Secretary of Finance Preston Doerflinger spoke with State Auditor and Inspector Gary Jones about potential problems at the Oklahoma State Department of Health about a month earlier than Doerflinger indicated during testimony Monday in front of the House Special Investigation Committee.
Jones will testify at 9:30 a.m. Thursday for the same committee, which so far has focused on confidants of Gov. Mary Fallin three weeks after she vetoed the Legislature’s revised appropriations bill at the end of special session.
Tuesday, Jones said he discussed “real concerns” about OSDH’s finances with Doerflinger on Sept. 1 and Sept. 7. He showed NonDoc a text message thread indicating a phone conversation about “issues” followed by a meeting he told Doerflinger would only take “five minutes.”
“Information had been brought to our attention that there were concerns at the Health Department about the financial situation, and they were in a situation where they may not be able to make payroll in a few months,” Jones said of his Sept. 1 conversation with Doerflinger. “We met on Sept. 7, and I explained to him we were further looking into it and that we had real concerns, but that we would keep him informed. I told him that all indications were they were going to run out of money.”
But Doerflinger replied Tuesday that he sticks by his sworn testimony, which said “the urgency of the situation became aware to me on the 27th” [of October] and that he had talked to Jones “approximately two weeks prior.” He also referenced having met with Jones “before that” but did not mention a date in that statement.
“I’m not going to deny, I have a time frame in my head of when I thought he brought this first to my attention, but if Gary Jones says it was Sept. 7, then fine,” Doerflinger said Tuesday. “I’m just telling you that there was gravity when we all came to know the situation, and that was when swift action was taken, and that is per my testimony.”
Doerflinger said OSDH leadership had presented his office with a budget Oct. 1 “that did not say they weren’t going to be able to make payroll,” and he said Jones has told him in the past that agencies might be facing problems.
“Gary never told me, ‘By God, Preston, they are not going to be able to make payroll, and we’ve got a crisis on our hands. Help.’ If that had been conveyed to me, I would have been screaming from the rooftops that we’ve got a crisis there,” Doerflinger said. “If he felt like they were not going to make payroll and there was a ‘Code Red’, then that should have been screamed from the rooftops to everyone, and that was not the case.”
Jones said he did not alert legislative leaders or Gov. Mary Fallin about the situation, contrary to what was implied during Monday’s investigative committee hearing.
Doerflinger said if Jones had told him about a serious problem, it would have made sense for the auditor to tell others as well.
“If Gary knew they weren’t going to make payroll prior to that, shame on Gary for not screaming it to the world versus just saying, ‘There are issues at the Health Department that we are looking into, including concerns about payroll,'” Doerflinger said.
Jones says he did not talk to governor
The Sept. 7 meeting between Jones and Doerflinger came the day after Fallin announced Sept. 25 as the date of a special session made necessary by the Legislature’s passage of an unconstitutional cigarette fee used to fund three separate health agencies.
On Sept. 28, then-Commissioner of Health Terry Cline sent a formal request to Jones for a special audit of the Health Department. Word of OSDH financial problems broke to the public Oct. 20 in a story by Paul Monies of Oklahoma Watch.
While he was the director of the Office of Management and Enterprise Services at that time, Doerflinger was appointed acting commissioner of health Oct. 31 following the resignation of Cline, a longtime bureaucrat. On Oct. 30, Jones had sent a confirmation letter to Cline saying he would conduct the requested special audit.
“When all of us learned of the gravity of the situation, the board took swift action, the governor’s office took swift action,” Doerflinger said. “I’m not going to get into the nuances of when Gary Jones first said there might be problems.”
Jones said Doerflinger was the first person he told about the OSDH problems outside of his own office. He said he was speaking to media Tuesday because the House Special Investigation Committee Chairman Rep. Josh Cockroft (R-Wanette) implied in Monday’s hearings that a conversation between Jones and Fallin had taken place.
“There’s a misperception out there that I was having conversations with the governor,” Jones said. “The reality is, I had no communication of any type with the governor herself or anyone else other than Preston Doerflinger until the Oct. 30 meeting in her conference room.”
Tension and ‘a breakdown in communication’
Cockroft said Tuesday that what Jones has told him “is not consistent with the testimony that was given yesterday” by Doerflinger, acting-OMES director Denise Northrup and Fallin chief of staff Chris Benge.
“There’s obviously a breakdown in communication because if legislative leaders were not told until mid to late October that there was an issue, that’s concerning to us,” Cockroft said. “It makes me think that the secretary of finance had some information regarding the Department of Health and that there were some problems. Communication was either not run up to the governor and legislative leadership, or (it) was kept under wraps for a period of time.”
The House’s examination of who knew what when about State Department of Health problems has exacerbated tension between Oklahoma’s legislative and executive branches of government.
“I think part of the tension is from [Fallin] agreeing with legislative leadership to sign the bill she ultimately vetoed,” Cockroft said. “There’s going to be natural tension that happens in a situation like that.”
Jones, a 2018 Republican candidate for governor, said he told Cockroft weeks ago that he had spoken to Doerflinger in early September.
“Nothing in asking the timeline questions is intended to be punitive or a ‘gotcha’ situation,” Cockroft said. “We’re trying to gain an understanding of what happened and what’s currently happening now so we can improve the situation going forward.”
Doerflinger: ‘I’m not running for anything’
But Doerflinger noted a difference between himself and Jones, Cockroft or other elected officials.
Doerflinger at Health Department hearing: ‘The people of this state should be angry’ by William W. Savage III
“I’m not running for anything. Nothing. I have a job to do at the State Department (of Health) that I have taken on, and if anybody else wants to do that job, they can step up to go do it,” Doerflinger said following the OSDH board meeting Tuesday. “I am there for one reason and one reason only, and that is to be helpful. I’m not positioning myself for some future run for office. We have plenty of people who are more concerned about their next run, and that’s their motivation versus just being of service to the citizens of this state. That’s my motivation.”
He said insinuation that he and Fallin spent September withholding information about the OSDH scandal does not make logical sense.
“There is no upside for me, for the governor’s office or for anybody with those implications,” Doerflinger said. “The suggestion that there was some type of orchestration around special session call and this situation, I will absolutely say is ludicrous and laughable.”
Cockroft said his committee is simply “focused on the money.”
“If this was a punitive process, if this was a witch hunt, I would not be a part of it,” Cockroft said. “I am not interested in just playing politics and trying to one-up.”
Jones is scheduled to testify before Cockroft’s committee Thursday morning in Room 206 of the Oklahoma State Capitol.
House Special Investigative Committee audio from Dec. 11
(Update: This story was updated at 8:07 a.m., Wednesday, Dec. 13, to add reference to an additional statement of Doerflinger’s testimony.)