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Blue Cross & Blue Shield of Rhode Island to pay $20M in corruption probe; no prosecution

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    PROVIDENCE, R.I. — Blue Cross & Blue Shield of Rhode Island will pay $20 million but avoid criminal charges following a federal investigation into improper lobbying of stage legislators by its executives.
    Under an agreement announced Thursday by U.S. Attorney Robert Clark Corrente, Blue Cross will cooperate with prosecutors in a continuing investigation, accept increased oversight for two years and acknowledge responsibility for the conduct of its executives. Four Blue Cross executives left the company Tuesday.
    The agreement says Blue Cross executives lobbied three former state lawmakers for legislative favors, in total, paying them hundreds of thousands of dollars.
    The three legislators include former House Majority Leader Gerard Martineau and former Sen. John Celona, who have both pleaded guilty to corruption charges for supporting bills the insurer supported and working to defeat legislation it opposed.
    Corrente identified the third lawmaker as a former Senate president who received $400,000 in commissions from Blue Cross as an insurance broker. Former Senate President William Irons is the subject of an ethics complaint for his work as an insurance broker for Blue Cross. He has not been charged with any wrongdoing. His attorney did not immediatly return calls for comment.
    Jim Purcell, the president and CEO of Blue Cross of Rhode Island, said the company gad already made significant internal changes, including new ethics and integrity classes for its board of directors and employees. The executive management team has also been replaced.
    ‘‘We’re very satisfied that no criminal charges have been brought against us,’’ Purcell said in a telephone interview. ‘‘We’re hoping to focus now on the future rather than the past.’’
    The $20 million payment will be placed into a trust and used to fund affordable health care programs. The trust will be administered by The Rhode Island Foundation, a private philanthropic organization.
    The agreement does not protect individual Blue Cross executives from indictment, Corrente said.
    Prosecutors say Blue Cross financed a cable access television program hosted by Celona in exchange for his support of bills favorable to the health insurer. Celona pleaded guilty to federal fraud charges in 2005 and is now in prison.
    Last month, former House Majority Leader Gerard Martineau, who had a contract to sell Blue Cross paper prescription bags, admitted receiving roughly $175,000 from the insurer while using his power at the Statehouse to kill bills the health insurer opposed. He also pleaded guilty to a similar business deal with the CVS pharmacy chain and is due to be sentenced in February.
    Federal prosecutors are conducting a broad influence-peddling investigation they have said involves more than a dozen state politicians and corporations.
    Besides plea agreements with Celona and Martineau, the probe has led to the conviction of two former executives at a Providence hospital who illegally hired Celona and criminal charges against two former vice presidents of CVS, who have pleaded not guilty and are awaiting trial.
    Blue Cross agreed to turn over any relevant documents and information and provide other help.
    The deal also bars Blue Cross executives from lobbying politicians or government employees with whom the company does business.

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