Insider chosen to lead DHHS

Former legislator and lobbyist Lanier Cansler faces big obstacles at Health and Human Services

Gov.-elect Beverly Perdue's choice to run the state Department of Health and Human Services is familiar with the challenges facing the large and unwieldy agency. He once helped run it and tried as a lobbyist to influence it.

Lanier Cansler, a former DHHS deputy secretary, will return as the agency confronts a failing mental health system, stubborn public health problems and a tightening budget.

Perdue, a Democrat, said she is counting on steady and forthright leadership from Cansler, who knows both the workings of the state legislature and the department that touches the lives of every state resident. Cansler was a Republican state House member from Asheville before he left to work at the department.

Human Services has more than 19,000 employees and a budget of about $14 billion. The agency has a hand in issues from public health to child care to programs for the elderly. It is responsible for overseeing Medicaid, the federal insurance program for the poor and disabled.

With the appointment of Cansler and the heads of three other agencies Tuesday, Perdue finished filling her top Cabinet posts as she prepares to be sworn in as governor Saturday.

While several mental health providers and advocates praised Cansler, others said the choice raises questions about how quickly lobbyists should be able to move to government jobs.

After Cansler left DHHS in 2005, he started a consulting and lobbying firm, Cansler Fuquay Solutions, with clients that include companies that do business with the agency he will run.

To slow the revolving door between making laws and lobbying, legislators mandated a six-month period between leaving elected office and working as a lobbyist. There is no prohibition on the door swinging the other way.

Bob Phillips, executive director of Common Cause North Carolina, said it would make sense to have a "cooling off period" of at least 12 months between lobbying and working for a state agency.

Won Medicaid contract

Cansler "has become 100 percent owned by the people of North Carolina," Perdue said. "He has agreed to abstain from any kind of discussion or any kind of involvement on anything that has to do with any of his prior clients."

Until Tuesday, Cansler, 55, was the lobbyist for Computer Sciences Corporation, a Virginia company that won a $265.2 million state contract a few weeks ago to build and run a Medicaid bill-paying system. Cansler said he introduced company officials to people at the legislature.

The work he did for companies was not really lobbying, Cansler said. He registered with the state "to err on the side of caution."

"A lot of times, it was merely introducing people to people in government, not really trying to influence any kind of action," he said. As DHHS secretary, Cansler will be responsible for overseeing CSC's work.

CSC's competitor may contest the award, and ordinarily, the DHHS secretary would decide whether it was fair. Cansler talked with Perdue about having someone else decide. "One thing I don't want to do is get wound up in any ethical issues or perceived ideas there's conflicts," he said.

Backed Value Options

Cansler also worked for the company that won the Medicaid claims contract in 2004 and had it taken away two years later by then-secretary Carmen Hooker Odom.

From June 2006 to October 2006, Cansler was a lobbyist for Value Options, which evaluates mental health-care plans for Medicaid patients. Legislators want to return that job to local government mental health offices, while Value Options is fighting to keep the work.

Cansler also lobbied for the ARC of North Carolina, a private provider that does business with the state and helps shape policies on issues related to the developmentally disabled.

Cansler was deputy during the early years of mental health reform, when the state began discouraging public mental health services in favor of having private providers do the work. The result was more short-term stays in state mental hospitals, patients who could not find care, and a proliferation of low-end mental health services that wasted millions.

"I believe the concept of community capacity was good," Cansler said Tuesday. "Implementation was a real problem, and we want to focus on addressing that."

Cansler has wide support among advocates who say he is not responsible for the system's failings.

"He's been in the legislature, he has a financial background, he understands the system pretty well," said Frank Edwards, a co-president of the Wake County chapter of NAMI, the National Alliance on Mental Illness. A new management team would be "very, very, very positive," Edwards said.