Health contract investigation results
Here are the major developments resulting from Attorney General Peter Heed’s investigation into the awarding of an $866,000 health-care consulting contract:
RESIGNATION: State Director of Personnel Joseph D’Alessandro resigned under fire, minutes before Heed issued the report calling for his resignation. Heed said if D’Alessandro had not stepped down, he would have sought an Executive Council hearing to dismiss him on charges he violated the state Code of Ethics by awarding an insurance broker contract to a firm that agreed to pay fees to a Benson volunteer, Linda Pepin.
BENSON’S KNOWLEDGE: Heed said Benson was unaware Pepin was being paid the fees until a short time before The Telegraph and New Hampshire Public Radio first reported in late November that she was getting these payments.
INSURANCE DEPARTMENT ACTIONS: Insurance Commissioner Roger Sevigny has charged that Pepin is guilty of breaking insurance laws and should pay $42,500 in civil fines for accepting broker fees without obtaining a license. Candia insurance broker Dennis French has settled a case with insurance authorities and agreed to pay a $2,500 fine for paying Pepin.
INSURANCE BROKER FEE: From mid-March to December 2003, Pepin received $187,010 in fees from Delta Dental and Anthem Blue Cross Blue Shield of New Hampshire to broker health and dental insurance benefits for the state, even though she was not licensed as a broker. French, the insurance broker of record, funneled the payments to Pepin and pocketed only a final $7,700 payment from Delta Dental. Pepin paid French’s partner in the company, broker Robert Bergan, $2,500 to advise her on negotiations over the health insurance contract.
FUTURE FEES: Pepin played a major volunteer role in crafting the existing health care contract and advocated continuing the broker fees. Ultimately, Administrative Services Commissioner Donald Hill took over that part of the negotiations and ended the practice of brokerage fees, replacing it with one staff employee who now monitors the ongoing benefit plan.
PEPIN-D’ALESSANDRO PAYMENTS: Records reveal Alpha Directions Inc., an employee benefits company run by Pepin, paid D’Alessandro $10,450 from May-July 2003. From July 2002-December 2003, D’Alessandro wrote checks to ADI totaling $8,280. D’Alessandro said the checks he wrote were loans to the company and that the payments made were repayments as well as reimbursement for $5,890 worth of expenses he incurred in working to help set up the company.
CHOICELINX CONTRACT: The report concludes the contract was lawfully awarded and no criminal laws were broken because neither Pepin nor D’Alessandro received any financial benefit from awarding of the contract. Pepin did deceive state officials and the Executive Council, however, when she said she contacted several competing firms before recommending Choicelinx when all she did was research them on a Web site.