The Oregon Educators Benefit Board is sticking with its chosen new director, James Raussen, after an article last month in The Lund Report forced a special executive session of the board before its regular scheduled meeting Tuesday.
“There was a recent report in the media about our recent selection for director. We had HR do a further vetting of our report,” said OEBB board member Ron Gallinat, a Bend insurance broker and member of the High Desert Education Service District in Redmond. “We’re moving forward with our current selection.”
The further vetting included an independent auditor’s due diligence report of the Chicago Comptroller’s Office, where Raussen worked under Amer Ahmad, who is now serving a lengthy prison sentence for crimes committed at the Ohio Treasurer’s Office.
The report cleared Ahmad and his staff of any wrongdoing at the city, although it did mention the political connections between Raussen and a Cincinnati insurance broker who won $2.7 million in no-bid contracts from the city. A lobbyist for the broker gave campaign contributions to Raussen during election runs for the Ohio House of Representatives.
Because of that controversy, Chicago Mayor Rahm Emanuel changed the city’s policy regarding insurance contracts, requiring them to go through the normal procurement process, according to the Chicago Sun-Times.
The insurance deal and connection to Ahmad had apparently been unknown to OEBB staff and the board until the Nov. 20 article in The Lund Report, despite numerous articles from the Chicago and Ohio press that were easily accessible by doing a cursory Internet search.
The state has failed in the recent past to properly vet candidates -- particularly in the hire of Carolyn Lawson, the former chief information officer at the Oregon Health Authority, who infamously canceled a bid for a systems integrator for Cover Oregon that would have overseen Oracle’s work and may have prevented the total technological failure of the state’s health insurance exchange.
Although it would not have been available at the time of her hire to anyone with access to Google, the Oregonian reported in February 2014 that the state had hired Lawson while unaware she had been investigated for funneling $500,000 to her former private sector employer, Steven Powell, after she was hired by the California Public Utility Commission. Powell later came to work for Lawson at the Oregon Health Authority.
Former Health Authority spokeswoman Patty Wentz only told The Oregonian that the investigation had not been disclosed by Lawson or her self-selected references -- an unflattering detail of her background that they would have been unlikely to reveal.
Chance for Better Process at DHS
The Department of Human Services is now on the hunt for a permanent director, and acting Director Clyde Saiki promised Wednesday to remain in his post until the state found a solid replacement who would stick with the agency.
Department of Administrative Services spokeswoman Amy Williams said the agency will conduct a number of background checks on top candidates, although DHS spokesman Gene Evans was not able to confirm by press time to say whether such searches included looking at public information reports on the Internet.
OEBB acting director Heidi Williams wouldn’t answer how the information about Raussen's background did not appear to come to the board’s attention before the news article. “The OEBB Board followed the steps outlined in the OEBB Director Recruitment Plan that was previously approved by the Board,” she wrote in an email. “The Board worked closely with Oregon Health Authority Human Resources Office to coordinate and ensure the process and steps were followed. The Oregon Health Authority performs background checks on everyone prior to employment.”
According to the due diligence report by the Philadelphia law firm Drinker, Biddle & Reath, Raussen met Ahmad while they both worked in Ohio state government, but they were in separate agencies. Raussen told the auditors that he did not know Ahmad well, but he apparently made enough of an impression on Ahmad that he was offered a job at the city of Chicago after he sent Ahmad a polite email congratulating him on his new job as the city comptroller.
Meanwhile, Mayor Rahm Emanuel hired Ahmad even as his former boss, ousted Ohio Treasurer Kevin Boyce, knew that the FBI was investigating Ahmad.
Ahmad was convicted in 2013 for a fraud and kickback scheme related to his work in Ohio; he initially fled to Pakistan before being extradited back to the United States this August and sentenced to 15 years in prison for accepting a $522,000 bribe to give state business to his cronies while at the Ohio treasurer’s office, according to the Chicago Tribune and the Dayton Daily News.
Raussen was never a suspect in the Ohio corruption case, and the report revealed that the Cincinnati insurance broker, USI Midwest, proved to be a good choice for Chicago -- saving the city $2.2 million on insurance costs at the city’s two airports.
Chris can be reached at [email protected].
