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| Neb. audit, corrections conflict of interest |
| By fremonttribune.com |
| Published: 12/29/2009 |
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Nebraska awarded a $200,000 contract to a private company overseen by a state psychologist and owned by his wife, even though state officials knew of a possible illegal conflict of interest, according to an audit released on Monday. State Auditor Mike Foley called the contract that was awarded but never finalized in August a serious breach of conflict-of-interest rules. A state commission that deals with such matters should send a message "that this type of behavior cannot be tolerated," Foley said. A previous, $4,800 contract was awarded to the same company after direct involvement from the same state-employed psychologist, Dr. Richard McNeese, the audit says. The Department of Correctional Services said it conducted its own investigation, which led to McNeese's resignation. Director Robert Houston said in a letter to Foley that the department is also taking action to ensure similar missteps don't recur and existing contracts are being reviewed for potential conflicts. According to the audit, McNeese helped write bid requests for psychological services that private companies would respond to when trying to land a contract to help recently released inmates stay sober. McNeese, who was assistant administrator for the department's substance-abuse program at the time, also crafted the criteria that companies would have to meet to get the contract. Also, members of a committee that determined what company got the contract were under McNeese's direct supervision. A company that McNeese is president of _ Lincoln-based First Step Recovery Center _ was selected to receive the contract. McNeese's wife, Dianne McNeese, owns the company. Richard McNeese told The Associated Press that he wrote the bid requests because he developed the program, but that the requests weren't crafted to give First Step an advantage in the selection process and that he didn't help write the company's bid proposal. Department of Corrections officials, he said, were aware of his ties with the company including that his wife was the owner and, "I told them to review it and review it carefully." "I knew it would be sensitive because of the relationship," he said. He also said the contract was worth about $135,000, not the $200,000 Foley cites. A final contract for the services First Step was once told it would be paid to provide was never awarded. McNeese said it fell victim to the state budget crunch. The audit says that in its bid proposal, First Step did not disclose the fact that McNeese's wife owned the company. In his letter to Foley, Houston said McNeese didn't disclose his financial interest in First Step until after another company complained about First Step getting the contract. But McNeese said corrections officials knew early on of the financial link. A state official in charge of buying services visited First Step's Lincoln offices, McNeese said, where she met his wife and was told that his wife was the owner. A letter from the company's business manager to the corrections department after concerns were raised gives a similar account of the meeting and said it occurred in April, before First Step was granted the contract. The grievance filed by another organization led the department to rescind its earlier acceptance of First Step's proposal. Thus far, no contract has been awarded. Houston questioned the account of the corrections employee being told McNeese's wife owned the company, saying it was given only after the department had launched an investigation and long after the alleged meeting. Read More. |
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