Skip to main content

Investment Firms Question WellPoint Political Spending

 |  By Margaret@example.com  
   August 31, 2012

Two days after WellPoint CEO Angela Braly's resignation, a coalition of investment firms is asking the WellPoint board of directors to come clean about the company's political spending and lobbying activities.

>>>

In an Aug. 30 letter addressed to Jackie M. Ward, WellPoint's lead independent director, the group of five investment firms representing more than $450 billion in plan assets asks the board to "promptly disclose political expenditures, including so-called ‘special assessments' or other payments to trade associations, for the past year and planned political expenditures for the next 12 months."

The four-page letter is signed by representatives from Co-Operative Asset Management, CtW Investment Group, Marco Consulting Group, Mercy Investments Services, and The Nathan Cummings Foundation.

 "Corporate political activity pursued for good strategic reasons and in an appropriate manner, and supported by clear disclosure can be positive and value-enhancing for shareholders," the letter states.

"Unfortunately, we are concerned that WellPoint's activities around healthcare reform, particularly in light of the proposed acquisition of Amerigroup, embody the other extreme: political spending that lacks adequate disclosure and potentially places shareholder value and corporate reputation at risk."

Interest in the political and lobbying efforts of health insurers has increased since the passage of the Patient Protection and Affordable Care Act in 2010 and the efforts by the US Chamber of Commerce and others to have the law repealed. The investment firms contend that WellPoint has not fully answered questions about its involvement in the transfer of $100 million to the Chamber, which reportedly used the money to fund its opposition efforts.

WellPoint officials did not respond to questions from HealthLeaders Media. In the past the company has stated that its contributions fully meet all state and federal reporting rules and regulations.

The annual report of WellPac, WellPoint's political action committee, details its extensive contributions to trade associations, including America's Health Insurance Plans, as well to candidates for state and federal offices.

Michael Pryce-Jones, senior analyst at CtW Investment Group, an umbrella group representing union pension funds, says the WellPac report does not include information about special assessments, which he defines as "one-time payments to trade organizations."

He contends that WellPoint's past and future political funding activity is especially relevant in light of its planned $4.9 billion acquisition of Amerigroup. "With the Amerigroup acquisition heavily premised on Medicaid expansion under the Affordable Care Act shareholders need to know whether WellPoint is part of any new industry efforts to undermine the ACA," he explains.

The group has not been able to rally shareholder support for its position. A resolution asking WellPoint to provide additional disclosure was soundly defeated during the company's annual meeting in May.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
Twitter

Tagged Under:


Get the latest on healthcare leadership in your inbox.