Secret recordings reveal untold story of MNLARS mess

- When the State of Minnesota rolled out a new $93 million vehicle licensing and registration system last summer called MNLARS, it immediately backfired. 

People waited in long lines, it took months to get license plates and car dealers couldn't sell inventory.

And now Governor Dayton’s administration said the new computer system, which was eight years in the making, needs a huge $43-million fix.

Secret recordings given to the Fox 9 Investigators show the Governor's office was notified three years ago that the project was headed for a cliff.

MNLARS determines what you’ll pay for new license tabs.

Scott Lambert is with the Minnesota Automobile Dealers Association. He said the new system is a “man-made disaster.”

It replaced a 35-year old system for licensing and registering all things on wheels.

With a billion dollars of revenue to collect every year, it’s critical for MNLARS to get the numbers right.

But millions of records that were transferred from the old computer system to the new one may not have accurate information about vehicles and their owners.

Deputy Registrar Gaye Smith told the Fox 9 Investigators she believes that includes eight out of ten vehicles.

She did an experiment and used MNLARS to calculate the tax on 5,000 new and same-model SUV’s.

Smith discovered a system flaw that’s likely costing the state millions of dollars in lost revenue.

“In the first year alone we lost one million dollars,” she said. “Just on those five thousand vehicles.”

According to the state, it currently has some "16,000 revenue discrepancies under review.

POLICE STOP

Turns out MNLARS also can’t process the transfer of personalized plates from one car to another.

Dawn Morningstar was busted by police.

“All I know is it was really terrifying for me. Terrifying,” she remembered. “They came up, they said hands on dash.”

They thought she was driving a stolen car but actually her plates had just been moved from an old lease to a new one.

“It makes me wonder why this wasn’t planned out better," she said.

It could take another 43 million tax dollars to fix all of the problems.

It's not a surprise to Bob Helland who was a MNLARS Business Process Analyst.

“It was off the wheels at the time I was working there as of June 2015,” he said.

HOW DID THIS HAPPEN?

He's one of several insiders, including some with critical roles, who spoke with Fox 9 about what was going on behind the scenes.

Picture the beginning of the project like an old car in need of a total rebuild.

In 2012, DVS, the state's Driver and Vehicle Services division first hired Hewlett-Packard to overhaul its antiquated computer system.

By 2014, an audit showed the project was misfiring from a "culture of distrust and negative undercurrent."

After spending $16 million, DVS slammed the door on HP.

It brought in MN IT, the state’s Information Technology Department to look under the hood.

MN IT gave some of the development work to its own state employees, who make about $50 an hour.

But it also hired four times as many outside consultants and paid some of them over $300 an hour.

A former manager said some of the rates were "outrageous, irresponsible spending of taxpayer dollars.”

"It was important for me to let them know the severity of the problems that I saw," said Helland.

He and other insiders told the Fox 9 Investigators some consultants were given too much authority to run things, creating a potential conflict of interest to create more work for themselves.

They said people in key decision making roles didn't understand the business of licensing and registration.

Plans to test and catch software defects were woefully inadequate.

They warned both DVS and MN IT management the project was in danger of becoming a "public and political spectacle."

Helland said his concerns fell on deaf ears.

SECRET RECORDINGS

So in March of 2015, he went straight to the Governor’s office.

He met with Jaime Tincher, the Governor’s Chief of Staff at the time and secretly recorded their nearly hour-long conversation.

“There’s very little confidence in DVS management,” he can be heard telling Tincher on the recording. “This was kind of the last straw for me to say, there’s no truth in the public about this project and we have no truth internally, so I felt compelled to let you guys know.”

Tincher seemed interested in what Helland had to say.

“I would like to look into this. I want to do some outreach,” she told Helland.

She added she was going to talk with Tom Baden, the Commissioner of MN IT.

“So I’d kind of like to get a sense from him and just ask him to dig in and come back to us with what he thinks is going on, what is happening there and try to dig into that,” she said on the recording.

Baden, who in Feb 2018 took early retirement, told the Fox 9 Investigators he does not remember ever getting a call from Tincher about the concerns.

“To the best of my recollection I did not have that conversation,” he said to the Fox 9 Investigators.

Tincher, who now serves as deputy Mayor of St. Paul, said she can’t recall ever meeting with Helland or what they discussed.

And a spokesman for Governor Dayton said the Governor doesn’t remember anyone on his staff bringing Helland's concerns to his attention back in 2015.

After MNLARS tumultuous roll out last summer, Dayton was quick to say things weren't as bad as critics were making it sound.

"Once again Republican Legislators are just delighted to jump on something if they think they can do damage to the credibility of state government, especially to a Democratic Governor,” he told reporters during a news conference last August.

Then came a series of legislative hearings in the fall and this winter to get to the bottom of what went wrong.

“They didn’t seek input from stakeholders, from people who use the system,” Lambert said.

In a statement to the Fox 9 Investigators, MN IT acknowledges "many individuals voiced their concerns about this project and we regret that they feel they went unheard."

“Had I known what I know now, I wouldn’t have released it at the time,” former MN IT Commissioner Baden said at a Senate hearing in November.

But it's what Baden said when there were no cameras around, that stunned Republican State Representative, Jim Nash.

“Did someone along the line know that this was not ready to go live and yet said go live? He took a pause and he said ‘yes,'” Nash recalled.

According to Nash, Baden told him that Paul Meekin, the manager in charge of MNLARS knew that it wasn't ready, but advocated for it to go live anyway.

Baden hedged when the Fox 9 Investigators asked him if Nash was giving an honest recollection of what was said.

“I have no reason to doubt representative Nash, he’s and honorable guy, but I don’t recall making that statement,” said Baden.

When asked if he could have made it, Baden responded, “Possibly, you know we were all having a pretty open and candid conversation.”

Meekin is currently on leave. 

The state said privacy laws prevent it from disclosing the reason for his absence.

The Fox 9 Investigators told Meekin about the conversation between Nash and Baden and that allegations had been made that he approved the release of MNLARS knowing it wasn't ready.

"I think you should talk to communications. We can talk through them,” he told Fox 9.  “I'm an employee of the state. If I spoke to you without talking to them, I'd get fired instantly." 

Fox 9 contacted MN IT communications. They did not address the question about Meekin’s role in the decision to go live with MNLARS but they did say the system was "released too early without all of the features needed by our stakeholders."

"Road ahead is not going to be easy," Dana Baily from MN IT said.

The state agencies responsible this massive project admit leadership did not pay attention to staff who tried to blow the whistle on the problems.

“They were not really listened to and they were disregarded," Joan Redwing of MN IT said.

Helland said DVS, MN IT, the Governor’s office and the Legislature, all had reason to know MNLARS was headed for mayhem.

“They all have a part to play in this and they’ve all fallen asleep on the job really,” Helland added.

The legislature is back in session on Tuesday (Feb 20, 2018). That extra funding for MNLARS is going to be one of the first things on the agenda and some are saying, it's not by any means a done deal.

Fox 9 has been told by MN IT Services that they've changed the structure of management for MNLARS and changed the testing process.

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