The U.S. Department of Justice may be seeking to block the merger between Anthem and Cigna, but with no ruling in sight until 2017, the Office of State Ethics continues to pursue financial information from Insurance Department Commissioner Katharine Wade.
In Connecticut, Wade, a former Cigna executive whose husband still works for the Bloomfield-based insurer, would be required to review the proposed merger. Common Cause asked the Citizen’s Ethics Advisory Board this summer to issue a formal opinion as to whether Wade was in compliance with the state’s code of ethics by deciding to oversee the merger.
That decision was expected to be made later this week, but the Office of State Ethics said it doesn’t have enough information from Wade to issue an opinion because the commissioner, according to Office of State Ethics General Counsel Barbara Housen, hasn’t complied with its request for information.
“I twice asked Commissioner Wade to provide me with the number of shares her spouse stands to gain each year per the vesting schedule,” Housen wrote in a Sept. 6 letter to Wade’s attorney. “This information is still needed and I am requesting it again.”
Housen said she will be forced on Thursday to recommend that the board extend the period of time to issue a draft ruling as a result of the delay in obtaining information and will assign two board members to conduct a hearing in this matter to ascertain the facts needed to complete the draft ruling. The board is expected to meet at 1 p.m. Thursday, Sept. 15.
In correspondence with Housen, Wade’s attorney said she doesn’t believe her client has to disclose the information requested. At the same time, Wade’s attorney, Kimberly Knox, said Wade has been as responsive as she can be.
“It bears repeating that the Commissioner’s husband owns no stock or options,” Knox wrote in an Aug. 26 letter to Housen. Wade’s husband, Michael, has “no absolute right to the unvested stock and options,” Knox added.
Ethics laws are based on the financial gain or loss of an official and Knox said it’s impossible to speculate what options Michael Wade will own in the future.
“It is speculative to assume that he will own stock or options in the future as such compensation is tied to his continued employment,” Knox wrote in an Aug. 22 letter. “Until such time as the unvested stock and options vest, there is no legal basis upon which to determine any conflict of interest.”
In that same letter Knox told Housen that Mr. Wade’s “unvested stock and options will next vest in approximately the last week of February/first week of March 2017, 2018, and 2019.”
Housen said she is requesting information about the impact the potential Anthem-Cigna merger would have on those unvested stocks and unvested stock options.
In a Monday letter, Knox said Wade has volunteered information and been responsive to requests for information. However, because of the pending Department of Justice lawsuit on the antitrust concerns regarding the merger, a ruling on Wade’s conflict of interest “appears to be unnecessary,” Knox wrote. “If the Citizen’s Advisory Board elects to proceed, it should conclude that there is no conflict of interest.”
But Matthew Katz, executive vice president and CEO of the Connecticut State Medical Society, whose organization has been against the merger, said the Department of Justice lawsuit shouldn’t limit state officials’ responsiveness to a potential conflict of interest. He said other states like New York have conducted hearings on the merger because it’s unclear what is going to happen with the pending lawsuit.
Regardless, Katz said there’s nothing that should delay the submission of materials to the Office of State Ethics by a sitting commissioner.
Carol Carson, executive director of the Office of State Ethics, said last week that her office has never had to go through this process in order to obtain information in a compliance matter.