Nessel's office finds no evidence of criminal conduct in contact-tracing controversy
Lansing — Michigan Attorney General Dana Nessel said her office found "no evidence of criminal conduct" after investigating a state contract for tracking the spread of COVID-19 that involved a Democratic political consultant.
Nessel released a 29-page report Wednesday on her staff's inquiry into the agreement with Great Lakes Community Engagement, which is tied to Democratic consultant Michael Kolehouse.
However, the report noted that the Attorney General's Office was unable to interview three "critical individuals," including a central figure in the arrangement, Andrea Taverna, the Department of Health and Human Services' senior adviser on opioid strategy.
Taverna was in charge of developing the contact tracing program. Also, Lynn Sutfin, spokeswoman for the Department of Health and Human Services, and Sarah Lyon-Callo, the state's top epidemiologist, didn't agree to interviews, according to the report.
Investigators couldn't force them to cooperate because there was no evidence a felony took place, Nessel's spokeswoman Kelly Rossman-McKinney said.
At the height of the coronavirus pandemic in Michigan, Democratic Gov. Gretchen Whitmer canceled the contact-tracing deal a day after it was publicly announced in April.
A team of three criminal investigators and four assistant attorneys general with expertise in criminal or procurement law conducted interviews with 17 individuals and reviewed thousands of emails and documents, according to a press release from the Attorney General's Office.
"With the benefit of hindsight, there may have been a better way to accomplish the department’s ultimate purpose but we found no evidence of criminality," Nessel, a Democrat, said in a statement. "Instead, it appears the imperfect process used here was mainly a result of the department’s attempt to get a contact-tracing program underway as quickly as possible in light of the dire public health crisis.”
Sen. Jim Runestad, R-White Lake, requested the attorney general investigation after the contract drew national attention in the spring because of the political connections of those involved.
Department of Health and Human Services Director Robert Gordon told lawmakers in August that the contract was a mistake made in the middle of a "terrifying surge" in cases, but he denied there were political motivations behind the decision.
The contract was a mistake not because the firm wasn't capable of doing the job, Gordon said, but because of the appearance it created and the time the furor over the canceled contract has since stolen from the department.
Gordon was not involved in his employees’ decisions to answer questions from the Attorney General's Office, and he was not asked by Nessel to become involved, his spokesman Bob Wheaton said Wednesday.
"We appreciate the Department of the Attorney General’s report," Wheaton added. "MDHHS continues to work on protecting Michiganders and delivering vaccines to save lives during this terrible pandemic."
The contract was approved by officials with the Department of Health and Human Services and the Michigan Public Health Institute. The department announced the contract with Great Lakes Community Engagement, a firm that specializes in outreach campaigns to engage citizens, and Every Action VAN, a platform used by nonprofits, on April 20.
Every Action's involvement immediately raised alarms among Republicans, who questioned the selection process. Every Action’s CEO Stu Trevelyan is also chief executive of NGP VAN, according to his Twitter profile. The companies differ in that Every Action handles nonprofit, corporate and government markets while NGP VAN works with campaigns, Every Action spokesman Max Kamin-Cross previously told The Detroit News.
The governor's administration canceled the agreement on April 21 after backlash from Republicans. It later was awarded to Rock Connections LLC and Deloitte.
The contract should have been approved by the State Emergency Operations Center, but was not, Whitmer's spokeswoman Tiffany Brown said at the time. Brown has said the executive office never approved the vendor.
According to Nessel's report, Ed Duggan, Detroit Mayor Mike Duggan's son and then a senior adviser for the Department of Labor and Economic Opportunity, introduced Kolehouse to Taverna in late March after Taverna had contacted Duggan about the contact tracing project.
The introduction was made March 27, the same day Kolehouse said in a Facebook post that he hoped President Donald Trump would get "coronavirus ASAP."
"Can someone do the country a favor and cough on that man," Kolehouse wrote.
The contract was awarded to Kolehouse, initially through Kolehouse Strategies and his vendor, political platform NGP VAN, without any form of competitive bid or vetting process. The agreement later substituted in one of Kolehouse’s subsidiaries, Great Lakes Community Engagement and vendor Every Action VAN, used more often for nonprofit fundraising and community engagement.
The changes came after Whitmer’s communications director Zack Pohl told Taverna that “using politically involved entities may be a distraction," according to the report.
“Mr. Pohl gave his personal approval to the change,” the report said. “It appears Ms. Taverna took Mr. Pohl’s approval to be that of the governor’s office.”
During Pohl's interview, he said he was not involved in the development of the contract, according to the report.
Eventually, the contract with Great Lakes Community Engagement was made through the Michigan Public Health Institute, a nonprofit the department uses for hundreds of contracts a year because the nonprofit is “able to execute contracts at a quicker pace” than if the health department were to go through the regular contract process, according to the report.
James Colangelo, chief procurement officer with the Department of Technology Management and Budget, told investigators he believed the state health department also used the public health institute for some contracts "to avoid oversight."
There were no emails indicating Whitmer was aware of the contract, nor were there emails indicating people intended to skip proper procurement procedures or that “any favors were discussed or contemplated.”
“There were no emails demonstrating any deception on the part of any individual,” the report said.
The subcontract between Michigan Public Health Institute and Great Lakes included a data use and non-disclosure agreement regarding any information procured during the process.
While purchases above $50,000 would usually merit a request for proposals, an exception exists in the law for emergency purchases to protect public health or safety or in response to a declared state of emergency. But the contract did require approval from the State Emergency Operations Office and the Department for Technology, Management and Budget, which officials did not seek out or receive.
The contract between Michigan Public Health Institute and Great Lakes Community engagement included language agreeing to pay $82,000 for first four weeks and $112,250 for the last four weeks, in an amount not to exceed $194,250.