A recent article discusses an important issue in public pension and health plans — a lack of transparency. I realize this topic is a change from my normal posts discussing personal injury, products’ liability, and Alabama court issues. However, it’s an important issue. It’s one important to Alabama. And, it’s one I’ve explored in a recent case representing a local healthcare business in Alabama with significant damages.
While the article discusses public plans in Kentucky, the issues also apply in Alabama. Some of our public plans have similar problems. What are two of the transparency problems we discovered in our case? They are:
- Conflicts Of Interest: Let’s face it – health and pension plans involve complex issues. So, the State often employs consultants with expertise in the field. That’s OK. It’s important these plans provide long-term benefits to our valued public employees. Here’s the problem. In our case, the State’s consultant managed the entire bidding process. He even scored the bids of companies competing for the contract. Yet, while handling the bidding process, he also accepted thousands of dollars from one bidder. And, no surprise, that bidder won the contract. Although he accepted thousands of dollars and provided the winning bidder with important pricing information, neither consultant nor bidder disclosed their relationship. The bidding process should be fully transparent and beyond ethical question.
- Use Of Public Money To Favor Some Firms: Health and pension benefits need specialized management. These plans need a contractor to administer benefits fairly between providers. Does anyone think it fair for the contractor administering state funds to choose one healthcare provider and pay it more for the same service than others? And, shouldn’t the use of the State’s money be transparent so everyone knows service providers are all being treated fairly and equally? When the contractor favors one company over another with the State’s money, it negatively affects competition and service for all.
These are important issues. Conflicts of interest and favoritism in government contracts should be a public concern. Most disappointingly, our public officials seemed more concerned with keeping obvious conflicts quiet than fixing them upon discovery. Maybe it was simply embarrassment arising from ethical concerns occurring on their watch? Regardless, we should expect better from our public officials and the companies handling public money.