CORPORATE CRIME REPORTER
Blue
Cross Blue Shield Rhode Island Gets Non Pros Agreement
22 Corporate Crime Reporter 1, December 13, 2007
If you or I bribe a public official and are caught doing it, we'll likely be
convicted and will be thrown in jail.
If a corporation does it, federal prosecutors will agree not to criminally prosecute.
At least that’s what happened today when federal officials cut a very generous deal with Blue Cross & Blue Shield of Rhode Island.
The case involves former Rhode Island State Senator John Celona and former House Majority Leader Gerard Martineau.
Both pled guilty to public corruption charges as part of the investigation.
Blue Cross & Blue Shield on the other had entered into a non-prosecution agreement and will pay $20 million.
The company was represented by Joan McPhee of Ropes & Gray in Boston.
The company admitted that while lobbying Celona on legislation, its executives caused the insurer to pay $74,000 to a communications company to produce a cable access program hosted by Celona.
Celona was paid $13,565.
Likewise, the company admitted that, while its executives were lobbying Martineau on legislation, members of the insurer's executive management caused the insurer to pay about $175,500 to a business run by Martineau for the purchase of paper prescription bags.
The company also admitted that it paid $400,000 in insurance brokerage commissions to a former Rhode Island Senate President while its executives were lobbying him concerning legislation.
As long as the company complies with the terms of the agreement, the government agrees not to criminally prosecute it for the illegal conduct.
This even though the company admitted that the executives were acting within their apparent authority as executives of Blue Cross Blue Shield of Rhode Island.
The company agreed to put in place a series of reforms, including compliance oversight by a Corporate Compliance and Ethics Committee, full time corporate compliance officer and ethics department, a code of ethics governing the conduct of directors, officers and employees, and ethics training programs.
The insurer also agrees to hire a government-approved monitor to oversee its ethics reform and its compliance with the agreement.
The
monitor will be in place for at least two years.
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