Criminal Probes Recommended For Former Oregon Governor's Failed Health Care Exchange

Criminal investigations are being recommended into former Governor John Kitzhaber and how his administration handled the creation of Cover Oregon, the state's health insurance enrollment website.

In letters to U.S. Attorney General Loretta Lynch and State Attorney General Ellen Rosenblum, the House Committee on Oversight and Government Reform asks for criminal investigation charging, among other things, that decisions were made based on how it would affect Kitzhaber's re-election campaign as opposed to what needed to be done.

"More than $305 million in federal taxpayer dollars were sent to Oregon state for purposes of implementing a state exchange to benefit the people," the committee said in its letter to Lynch. "The state exchange never came to fruition, and the money is gone."

And in the letter to Rosenblum, the committee goes further.

"The documents and testimony show Oregon State officials missed $305 million of federal funds and improperly coordinated with former Governor John Kitzhaber's campaign advisers," the committee writes.

"Official decisions were made primarily for political purposes. The evidence we have involved implicated violations of state laws that restrict political activity by public employees."

Kitzhaber fought back in a statement on his Facebook page, calling the report "another example of the kind of partisan politics that has left so many Americans disullioned.

"It is worth noting that this is an unofficial report prepared solely by the Republican staff. It is not an official report from the Committee because it reflects no input from the Democratic members."

The committee also asks that Rosemblum step aside from leading the investigation.

"Given your role in the ongoing litigation and closeness to several of the prospective defendants, we expected you and any other similarly-conflicted aides will be recused and a special prosecutor be appointed forthwith."

Rosenblum 's office was dismissive of the report.

“The House Oversight Committee’s Republican majority staff report on Oregon’s failed health exchange is politically motivated," said Kristina Edmunon, spokeswoman for Rosenblum. "It’s that simple.

"The report ignores basic facts, disregards Oracle’s failures, and downplays—or entirely omits—key evidence."

Oregon's rollout of Cover Oregon was generally considered the worst in the country. The website never enrolled a single person and the state eventually hired hundreds of people to process applications by hand.

The website was supposed to launch October 1, 2013 and it didn't.

The exchange's failure came as Kitzhaber was headed into a re-election campaign.

The report details how the involvement of his political advisers in managing public relations regarding the exchange.

What went wrong is still be argued out in the courts.

Oregon and the main tech contractor on the site, Oracle, have sued each other over who was responsible for the failure.

And this past March, Oracle filed an additional suit against the United States Department of Health and Human Services, alleging they failed to investigation allegations of misconduct involving Cover Oregon.

KItzhaber resigned in February 2015 and, along with his fiancé Cylvia Hayes, is the subject of a federal criminal investigation over influence peddling.

One month later, Governor Bate Brown signed legislation dissolving Cover Oregon.

One of the issues highlighted in the committee's report on Cover Oregon is the inclusion of people like Hayes in the process even though they had no responsibilities involving the exchange.

"Documents and testimony show the work of the Governor's office, the campaign, and Cover Oregon were inextricably intertwined," the report states. "Discussions about Cover Oregon often included individuals with no authority over the exchange."

They then highlight an email from Hayes.