Lawmaker questions transparency of state contracts

By Cy Ryan

Monday, March 7, 2011 | 11:30 p.m.

CARSON CITY – Millions of dollars in state contracts are being awarded or extended to private companies without the public being aware, says Senate Majority Leader Steven Horsford, D-North Las Vegas.

Horsford, during a meeting of the Senate Finance Committee, focused on contracts awarded by the state Department of Taxation and the state Division of Employment Security.

Using competitive bidding, the tax department initially awarded a $5.89 million contract to JP Morgan Chase to process and set up accounts for tax returns. The contract was then extended by the department without public notification.

Horsford complained there was “no transparency” in extending the contract, which didn’t give other firms a chance to bid and possibly give the state a better deal.

Taxation Director Dino DiCianno told the committee it would “not be fruitful” to reopen bidding. He said there were many efficiencies and there was an “excellent working relationship” with JP Morgan Chase. He said JP Morgan Chase deposits the state tax collections quickly.

Horsford also said he receives complaints from people who don’t like doing business with an out-of-state bank. DiCianno told him that residents could mail their tax returns to the Nevada taxation department, go to a district office or register online without contacting JP Morgan Chase.

DiCianno said the contract and extensions are reviewed by the state Board of Examiners.

Horsford also zeroed in on the state’s business arrangement with ACS State and Local Solutions and Wells Fargo bank. About $160 million is being paid out to the unemployed every month and those transactions are handled by the two companies.

The state isn't charged, but a jobless worker is assessed some fees on certain transactions.

A representative of Wells Fargo didn't appear at the hearing. Horsford called that an “affront to the unemployed workers of Nevada that they would not show up to explain the terms of this contract that is making a profit on the unemployed.”

He said the bank was notified a week ago of the hearing, adding that he wants to know how much the two companies are profiting from transactions by the jobless.

The unemployed receive debit cards they can use in stores, but they are limited on the number of free withdrawals they can make from their bank without being charged a fee.

Horsford said there should be a “level of transparency” in the contract between ACS and Wells Fargo.

He appointed a subcommittee headed by Sen. Sheila Leslie, D-Reno, to look further into the state’s handling of contracts.