Police search DHHR offices in connection with bid controversy
CHARLESTON, W.Va. - The State Police searched Department of Health and Human Resources offices in Charleston on Tuesday for evidence that three employees may have illegally interfered with a multi-million dollar marketing contract.
A nine-page search warrant, filed in Kanawha Circuit Court, for the first time indicates to the public why three senior officials were mysteriously placed on paid leave in mid-July.
The three questioned the department's decision to award a marketing contract to the highest bidder. Two of the employees have notified the agency they plan to file suit against it and claim they are whistleblowers.
But Tuesday's search warrant alleges the three unlawfully tried to swing the contract's outcome. The warrant was drafted by DHHR's Office of the Inspector General and issued based on a complaint by State Police Cpl. P.T. Kelly.
The three on leave include two attorneys - DHHR's deputy secretary for legal affairs, Susan Perry, and its general counsel, Jennifer Taylor - and assistant secretary John Law, who handles public relations.
Their attorney, Walt Auvil of Parkersburg, said the search warrant read unlike any he'd ever seen.
"It reads more like a press release than a criminal warrant," Auvil said in a Tuesday night telephone interview.
It's unclear why the department waited nearly two months to formally seek the information from within its own offices.
The warrant alleges the group tried to "favor" Charleston-based Arnold Agency, which narrowly lost the marketing contract to Ohio-based Fahlgren Mortine.
The Arnold Agency was the lowest bidder. Fahlgren was the highest. A number of judgment calls by a three-member evaluation team gave Fahlgren a razor-thin victory.
Last week, an attorney for Perry and Taylor sent acting DHHR Secretary Rocco Fucillo and Attorney General Darrell McGraw an obligatory warning that they plan to sue the state.
They accuse DHHR employees of violating the state's whistleblower law and specifically accuse Fucillo of casting Perry and Taylor in a false light.
The warrant paints a partial picture of what allegedly happened inside DHHR in the weeks and days before Law, Perry and Taylor were put on leave.
The three were not on the committee that evaluated the marketing contract but became involved after that committee finished its work, according to the warrant.
The warrant said that Law "deduced The Arnold Agency was not going to receive the award" during a conversation with Marsha Dadisman, who was a member of the evaluation committee and is one of Law's aides.
Dadisman said Law then "went around campaigning for Arnold to get the contract," according to the warrant.
Law was acting "frenzied," assistant DHHR secretary Nancy Sullivan told investigators, according to the warrant.
At a meeting in late April or early May, Law had a meeting with Sullivan, Taylor and Perry, according to the warrant.
"Mr. Law and Ms. Taylor then discussed concerns about an out-of-state vendor being awarded the contract," according to the warrant. "Jennifer Taylor's husband and stepson both work for Charleston-based advertising and media firm Maple Creative. Susan Perry seemed disinterested in the discussion until Mr. Law said that it would be bad for the Governor in an election year. At that point Ms. Perry stated, 'We can look at it.' "
Maple Creative was not one of the four firms that bid on the DHHR marketing contract. Perry, a Logan County native, is said to be a friend of Gov. Earl Ray Tomblin's wife, Joanne.
Law and Perry went to Dadisman's office and asked for bid documents, according to the warrant. The documents were locked up as part of an ongoing "blackout period," according to the warrant.
According to the warrant, Law told Dadisman there would be a "legal review" of the award decision, but Dadisman expressed concern about turning over the documents.
"Oh, yeah. No problem. I do this all the time," Perry said, according to the warrant.
The warrant said Perry had not conducted such a review previously.
In any event, they obtained the documents and Taylor began a legal review.
Taylor told DHHR's inspector general that she had extensive work reviewing contracts for the Treasurer's Office.
According to the warrant, Taylor "also stated she is often referred to as 'The Queen of RFPs," a reference to "request for proposals."
DHHR has had recent trouble with some bids handled by its purchasing division. One $200 million computer contract has been rebid twice - once because of unrevealed problems and a second time because the procedure was tainted by a conflict of interest.
A recent legislative audit of the DHHR recommended the department lose the power to award its own contracts without additional oversight.
On May 4, there was a group email exchange among DHHR's top staff about what was going on with the new marketing contract.
At one point, Taylor replied to an email from DHHR purchasing director Bryan Rosen to tell him, "I am reviewing the reviews."
A bit later, Rosen emailed his boss, deputy secretary Warren Keefer, to say "this may be headed for disaster."
On May 8, Rosen emailed Perry and Keefer.
"Susan, this really has to stop or this procurement is going to be dead," Rosen warned.
Perry responded directly to Rosen and not Keefer.
"If you feel that it has to go or be lost then let it go. But be aware that (another DHHR lawyer) will have to be your counsel if a challenge occurs as Jennifer and I believe that there are 'issues,' " Perry said in the email. "We do not wish to put them in emails."
Keefer then replied to Rosen's earlier warning.
"Worse than that," Keefer said, "it might be perceived that the evaluation team's scoring did not meet the desired outcome of our Communications group - thus they sought someone to overrule the score."
Keefer was referring to Law, who leads DHHR's public relations efforts.
Because of the holdup in awarding the new marketing contract, on May 15 The Arnold Agency was granted an extension of its existing contract.
The warrant makes clear that Taylor conducted a review of the contract that found problems.
On May 16, Taylor presented her findings.
She had prepared a "document of her re-evaluation of the technical scores and the problems she had with the subjective scoring of the evaluation committee," the warrant said.
A recent review of bid documents by the Daily Mail showed a number of judgment calls made by the evaluation committee either helped Fahlgren or hurt the other three bidders.
But Keefer and Rosen came away from the meeting thinking that despite the issues raised, the contract would go to Fahlgren, according to the warrant.
Perry and Taylor had "agreed to stand down," Keefer said in an email, according to the warrant.
But the three later placed on leave did not stop voicing concerns over the outcome of the contract, according to the warrant.
It says Law approached Fucillo in early July, during Fucillo's first days as acting secretary.
"I have to speak with you about this contract. It's not good," Law said, according to the warrant. "You have to work with me on this one."
Fucillo had been told about the situation by Keefer and, according to the warrant, stopped Law.
The warrant said Law later set up a meeting "under the guise of a different subject" and then began discussing the contract. Fucillo told Law the conversation was inappropriate, the warrant said.
According to the warrant, Taylor expressed concerns on July 10 to Tomblin's deputy chief of staff, Erica Mani.
Mani said she would look into it. Mani then called Taylor back and said the Governor's Office was not going to get involved.
According to the warrant, on July 13 Fucillo, Taylor and Perry had a conference call.
Taylor and Perry told Fucillo there were major issues with the contract. The warrant said Taylor told Fucillo that the Governor's Office expected Fucillo to pull the contract. Fucillo asked why it needed to be pulled. Perry and Taylor said because no lawyers had been on the evaluation committee.
"Mr. Fucillo was also told that the issues were so significant that rescoring was not an option and the contract award would have to be pulled back," the warrant said. "Mr. Fucillo asked them who involved them in reviewing the award and was told John Law."
Fucillo became concerned there had been attempts to interfere with the bid. He said there would need to be a meeting with everyone involved.
Then Fucillo called Mani. She told him the Governor's Office did not expect the contract to be pulled.
Early the next week, Fucillo barred Law, Perry and Taylor from DHHR's offices and put them on paid leave.