June 24, 2024

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Commerce official awarded lucrative consulting gig — with Commerce Department

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Cronyism in Kansas government is nothing new, but it may have reached new heights with a recent deal in which a former official with the Kansas Department of Commerce was awarded a consulting contract — with his own agency.

The Topeka Capital-Journal reports that Paul Hughes — who at the time was deputy secretary of business development at the Commerce Department — was awarded a $180,000 a year consulting contract that went into effect more than two weeks before he left the department.

According to the Capital-Journal, Hughes formed his company, Catapult Kansas LLC, while still employed by the state. His role while at Commerce included helping to recruit Panasonic to the state.

Hughes then bid on the contract to consult for Commerce on “megaprojects.”

Commerce has said the entire process was above-board and there was no conflict of interest — despite the insider contacts and knowledge Hughes would have garnered after years within the department — and the fact that Catapult Kansas was the only bidder.

Bidding opened Feb. 26 of this year and ended on March 31 for a “megaproject and headquarters attraction consultant” — effectively the same job he was already doing for the state. Hughes formed his company on March 12.

He was awarded the contract on May 16, and it went into effect immediately, but he didn’t leave state employ until June 2.

On May 17, the department posted a job opening for Hughes’ old position at a salary of $150,000 per year which has yet to be filled.

Why the state would need both a “megaproject and headquarters attraction consultant” and a deputy secretary of business development is unclear.

According to the Capital-Journal, Hughes was not involved in the process of creating the consulting RFP and did not tell the agency he was bidding on the contract.

“I did not participate in the development of the RFP or posting of the position, which was done by the state’s procurement office,” Hughes told the Capital-Journal. “My response to the RFP took place several weeks after it was publicly posted. I did not discuss my interest in the role with Commerce because procurement rules prohibit doing so while the RFP is open.”

What Hughes will be doing seems to largely mirror his previous role.

“This position requires extensive knowledge of executive decision-making considerations regarding corporate relocations as well as a strong network of contacts within the site selection industry,” the contract states. 

“Additionally, previous experience with megaprojects and headquarter attraction efforts is required.” Something which seems rather tailored to Hughes’ experience.

Hughes will now report to the new deputy secretary of business development when one is hired and will be required to produce a monthly activity report outlining work on new leads and existing projects.  Commerce officials say those reports will be confidential and not public records, making transparency difficult.

Commerce has other consulting agreement with former government employees

According to the Capital-Journal, the state also has a “megaproject liaison” contract at $150,000 a year with a Kansas City, Kansas firm formed by former Unified Government of Wyandotte County and Kansas City Administrator Doug Bach five months after he retired from his government role.

Bach’s company apparently will “liaise” with Panasonic, local communities and “related supplier opportunities.”

Potential conflicts draw swift legislative response

In response to Hughes’ contract award, Sen. Caryn Tyson, (R-Parker) quickly asked the Kansas Revisor of Statutes to draft a bill bringing state ethics and conflict of interest guidelines more in line with federal statute.

“The Deputy Secretary of Commerce probably would not be mistaken for a “deputy-do-right,” Tyson told the Sentinel.  “I’m not a person that wants more regulations and laws, but it isn’t fair to taxpayers to have government officials use their position in such a conflict of interest.”

According to the Capital-Journal, the Department of Commerce insists this is all above board.

“RFP procurement process was handled by the Department of Administration and complied with all procurement policies,” Commerce Department spokesperson Pat Lowry said earlier. “It was competitively bid, open to the public, followed all established policies, and the vendor met all criteria, therefore there was no concern of a conflict of interest.”

Tyson is going to ask the Joint Committee on Information Technology to discuss taking up the issue as a committee bill at its next meeting on Aug. 23. The state’s IT systems have previously seen similar contracting situations, she said.


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