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Problems, what problems? Hearing on DHS offers plenty of questions — and almost no answers

Among other things, lawmakers wanted to know why former DHS head Tony Lourey resigned, and when an investigation into department Inspector General Carolyn Ham would be done.

Sen. Jim Abeler, R-Anoka, and Sen. Michelle Benson, R-Ham Lake
Sen. Jim Abeler, R-Anoka, and Sen. Michelle Benson, R-Ham Lake, shown during the nearly four-hour hearing on Tuesday.
MinnPost photo by Peter Callaghan

A state senator with budget and policy oversight of the Minnesota Department of Human Service had a lot of questions about the agency whose name these days is frequently preceded by the word “troubled.”

She didn’t get a lot of answers.

At a nearly four-hour hearing Tuesday in a crowded Capitol hearing room, Sen. Michelle Benson said she wanted to know, among other things, why former DHS Commissioner Tony Lourey had suddenly resigned last month — and why two of his top deputies had rescinded their own resignations after Lourey submitted his own? 

Benson, of Ham Lake, said she wondered if Lourey had been trying to make reforms in the massive agency but was thwarted by the bureaucracy. She also wanted to know why Gov. Tim Walz had announced a new leader for DHS the day before the hearing was to be held — even though that appointee wouldn’t start for more than three weeks.

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Benson also questioned why it was taking so long to look into complaints against the head of the agency’s investigatory unit — complaints made in the midst of allegations that the unit hadn’t been tough enough on investigating fraud in the Child Care Assistance Program.

Tony Lourey
MinnPost photo by Peter Callaghan
Tony Lourey
To get the answers to those questions, Benson and Sen. Jim Abeler, R-Anoka, asked seven current and former top DHS brass to attend the hearing. They included Lourey and his chief of staff, Stacie Weeks; the on-leave inspector general, Carolyn Ham; acting inspector general Bob Jacobsen; and the two department deputies who resigned and then unresigned in the wake of Lourey’s departure: Claire Wilson and Chuck Johnson. 

But of those seven invitees, only one showed up: acting DHS Commissioner Pam Wheelock, who took the job July 15 and will relinquish it to new DHS Commissioner Jodi Harpstead on Sept. 3.

The lack of participation — and the subsequent paucity of new information revealed – was anticipated by Benson in her opening comments, in which she compared trying to get information out of the agency with the arcade game “Whack-a-Mole.”

“Somehow the Legislature never gets direct answers,” Benson said. “It’s time for the shoulder-shrugging to stop. And for those who say it’s time to move on, that there’s nothing to see here, I can tell you it’s not time to move on; it is time to learn a lesson.”

Bipartisan frustration 

Certainly, one motivation for the hearing was to muddy up the DFL and its new governor. Citing chaos in a state agency and allegations of waste, fraud and abuse are early chapters in the playbook for any party out of power.

Sen. Julie Rosen, the Vernon Center Republican who chairs the Senate’s budget writing committee, said chaos at the agency is the main topic of “gas station chatter,” along with gas taxes. “What is going on with the child care fraud and something needs to be done,” is how she described those conversations.

But there was also evidence of longstanding and bipartisan frustration with a lack of transparency at one of the state’s largest agencies, one with 7,266 employees and an $18 billion budget. 

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Aberler, R-Anoka, called DHS staff “hard-working and amazing” despite what he called significant obstacles.“For me … this is not a witch hunt, it’s not a rodeo, it’s not a gotcha thing,” Abeler said of Tuesday’s hearing. “This is us doing our due diligence. This is our responsibility.”

Said Rosen: “When you have to drag information out of DHS and there is no oversight and there is no cooperation, we are struggling. And there is really no need for this hearing if we did have cooperation and accountability.”

While DFL members on the panel were much less enthusiastic about roasting the agency, they too expressed concerns. One DFL senator described the dismissal of the department’s medical director, Dr. Jeff Schiff, earlier this year as “a loss to this great state of ours.” 

Schiff said he was let go after he complained that medical decisions were being overridden by nonmedical department staff to save money, a charge that resonated with senators from both parties. “We worked against an entrenched dynamic that valued short-term financial interests over appropriate care,” said Schiff, who described decisions to dismiss medical opinions about care as “unconscionable arrogance.” 

“A small faction has an inordinate amount of control,” Schiff said. 

But Schiff warned against viewing the issues at DHS through a partisan lens. “Your request for this hearing is important for many Minnesotans, but I don’t wish to be part of the partisanship that continues to damage our system or the agency,” he said.

Dr. Jeff Schiff
MinnPost photo by Peter Callaghan
Dr. Jeff Schiff said he was let go after he complained that medical decisions were being overridden by nonmedical department staff to save money.
And there were plenty of concerns that don’t fall into a partisan framework. DFL Sen. Chris Eaton of Brooklyn Center was worried that work on opioid treatment and prescription monitoring would suffer from the departure of Schiff. And later, Eaton said she thinks two Indian tribes accused of overbilling the department for addiction treatment services are being unfairly blamed, since they were, in fact, following agency instructions.

Meanwhile, a contract compliance officer for the agency, Faye Bernstein, testified that she was dismissed, marginalized and eventually threatened with discipline for pointing out errors in agency contracts, something she has done for years without repercussions.

Legislative Auditor Jim Nobles
MinnPost photo by Peter Callaghan
Legislative Auditor Jim Nobles
Finally, there was also criticism of the agency from the nonpartisan Legislative Auditor, Jim Nobles. Nobles had reported disarray in the Office of Inspector General as part of his investigation into abuse in the child care assistance program and recommended an independent OIG. That was rejected by Walz and legislative DFLers.

Valerie Bombach, the director of the health and human services team at the Office of Legislative Auditor, said her group does numerous and frequent audits of the agency and its programs. In addition, the OLA conducts special audits such as the examination of fraud allegations at the child care assistance program.

“However, our audits are retrospective in nature,” Bombach said. “We are looking back at historical events. We can’t audit our way to effective program integrity. The agency, in this case DHS, should have in place ongoing activities, ongoing oversight, policies, mechanism, controls to prevent potential error and fraud upfront.”

‘There is no scandal. There is no chaos.’

Wheelock, the one DHS official who did show up, managed to elicit some sympathy from committee Republicans. Abeler told her that “probably Sept. 3 can’t come soon enough for you.” And Benson called her current post “the most thankless job in Minnesota.”

Wheelock described her acceptance of Walz’s request to serve as interim commissioner as akin to coming off the bench to play quarterback.

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For all that, though, she got little sympathy when her opening statement — complete with a Powerpoint presentation — resembled something that might be shown to a Rotary Club lunch. After 10 minutes of Wheelock going through slides describing the agency’s functions and beneficiaries, Benson interrupted.

“We sent a list of the topics we were interested in and so far you haven’t hit on any of those, and I am wondering when your presentation is going to get to those?” she asked.

“I’ll get to those very quickly,” Wheelock answered.

“I think now would be a good time,” Benson said.

Her request, however, didn’t produce much in the way of new information.

On the Ham investigation, Wheelock said it is still being conducted and no information could be presented.  

When will that be? 

Sooner rather than later, Wheelock said. When pressed, she said in two to six weeks.

When asked to explain the resignations of Lourey, Weeks, Wilson and Johnson, Wheelock said lawmakers shouldn’t read too much into it. “This is a complicated place and these are really difficult jobs,” Wheelock said, calling Lourey’s decision as “deeply personal.”

Acting DHS Commissioner Pam Wheelock
MinnPost photo by Peter Callaghan
Acting DHS Commissioner Pam Wheelock managed to elicit some sympathy from committee Republicans.
“At some point we have to accept that these are personal choices,” she continued. “I have not found any issue about impropriety. I have not found any issue about any kind of criminal activity. There is no scandal. There is no chaos. I think it’s time to move on and let these people have some personal privacy and lives.”

Was Lourey thwarted by the nonpolitical appointees? Benson asked. 

“I would ask everyone not to oversimplify that this is about reformers vs. change-resistant bureaucrats,” Wheelock said. “Life is more complicated than that, and I don’t see any evidence that we can’t move the important work of the agency forward.”

No reform, no insulin program? 

After the hearing, Benson said her process was akin to “chipping away” at the agency. She said she expected additional probes into the Office of Inspector General investigation, into the overpayment of treatment dollars to the Leech Lake and White Earth bands, into whether the agency is too large and should have a separate agency for services that provide direct health care and treatment to Minnesotans.

One suggestion she has rejected was to push forward with an emergency insulin program. The bipartisan request — from GOP Sen. Scott Jensen and DFL Sen. Melissa Wicklund — stems from a work group trying to resolve differences that saw plans for such a program fail at the end of session in May.

Until now, the conflict had been over money: whether the several million dollar cost to provide insulin to Type 1 diabetics who can’t afford it should be borne by insulin producers or state taxpayers. On Tuesday, Benson introduced a new roadblock, however: that she didn’t think additional duties should be given to DHS until it reforms.

Rep. Mike Howard, DFL-Bloomington, called that an additional excuse from Republicans who don’t want to bill drug companies, even though all voted for such a funding plan during the session. 

“It’s a red herring and it’s part of a pattern,” Howard said. “I think we’re in double-digit excuses … and this is just the latest.”