'Houston Chronicle' Report Prompts Probe of State Agency

By: (AP) Lawmakers said they will investigate allegations of cronyism related to contracts at the Texas Health and Human Services Commission and the Texas Workforce Commission, in response to a Houston Chronicle investigation.

The Chronicle reported in a series of articles this week that former Health and Human Services Deputy Commissioner Gregg Phillips apparently set up a business partner in a consulting business advising clients on how to win state contracts that he could influence.

Also, a company Phillips founded reportedly got millions of dollars in contracts through the Texas Workforce Commission, run by his good friend, Larry Temple.

"This is something we need to look into," said state Rep. Kevin Bailey, D-Houston, chairman of the House General Investigating Committee.

Bailey said his staff will review the newspaper's stories to see if a full investigation is needed, as well as ask for help from the state auditor's office and Travis County District Attorney Ronnie Earle.

State Rep. Craig Eiland, D-Galveston, a member of the budget-writing appropriations committee, told the newspaper for its Tuesday editions that an investigation is warranted, especially if there is going to be more privatization of state business.

Phillips played a major role in helping write 2003 legislation to privatize the state's human-services system.

Eiland said he was surprised at how many people involved in state contracts with Phillips and Temple had Mississippi ties.

Phillips once headed the Mississippi Department of Human Services, and Temple was his deputy there.

"All their friends seem to be from Mississippi. At least they could get some friends here in Texas," Eiland said.

Temple, executive director of the Texas Workforce Commission, helped set up an $800,000 agency contract with WorkForce-One Network Inc. of Brandon, Miss., according to the Chronicle. The firm was founded by an old friend of Temple's.

The state auditor's office has been investigating possible criminal wrongdoing on state contracts at the Texas Workforce Commission.

Commission Chairwoman Diane Rath said she believes contracting at the agency was handled correctly.

Temple had told the newspaper that many other commission employees could have blocked his actions along the way.

"I don't believe there's a 'yes man' in the agency," he said. "The real good thing about my working relationship with my peers and now my subordinates is they tell me when something is a good idea and when it's not a bad idea."