News Release
U.S. Department of Justice
United States Attorney
District of Rhode Island
December 13, 2007
Prepared remarks of U.S. Attorney Robert Clark Corrente
announcing agreement with Blue Cross
We are here this morning to announce another major development in the ongoing investigation into corruption within the Rhode Island General Assembly, sometimes referred to as Operation Dollar Bill.
At the outset, I want to acknowledge the efforts of all of our partners in this enterprise, and especially the FBI, which has been the lead agency on this investigation, and the Public Integrity Section from the Department of Justice.
In prior court filings relating to the charges brought against former Senator Celona and former Representative Martineau, we have described their involvement with a health insurance company. In keeping with DOJ policy, that company was not identified at the time. Today, we are confirming that the company in question was Blue Cross Blue Shield of Rhode Island, which I will refer to simply as Blue Cross.
Further, we are announcing that we have entered into an agreement with Blue Cross to resolve the matters under investigation with respect to the company. The agreement itself will be made public today, so everyone can read it for themselves, but I want to outline the major terms.
As far as Blue Cross is concerned, the investigation has focused on the dealings between the company and three legislators: former Senator Celona, former Representative Martineau, and a former president of the Rhode Island Senate.
Between 2002 and 2003, while Blue Cross executives were lobbying former Senator Celona on a variety of matters, some Blue Cross executives, at Celona’s request, caused the company to pay roughly $75,000 to a communications company to produce a cable TV program, which Celona hosted. The communications company paid Celona more than $13,000. This is laid out in greater detail in the Celona Information.
From 1998 to 2003, while Blue Cross executives were lobbying former Representative Martineau on a variety of matters, some Blue Cross executives caused Blue Cross to pay $175,500 to The Upland Group, which was Mr. Martineau’s sole proprietorship, to purchase paper bags. Again, this is laid out in greater detail in the Martineau Information.
With respect to the former Senate President, from 1997 to 2003, while Blue Cross executives were lobbying him on a variety of matters, some Blue Cross executives caused him to be paid monthly commissions in excess of $400,000 as an insurance broker for one of Blue Cross’ pharmacy clients.
That’s the conduct at issue. Now let me turn to the Agreement. Blue Cross has done, or has agreed to do five things.
First, in the Agreement Blue Cross acknowledges and accepts responsibility for the conduct of its executives.
Second, Blue Cross has cooperated with our investigators throughout this process, and it has agreed to continue to do so, as detailed in the document. This level of cooperation was a critically important factor in arriving at this Agreement to resolve the matter.
Third, Blue Cross has instituted and has agreed to continue to institute a wide variety of corporate ethics and compliance programs and improvements, designed to strengthen the company in these areas. As part of these important measures, Blue Cross has replaced members of its executive management team.
Fourth, Blue Cross has agreed to submit to the oversight of a Monitor for a two-year period. The Monitor will oversee the company’s compliance with the terms of the Agreement, and will report to my office on a regular basis.
And fifth, Blue Cross has agreed to pay the sum of $20 million. This money will be paid out of the company’s reserves. It’s important to note that Blue Cross has agreed that it will not seek any rate increase specifically to recoup this payment.
And, in an effort to derive the maximum possible benefit for the people of Rhode Island – rather than simply paying the money into the treasury -- we have agreed to set up a trust fund with this money, to be administered by the Rhode Island Foundation. The $20 million will be invested, and the annual earnings and interest will be used every year to fund projects and initiatives that are geared to improving the quality and the affordability of health care for everyone in Rhode Island.
In exchange, we have agreed that if Blue Cross complies with the terms of the Agreement, the company will not be criminally charged for the conduct of the executives I described earlier.
This Agreement covers only Blue Cross, not any individuals.
And, finally, let me emphasize that the investigation continues, actively and on a number of fronts.