Forbes - IL Gov. Bruce Rauner Grounded State Airplanes, But Many Public Contractors Are Still Flying High 100_flying_high

July 31, 2015 11:53 PM
By: Adam Andrzejewski
Contractors hired by previous governor are still billing for chartered airplanes, charging taxpayers up to $286,000 per year, and recruiting out-of-state and out-of-country staff.
New Illinois Governor Bruce Rauner promised to "Shake Up Springfield."  He’s had some success, and an early victory grounded the state air fleet saving $3 million per year.  But the contractor complex from the previous administration, and the entrenched bureaucrats who support them, don’t want to give up their place at the public trough.
The fight is representative of the fight for Illinois’ fiscal future.  By now Rauner has figured out ‘if you’re spending, you’re taxing.’ With all state spending on the table – exposing the secret slush funds and auditing decades of waste out-of-the-system is an arduous task.
One of those ‘secret’ spending practices fleecing taxpayers and enriching contractors is the ‘inter-governmental agreement’ loophole in the Illinois procurement code.  This is where no-bid contracts flow to the politically-connected.  Legislation to close this massive loophole (that resulted in $5.2 billion in contracts under previous Gov. Pat Quinn) on intergovernmental agreements more than $250,000 currently sits in committee.
Rauner, the reformer, should push for it.
Here’s why it’s important.  Three years ago, Illinois entered into an intergovernmental agreement with the State of Michigan to upgrade our Medicaid Management Information System (MMIS). It’s one of the largest contracts awarded in state history. But, in August 2013, a National Review expose and a FOX News investigation found that there’s never been a competitive procurement process.  Moreover, a federally ‘mandated’ cost-benefit analysis was never completed.
Not one statehouse lawyer would author a legal opinion on its veracity, but then-Illinois governor Pat Quinn plowed ahead with the agreement anyway.
Just a couple of weeks ago, under this Michigan-Illinois arrangement, the MI Department of Transportation flew employees and contractors into Springfield Capitol Airport.  So, while Illinois was operating without a budget and shutting down services, taxpayers were still being hustled for massive travel costs from state contractors.
Bottom line: the taxpayers were losing but the contractors were winning – big time.
This is not new. For at least the past year, the Michigan airplane has flown nearly every other week between Lansing and Chicago or Springfield, IL – with Illinois taxpayers paying the bill. In the age of online meetings, these meetings were also scheduled and available on WEBX. In fact, sources close to the situation confirmed no additional value for the contractors to attend in person.
The unnecessary airplane flights are not the only problems.
Illinois taxpayers are picking up the tab on exorbitant hourly rates for the contractors. A legacy of the past governor Quinn administration, IL Health and Family Services released contractor billing rates this week via a Freedom of Information Act request.  For 44 contractors, the billing rate ranges between $97.57 per hour ($195,000 per year) to $143 per hour ($286,000 per year). This is in stark contrast to the 27 state employees on the upgrade whose pay ranges between $42,720 to $124,320 a year.
In our past investigations of the IL MMIS upgrade, we found the contractor positions were recruited from India – with many positions based in Chennai and Bangalore.  For example, in 2013, Cognizant was awarded a $71 million contract with Illinois and immediately applied for 100 H-1B visas with the U.S. Department of Labor. A travel reimbursement fee of $200,000 was built into its contract.
In 2013, at National Review, Jullian Kay Melchior investigated how contractors ‘gamed-the-system’ by drinking and partying with Illinois officials to win their MMIS business. We even discovered a hand-notated, ‘cash expenditure’ $1,000,000 invoice with a complete lack of specified work product from Michigan to Illinois.
Changing the culture of Illinois state government is going to be very difficult for the new Rauner administration.  He can start by establishing a contractor no-fly-zone.  He can also advocate for the legislation to bring transparency to the secret slush funds that may contain billions of dollars hidden away in ‘intergovernmental spending agreements.’
Rauner has a chance to clean up Illinois and we wish him luck.  These small steps are a good place to start.
Adam Andrzejewski is the founder of the transparency website and Chairman of American Transparency
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