ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, March 13, 1996 TAG: 9603130067
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
DATELINE: RICHMOND
SOURCE: DAVID M. POOLE STAFF WRITER
More questions arose Tuesday about the role several General Assembly leaders played in helping the state's largest insurer become a for-profit company - and whether the state's financial disclosure laws are detailed enough to let Virginians know when elected officials are pushing legislation that would benefit their clients.
Trigon Blue Cross Blue Shield, in recently filed reports with the state, revealed that it hired the law firms of three top state legislators in 1995 - one of whom later headed a special panel that approved Trigon's high-stakes bid to convert from a mutual corporation to a stockholder company.
House Majority Leader Richard Cranwell, D-Vinton, figured prominently in the latest controversy - Trigon's report showed that it paid Cranwell's law firm $385,000 last year, most of that for legal work in the insurer's for-profit conversion effort. That's in addition to the $179,000 Trigon paid his firm in 1994.
However, Cranwell dropped off Trigon's legal team earlier this year when public interest groups and some Republicans said it was a conflict of interest for Cranwell to represent the insurer - and he later abstained on Trigon-related legislation.
Instead, the attention Tuesday turned to Del. George Heilig, D-Norfolk, who is chairman of the House Corporations, Insurance and Banking Committee and headed a special subcommittee that considered the legislation dealing with Trigon's plan to become a for-profit stock company.
Heilig also spoke on the House floor against efforts to force Trigon to repay the state more than $175 million for special tax breaks the company enjoyed for 50 years.
Trigon's disclosure report showed it paid Heilig's firm $9,581 last year - a few hundred dollars short of a $10,000 threshold that legislators are required to report.
But some lawmakers argued Tuesday that Heilig should have made the information public.
"It smells," said Del. Morgan Griffith, R-Salem. "Nobody on that floor knew that Trigon paid his firm.''
Heilig could not be reached Tuesday.
In accordance with General Assembly rules, Heilig did not have to list Trigon as a law client in a disclosure statement earlier this year. He simply had to check a box indicating he earned more than $1,000 from unspecified insurance companies.
Heilig would have had to name Trigon only if he or his firm represented the company before a state agency. But Heilig did routine legal defense work, according to Jim McKenry of Heilig, McKenry, Fraim and Lollar.
Trigon, however, has different reporting requirements, and documents filed with the State Corporation Commission earlier this month show exactly how much the insurer paid to various law firms.
Griffith said Heilig's relationship with Trigon was significant enough that he should have disclosed it.
``He owed it to us to say, `I don't think it changes anything, but Trigon paid $9,500 to my firm.'''
The General Assembly approved Trigon's $175 million special payment to the state, and the insurer's conversion plan is pending before the State Corporation Commission.
SCC documents show the amount Heilig received is a fraction of legal fees paid to Cranwell's firm - which received $208,587 for work on its conversion and $176,973 for other legal work in 1995.
In accordance with General Assembly rules, Cranwell had checked off a box on his report showing Trigon paid his firm more than $10,000 for representation before the State Corporation Commission.
When asked in January how much his law firm earned from Trigon in 1995, Cranwell would not say.
Cranwell said this week that the gap between what the law requires him to report and what he earns may be a sign that Virginia's disclosure law for legislators needs to be changed.
"I guess I'm considered a good lawyer, and I'm considered an influential legislator, and maybe that's too much concentration in one person," Cranwell said. "Maybe we ought to be looking at our disclosure rules and think about whether they need more detail."
In its SCC filing, Trigon also reported that it paid a $5,850 retainer to a law firm headed by House Speaker Thomas Moss, D-Norfolk.
Moss said Tuesday that his firm did routine collection work.
Del. Allen Dudley, R-Rocky Mount, said the Trigon payments to Heilig, Cranwell and Moss reaffirm his belief the legislation was "railroaded" through the General Assembly.
"I feel better now," Dudley said. "I felt I took a lot of heat from a lot of people who felt I should not have been raising any objections."
Staff writer Dwayne Yancey and The Associated Press contributed to this story.
LENGTH: Medium: 90 linesby CNB