MI Firm with $4M prison legal contract had family tie


http://www.freep.com/story/news/politics/2015/02/28/law-fim-prison-legal-contract-family-tie/24193457/

A partner in a law firm that holds a $4.2-million MDOC legal contract is married to a woman who was the department’s registered lobbyist when the contract was extended without bids in 2012 and 2013.

A partner in a Grand Rapids law firm that holds a $4.2-million Michigan Department of Corrections legal contract is married to a former Corrections Department official who was the department’s registered lobbyist when the contract was extended in 2012 and 2013, records show.

The contract was to be extended by another nine months by the State Administrative Board on Tuesday, but the length of the extension was shortened to one month at the request of Gov. Rick Snyder’s office after the Free Press raised questions about the contract in a Tuesday article.

Kevin Peterson is a partner in Peterson Paletta, which in 2009 was awarded the three-year contract to train and oversee inmate “legal writers” who help less-literate inmates draft court filings, including appeals of their convictions and lawsuits related to the conditions of their confinement.

Peterson Paletta was one of four bidders on the original contract and its proposal received the highest score in an analysis that considered prior experience, staffing and other factors.

Peterson’s wife, Jessica, was the legislative liaison in the chief deputy director’s office of the Corrections Department and the department’s registered lobbyist from 2011 until January 2014, according to state records. She then moved to a communications role until she resigned in October 2014, department spokesman Chris Gautz said Friday.

Jessica Peterson did not work for the department when the contract was awarded, disclosed the fact her husband’s firm had a contract with the department when she was hired, as required, and was “too far removed” from the procurement process to have a role in extending the contract, Gautz said.

But an attorney with an Okemos firm said lawyers there have been waiting for years for the contract to come up for bid and even met with Corrections Department Director Dan Heyns in March 2012 to let him know they were interested.

“If you’re going to privatize government services, it should be done on a fair and equitable basis,” said Alexander Rusek of White Law PLLC in Okemos. “They’ve had years to prepare, (yet) it was extended beyond the contract terms on a no-bid basis.”

Kevin Peterson did not respond Friday to telephone and e-mail messages. Jessica Peterson could not be reached.

The contract with Peterson Paletta, initially worth $2.3 million over three years, was extended by one year at an added cost of $752,000 in July 2012 and by an additional one year, again for $752,000, in May 2013. The contract, at some point, was extended a third time, for a six-month period from September 2014 through Saturday, at a cost of $376,000, though that third extension was not provided for in the contract and had not received State Administrative Board approval, according to state records.

On Tuesday, the contract was extended a fourth time, despite the fact the contract provides for a maximum of two one-year extensions.

But instead of the nine-month, $564,000 increase requested by the department, which officials said was needed to give the department time to rebid the contract, the State Administrative Board extended the contract only one month, at a cost of $60,000. That was at the request of the governor’s representative on the board, legal counsel James Robert Redford, Snyder spokeswoman Sara Wurfel said. She said the governor’s office felt a one-month extension would be more prudent but wouldn’t elaborate on reasons for the late change.

The board made that change Tuesday, the same day the Free Press published a report highlighting the little-known contract and reporting on criticism of the contract from both a fiscal conservative and an advocate for prisoners’ civil rights.

Jessica Peterson didn’t work for the department in 2009, when the contract was first awarded, though she did work at the Capitol then. In 2009, Peterson worked for two powerful chairmen in the Republican-controlled Senate. She was legislative director for Sen. John Pappageorge, R-Troy, from 2007 until April 2009, and legislative director for Sen. Wayne Kuipers, R-Holland, from April 2009 until December 2010, according to her work history on the social networking site LinkedIn.

Snyder, a Republican, took office in 2011, after the contract was awarded but before its initial three-year term expired.

Gautz said the two optional extensions were granted because the law firm was doing a good job. It’s not clear why the department didn’t move more quickly to get the contract rebid at the end of those extensions, as required, though lack of manpower and delays in getting administrative approval are likely reasons, Gautz said.

“We have multiple kinds of these contracts at various stages, through the department,” Gautz said Friday. “Our policy is to know (when the contract is approaching its end date) and try to get that on the schedule.”

“That didn’t happen in this case, or at least as quickly as we would like,” he said.

Caleb Buhs, a spokesman for the Department of Technology, Management and Budget, said department officials have the authority to extend contracts without board approval if necessary to assure uninterrupted service.

Rusek said his firm believes it can provide better service at a lower price.

Gautz confirmed Rusek met with Heyns in 2012.

Rusek said he wasn’t aware of Peterson Paletta’s connection with a department official, but “any time you have the public and private sectors mixing in that way it causes some concern.”

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