Felony conviction of former state senator threatened looming $159 million contract for Medicaid data

By JAMES M. ODATO, Capitol bureau

ALBANY — With a pending $159 million Department of Health contract at stake and tens of millions of dollars in other state business on the line, CMA Consulting Services on Tuesday bid goodbye to ex-Sen. Joseph L. Bruno. His exit came less than 24 hours after his conviction on two felony fraud counts.

CMA, with 61 current state contracts worth more than $53 million, cut Bruno from the chief executive officer post he took 18 months ago after abruptly ending his 32-year career in the Senate amid an FBI probe.

Chairwoman and President Kay Stafford assumed the CEO post and notified state agencies of the decision. She also kept three former Senate aides of Bruno who moved with him to CMA: Kris Thompson, Amy Leitch and Maston Sansom. Thompson said the three will stay with CMA: “Our plans are to continue assisting one of the fastest growing IT firms in the industry and one of the largest employers in the Capital Region,” he said.

He said there was no connection to the pending DOH contract to develop a Medicaid data warehouse, which is under protest from competing bidders or the risk of losing business going forward, and Bruno’s departure.

It was clear that state contracts — on which CMA relies heavily — may have been in peril because of Bruno’s conviction. Vendor questionnaires specifically ask about criminal histories of corporate officers although companies associated with criminals are not automatically disqualified.

Stafford is required to amend numerous documents to declare Bruno’s felonies, said Jennifer Freeman, spokeswoman for Comptroller Thomas DiNapoli.

The felonies could have hurt CMA’s chances in New York and in other jurisdictions, according to people familiar with CMA’s consulting contracts, which involve information technology and other computer services. The state Office of Comptroller’s Web site shows the firm holding $53 million in contracts at agencies ranging from the State Police to the Division of Parole.

Several agencies contacted by the Times Union said they had to investigate CMA’s status. The comptroller’s office had already started looking into the issue after Bruno was indicted at the beginning of the year, said Freeman, because of protest letters from competing bidders on the Health Department’s contract — Thompson Reuters’ health care division and a company called Integris doing business as Ingenix. The two firms complained the Department of Health selected CMA for a $159 million Medicaid data warehouse job. The firms cited Bruno’s indictment in their protests and also questioned the health department’s evaluation of CMA’s expertise.

DiNapoli’s office has held up the contract and it was under review even as Bruno was convicted. “While DOH has awarded it, this office has not approved it,” Freeman said.

She said vendors and contract awards are considered on a case by case basis, but state law requires the state deal only with “responsible” vendors. Those ruled not responsible can appeal the decision. “To be considered responsible, the vendor, including senior management, must have the requisite integrity to carry out the contract,” Freeman said. “Criminal investigations, indictments, convictions factor into integrity.”

Although the $159 million contract was awarded during Bruno’s career with CMA, CMA officials told the comptroller’s office that the former Senate majority leader had no role in the agreement and was not going to be involved with the contract.
“The vast majority of state contracts with CMA pre-date Mr. Bruno’s tenure and are for standard business enterprise services,” said Morgan Hook, a spokesman for Gov. David Paterson. “Individual agencies will review their current contracts with the company as soon as possible and report back with any potential issues. Going forward — and as with any vendor — we will continue to evaluate our relationship with CMA in order to ensure that expected services are provided in the most effective and cost-efficient manner for taxpayers.”

Officials with Attorney General Andrew Cuomo’s office and with Albany County District Attorney David Soares’ office had no comment on the Bruno conviction other than to say it would not be appropriate to discuss what, if any, interest they would have in pursuing investigations while the federal case is still pending. Bruno must still be sentenced and is proposing to appeal his conviction.

Officials in other states also were planning to scrutinize CMA, according to interviews. Laura Oxley, of the Arizona Department of Health, said her agency is a client and found out about the conviction. She couldn’t say how that would affect the company’s eligibility for new business but that agencies are consulting on what steps might be necessary. CMA has offices in Washington, D.C.; Texas and Arizona and does business in several regions of the country with public and private clients. State officials say it has provided good service.