D.C.'s former Medicaid provider, Chartered Health Plan Inc., owes health care providers in the District $60 million for services rendered. Last week, the company, which is in receivership, sued former major shareholder Jeffrey E. Thompson for allegedly diverting $17 million in taxpayer funds to other companies he controlled. Even if the lawsuit is successful, District taxpayers will still be facing a potential $43 million liability. This is outrageous, especially since this is not the first time Thompson has been sued for fraud.

In 2005, a Philadelphia accounting firm reported that he diverted $12.2 million in Medicaid funds to other firms he owned. In 2008, an audit by D.C. Inspector General Charles Willoughby confirmed numerous irregularities, including billing for dead patients and those lacking valid Social Security numbers. Then interim D.C. Attorney General Peter Nickles sued Thompson for fraud for overbilling Medicaid, the District's largest source of federal funds, and for not providing supporting documentation to back up his claims.

In a confidential settlement obtained by the Washington City Paper under a Freedom of Information Act request, Thompson agreed to settle the case quietly by paying a $12 million penalty. Incredibly, that didn't stop the city's procurement office from conferring most-favored contractor status on Thompson and signing off on more Medicaid contracts with Thompson worth hundreds of millions of dollars.

Thompson has also been accused of spending $653,000 on an illegal secret campaign on Mayor Vincent Gray's behalf, which provides a clear motive for the executive branch to look the other way. D.C. Council members Phil Mendelson, Jim Graham, Muriel Bowser, Yvette Alexander, Vincent Orange, Marion Barry and David Catania also pocketed generous donations from Thompson and his network. Ward 6's Tommy Wells seems to be the only one they bypassed. But this was a conflict of interest, because the council is responsible for overseeing the city's Medicaid contracts. What kind of oversight allows a contractor who has already been sued for fraud once by the District another chance to rip off the city?

Chartered's remaining assets have been purchased by AmeriHealth Mercy Family of Companies, which has assumed Chartered's role as D.C.'s prime Medicaid provider. But the deal did not include the liabilities of Thompson's now-defunct company, which total $60 million. D.C. taxpayers, who are left holding the empty bag, deserve to know exactly which members of the Gray administration and the council did nothing while this shady contractor fooled them again.