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Wednesday, May 03, 2006

Ind. Gov't. - Still more on: State FSSA exec goes from public to private at twice the price

The Indianapolis Star's Michele McNeil writes in a brief story posted late this afternoon on the Star website:

The Indiana Democratic Party wants the state's top ethics officer to investigate a no-bid contract that nearly doubled the salary of the chief financial officer of the Family and Social Services Administration.

In January, FSSA awarded a $540,000 three-year contract to Allied Professional Services, whose president is former agency CFO Richard E. Rhoad, of Fort Wayne. That salary was nearly double what Rhoad was making at FSSA to do virtually the same job, according to state Democrats and the contract. The party issued their call after the contract was publicized in media reports.

According to state personnel records, Rhoad worked at FSSA from Jan. 10, 2005 until he resigned on Jan. 14, 2006. The contract was signed on Jan. 13. His salary, while at FSSA, was $100,000.

The expanded story will appear in tomorrow's Star. Earlier ILB entries appear here (3/2/06) and here (earlier today).

[More] The Star and the Louisville Courier Journal also have an AP story, by Ken Kusmer, this afternoon that reports:

INDIANAPOLIS (AP) -- Top Indiana Family and Social Services Administration officials signed a contract to outsource the agency's financial functions for $1 million per year to a company owned by one of its senior executives at the time, The Associated Press has learned. * * *

The $1 million contract came to light Wednesday as the Indiana Democratic Party called for state ethics and criminal investigations into a subsequent FSSA contract that pays a much smaller amount - $180,000 per year - to the senior executive in question, Richard Rhoad of Fort Wayne, who was FSSA's chief financial officer until Jan. 13.

The original contract, which was to run for two years beginning Dec. 1, 2005, had been signed two weeks earlier, on Nov. 17, by Rhoad as president of a private company called Allied Financial Services LLC, by FSSA Secretary Mitch Roob, and by John Davis, FSSA's general counsel.

A copy of that contract obtained by the AP lacked necessary signatures from Charles E. Schalliol, who is Daniels' budget director, and officials in the Department of Administration and the attorney general's office. FSSA spokesman Dennis Rosebrough confirmed the existence of the signed, unexecuted contract.

The earlier contract called for FSSA, the state's largest agency, to pay Rhoad and two other employees of his company a total of as much as $35,000 per month, plus expenses and travel costs, up to a total cost of $2 million over two years.

Rosebrough denied that the contract had been rejected by Schalliol, the attorney general or administration. He said that even though Roob and Davis had signed the contract, FSSA officials had second thoughts about it and decided against taking it to the other agencies for their review. The reconsideration occurred sometime in the two weeks between the signing and the date the contract was to have taken effect, Dec. 1. * * *

Rhoad eventually signed a contract with FSSA to perform his duties, including budget development and administration, as a private contractor earning $180,000 per year for three years, for a total of $540,000 through 2009. That contract, first reported by The Journal Gazette of Fort Wayne on Tuesday, took effect after Rhoad formally left his position as an FSSA employee. * * *

Associated Press Writer Mike Smith in Indianapolis contributed to this report.

Posted by Marcia Oddi on May 3, 2006 04:20 PM
Posted to Indiana Government