After Bruce Greenstein took the helm of the state Department of Health and Hospitals in September 2010, he made "hundreds of phone calls" and exchanged "thousands of text messages" with a company he previously worked for that was seeking a lucrative agency contract, Gov. Bobby Jindal's administration said last month. In a letter to Client Network Services Inc., a...
After Bruce Greenstein took the helm of the state Department of Health and Hospitals in September 2010, he made "hundreds of phone calls" and exchanged "thousands of text messages" with a company he previously worked for that was seeking a lucrative agency contract, Gov. Bobby Jindal's administration said last month. In a letter to Client Network Services Inc., a state official explained that the state took away the contract almost two years after awarding it because these interactions "created an unfair advantage."
That finding sharply contrasts with earlier assertions by Greenstein -- some made, under oath in a state Senate confirmation hearing -- that he had limited involvement with the contract and the companies vying to win it. With both federal and state investigators now looking at the contract, the administration's new assertions raise questions about whether Greenstein lied about his actions and if those statements could amount to perjury.
Stephen Street, the state's inspector general, said the truthfulness of Greenstein's committee remarks are just one aspect of the saga that is now under a microscope. Along with Street's office, the state Attorney General, the FBI and a federal grand jury are all looking at the deal.
"We are reviewing all of the issues concerning the CNSI contact award, including whether or not the secretary was truthful in his testimony before the Senate and Governmental Affairs Committee," he said. "We are looking at all aspects of this now because we have been asked to do so by the Division of Administration."
Still, legal experts caution that perjury is rarely prosecuted because nailing down exactly what is a lie is tough in a criminal legal setting.
At least part of what is now being examined was initially raised during Greenstein's contentious 2011 confirmation hearings, which were held after he had already been at the helm of the state health department for nine months. Greenstein, who resigned after the Jindal administration canceled the contract, did not respond to two requests for comment.
Despite red flags raised at the time by lawmakers, it does not appear that the Jindal administration looked into the newly approved health secretary's involvement in the contract. The Division of Administration rejected complaints from other companies who filed protests in 2011 and proceeded with the contract. A DOA spokesman declined to answer questions about the agency's actions at the time, referencing a request by the inspector general to make no comments in light of the pending probe.
Since then, the state has paid CNSI about $17 million for its work installing a Medicaid claims processing system that was supposed to go into effect next year. A letter from the state to the company this week indicated the state will press CNSI to repay some portion of that amount.
The state canceled the almost $200 million contract in March, after The Advocate reported that a federal grand jury had subpoenaed related documents. Commissioner of Administration Kristy Nichols said in a statement that she decided to terminate the contract after consulting with the attorney general's office.
David Caldwell, head of the attorney general's public corruption unit, told the Associated Press the contract was improperly handled and "should never have been let in the first place."
CNSI has denied any improper behavior. On Thursday, Kathryn Harris, a CNSI executive and lawyer, lambasted the state for damaging the company's reputation with "unsubstantiated allegations." Harris pledged the company would pursue legal remedies and noted that the state hasn't responded to CNSI's requests for public documents related to the contract cancellation.
During Greenstein's 2011 confirmation hearings, lawmakers grilled him as if he was on the witness stand. At issue was one of the most lucrative contracts doled out by the state. Just drawing up the state's request for proposals took years and the assistance of an outside contractor.
At his first hearing, Greenstein balked at even telling senators which company had won the contract, insisting it first had to be disclosed in another committee. When he relented, senators learned the contract was to go to CNSI, where Greenstein worked from June 2005 to September 2006.
CNSI had offered the lowest price out of the four firms that bid, but got the third worst technical marks in extensive evaluations. Competitors cried foul at the time, saying the company had low-balled its offer.
During his confirmation hearings before the Senate and Governmental Affairs Committee in June 2011, Greenstein insisted that he maintained a strict distance from the evaluation process that determined which of the four companies got the contract.
But his recollection about the nature of his involvement evolved as the hearings proceeded. In the first hearing, on June 8, 2011, he described a "firewall" between himself and the award process, saying he "had no conversations about anything that was contained in the RFP (request for proposals)."
In another hearing nine days later, he acknowledged having some involvement as the framework of the proposal request was shaped, insisting he was focused on encouraging as much competition as possible.
Specifically, Greenstein stepped in to change one requirement that would have barred CNSI from bidding on the work. The change allowed the company to be the primary contractor, as long as it had a subcontractor with certain financial experience. CNSI officials have argued they would have adjusted plans to be a subcontractor if that change hadn't been made.
Between the first hearing and the second, the Senate committee had subpoenaed documents from Greenstein and his agency and found an email related to the change.
Sen. Karen Carter Peterson, D-New Orleans, told Greenstein she believed he had lied in his first appearance.
"Under oath, why were you not truthful last week?" Peterson asked as she pressed him about his involvement with the contract.
"I was not trying to mislead anyone. I was a bit nervous at the time," Greenstein replied. "I could just not remember the degree to which I was involved in the interactions during that time. There were very few."
During the June 8 hearing, Greenstein had been fairly specific about his contacts with CNSI. When asked by former Sen. Rob Marionneaux, D-Livonia, about his contact with CNSI, Greenstein recalled a couple of meetings, three to four phone conversations and the same amount of emails.
But the letter from the Division of Administration to CNSI late last month portrays a much more extensive level of interaction between Greenstein and company employees. Sandra Gillen, the director of state purchasing, told CNSI that her department was informed by the state inspector general that there had been hundreds of calls and thousands of text messages exchanged between Greenstein and CNSI employees in the months between when Greenstein became agency secretary and the contract was awarded.
On the very day that Greenstein made the change that allowed CNSI to bid on the contract, there were "16 communications" between company management and the secretary. This "tainted any semblance of a fair and impartial process and created an unfair advantage for CNSI," Gillen wrote.
Peterson said she has asked staff to look into the Senate rules to determine if Greenstein could be held in contempt for lying in his 2011 confirmation hearing.
While the inspector general says his office is also looking at the committee statements, experts agree that perjury is a charge rarely seen in criminal courts.
"Prosecutors are very reluctant to bring them unless there is an absolute, clean, unobstructed shot between the eyes," said Dane Ciolino, a Loyola University law professor.
The reason is simple: The cases tend to be very hard to prosecute. State law defines perjury as making an intentional false statement under oath. To boot, the false statement must also "relate to matter material to the issue or question in controversy."
In other words, prosecutors must show that the defendant knew a statement was misleading and offer a motive for why he would lie, said Paul Robinson, a law professor at the University of Pennsylvania.
"What were his motivations when he was saying something other than what he knew was the truth? Those are very difficult facts for prosecutors to get to," he said.