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Maine Cancels Controversial Contract for Welfare Study

Maine has canceled its controversial contract with the Alexander Group. The move comes after reports that some parts of the report on Maine's welfare system were plagiarized from a national think tank.

"We determined there was value contained in the content that was produced under this agreement. But serious problems with citations in the text of two reports warranted both financial penalties and an end to future work to be performed under the contract," DHHS officials say in a statement.

Officials say the agency will levy a penalty of 40 percent for the a recently received "Baseline Analysis" part of the report.  The penalty, which amounts to $145,153, hasn't been paid, but will be withheld. Another 25 percent penalty will be levied for another section of the report, an analysis on expanding Medicaid in Maine. That amounts to $27,000, which officials say has already been reimbursed by the Alexander Group.

The termination means the Alexander Group will lose $450,400 of its nearly $1 million contract. So far, the state has paid $239,075 to the firm, owned by Gary Alexander, and another $235,685 came from federal funds.