In March 2011, Michael Taaffe, 56, retired from his $91,000-a-year job as an assistant administrator for the Health Services Division of the Oregon Department of Corrections (ODOC). Three days earlier he had been hired by Correctional Health Partners (CHP), a private medical services company.

While employed with the ODOC, Taaffe had helped CHP land a multi-million dollar contract with the state’s prison system; the Oregon Government Ethics Commission is now investigating whether he violated the state’s “revolving door” statute after retiring from his government position.

Taaffe began working in the ODOC prison industries in 1996. He was later employed as a pharmacist before being promoted to an executive position with the ODOC’s Health Services Division in 2007.

Taaffe served on a three-member panel which, in March 2009, selected CHP over five other bidders to manage some of the ODOC’s medical services for prisoners.

However, he did not make the final selection or administer the contract, according to a May 10, 2011 email that ODOC Director Max Williams sent to Governor John Kitzhaber and the Director of the Oregon Department of Administrative Services, briefing them on the situation.

In June 2009, CHP became a “third-party administrator” of the ODOC’s health care system, monitoring medical care for prisoners, scrutinizing medical claims to prevent overpayments caused by mistake, fraud or abuse, and providing data to help the ODOC track health care trends and contain costs. CHP was paid $1.2 million during the first year of the contract and continues to receive monthly payments of approximately $100,000.

“We’re quite happy with their performance,” said Williams, noting that CHP had helped reduce prison medical costs that were consuming around 15.4 percent, or $216.6 million, of the ODOC’s $1.3 billion budget.

Williams admitted, however, that “some of the contractor’s employees are embedded with DOC Health Services staff in our offices, and Mr. Taaffe is one of those.”

Oregon law prohibits state employees from having a “direct beneficial financial interest” in a contract awarded by an agency with the employee’s participation. The ban, which lasts for two years after the employee leaves public service, may be triggered by “participating on a selection committee” as Taaffe did, according to the Ethics Commission.

“There was no effort to try to sneak something past the process,” Williams said. He noted “that the contract is not directly with Mr. Taaffe but with a larger Corrections Health Management company.” Additionally, “his duties are not the same as those he was performing for the department.”

When Taaffe was nearing retirement he asked his supervisor about applying for the CHP job, according to Williams. He was told there was no problem and submitted his job application on February 28, 2011.

The Ethics Commission opened a preliminary inquiry into Taaffe in April 2011 after receiving a complaint from ODOC employee Vicki Gallegos. Gallegos alleged that “Mr. Taaffe left his official position and went to work for [CHP] immediately,” and that after he was hired by CHP, the company set Taaffe up “as an on-site vendor representative in the same office he occupied when employed by [ODOC].”

“We have no concerns about his actions and feel [Taaffe] is a very ethical employee,” countered Jeff Archambeau, a CHP official. Archambeau denied that Taaffe had done anything to benefit the company when he was a state employee in exchange for the job.
“Absolutely and unequivocally not,” said Archambeau. Taaffe, who was hired by CHP three days before retiring from the ODOC, declined to comment.

On May 11, 2011, the ODOC released Williams’ email to the media. “I am writing to give you all a heads up on a Statesman Journal media issue inquiry involving a former DOC employee that recently retired,” wrote Williams. “Michael Taaffe worked most recently in our Health Services office in a budget/business role. He retired sometime last month and immediately went to work for our contracted third-party administrator for Health Care.”

Williams and ODOC’s legal counsel were not consulted or notified of the situation until after Taaffe was hired by CHP.

“I am sorry that I wasn’t made aware of the situation until the retirement was complete and he had been hired by the contractor,” Williams wrote. “What is unfortunate is that his immediate supervisor didn’t not [sic] recognize any concerns (even internal politics) with this approach and told Mr. Taaffe he didn’t think it would be a problem. The supervisor did not ask [ODOC] leadership ... for any opinion or advice on the issue and did not feel it was a problem since Mr. Taaffe was retiring from state service.”

“Nevertheless, it may in fact be that Mr. Taaffe violated ethical laws of the state,” Williams admitted.

The Ethics Commission released a preliminary review in September 2011 which concluded, “there appears to be a substantial objective basis to believe that violations of Oregon Government Ethics law may have occurred and that Mr. Taaffe may have committed such violations.”

Further, “[i]nformation for this preliminary review appears to indicate that Mr. Taaffe may have had a direct beneficial financial interest in a public contract in which he participated in the authorization of while acting in his former official capacity as a public official representing [ODOC],” the Ethics Commission stated. See: Oregon Government Ethics Commission, Preliminary Review, Case No. 11-136EDT.

The matter now progresses to a formal investigation of Taaffe’s post-retirement employment with CHP. Taaffe had tried to downplay his involvement in the evaluation committee that granted the lucrative ODOC contract to CHP. The law is the law, though, and presumably prison officials have to follow state ethics laws just like all other public employees.

Sources: The Oregonian, Statesman Journal, Ethics Commission preliminary review

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