Grand jury seeks PrimeHealth records on contacts with Glendening's staff Subpoena is latest in Young investigation

March 19, 1998|By Walter F. Roche Jr. and Scott Higham | Walter F. Roche Jr. and Scott Higham,SUN STAFF

A federal grand jury investigating corruption claims against former state Sen. Larry Young has issued a new subpoena to PrimeHealth Corp. seeking documents relating to the Lanham-based company's contacts with members of Gov. Parris Glendening's staff.

Two weeks ago, FBI agents served a similar subpoena on Glendening's office. That subpoena seeks fund-raising records and documents relating to meetings and other contacts between the governor's staff and officers of Prime-Health.

In a related development, PrimeHealth won an extension yesterday from the Maryland Insurance Administration to answer questions about the ownership, management and finances of the health maintenance organization. Insurance Commissioner Steven B. Larsen had originally set yesterday as the deadline for the questions to be answered.

In a statement issued late yesterday, Larsen's office said PrimeHealth had requested and been granted an extension until March 27. The state will not issue additional payments to PrimeHealth until the responses are received and reviewed, the statement says.

State health department officials said there will be at least a slight delay in issuing a monthly check to PrimeHealth, but they added that they had been assured by company executives that the firm had cash reserves to continue paying bills and serving its 12,300 Medicaid clients.

PrimeHealth won an HMO license and a contract to treat Maryland Medicaid patients last year. Young played a key role in that process, lobbying top health department officials on the company's behalf.

Subpoenas served on Glendening's office and PrimeHealth show that federal investigators are trying to determine what role, if any, members of the governor's staff may have played in the state contract.

Andrea Leahy-Fucheck, legal counsel to Glendening, said yesterday she was not aware of the new subpoena served on PrimeHealth and declined to comment. She said the administration was responding to the grand jury subpoena served on the governor's office two weeks ago.

FBI agents served the subpoena on PrimeHealth this week. It was issued by a grand jury in Baltimore as part of a wide-ranging public corruption probe of Young, a former West Baltimore senator who was expelled Jan. 16 from the General Assembly for using his legislative office to benefit corporations he controls.

After winning the state HMO contract, PrimeHealth paid at least $31,475 to two corporations controlled by Young, the American Advocate and the National Black Health Study Group.

The PrimeHealth probe has raised a series of troubling questions that could place the company's license and its business at risk, according to Larsen. He originally gave PrimeHealth until yesterday to answer questions about the ownership of the company. He also ordered the company to answer questions relating to PrimeHealth's finances by the end of the week.

In a March 11 letter to PrimeHealth President Edward A. Thomas, Larsen said the information about the ownership and management had to be submitted "in a sworn affidavit under penalty of perjury." He called other submissions by PrimeHealth about its ownership contradictory.

Pub Date: 3/19/98

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