Nebraska Auditor Questions Contracts

First Jerry Bauerkemper unsuccessfully sued the state of Nebraska in 2011for not granting his nonprofit group contracts to help problem gamblers. Then those services were taken from a state agency and awarded to a new commission, which awarded Bauerkemper's group two contracts for $200,000, without taking bids. State Auditor Mike Foley smells something fishy.

Nebraska State Auditor Mike Foley recently issued a report claiming the Nebraska Commission on Problem Gambling, formed in July 2013 to replace the Nebraska Department of Health and Human Services ‘ Gamblers Assistance Program, awarded two contracts for more than 0,000 without bidding out the work, a violation of the state’s conflict-of-interest laws.

The individual at the center of the controversy is Jerry Bauerkemper, who in 2011 unsuccessfully sued the state after his nonprofit group, Nebraska Council on Compulsive Gambling, was denied contracts to help problem gamblers. After his lawsuit failed, Foley said, Bauerkemper lobbied to have the Nebraska legislature pass a bill to take problem-gambling services away from the Nebraska Department of Health and Human Services’ Gamblers Assistance Program, and give it to an new, independent commission, the Nebraska Commission on Problem Gambling, whose members are appointed by the governor. That new commission named Bauerkemper as interim director.

He then took a nine-month leave of absence as that group’s director, but remained on its payroll, Foley said, while the commission awarded his organization two contracts valued at more than $200,000 without taking bids on the work. The contracts were issued to manage a problem gambler’s hotline and to provide training services “on an emergency basis.”

“They were able to get their own guy installed as the interim director of the new commission. And then one of the first things he did was to write the contracts for his own group, then went back to work for them. So the whole thing is very peculiar and, we think, inappropriate,” Foley said.

Foley’s report also questions whether the Bauerkemper’s organization actually provided the taxpayer-financed contract work, since there are no documents to prove it.

State Senator Bob Krist, who introduced the bill creating the new commission, said replacing the state-run program with the new commission is saving Nebraska taxpayers money. “It’s taken a function of training that had been costing taxpayers about $100,000 and reduced it to about $5,000,” Krist said.

He added Bauerkemper’s leave of absence from the nonprofit was the same as quitting the organization and then being rehired later. “That contract was awarded at the approval of the commission. If there was a hint of malfeasance, I’d be the first to admit it,” Krist said.