DHS whistleblower alleges ongoing retaliation for raising alarms over state opioid contracts

A whistleblower at the Minnesota Department of Human Services (DHS) alleges she has been retaliated against and effectively barred from doing her work as a compliance officer since she raised alarms this summer about the legality of some drug abuse prevention contracts issued by the agency.

Faye K. Bernstein, 54, an attorney and lead contract specialist at the DHS, said in recent interviews that she has been excluded from key meetings over state contracts, subjected to threats of termination and targeted with rumors designed to undermine her credibility. Bernstein said this "sustained campaign of retaliation" began in mid-July after she raised alarms about contracts approved by the agency's behavioral health division, which awards millions of dollars each year in contracts to mental health and substance-use treatment providers.

"I was told by a supervisor that I needed to be stifled," Bernstein told the Star Tribune on Friday. "It makes me worried that the same mistakes will be made again, and over the long term there will be misuse of taxpayer dollars."

Bernstein alleged that DHS employees skirted the rules in awarding contracts to organizations, that some managers failed to report contract violations as required by law, and that some employees had possible conflicts of interest. In August, Bernstein filed a formal complaint against eight supervisors, managers and employees at the DHS, in which she called for a "very public apology" to "lessen the chill" of staff reporting incidents of retaliation. She recently shared details of her alleged mistreatment, including dozens of internal e-mails, with Legislative Auditor James Nobles, who said Friday that his office — an independent, nonpartisan arm of the Legislature — is monitoring the situation.

"We are concerned," Nobles said. "If she is fired, we will certainly consider an investigation."

In July, Bernstein was escorted out of the DHS central office at 540 Cedar St. in St. Paul after she wrote an e-mail to all the employees in her division encouraging them to speak out about problems within the agency. Bernstein was allowed to return to the building, but she alleges that she has been sidelined to the point where she is no longer able to do her work reviewing state contracts for compliance.

Jodi Harpstead, who took over last month as DHS commissioner amid a leadership shake-up, said she would not tolerate retaliation against employees, repeating a public pledge she made days after taking the helm at the state's largest agency.

"When I say I won't tolerate retaliation against employees, it's not just talk," Harpstead said in a written statement. "We have systems and processes in place for employees to follow when they need to raise concerns. Investigating those concerns allows us to gather all of the facts. While it can be frustrating, until investigations are complete, there is a period of time when everyone is waiting."

Bernstein said she began spotting "substantial irregularities" with state contracts designed to stem the opioid epidemic in March. Among her concerns, she said, was that officials within the DHS behavioral health division had deviated from the normal scoring system for a multimillion-dollar request for proposals to expand substance-abuse treatment and prevention services. Officials in the division appeared ready to award a contract to an organization that scored so low in the bidding process that it did not qualify, she alleges.

In other cases, Bernstein raised concerns that DHS was wrongly awarding contracts for substance-use services that had recently become billable under Medical Assistance, the state's version of Medicaid. These state contracts, she said, were "duplicative" and "a waste of state funds," because the services were already available in the community and covered through public insurance. Bernstein said she also objected to a contract that was awarded to a provider for the bulk purchase and resale of Narcan, a drug that can reverse the effects of opioid overdoses, because the provider lacked the proper license.

"There was a willful disregard of state law and policy," Bernstein said.

In August, Bernstein filed a 14-page complaint with the DHS human resources department, which chronicles her interactions with staff since she began to report the contract deficiencies. In one case, a manager in the behavioral health division said Bernstein was "too focused on compliance" and questioned whether she was doing her job correctly. In another incident, Bernstein said, a co-worker said she was instructed by people on "the 8th floor" — the executive-level floor at the DHS central office — not to give her information necessary for her compliance work. By this spring, Bernstein found that she was not being invited to meetings, which she saw as part of a concerted effort to discredit and sideline her.

More recently, Bernstein said she discovered that she was the subject of a false rumor that she was having a romantic relationship with an investigator within the agency's Inspector General's Office. Bernstein said she believes the rumor was started to undermine her credibility.

Bernstein said the prolonged struggle with her supervisors — and fear of losing her job — are taking a heavy emotional toll. She has had difficulty sleeping and stopped wearing eye makeup to work because of her crying.

Still, Bernstein has become more public with her concerns: She testified before a Senate committee in August and, this month, she protested retaliation against whistleblowers by appearing with orange tape over her mouth and a sign saying, "Proud to be a whistleblower," outside a rally for President Donald Trump in Minneapolis.

"We should have an atmosphere where pointing out problems and raising concerns — and people having diverse opinions … should just be the normal way of doing business," she said.

Glenn Howatt • 612-673-7192 Chris Serres • 612-673-4308 Twitter: @chrisserres