Technicality Allowed Governor Lujan Grisham to Dodge a Formal Complaint Under Governmental Conduct Act
A Majority of State Ethics Commission voted to “authorize the filing of a civil action regarding violations of the Governmental Conduct Act by state officials and employees.” – April 20, 2023 Meeting Minutes.
In the early months of 2023, politicians and observers on both sides of the political aisle were stunned upon learning that Governor Michelle Lujan Grisham was alleged to have interfered in one of the state’s largest Request for Proposals (RFP) with Managed Care Organization contractors for the then newly named Turquoise Care program – the state’s Medicaid healthcare entity.
The demonstrative act of interference with the Turquoise Care RFP process by the Governor’s team, came on January 30, 2023, when “acting HSD Secretary Kari Armijo, following instructions communicated by Governor’s Office employees, sent the five offerors the Notice of Termination of Turquoise Care Medicaid Managed Care Request for Proposals (RFP # 23-630-8000-0001) (Jan. 30, 2023) (“Notice of Termination”)…” – as was alleged and eventually reported by the New Mexico State Ethics Commission (SEC).
Events Leading up to Cancellation of Turquoise Care RFP process
On January 24, 2023, six days before Armijo acted on the instructions of the Governors office employees, then HSD Secretary David Scrase, MD, announced that the New Mexico State Medicaid Director, Nicole Comeaux J.D. MPH, was leaving the HSD after serving as the Director of the Medical Assistance Division since January 2019.
And on January 27, 2023, just three days before Armijo carried out the instructions of the Governor’s team to end the Turquoise Care RFP, the Governor announced that David Scrase was retiring.
Comeaux and Scrase supported the Turquoise Care RFP process, which had followed best practice guidelines of the procurement rules.
After Comeaux and Scrase were no longer in charge, it appears the SEC was tipped off about events surrounding Armijo’s rescinding the Turquoise Care RFP, as an investigation was opened up by the State Ethics Commission staff.
The investigation resulted in a civil enforcement action that ran against the Governor and the Human Services Department (HSD) for what the State Ethics Commission (SEC) contended were actions that violated the New Mexico Procurement Code when the Request for Proposals process with Managed Care Organization contractors was cancelled.
(Requests For Proposals in New Mexico are mechanisms that engage a bidding process involving scoring the proposals of each offeror with the expectation an agency will get the best deal for the state for services.)
The SEC eventually reached a settlement with the Governor and the HSD, which required a reversal of their actions that curtailed the RFP process.
However, despite the significant amount of reporting about alleged violation of the state’s Procurement Code, little if anything seems to have been reported about another significant element of transgression that the SEC considered – an alleged violation of the New Mexico Governmental Conduct Act.
When the SEC announced the settlement there were scant details regarding the individuals involved and alleged transgressions that led to an investigation by the staff of the SEC.
The Candle requested a copy of the investigative report made to the members of the SEC, but according to the SEC, the investigation related documents will remain secret.
The only public record The Candle can find relative to alleged Governmental Conduct Act violations in the matter of the rescinding of the Turquoise Care RFP, is located in the minutes of the special meeting convened by the SEC members to address the results of the investigation done by SEC staff.
Majority of the Ethics Commission Members Vote to File Violations of the Governmental Conduct Act Civil Action
According to records of the SEC, and the Minutes of the April 20, 2023, Special Meeting of the SEC, seven members met for two hours in executive “closed” session, before coming into open session for a vote.
The minutes state the following,
“Commissioner Bluestone moved that the Commission authorize the filing of a civil action regarding violations of the Governmental Conduct Act by state officials and employees. Commissioner Holt seconded the motion.”
“Hearing no discussion, Chair Bosson conducted a roll-call vote. Commissioners Bluestone, Holt, Solimon and Villanueva voted in the affirmative. Commissioners Baker, Foy Castillo, and Bosson voted in the negative.”
“The motion failed for lack of consent of “at least two members of the largest political party in the state and two members of the second largest political party in the state” under NMSA 1978, Section 10-16G 3(H).”
It is important to note, that regardless of Commissioner Bluestone’s motion failing due to the political composition of the Commissioners voting, a majority of the SEC members (four, yes and three, no) voted to pursue “… a civil action regarding violations of the Governmental Conduct Act by state officials and employees.”
Then there was a second motion regarding allegations of violations of the state’s procurement code – it passed unanimously.
The minutes continue as follows:
“Commissioner Bluestone moved that the Commission authorize the filing of a civil action regarding violations of the Procurement Code by state officials and employees by seeking declaratory injunctive relief, authorizing staff to pursue pre-filing settlement discussions, and authorizing staff to enter a settlement agreement subject to Commission approval. Commissioner Foy Castillo seconded the motion. Hearing no discussion, Chair Bosson conducted a roll-call vote. All Commissioners voted in the affirmative and passed the motion unanimously.”
Over several months, attorneys for the Governor, Human Services Department officials, and the SEC, negotiated a Settlement Agreement.
Governor and HSD Get a Pass from SEC on “… Any and All Claims, Known or Unknown ...”
The agreement required the Governor and HSD to reinstate the RFP process, while they continue to deny any wrongdoing.
In return the SEC granted the Governor and the others a very broad release which went further than the matters regarding the procurement code.
The negotiated agreement states, “This Settlement Agreement is intended to have the broadest possible effect so that the allegations arising from the Released Claims be finally and forever put to rest.”
Additionally, it includes language that appears to inoculate the Governor and the other “releasees” from any further action by the SEC – even any alleged or potential violations of the Governmental Conduct Act regarding the RFP matter.
The Settlement Agreement states that the SEC “…hereby releases, acquits, and forever discharges Releasees from any and all claims, demands, and damages, of whatever nature, actions and causes of action of any kind whatsoever, known or unknown, suspected or unsuspected, which Releasor could have asserted as part of a lawsuit against the Released Parties, or any other current or former employee of the State of New Mexico, regarding the RFP or the Notice of Termination (“Released Claims”)…”
The Settlement was signed on August 10, 2023.
Why is This Still Important?
For years, hundreds of millions of dollars in spending are contracted with companies, many of them out-of-state, by state agencies without ever seeking a request for proposals for bids.
While researching information regarding the State of New Mexico purchasing practices and efforts by reformers to tighten the state’s procurement code, The Candle reviewed the exceptions in the existing laws that agencies use to bypass requirements to put many contracts out for competitive bid.
As previously reported, there is been a sharp increase in the number of Sole Source and so-called Emergency purchases during the seven years of the Lujan Grisham Administration – almost a doubling of those made during the Administration of former Governor Susana Martinez.
When the 2023 Request for Proposals for the Turquoise Care were temporarily hijacked by the Governor’s team, there was an independent legislative effort to reform the procurement code.
At the beginning of the 2023 New Mexico Legislative Session, State Senator Bill Tallman, of Albuquerque, filed Senate Bill 76, which would have made important changes to the state’s procurement process.
The bill was endorsed by the Legislative Finance Committee, and drafted by the Senator and LFC staff to address problems cited in the LFC reports from 2016 through 2021, about misuse of the procurement code exceptions.
But the bill hit an early roadblock.
Senate Bill 76, was scheduled to have its first hearing on Thursday, February 16, 2023, before the Senate Tax, Business & Transportation Committee, and Tallman, as well as the director of the LFC, and the lead analyst and support staff of the LFC procurement studies, were all in the hearing room that day to explain the importance of bill.
However, as the committee was about to begin, SB 76, was pulled from the agenda for the hearing by the Chair of the committee, Senator Benny Shendo.
According to Tallman, Shendo told him the Governor did not want the bill to be heard.
It’s not a stretch to think the Governor wanted to prevent the bill from being heard given the circumstances surrounding her alleged interfering with one of the state’s largest Request for Proposals.
(Next Week: The Candle will continue its series on the hundreds of millions of dollars spent by New Mexico state agencies using No-Bid contracting, as well as reporting on a series of “just below the radar” $60,000 contracts HSD entered into with consultant Dana Flannery at about the time the SEC was investigating and eventually settled with the Governor and HSD over the alleged transgressions in rescinding the Turquoise Care RFP.)
The Following is a timeline of related events and actions between September 2022 and August 2023, regarding the Turquoise Care Request For Proposal alleged to have been interfered with by officials in Office of Governor Michelle Lujan Grisham and then acting Human Services Department Secretary Kari Armijo.
September 30, 2022
HSD issued a Request for Proposals for Managed Care Organization Contractors for Turquoise Care RFP # 23-630-8000- 0001 (Sept. 30, 2022) (“RFP”). – From State Ethics Commission Settlement Agreement with Governor Michelle Lujan Grisham.
January 18, 2023
Senator William Tallman files Senate Bill 76, PROCUREMENT CODE CHANGES, a Legislative Finance Committee Endorsed measure.
January 24, 2023
“The New Mexico Human Services Department (HSD) today announced that New Mexico Medicaid Program Director Nicole Comeaux J.D. MPH, will depart HSD after serving as the Director of the Medical Assistance Division since January 2019.” … “I will miss Nicole greatly. She has provided outstanding leadership for our state’s Medicaid program over the past four years. During her time in New Mexico, we have seen a more than $2 billion annual increase in federal health care revenue for healthcare for the state’s 980,949 Medicaid customers,” said David R. Scrase M.D., cabinet Secretary for the New Mexico Human Services Department.” – New Mexico Human Services Department (Now Health Care Authority) Press release.
January 27, 2023
“The Office of Gov. Michelle Lujan Grisham on Friday announced the retirement of Dr. David Scrase from state government. Scrase has served as secretary of the Human Services Department since the governor took office in 2019 and served as Acting Secretary of the Department of Health between 2021 and 2022.”
“Dr. Scrase has been a valued member of state leadership since the very start of my administration. For many, he was the face of the state’s pandemic response, and his leadership contributed to countless New Mexican lives being saved,” said Gov. Lujan Grisham. “What’s more, his work at HSD has benefited hundreds of thousands of low-income New Mexico families, delivering critical supports and services. I am deeply grateful to David for his tireless service to New Mexicans as both secretary of the Human Services Department and acting secretary of the Department of Health, and I wish him all the best.” – Governor Michelle Lujan Press Release.
January 30, 2023
State Ethics Commission alleges that on January 30, 2023, acting HSD Secretary Kari Armijo, following instructions communicated by Governor’s Office employees, sent the five offerors the Notice of Termination of Turquoise Care Medicaid Managed Care Request for Proposals (RFP # 23-630-8000-0001) (Jan. 30, 2023) (“Notice of Termination”). – From State Ethics Commission Settlement Agreement with Governor Michelle Lujan Grisham.
February 16, 2023
Senate Bill 76, is scheduled to have its first hearing before the Senate Tax, Business & Transportation Committee, and Tallman, as well as the director of the LFC, and the lead analyst and support staff of the LFC procurement studies, were all in the hearing room that day to explain the importance of bill.
Tallman, who has since retired, told The Candle that as he was preparing to present his arguments before the Senate Tax, Business & Transportation Committee, the Chairman of the committee, Senator Benny Shendo, Jr., informed him the bill would not be addressed.
According to Tallman, Shendo told him Governor Michelle Lujan Grisham did not want the bill to be heard.
NOTE: Sometime Between January 30, 2023, and April 14, 2023, the State Ethics Commission conducts an investigation into the cancellation of the Request for Proposal.
April 14, 2023 – Regular Meeting of the New Mexico State Ethics Commission
—Beginning of Executive Session—
Chair Lang sought a motion to enter executive session under NMSA 1978, §§ 10-15-1(H)(3)
(administrative adjudicatory proceedings), and 10-15-1(H)(7) (attorney-client privilege
pertaining to litigation). Commissioner Baker moved to enter executive session; Commissioner
Solimon seconded. Hearing no discussion, Chair Lang conducted a roll-call vote. All
Commissioners voted in the affirmative and entered executive session.
10. Discussion regarding potential litigation: (Farris)
a. Commission authorization of civil action regarding violations of the Procurement
Code and the Governmental Conduct Act by state officials and employees
Chair Lang and Commissioner Carruthers recused themselves from both discussion and the vote on the above matter. Both Commissioners left the private session for this discussion, and Commissioner Carruthers was excused from the rest of the meeting.
12. Authorization of Civil Actions – a. Commission authorization of civil action regarding violations of the Procurement Code and the Governmental Conduct Act by state officials and employees.
“▪ Commissioner Bluestone moved that given the recusals of Chair Lang and Commissioner Carruthers, the Executive Director be directed to contact a list of pro-tempore commissioners to consider Commission authorization of civil action regarding violations of the Procurement Code and the Governmental Conduct Act by state officials and employees. Commissioner Foy-Castillo seconded as stated above. Chair Lang conducted a roll-call vote. Chair Lang recused himself from the vote. All other present commissioners voted in the affirmative and approved the motion unanimously.” – All of the above from State Ethics Commission Meeting Minutes of April 14, 2023
April 20, 2023 – Special Meeting of the New Mexico State Ethics Commission
5. Oath of Office for the Honorable Richard C. Bosson (Ret.) and Matthew P. Holt as temporary commissioners.
Commission General Counsel Boyd administered the oath of office for both Judge Bosson and Mr. Holt to serve as temporary commissioners.
–Beginning of Executive Session–
6. Discussion regarding potential litigation: (Farris)
a. Commission authorization of civil action regarding violations of the Procurement Code and the Governmental Conduct Act by state officials and employees
The matters discussed in the closed meeting were limited to those specified in the motion to enter executive session. After concluding its discussion of these matters, the Commission resumed public session upon an appropriate motion.
–End of Executive Session–
7. Authorization of Civil Actions
a. Commission authorization of civil action regarding violations of the Procurement
Code and the Governmental Conduct Act by state officials and employees
i. Commissioner Bluestone moved that the Commission authorize the filing of a civil action regarding violations of the Governmental Conduct Act by state officials and employees. Commissioner Holt seconded the motion.
Hearing no discussion, Chair Bosson conducted a roll-call vote. Commissioners Bluestone, Holt, Solimon and Villanueva voted in the affirmative. Commissioners Baker, Foy Castillo, and Bosson voted in the negative.
The motion failed for lack of consent of “at least two members of the largest political party in the state and two members of the second largest political party in the state” under NMSA 1978, Section 10-16G 3(H).
ii. Commissioner Bluestone moved that the Commission authorize the filing of a civil action regarding violations of the Procurement Code by state officials and employees by seeking declaratory injunctive relief, authorizing staff to pursue pre-filing settlement discussions, and authorizing staff to enter a settlement agreement subject to Commission approval. Commissioner Foy Castillo seconded the motion. Hearing no discussion, Chair Bosson conducted a roll-call vote. All Commissioners voted in the affirmative and passed the motion unanimously.
– All of the above from Special State Ethics Commission Meeting Minutes of April 20, 2023.
May 16, 2023
From May 16, to the Execution Date of this Agreement, the Parties participated in a settlement conference with the Honorable Judith K. Nakamura (Ret.), as Mediator. – From State Ethics Commission Settlement Agreement with Governor Michelle Lujan Grisham.
August 10, 2023
State Ethics Commission approved Settlement Agreement at a duly convened meeting on August 10, 2023, and authorized the Commission’s Executive Director to enter the Agreement on the Commission’s behalf. Governor Michelle Lujan Grisham’s General Counsel, Holly Agajanian, and Health and Human Services (HSD) General Counsel, Paul Ritzma, sign the Agreement for their respective clients, the Governor and HSD. – From State Ethics Commission Settlement Agreement with Governor Michelle Lujan Grisham.