The second-in-command at the state Crime Laboratory co-owns a Little Rock company that is profiting from blossoming business with the taxpayer-funded agency, an Arkansas Democrat-Gazette investigation shows.
PinPoint Testing LLC, co-founded in 2013 by assistant lab director Cindy Moran, has benefited from outsourced lab work since 2017, providing toxicology services and equipment known as “ToxBox” kits.
Direct and indirect business has exceeded $150,000, will soon more than double and could grow to millions by 2024, records obtained under the Arkansas Freedom of Information Act show.
The arrangement shows how a state employee can privately gain from public work under her purview without breaking the law. High-ranking state officials have blessed the dealings because they said Moran has disclosed the conflict of interest and recused herself from the purchasing process.
But the Democrat-Gazette’s investigation uncovered details that raise questions about Moran’s independence from PinPoint’s work. Moran received an email with unpublished bid specifications, and she signed paperwork allowing the lab to receive federal grant money to pay the company, for instance.
Over three bid opportunities in the past three years, PinPoint and a supplier it works with have not faced any rivals in the competitively bid work they won. At least one potential competitor stepped aside specifically because of how the lab packaged a bid opportunity, records show. On another occasion, PinPoint was hired for a small job without bidding.
Toxicology labs across the country vary in how they test for drugs in blood or urine, including which list of chemicals they try to detect, lab officials said. What makes PinPoint appealing, officials said, is its ability to handle laborious preparation work in a way that is tailored to the Little Rock lab’s needs.
Crime Lab Executive Director Kermit Channell and toxicology section chief Kristen Mauldin said PinPoint has made the toxicology lab’s drug screenings more efficient and reliable.
The lab receives thousands of cases a year from law enforcement officials, coroners and the state medical examiner — crucial evidence that underpins death investigations, criminal charges and trials.
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Turnaround times have shortened from six months or more to 30 days or less, Channell said. The lab is also newly compliant with a federal mandate for testing in the aftermath of all fatal vehicle crashes, he said.
“At the end of the day, I’m the decision-maker,” said Channell, the lab’s chief since June 2007. “The buck stops with me. Those are ultimately my decisions to make. That’s what the governor — and the governor before him — expects me to do.
“I don’t care who makes ToxBoxes,” he said. “I just need it done. I need it done professionally, accurately, timely — because I’ve got no dog in the fight except the end product.”
Moran holds 12% of PinPoint’s stock, according to a disclosure the company made last month while bidding for a new round of Crime Lab work.
Her annual salary at the Crime Lab is $82,144, according to www.transparency.arkansas.gov.
“I step back, and I don’t have an impact in what goes out the door concerning anything related to PinPoint,” Moran said. “I can assure you of that. … I feel like we have done everything that the state asks us to do.”
Moran’s husband, Jeffery Moran, a former branch chief at the Arkansas Department of Health, is PinPoint’s chief executive. Reached by phone, Jeffery Moran asked that questions be submitted by email, but did not respond to the email nor return a follow-up call.
What began with direct payments totaling $49,250 for one-time services has evolved into the Crime Lab’s regular purchase of PinPoint-produced ToxBoxes from a third party.
The lab signed a contract with national supply company Fisher Scientific, which pledged to serve as a middleman even though it doesn’t stock the kits. Instead, PinPoint directly ships the single-use tools to the lab, records show.
Now the Crime Lab is preparing another round of one-time services with PinPoint worth $239,000.
A BURDENSOME BACKLOG
Three years ago, the Crime Lab’s toxicology section faced a monthslong case backlog and was failing to run detailed drug tests for all fatal car crashes as required by federal regulations, lab officials said.
To address the challenge, officials planned to reformat two pieces of expensive drug-testing equipment known as liquid chromatography-mass spectrometry instruments. The machines measure the presence of substances based on their reactions to an electric charge.
The lab also planned to buy a third machine and format it.
The purpose of the reformatting, called “method development and validation,” is to develop a list of drugs that the instruments can detect at desired levels, to create consistent procedures for lab workers to use in that testing and to verify that those tests are reliable.
Although it can be done in-house, the work is time-consuming and would have further burdened backlogged technicians, Channell said.
In May 2016, the lab circulated an invitation for bids for validation of the two instruments.
Because the total cost was less than $50,000, the Crime Lab could directly solicit bids by email from three hand-picked companies rather than publicly publishing the bid request. The lab notified PinPoint and two other vendors.
The invitation for bids sought validation for two instruments made by separate manufacturers — Agilent Technologies and AB Sciex.
The Crime Lab bundled both brands in the bid opportunity, which it emailed to representatives for those manufacturers and to PinPoint.
Sciex’s representative informed the lab that his company would not bid because it was not authorized to validate an Agilent instrument.
The Agilent representative — who did not respond to the newspaper’s phone or email messages seeking comment for this article — told the Crime Lab that it was “unfortunately … a No-Bid for us,” without explaining why.
PinPoint submitted a $37,000 bid.
Who wrote the bid specifications and selected which vendors to contact is in dispute.
After receiving the bid, the Crime Lab’s attorney asked the Department of Finance and Administration for an opinion on whether the deal would comply with the conflicts of interest-in-purchasing law.
The conflict of interest law, Ark. Code Ann. 19-11-705, says it is “a breach of ethical standards for any employee[s] to participate directly or indirectly” in contracts in which he has a financial interest. Ark. Code Ann. 19-11-715(c) allows the finance department director the authority to grant a waiver.
In an email to the finance department, then Crime Lab attorney Doralee Chandler wrote that Cindy Moran provided the bid specifications to the lab’s purchasing manager and provided suggestions for potential vendors.
Larry Walther, the finance department’s director, relied on Chandler’s email to determine in a three-page opinion that a “substantial” conflict of interest existed. He wrote, in a list of numbered facts, that Moran “developed the specifications” and “suggested vendors to solicit bids from.”
But he granted a one-year waiver from the conflict law, allowing the work to proceed after he found it was in the state’s best interest.
In granting the waiver, Walther cited the federal fatal-crash reporting system mandates and the lab’s “substantial workload.” The lab’s duties “can only be managed by implementing” the plan provided by officials, and PinPoint was the only bidder, he wrote.
Nevertheless, he said, the lab “should prepare to engage in an appropriate competitive procurement without any involvement from Cindy Moran or any other employee with a potential financial interest in the procurement.”
Channell said last month that Walther’s opinion about Moran’s involvement was “not accurate.” John Smith, the lab’s chief fiscal officer, called that part of the opinion “wrong.”
Channell, Smith and Mauldin all said Moran had no involvement in the 2016 request for bids. They said Mauldin, who reports to Moran, worked with Smith to write the specifications and suggest potential vendors.
Asked why they didn’t seek to correct Walther’s opinion, the lab officials said they did not notice the detail until shortly before a May 17 interview with the Democrat-Gazette.
Moran, who was the lab’s scientific operations director in 2016, said Walther’s opinion mischaracterized her involvement.
“Did I write the specifications? Absolutely not,” Moran said. “Did I review [them] upon going out? That’s my job.”
When provided with a copy of Chandler’s email on which Walther based his opinion, the Crime Lab, through its current attorney Kelli LaPorte, again rebutted the information.
“Chandler’s comments were inaccurate,” LaPorte said. “While Moran had oversight because of her supervision of scientific operations, it was Kristen Mauldin who developed the specifications for the bid and provided possible vendors.”
Chandler is now director of state Alcoholic Beverage Control’s administrative wing. A spokesman for the finance and administration department, which oversees beverage control, said Chandler was unavailable for an interview but stood by what she wrote in the email.
“We have no reason to believe the information presented was inaccurate,” said the spokesman, Scott Hardin.
“Ms. Chandler was simply fulfilling her duties,” Hardin said when asked how she learned the information.
After Walther granted the waiver, PinPoint completed the validation work on the mass spectrometry equipment in February 2017, earning $37,000.
Later that year, the Crime Lab purchased a new drug-testing instrument, an Agilent, and PinPoint in 2018 validated that equipment for $12,250, records show. The lab did not solicit bids for this work because it was less expensive than the threshold that would require them to do so, LaPorte said.
The Crime Lab used federal grant money managed by the state Highway Safety Office, a part of the Arkansas State Police, to pay most of the cost to validate the three instruments.
Moran signed subgrantee paperwork on behalf of the lab as part of the process to secure $12,250 for PinPoint, records obtained from state police show.
State police spokesman Bill Sadler provided a copy of federal rules concerning purchases that states make with federal money, highlighting a section that says a state “must follow the same policies and procedures it uses for procurements from its non-Federal funds.”
State police officials believe the Crime Lab met this requirement because state law allows Walther to waive the conflict-of-interest law when he finds it is in Arkansas’ interest.
“We believe that that letter signed by Larry Walther is sufficient to meet the federal guidelines,” Sadler said.
Within a month of the initial validation work, the Crime Lab began purchasing PinPoint-produced ToxBoxes from Cayman Chemical Co. of Ann Arbor, Mich., invoices show.
Chandler’s 2016 conflict-of-interest letter to the finance department said PinPoint maintained the patent on drug-testing trays called well plates sold by Cayman Chemical and received royalties from sales.
ToxBox kits are pre-made, pre-packaged well plates used in drug-testing that are customized to a lab’s needs. A well plate is a tray with dozens of wells in which specific amounts of often-liquid “standards” are placed.
Standards are a known amount of specific drugs, such as cocaine, morphine or methamphetamine. Because technicians know how much of a drug is present in a standard, they can reliably gauge its presence in an evidence sample, such as blood or urine.
One factor that distinguishes PinPoint from other companies’ pre-filled plates is that its ToxBox kits are customized to an individual lab’s testing needs, Moran said.
The Crime Lab runs different tests — what it does for a criminal case differs from what it does in the aftermath of a fatal crash — so it requires multiple varieties of ToxBoxes.
When asked, Mauldin and Moran said PinPoint’s validation of the drug-testing equipment did not make the Crime Lab dependent on the company’s ToxBoxes.
Without PinPoint’s ToxBoxes, Crime Lab staff members would likely have to acquire plates and standards and then fill the wells themselves, which is what they did previously, they said.
Aside from the time it takes to fill the trays in-house, doing so allows for variability in test results because different workers may not have the same filling techniques, for instance, they said.
Other companies sell pre-filled well plates, but Moran said she is not aware of any that customize the kits to an individual lab’s needs, as PinPoint has done for the Crime Lab.
Purchase orders show the lab bought 67 ToxBox kits from March-July 2017 from Cayman Chemical at a total cost of $30,860.
‘BY CUSTOMER REQUEST’
In the summer of 2017, the Crime Lab worked with the finance department to solicit bids for the regular supply of pre-filled plates.
A first draft of the “scope of work” for the bid opportunity, which the lab gave to the procurement office, included the brand name ToxBox. The “scope of work” description was included in the broader invitation for bids.
The brand name was deleted from later drafts and not included in the formal call for bids.
The invitation for bid requested up to 800 plates a year customized to identify drugs that the Crime Lab had formatted its equipment to test.
Fisher Scientific, a national laboratory supply company and subsidiary of Thermo Fisher Scientific, was the only bidder. It pledged to provide up to 800 ToxBox-branded kits a year at a total $441,360.
The one-year contract went into effect on Nov. 1, 2017. It can be extended annually for up to seven years total, meaning its maximum value — if the lab buys 800 kits a year for seven years — is $3.1 million.
Mauldin said she does not foresee using 800 kits a year.
Through mid-May, including the 2017 Cayman Chemical purchases, the Crime Lab ordered 204 ToxBoxes at a total cost of $101,337, a Democrat-Gazette review of invoices found.
Fisher Scientific’s online catalog says ToxBox kits were “recently added by customer request.”
Ron O’Brien, a Thermo Fisher Scientific spokesman, said the request “came from the customer at the State of Arkansas.”
Mauldin said she was not “aware of” the Crime Lab making such a request and she did not know why Cayman Chemical or PinPoint did not bid to supply the kits.
ToxBoxes are shipped directly from PinPoint to the lab, O’Brien confirmed. Fisher Scientific does not stock them, which is normal for supplies it sells through a program that connects customers to niche products, he said.
“The only sales of these products has been to State of Arkansas, although they are available on our website in the event other customers are interested,” said O’Brien, who would not disclose the middleman’s cut for each sale.
PinPoint CEO Jeffery Moran did not respond to requests for comment.
No one requested an advisory opinion on the ethics of the Fisher Scientific contract.
MORE WORK AHEAD
The Crime Lab is now preparing to pay PinPoint an additional $238,640 to validate three drug-testing instruments. PinPoint was the sole bidder, and Walther signed off on the arrangement May 16.
PinPoint will validate up to four testing methods on three instruments, according to the bid documents. A broader scope than the three 2016 validations — those cost $49,250 — explains the price difference, officials said. The lab plans to use one of the instruments at its new satellite location in Lowell.
In requesting Walther’s opinion, Channell said Cindy Moran “has no influence in or [involvement] in any of the bid process and/or selection of vendors.”
“ASCL is representing that Cindy Moran had no influence in [n]or was involved in any of the bid process and/or selection of vendors, thereby lifting the conflict of interest off of the newly solicited contract,” Walther wrote, using the agency’s acronym.
Emails obtained from the Crime Lab highlight both the difficulty for someone as high-ranking as Moran to disassociate from the PinPoint business and the ambiguity over whether someone “directly or indirectly” participates in the buying process.
Mauldin emailed an attachment to Moran and the lab’s purchasing manager, Carol Grinstead, in January 2019, three months before officials publicly solicited bids for the new round of validation work.
The attachment’s file name was “Scope of work and specs for TOXBOXES 2019.docx.”
A copy of the attachment provided to the newspaper included specifications for ToxBoxes, not the validation work. Because ToxBoxes and validations are both customized to fit a lab’s goals — mainly the drugs it wants to test and at what levels — the details overlap.
“Sorry, I think this is more of what we are after with the validations,” Mauldin wrote. “Thanks!”
A day later Mauldin emailed Grinstead, but not Moran, an attachment with the same file name. But this document was for the validation work PinPoint ultimately bid last month.
LaPorte, the Crime Lab attorney, declined to answer specific questions about the emails but provided an overview.
“The first e-mail was a subsection of the scope of work and specs for ToxBoxes edited by Kristen Mauldin,” LaPorte said by email. “This was likely sent to Cindy Moran due to her role of Assistant Director.
“As the Assistant Director, Cindy oversees each section of the lab and works closely with the sections chiefs, including Kristen Mauldin. The section chiefs report to Cindy what they need for bids and validation.”
The second email, from Mauldin to Grinstead, was “the final scope of work for validations,” LaPorte said.
The Crime Lab, through the Office of State Procurement at the finance department, first published those validation specifications for potential bidders in April.
Arkansas Legislative Audit indicated that it is reviewing the Crime Lab-PinPoint relationship.
In response to an open-records request for a file about the business dealings, agency attorney Frank Arey said the records exist but are not releaseable because they are “working papers, to be used in the preparation of an audit report.”
Asked if it was then fair to infer that the agency is investigating the dealings, Arey said “it is [Legislative] Audit’s practice to not comment about our ongoing work, and then to let our audit reports speak for themselves.”