By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
Johnston, managing partner of the law firm of Johnston Maynard Grant and Parker, usually appears in venues classier than the cramped justice courtroom where he sought a restraining order against his ex-wife, Polly Parker-Johnston. Johnston claimed that Parker was stalking and threatening him. Parker denied Johnston's charges, and said he was using litigation to harass her.
Ordinarily, this would be a private matter, one of the uglier cul-de-sacs along the road of domestic life. What dragged this painful moment out in public was a diary entry, 24 years old, and the one word it contained which might have an impact on Johnston's career and his position as attorney for the Arizona Health Care Cost Containment System (AHCCCS).
It was, as Johnston put it to New Times, an "unfortunate choice of words"--made even more unfortunate because it had been distributed to the media and the local chapter of the NAACP by Greg Kahlstorf, a former AHCCCS employee who is now the central--some say the only--figure behind AHCCCSWatch, a loosely organized coalition of whistle-blowers and others who find fault with the agency.
One reason Johnston sought a restraining order against his ex-wife was because Kahlstorf got that diary entry.
"She has been threatening to take her story--whatever that is--to my clients and to the tabloid papers that would be interested in such things, for the purpose of injuring my reputation, all with the innuendo that I am a racist, when she knows perfectly well I am married to an African-American woman," Johnston told the court.
Parker's attorney argued the restraining order was retaliatory, that it only came about after the diary entry was made public.
While Johnston denied the restraining order was meant to keep Parker from talking to the press, in his cross-examination of her, he asked his ex-wife:
"Did you give my diary entry to Greg Kahlstorf?"
Judge Ortiz sustained her attorney's objection, but not before Polly Parker-Johnston answered, "Yes."
Johnston got his restraining order--the court decided there were sufficient problems to keep the two apart. "I think that each of you, in some manner, is on the edge," Ortiz told the pair.
It might have been a victory for Johnston, but the diary entry had already raised the interest of federal officials as well as forced Johnston to defend his reputation.
This was, more or less, just what Greg Kahlstorf wanted.
These are the latest developments in the ongoing war between AHCCCS and AHCCCSWatch, which has included charges of conflicts of interest, fraud and mismanagement, and which has, according to one agency official, cost taxpayers a six-figure sum so far.
AHCCCS, Arizona's system for delivering health care to the poor through health-maintenance organizations, has won praise at a national level for its innovation. The massive agency, staffed by more than 1,000 people, spends $1.8 billion a year delivering health care to 472,000 of Arizona's neediest citizens.
But it's also a big target for critics--not the least of which is AHCCCSWatch--who claim the program is riddled with problems and poor oversight. Two years ago, the Department of Justice and the office of the inspector general of the federal Department of Health and Human Services announced a joint investigation into AHCCCS' finances. That probe continues today.
The investigation was triggered in large part by allegations of AHCCCS whistle-blowers Greg Kahlstorf, Janice Schoonover and Farrell Janssen, first published in New Times. They charged that AHCCCS paid providers for dead people who had been left on the rolls, that managers had conflicts of interest and that fraud and intimidation were used to cover up these problems.
While AHCCCS now admits there were some problems--it concedes it paid for health care for some dead people--the agency says there was never any fraud, and has denied it punished whistle-blowers.
The Health Care Financing Administration, which oversees how AHCCCS spends its money, is now "looking into" allegations of noncompliance with affirmative-action programs at the law firm that represents AHCCCS, Johnston Maynard Grant and Parker. This inquiry was precipitated by Kahlstorf.
But these claims of racism, hardly as clear as bottled water to begin with, are clouded even further by the personal pissing match between AHCCCS and its self-appointed watchdog.
AHCCCS personnel say Kahlstorf is a bitter, disgruntled and possibly dangerous ex-employee bent on revenge. Kahlstorf responds that he's just a good citizen trying to shed a little light on a bad program, and that AHCCCS is out to smear him.
Both sides say it's nothing personal. But the charges and documents fired back and forth suggest otherwise. Now, as the price tag for this feud mounts and the accusations descend into racism, it's starting to get ugly.
Sharon Yee, of the Health Care Financing Administration's Division of Medicaid, confirms that her agency is "looking into" claims of racism raised by Kahlstorf. But that doesn't mean the federal government is about to stomp on AHCCCS and the law firm that represents it.
Kahlstorf first raised the issue of racism at Johnston Maynard Grant and Parker in an April 24 letter to AHCCCS director John Kelly; the letter included a copy of the 1973 diary entry.
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.
Since then, Kahlstorf has also been a source of stories about AHCCCS in the Arizona Republic and on local TV stations.
To hear Kahlstorf tell it, that's just what he does: He doesn't expect love or money or fame, but he does want the truth to come out. Kahlstorf even goes so far as to say he's not really involved in the fight with AHCCCS; he's just covering it as a journalist.
"I think our track record as a media organization stands on its own," he says. "The truth is, I don't really know too many of these people personally. I have the same relationship most reporters have with their subjects. The only difference with us is, after we write the story, if we think there's something the federal government ought to be doing . . . we will take the time to document . . . and forward it to them."
AHCCCS has persecuted him and other AHCCCSWatch members, Kahlstorf says.
"They would literally pick up the phone . . . Charlie Adornetto [head of AHCCCS' Office of Grievance and Appeals] . . . would call up the Republic or a TV station and go, 'This [AHCCCSWatch member] had this kind of problem in their past, and this one, in 1986, had three jobs,'" Kahlstorf says. "It was the kind of thing where someone had taken the time to really look into what you had been doing. . . . As far as the attacks on me personally, that I'm used to. Charlie Adornetto once screamed at me over the telephone that I was like Jeffrey Dahmer, and it was his responsibility to protect the agency from people like me, from the Jeffrey Dahmers of the world."
(Adornetto denies he's ever called Kahlstorf a "Jeffrey Dahmer"--he says that once, as he argued about public access to agency offices, he told Kahlstorf, "Well, Jeffrey Dahmer was once a member of the public, too." Adornetto says he's given reporters background on Kahlstorf, but just to let them know the facts.)
Kahlstorf believes AHCCCS personnel get so angry with him because they can't handle criticism. In spite of this, Kahlstorf claims, he manages to keep his cool.
"When people are screaming at you, you're trying to operate on any kind of professional level, you don't just abandon all the things you know as normal," Kahlstorf says. "Nothing AHCCCS would do or say would surprise me."
Kahlstorf's narrative history of AHCCCS and AHCCCSWatch is abbreviated, at least. AHCCCS personnel are only too happy to fill in a few of the blanks.
They complain that some of Kahlstorf's charges have made the front page; but when he comes up short, AHCCCS points out, there's little or no coverage.
For example, one Health Care Financing Administration review of AHCCCSWatch's most serious charge--that AHCCCS paid HMOs for dead recipients and never demanded reimbursement--found the claim to be baseless. HCFA examined a random sample of cases in 1995. It concluded "death terminations were being processed in a timely and accurate manner" and "AHCCCS staff took very thorough measures to resolve them." Kahlstorf maintains the HCFA sample was too small to catch any real fraud.
And at least one federal administrator has told Kahlstorf he doesn't want to hear it anymore. In a 1995 letter, Richard Chambers, associate regional administrator of HCFA, told Kahlstorf to communicate only in writing "in light of your mischaracterization of our conversation . . . [and because] your frequent and protracted telephone calls to various members of my staff have reached the point where they interfere with the agency's mission."
(Kahlstorf claims he's since patched things up with Chambers; Chambers didn't return calls for comment.)
The state Attorney General's Office investigated charges made by Jan Schoonover and AHCCCSWatch and found they did not rise to the level of criminal conduct. (However, the AG's Office warned AHCCCS that, in light of the continuing federal investigation, AHCCCS should not view the findings as a complete exoneration of all allegations against the agency.)
AHCCCSWatch hasn't fared much better pursuing its claims of persecution by the agency. Kahlstorf and Farrell Janssen both recently lost their employee-grievance appeals against AHCCCS in Superior Court. Kahlstorf was ordered to pay AHCCCS $1,876 in attorneys fees. A few weeks earlier, a state personnel board ruled against Jan Schoonover's whistle-blower complaint in an administrative hearing, which she is now also free to appeal to Superior Court.
Frank Lopez, public information officer for AHCCCS, believes Kahlstorf "shops around" the same allegations of fraud and mismanagement to different agencies until he finds someone willing to buy into it.
"Kahlstorf first went to the Attorney General's Office, they investigated, found nothing. He didn't like that--obviously, they were in our pocket or something. He went to the Health Care Financing Administration, the agency that oversees us, they sent a team of people out, found nothing. Again, it was HCFA that was covering for us," Lopez says. "Then he went to the Department of Justice, and that's where, I think, they said, 'We're going to take a really close look at this.'"
Lopez, a former reporter and editor himself, says he understands the need to look into the allegations, but he thinks people should consider the source.
"Sooner or later, somebody is going to ask the question, 'Who is this guy?'" Lopez says. "I don't know who AHCCCSWatch is. As far as I know, it's just Greg Kahlstorf and his fax machine."
Lopez wonders what Kahlstorf would do if he were ever scrutinized.
"Everything for two years has gone his way . . . he's very clever, very smart. The coverage he has gotten is always favorable to his cause, always attacking AHCCCS. My own personal feeling is something is going to happen when something doesn't go his way," Lopez says. "I think he's an opportunist, I think he will take any opportunity to attack. And he took that opportunity with Logan. He has tried very, very hard to shine the spotlight on AHCCCS. I don't know if he understands that, eventually, the spotlight is going to hit him, too."
Greg Kahlstorf doesn't believe he belongs in the spotlight. His stake in the fight, he thinks, is irrelevant.
Despite his attempts to portray himself as an objective journalist covering a story, there are serious questions about his credibility.
Kahlstorf had problems with another ex-employer. And although this employer wasn't a public agency, Kahlstorf used the same tactics against it that he does against AHCCCS--and got slapped with a restraining order.
"Oh, God. It's like a curse," Carmen Santamaria-Urso says when she hears Kahlstorf's name. Urso says she hired Kahlstorf in March to do production work for her company, which does photo shoots for catalogues in Phoenix. Kahlstorf, she says, only lasted two weeks. After several confrontations, he left. But that wasn't the last she heard of him.
"He actually tried to start investigating us, for no reason, actually," Urso says. She claims Kahlstorf began faxing her clients, demanding payment for services he hadn't provided, threatening lawsuits. He also tried to get her kicked out of her hotel. She responded by getting a temporary restraining order against him.
Urso suggests that Kahlstorf is not the best person to make allegations of racism. The last confrontation, the one that led Kahlstorf to quit, was sparked by his racist comments, she contends.
"There was this little Mexican kid who worked for me, and he [Kahlstorf] was very discriminatory," Urso says, though she couldn't recall Kahlstorf's exact words. "I told him he didn't have to talk to the kid like that, that I didn't appreciate that kind of racism. . . . That was the last confrontation. He lost his top."
Kahlstorf refused to address Urso's allegations specifically when questioned about them.
AHCCCS officials also scoff at the image of Kahlstorf as a crusader for racial justice.
Kahlstorf targeted his former administrator, Barbera Bridgewater, and two other African-American employees, Charlie Adornetto says. "So for Mr. Kahlstorf to put on a white hat and claim that there is racism at AHCCCS is preposterous. Check out the source. He has viciously attacked African Americans."
Lopez and Adornetto both say they fear for employee safety at AHCCCS because of Kahlstorf. They say he fits the profile of the "disgruntled ex-employee." Because of this, AHCCCS has alerted the Capitol Police about Kahlstorf.
According to the restraining order, Urso was also concerned about Kahlstorf as a physical threat. "He's very obsessed with things. He's always right. He's always got to have the last word," she says. "He's just bad news. He's a frustrated man."
Kahlstorf says the allegations are unfounded, merely part of the smear campaign against him.
"Anyone can get a restraining order, as Logan Johnston has clearly demonstrated with his ex-wife," Kahlstorf says. "Whatever I might or might not have done, or whatever other members of AHCCCSWatch may or may not have done, if they have restraining orders, parking tickets . . . these are issues of individuals in their individual lives. . . . What we're talking about affects federal law, federal agencies, public money, public issues. . . . If the agency's best response to fraud, mismanagement, conflicts of interest, is that I have had a restraining order taken out against me . . . [that] is irrelevant and shows also a degree of desperation."
There's also an implied threat in Kahlstorf's responses to AHCCCS. He says he can get down and dirty, too, if he has to.
"We--meaning the people who are involved with AHCCCSWatch--certainly have access to all kinds of information. We have never wanted to get involved with personalities. The evidence we have to offer the government and the media is very solid. And because of that, there's never been a need to cross the line to taking personal attacks on people," Kahlstorf says. But he adds, "Frankly, I'm surprised AHCCCS would raise the issue of my personal credibility. . . . When it gets to character issues, we certainly could have gone down that path 10 times over."
Kahlstorf's reference to the "we" of AHCCCSWatch may be a stretch. Farrell Janssen, one of the people Kahlstorf refers to as a member, says it's actually just Kahlstorf's one-man show.
Despite Janssen's support for Kahlstorf, he doesn't think of himself as a member, and Kahlstorf doesn't consult with him on AHCCCSWatch matters. Janssen says he "rarely" talks to Kahlstorf anymore.
With the loss of his personnel claim, Janssen says he's likely to be even less involved. He has a job, after 18 months of unemployment, and that keeps him busy. Janssen says he means to tell people about AHCCCS through letters to the editor, but "I'm not much of a letter-writer."
Still, he trusts Kahlstorf to carry on. "I think Greg's pretty credible," he says. "He's not perfect . . . but he's not a bad person . . . they're [AHCCCS] rotten."
AHCCCS officials concede that not much has been out of bounds in their fight with AHCCCSWatch. Charlie Adornetto, head of AHCCCS' Office of Grievance and Appeals, says that's because Kahlstorf made it that way, and that AHCCCS employees are the real victims.
Despite his roly-poly exterior, Adornetto, a former attorney at Johnston's firm, isn't at all jolly, especially when talking about Kahlstorf.
Adornetto says Greg Kahlstorf is AHCCCSWatch, and dealing with him--his requests for information, his attempts to interview AHCCCS administrators and the media interest he generates--has cost the agency hundreds of thousands of dollars.
"I'd say we're at least in the six figures," he estimates. "There have been weeks where I have done nothing but respond to demands . . . from Mr. Kahlstorf."
Adornetto charges Kahlstorf with a long list of offenses, including: calling AHCCCS personnel at home, threatening employees with investigations, pretending to be a reporter, faxing AHCCCSWatch publications all over the agency, demanding private information, demanding to attend private meetings and making allegations to AHCCCS contractors.
"Like any agency, we take allegations of fraud seriously," Adornetto says. "To have to repeatedly investigate allegations of fraud which have repeatedly been shown to be without merit, has wasted . . . time and resources which should be used doing our mission, providing health care to the indigent of Arizona."
But AHCCCS isn't above taking cheap shots at Kahlstorf.
In a fax to New Times, Logan Johnston says any animosity is all Kahlstorf's. "As to how things got so bitter and personal between Kahlstorf on one side and AHCCCS and me on the other, the vendetta is Kahlstorf's; everyone else would just as soon forget him."
Johnston's fax goes on: "[Kahlstorf]'s an unfortunate example of the new breed of paper terrorists who use, and hide behind, the media to make other people's lives difficult. This is not just my opinion; it is the opinion of many good people who get up every day and do their jobs as best they can only to be harassed by this unemployed person whose only assets are a glib tongue, obsession, and a fax machine."
Johnston didn't sound as detached when he taunted Kahlstorf in a letter about a personnel-board hearing which ruled against Jan Schoonover. Kahlstorf, who had been acting as a lay representative for Schoonover, didn't show for the hearing.
"The Personnel Board was impressed by your failure to appear," Johnston writes. "I'm sure Ms. Schoonover looks back in wonder at how you led her down the primrose path to waste her time, money and health being your sacrificial lamb. . . . P.S.: Knowledgeable insiders have offered the following headline for consideration by AHCCCSWatch: 'Paydirt eludes cyberblob in latest gutless performance as process servers close in.'"
AHCCCS says Johnston didn't bill the state for his rant at Kahlstorf; he just threw it in for free.
Also apparently pro bono was Johnston's assistance to a process server hired by Carmen Santamaria-Urso.
When one process server couldn't find Kahlstorf to deliver the restraining order, AHCCCS' lawyer pitched in to help, she says. "We had to serve him by way of an attorney giving us the date of a court hearing that he was going to be at," Urso recalls. "We spoke to the attorney representing AHCCCS, and he told him [the process server] . . . 'I will show you personally, I will point him out to you.'"
Johnston has since filed for a restraining order against Kahlstorf, but hasn't served him yet.
Charlie Adornetto's job at AHCCCS might officially be to deal with grievances, but he also made it a part of his job to keep a chronology of Kahlstorf's activities.
Adornetto also addressed a long letter to Kahlstorf, dated April 15, 1996, in which he insists that Kahlstorf have no further contact with anyone but him, in writing.
"You have amply demonstrated that your discredited, self-indulgent writings are intended only to exact personal revenge, and your repeated phone calls and faxes are a nuisance," Adornetto writes.
For Adornetto, it's simple; Kahlstorf is the bad guy, and he deserves whatever he gets.
"Nothing can vindicate what Mr. Kahlstorf has done," he says. "There is nothing that can justify the disgusting manner in which Mr. Kahlstorf has conducted himself."
Frank Lopez admits the correspondence doesn't always sound like the work of grown-ups. But he says Kahlstorf just pushes people to the edge. He doesn't exempt himself, either; Lopez refused to talk to Bill Straus, a host on KTAR-AM 620, when Straus wanted to discuss Kahlstorf's charges.
"Ordinarily, I never would have handled Bill Straus the way I did," Lopez says. "But to me, it sounded like he was taking Kahlstorf's side. I might have handled it differently if not for the frustration . . . and I think that's an aberration you're going to see after people have been through two and a half years of this kind of harassment."
Still, blowing off steam at Kahlstorf can backfire.
The NAACP's Reverend Oscar Tillman says he was prepared to accept Logan Johnston's explanation for his use of a racial slur 24 years ago until he saw the "cyberblob" comment.
"That, to me, made my blood boil," Tillman says. "Here, to me, is a man standing at the peak of a major organization . . . who could stoop so low as to personally attack a person. And this person wants to tell me to consider him fair? That one pivotal statement made me reach back and reopen the files. . . . That shows the caliber of man I'm dealing with."
Tillman now says he'll be watching Johnston's law firm in the future.
Kahlstorf, of course, couldn't turn the other cheek. He faxed Adornetto's letter--which was line-numbered, as some legal documents are--back to AHCCCS, and to legislators as well. He included a cover sheet, which read, "IS THIS ANY WAY TO RUIN--ER--RUN A MEDICAID AGENCY? IF JOHN AND CHUCK MUST WASTE OUR TIME AND MONEY IN THIS MANNER, THEY MIGHT AS WELL JUST CITE WHATEVER STATE OR FEDERAL LAWS THEY BELIEVE GIVE THEM THE AUTHORITY TO MAKE THEIR RIDICULIOUS [sic] DEMANDS. UNLESS, OF COURSE, THEY HAVE NO SUCH AUTHORITY. IN ANY CASE, PROCEED WITH CAUTION. CHUCK HAS MASTERED THE WORD PROCESSOR, AND HIS USE OF LINE NUMBERS IS REEEEEEEALLLY SCARY."
Kahlstorf also shot back a letter to Logan Johnston after the "cyberblob" taunt.
"Your apparent concern that process servers are closing in [on Kahlstorf] seems misplaced. I doubt very much that authorities examining your Affirmative Action record will even need a subpoena to obtain contract compliance information relating to your profitable, federally-financed activities," Kahlstorf writes.
Kahlstorf defends his replies, even as he insists there's nothing personal about them.
"Am I supposed to be afraid because a manager at AHCCCS has mastered Windows? I'm supposed to shit myself now because Charlie's turned on line-numbering? No," Kahlstorf says. "Believe me, if we wanted to go after people personally, diary entries are the least of their worries, but we just don't do that."
When they attack each other, Kahlstorf and AHCCCS make the same mistake: They confuse the personal and the political.
Attacking Kahlstorf's credibility won't change the findings of federal investigators, a point Lopez concedes.
"You know, when you look at a program this big, with $2 billion, you're bound to find something," he explains. "Certainly, what you're going to find are errors . . . but I cannot believe there is fraud going on. I won't accept that. But I think that they will find something. They've got to find something. They've spent a lot of time on this."
And while AHCCCS officials are eager to question Kahlstorf's credibility, the agency is much quieter when it comes to the two other prominent whistle-blowers, Janssen and Schoonover. Even though their claims were dismissed by personnel boards, there's no denying the two were terminated after they made public claims of fraud and abuse at AHCCCS. Nor can AHCCCS comfortably state today, as it once did, that the agency's problems are just media hype.
"The issues are there," Lopez admits. "This agency is not trying to diminish the fact that there are issues here. . . . Dead people came up in the system, we corrected, we reconciled, that's it."
Even Lopez concedes it's unlikely there would have been any scrutiny of those problems without Kahlstorf. When asked if AHCCCS staffers would have alerted anyone to the presence of dead recipients on the rolls if they found out about it themselves, Lopez asks a rhetorical question back:
"You mean, do a press release on our own?"
Lopez's laughter suggests that no matter what else might be said of Greg Kahlstorf, without him, the public might never have known of some serious problems at AHCCCS--and neither would have federal investigators.
But Kahlstorf makes the same mistake when he assumes he's the only one with a handle on the truth. In speaking with New Times, Kahlstorf even hints that questioning his credibility could jeopardize the federal inquiry.
If the federal investigation doesn't find anything, Kahlstorf says he's willing to live with that.
"We all started this with the understanding that the highest authority is the federal government," he says. "If after two and a half years, if they're actually able to determine nothing's wrong here, I guess we'll have to accept that."
But he adds, "I think we've already had an important and undeniable effect on AHCCCS. I don't think that they will ever do business the way they did before."
To Kahlstorf, that's all that should matter--not his own credibility, not the public money that's been spent in the back-and-forth accusations and not the charges he's made that have turned out to be wrong.
"It's very possible that there may be conflicts of interest up the ass, as far as me being a journalist covering the story, but I do know this," he argues. "No one in the state of Arizona is better equipped to give you independent information about AHCCCS than AHCCCSWatch is.