Carefirst Ex-ceo's Shameless Cash Grab

November 29, 2009|By Dan Rodricks

Did you see where Bill Jews is still looking for money? He thinks he was entitled to $18 million when he finally departed as CEO of CareFirst BlueCross BlueShield, but the state insurance commissioner said he should only get half of that, a crummy $9 million, so there's an argument raging, and Mr. Jews had to hire a lawyer to get this settled.

Times are tough, can you blame him?

First, Mr. Jews went to federal court to get his full severance package reinstated. He claimed he had an agreement for the lovely parting gift going back to the late 1990s, and no matter what unsavory things happened in the intervening years, a deal's a deal.

A federal judge dismissed Mr. Jews' suit.

That was in January, and we thought we had finally heard the last of Bill Jews in his role with CareFirst. He'd left the insurer at the end of 2006, but he evidently had some big bills to pay, or he wanted to maintain the lifestyle to which he'd grown accustomed, or he's a man who stands on principle - even one involving a grotesque amount of money from a nonprofit health insurance provider.

So, he's still around, still trying to get the extra millions he believes he deserves.

You might ask yourself: Would I be doing the same? In the midst of recession and public anger over corporate bailouts and enormous executive compensation, in the midst of an effort to get health coverage to more low-income Americans, and years after I was exposed as a $2 million-plus-a-year CEO who wanted to sell a perfectly fine nonprofit to a for-profit health insurance company and get bonuses of up to $40 million for doing so - would I still be in the public arena, asking: "Where's mine?"

A lot of people, even those smart enough to have run a nonprofit or small for-profit as well as Bill Jews did, might consider themselves lucky to get away with a half a loaf.

But everyone's different. Some are afflicted with an enlarged sense of self-importance and entitlement; they believe in survival of the fittest and the shameless. The high opinion of the public is nice, but it doesn't pay for greens fees.

This month, in his quest for the righteous $9 million, Mr. Jews finally found a sympathetic ear - that of a judge in Baltimore County named Timothy J. Martin, who was appointed to the Circuit Court in 2005 by the former Republican governor.

This judge clobbered the state insurance commissioner with a 60-page opinion. Mr. Martin said Ralph Tyler, appointed to his regulatory position by the Democratic governor in 2007, went way overboard, way over the line - not to mention far beyond his authority - and cut Mr. Jews' severance in a spiteful, downright personal way.

Most importantly, Mr. Martin called Mr. Tyler's decision "unlawful," and said Mr. Jews was entitled to the $18 million. Mr. Tyler says the Maryland Insurance Administration will appeal the judge's ruling.

For those who've forgotten why Mr. Tyler presumed any grounds to slash Mr. Jews' bye-bye money, a quick refresher:

About seven years ago, Bill Jews led an effort by CareFirst, which had been incorporated to provide health coverage "at minimum cost and expense," to sell itself to a for-profit company in California for $1.37 billion. Mr. Jews, it was learned, would have received close to $40 million in "merger incentives," though he denied being personally involved in any bonus discussions.

After Mr. Jews spent about a year trying to convince the state that the deal was in Marylanders' best interest, the whole thing collapsed. Steve Larsen, the state insurance commissioner at the time, concluded that in order to make itself more attractive to a buyer, CareFirst had abandoned its mission and "adopted the goals and missions of a for-profit company."

The Maryland Senate and House of Delegates unanimously supported laws to ensure that CareFirst would remain and act like a nonprofit. The legislature gave the insurance commissioner authority to review executive pay and to block any severance or other payments he considered excessive.

When Mr. Jews finally left CareFirst three years later, his severance came under review.

So that's how we get to this stage: Mr. Tyler claims $9 million is a fair and reasonable sum for a nonprofit to pay; Mr. Jews believes he deserves twice as much.

I guess, if once upon a time he thought he'd walk away with nearly $40 million, then $9 million must seem like chump change: settling for bronze when you've convinced yourself you deserve gold.

Dan Rodricks' column appears Thursdays and Sundays in print and online, and Tuesdays online-only. He is host of the Midday talk show on WYPR-FM.

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