State personnel Director Joe D'Alessandro has resigned. The move comes after an attorney general's investigation found that D'Alessandro improperly channeled nearly $200,000 dollars generated from state healthcare contracts to Linda Pepin, volunteer adviser to Governor Craig Benson.
New Hampshire Public Radio's Josh Rogers reports.
NHPR's series on Linda Pepin and the Choicelinx contract earned a 2004 Sigma Delta Chi Award for Radio Investigative Reporting from the Society of Professional Journalists.
After three months of investigations, and interviews with a list of witnesses that included Governor Craig Benson and former Governor Jeanne Shaheen, The Attorney General's office has concluded the conduct of Joe D'Alessandro and Linda Pepin was "unethical" and "unacceptable" but not criminal. The substance of the report's findings is that Joe D'Alessandro used his state position to enrich Pepin, a fellow Cabletron alum, who had once been his business partner. Attorney General Peter Heed.
"The evidence supports a finding that Mr. D'Alessandro violated the state code of ethics by essentially orchestrating the funneling of insurance commission fees to Pepin."
Those fees totaled $187,000 over an eight month period. And derived from the state's health and dental contracts and paid to Pepin even though she lacked the license needed to receive them. For that, says the AG's office, Pepin will face some 42,000 in fines from 17 counts of violating state insurance laws. But as Assistant Attorney General Ann Rice admitted, Pepin's abbreviated stint as "Benson administation volunteer" will likely leave her $140,000 in the black.
"She has not returned the money and um, we have not considered asking for that money back at this point -- there's really no mechanism to obtain those."
The matter that drew attention to Pepin in the first place was another heathcare contract. That was an $885,000 dollar agreement with Manchester-based Choicelinx - the company hired to manage state employee health and dental benefits online. That company is run by a member of Governor Benson's healthcare transition team. The main issue there was Pepin and D'Alessandro truthfulness in preparing the contract for the Executive Council's approval. The contracts cover letter indicated the state had talked to five other companies. That wasn't true. But according to the attorney general's office, it did not need to be true. Again Ann Rice.
"Everyone did understand that this was going to be a sole source contract even if that term was not used."
"No, absolutely not. Absolutely not. No it was not."
That's District 2 Executive Councilor Peter Spaulding. He says the contract coversheet was clearly an attempted to mislead.
"If it's a sole source contract you do not go out and solicit other proposal from possible vendors --- which they gave the impression that they had."
Spaulding believes state government is well rid of D'Alessandro and Pepin, but adds the right thing to do would be to require Pepin to repay the money she earned as a Benson volunteer. And Spaulding is not alone in that goal. Democrats are also calling for Pepin to reimburse the state the cost of the brokers fees. House Democratic leader Peter Burling.
"That is public money. It belongs to the people of New Hampshire. She should be forced to give it back. And if the Attorney General can't figure out a way to do it than someone should take her to Merrimack Superior Court and simply sue her in common law."
And as for Governor Benson's reaction to the AG's findings? So far, it's muted. In a prepared statement, he said "The attorney general found no evidence of illegal activity, however I agree with his conclusion that it is unacceptable for state employees, volunteers or elected officials to give the appearance of impropriety." Benson spokesman Wendell Packard added that the governor is "very uncomfortable with the situation." But Packard says Benson's discomfort is not such that it's led him to believe he ought to push to get Linda Pepin to repay the brokers fees.
"There's no grounds on which any one can do that, as the attorney general indicated."
"Well, he could ask."
"Well he's going to let the process play out first before he makes his decision."
So after a three month investigation, the attorney general's report has answered some questions, but left others unresolved.
For NHPR News, I'm Josh Rogers.
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