Official OKed payments to group while on its board

Published 8:35 pm Tuesday, December 17, 2019

MINNEAPOLIS — A top official at the Minnesota Department of Human Services approved thousands of dollars in payments to a nonprofit while serving on its board of directors, a newspaper reported Tuesday.

The Star Tribune reported that it obtained documents showing that former Assistant Commissioner Nathan Moracco signed contracts and payment authorizations with the Minnesota Health Action Group, which ran a quality improvement program to provide better care for Medicaid patients.

The actions appear to violate state ethics policies, which say, “As individuals, all state employees must ensure that neither they nor their agency are put in a situation where a potential conflict of interest exists or gives the appearance of existing,” the paper reported.

Moracco had been on the nonprofit’s board since 2004 and chaired the board in 2015 and 2016. He is no longer on the board but serves in an advisory capacity, according to the group.

The Legislative Auditor’s office confirmed that it is looking into the potential conflict, but it declined to give specifics.

“Our office is in the late stages of completing a special review that looks at similar issues,” said Joel Alter, who oversees special reviews at the auditor’s office.

Officials with Gov. Tim Walz’s administration defended Moracco, saying there was no conflict of interest because Moracco was representing the state’s interests with an organization that was trying to lower health care costs and improve quality.

“When somebody is serving in their capacity for the state, that is not a conflict of interest,” said Myron Frans, commissioner of Minnesota Management and Budget.

Furthermore, Moracco did not personally benefit financially and the department was aware of the arrangement, they said.

“Nothing that Nathan did was unknown to DHS,” Deputy Commissioner Chuck Johnson told the newspaper, which didn’t note whether any other groups had bid for the contracts.

Moracco did not respond to the newspaper’s requests for comment. He was replaced as assistant commissioner, where he oversaw the Medicaid program, earlier this year when then-Commissioner Tony Lourey took over the agency. But Moracco remains at the department as a technology director.

Although no allegations of financial improprieties have been raised, Minnesota’s laws were written to avoid even the appearance of a conflict, said Annastacia Belladonna-Carrera, executive director of Common Cause Minnesota.

“The statute is clear on that,” she said. “Regardless of whether there was personal benefit or gain … even if there is an appearance of a potential conflict, you are to walk away.”

The department did not extend the Action Group’s contract in 2017 because it was improving quality through its own programs, Johnson said.