Blue Cross and Blue Shield of Rhode Island has agreed to pay $20 million and submit to a federal monitor to avoid being prosecuted for the conduct of former executives who the insurer concedes steered $550,000 of its money to companies connected to elected officials.
The company was never charged and will not be as long as it satisfies the terms of the agreement, which also calls for cooperation in the governments ongoing investigation of public corruption in the Rhode Island Statehouse, U.S. Attorney Robert Corrente said in a news conference in Providence.
This agreement covers only Blue Cross, not any individuals, Corrente said, according to a transcript. Two senior vice presidents and two lobbyists for the insurer terminated their employment with the company Dec. 11, spokeswoman Kim Keough confirmed. She declined to say whether their departure was related to the agreement.
The 22-page deal describes arrangements between 1997 and 2003 in which Blue Cross executives created paydays for influential officials they were lobbying. In one instance the insurer admits paying $75,000 to a company that produced a cable-access program featuring then state Sen. John Celona, who has pleaded guilty to corruption charges. Celona received $13,500 for his turn as TV host.
Since 2004 the company has overhauled its management, board structure, code of conduct and monitoring system, according to a news release.
While we are profoundly saddened by the circumstances that led to this agreement, we are gratified that the United States attorneys office recognizes changes weve made, President and Chief Executive Officer James Purcell said in the release. -- by Gregg Blesch
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