Attorney General Richard Blumenthal today released a report finding that the state badly botched an $80 million deal privatizing payment of some state worker’s compensation claims, likely overpaying a Westport-based contractor and failing to save the state money.
The Department of Administrative Services (DAS) doomed the 2001 deal by hiring a contractor lacking the expertise to properly evaluate claims slated for privatization, Blumenthal found.
The contractor, MRM Consulting, Inc., of 1720 Post Road East, Westport, whose CEO is Westporter Adrien Theriault, hired college interns to do key parts of the highly specialized analysis, charging the state $105 an hour, Blumenthal said.
“Friends of Mr. Theriault’s college-aged son from the son’s high school years in Westport with no experience whatsoever in the insurance industry performed critical tasks in developing the reserves and setting the liability on the cases,” the report said.
Experts told the Attorney General’s Office that evaluating such claims requires years, even decades of experience.
Theriault nonetheless dismissed analysis of such claims as “not rocket science,” the report said.
The Department of Administrative Services knew the company was using college students, but instead of demanding MRM use qualified professionals, it expressed concern over invoices listing them as “interns” and instructed MRM to change their designation to “junior staff,” Blumenthal said.
The Associated Press said that Theriault could not be reached today. A message for him was left at the company’s headquarters.
MRM’s analysis was plagued by “misinformation and misadvice” that led to “unfounded overestimates and payments,” Blumenthal said.
Blumenthal recommended that the state hold MRM responsible, if possible, for its failure to properly evaluate the claims and strictly adhere to laws requiring careful cost-benefit analysis before privatizing any activity.
