A Kansas Democratic state lawmaker is being sued by his former local government employer for allegedly fraudulently claiming his longtime companion as a spouse for health insurance benefits.
Sen. David Haley, a 30-year legislator now serving Senate District 4 in Wyandotte County/Kansas City, Kansas, was also elected to the local Board of Public Utilities in late 2021 — and again last November, even after the news of his alleged health care fraud.
“Health insurance coverage for Defendant Haley, [the woman], and their identified children became effective on or about January 5, 2022,” according to the lawsuit filed Tuesday in Wyandotte County District Court.
Initially the paid job was considered a contractor position with benefits. But when the BPU decided last summer to make board members actual employees, it discovered Haley’s alleged deception.
When board members were required to provide health benefit information for the transition to employee status last july, the BPU’s lawsuit against him alleges, “Defendant Haley informed Human Resources that he is not legally married” to the woman.
Haley claimed last year that the BPU knew about the arrangement, but that’s not what the lawsuit says.
“Defendant Haley contended the BPU understood his relationship with [the woman] as ‘partners’ and they were not married under common law,” it reads, but a “BPU representative denied ever speaking with Defendant Haley about his relationship status or Defendant Haley’s benefit enrollment, or any knowledge of Defendant Haley’s marital status.”
In addition, the lawsuit argues Haley “agreed to provide documentation of his joint bank statement, mortgage agreements, utility bills, and other pertinent information” but “never provided any such documentation.”
The lawsuit seeks more than $25,000 from Haley in fraudulent health insurance benefits.
The BPU voted in September to censure and remove Haley as president, though as an elected official he remained on the board.
The Heartlander reached out to Haley for comment. He said he didn’t know anything about the lawsuit and would comment when he learns more.
The lawsuit further says Haley last summer more than once “inquired about postponing the W2 transition until after his upcoming reelection,” admitting that “I really f—-d this up.”
The lawsuit says Haley “denied that he was married, part of a civil union, or married under common law,” and that “Defendant Haley and [the woman] have never participated in any legal process to become married or a member of a civil union.”
The woman “is listed as Defendant Haley’s landlord to whom he pays rent,” the lawsuit says.
The lawsuit quotes the BPU ethics policy as saying:
“An elected official, official, or employee shall not intentionally use the prestige of his or her office for his or her own private gain or that of another except as may be permitted under this ethics policy.”
The lawsuit lists five civil counts against Haley: Fraudulent Misrepresentation; Negligent Misrepresentation; Unjust Enrichment; Breach of Contract; and Fraudulent Inducement.
“Defendant made the false representation intentionally for the purpose of inducing Plaintiff to provide health insurance coverage to [the woman], despite his marital status and [her] dependent eligibility.”
BPU is asking for “an award of actual damages as is fair and reasonable, in an amount in excess of Twenty-Five Thousand Dollars ($25,000.00), including but not limited to its lost benefits, liquidated damages, attorney’s fees, all costs including pre-judgment and post-judgment interest, and any such other relief as the Court deems just and proper.”
“I’m having a hard time coming down on the side that it was an honest mistake rather than an attempt to get an extra benefit,” a fellow board member Brett Parker said during Haley’s termination in September.
Added board member Rose Henry: “Having been through the enrollment process many times with many employers…I know the consequence of potentially adding a dependent to an insurance policy that is not allowed to receive those insurance benefits.”
Board members warned at the time they would explore coming after Haley for the fraudulent funds.
“We have a duty to the rate payers,” said Parker. “This is their money that this has cost.”
Haley complained to a reporter that the censure in September seemed timed to November’s BPU elections.
“I would think it would’ve been addressed in the last three-and-a-half years — not until just a month out before a very tight reelection effort,” he said — notwithstanding the fact that his discrepancy wasn’t discovered until that summer.