‘If It’s True, Someone’s Going to Prison’: Serious Allegations Hit Oregon’s State Health Insurance Exchange

A former Republican lawmaker has contacted the FBI over allegations that Cover Oregon project managers misled the federal government about the progress of the state health insurance exchange in order to get millions of dollars in funding.

More specifically, KATU-TV reports that project managers allegedly “initiated the design of dummy web pages to convince the federal government the project was further along than it actually was.”

If the allegations are true, it amounts to fraud and “someone's going to prison,” former Republican state Rep. Patrick Sheehan told the news station.

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

The federal government initially approved a $48 million “early innovator” grant for the Cover Oregon project. However, the project ultimately brought in $59 million in federal funding.

In order for the federal government to continue pouring money into the state health insurance exchange, the Cover Oregon website was required to meet specific goals between 2011 and 2013, KATU-TV reports.

Carolyn Lawson (Credit: Twitter)

“The state needed to show the feds it had picked a company to provide software and technical assistance; it had to demonstrate that the website was safe from hackers; and, most importantly, it had to show that people could actually sign up for insurance on the website,” the report adds. “The evidence these marks had been reached would be presented during a process called ‘gate reviews.’”

The official in charge of overseeing the project and presenting the gate reviews was Carolyn Lawson, an IT professional from California. She has since resigned.

Lawson is accused of using an “iterative” approach to building the Cover Oregon website, which KATU-TV describes as a “concept car that looks flashy in the showroom but doesn’t actually run.”

So the allegation is that Lawson was showing her bosses a shell website hosted by software contractor Oracle called “The Solution Factory.” The link to that site is no longer working.

In April 2012, Lawson reportedly told the State Emergency Board that the Cover Oregon team presented a “working system build to executive stakeholders and sponsors.” The presentation included an instance where a person actually signing up for insurance via the Cover Oregon website.

As of January, Covered Oregon had enrolled just 20,700 people in the exchange. That was after the number was still at zero in November.

After receiving information at the state of Oregon was misleading the federal government in order to secure millions of dollars in funding, Sheehan said he had no choice but to take the information to the FBI. He says he has been in contact with investigators several times.

"If they were able to connect the dots and if it's true, someone's going to prison. It would be fraud. It would be the State of Oregon, actually, willfully, misrepresenting something for federal funding,” Sheehan said.

Read the entire report on the serious allegations here.

UPDATE:

Early Tuesday morning KATU was teasing potential FBI involvement:

Exclusive details uncovered by @KATUNews about a potential FBI investigation into Cover Oregon website woes. See you #liveonk2 at 5am

— Valerie Hurst (@ValerieHurst) February 4, 2014