Fired Contractor: Indictment Didn't Disrupt Case

BATON ROUGE (AP) — The company whose $200 million Medicaid contract was canceled by Gov. Bobby Jindal's administration says the indictment of Louisiana's former health secretary won't harm its wrongful termination lawsuit against the state.

Michael McKay, lawyer for Maryland-based Client Network Services Inc., known as CNSI, said the charges against Bruce Greenstein don't undermine claims that the state was wrong to fire the company.

Greenstein was indicted last week by a state grand jury on nine counts of perjury, charged with lying when questioned about the contract award. The Jindal administration has accused Greenstein, a former CNSI vice president, of inappropriate contact with the company throughout the bid process. Greenstein denies involvement.

The company alleges state officials released inaccurate information from a whistleblower who raised concerns about the 10-year contract. In court documents, McKay said the whistleblower was a disgruntled former CNSI employee who has since admitted he didn't personally "know of anything illegal or improper" the firm had done to get the contract.

McKay also points to sworn testimony from retired health department leader Jerry Phillips, who said he believes the contract was awarded fairly and without improper influence.

"It's clear that Bruce had nothing to do with the award of the contract," McKay said.

The now-canceled Medicaid claims processing agreement is part of a wide-ranging dispute that stretches into civil and criminal court.

The state attorney general's office has empaneled a grand jury that is digging into the contract award and that handed down the criminal charges against Greenstein. Meanwhile, the company slapped the state with a lawsuit alleging breach of contract in its firing.

No trial date is set in the lawsuit.

McKay said he continues to take depositions in his case, and he released the testimony of Phillips, a long-time official with the state Department of Health and Hospitals who worked for several secretaries and in the number-two role when CNSI was awarded the contract.

Under oath, Phillips said that he didn't know of any interference from Greenstein and that Greenstein never pushed CNSI over other vendors who applied for the work.

However, Phillips acknowledged that another employee at the state health department raised a concern that Greenstein had a private meeting with CNSI officials after being named Louisiana health secretary and in the middle of the procurement process.

"But I didn't really take it as an issue," Phillips said.

CNSI was selected by the state in 2011. State lawmakers immediately questioned the involvement of Greenstein, and the health secretary acknowledged in a confirmation hearing that a decision he made in the bid solicitation process made the firm eligible for the contract.

The Jindal administration scrapped the contract in March 2013, saying they found out Greenstein exchanged hundreds of phone calls and thousands of text messages with CNSI leaders throughout the bid process. The administration said that created an unfair advantage.

Company officials say the communication between Greenstein and employees was largely of a personal nature.

CNSI and the attorney general's office will be back in court next week.

A Tuesday hearing is scheduled over accusations that an investigator with the attorney general's office tampered with a statement from a whistleblower whose allegations led to the contract investigation. The attorney general's office denies any misconduct.

– by AP Reporter Melinda Deslatte

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