Rowland-era sweetheart deal cost millions
Source: By KEN DIXON, Connecticut Post, 01/31/2008
A multi-year investigation (.pdf) into a Rowland-era sweetheart contract to privatize Connecticut's worker's compensation claims, indicates the state may have overpaid tens of millions of dollars. The no-bid contract, awarded through the state Department of Administrative Services, used $80 million in state bonding funds, usually used for long-term capital construction projects.
....... Blumenthal, in a morning news conference in his office, said that while there was no apparent criminal activity - and no written order from Rowland to hire the consultants - the state clearly overpaid a consulting company to settle hundreds of worker's compensation claims, using college interns who were paid $105 per hour. He said that state employees were clearly capable of settling the claims, but in the move to privatize the work, taxpayer funds were misspent.
..... He said MRM Consulting, Inc. made a "deeply flawed" consultant's report advising an outside contractor be hired.
...... A firm called ACE Financial Solutions, LLC, was paid $80 million. About $60 million was spent to settle about 545 of the 600 worker's compensation claims and ACE has been collecting interest on the remaining $20 million.