Probe is just latest of McMillen woes Business aspirations ,,repeatedly lead to trouble

November 23, 1997|By David Folkenflik and Tom Bowman | David Folkenflik and Tom Bowman,SUN NATIONAL STAFF

WASHINGTON -- When armed federal agents seized records last week at a Capitol Hill health management company headed by former Rep. Tom McMillen of Maryland, it was only the latest setback to befall McMillen since he lost his congressional seat five years ago.

Since 1992, McMillen has become involved in numerous business ventures, often in risky, start-up companies that have flopped or suffered other problems.

And last summer, McMillen was arrested after a confrontation with a female friend. The friend, who had accused McMillen of shoving her down a flight of stairs, later took back her story, and police did not press charges.

Neither McMillen, 45, nor any company official has been charged with a crime in the latest episode.

The White House did, however, force McMillen's resignation Friday from his unpaid post as the chairman of President Clinton's Council on Physical Fitness and Sports. And the investigation of his company has contributed to the perception that a one-time Democratic golden boy -- a former basketball star and Rhodes scholar who harbored visions of entering the Senate -- has allowed his affairs to skitter out of his grasp.

"What is going on with Tom McMillen?" asked former Rep. Beverly B. Byron, a Democrat who represented Western Maryland during McMillen's three terms in Congress. "I can't figure out -- I can't fathom -- what happened."

Few friends or colleagues were willing to talk on the record about him, with either support or criticism. But interviews with friends and acquaintances offer a glimpse of a man who has struggled repeatedly to realize his grand entrepreneurial visions.

During his six years in Congress, McMillen took a keen interest in high-technology industry, reform of collegiate sports and promotion of fitness.

The 6-foot-11-inch McMillen was perhaps even better known on the cocktail circuit, his distinctive white mane bobbing above the heads of other partygoers.

"At major social events, it was likely Tom McMillen would be there," said Rep. Benjamin L. Cardin of Baltimore, a fellow Democrat who tends to travel in different circles.

Marshaling his energy and charm, McMillen pressed people active in Democratic circles -- consultants, party officials and contributors -- to invest in his business ventures.

Many were impressed by the advice he had given more than a decade ago to Mark Warner, a Democratic fund-raiser who ran unsuccessfully for U.S. Senate from Virginia last year. In the early 1980s, McMillen, then a politically inclined player for the Atlanta Hawks, told Warner to consider buying the rights to cellular radio licenses from the government.

While seen as a long-shot investment at the time, it enabled Warner to build a personal fortune of more than $100 million.

McMillen was less fortunate. Before entering Congress, he founded a paging company, McMillen Communications, which went bankrupt in 1992. Though McMillen relinquished day-to-day control of the company after he entered Congress, he lost $103,000 he had lent the firm.

Integrated Communications Network Inc., which listed McMillen as a director until last winter, was sued by shareholders in 1996, after the stock price had plummeted to pennies from an initial public offering price of $5.

There was also Clinicorp, a chiropractic and health care firm for which McMillen served as a consultant and administrative officer in the mid-1990s. He received a $150,000 loan and a $20,000 monthly salary, then left with a settlement of more than $140,000 in 1995. A year later, the company filed for bankruptcy.

But McMillen decided to try again, touting Complete Wellness Centers, of which he is now CEO. Like Clinicorp, Complete Wellness set up clinics that mixed traditional medicine with chiropractic and acupuncture treatment.

"They were hyping it pretty hard on what kind of quick buck you could make," said a former national Democratic official who spoke on condition of anonymity.

Nathan Landow, a former Democratic chairman in Maryland, said he was among those asked to invest in 1994 by McMillen and former Rep. Robert J. Mrazek, a New York Democrat who became a senior officer of Complete Wellness. Landow said he thought plans were not yet detailed enough to merit an investment.

The federal investigation of Complete Wellness was prompted by concerns that some of its affiliated clinics fraudulently billed government health insurance plans for chiropractic care as though it were traditional medical treatment, several people familiar with the investigation said.

The firm has expanded rapidly this year, growing to 69 clinics from 42 clinics since June 30, with plans for further growth. It reported losses of $2 million over the first nine months of the year; company officials blamed growing pains.

A business associate says McMillen claims to be dumbfounded by the investigation and has promised a thorough internal review. Company offices in Washington, Virginia and Florida were searched Tuesday by armed federal agents, who seized copious documents and computer files.

Fraud can carry criminal charges and also civil charges, including triple penalties and a $5,000 to $10,000 fine per instance.

McMillen, who had been in California at a conference on wellness, returned Wednesday to Washington and was back at work Thursday. He has spoken encouragingly to partners and co-workers, but he has not spoken publicly.

Pub Date: 11/23/97

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