« Ind. Law - So you think you are automatically exempt from jury duty because you are old or drive a ferry boat? It is no longer so. | Main | Ind. Courts - "Fill-in judge sought in Huntington" »

Tuesday, May 02, 2006

Ind. Gov't. - State FSSA exec goes from public to private at twice the price

"Exec goes from public to private at twice the price" is the headline to a story today by Niki Kelly in the Fort Wayne Journal Gazette. Some quotes:

INDIANAPOLIS – On his last day as a state employee, a top Fort Wayne executive at the Family and Social Services Administration signed an outside contract to perform the same job at a much higher rate of pay – $180,000 a year.

Richard E. Rhoad’s compensation is nearly double the governor’s salary, and is $70,000 more than Mitch Roob receives as the head of the agency.

But Roob and State Budget Director Chuck Schalliol defended Rhoad’s unique contract, saying it is sometimes worth extra money to get the right person to do the job and have geographic diversity in staff members.

State officials also sought an opinion from the Indiana State Ethics Commission before signing the contract.

“FSSA handles 5 billion Hoosier dollars. If FSSA is not successful, the administration and state government will not be successful. It is true that wherever we can help FSSA and Mitch Roob be successful I’m inclined to try to help them get their job done” Schalliol said. “Paying $130,000 a year plus benefits is not scandalous. * * *

The situation is rooted in the transition phase after Gov. Mitch Daniels was elected in November 2004 but before he took office.

During that time, Roob admits, he offered Rhoad the position of chief financial officer and promised the state would pay for his Indianapolis housing during the week and travel expenses for trips back and forth to Fort Wayne where his family remained.

Roob said he did so without realizing the promise went against state regulations.

The agency paid some expenses in the first couple months of 2005 and then Rhoad started picking up the tab when it became problematic.

“I didn’t know what the rules were. If anyone is to blame, it’s me,” Roob said. “At some point in time I just gave up trying to fight it, so the contract became more expeditious.

“If anyone has done the wrong thing here it’s me. I didn’t know the state rules before I got to state government. I’d much rather pay him on the state payroll if we could.”

The solution was to hire Rhoad though his personal company – Allied Professional Services LLC, which isn’t listed in the Fort Wayne phone directory nor does it come up in any basic Internet searches.

According to the Secretary of State’s Web site, the company was formed in 1999 and Rhoad is listed as the registered agent. Roob and other Family and Social Services officials admit Rhoad is the only person involved in the company.

The consultant contract with Allied is to “support the financial functions of FSSA” and includes duties such as developing and administering a budget, monthly budget briefings and monthly financial reporting. The net effect, Roob said, is Rhoad continues to be the agency’s top financial officer.

The three-year contract running into January 2009 is worth $540,000, or $180,000 a year.

According to Rhoad’s resignation letter, he quit the state agency at of the close of business Jan. 13, 2006 – the same day he entered into the private agreement as president of Allied. * * *

Although Roob said the Ethics Commission reviewed and approved the contract, there is no formal opinion on the case and the commission isn’t allowed to release informal advisory opinions.

Rosebrough said there was a favorable informal opinion, but declined to release it per Family and Social Services practice.

Dave Thomas, Indiana’s inspector general, said he has heard talk about the contract and even knew Rhoad by name without being told. But he said no one has filed a complaint that would cause him to look into the situation.

The Journal Gazette learned of the contract via a Democratic blog.

The "Democratic blog" referenced is Taking Down Words. Here is their entry, from April 29th.

Posted by Marcia Oddi on May 2, 2006 07:25 AM
Posted to Indiana Government