Video: Criminal fraud in Oregon ObamaCare exchange?

posted at 8:41 am on February 4, 2014 by Ed Morrissey

Oregon Governor John Kitzhaber promised that its Cover Oregon web portal for the state ObamaCare exchange would lead the nation. The portal managed to lead the nation in incompetence and failure — but did it also lead it in fraud? One lawmaker has blown the whistle on deceptive reports sent to the federal government that allowed Oregon to get tens of millions of dollars from Washington for the project, allegedly including dummy web pages intended to fool HHS into believing that Cover Oregon development was on schedule. KATU continued its investigative reporting into Cover Oregon with this stunning update:

Former Republican state Rep. Patrick Sheehan told the KATU Investigators he has gone to the FBI with allegations that Cover Oregon project managers initiated the design of dummy web pages to convince the federal government the project was further along than it actually was.

If Sheehan’s allegations are true, those managers could face time in jail for fraud.

“One of the allegations that was made was so alarming that it went way beyond a legislative oversight committee and so I did reach out and contact the FBI,” Sheehan said.

“The issue had to do with federal funding and proving some amount of compliance with the federal regulation in order to get funding.”

The problem was that the project’s CIO, Carolyn Lawson, didn’t know how to build a web portal for a health-insurance exchange, and neither did the people hired for the project. She did, however, know how to make it look like she knew how to build one, at least well enough to fool HHS:

What that meant for the Cover Oregon website was that it was able to paint a picture of a flashy website – imagine a concept car that looks flashy in the showroom but doesn’t actually run.

But documents uncovered by the KATU Investigators show Lawson hadn’t actually figured out how to build the site, even as she was promising the federal government – and her bosses – that Cover Oregon’s website was going to work.

So what, exactly, were the federal and state reviewers being shown?

In a Sept. 27, 2012 email to Bruce Goldberg – Lawson’s boss at the Oregon Health Authority, who is now in charge of Cover Oregon – she sent a link to something called “The Solution Factory,” a site hosted by software contractor Oracle.

Lawson wrote in the email that the link went to a site hosting the same demonstrations the team provided to project stakeholders.

“It demonstrates what we have built to date,” she wrote. “By watching this every month, you can see our progress in real time.”

Let’s make sure to note that this doesn’t appear to be a very effective fraud, except when targeted at the truly ignorant. After all, an agency that’s certifying work for a state exchange should have the wherewithal to check the actual functionality. If a bunch of non-functioning web pages was enough to fool HHS into writing $59 million in checks, then the web pages weren’t the only dummies involved here.

State Rep. Patrick Sheehan called the FBI after discovering the potential fraud, which could result in a large amount of prison time at Club Fed if substantiated. The FBI won’t specifically state whether they’re investigating Cover Oregon officials for fraud, but Sheehan says they have discussed the case on several occasions since his first call. Oregon voters might wonder just what Kitzhaber knew on this issue, and when he knew it, too.


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Shocka

BigAlSouth on February 4, 2014 at 8:46 AM

Oregon Governor John Kitzhaber promised that its Cover Oregon web portal for the state ObamaCare exchange would lead the nation
=========================================================

Boinking OutStanding!!!!

canopfor on February 4, 2014 at 8:47 AM

She did, however, know how to make it look like she knew how to build one, at least well enough to fool HHS:

Reminds me of that old commercial just after the internet bubble popped, the CEO asking what he got for his $5 million website investment, and the hipster programmer said “Flaming letters!”

What a disaster, but hey, government knows best.

Bishop on February 4, 2014 at 8:47 AM

At this point, what difference does it make?

esr1951 on February 4, 2014 at 8:48 AM

Former Republican state Rep. Patrick Sheehan told the KATU Investigators he has gone to the FBI with allegations that Cover Oregon project managers initiated the design of dummy web pages to convince the federal government the project was further along than it actually was.
==================================================

Smells like a Democrat Fraud Scandal!!

canopfor on February 4, 2014 at 8:49 AM

You really think Atty. General Holder is going to have the FBI investigate anything that has to ObamaCare that would make it look bad?

No way.

albill on February 4, 2014 at 8:51 AM

Damn that Fox News!

Deafdog on February 4, 2014 at 8:53 AM

Speaking of Fraud, *cough-cough*:

Source: Rep. Rob Andrews, D-NJ, will leave Congress this month to take a job with a prominent Philadelphia law firm – @JonathanTamari
read more on philly.com
========================

But Andrews has also faced an ethics committee investigation over a family trip to Scotland paid for with campaign funds. The House ethics committee was investigating the trip and the use of $30,000 of campaign money to pay for flights, a luxury hotel stay and other expenses while attendign a wedding in Edinburgh.(More……)
=============================================

http://ht.ly/tgoKo

canopfor on February 4, 2014 at 8:54 AM

Just multiply this by 50 and throw in the dems in DC and you might start to see the massive fraud perpetrated on country from obamacare. AND it will continue AND it get worse

jaywemm on February 4, 2014 at 8:54 AM

The problem was that the project’s CIO, Carolyn Lawson, didn’t know how to build a web portal for a health-insurance exchange, and neither did the people hired for the project.

Let’s make sure to note that this doesn’t appear to be a very effective fraud, except when targeted at the truly ignorant. After all, an agency that’s certifying work for a state exchange should have the wherewithal to check the actual functionality. If a bunch of non-functioning web pages was enough to fool HHS into writing $59 million in checks, then the web pages weren’t the only dummies involved here.

How the hell does neither your CIO nor the people she hired know how to build a web portal? So what the hell are they even there for?

As for HHS, they gladly wrote those checks. They didn’t care if the website didn’t work. All they wanted was the ability to tell the public that everything was going great since the media would just regurgitate those talking points. The problem of course is when people tried to sign up using that dummy website, then the fit would hit the shan(as it has).

Doughboy on February 4, 2014 at 8:57 AM

At this point, what difference does it make?

esr1951 on February 4, 2014 at 8:48 AM

Yep, when we’re $17 trillion in debt, with hundreds of trillions more in unfunded liabilities, what’s another wasted $100 million or so going to matter?

BTW, speaking of lost causes, did anyone catch that Fox interview the other day with the ICE agent? He was talking about all the illegal alien infants and kids that the Obama administration is knowingly allowing to enter the U.S. — and in many cases, actively assisting them in entering illegally. He said one ICE station alone had over 2,000 such entries in one month, and he estimates that nationwide, there are at least 50,000 such entries every month.

AZCoyote on February 4, 2014 at 8:59 AM

“…those managers could face time in jail for fraud.”
.
Uh-huh. There is such a clear pattern of jail time for people who support Dear Leader and his goals. That former Oregon legislator is obviously a racist!

KS Rex on February 4, 2014 at 8:59 AM

Anyone that would still vote democrat needs to be considered an enemy to America and treated as such. This country won’t survive unless we clean house and get rid of all progressives. By Any Means Necessary!

Flange on February 4, 2014 at 9:02 AM

So…

We replaced those evil insurance companies with…

Evil Government..

No wait……

We now have both…

Embrace The Suck!

Electrongod on February 4, 2014 at 9:02 AM

You really think Atty. General Holder is going to have the FBI investigate anything that has to ObamaCare that would make it look bad?

No way.

albill on February 4, 2014 at 8:51 AM

You could do twenty years in a SuperMax for writing “Obama is a dumbass” on a bathroom wall and yet bilk the government out of hundreds of millions of dollars on “green” projects or phony Obamacare web programming and still get an invite to the next fundraiser …

… wait …

… maybe there’s a connection. Hmmmm.

M240H on February 4, 2014 at 9:03 AM

You really think Atty. General Holder is going to have the FBI investigate anything that has to ObamaCare that would make it look bad?

No way.

albill on February 4, 2014 at 8:51 AM

I hate to say it, but that’s the first thing I thought of when I read that he went to the FBI. Will that make any difference whatsoever given the level of corruption in that institution thanks to Holder? Look at how they’ve handled the IRS “investigation”. I’m glad he blew the whistle on what was going on, but aside from a few possible firings or resignations, I don’t see anything getting fixed. I seriously doubt Oregon will have to give that money back(unless a Republican wins the next governor’s race of course).

Doughboy on February 4, 2014 at 9:04 AM

“Flaming letters!” –Bishop
… LOL I remember that one — too funny … and sad in light of the ObummerCare fiasco.

KS Rex on February 4, 2014 at 9:04 AM

Christie!!!
-lsm

cmsinaz on February 4, 2014 at 9:07 AM

Spoiler alert!!!!

Here’s what happens at the end of this exciting story about actual government corruption:

NOTHING.

justltl on February 4, 2014 at 9:10 AM

When you think of it, though, how is this any more fraudulent than everything else involved in the selling and roll-out of ObamaCare?

SacredFire on February 4, 2014 at 9:13 AM

And what does the hhs know about building a web site. Wasn’t theirs as much as a failure and still is?

phatfawzi on February 4, 2014 at 9:13 AM

The problem was that the project’s CIO, Carolyn Lawson, didn’t know how to build a web portal for a health-insurance exchange, and neither did the people hired for the project. She did, however, know how to make it look like she knew how to build one, at least well enough to fool HHS

Considering that they don’t know how to do it either, that probably wasn’t too difficult.

So what, exactly, were the federal and state reviewers being shown?

In a Sept. 27, 2012 email to Bruce Goldberg – Lawson’s boss at the Oregon Health Authority, who is now in charge of Cover Oregon – she sent a link to something called “The Solution Factory,” a site hosted by software contractor Oracle.

Lawson wrote in the email that the link went to a site hosting the same demonstrations the team provided to project stakeholders.

I suspect at least a few of the “managers” working on O-Care, and the HHS PR crew, were already using that site themselves.

Let’s make sure to note that this doesn’t appear to be a very effective fraud, except when targeted at the truly ignorant.

Like- the people running O-Care?

After all, an agency that’s certifying work for a state exchange should have the wherewithal to check the actual functionality.

The people running the O-Care website at the national level have no way to check its functionality.

Asking a state (run by progressives who “desperately want” their dream system to work) to exercise due diligence is very likely asking too much.

If a bunch of non-functioning web pages was enough to fool HHS into writing $59 million in checks, then the web pages weren’t the only dummies involved here.

I suspect the main problem those at the HHS headshed see is that this is yet another O-Care related scandal, the existence of which they have been unable to conceal from the peons.

This is not going to make it any easier to rope in all those “Young Invincibles”. Without whom the entire “Airplane Game” crashes and burns.

clear ether

eon

eon on February 4, 2014 at 9:27 AM

..all said, that reporter did a helluva job uncovering this festering mountain of sleaze.

The War Planner on February 4, 2014 at 9:27 AM

HHS wrote them $59 million in checks… So, who got the our tax money?

Fallon on February 4, 2014 at 9:28 AM

So, who got the our tax money?

Fallon on February 4, 2014 at 9:28 AM

The FOO Crew

Rio Linda Refugee on February 4, 2014 at 9:31 AM

State Rep. Patrick Sheehan called the FBI after discovering the potential fraud, which could result in a large amount of prison time at Club Fed if substantiated. The FBI won’t specifically state whether they’re investigating Cover Oregon officials for fraud

…that’s gonna happen…more ‘stern’ letters…hearings!

KOOLAID2 on February 4, 2014 at 9:47 AM

Let’s make sure to note that this doesn’t appear to be a very effective fraud, except when targeted at the truly ignorant.

…or those who truly want to be believe, as was the case with even the so-called more ‘intelligent’ Democrats.

It’s the same blinders that allow sports fans to think with just one or two patches here and there — including that fifth-round draft choice with the great combined numbers — their team that was below .500 this year can compete for the Super Bowl next February. Those in charge in Oregon who may not have wanted to believe there was any fraud still wanted to believe ObamaCare was going to cure the world, so the Cover Oregon people could have put a 1995 CompuServe webpage up there with a few flashing colors, and they would have believed it was a functioning health care portal.

jon1979 on February 4, 2014 at 9:56 AM

It’s just Dems being Dems.
Nothing’s going to happen.
Gotta continue making progress…

bofh on February 4, 2014 at 10:03 AM

So what..it’s not like someone’s commute time was impaired.

HumpBot Salvation on February 4, 2014 at 10:03 AM

wow, straight-up od fashioned easy to detect fraud. It comes so easy to these people.

DanMan on February 4, 2014 at 10:08 AM

and then hotair will run out of material to bash the President on…that’s what you’re really afraid of, right?

nonpartisan on November 19, 2013 at 4:47 PM

But these Obamacare posts are about whistling past the graveyard, by next Novemeber Democrats will be openly running on the ACA. Mark my words.

libfreeordie on December 20, 2013 at 10:14 AM

Chris of Rights on February 4, 2014 at 10:08 AM

Lies, deceit and dirty politics. That’s all the Dims are capable of.

Meople on February 4, 2014 at 10:13 AM

ObamaCare
should
turn
the
corner
any
day
now.

I
can
feel
it

Chuck Schick on February 4, 2014 at 10:19 AM

Obama will have Congressman Issa investigate it….
;-)

albill on February 4, 2014 at 10:46 AM

But these Obamacare posts are about whistling past the graveyard, by next Novemeber Democrats will be openly running on the ACA. Mark my words.

libfreeordie on December 20, 2013 at 10:14 AM

Schadenfreude on February 4, 2014 at 11:04 AM

Former Republican state Rep. Patrick Sheehan told the KATU Investigators he has gone to the FBI with allegations that Cover Oregon project managers initiated the design of dummy web pages to convince the federal government the project was further along than it actually was.

If Sheehan’s allegations are true, those managers could face time in jail for fraud.

“One of the allegations that was made was so alarming that it went way beyond a legislative oversight committee and so I did reach out and contact the FBI,” Sheehan said.

Clearly not a team player. Must be one of those hyper-partisan ideologues we hear so much about.

Ed –
You mean the websites aren’t working perfectly on day one two three four five six seven eight nine ten eleven twelve thirteen fourteen fifteen sixteen seventeen eighteen nineteen twenty twenty-one twenty-two twenty-three twenty-four twenty-five twenty-six twenty-seven twenty-eight twenty-nine thirty thirty-one thirty-two thirty-three thirty-four thirty-five thirty-six thirty-seven thirty-eight thirty-nine forty forty-one forty-two forty-three forty-four forty-five forty-six forty-seven forty-eight forty-nine fifty fifty-one fifty-two fifty-three fifty-four fifty-five fifty-six fifty-seven fifty-eight fifty-nine sixty sixty-one sixty-two sixty-three sixty-four sixty-five sixty-six sixty-seven sixty-eight sixty-nine seventy seventy-one seventy-two seventy-three seventy-four seventy-five seventy-six seventy-seven seventy-eight seventy-nine eighty eighty-one eighty-two eighty-three eighty-four eighty-five eighty-six eighty-seven eighty-eight eighty-nine ninety ninety-one ninety-two ninety-three ninety-four ninety-five ninety-six ninety-seven ninety-eight ninety-nine one hundred one hundred one one hundred two one hundred three one hundred four one hundred five one hundred six one hundred seven one hundred eight one hundred nine one hundred ten one hundred eleven one hundred twelve one hundred thirteen one hundred fourteen one hundred fifteen one hundred sixteen one hundred seventeen one hundred eighteen one hundred nineteen one hundred twenty one hundred twenty-one one hundred twenty-two one hundred twenty-three one hundred twenty-four one hundred twenty-five one hundred twenty-six one hundred twenty-seven
verbaluce on October 1, 2013 at 10:18 AM

(H/T NotCoach)

There Goes the Neighborhood on February 4, 2014 at 11:09 AM

I suppose I should mention that a dummied-up web page is not necessarily fraudulent. It all depends on if it’s represented as what the web site will look like when complete, or if it’s misrepresented as working.

It’s the difference between a non-functional demo and pure fraud.

I can’t imagine payments being authorized for a non-functional demo, though. Which strongly implies fraud.

There Goes the Neighborhood on February 4, 2014 at 11:17 AM

Well what do think Holder’s FBI will do in this truly Democratic controlled state. Better yet our Governor wants another term, I guess to show just how incompetent he has been in selecting people in his administration. It’s unfortunate but we have a large majority of low information voters in the city of Portland who keep the democrats in control.

regmgr on February 4, 2014 at 11:51 AM

This was probably just some low-level employee confused over the requirements for complete transparency as laid out by HHS. Certainly no one in DC is complicit and anyone who might’ve inadvertently mislead HHS officials or the citizens of Oregon will be held accountable, even if it means being moved to an office without a view.

BKeyser on February 4, 2014 at 11:55 AM

At this point, what difference does it make?

To the people of Oregon, none.

ORconservative on February 4, 2014 at 12:28 PM

Follow the money, starting with the Cover Oregon ad campaign as well as campaign finances for Merkley, Kitzhaber, and Schrader. Also, the state Senate is controlled by the Democrats by a 16 to 14 margin. They seek to gain two seats to gain a supermajority, so check into contested races in districts 3(Bates), 8(Gelser), 11(Courtney, Senate president), and 26(Bruce). Also, keep an eye on $ for the 2016 Secretary of State race, as incumbent Kate Brown is term limited.

Christien on February 4, 2014 at 12:29 PM

Oregon Dems like to use OPM to fund their operations. See the Oregon 529 College Savings Plan circa 2008, when they stole families’ college savings and Oppenheimer which Dem cronies picked over Vanguard kicked in $350,000 in marketing fees to seal the deal. With Cover Oregon, they used federal taxpayer money.

Again, follow the money.

Christien on February 4, 2014 at 12:36 PM

I seriously doubt Oregon will have to give that money back(unless a Republican wins the next governor’s race of course).

Doughboy on February 4, 2014 at 9:04 AM

Good one, Doughboy! What a strange and foreign concept; a *Republican* governor? In Oregon? I can’t stop laughing. If I do I’ll cry.

Oregon is top-loaded with the same breed of tax-happy corruptocrats as fill Washington DC. Oregon is a third-world socialist paradise. Really sucks to live be an inmate here.

bigbeachbird on February 4, 2014 at 12:49 PM

Ask the FBI to investigate. What a joke. They will declare that there is no criminal conduct involved before they open the “investigation”. See:IRS “investigation”.

tngmv on February 4, 2014 at 3:50 PM

Guys, guys… guys… we have more important things to worry about here in Oregon. The state legislature here is using the small session they have this year to discuss banning e-cigarettes. Thats far more serious than some silly website stuff. Come on. Besides, the FBI is on the case!

oryguncon on February 4, 2014 at 5:09 PM

There seems to be a lot of misunderstanding regarding having a criminal investigation by the FBI.

1. There does not have to be any proof that anything criminal occurred. The purpose of the investigation is to determine whether or not anything criminal occurred and if Probable Cause exists to bring charges against anyone.

2. A criminal investigation would protect the rights of suspects. (Unless your name is Scooter Libby)

3. The FBI has resources, such as forensic accountants, that can be brought to bear even if no one ends up being criminally charged. It would be nice to know exactly where all that money went.

5. People can lie to KATU/KPTV/Oregonian without facing a penalty. Not so with the FBI.

schmuck281 on February 4, 2014 at 11:02 PM