NewsChannel 5 Investigates: Capitol Hill Corruption
Millions Flow from TennCare to Ford-Connected Companies
(Story created 4/6/05)
FIRST ON 5: State Sen. John Ford already faces an on-going investigation into whether he improperly profited from TennCare.
Now, a NewsChannel 5 investigation has uncovered questions about how millions of dollars flowed from the state's health insurance program into a company tied to the powerful Senate chairman.
State Sen. John Ford has never lacked passion.
And, as the now-bankrupt TennCare giant Access MedPlus struggled to stay afloat, the powerful Senate chairman was equally passionate. As long as he was around, the Memphis Democrat told reporters, the state would not impose sanctions against the company.
Now, documents obtained by NewsChannel 5 -- wire transfers from Access MedPlus parent company, Tennessee Coordinated Care Network -- provide a trail of hundreds of thousands of dollars a month from the Nashville based contractor into the accounts of Oseman Insurance.
That's a Memphis agency with which Ford has long been affiliated, according to his registration as an insurance agent.
"My goodness, Access MedPlus dealt in the millions and millions of dollars," state Rep. Frank Buck tells NewsChannel 5's chief investigative reporter Phil Williams.
The Dowelltown Democrat has been pushing ethics legislation to require the disclosure of such side deals between lawmakers and state contractors.
The question, Buck says, why would such a big TennCare contractor from Nashville go all the way to Memphis to buy insurance?
"I don't assume Ford or General Motors buys from a local insurance agency," he adds. "They buy from the big companies. I think Access MedPlus would be the same way."
In amounts ranging from $140,000 one month, $244,000, even $400,000 another month, Access MedPlus transferred more than $3.5 million to Oseman between May 2000 and October 2001 for reinsurance. That's insurance to spread out its financial risk.
That's $3.5 million in an 18-month period.
"The fact that insurance was bought from his insurance company and he was in charge of the committee that oversighted Access MedPlus would raise one's question as to whether or not any influence was used to gain that insurance contract."
No one from Oseman or Access MedPlus returned NewsChannel 5's phone calls.
But Access Med Plus wasn't alone.
Other documents also show the now defunct Xantus health plan also spent hundreds of thousands of dollars to buy insurance from the same agency.
"Strange coincidence, strange coincidence -- enough to make an old country lawyer a little bit suspicious," Buck says.
The former chief financial officer for Xantus, Stephen Braden, tells NewsChannel 5 that Oseman Insurance was chosen because they were able to offer the best deal.
But the negotiations began, he says, after the Senate chairman called up one day and asked that the agency be considered.
"He called out of the blue," Braden says. "He told me he would like me to discuss the coverage with them, that he thought they would do a good job for us."
Braden says he never felt Ford was telling him he had to do business with Oseman.
"I absolutely would not have chosen any kind of policy under duress from Sen. Ford."
Still, he estimates that the TennCare contractor ended up doing at least a million dollars of business with Ford's company.
In fact, Ford has acknowledged before the Senate ethics committee that his consulting business also includes insurance.
And the fact that that might include folks with business before the senator's committee was acknowledged, at least indirectly, by his own lawyer.
"Do members of the legislature do consulting work? Yes," Ed Yarbrough told Phil Williams.
"Are they insurance agents? Yes. Does the fact that they are a member of the legislature make them more attractive in their businesses? Probably."
While the debate so far has focused on outlawing consulting fees like Ford took from another TennCare provider, Buck says if a lawmaker threatens to use his position to defend a state contractor, the public has a right to know if he has a financial interest in the outcome.
"In light of the fact that his own insurance agency was getting three and a half million dollars, that obviously is a good explanation of why those kind of statements were made."
Despite all the ethics legislation floating around Capitol Hill, Ford probably would not be required to disclose business with TennCare companies under the current plans.
Instead, he could just report income from his consulting business or the insurance agency -- not that he was hitting up state contractors with business before his committee.