The Shrill Whistle-blower

The war between a state agency and a self-appointed watchdog degenerates into accusations of racism, revenge and name-calling--and your tax dollars pay for it

Kahlstorf wrote, "We have received disturbing reports that this firm has completely excluded certain minorities, and there are questions about whether there is any connection between this alleged discrimination and the apparently racist views expressed by . . . Logan Johnston."

Two days later, Kahlstorf took his concerns to HCFA.
Kahlstorf contended that Executive Order 11246, a mandate for federal contractors to take affirmative action to hire qualified minorities, required the law firm to recruit minorities and prohibit discrimination. Johnston's firm had agreed to comply with that rule when it signed its contract with the state.

Johnston's diary entry implied such discrimination at Johnston's firm, Kahlstorf argued. In a May 12 letter, Kahlstorf urged HCFA to "immediately suspend" all Medicaid contracts with Johnston's firm "pending the outcome of a full investigation"--which would, in effect, shut out one of Johnston Maynard Grant and Parker's biggest clients. Since fiscal 1993, the state has paid the firm $2,951,300 for services rendered to AHCCCS.

HCFA's general counsel is aware of the allegations, Sharon Yee says. But she stops short of saying the counsel is investigating, and says her agency has not broached the allegations with AHCCCS.

"We're not opening a case, so to speak," Yee says. "We are checking to see if there's anything the Department of Health and Human Services has jurisdiction over. If it does, we will certainly check it out."

Aside from Kahlstorf's, Health and Human Services has received no other complaints of racism at AHCCCS or its law firm, according to Yee.

(Separate from Kahlstorf's charges, two African-American AHCCCS employees, James Toppin and James Dade, say they experienced racial discrimination at the agency; Dade says it caused him to leave his job as a supervisor there. But after administrative reviews, neither man's grievances were upheld. In the past five years, eight employee grievances have been filed with AHCCCS managers based on race, 10 other complaints have been filed with AHCCCS' internal equal employment opportunity officer, and 11 other complaints have been filed separately with the EEOC. Of those, only one was sustained by AHCCCS' internal EEOC officer as a case of possible discrimination; two are pending.)

Even if Health and Human Services investigators were to scrutinize Logan Johnston's law firm, it seems unlikely they'd find anything actionable. The firm does have an affirmative action/equal employment policy. And though no black attorneys currently work for the firm, Logan Johnston calls that "an accident of timing." He says the 25-member firm has hired three African-American attorneys since it was founded in 1989.

In a letter from partner Michael Grant to the Reverend Oscar Tillman, state director of the NAACP, the firm points to its "commitment to civil rights and affirmative action," such as its sponsorship of awards at the city's annual Martin Luther King Day breakfast and its representation of an elderly black woman in a lawsuit against TransAmerica Corporation.

Johnston calls the release of the diary entry "just another part of the vindictive, malicious vendetta Greg Kahlstorf has against me and AHCCCS."

He says of the entry, "I've apologized to everyone involved. What happened was, my ex-wife stole my diary and other personal papers and gave it to Kahlstorf, who's since tried to use it to discredit me and my firm in the press."

However, the most convincing evidence that Johnston's attitudes have adjusted is that his wife is an African American. Johnston faxed New Times an explanation of how his life has changed since he wrote that slur 24 years ago.

"I was exposed to a fair amount of bias in suburban Chicago as a child, and I saw some things in my four months at Fort Polk, Louisiana, in Army basic training in 1970 that made a negative impression," Johnston states. "Gradually, as I got to know African Americans as individuals, I grew up . . . I give great credit to my wife Celeste for helping open my eyes. Other than this, I'd just as soon keep my journey private."

If there's ever a movie made about this, Greg Kahlstorf will be played by Bruce Willis. Not because they look alike--the only physical trait they share is the going-going-gone hairline--but because Willis has played Kahlstorf before. He's the guy who won't let go, no matter what. It's the role of the Man Who Knows Too Much.

Kahlstorf's eyes don't gleam, and he rarely raises his voice above a polite, conversational level, but he's clearly put everything he has into this conflict. While Kahlstorf makes his living as an Internet consultant, designing Web pages, it's obvious that his life revolves around his fight with AHCCCS.

Most of his research and muckraking appear online and in a printed newsletter he distributes sporadically. Kahlstorf's allegations against Johnston and his firm are the most recent in a two-year career as a whistle-blower.

Kahlstorf was passed over for a permanent job with AHCCCS after a probationary trial in 1995. He says it was because he'd already begun exposing corruption, asking questions about the consulting contract his supervisor, Barbera Bridgewater, held to provide services from her company.

Bridgewater resigned from AHCCCS, though she denied it had anything to do with Kahlstorf's charges or the subsequent stories in New Times. Kahlstorf also claims credit for the resignation of former AHCCCS director Mabel Chen.

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