John A. Donaho, 88, state insurance commissioner

March 22, 2006|By JACQUES KELLY | JACQUES KELLY,SUN REPORTER

John A. Donaho, Maryland's former insurance commissioner who became such a critic of the industry he regulated that he lost his job, died of kidney failure and complications from diabetes Friday at Stella Maris Hospice. The Timonium resident was 88.

In his nearly 70 years of work, Mr. Donaho had been an assistant to the federal budget director under President Franklin D. Roosevelt and later became a problem solver for two governors and mayors, Theodore R. McKeldin and William Donald Schaefer.

Family members said he designed budgeting systems for some 97 state and municipal city clients.

"He knew cities well, down to their snowplows," said his wife of 44 years, the former Patricia Maguire, who is a retired Notre Dame Preparatory School teacher. "When we'd drive past a fire station, he'd look at the tower and say if it was too high, too low or just right."

Mr. Donaho was recalled yesterday as a bureaucratic maverick with a freewheeling style who never hesitated to speak his mind.

"He was smart as all get-out," said Mr. Schaefer of the man he named to the insurance post but later fired. "Along with city budget director Charlie Benton, he was a mental giant."

Even after Mr. Donaho left his state post, he and Mr. Schaefer remained friends and had frequent lunches at the Johns Hopkins Club.

In 1989, Mr. Schaefer appointed Mr. Donaho state insurance commissioner, succeeding a commissioner who left after 10 months.

According to news stories, Mr. Donaho warned that his agency was being denied the money to oversee the complex insurance industry and that the state's rigid bureaucracy made it impossible to pay high enough salaries to attract the experts he needed.

Accounts in The Sun said he pleaded for more high-tech equipment, skilled personnel to conduct detailed audits and more funding to train his staffers. In 1992 he testified before a U.S. Senate subcommittee that a Maryland Blue Cross plan was poorly managed and "barely solvent."

In 1993 Mr. Schaefer dismissed him from the office. A Sun editorial commented that Mr. Donaho was fired "for ruffling too many feathers.

"He dared to expose Blue Cross' considerable financial weaknesses in an attempt to force the company to get its act together. His threats of extreme regulatory action alarmed the governor and legislators. Mr. Donaho's message was on target, but he delivered his blasts with a cannon instead of a more-effective rifle," the editorial said.

At the time of his dismissal, Mr. Donaho told reporters he had done the "best I can to protect the citizens of this state. I believe I have been courageous, I have stood up against interest groups, and I have brought to light the inequities of the health care system, and I will continue to do so."

Born in Chicago, Mr. Donaho earned a bachelor's degree from Thomas Jefferson College, now Roosevelt University, in Chicago, where he later served as a vice president.

He earned a master's degree in public administration from the University of Chicago.

He began work in 1935 as an administrator for the Commonwealth Edison Co. of Chicago. After Pearl Harbor, he moved to Washington and served in the Roosevelt and Truman administrations.

From 1948 to 1952 he was city manager and budget director for Richmond, Va.

The next year, Mr. McKeldin, then Maryland's governor, hired him as a consultant to overhaul the state's budgeting and accounting systems. He also operated his own business, John A. Donaho and Associates, from his home in Reisterstown, where Mr. Donaho lived for 50 years.

He had numerous governmental clients and served as a consultant for many Maryland counties.

He also worked with governments throughout Asia and the Far East.

Mr. Schaefer, then mayor of Baltimore, named him a city consultant in 1974. For more than a decade, Mr. Donaho worked on issues of state and federal aid to the city, economic development, workers' compensation, risk management and insurance.

"I'd say that John was one of the 10 most influential people in Baltimore in turning the city around in the 1970s," said Mr. Schaefer's former press secretary, Christopher Hartman.

"He could tick off a lot of people, especially if they weren't doing their job right. He was tenacious. He could ferret out anything. Lie to him and you were dead," Mr. Hartman said.

Mr. Donaho kept up his consulting work until several months ago. He was an avid reader and enjoyed weekend landscaping chores.

Services will be held at 5 p.m. today at Eline Funeral Home, 11824 Reisterstown Road at Franklin Boulevard.

In addition to his wife, survivors include a daughter, Rondi Ann Coates of Severn; three grandchildren; and four great-grandchildren. His first wife, the former Judith O'Brien, died in 1960. A son, John William Donaho died in 1973.

jacques.kelly@baltsun.com

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