State Attorney General: Obamacare Architect Jonathan Gruber ‘Violated Vermont Civil False Claims Act,’ Submitted False Invoices

Jonathan Gruber

Vermont Attorney General T.J. Donovan alleges Obamacare architect Jonathan Gruber submitted at least two false invoices in connection with a $400,000 contract he had with the state to provide economic consulting services.

“The Attorney General’s Office concluded that Dr. Gruber’s conduct violated the Vermont Civil False Claims Act. While Dr. Gruber denied that there was a violation, in order to resolve the matter, he agreed to forgo any further payment that might be due from the State under the contract, including $90,000 outstanding for retainage amounts and unpaid research assistant time,” Donovan’s office said in a statement released on Friday:

The Vermont Attorney General’s Office has concluded its investigation into the invoices and billing practices of Dr. Jonathan Gruber, an economic consultant, who contracted with the State of Vermont in July 2014 to provide policy expertise, research and economic modeling relating to the implementation of Vermont’s single-payer healthcare system, Green Mountain Care. The Office’s investigation was opened following a referral by State Auditor Doug Hoffer. The Attorney General’s Office and Dr. Gruber have reached an agreement to settle the State’s potential legal claim that Gruber submitted false claims to the State under Vermont’s Civil False Claims Act.

According to the Settlement Agreement, Dr. Gruber’s personal services contract with the State was a standard “time and materials” contract which specified that Gruber would be paid only for services actually performed and required Gruber to submit monthly invoices describing the work performed and the amounts billed for such work. The Office’s investigation revealed that Gruber submitted at least two invoices that were false with respect to the amount of work performed by Gruber’s research assistant. Further, the supporting documentation provided by Gruber did not reflect the actual hours worked by the research assistant, nor did the assistant keep records accurately reflecting the hours he devoted to the state project.

The facts as recounted in the 10 page settlement agreement signed by Gruber on May 10 and Attorney General Donovan on June 8 suggest that Gruber is fortunate the case did not go to trial.

Under the Vermont False Claims Act, “No person shall: (1) knowingly present, or cause to be presented, a false or fraudulent claim for payment or approval; (2) knowingly make, use, or cause to be made or used, a false record or statement material to a false or fraudulent claim.”

“Any person who violates a provision of subsection (a) of this section,” the Act continues, “shall be liable to the State for: (1) a civil penalty of not less than $5,500.00 and not more than $11,000.00 for each act constituting a violation of subsection (a) of this section, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. § 2461); (2) three times the amount of damages that the State sustains because of the act of that person; and (3) the costs of the investigation and prosecution of such violation.”

Gruber also may have faced possible criminal charges. Vermont law says that “A person who designedly by false pretenses or by privy or false token and with intent to defraud, obtains from another person money or other property, or a release or discharge of a debt or obligation, or the signature of a person to a written instrument, the false making whereof would be punishable as forgery, shall be imprisoned not more than 10 years or fined not more than $2,000.00, or both, if the money or property so obtained exceeds $900.00 in value.”

The Vermont False Claims Act clearly contemplates that individuals who violate its provisions may also be subject to criminal charges for those acts. “A final judgment rendered in favor of the State in any criminal proceeding charging false statements or fraud, whether upon a verdict after trial or upon a plea of guilty or nolo contendere, shall estop the defendant from denying the essential elements of the offense in any action which involves the same transaction as in the criminal proceeding and which is brought under section 632 of this chapter,” the act notes.

Among the findings of fact made by Attorney General Donovan  are the following:


Invoices #1 [in the amount of $100,000] and #2 [in the amount of $100,000] were false with respect to the amount of work performed by research assistants. Both invoices indicate that Dr. Gruber’s “research assistants” worked 500 hours during the invoice period. Invoice #1 covers a period from July 21, 2014 through August 31, 2014–a period of 42 days. Invoice #2 covers September 2014–a period of 30 days. During this period. Dr. Gruber had a single research assistant. Thus, 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 hour a day for the second period.

Dr. Gruber’s research assitant was not reporting the hours he worked directly to Gruber. Instead, the research assistant, an independent contractor, kept track of his hours and then reported them by email on a bi-weekly basis to a payroll company. The research assistant did not retian his notes tracking the time he worked.

The Research Assistant was compensated by Dr. Gruber on a salary basis. He reported only 40 hours per week for work to the payroll service in order to receive his weekly salary. The time the research assistant reported to the payroll service was not intended and did not reflect the actual hours the research assistant devoted to work on the Contract with the State of Vermont. The Contract required that the State be invoiced for actual hours worked by Dr. Gruber’s research assitants. The research assistant retained no records of the actual hours worked on the Contract

Dr. Gruber’s February 18, 2015 “documentation” of the research assistant’s hours did not reflect the actual hours worked by the research assistant.


“The attorney general’s office’s began the investigation into Gruber’s billing after receiving a referral by State Auditor Doug Hoffer,” the Rutland Herald reported:

“Gruber’s contract was originally supposed to pay him as much as $400,000 to test economic models related to Shumlin’s health care proposal. The contract allowed the state to use the Gruber Microsimulation Model that Gruber developed to simulate the implementation of Shumlin’s plan and test various financing mechanisms,”  the Herald noted:

“When originally signed in July 2014, the Gruber contract was for $450,000. Last month, it was reduced to $280,000,” Breitbart News reported in December 2014.

Breitbart News noted Gruber’s overbilling problems in December 2014, shortly before the state of Vermont began its investigations.

“As part of his $280,000 contract with the state of Vermont to conduct economic modeling for the state’s potential single-payer plan, Gruber has billed the state $100,000 for 1,000 hours of work by unnamed research assistants,” Breitbart News reported in December 2014:


The state paid Gruber, personally, $80,000 against these invoices, trusting that Gruber would in turn pay his research assistants. Gruber, however, has yet to produce any documentation concerning these research assistants. He has not provided their identities, defined work product, or proven he made the payments to them.

Breitbart has repeatedly asked Gruber to produce this documentation, and has now done so again, asking him to provide it by Monday.

This lack of worker documentation caught the attention of Vermont State Auditor Doug Hoffer, who on December 3 asked the Shumlin administration to provide him with the names, employment status, and contact information for these research assistants.

To date, the Shumlin Administration has not responded to Hoffer’s request.

Bretibart News posed the following questions to Professor Gruber in December 2014, but never received a response:


1. Have you provided the Shumlin administration with the details of the names, employment status and contact information of the research assistants who you said in your invoices to the state of Vermont have worked 1,000 hours on your project?

As you know, State Auditor Doug Hoffer requested this information of the Shumlin administration on December 3, but has apparently not yet received it.

2. Has State Auditor Doug Hoffer contacted you directly about this information request yet?
3. Can you produce the cancelled checks to the research assistants you’ve paid in conjunction with this contract with the state of Vermont? You’ve billed $100,000 (1,000 hours of research assistant time at $100 per hour) and been paid $80,000 against these invoices by the state of Vermont.
4. If so, can you forward a scanned copy of those cancelled checks, front and back?
5. If not, will you refund the state of Vermont the $80,000 you received for these research assistant billings?
6. If so, by what date?

In a 54-page memo released in February, 2015, Vermont State Auditor Doug Hoffer “confirm[ed] that embattled Obamacare architect Jonathan Gruber overbilled the state in invoices he submitted for work Gruber claims was performed by research assistants.”