Heads roll in Inslee’s Cabinet

Gov. Jay Inslee speaks about the recent ouster on the Senate floor of his appointment to the state Department of Transportation.
Gov. Jay Inslee speaks about the recent ouster on the Senate floor of his appointment to the state Department of Transportation. The Associated Press

State government’s three largest agencies — with more than half the state workforce of 60,000 employees — are losing their top leaders.

Who’s next?

The question hangs over the half-finished 60-day legislative session. State senators deposed Transportation Secretary Lynn Peterson on Friday. Corrections Secretary Dan Pacholke quit Saturday after less than four months on the job.

Democratic Gov. Jay Inslee says election-year politics are at play, but Republicans allege mismanagement at the departments of Transportation, Corrections and Social and Health Services, where Secretary Kevin Quigley announced last month he was leaving. Those aren’t the only parts of Inslee’s Cabinet that are under fire.

“There are other agencies we’re having terrible problems with. Health Care Authority for years now has been out of control,” said Andy Hill, the Senate’s lead budget writer. “They’re the ones that have given us this nice $600 million deficit.”

Inslee appointed Dorothy Frost Teeter to lead the Health Care Authority, which oversees Medicaid insurance for the poor, shortly after taking office in January 2013. Hill said he didn’t know if the Senate would try to remove Teeter.

Sen. Michael Baumgartner, R-Spokane, a critic of some of Inslee’s choices to lead agencies, said there have been “a number of fiascos and poor management in a number of agencies.”

Baumgartner tweeted Friday: “Note to other Inslee Appointees: Shape up, Do your job. Serve the people w accountability. Or more heads are going to roll.”

Inslee unloaded on Senate Republicans on Monday, saying that by dismissing Peterson in a surprise move effective immediately, they “significantly damaged our ability to get the job done in transportation.”

The agency is getting started on a $16 billion package of transportation projects to implement, approved by the Legislature last year. One project has broken ground, with many others in planning stages.

“Senate Republicans are conducting a dishonest, partisan and frankly scurrilous political campaign,” Inslee said, saying they “should be ashamed” of the “political ambush” and “decapitation” of Peterson. He said praise, not concerns, preceded the move.

Inslee is seeking a second term this fall and faces a challenge from GOP Port of Seattle Commissioner Bill Bryant.

Sen. Sharon Nelson, the leader of minority Senate Democrats, said Monday she worries the vote will scare away potential applicants for the vacant positions.

“How do we attract talent to the state with what just happened?” Nelson, D-Maury Island, asked.


Republicans say they have long complained about problems at the Department of Transportation, including high tolls and traffic problems surrounding implementation of toll lanes on Interstate 405.

“It’s about an agency that has broad systemic flaws that have been going on for years,” Hill said. “The public wants accountability. The way to start it is to replace the person at the top, and you want somebody who’s going to, instead of treating drivers as an annoyance, treat them as a customer.”

Peterson’s deputy, Roger Millar, is now in charge at the transportation department.

“While we no longer have the benefit of her leadership, we still have jobs to do,” Millar told staff in an e-mail Monday. “We have highways to maintain, vessels to operate, projects to develop and deliver and relationships to maintain in the communities that we serve.”

Quigley lasted longer than many DSHS secretaries, but announced last month that three years is enough. He hands off the reins of the agency to an assistant secretary when he leaves Feb. 22. Patricia Lashway will serve as acting secretary as the state conducts a national search.

“With respect to our value, commitment to excellence, you have rocked it,” Quigley said in a parting e-mail to staff last week. “Even without resources, I’ve seen a team always striving to improve service delivery.”

The changeover comes as DSHS staff are working “day and night” to resolve safety problems at Western State Hospital, agency spokesman Adolfo Capestany said. Federal investigators identified staffing and training gaps at the Lakewood facility.

Pacholke, who hasn’t set his departure date, leaves the Corrections Department as the agency reels from the department’s revelation shortly after Pacholke took over of a software-programming error that caused early release of inmates for more than a decade.

At least two released prisoners are accused of causing deaths while they should have been locked up. The agency identified the problem in 2012 without fixing it. Inslee’s office and the Senate have investigators looking at why.

Sen. Steve O’Ban, R-Tacoma, said senators hope to “have the facts on what is the systemic cultural problem within the DOC, and how is that going to be fixed. And the new person who is appointed to that position will have a better idea how to run that organization if we’ve been able to get to the bottom of it.”

Pacholke told staff in an e-mail Monday that he hopes his resignation is enough to stop “the political interference.”

“This season of challenges will soon pass and this agency will be stronger and better for having weathered the storm,” Pacholke wrote.


At the Health Care Authority, the expense cited by Hill includes a four-year total of higher-than-expected amounts being paid to insurers as part of Medicaid managed-care plans. Prescription-drug costs account for most of the increase.

Hill, R-Redmond, said the authority should have been able to better predict the increases and to question actuarial estimates about what is needed. Hill said it is part of a pattern of the agency failing to give lawmakers data they need.

Pricey new drugs are hitting the market and existing specialty drugs are becoming more expensive, the Health Care Authority says — with generic alternatives often lacking. Some of the most costly are for inflammatory conditions, multiple sclerosis and mental illness.

Nathan Johnson, chief policy officer for the Health Care Authority, said the rate decisions are sound and are based on data that wasn’t available at the time of a forecast that lawmakers relied on in writing their budget last year.

“This is a national phenomenon,” Johnson said. “It’s occurring in nearly every state Medicaid program.”

Another prediction that didn’t pan out was huge savings predicted for a Medicaid overhaul involving integration of mental and physical health care treatment. Savings were less than 5 percent of what was budgeted, in part because King and Pierce counties didn’t voluntarily adopt the changes far earlier than the rest of the state as anticipated.

-Melissa Santos contributed to this report.

Jordan Schrader: 360-786-1826, @Jordan_Schrader