Economist Jonathan Gruber signed a revised contract this week that gives up $120,000 in compensation, but Shumlin administration critics argue that poor contract management makes it unclear whether he has earned the $160,000 he was already paid.
Gruber, an MIT professor hired to calculate the economic impact of a universal health care plan on the state’s economy, agreed to reduce his original $400,000 contract after on-camera remarks denigrating the voting public caused some to question his integrity.
A provision allowing for an additional $50,000 to be spent for macroeconomic simulations by Moody’s Analytics was removed in the contract revision.
Bare-bones invoices billing for rounded numbers of hours and identical invoices for two separate months have led critics to question how state officials can be satisfied the bills submitted by Gruber are accurate.
State officials say they are in near daily contact with Gruber and they say that he is not overbilling.
Gruber’s contract provides an hourly rate of $500 for his own work and $100 for his research assistants.
Both invoices the state received were for $100,000. The state was billed for 100 hours for Gruber’s time and 500 hours for his research assistants.
The state’s payments, on the other hand, are for $80,000 each, because of a 20 percent retainer included in the contract — totaling $160,000 to this point. As part of the revised agreement, Vermont will pay only $20,000 of that retainer.
The invoices do not include a breakdown of when those hours were worked, or what work was performed. They also do not identify how many research assistants worked the 500 hours, nor do they list the names of the assistants.
“This raises red flags and calls out for an impartial audit from people who care about good government,” said attorney Brady Toensing, vice chairman of the Vermont Republican Party.
In contrast to Gruber’s invoices, a copy of a recent invoice from the firm KPMG, a contractor for State Auditor Doug Hoffer’s office, provides a detailed breakdown of which staff, billing different hourly rates, worked what hours and what work they performed. (see documents below)
Lawrence Miller, chief of health care reform, said documentation with greater detail could be requested from Gruber if officials believed it was necessary.
“Just because the invoices aren’t presented that way doesn’t mean we don’t have the option to go deeper,” he said.
Robin Lunge, director of health care reform, and Michael Costa, Lunge’s deputy, are working closely with Gruber as they prepare the governor’s much-anticipated single-payer financing plan, Miller said.
“It’s not unusual for a contract manager to rely on their knowledge of the work that’s being done to accept invoices,” he said.
But Toensing argues there is a different reason state officials haven’t asked Gruber to better document his work with invoices.
“They have conditioned themselves and their vendors not to put things in writing so that they don’t have to disclose things under the sunshine laws,” Toensing said.
Republican opponents of Gov. Peter Shumlin’s health reform agenda, and at least one Democrat, have accused the governor of not being transparent about his plans.
After the governor declined to release his financing plan last legislative session, Rep. Cynthia Browning, D-Arlington, requested records showing how it was being developed. When that request was denied, Browning sued the administration.
Gruber’s comment that “lack of transparency is a huge political advantage” and his role in developing Shumlin’s single-payer proposal have renewed charges from Republicans that the governor is keeping the public in the dark.
Since his near electoral defeat this month, the governor has said he wants to be more inclusive and transparent going forward, so that he can win back support for his health reform agenda.
He will release a financing proposal for single payer in January.
Questions about Gruber’s research assistants
Payments on Gruber’s contract do not go to a company or consulting firm, but directly to the economist at his Lexington, Massachusetts, address.
Gruber then presumably pays his research assistants, who are, according to Miller, MIT graduate students. It is unknown whether Gruber employs the students directly or through the university.
It is also unclear whether those graduate students receive the full $100 hourly rate, or if some of that is kept as a fee by Gruber.
Gruber declined to answer questions for this report.
It also raises the question of whether money will continue to flow to Gruber as the state pays out the final $120,000 in the contract, which is meant for his research assistants.
The contract provides audit rights to the state, which they could use if there was concern that Gruber is continuing to profit from the state, Miller said.
Also, if the graduate students are Gruber’s current students that could violate the MIT ethics policy.
Miller said that’s an issue for MIT, not the state of Vermont.
Gruber Contract Revision
Gruber invoice
KPMG Invoice
