Illegal cash went to many officials

By Gary Fineout
8/20/2009 © Health News Florida

WellCare Health Plans gave illegal campaign contributions to dozens of Florida’s legislators and top officials, including the current attorney general and top health regulator, between 2005 and 2007, according to a Florida Elections Commission report.

In addition to now-Attorney General Bill McCollum and Holly Benson, secretary of the Agency for Health Care Administration, recipients included current Senate President Jeff Atwater and House Speaker Larry Cretul.

There is no indication in the Elections Commission report, released Wednesday afternoon, that any of the public officials knew the contributions were illegal. McCollum, Benson and Cretul could not be reached for comment.

Atwater’s campaign advisor Rick Wilson said that while he was not familiar with the WellCare case, in the past the Senate President has returned questionable donations. 

“Jeff Atwater has very high standards and a very high standard of making sure campaign donations are appropriate and legal,’’ said Wilson. But little can be done now, he said, since the campaign account for the 2008 election is closed.

The Tampa-based company, which has changed leadership since the donations were made, agreed to pay a fine of $120,000 to settle the violations. They cover nearly 150 donations that subsidiaries of the company made to both Democrats and Republicans.

“We are pleased this matter has been resolved,” said Thomas F. O’Neil III, WellCare’s vice chairman said in a statement. “Our voluntary disclosure to the commission demonstrates our enterprise-wide commitment to regulatory compliance, transparency, and accountability. Those responsible for these issues are no longer employed by the company.” 

WellCare acknowledged that it broke the law two ways: by making contributions that exceeded legal limits, and by donating money in someone else’s name. 

The company initiated the investigation earlier this summer by turning over information about the questionable donations to the Florida Elections Commission, the appointed panel responsible for enforcing the state’s campaign finance laws. The commission approved the settlement at its meeting this week in Tallahassee. 

The 11-page consent order between WellCare and the elections commission states that WellCare donated more than $1 million to campaigns between 2003 and 2007. Included in this amount were 129 contributions worth $64,500 that were ostensibly paid by four separate companies but actually came from WellCare. Another 13 contributions exceeded the $500 limit placed on donations to candidates.
 
The companies selected to give the contributions were chosen largely on a random basis, although the consent order states that “WellCare government relations personnel” also picked companies that were located in a particular state or did not have WellCare in its name. The consent order also states that “there is no evidence this selection process involved an intentional violation of law” or that any subsidiary was created just to make campaign contributions.
 
The donations cited by the elections commission included $1,000 given to McCollum while he was running for attorney general, whose staff prosecutes Medicaid fraud.

Benson, now secretary of the Agency for Health Care Administration, received $500 when she was running for the Legislature. Cretul, R-Ocala, received a total of $2,500 in illegal contributions while Atwater, R-North Palm Beach, was given $500. 

Scores of other legislators also took in illegal contributions, including Sen. Dan Gelber, D-Miami Beach, who is now a candidate for attorney general; Sen. Don Gaetz, R-Niceville; former Senate President Ken Pruitt; and Sen. Mike Haridopolos, R-Melbourne.

Top lawmakers in the Florida House who received questionable donations include House Majority Leader Adam Hasner, R-Boca Raton, Rep. Ellyn Bogdanoff, R-Fort Lauderdale and former House Speaker Ray Sansom, R-Destin.

Former House Speaker Marco Rubio, R-Miami, also received the redirected funds. He is now a candidate for U.S. Senate. 

While most of the contributions flowed to Republicans, a handful of Democrats received donations, including Rep. Betty Reed, D-Tampa, Rep. Yolly Roberson, D-Miami, and former Reps. Terry Fields, D-Jacksonville, Dorothy Bendross-Mindigall, D-Miami, and Shelley Vana, D-Lantana. 

WellCare, a publicly owned company, provides managed care services exclusively for government-sponsored healthcare programs, mainly Medicaid and Medicare. It had more than 2.5 million members nationwide at the end of last year, and is Florida’s largest Medicaid contractor.

Since March, WellCare has been suspended from enrolling Medicare beneficiaries in its drug and managed-care plans. The federal government imposed the sanctions because of complaints from members and administrative problems that turned up in an audit.

During the time it was making the donations, WellCare was pushing for changes to state law, including the one it would eventually be accused of breaking: a requirement that HMOs spend a certain percentage of their mental health funds from Medicaid on direct patient care.

The legislature passed the measure WellCare wanted in 2007, but it was vetoed by Gov. Charlie Crist, whose name was not included in the list of donations. 

Months later hundreds of federal and state agents raided the Tampa headquarters of the company and carted off laptops and boxes of files. The top three executives at WellCare all resigned in early 2008: President, CEO and Chairman Todd Farha, CFO Paul Behrens and General Counsel Thaddeus Bereday. 

In May of this year, prosecutors charged WellCare with criminally defrauding Florida’s Medicaid and Healthy Kids programs, but prosecution was deferred after the company agreed to pay $80 million. A few weeks later, WellCare also agreed to a $10 million settlement with the Securities and Exchange Commission (SEC), which had been investigating the company’s reports on earnings.

WellCare says it stopped giving campaign contributions altogether in the second quarter of 2008. 

Elections commission attorneys had initially negotiated a settlement that called for WellCare to pay $142,000. But Jorge Cruz-Bustillo, chairman of the commission, said he and some other commissioners thought that the amount was too high. 

Cruz-Bustillo pointed out that the majority of the campaign contributions were given more than 2 years ago, which means normally the commission could not investigate them. But he also said that WellCare deserved some credit for stepping forward and turning itself in. 

“Yes, we could have extracted this very large fine, but the fact that they were showing such good faith, we were obligated and compelled to take it into account,’’ said Cruz-Bustillo.