Politics & Government

Beshear: $60,000 termination fee paid to Bevin’s child welfare adviser was illegal

Daniel S. Dumas, who was senior vice president at the Louisville seminary before being named Kentucky’s “czar” for adoption and foster care, is leaving the still new state post.
Daniel S. Dumas, who was senior vice president at the Louisville seminary before being named Kentucky’s “czar” for adoption and foster care, is leaving the still new state post. Photo provided by the Office of the Governor.

The $240,000-a-year contract Gov. Matt Bevin’s administration had with a Southern Baptist seminary official to be a special adviser to the state on adoption and foster care was invalid, Attorney General Andy Beshear said Thursday in a legal opinion.

Beshear was responding to a question by state Rep. Jim Wayne, D-Louisville, about the legality of a $60,000 termination fee paid to Daniel Dumas in January. Because the contract was invalid, the termination fee also was inappropriate, he opined.

Beshear said the contract between the state Cabinet for Health and Family Services and Dumas through Red Buffalo Ventures LLC, did not meet the requirements of a “sole source” contract, commonly called a no-bid contract.

Beshear, who is a Democratic candidate for governor next year, also said Dumas was not “uniquely qualified” for the job.

A spokeswoman for Bevin dismissed the opinion as political posturing by Beshear.

“This is a classic response from candidate Beshear, who is once again using public office to advance his personal agenda,” said Elizabeth Kuhn, Bevin’s communications director.

Wayne said Thursday he was surprised by Beshear’s opinion on the Dumas contract.

“I was expecting him to look at only the termination fee but he looked at the entire contract,” the lawmaker said.

Wayne said the opinion will “provide good advice to future administrations in awarding contracts. This opinion speaks to the future.”

The legal options for the state to recover the $60,000 termination fee paid to Dumas are limited, Wayne said, but he suggested it might be appropriate for the Executive Branch Ethics Commission to review Beshear’s opinion.

Beshear spokesman Terry Sebastian said the opinion will be referred “to the appropriate agencies,” but he declined to identify them.

On May 1, 2017, the state entered into a personal services contract that was exempt from competitive bidding for consulting services with Red Buffalo Ventures and its only member, Dumas, from June 17, 2017, to June 30, 2018. The state had an option for two separate one-year renewals.

The contract provided that in the event of termination without cause, Dumas would be paid an early termination fee that equaled three months regular base compensation.

Becky Mullins, a foster parent in Lee County, says Kentucky children often spend too long in foster care while their biological parents struggle to turn their lives around.

On Jan. 16 of this year, the cabinet terminated the contract and paid the $60,000 fee. Bevin did not explain why he fired Dumas. Earlier this month, Bevin’s office announced it will pay another Baptist minister from Florida and his wife an annual salary of $82,500 each to help the state reform its foster care and adoption systems.

Beshear said the early termination fee did not meet the legal requirements for such an agreement under the state’s Kentucky Model Procurement Code. The code provides regulations for state purchasing.

“Because the contract at issue here was invalid, the early termination fee provision included in the contract also was invalid,” the attorney general said.

Beshear also said a review of the contract requirements reveals that the cabinet’s justification for hiring Dumas was “woefully insufficient.”

Dumas, the parent of two adopted children, had served 10 years as senior vice president for institutional administration at The Southern Baptist Theological Seminary in Louisville.

He also served in the U.S. Navy for five years and was a consultant to various organizations in helping them identify and hire talented people. He also wrote books and articles on leadership and service.

“Although Dumas may be capable of performing the assessment contemplated by the contract, he undeniably is not uniquely or solely qualified to do so,” Beshear’s opinion said.

“Indeed, Dumas’ only experiences with Kentucky’s child welfare system relate to the adoption of his own children. But last year, nearly 1,000 children in CHFS foster care were adopted and more than 80 percent were adopted by their foster families,” Beshear wrote. “Thus, if Dumas’s experience comes from the adoption of children, he cannot be the only or ‘sole’ individual with such experience.”

Beshear also noted that Dumas’s professional and military experience may have provided leadership and other skills but there are “numerous other individuals” with such a background.

Opinions of the attorney general do not have the force of law, though they can be cited in court and “public officials are expected to follow them,” according to the website of the Office of the Attorney General.

Bevin announced earlier this month that Chris Johnson and his wife, Alicia Johnson, will be special advisers to support the state’s efforts to improve foster care and adoption at an annual salary of $82,500 each.

Kuhn said the Johnsons were hired as state employees and not under a contract.

Kuhn said Beshear should “give the same level of scrutiny to contracts that are truly are illegal, like the $4.2 million contract he gave to Jack Conway’s law firm and the no-bid contract funneling millions of dollars to a company associated with his father’s political buddy Frank Lassiter.”

She was referring to $4.2 million in attorney fees paid by Beshear to a Louisville law firm in a $24 million settlement reached under former Attorney General Jack Conway with OxyContin maker Purdue Pharma. Beshear said he was following the advice of Bevin’s finance cabinet when he paid the law firm in January 2016.

In 2015, in the final days of the administration of former Gov. Steve Beshear, the attorney general’s father, the state approved a $3 million extension of a non-bid contract awarded to a North Carolina company that had employed Lassiter as a consultant. Lassiter is the husband of Gov. Beshear’s executive cabinet secretary and claims he had no role in helping the company get the contract.

The Bevin administration lost its attempt to subpoena Lassiter in Woodford Circuit Court but has appealed the ruling.

Beshear spokesman Terry Sebastian said Beshear’s gubernatorial ambitions played no role in his legal opinion. “Our decision in the opinion is based solely on the law, which the governor’s office violated,” Sebastian said. “It’s unfortunate, however, that the governor’s response is more bullying and name-calling.”

Gov. Matt Bevin encourages people at the Summit to Save our Children to work to address the issues in the adoption and foster care system in Kentucky.