Legislature grants California Obamacare Exchange Secrecy on Spending

California Speaker John Perez (D-Los Angeles) says California law that created an agency to oversee national health care reforms granted it sweeping authority to conceal spending on the contractors that will perform most of its functions will meet California Constitutional requirements. Covered California plans to spend nearly $458 million on outside vendors by the end of 2014, covering lawyers, consultants, public relations advisers and other functions.

According to AP, California bureaucrats can conceal spending on the contractors that will perform most of its functions, potentially shielding the public from seeing how hundreds of millions of dollars are spent. The California agency was given powers that are the most restrictive in what information is required to be made public.

California will be unique among the states implementing Obamacare by creating a barrier from public disclosure that stands out nationwide.

In setting up the California exchange, lawmakers gave it the authority to keep all contracts private for a year and the amounts paid secret indefinitely. “Except for the portion of a contract that contains the rates of payment, contracts entered into pursuant to this title shall be open to inspection one year after their effective dates,” reads the code specifying what exchange records are exempt from public disclosure.

AP notes, “Other exchange records that are allowed to be kept secret include those that reveal recommendations, research, strategy of the board or its staff, or those that provide instructions, advice or training to employees. Minutes of the board meetings also are exempt from disclosure.”

Exchange spokesman Dana Howard said the agency complies with state law but declined to discuss in detail how it determines what is public and what is not.

“I’m not going to go down item by item, about how it is and what kinds of meetings and what was talked about,” he said.

It’s routine in government to keep bids secret until contracts are awarded, so one vendor does not get an unfair advantage over others. After a bid is awarded, contracts generally become fully public.

But not in California!

In California, the explicit exclusions from open-records laws may run afoul of the state constitution, said Terry Francke, head of Californians Aware, a group that promotes government transparency.

If the Legislature wants to limit access, the state constitution requires it produce findings that demonstrate the need for shielding information from the public. In the bill that authorized the exchange, the Legislature devoted two sentences to address that issue. It argued the cloaked spending was “necessary” to protect “powers and obligations to negotiate on behalf of the public.”

Those provisions are vulnerable to being declared unconstitutional, according to Francke.

He said, in essence, lawmakers are saying they need it because they need it, with no details or evidence to support it. The Legislature should have answered the questions, “Why couldn’t the exchange do its job without this secrecy? What’s the worst that could happen?” Francke said.

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Author: Bill Gram-Reefer

Bill Gram-Reefer is an expert in Public Relations, Social Media, and copywriting for business, government, non-profits, and public affairs. He offers Internet marketing services via WORLDVIEW PR.

2 thoughts on “Legislature grants California Obamacare Exchange Secrecy on Spending”

  1. This is a great article. It is reminiscent of Richard Nixon and Watergate all over again. The article also reminds one of the Nixon Administration’s attempt, in 1971, to suppress publication of the Pentagon Papers, the secret history of the Vietnam war.

    Richard Colman
    Orinda, CA

    1. It is borderine Orwellian that state government can flaunt the basics of public scrutiny and transparency. This is essentially a blank check no doubt driven by fears concerning the vast complexity of implementing Obamacare and the ability of the regime to actually launch exchanges nationwide by January 2014. So this could be the full court press to make it happen that will need the cover of darkness to hide the desparation spending. Additionally, I don’t believe Democrats and Governor Brown want anyone to know how California will be using Obamacare dollars to backfill it’s own budget shortfalls.

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