed in the contract, and relies only upon his word that his unnamed, subcontracted research assistants are paid in accordance to the hours specified in the invoices he submits to the state.

Last month Lawrence Miller, Vermont’s health care reform chief, announced that the amount Gruber was being paid in the contract had been reduced from $450,000 to $280,000. Miller did not, however, present the written amendment required in the contract until two weeks later. That amended was signed by both parties on November 25.

“After the first inquiry [from the press], the [Shumlin] administration put the amendment in writing,” Hoffer told Breitbart News. However, Hoffer noted that “they had not yet as of earlier this week provide the billing documentation [for the Gruber contact].”

Consequently, Hoffer said, he sent a request for that documentation to the Shumlin administration by email on Monday. “They called me back the same day and said we’ll get back to you in a few days, but we’re dealing with a number of other requests right now for public documents,” Hoffer added.

“They will let me know if they have the information. It’s probably likely that they don’t have this information.  I would hope that they will ask Gruber for it,” Hoffer stated. “If they provide that information [on employment status, names, and contact information for Gruber’s research assistant] the rest of the information will be obtainable,” Hoffer said.

Hoffer confirmed that he will be looking for evidence to confirm that payments have been made to Gruber’s research assistants by Gruber in accordance with how he billed for their services in invoices submitted to the state of Vermont.

In September, Gruber billed Vermont $50,000 for 500 hours of work by his research assistants, which he billed at $100 per hour. In October, Gruber billed an additional $50,000 for 500 more hours of research assistant work.

To date, the state has paid Gruber personally $80,000 against these two invoices, reserving the final $20,000 for payment after the contract is completed. (Note, Gruber has also been paid an additional $80,000 for his personal work, which he has billed at $500 per hour. All told, Gruber has been paid $160,000 to date on the contract.)

Under the revised terms of the contract, Gruber will bill Vermont an additional $100,000 for 1,000 hours of research assistant work billed at $100 per hour. “The more important question,” Hoffer told Breitbart News, “is the substance of the deliverable.”

Under the terms of the contract, Gruber’s deliverable is to provide economic and financial modeling assistance to the State of Vermont in preparation for a report to be delivered to the state legislature on January 15, 2015 that outlines the financial viability of the proposed single-payer Green Mountain Care health system.

The information requested of the Shumlin administration about the details of the Gruber contract “is important because I take the state’s responsibility for auditing contracts with great seriousness,” Hoffer concluded.

When asked about the steps he will recommend to be undertaken if Gruber and the Shumlin administration fail to provide this information about Gruber’s contract, Hoffer said “we’ll see what happens.”

“I’m not the Attorney General,” Hoffer said. “At some point if there is no ‘there there’ [in the documentation of the Gruber contract], then it’s up to others.”

Concern about the lack of oversight and transparency in the state’s contract with Gruber is widespread, particularly since Gruber appears to have missed several of the requirements set forward in the state’s contracting rules as detailed in the 2008 State of Vermont contracting standards

A senior contracting manager for the state of Vermont told Breitbart News “Gruber’s contract is missing so many of the necessary requirements [specified in the state’s contracting rules] it’s hard to know where to begin.”

“Most notably,” the contracting manager continued, “there is no identification or monitoring of his subordinates (subcontractors), no standards by which the contractor’s performance can be measured, no contractor accountability, no real work plan or dates for deliverables,  no protection for the state regarding confidentiality or the use of the data, no requirement that the state owns the work, not Gruber…it just goes on and on.”

“In my view,” the state contractor concluded, “a contract of nearly a half million dollars should have all the protections and requirements that the state’s contracting rules mandate.”

When originally signed in July 2014, the Gruber contract was for $450,000. Last month, it was reduced to $280,000.

As Breitbart News reported earlier, the contract’s scope of work is limited to only two of the six financial conditions required by Act 48, the 2011 enabling legislation for Green Mountain Care, to be met prior to the launch of the system in the state.

Hoffer’s informational requests are similar to those identified as missing in the oversight and transparency of the Gruber contract with the state of Vermont by Breitbart News last month.

Specifically, Breitbart News asked Vermont health care reform chief Lawrence Miller what level of oversight he has personally provided on the Gruber contract and whether he considered the lack of detail provided in Gruber’s invoices submitted and paid by the state to be consistent with good business practices.

Miller never responded to Breitbart News. But State Auditor Hoffer wants those invoice details. 

Breitbart asked Miller by what mechanism will the State of Vermont pay Professor Gruber’s research assistants going forward for their work? Will the State of Vermont pay Professor Gruber based upon his subsequent invoices, relying upon him to pay his research assistants? If so, Breitbart News asked, will the State of Vermont require more detail as to the names of the research assistants and evidence they’ve been paid? Or will instead, the State of Vermont pay the research assistants directly based on invoices they submit?

Earlier, Miller had told Vermont Digger “the administration did not have additional documentation of the type Hoffer requested, but that it could obtained from Gruber should it be deemed necessary.”

“Just because the invoices aren’t presented that way doesn’t mean we don’t have the option to go deeper,” Miller told Vermont Digger.

These new questions about Gruber’s accounting practices come on the heels of renewed interest in the accuracy of Gruber’s economic models

Local media in Vermont also is beginning to question the details of the Gruber contract with the state.

WCAX television in Burlington, Vermont reported on Wednesday that the administration of Governor Peter Shumlin (D-VT) continues to withhold information about the financial details surrounding the state’s contract with controversial MIT economist Jonathan Gruber.

WCAX confirmed Breitbart’s earlier reporting, when it found that “Vermont recently amended its contract with Gruber for his work projecting how that planned transition would affect the state economy. Gruber will no longer be paid $500 an hour for his time, but he may still be cashing in on the $100 an hour he bills for graduate assistants’ time.”

Suprisingly, WCAX was unable to obtain much information about the details of Gruber’s contract with the state from Governor Shumlin. In an embarrassing admission, the Shumlin administration said it was exercising no financial control over the administration of Gruber’s contract.

“The governor’s office says they do not know those details, but did say a PhD. is also working under Gruber,” WCAX reported.

“MIT’S website does list stipend levels for grad students in science and engineering fields, and indicates students in other fields should be similarly compensated,” the station added. “At the high end of the range, those students receive about $20 an hour.”

As Breitbart reported previously, all checks issued in compliance with the $280,000 personal services contract Gruber has with the state of Vermont are issued to him personally. The state is not requiring any accounting documentation that future payments they make to Gruber are then paid directly to his graduate students working at the $100 rate he’s billing the state.

In essence, the state is giving Gruber blank checks to spend as he wishes and is relying entirely upon his word that he’s paying his assistants as he claims in his contract. According to WCAX, “Gruber declined multiple requests for comment.”

Gruber has given Breitbart News exactly the same response on numerous occasions.


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