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Rhode Island Blues Plan Settles Corruption Charges

Blue Cross Blue Shield of Rhode Island will pay $20 million to resolve federal public corruption charges over payments that its lobbyists made to state officials.

December 18, 2007
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Blue Cross Blue Shield of Rhode Island will pay $20 million to resolve federal public corruption charges over payments that its lobbyists made to state officials, the U.S. Justice Department announced December 13.

As part of the agreement, federal officials agreed not to press criminal charges against the health insurer as long as it continues to cooperate with federal and state investigations.

The Providence, Rhode Island-based insurer also agreed to implement ethical reforms on how it will interact with state officials and not to impose rate increases to recoup the $20 million fine.

Under the agreement, BCBSRI accepted responsibility for former executives whom the insurer admitted acted within their authority as lobbyists when they made illegal payments to elected officials. For example, the insurer paid $400,000 in insurance brokerage commissions to an unidentified former state Senate president while the insurer’s executives were lobbying him, the Justice Department said.

A Justice Department spokeswoman says she could not elaborate on the circumstances under which the official was paid the commissions. The insurer paid $74,000 to a communications company to produce a cable access program that former state Sen. John Celona hosted. Celona was paid more than $13,500 as the host.

In addition, the insurer paid about $175,500 to a business that former House Majority Leader Gerard Martineau ran.

Celona and Martineau have pleaded guilty to public corruption charges as part of the investigation, the Justice Department noted.

The money from the fine will be deposited into a fund to support projects designed to provide affordable health care services in Rhode Island, according to the Justice Department.

Filed by Dave Lenckus of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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