A former employee of the health care district in Maricopa County falsified more than a dozen public documents during the past three years by counterfeiting the signature of a notary public, compromising at least $8 million in government construction contracts, according to the findings of an Arizona Capitol Times investigation.
The Maricopa Integrated Health Care System, the government agency that awarded the contracts, tried to hide the employee’s actions for months after top officials discovered that the fake documents had tainted the bidding process for contracts that ranged from the construction of a pediatric emergency department at the Maricopa County Medical Center to the installation of new fire alarms.
At least 14 times during the past three years, the health care district failed to publish notices as required by law that it was soliciting bids for various high-dollar projects. To cover it up, an employee who handled procurement responsibilities for the district repeatedly duplicated a notary public’s signature on public notice affidavits to make it appear as though requests for bids had been published in a local newspaper.
The Arizona Capitol Times discovered the misconduct associated with the pediatrics emergency department project in mid-November and was met with a one-sentence statement that the district’s lawyers were looking into the matter. A spokesman for the health care district repeatedly refused to answer questions, while several top officials, including four members of the board of directors and Executive Director Betsey Bayless, declined to return phone calls.
An ensuing Arizona Capitol Times investigation included five separate public records requests; interviews with legal experts and law enforcement officials; and examination of procurement and personnel files, dozens of affidavits and public notices, hundreds of e-mails and minutes of board of directors meetings.
On Jan. 4, just as the newspaper was preparing to release the findings of its investigation, the health care district alerted the Phoenix Police Department to pursue a criminal investigation of falsified documents regarding government contracts that had been awarded by the health care district during the past three years.
Former Maricopa County Attorney Rick Romley, who prosecuted many high-profile public corruption cases during his 16-year tenure, said falsifying public records could fall under the statute of fraudulent schemes and artifices, a felony.
Romley said the delay in reporting the violations compromised public trust and jeopardized the criminal investigation because timing is essential for law enforcement officers, some government records are not retained for long periods of time, and there’s a statue of limitations on criminal prosecutions.
“The leadership should have demanded immediately that this be reported to law enforcement,” he said.
Legal experts said Arizona law requires government agencies to publish bid requests in newspapers as a way to make sure private companies compete fairly for government contracts, companies do not receive inside information to land a contract, and taxpayers get the best deal possible. However, there is no penalty for violating the law.
Tom Irvine, an attorney specializing in construction law, said that although the requirement to advertise the bid in a newspaper might be antiquated and toothless, not doing it is a serious breach and shouldn’t be minimized. Failing to publish notice of a request for bids, he said, may allow a losing bidder to protest the contract award if the violations are discovered before work begins.
“One person’s technicality is another person’s fundamental right,” Irvine said.
The public would have been better served had the district been forthright from the beginning and acknowledged there was a serious problem, said Bruce Merrill, a pollster and political scientist for more than 40 years.
“Stonewalling, it’s not smart as a strategy, I’ve never seen it be successful,” Merrill said. “We’ve seen it in politics, we’ve seen it in business. Eventually it will all come out.”
Groundbreaking for the $4.6 million pediatric emergency department at the Arizona Children’s Center at Maricopa Medical Center, was celebrated with an appearance by Gov. Jan Brewer on Oct. 4. The expansion and renovation project was intended to bring the department into compliance with federal and state laws, provide additional capacity and give the aging facility a better-looking gateway.
The hospital was part of Maricopa County’s health care system until 2003 when voters passed an initiative to create a special taxing district and an independently managed health care bureaucracy that provides care for the indigent at the hospital and 10 clinics throughout the Valley.
In mid-October and with construction underway at the Arizona Children’s Center, Brian Maness, the district’s director of procurement and contracts, found the first of the falsified documents while going through the files of an employee who had resigned the month before. The fake affidavit was part of the procurement file for the hospital’s pediatric wing.
Michael Murphy, spokesman for the health care district, refused to name the employee or explain the conditions that led to the employee’s resignation because it’s against the health care district’s policy to discuss personnel issues. But the district’s procurement records show that Andrew K. Wilson was in charge of the procurement process of the pediatrics project, and his name appeared on the falsified document.
Wilson came from the Boston area, where he was a procurement officer for government agencies there. He also worked at the Arizona Department of Education for a year before joining the health care district in 2007.
Wilson, who resigned Sept. 10, could not be located for comment.
The district’s procurement code and Arizona statute required the district to advertise the bid solicitation in a newspaper of general circulation at least twice.
The procurement file contained an affidavit of publication from the Record Reporter, a newspaper that publishes three times a week and runs hundreds of public notices. The affidavit indicated that the public notice of the health care district’s request for bids on the pediatrics project had been published on June 9 and 25, but a check of the paper for those dates shows the ad never ran.
It appears the affidavit of publication was falsified by recreating and altering an old one. A close comparison reveals some differences in style between the faked and true copies.
The Arizona Capitol Times used several valid copies of affidavits of publication from the Arizona Corporation Commission that ran in the Record Reporter to compare them against the affidavits that appeared to have been altered.
In all, the Arizona Capitol Times found 14 falsified affidavits of publication bearing Wilson’s name from 2008 until 2010.
The most obvious discrepancy is that all of the faked affidavits bear the signature of a notary public who no longer works at the Record Reporter. That former newspaper employee, Annette Acosta, said she has no idea how her name ended up on the forged affidavits.
“I haven’t worked there since Nov. 26, 2008,” she said.
Eleven of the 14 tainted affidavits of publication indicate the bid requests ran in the Record Reporter on dates the newspaper didn’t publish an edition.
Falsifying documents could fall under a range of statutes in Arizona’s public records laws and criminal code. All are felonies and carry possible prison terms of up to two years.
EXCUSES AND SOLUTIONS
The Arizona Capitol Times began contacting health care districts in mid-November. Bayless, Maness and four of the health care district’s board members – Bil Bruno, Greg Patterson, Susan Gerard, and Alice Lara – have yet to return calls regarding the violations.
Elbert Bicknell, chairman of the Maricopa Special Health Care District, was the only board member who agreed to be interviewed. He said he first heard about the violations when contacted by the Arizona Capitol Times on Dec. 13. He said he was upset that he wasn’t told earlier by the health care district staff, especially considering he had met recently with Bayless.
Bicknell said he has since directed Bayless to complete a report on the matter and submit it to the board.
“If it is white-washed, the board will ask for an outside investigator,” Bicknell said.
Murphy began answering questions about the problem on Dec. 15 after the Arizona Capitol Times already had gathered most of the documents and other pertinent information through public records requests and had demonstrated the findings of the investigation.
He said he didn’t answer questions early on because little was known at the time. But he also admitted that Maness had identified falsified documents a month before the Arizona Capitol Times began its inquiry.
Murphy contended that failing to advertise the bids in the newspapers as required by law had a negligible effect because there were a sufficient number of bidders for each project.
He said the four of the mishandled bid requests in 2009 and 2010 attracted between seven and 18 bidders each, and there were an average of 36 to 40 notices sent by e-mail to contractors for each of the 2008 projects. All of the projects were advertised on the health care district’s website.
“What you don’t have is actual, technical compliance with the procurement code and complying with an outdated and obsolete requirement of putting it in a newspaper,” he said.
Even legal experts say the procurement violations didn’t have a major effect on the outcome of the bidding since there was healthy competition. More troublesome, they said, was the succession of public notice violations, falsification of government documents to cover it up and then a second cover-up when confronted by the media.
“Government must be as transparent as possible and the rules – although many may think they’re bureaucratic and unnecessary, they’re there for a specific reason,” Romley said. “To sit there and skirt around those procurement laws must be taken seriously by a prosecutor, because if you don’t do it in this situation, then what situation would ever be enforceable?”
Since the Arizona Capitol Times began its investigation, the health care district has changed its policies and procedures to avoid similar violations in the future. Each public notice advertisement must now be clipped from the newspaper and placed in a project procurement file along with the affidavit of publication, Murphy said.
Irvine, the construction attorney, said Maricopa Special Health Care District may need to make fundamental changes to the procurement process. But he said the board of directors also needs to go back and reaffirm the contract awards that were compromised to make sure there aren’t any charges of misspending.
“That’s something that should probably be aired at a board meeting so that the public can talk about it,” he said.