HHSC Revamping Rules After Paying for Janek Aide's MBA

_{*This story has been updated throughout.}

In violation of its own policy, the Texas Health and Human Services Commission paid $97,020 so a top aide to Commissioner Kyle Janek — and former aide to ousted chief counsel Jack Stick — could pursue an MBA degree, The Texas Tribune has learned.

Casey Haney, now Janek's $159,075-a-year deputy chief of staff, has been working on his graduate business degree at the University of Texas at Austin. His tuition was paid to UT up front out of the HHSC budget, a rare academic reimbursement deal that was approved in writing by Erica Stick, who is Haney's supervisor, Jack Stick’s wife and Janek's chief of staff.

Tweaks to the mega-agency’s tuition program were among a laundry list of reforms that HHSC — embroiled in contracting scandals and the target of at least two investigations — announced Friday.

House Speaker Joe Straus, meanwhile, also announced that his upcoming budget proposal will tighten the reins on state contracting.

"These reforms, combined with legislative changes, will help prevent abuses in the contracting process and make executive agencies more accountable to the Legislature and the public," Straus said in a statement.

A second HHSC employee, Patricia Vojack, who worked for Janek when he was a state senator, also received $37,000 prepaid to pursue an executive master's degree at UT's LBJ School of Public Affairs.

Janek acknowledged in an interview with the Tribune that the tuition payments for Haney and Vojack violated rules for the HHSC tuition program.

Both Haney and Vojack have agreed to pay back half of the costs, Janek said. Attempts to reach each were unsuccessful.

HHSC has spent about $525,000 for employee tuition since 2002, according to agency records.

Under HHSC’s tuition policy, employees can be reimbursed for education costs as they pursue their studies, but not receive the entire cost ahead of time.

"We did not follow that with at least two I’m aware of," Janek told the Tribune. 

Janek said his relationships with the employees had nothing to do with their tuition arrangements. After learning of the arrangements sometime last August, Janek said, he began looking at ways to revamp the tuition program to prevent such expenditures again.

Limiting the HHSC tuition program is one of several reforms the massive agency plans for itself and its four sister agencies — the Department of Family and Protective Services, the Department of Aging and Disability Services, the Department of State Health Services and the Department of Assistive and Rehabilitative Services — in the coming weeks.

The new program will require a committee to screen employee requests for tuition reimbursement, and any request for more than $5,000 would be split 50-50 with the employee.

"We want some employees to have some skin in the game," Janek said.

News of the unusual deal for Haney could not come at a worst time for HHSC, which faces two conflict-of-interest probes into its contracting for Medicaid fraud software.

Haney has long ties to both Janek and former chief counsel Jack Stick, who resigned on Dec. 12 amid questions about his ties to a lobbyist for an Austin contractor that won a $110 million agency contract.

A week later, Gov. Rick Perry called for and got the resignation of the agency’s inspector general and Stick's former boss, Doug Wilson, but not before state Sen. John Whitmire, D-Houston, fired off a complaint to the state's public integrity unit.

Haney served as a legislative aide for both Stick and Janek when the two were members of the Texas Legislature. Stick was a one-time Republican member of the Texas House from 2003 to 2005. Janek was a state senator from 2003 to 2008. Haney also worked for Perry as an aide from Jan. 1, 2011, to Sept. 30, 2011, according to the governor's office.

The State Auditor’s Office is about to begin its review of HHSC contracting procedures, and the state’s public integrity unit is also investigating following questions raised both by the Austin American-Statesman and lawmakers. Stick, who was deputy inspector general at HHSC's audit arm when the contract with 21st Century Technologies was first struck in 2011, once was involved in a business with 21CT's lobbyist, James Frinzi.

Erica Stick is on paid administrative leave from her $161,000 job while the state auditor's office examines HHSC contracting and procurement procedures.

In addition to tightening up the tuition program, Janek said he is sending a letter to Texas lawmakers informing them of several reforms to the contracting process at HHSC and its sister agencies.

Under the reforms, the commissioner and his deputy will sign all contracts worth $1 million or more after being reviewed by HHSC’s legal department. Each quarter, HHSC will begin giving the governor’s office, the Senate Finance Committee and the House Appropriations Committee a list of any emergency or single-source contracts it has awarded, and explain why.

In addition, any purchase of work from the Texas Department of Information Resources that totals $25,000 or more will have to be signed off by the HHSC legal and IT departments. To speed up communication between HHSC and its audit arm, a new deputy of administration position will be created in the HHSC Office of Inspector General, and filled by former Fort Hood commander Col. Quinton Arnold.

HHSC has also requested an accounting of all payment holds made to Medicaid providers.

The Tribune asked Janek if he has had conversations with the staff of Gov.-elect Greg Abbott since mid-December, when Stick and Wilson were shown the door. Yes, Janek, said. Staffers from Abbott’s office have called.

“They want to know what I’m doing to make changes over here,” he said.

Christine Ayala and Ryan McCrimmon contributed to this report.

Disclosure: The University of Texas at Austin is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.