FRANKFORT, Ky. – A former Beshear administration official said on Wednesday that Gov. Matt Bevin’s administration lacks legal authority to force him to cooperate with Bevin’s investigation into what Bevin has said was significant corruption during his predecessor’s years in office.
Frank Lassiter said the investigation overseen by Bevin’s Finance and Administration Cabinet secretary does not have the authority “to compel testimony or the production of documents” from persons such as Lassiter who are not state employees.
At issue is a petition filed by Finance and Administration Secretary William Landrum last month asking Woodford Circuit Court to compel Lassiter’s cooperation with the investigation.
Lassiter’s wife Mary Lassiter served as secretary of Gov. Steve Beshear’s executive cabinet, and Frank Lassiter worked from 2008 through mid-2011 as executive director of administration and technology services in Beshear’s Cabinet for Health and Family Services. He left that job to start his own technology company and become a consultant.
Bevin announced last spring that he was creating an office of inspector general within the Finance and Administration Cabinet to investigate suspected political corruption while Beshear was governor. Beshear strongly rejected the charge and called Bevin’s move political.
Landrum’s petition to compel Frank Lassiter’s cooperation – filed in court just five days before the November election – is the only public action by the investigation that has revealed a specific controversy under the inspector general’s scrutiny.
That petition shows that the inspector general is seeking more details of a $3 million contract awarded on the final day of Beshear’s administration to SAS Institute of North Carolina to detect fraud in billings made to Medicaid and other state programs.
The Courier-Journal first reported in February the award of that no-bid contract – along with the fact that Lassiter was a consultant for SAS. Lassiter said in that story he had no involvement in representing SAS on that particular contract and made no money on it. Mary Lassiter said she “wasn’t involved at all” in any state government dealings with SAS.
Frank Lassiter’s attorney, Guthrie True of Frankfort, argued in his 15-page response to the petition, that the subpoena authority the Bevin administration cites in its petition is not applicable for an investigation into alleged state procurement violations. He further argued that the Finance secretary’s subpoena power extends only to “any officer, employee or governing body” within the executive branch of state government – not a private citizen like Lassiter.
As for the SAS contract, True said SAS was initially retained by Deloitte Consulting as a subcontractors on the development of Kentucky’s health benefit exchange, called kynect. True said provisions within the state’s contract with Deloitte allowed the state to make the fraud detection services performed by SAS available to other state agencies including the Revenue Department.
After Bevin was elected governor in November of 2015 and repeated his pledged to dismantle kynect, the Beshear administration realized if it kynect was dismantled the state would also lose what had become “highly effective fraud detection” services that SAS was providing to the Revenue Department, True said. Because those services could not be “reasonably or practically” obtained from another source through bidding, the Beshear administration negotiated the final day contract with SAS, True said.
The spokeswoman for the Bevin Finance and Administration Cabinet said Wednesday that it had not see Lassiter’s response and “as a matter of routine” does not comment on pending litigation.
Reach Tom Loftus at firstname.lastname@example.org.