A Republican-led U.S. House committee has found that former Gov. John Kitzhaber and a federal agency mishandled the creation of Oregon's health insurance enrollment website, with the Democratic governor's political advisers making decisions based on his re-election campaign.
In a staff report released Wednesday, the Republicans on the committee said they are asking the Justice Department and state attorney general to conduct criminal investigations into the actions involving Cover Oregon.
"More than $305 million in federal taxpayer dollars were sent to Oregon state for purposes of implementing a state exchange to benefit the people," the committee said in a letter to U.S. Attorney General Loretta Lynch. "The state exchange never came to fruition, and the money is gone."
The Republican-controlled Committee on Oversight and Government Reform said its investigation showed state officials misused federal money and improperly commingled official and political resources to enrich the Kitzhaber's political prospects. However Democrats on the panel blamed the state's contractor, California-based Oracle Corporation, for the website's problems. In their own report released Wednesday Democrats say Oracle failed to deliver a functioning website and misled state officials.
Oregon produced the country's worst rollout of the new national health insurance program. While the crippled federal website eventually worked, Oregon's failed to enroll a single person online. The state had to resort to hiring 400 people to process paper applications.
The CMS' "failed oversight of the development and implementation of Cover Oregon resulted in millions of wasted taxpayer dollars," the committee said. The federal agency should reform its grant and oversight process, the panel said.
The committee said documents and testimony it obtained are consistent with the findings of the Government Accountability Office, a congressional watchdog agency. The committee report also noted Cover Oregon is not unique.
"Several other states have had significant problems developing and implementing a health insurance exchange," the report said.
An email seeking comment from Kitzhaber early Wednesday morning through his fiancée, Cylvia Hayes, wasn't immediately returned. Representatives of CMS also didn't immediately return a request for comment. A representative for Oracle didn't immediately return a phone call and email seeking comment.
In other findings, Republicans on the committee said:
- Oregon decided the state should establish a state-based system and was awarded more than $300 million in federal grants, but the state-supported platform was then abandoned for HealthCare.gov, a federal platform, and was permitted to use it for free.
- Officials with the CMS applauded the progress at Cover Oregon and awarded the project additional federal dollars even as the quality assurance vendor rated the project as "high risk."
- State officials and Kitzhaber's campaign advisers "collaborated to such an extent that the lines between official and political activities became blurry."
- The CMS didn't adequately monitor and address the "excessive involvement" of Kitzhaber's staff and campaign advisers.
In their own report Democrats said Oracle "misled state officials by repeatedly assuring them its work was on track and on schedule when in fact it was riddled with errors." The Democrats' report also said independent experts said Oracle's work was so flawed that the state should consider withholding payment to the contractor.
In March 2015, Gov. Kate Brown signed legislation dissolving Cover Oregon.