Blues official cites sex harassment Treasurer alleges she was pressured to quit

financial officer denies charge

September 30, 1992|By Patricia Meisol | Patricia Meisol,Staff Writer

The treasurer of Blue Cross and Blue Shield of Maryland, who repeatedly questioned the legality and propriety of the embattled insurer's financial practices, said in sworn testimony that she was sexually harassed by a top company official in a bid to get her to quit.

The treasurer, Rosemarie Kathleen Schwartz, who began working at Blue Cross in 1989, told Senate investigators that while her recommendations and warnings about unsound business and accounting practices were ignored by her superiors, she was sexually harassed by her boss, chief financial officer Peter J. Campisi.

Mrs. Schwartz told Senate investigators on Thursday, when she was questioned for five hours, that the harassment was still continuing.

"Do you believe that this harassment is in any way intended to force you to leave the company?" a Senate investigator asked Mrs. Schwartz, according to an unedited transcript of her sworn statement.

"In my opinion, yes," she said.

Sen. Sam Nunn, D-Ga., chairman of the Senate Permanent Subcommittee on Investigations, referred to only a small part of Mrs. Schwartz' statement as he questioned company officials on Friday, the second of two days of hearings on the Maryland Blues, and did not refer to her statements on sexual harassment. The hearings and a staff report were highly critical of the company's management and financial practices.

The nature and duration of the incidents were not detailed, but Mrs. Schwartz said in her statement that the harassment was verbal. She declined, through her attorney, to comment further yesterday.

Mr. Campisi yesterday called the allegation "absurd. I've never knowingly said anything to anybody that I thought would be offensive in any way," he said. He added that, had Mrs. Schwartz ever told him that he had been offensive, he would have immediately apologized. "I've never sexually harassed anyone," he said.

Blue Cross officials said yesterday that they were opening an inquiry into the matter.

According to her sworn statement, Mrs. Schwartz complained about the harassment to one of Mr. Campisi's bosses, Charles E. Vadakin II, chief operating officer, who heads a company committee on sexual harassment policy. She also complained to Fred M. Gloth Jr., who held the title of general counsel until recently.

Mr. Vadakin took no action, according to the statement. Mr. Gloth spoke to Mr. Campisi and, for a time, the financial officer responded by ignoring Mrs. Schwartz, she said. But then, she said, "he has not discontinued comments of that nature."

Sexual harassment is banned under Title VII of the federal Civil Rights Law of 1964. As amended in 1991, the law carries compensatory as well as punitive damages for intentional misconduct. Blue Cross policy barring sexual harassment specifies that allegations are to be investigated within two weeks.

Amy Levy, vice president for corporate relations, said she could not comment on the sworn testimony because the company has not seen a copy. But she said that during a meeting yesterday morning at Blue Cross, Mrs. Schwartz discussed with Carl J. Sardegna, the company president and chief executive officer, and Sharon Vecchioni, vice president of human resources, "remarks that she felt were inappropriate." As a result, Ms. Levy said, Mr. Sardegna has asked the Human Resources Department to conduct an inquiry.

Ms. Levy also said the two top company officials met with Mrs. Schwartz to make sure she "knew she had the support to do her job." The three also met with finance department employees where Mr. Sardegna asked employees to support Mrs. Schwartz in her job, Ms. Levy said.

Mrs. Schwartz was subpoenaed by the Senate panel on the eve of its investigation of the state's largest health insurer.

In its report released during the hearings, the Senate staff investigators painted a picture of a company with a history of weak internal controls and other management problems that misled the public about its financial health by obtaining state regulators' permission to skirt normal accounting rules.

Her deposition included a number of other revelations about company practices not reported until now.

Although she is one of three company officers legally responsible for the accuracy of the company's annual financial filings, she told investigators that she was given the formal blanks -- the financial reports filed with the insurance commissioner -- for her signature only 15 minutes before they were due at state offices.

Although she signed the formal filings with the state insurance division, Mrs. Schwartz said she repeatedly objected to the way the company arrived at its net worth, saying it was overstated beginning in 1990.

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