Minnesota DHS whistleblower: I got ‘threatening' warning about speaking up

A whistleblower at the state Department of Human Services said the agency told her she could be fired for sharing her concerns at a Minnesota Senate committee hearing Tuesday.

Faye Bernstein, a DHS compliance officer, said she began raising issues about state contracts within the agency’s behavioral health division in March. Bernstein said agency officials retaliated against her, ultimately escorting her out of her office on July 10 before she was allowed to return to work. Bernstein said a DHS employee then telephoned her last week to warn against testifying, even though she had taken a vacation day to speak to senators who are looking into wrongdoing at Minnesota’s biggest state agency.

“The way that information was presented to me was not threatening,” Bernstein said. “However, the content, the words -- saying that I could be discharged for this -- that is threatening.”

Acting Commissioner Pam Wheelock provided few specifics about the warning that Bernstein received, referring to it as an “assistive conversation with agency staff.” Senate Republicans were also frustrated by the lack of details that Wheelock offered about other topics, ranging from potential overpayments to Native American tribes to an ongoing investigation of the agency’s former inspector general.

DHS has been plagued by fraud concerns, overspending for medical services, investigations and resignations of top officials. Tuesday, senators heard from tribal officials, the former human services medical director, and the state’s legislative auditor, who all criticized DHS for various issues.

“For those who say it’s time to move on, I can tell you it’s not time to move on,” said state Sen. Michelle Benson, R-Ham Lake, adding that lawmakers planned to hold more hearings. Benson is the chairwoman of the Senate Health committee.

Overpayments to tribes

Wheelock could not say how DHS planned to repay an estimated $25 million to the federal government for apparent overpayments to the White Earth and Leech Lake bands of Ojibwe.

DHS officials have said the two tribes have been overpaid since 2017 and 2014, respectively, for medically assisted treatment programs through Medicaid.

The acting chairman of the White Earth Band of Ojibwe directly disputed a DHS claim that his tribe had been overpaid $11.9 million.

“Words like ‘overpayment’ and ‘reimbursement’ imply that White Earth was not authorized to receive the money we did,” Acting Chairman Eugene Tibbetts said. “We assert that we collected those amounts with DHS’s advice and approval.”

Senators said they had received copies of email correspondence that back up Tibbetts’ assertion.

Wheelock did not rule out asking the tribes for repayment. Benson sent a strong warning against DHS asking the state Legislature for emergency funding.

“That doesn’t sound like a problem that the taxpayers of Minnesota should have to solve,” she said.

Leech Lake’s chairman said DHS was disrespecting his tribe’s sovereignty by forcing it to the negotiating table. Tribal leaders said they would have to cut programs if they were forced to repay millions in funding.

Legislative Auditor Jim Nobles has launched an investigation of the overpayment issue. He told senators Tuesday that it would be a lengthy process.

"We cannot audit our way to good government,” Nobles said, recommending that DHS's own investigative office be spun off and given more independence. Lawmakers decided not to make that change in the 2019 session.

More investigations

DHS’s internal investigators are themselves the subjects of an outside investigation. 

Wheelock, who took charge of the agency in July after several top officials resigned, said an investigation against former Inspector General Carolyn Ham could wrap up soon. But she could not name the outside law firm conducting the investigation, how much the contract was worth, or why Ham was under investigation.

Ham was paid more than $42,000 to sit home for four months on leave, before recently being reassigned to a non-supervisory job while continuing to receive her previous – higher – salary.

“My hope would be that it (the end of the investigation) would be sooner rather than later, and I have reason to believe it would be,” Wheelock said.

Wheelock was briefly interrupted by an outburst from a person seated in the Senate committee room’s gallery that shouted, “The gallery is paying for Carolyn Ham’s salary!”

Also at Tuesday’s hearing was Dr. Jeff Schiff, the former DHS medical director who was fired in June after 13 years at the agency. Schiff said bureaucrats routinely ignore the advice of doctors, despite the medical nature of many DHS programs.

“In what I would call unconscionable arrogance, leaders in the health care administration dismissed medical input from myself and many other physician experts,” Schiff said. Senators from both parties praised his work, while raising concerns about how DHS will respond to the opioid crisis without a medical director.

‘Fishing expedition’

While Gov. Tim Walz has publicly supported the hearing, the Minnesota DFL sent a tweet Tuesday morning that called it a “partisan fishing expedition” and a “political stunt.”

Senate Republicans said they were concerned that other whistleblowers within the agency would not speak up after hearing the warning given to Bernstein, the employee who had concerns about state contracts.

“If something happens, she’ll be on all your news programs,” said state Sen. Jim Abeler, chairman of the Senate Human Services committee. “If anybody is safe, she is safe. But I hope other employees feel like they are safe to come forward and make the department better.”

Wheelock called Bernstein “a success story” and said some of her suggestions were being implemented. Wheelock did not dispute that Bernstein had been warned against testifying. 

“If someone comes here that is not authorized by the agency head and shares, for example, private data, that is a problem,” Wheelock said. “It’s not to suppress. It’s to make sure they understand and are well-equipped to what they need to do here today.”

On Monday, Walz named Jodi Harpstead, the chief executive of Lutheran Social Service of Minnesota, as Wheelock’s replacement. Harpstead says she will start her new job Sept. 3.