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Ex-VA exec says he was never told Denver hospital cost



DENVER — A former Veterans Affairs Department executive who was harshly criticized by Congress for massive cost overruns at a new Colorado VA medical center said he was never told the price had ballooned to more than $1.7 billion before he left the agency, and does not know how it happened.

“I’m just astounded, quite frankly, I’m absolutely astounded,” Glenn Haggstrom told The Associated Press in a rare interview.

Haggstrom, who was the VA’s top construction official when the project nearly collapsed amid legal disputes and skyrocketing costs, said the last estimate he heard from the builder before he was removed from the project was about $890 million.

Haggstrom said had been made a scapegoat, and that responsibility for the failures was widespread within the agency. But he acknowledged that he had a role because he was director of the VA’s Office of Acquisition, Logistics and Construction.

“As the leader of that organization you do bear the responsibility,” said Haggstrom, who retired in March 2015 amid an internal VA investigation into the costs.

The medical center, under construction in the Denver suburb of Aurora, has been a monumental embarrassment for the VA.

The initial construction contract was awarded in 2010 with a projected cost around $590 million. But after years of disputes among the VA, the contractor and the design team, an independent government panel called the Civilian Board of Contract Appeals ruled in December 2014 that the VA had violated the contract by not giving the builders, the Kiewit-Turner joint venture, a design that could be built within budget.

The VA then asked the Army Corps of Engineers to estimate the cost, and the answer, delivered in March 2015, was a staggering $1.73 billion. The Corps took over management of the project, and the medical center is expected to be completed next year for about $1.7 billion.

Multiple investigations concluded the costs got out of hand because the VA did not oversee the project closely enough, did not assign enough officials to it, approved lavish design elements, failed to get the designers and builders to agree on the design and tried to use a complicated form of construction contract that agency executives did not fully understand.

The VA’s inspector general, an internal watchdog, said last year that Haggstrom knew the project was veering toward huge cost overruns but didn’t tell lawmakers when he testified before Congress in 2013 and 2014. That prompted lawmakers to call for a perjury investigation, but the Justice Department decided last month not to file charges, citing insufficient evidence.

Haggstrom told the AP he had been given conflicting information about the project.

He said cost projections kept rising, and the highest estimate he saw from Kiewit-Turner was about $890 million. He said the VA removed him from the project before the Corps of Engineers compiled its estimate.

“This thing is a moving target,” he said.

Kiewit-Turner spokesman Tom Janssen said the Civilian Board of Contract Appeals clearly faulted the VA for the problems. He quoted from the board’s decision: “We find that the behavior of the VA has not comported with the standards of good faith and fair dealing required by law.”

Haggstrom said the architectural and engineering team had repeatedly assured him it could be built within budget. The architects and engineers, a group of four companies known as the Joint Venture Team, said it had done what the contract required.

“The JVT worked diligently to ensure the project was designed to meet the standards set … within the budget and on time,” spokesman Andy Boian said.

Haggstrom declined to identify any other VA officials he thought shared the responsibility for the problems.

“I’m not going to pin this on anybody because this was a decision that was made by the department,” he said.

Haggstrom said he decided to retire because the members of the panel conducting the internal VA inquiry, called an administrative investigation board, did not have skills to sort out what happened.

“I didn’t want to be a part of that process,” he said.

Haggstrom said a high-ranking VA official had been pressuring him to retire for weeks, but he declined to say who it was.

The investigation board’s report, obtained by the AP through an open records request, echoed many criticisms of previous reviews.

No one has been fired or criminally charged over the project, angering members of Congress.

Lawmakers were incensed when Haggstrom retired with full benefits, but the VA said he was legally entitled to do so.

Congress this week passed a bill designed to make it easier for the VA to fire employees and allowing the department to reduce an employee’s pension for negligence or mismanaging funds — in part a response to the Colorado project.

Last year, Congress stripped the VA of the authority to manage large construction projects and turned it over to the Corps of Engineers, also a reaction to the Colorado project.

Haggstrom said some VA employees were unfairly criticized for the failures when they were trying to get the project completed, and they made numerous cost-cutting suggestions, most of which were rejected by higher-ups.

“They’re being vilified for it,” he said.
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Colorado officials to focus on treatment, enforcement to curb heroin epidemic



Colorado officials said Tuesday that they hope a two-fold approach will prevent the growth of the state’s heroin epidemic.

Federal and state officials announced plans to focus on prosecuting dealers and use local law enforcement to link people addicted to the drug to treatment options.

According to an updated report also released Tuesday, 228 people died in Colorado in 2016 from heroin overdoses. That’s an increase of 43 percent compared to 2015, when 160 heroin overdose deaths were reported.

Colorado U.S. Attorney Bob Troyer said his office is working with the Drug Enforcement Agency and local prosecutors to bring federal charges against traffickers of heroin, fentanyl and other dangerous drugs. Federal prosecutions can lead to longer sentences and those convicted serve time in far-flung federal prisons rather than state prisons, sending a warning to other dealers, Troyer said.

“This is not a mass incarceration argument,” Troyer said. “This is an exacting, targeting argument on those causing the most harm.”

The second half of the strategy will encourage local law enforcement to help people addicted to the drug get access to treatment through a state hotline.

Douglas County Sheriff Tony Spurlock said local law enforcement quickly learn to recognize the difference between someone who is dealing and someone who is caught in the grip of addiction.

“We’re doing something that we haven’t done in a long time,” Spurlock said. “And that is go after the pushers but have an equally opposing force on the user and helping those folks get off.”

Under the new plan, officers can contact the hotline directly or encourage people with addiction to use it as a resource.

State health officials said the hotline operators walk callers through the process of finding treatment options.

The effort doesn’t have any new financial backing. Officials with the Rocky Mountain High Intensity Drug Area program said they will direct $4 million in existing funds toward law enforcement task forces aggressively targeting heroin dealers.

“We don’t want to become an East coast, a West Virginia or Ohio,” said Tom Gorman, director of the program. “We want to take a proactive approach and say we want to stop this in Colorado.”

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Denver seeks cannabis tax hike to ease housing crisis



Denver officials have unveiled a plan that would have marijuana buyers help pay for an expansion of the city’s 10-year, $150 million affordable housing fund.

The Denver Post reports Mayor Michael Hancock and other city officials on Monday unveiled the proposal that, if approved, would increase the city’s 3.5 percent special tax on recreational marijuana sales to 5.5 percent.

The tax hike requires only council approval since Denver voters capped the special local tax at 15 percent when they approved it in 2013.

The city’s shorter-term plan is to subsidize the building or preservation of 3,000 income-restricted apartments and other housing units in the next five years. The Denver Post reports that the proposal would allow the city to up its goal of 3,000 apartments to 6,400.

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Colorado teachers takeover Capitol demanding better school funding



Hundreds of public school teachers swarmed the Colorado state Capitol on Monday, shuttering one suburban Denver school district to demand better salaries, as lawmakers were set to debate a pension reform measure that would cut retirement benefits and take-home pay.

With the demonstrations, Colorado educators join peers in West Virginia, Oklahoma, Kentucky and Arizona who have staged strikes or high-profile protests in recent weeks to draw attention to what teachers unions see as a growing crisis in the profession.

In Colorado the need is especially stark – and apparently at odds with a state economy that ranks among the nation’s best. The average teacher salary – $46,155 in 2016 -ranks 46th among states and Washington, D.C., according to the latest figures from the National Education Association.

By another metric, Colorado’s dead last. The Education Law Center, an advocacy group, said this year that Colorado’s teacher salaries are the worst in the nation “when compared to professionals with similar education levels.”

Teachers rallied in and outside the building Monday, holding signs and chanting slogans including “You left me no choice. I have to use my teacher voice.” They drew honks from passing cars before heading inside, where their cheers and songs resonated throughout the Golden Dome, drawing lawmakers out of their respective chambers to investigate the noise.

Washington, D.C., native Callie Gonyea, who is in her second year teaching at Ellis Elementary School in Denver, said she was surprised to learn that Colorado spending was so far below the national average given the number of people moving to the state and the millions of dollars raised in taxes on legalized marijuana.

“There’s no reason we should be down there,” said the second-grade teacher, who walked outside the Capitol holding a sign that said “We(e’)d like the weed money, man.”

Gonyea said she would like to see more funding to pay for mental health treatment at her school, which has one full-time psychologist. She said her class alone has three students who would benefit from daily check-ins with the therapist.

While recent teacher protests have come in firmly red states, Colorado has a Democratic governor and a Legislature split between Democrats and Republicans, but it has some of the strictest spending limits in the country thanks to a constitutional amendment passed by voters in 1992, and all tax hikes require voter approval.

Education advocates have filed statewide ballot measures this year to raise revenue for schools, but past attempts have repeatedly been rejected by voters.

It’s not clear if Colorado’s activism could be a sign of protests spreading to more Democratic-leaning states. There are two blue states are in the bottom half of per pupil spending with Colorado — California at 35 and Oregon at 36.

Monday’s demonstration was organized by the state’s largest teachers union, the Colorado Education Association, which estimated the morning crowd at 400. Englewood Schools Superintendent Wendy Rubin said that over 70 percent of the district’s faculty was expected to be absent so classes were cancelled Monday.

School funding has been at the forefront of the state’s spending fights for years, but organizers said this year’s lobbying day drew additional interest in light of recent demonstrations across the country.

Democratic lawmakers cheered the protests on Monday, stopping to pose for selfies with the teachers. But Republicans questioned the timing of the demonstrations in a year that lawmakers are expected to increase K-12 funding by the largest amount in recent memory.

“As a lifelong educator — I was in education for 40 years — I can see what the concerns are, but quite frankly this year they’re totally unfounded,” said state Rep. Jim Wilson, R-Salida. “I find it kind of ironic that we have the stirring up of the CEA troops and bringing them to the Capitol today when we’re considering a school finance bill this year which has the biggest increase since 2008.”

Colorado currently underfunds its schools by $822 million annually, pinching rural areas in particular, where school districts face teacher shortages. Lawmakers in next year’s budget plan to “buy down” the annual amount owed to schools by $150 million, and boost per-pupil spending by 6 percent. It’s unclear if the additional funding will result in lasting raises in the poorest districts, where superintendents complain of losing teachers to places like Walmart.

A sweeping pension reform effort moving through the Legislature could require districts and teachers alike to contribute more to the Public Employees’ Retirement Association, which faces an unfunded debt of at least $32 billion. And a property-tax limiting provision of the state constitution is expected to trigger cuts to local school funding in 2019.

Colorado recently ranked 40th in spending per student according to 2013 figures from the National Center for Education Statistics compiled by the Colorado School Finance Project.

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