High ranking state executive accused of steering taxpayer money to husband’s business

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Kristin Russell

Kristin Russell

DENVER — One of the most powerful and influential women in Governor John Hickenlooper`s cabinet resigned earlier this month just as the KWGN Channel 2 I-team started reviewing allegations of favoritism with your tax dollars.

Investigative Reporter Chris Halsne found personal connections between one of the Governor’s highest ranking executives and a private telecommunication company doing millions of dollars in business with the state.

The Governor selected Kristin Russell to lead his Office of Information Technology (OIT) in February of 2011.

She was given a directive and a massive budget to fix the state’s ailing computerized accounting system and create a “digital cloud” to store government information.

To get it done, records show, she sought help from outside vendors and that some of the deals may have benefited her own family.

Kristin Russell is married to Scott Russell, Vice President/General Manager for CenturyLink Northern Colorado. That’s no secret to her boss, the Governor.

According to Russell’s 2013 Conflicts Disclosure Statement, she admitted that three immediate family members “might reasonably be expected to have business dealings with the Governor’s Office or OIT.”  Her husband, Scott, is listed on the form, as are both her sisters.

The most prominent business deal connecting OIT and CenturyLink, signed during Kristin Russell’s tenure, is a $43.5 million contract-amendment.

KWGN Channel 2 also reviewed two other “add-ons”, one for about $4.8 million and the other for around $3.4 million.

Much of the requested work is for computer ‘hosting services’ called the ‘Cloud First’ project.

The $43.5 million deal was physically signed in August of 2013 by Russell`s close colleague Chief Technology Officer Sherri Hammons. (Hammons is now working for a private company called IQ Navigator. She declined comment on this investigation through a public relations representative.)

Kristin Russell`s name and title are also stamped on the contract, but when Halsne first asked her about it, she wasn`t entirely forthcoming.

Russell simply replied, “Well so … those contracts were not actually signed by me when I was in this role, so.”

A source inside OIT, who is familiar with the growing public-private venture, says Russell knew full well certain contracts benefited CenturyLink: a company managed by her husband.

When Halsne asked Russell to respond to allegations that the deal “looks like nepotism — looks like you`re trying to send business to your husband`s company,” Russell responded, “The state has lots of vendors that they do business with and lots of strategic partners that we work with across the community to make sure that the services within OIT are met.”

That non-answer was the last one KWGN Channel 2 was going to get with Russell outside her office at the Pearl Building.

An executive branch public relations aide cut short Halsne’s on-camera interview with Russell saying, “I`m not trying to stop the interview. I`m just saying the process is usually to contact the communications officer and I would suggest you do that. Kristin, come on in.”

Governor Hickenlooper’s director of communications, Eric Brown, later sent a statement which says (in part): “(Russell) removed herself from business matters related” to CenturyLink – “due to the potential for a perception of conflict of interest.”

“Things that might be considered OK in private businesses don`t really fly in the public sector,” Colorado Ethics Watch director Luis Toro told Halsne after reviewing some of the CenturyLink/OIT contracts. “I think people need to be extremely cautious when it comes to family members and realize that the appearances are bad.”

Toro says ethics law is “murky” when government leaders, like Russell, oversee multimillion dollar contracts with very large, publically-held companies like CenturyLink.

According to his company bio, Scott Russell leads a team of over 700 employees, but he`s doesn`t own the business.

Toro says, “The public really doesn`t approve of family members benefiting from government decisions, so this is where you have a disconnect between what’s in the law and what people really perceive. Most people would find this situation unacceptable.”

KWGN Channel 2 also found connections between CenturyLink and Kristin Russell and Governor Hickenlooper that go a bit beyond official government contracts.

The Governor`s mansion is a beautifully ornate historical home that costs plenty to maintain. Donations for its upkeep are run through a nonprofit called The Governor`s Residence Preservation Fund. The 2011 donor list includes Kristin Russell as a supporter and CenturyLink as giving the mansion fund an undisclosed amount of money between $10,000 and $50,000.

Kristin Russell’s last day at OIT was May 9. She resigned to join a private company called Deloitte, a company that does business with the State of Colorado. Its website lists Russell’s sister, Susan, as a board member and principal partner.

KWGN Channel 2 requested the amount of money the Governor’s OIT branch has paid Deloitte for contracted services, if any, during Russell’s tenure, but so far our I-Team has not received an answer.