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Family Bid-Ness: After Snagging a No-Bid Contract, Ex-Shumlin Official Offers Gov's Daughter a Job 

Fair Game

Less than a month after Gov. Peter Shumlin offered health care guru Anya Rader Wallack a $100,000, no-bid contract with the state, Rader Wallack offered Shumlin’s college-age daughter a job as her administrative assistant.

“I’d say nobody’s signed on the dotted line, but it looks like it might work out,” Rader Wallack said last Thursday afternoon. “She’s looking for work. She’s a very bright young woman … And she’s got a lot of experience.”

Rader Wallack, the architect of Shumlin’s ambitious health care overhaul, stepped down as chairwoman of the Green Mountain Care Board at the end of July to return home to Rhode Island.

But she wasn’t gone for long.

Barely a week after her departure, Secretary of Administration Jeb Spaulding signed a no-bid contract with Rader Wallack’s consulting firm to oversee a $45 million federal grant she had helped Vermont obtain while she worked for the state. The one-year contract, signed on August 8 and funded by the governor’s office budget, could be renewed twice. It promised her firm, Arrowhead Health Analytics, $100,000 for up to 500 hours of work.

Later that month or early the next, Rader Wallack said, she contacted Olivia Shumlin to see if the soon-to-be Brown University graduate would come to work for her.

“My recent model of hiring assistants is I go for really bright people right out of college who need experience,” she explained. “The last one was [former House Speaker] Gaye Symington’s son, so there’s a pattern in terms of political kids, I guess.” Prior to that, she added, she hired the son of her former boss, KSE Partners lobbyist Bob Sherman.

Rader Wallack said she had met Olivia Shumlin several times at political events and came away impressed. So she contacted the governor to ask for his daughter’s number. After speaking with the younger Shumlin, Rader Wallack said she contacted the governor a second time.

“After I talked with her, I told him we had a good conversation,” Rader Wallack said, though she emphasized that the job offer was “none of his business.”

“It’s mine,” she said. “It’s my business.”

Within hours of Seven Days’ first inquiry into the matter last week, Rader Wallack called back Thursday evening to say she had just spoken to Olivia Shumlin for the first time since September.

“I talked with her, and she has not accepted any offer from me, and, in fact, is looking at other options, so we’re still very much up in the air,” Rader Wallack said. “I said, ‘Where are you at?’ because we haven’t talked in a couple of months. She is looking at other stuff and also still considering whether she wants to work for me.”

That consideration quickly came to an end.

Later that evening, in response to questions from Seven Days, Gov. Shumlin’s spokeswoman, Sue Allen, wrote in an email, “Liv is not going to work for Anya. She did receive an offer, but declined.”

In a voicemail message Rader Wallack left the next morning, she said, “Just calling to confirm that Olivia Shumlin has indeed decided to pursue other options and will not be working for me.”

It’s unclear whether state-contracting regulations would prevent a recent administration official from hiring a family member of the governor to help implement a state contract. But the state’s executive code of ethics, which was signed by Shumlin and governs him and members of his administration, would appear to bar him from using his office to advocate for such employment.

The ethics code calls on administration officials to avoid “giving preferential treatment to any family member or member of the appointee’s household” and “using public office for the advancement of personal interest.”

Asked whether such a scenario would run afoul of the rules, Shumlin’s legal counsel, Sarah London, said in an email last Friday, “In the event such an employment relationship existed, it would need to be disclosed and would be addressed under both the Executive Code of Ethics and the state’s procurement policies.”

Asked what she meant by “addressed,” London said in an email Tuesday, “depends on the circumstances,” but declined to elaborate further.

Like most state contracts, Rader Wallack’s specifically precludes her from giving “any thing of substantial value (including property, currency, travel and/or education programs) to any officer or employee of the State” during the term of the agreement.

Asked whether a job offer to a family member constituted “a thing of substantial value,” Spaulding said in an email Tuesday that “the answer would depend on the nature of the employment relationship.”

“Since no such relationship exists, we have not had to address the issue and we do not need to,” he wrote.

It’s also unclear what role Shumlin personally played in awarding Rader Wallack’s contract — and whether he weighed in on the idea of her hiring his daughter.

When it was signed in August, the contract itself drew scrutiny from reporters and opponents of health care reform. They questioned why Rader Wallack got a lucrative private-sector contract just days after leaving her job in the public sector — and why nobody else had an opportunity to bid on it.

In a written request to waive the state’s competitive bidding process, Deputy Administration Secretary Michael Clasen argued in August that Rader Wallack “is uniquely suited for this role and project” due to her experience on the Green Mountain Care Board and as Shumlin’s special assistant for health care reform.

Asked Monday whether Shumlin played any role in awarding the contract to his former top adviser, the governor first said, “I have no memory of that.”

“I remember very clearly discussing the need to take on this extraordinary talent and keep it working for us,” he then added. “I don’t get into contracts. What’s that got to do with the price of eggs?”

Asked whether he ever spoke to Rader Wallack about the prospect of her hiring his daughter, Shumlin declined to say.

“My daughters have no interest in being a part of my political life,” he responded. “I respect that and I don’t involve them in my public life. I hope you’ll respect that, too.” (Both of Shumlin’s daughters have worked for his campaign, introduced him at campaign events and lent their names to fundraising solicitations.)

The Shumlin administration declined to put Seven Days in touch with Olivia Shumlin.

Asked last week whether her hiring practices were appropriate, Rader Wallack said, “I don’t think there’s anything inappropriate about it. I suppose it would be plausible there’d be some scenario where there’d be some sort of conflict, but nothing occurs to me off the top of my head.”

“Find the Plan That’s Right for You”

Nearly two weeks ago, when Shumlin extended the deadline many Vermonters face to buy health insurance through Vermont Health Connect, he pitched the three-month delay as a way to provide “additional options” and “peace of mind” to consumers.

But for those who work for businesses with 50 or fewer employees, their choices under Shumlin’s new contingency plan could actually evaporate.

Prior to Shumlin’s delay, small businesses could choose to offer insurance through Vermont Health Connect — or they could decline to offer coverage, which would allow their employees to enroll on their own and take advantage of federal subsidies. Either way, every small business employee in the state would have been able to choose from a menu ranging from nine to 18 plans.

But now, thanks to ongoing technical problems facing the Vermont Health Connect website, many employers may offer their employees only one plan.

Why? Companies that elect to sign up directly with insurance companies, as Shumlin’s new plan allows, can pick just one plan for all their employees. And those who work for companies that fail to take any action at all will be automatically enrolled in a plan that most closely matches their current coverage.

So much for choice.

And what about the “breathing room” that three-month delay will provide small businesses?

Sure, it’ll give them more time to weigh their options — and to await fixes to the website — but it will also essentially prevent their employees from switching carriers.

That’s because, under new rules outlined last Friday, deductibles and out-of-pocket maximums will reset January 1 for those whose current plans are extended into the new year. When such people sign up for coverage by the new March 31 deadline, any deductible and out-of-pocket payments they’ve accumulated will apply to their new plan — so long as they don’t switch carriers.

But if, come March, they switch from Blue Cross Blue Shield of Vermont to MVP — or vice versa — those out-of-pocket caps reset again.

Asked Monday whether his contingency plan actually limited choice for small-business employees, Shumlin said, “That’s a temporary fallback given the challenges that we’ve been facing.”

He added, “So yeah, you can find scenarios where people aren’t going to get the choice they would have under an ideal world. Is that what you’re asking? Yes. Plead guilty.”

Shumlin declined to say when he expected Vermont Health Connect to be fully operational, though he said he was “hopeful” it would be able to process electronic premium payments by the end of the month. He also said he was “hoping” he would not have to deploy any further contingency plans.

“As I’ve told you, I’ve learned a lesson as governor: I’ll never say a date again,” the governor said. “But I’m very hopeful that we’ll have it up and running by the end of the month. That’s my hope. I’m not promising. That’s what we’re working really hard to try and do.”

Party Bosses

Vermont’s Republican and Progressive parties elected new leaders over the weekend, both of whom are pledging to expand the reach of their respective parties.

At the GOP’s state committee meeting Saturday in Montpelier, former representative David Sunderland defeated former U.S. Senate candidate John MacGovern 48 to 30 to become the party’s new chairman. Sunderland, of Rutland Town, succeeds Jack Lindley, who last week dropped his plans to seek reelection in the face of health challenges and eroding political support.

Sunderland was endorsed by the party’s sole statewide officeholder, Lt. Gov. Phil Scott, along with many GOP legislators. MacGovern, of Windsor, was favored by Lindley.

“I think today what we can take away from this is that the Vermont Republican Party has voted for change — a change in direction, a change in tone — and we plan on going forward,” Sunderland said after the election.

Meanwhile, on Saturday, the Vermont Progressive Party unanimously elected former Burlington city councilor Emma Mulvaney-Stanak to succeed Martha Abbott as chairwoman.

Mulvaney-Stanak said she planned to focus on “building the party’s capacity” to support Progressive candidates and to encourage more women and young people to enter the fold.

As for whether the Progs will field a candidate for governor, as they perennially threaten to do?

“It’s too early to tell. I do think every cycle it’s worth a serious conversation,” Mulvaney-Stanak said. “[Shumlin] hasn’t really been a champion of the working people, and I think there might be a need to hold him accountable for some of those decisions.”

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About The Author

Paul Heintz

Paul Heintz

Paul Heintz is Seven Days' political editor. He writes the weekly column, "Fair Game."


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