April 6, 2011

Stopgap prescription contract extension approved; contender for $2.4 billion contract was generous to BPW members

Print More

By Megan Poinski
Megan@MarylandReporter.com

By Thomas Hawk

The Board of Public Works on Wednesday approved a one-year extension of a disputed contract providing prescription drug coverage to state employees so the coverage doesn’t lapse while the Board of Contract Appeals considers the protest.

The $422 million one-year extension until June 30, 2012 was given to Rockville-based Catalyst Rx with little discussion and a unanimous vote of all three members of the Board of Public Works: Gov. Martin O’Malley, Comptroller Peter Franchot, and Treasurer Nancy Kopp.

Catalyst Rx currently has the contract, but when evaluating bids for the $4.2 billion five-year contract award earlier this year, the Employee Benefits Division of Department of Budget and Management recommended that the contract be given to St. Louis-based Express Scripts.

Catalyst Rx has repeatedly protested the award to Express Scripts, and a protest is still pending before the Board of Contract Appeals. Because of the pending protest, the Board of Public Works has postponed making a decision on the five-year contract until there is a final decision from the Board of Contract Appeals.

The extension is just a stopgap measure, said Budget and Management Secretary Eloise Foster. When the Board of Contract Appeals decides on the bid protest, she said that the five-year contract will be decided by the Board of Public Works.

Campaign contributions

According to state campaign finance records, executives and family members involved with Catalyst Rx gave campaign contributions of more than $70,000 to O’Malley and Franchot in the last 12 months.

As the June 30 contract expiration came closer, Catalyst Rx’s Chief Executive Officer David Blair and members of his family, as well as the company’s Chief Operating Officer Richard Bates, gave generously to campaign coffers of the members of the Board of Public Works.

In the last year, Blair and several family members donated generously to O’Malley’s re-election campaign. Between David Blair and Mikel, Alice,Thomas and Melissa Blair, the O’Malley-Brown campaign received $46,000 in campaign contributions. Those donations were received between last July and late October.

Catalyst Rx Chief Operating Officer Richard Bates also was generous to O’Malley’s re-election effort, donating $4,000 to the governor’s campaign in July. Kelly Bates, who lives with him, donated $4,000 to O’Malley on the same day.

Most of the contributions to Franchot came in January 2011, almost four years before the next election. Franchot’s campaign committee received a total of $20,000 from people affiliated with Catalyst Rx this year. David Blair, as well as Mikel Blair, Alice Blair, Thomas Blair and Richard Bates, each gave Franchot $4,000 on Jan. 7. Melissa Blair donated $4,000 to Franchot’s campaign last August.

The Maryland Tax Education Foundation uncovered some of the original data on the contributions connected to Catalyst.

Express Scripts, whom the O’Malley administration selected for the new contract, made only one recent campaign contribution. The company made a corporate donation of $500 to Franchot’s campaign on Jan. 11. According to the campaign contribution database, no members of Express Scripts’ management team have made campaign contributions in Maryland.

No influence

Although a final vote on the contract has not been scheduled, representatives for O’Malley and Franchot both said that the campaign donations will not impact the way that they vote on the contract.

O’Malley spokesman Shaun Adamec said that the contributions have absolutely no bearing on the way that the governor will look at the contract.

Franchot spokesman Joe Shapiro said that the comptroller has always freely questioned contracts before the Board of Public Works, and considers each item solely on its merits. If the Board of Public Works ever has a 2-1 vote on an item, Shapiro said that it’s usually Franchot who has cast the dissenting vote.

“It shows that he reviews every item before voting,” Shapiro said. “He takes his responsibility seriously.”

  • Abigail Adams

    I thought better of the Comptroller. Maybe he should return the tainted campaign contributions? The same for the other payoffs. Whose the loser? Maryland taxpayers as usual.

    • You’re missing the point, Abigal Adams. The contributors’ firm was not successful in securing the five-year contract; another firm was selected (that only gave one $500 contribution to Mr. Franchot’s campaign).

      There was no quid-pro-quo–and no contributions are “tainted” as you say–because no favoritism was shown to the contributors’ firm, evidenced by the fact that the contract was awarded to a different firm.

      – Steve Lebowitz, Annapolis

  • Whcampbell

    Campaign contributions from individuals and companies that do business with the State should not be allowed. Public servants should not accept any contributions that give the appearance of a conflict of interest. This story is very disappointing, but typical for Maryland politics. It is not the amount of the contribution, or whether or not there is a payoff for the contribution. It is the corrosive affect on the public’s trust.