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Colorado’s health department argues it can’t be sued in whistleblower lawsuit tied to botched HIV program

Colorado’s former head of disease control, fired last summer amid the pandemic, alleges state health officials retaliated against him after he blew the whistle on financial mismanagement

The Denver City and County Building, where civil ligation is heard. (Daniel Ducassi, The Colorado Sun)
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A former high-level state epidemiologist — who was fired last June amid the COVID-19 pandemic — is going to court this week for a hearing that will determine if his whistleblower lawsuit against state health officials can move forward. 

Tony Cappello, former director of Disease Control and Public Health Response at the Colorado Department of Public Health and Environment, says the agency retaliated against him after he blew the whistle on financial mismanagement related to how the state handled federal funds for HIV programs.

Lawyers for Cappello will face off this week against attorneys representing CDPHE in a sort of mini-trial to determine if the state is immune from the lawsuit.

In addition to Cappello, Jill Hunsaker Ryan, the executive director of the state’s public health agency, is expected to take the stand. So is Karin McGowan, her former deputy who now serves on the Colorado Oil and Gas Conservation Commission.

The matter came to public attention in late 2019 after HIV advocacy groups spoke out against huge funding cuts with little notice. The Colorado Sun reported at the time that in addition to returning nearly $8 million in federal funding through the federal Ryan White program aimed at helping people living with HIV and AIDS, the Colorado Attorney General’s Office advised the health department that it should no longer use supplemental drug rebate dollars for HIV prevention.

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Instead, the state should spend the funds under the same guidelines used in the Ryan White program, which is for people who already have HIV or AIDS — not for prevention. But the state had already been using the money to pay for pre-exposure prophylaxis (called PrEP) to prevent HIV in communities that are at risk. 

In his lawsuit, Cappello says he spoke out about financial mismanagement at the state’s HIV branch a few months after he got the job as head of the agency’s disease control division in 2017. He also said he repeatedly raised the issue of using drug rebate dollars for PrEP — which he argues was in violation of federal law, per the direction of officials with the U.S. Department of Health and Human Services. 

BACKGROUND: HIV-prevention funding is being slashed in Colorado, even as a growing number of people are diagnosed

Cappello said he informed agency leaders and the governor’s office of his concerns. He says he eventually asked for advice from the Attorney General’s Office on how the money can be spent. Though the Attorney General’s Office sided with Cappello’s interpretation of federal requirements for spending the money, lawyers with the Attorney General’s Office are now defending the state’s main public health agency against his lawsuit.

The lawsuit was first reported by Colorado Public Radio in an article highlighting the departure of experienced agency staff during the pandemic

Lawyers for the state have placed a legal hurdle in front of the whistleblower retaliation claim, arguing that under state law, the agency is immune from the lawsuit. A week-long hearing on the question is scheduled in Denver District Court before Judge Shelley Gilman.

In court records filed ahead of the hearing, state lawyers sought to downplay the significance of Cappello’s disclosures, questioning whether they were disclosures at all, but also suggesting they “were internal disputes related to the administration of federal funds and accounting practices,” rather than a matter of public concern.

However, the abrupt funding cuts generated intense controversy in the HIV advocacy community. Passions flared at a November 2019 meeting with the HIV community to discuss the funding issues, according to a formal complaint of a “hostile work environment” filed with Joi Simpson, the agency’s director of human resources.

Shannon Flowers, an operations branch chief working under Cappello, wrote in her letter to Simpson that at the meeting, “members of the community and the [Colorado] Alliance [for HIV Prevention, Care, and Treatment] cursed at, verbally berated and shamed myself and other staff members in attendance.” Ahead of a subsequent meeting, in the first week of December 2019, Flowers says Hunsaker Ryan denied Simpson’s request to set “some ground rules for communication to avoid another meeting with cursing, yelling, etc.” 

Flower also wrote that she was soon removed from working on issues related to HIV and sexually transmitted infections for unclear reasons. Similarly, Cappello says the agency removed the STI/HIV/Viral Hepatitis Branch from his responsibilities “on account of his disclosure of information.” 

Then, in March 2020, Cappello says CDPHE took more responsibilities away from him and “began excluding Dr. Cappello — its highest-ranking epidemiologist — from critical functions associated with the COVID-19 pandemic response on account of his disclosure of information.” 

CDPHE placed him on administrative leave in May 2020, and fired him less than a month later.

The lawsuit says the agency “falsely attributed financial mismanagement to Dr. Cappello.” 

The lawsuit also named Bob Bongiovanni, a former CDPHE employee who became a consultant for the agency, as a defendant, though court records indicate Bongiovanni recently settled. Cappello’s lawsuit says Bongiovanni was the one who directed the money to be spent on PrEP and, after the spending issues came to light, orchestrated a no-confidence vote by the Alliance and pressured Hunsaker Ryan, with whom he had “close ties,” to oust Cappello. Bongiovanni’s lawyers made a similar claim of immunity.

Cappello’s case alleging CDPHE violated the state’s whistleblower law by firing him for disclosing financial mismanagement continues with the hearing this week. Witnesses expected to testify include Cappello, Hunsaker Ryan and McGowan. Lawyers for each side are expected to make their opening statements before Judge Gilman Monday morning.


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