The Alabama Department of Corrections’ request to hire outside legal counsel to pursue claims against former prison health care provider YesCare was delayed Wednesday amid questions about the law firm’s selection, the state’s oversight of the original contract and whether the company should face criminal prosecution.
The Joint Legislative Contract Review Committee held a proposed two-year, $200,000 contract with attorney Jack Crawford for legal services related to YesCare’s bankruptcy and the department’s efforts to recover money following the company’s collapse.
YesCare provided medical care in Alabama prisons until this spring, when the company filed for bankruptcy amid financial troubles. The department replaced YesCare with NaphCare to maintain inmate medical services after YesCare said it could no longer fulfill its contract.
Representative Chris England, D-Tuscaloosa, placed the hold after an exchange with Mandy Spiers, assistant general counsel for the department. England said he wanted more information before allowing the contract to move forward.
Spiers said the case involves bankruptcy proceedings in Florida, where YesCare filed for protection, and issues involving a performance bond issued in Texas.
“It is very complicated law. It’s also multi-jurisdictional,” Spiers said.
When England asked what the state hoped to recover, Spiers said the department wanted to ensure “that we don’t leave anything on the table in the bankruptcy” and determine whether Alabama could recover money through YesCare’s $15 million performance bond.
The hearing then shifted to the state’s final payment to YesCare before the company entered bankruptcy.
Mary Coleman Roberts, general counsel for the department, testified that YesCare asked the department to expedite its final payment because it needed the money to make payroll.
“YesCare asked us to expedite the payment with the understanding that they needed it expedited to make payroll, particularly on April 24, and then that would also cover the May 8 payroll,” Roberts said.
Roberts said the company made its April 24 payroll but failed to pay employees on May 8.
“When I asked David Goldwasser what our money was used for, he said, ‘Other things,’” Roberts said.
England argued that the testimony suggested the company had intentionally deceived the state.
“It seems to me that YesCare should be referred to the Attorney General’s Office for prosecution, for aggravated theft by deception, and as a matter of fact, I believe the code section is as vague as necessary to make this sort of prosecution possible,” England said.
Roberts stopped short of saying the department would make such a referral but acknowledged that officials were reviewing the issue.
“I will just say simply that conversations have been had,” Roberts said. “There has not been a formal request yet from our office because we felt like we are still in the investigative stages of what we need to do next.”
England also criticized the state’s decision to hire Butler Snow for the legal work. He questioned why the department selected a firm that employs attorney Bill Lunsford, who previously served on YesCare’s advisory board before the state rebid its prison health care contract over conflict-of-interest concerns.
Butler Snow has represented the department for years in high-profile prison litigation, including ongoing federal lawsuits over prison conditions and health care.
“Quite frankly, he may be responsible for what got us into this mess in the first place,” England said.
England also referenced Butler Snow’s use of artificial intelligence in federal prison litigation and questioned the firm’s recent legal record representing the state.
“I’m not suggesting that they’re not a good law firm,” England said. “They probably are. But Lord have mercy. What do we do to vet these folks, and how do we choose lawyers?”
England said he was placing a hold on the contract until lawmakers received additional information about how the firm was selected, what legal claims the state intended to pursue and how much money the department expected to recover.
“I need to know what we’re going into bankruptcy for,” England said. “What are we going after them in bankruptcy? I need to know what these numbers are.”
Roberts estimated that YesCare owed the state several million dollars, saying the amount was “a little south” of $12 million.
“That’s what happens when you hire a company running from bankruptcy,” England said. “We knew the day we signed up with these folks that that was a sinking ship, and we just jumped on it.”
“Now who’s left holding this responsibility?” England asked. “The state of Alabama and the taxpayers.”
