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

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DENVER -- One of the most powerful and influential women in Governor John Hickenlooper`s cabinet resigned earlier this month just as FOX31 Denver 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.

FOX 31 Denver 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 FOX 31 Denver 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."

FOX 31 Denver 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.

FOX31 Denver 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 we has not received an answer.


  • Steve

    Tip of the freaking iceberg. Want more-look at CDOT. Wholesale violations of statute with respect to the chief engineer’s role. 10 Million dollars paid to a consultant to turn the place upside down. An executive director who was a major player in the consulting engineering industry-and who now is privatizing the place with consulting engineers. Hickenlooper is Teflon coated-but his minions are the most corrupt on Sherman Street in decades.

    • Anonymous

      Thankyou for your generic comments that only you understand. In other words, what the —- are you talking about?

    • Anonymous

      Ya, I heard about this word of mouth. From what I heard some consulting company has an open ended contract? I also heard that there are a lot more high level managers costing a lot of $$. Sounds like empire building. Why is that?

  • gnk

    You might notice NONE (4, 9, 7, Post) of the other news outlets in Denver are giving this story any time. And who “accused” her of a possible conflict of interest? The reporter? The same guy that wrote “that some of the deals may have benefited her own family”? Where’s the evidence in your story supporting that? This is why Fox as no credibility.

    • Anonymous

      If you believe Scott Russell will not benefit from this contract, you have no concept as to how corporate America compensates executives. And Mrs. Russell currently has a public relations mouthpiece walking around Denver with her. Better pull your head out of the sand before you suffocate.

  • PKR

    This is yellow journalism at its worst. I agree this is why Fox lacks credibility. Sensational headlines with nothing behind it. Many who are in IT management necessarily have some sort of dealings with Century Link. They are a huge company, and her husband is a mid-level manager. It isn’t as if he “owns” the company. And she properly disclosed the relationship, so she is not trying to hide anything. The Deloitte connection is also a non issue. Deloitte is another huge company (in its field) and I am not at all surprised that the state has done business with it. The mention of Century Link and her contribution to the Governor’s mansion preservation fund is also ridiculous. Hickenlooper does not “own” this mansion, the State (meaning the citizens) own it. Shame on Fox News for trying to pull the wool over the eyes of those who are not in a position to understand that their accusations are baseless.


    Wow, Chris Halsne must just feel like an idiot for having to publish this “expose”. So, you are telling me that one of the largest technology groups in the state (State of Colorado IT) is working with one of the largest telecom/broadband companies in the country (that also happens to be one of the larger technology employers in the state)?? Seriously, find me a local IT company of this scale that doesn’t work with CenturyLink in some capacity. They ARE the fiber network in the metro area. And the husband of the IT chief works for that company (note: an employee, not possessive as in “he owns it”); but not in contracts, sales, or necessarily even the part of CenturyLink that the State contracted with… This is beyond a reach. Halsne, you should hang your head in embarrassment. There are plenty of controversies and mismanagement in the the State IT system – heck, the entire leadership team just resigned in the past month – go mine that instead of making up conflicts of interest where they don’t exist. And Deloitte? They are a Big 4 consulting firm in the WORLD and most major companies consult with them at some point. Way to not substantiate any relationship between State IT and Deloitte (misleading much?); and then act like going to a major consultancy is somehow outside of her capacity or resume. She was upper management at Oracle before coming to Colorado, for pete’s sake. However, as I intimated previously, State IT was in a constant state of re-organizing and has been severely mismanaged. The money and productivity lost by constantly shifting direction and re-arranging the droves of useless middle management has done nothing to make them an efficient, effective, or elegant organization. They are still bloated and lacking leadership; and their finances are a mystery to most.

  • Anonymous

    That was a ton of time, effort, and money spent in order to end the piece on…”maybe there is nothing wrong it’s just looks suspicious”. Two people work in the same space (tech) for 20 years and there is bound to be business ties between them. Dig hard enough and you can make news out of anything……waste of your and I time FOX

  • Ed Gonzales

    If you think that is bad, you should see how OIT wasted millions of tax dollars on obsolete technology. When money saving ideas were brought to light, they made up false reasons to force my resignation. I even proved they were false allegations made towards me but the HR under Kristen Russel ignored the facts that were brought forward. All of OIT is a fraud and a waste of Tax Dollars.

  • Bryan

    This story seems like it’s stretching at times. For example, this lady and CenturyLink both donating to the Governor’s Mansion doesn’t seem inappropriate in the slightest. Also, her husband doesn’t own the business so their income doesn’t increase or anything when CenturyLink is awarded a contract. I heard no evidence that would even imply that he gets a bonus or anything like that when a contract is awarded.

    • Anonymous

      It might be appriopriate if you consider she was appointed to her position that same year. Seems like a very nice thank you in my opinion.

  • spamthis@nospam.net

    Channel 7 investigated and reported on this matter. Channel 31/2 investigated and reported on it. Channel 9 and 4 may investigate and report on it. And nothing will come of it, because the Democratic apologists who pretend to be professional journalists will spin it that “Goober” Hickenlooper, like the occupant of the White House, B.O., knew nothing of the matter, despite the undeniable facts that prove otherwise. “Goober” Hickenlooper is a dirty, corrupt, immoral, unethical, self-serving politician, who is a disgrace and embarrassment to the State of Colorado.

  • Tom Sanders

    Just another example of these criminal democrats/associates that think the taxpayer is their personal piggybank…they get caught…then they resign….then nothing happens to them…VOTE OUT HICKENLOOPER.

  • SufferingFromFools

    This article intimates a lot but doesn’t seem to really have much proof of nepotism. Kristin Russell disclosed potential conflicts of interest to the state and as a CenturyLink employee (in Network, not IT) Scott Russell would have had to do the same. CenturyLink is not a privately owned company nor overall managed by Scott Russell in particular. It’s not unreasonable that the State of Colorado would turn to this company for cloud and other IT services, many states as well as other IT companies do so.

    If Investigative Reporter Chris Halsne has found actual evidence of wrongdoing, he should bring that forward. If not – this is a non-story.

  • Larry R

    Shame on you Kristin Russell. Taking a dilapidated CBMS riddled with performance problems, vendor finger pointing and a bottomless pit of wasted funds for the past 10 yrs — and moving it to a local Tier 3 data center with new SLAs that are backed by a fortune 500 company… AND saving the State money in the process. How does she sleep at night?

  • Sam Montana (@Montana410)

    Look at the head of the CDLE. Several years ago the press reported that the head of the CDLE spent a great deal of money to hire her friend to motivate supervisors. Hickenlooper said it was fine. All the while the CLDE fell apart and he did not lift a finger or make a comment. On and on it goes.

  • Anonymous

    All I know is that I have seen many technical people leave the State, They were replaced by consultants and non-techs costing many millions more who never built software. I have seen many forced out with 20 years plus who built the systems and servers and kept them going. The cloud first policy has been seek salesforce and deloitte first before having a State employee build something.

  • Anonymous

    The reality is that neither CenturyLink nor Kristin Russell had very much to do with this contract. This was about finding a new home for CBMS – and it was orchestrated by Sherri Hammons, the State CTO who inked the deal. Prior to the State, Sherri was CTO for PaySimple, who used Savvis (the hosting arm of CenturyLink) to host their infrastructure. Sherri brought high-level Savvis relationships to the State, and leveraged those contacts to make this deal happen. As an earlier poster pointed out, this agreement locks in a lower yearly rate than what the State had been paying out for CBMS – and establishes SLAs to ensure accountability where there was none before. Kristin Russell is a bright personality, but isn’t savvy enough to put a deal this complex together. After reading I wondered why the story didn’t address any of this, as it’s hardly a secret; but a quick search of the reporter’s name along with “sloppy journalism” explained things very quickly.

  • Anonymous

    Not talking about CBMS, all projects should be considered salesforce or Deloitte first. I saw some people suggest cheaper alternatives or even training for State employees and they were retired the next day. I believe that hundreds of State employees left the last couple of years in OIT. Many because they disagreed with Deloitte or Salesforce . If anything, there should be an apology for that Deloitte India person thay now does that local State employee jobs. The JBC asked how many Classified employees left? OIT said they do not have those nimbers. Why did OIT HR go through so many people to keep only at will people?

    • Anonymous

      So they can fire them all and outsource? Yea, lets use the people in other countries to support out IT because they are cheaper and the State has no desire to spend a dime to keep the State employees. As each one retires or quits, a consultant or consultant company charging 10 times more gets hired because our people aren’t smart enough. Thanks Governor and all of your appointed directors for looking within your current staff for answers, your Colorado citizens.

  • Joe

    The issue many of you who do not know the full story is… These contracts were awarded without Bid. That is the illegal part. Had there been a Bid process and Century Link won, this would be a non-issue. Because they were awarded with $43.5 million, without competition, it then does become an issue.

    • Anonymous

      Hmmm. How did CGI get selected as the implemter of their very own software without allowing other experienced software companies to bid? Sounds familiar, doesn’t it?

  • Amy Flower

    It is worth noting that all OIT employees were required to sign non-disclosure contracts this week.


    Starting with the facts:

    1. This was a no bid contract that took work away from another vendor that was delivering 99% uptime in the middle of their contract year.
    2. This contract is costing the state ~2+ million a year for the same work.
    3. This does not include additional ~2+ million more in change requests that are coming
    4. Because the contract did not go through a formal Request for Proposal (RFP) Process the state did not conduct an analysis of the work required to support the effort resulting in the change requests above.
    5. The team that received the no bid contract was made up not only of CenturyLink, but also Deloitte and Istonish.
    6. Kristin Russell quit her job to go to work for Deloitte to run “cloud services” for them.
    7. The stated purpose of the Governor’s objective was to move the state to a “cloud implementation” however the no bid contract also included county services support operations which replaces and services printers and PCs in all the counties, something that has nothing to do with cloud services.
    8. The State was already running the services being moved on a sophisticated cloud solution as defined by NIST (http://csrc.nist.gov/publications/nistpubs/800-145/SP800-145.pdf). The solutions uses broad network access, resource pooling, rapid elasticity, IaaS, and Private cloud as referenced in this document.
    9. As the CIO Kristin Russell was fully aware of the effort and directed the activities.
    10. The state now has a cloud infrastructure provider (CenturyLink), that was awarded a no bid contract set up to become the sole hosting provider of all state infrastructure services, not just the original award project, making the contract worth orders of magnitude more in revenue (+100M), with which the Colorado tax payers were not afforded a competitive approach to spending their money.
    11. The current contract is running +5 months behind schedule which is a leading risk indicator in IT programs.
    12. CDHS, the state agency that his having its solutions moved to the cloud and is a major provider of funding for the effort, inclusive of the county services piece, was not consulted at all until the contract was taken away from their service provider to which they had a direct contract, and given to the CenturyLink consortium (CenturyLink, Deloitte, and Istonish)

    Moving Beyond Nepotism
    Notwithstanding the questionable nature that the contract was awarded to CenturyLink the State needs to consider the following:

    1. Was there a violation made in the way the contract was awarded via the special provision afforded the CIO’s office, the provision that was used to give the contract without competition to CenturyLink? There may have been a policy violation that occurred that required a “one week” disclosure period of these activities. This bears research and verification.
    2. Why under a cloud services contract were other services bundled that had nothing to do with cloud services which provided for county support of IT equipment?
    3. Given this is the future direction for all State hosting services, meaning moving all State agencies to a public provider of cloud infrastructure services, wasn’t it in the State’s best interest to utilize a best practice approach to acquiring those services? One which saw the State doing the analysis work to that goes into a request for proposal (RFP), consulting with all State agencies to garner their critical input needs, execute a cost analysis of running the solution in house versus out of house, and letting the effort out for competition? The travesty of the no bid is how it undermines and downplays how serious this decision is for the future of State IT solutions.
    4. Deloitte is assuming the roll of handling all application services on the cloud, which makes the pill of Kristin Russell moving there a bit tougher to swallow. Where does this place all other providers developing application now with the State? What is the State’s strategy to open on competition on this new target platform and avoid the double monopoly of CenturyLink and Deloitte?
    5. The Federal Government is directly in part funding the current solutions that are being moved to the CenturyLink cloud. What implications does this raise given their stance on competition, contracting, and how their money is being directly spent?

    The State needs to suspend the current effort to move to the CenturyLink cloud until it develops a comprehensive plan that lays out what a cloud move forward approach actually is. One that includes a cost benefit analysis of a fully publicly hosted solution, a state private solution, and the probable the middle ground target known as the hybrid cloud which blends both. One that does a bit more analysis on how State vendors interact and compete for work on the platform and one that overlays a better enterprise look on how the state can best use the cloud concept. One that also provides for an open and competitive bid for a very key and integral part of the State’s future IT needs. Given that nothing yet has been moved to the CenturyLink solution and the work to date can be leveraged, the time is now to have the courage to be agile and adjust for the future of Colorado.

    • Anonymous

      You sure do seem to know an awful lot about this project. As someone so familiar with the State’s IT systems, how do you feel about the near $10M Vblock the State purchased and continues to pour millions into – all no bid. My understanding is that it’s one of the largest VCE deployments in all state & local government (nearly 1000 cores), and after nearly 2 yrs is still at less than 15% utilization. Why no mention of this?

    • Anonymous

      Here Here!! Or is it HEAR HEAR!!! Citizens of Colorado need to pay attention to where the Governor and his appointees are taking this State! The rules were written for a reason and NO agency or state official should be allowed to skirt the rules and regulations. They are there to protect the citizens from the abuse of power.

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  • Anonymous

    Another OIT manager’s departure was announce today. That makes 4 members of leadership team have “resigned” in last 3 weeks. Seems like the Governor is cleaning house, what is he trying to hide? Also as stated above, all employee’s of OIT have been required to sign Confidentiality reports this week.

    • Star Yeo

      Most likely realize it will be going to court, hence confidentiality non disclosure requirements. I consider this a contracting foul. It will be interesting to see if GAO gets involved if federal funds were used. This is screaming conflict of interest along with competitive issues. As for federal contracting, we would be looking for small business over large first,. For this type of project and the cost, I would think they would want to be more cautious in how they awarded.

    • Anonymous

      When the HR director runs for it, makes you wonder who else is still working there that this last regime hired to do their dirty work??

  • Anonymous

    Being a person directly affected by the incredibly poorly run OIT office I think there is much more to be investigated. I can’t wait to see how the implementation of their new ERP goes on July 1st. No wonder they whole top level of OIT has flown the coop. I’m sure that CGI (they implement the Obamacare insurance at the Federal level as I recall which was a joke. No one could even log in!) is doing their best with what expertise they have and with the lack of OIT staff. Please continue your investigation into the Governor’s appointees! We all deserve a good laugh!

  • seen it before

    this is the tip of the iceberg…..having worked in OIT I can safely say that many of the executives have cushy arrangements with the vendors and use no-bid too many times. at least a dozen of those executives should be in jail. to some reason these stories die too soon in the media. what is needed is true, investigative reporting that doesn’t stop.

  • Anonymous

    Side note, Gov. Hickenlooper officially declared May 6th as “Kristin Russel Day”. What exactly did she do to deserve this honor?

Comments are closed.