Long-time DeWine friend lobbied for corporation accused of fraud

Company’s massive business with Ohio was restarted despite the allegations

By: - August 23, 2021 1:00 am

Ohio Gov. Mike DeWine. Photo by Scott Olson/Getty Images.

Many Ohioans were scratching their heads earlier this month. 

The administration of Gov. Mike DeWine had just restarted a massive contract with Centene Corp. Only six months earlier, Attorney General Dave Yost agreed to accept $88.3 million from the company to settle claims that it had defrauded the state’s Medicaid program of tens of millions of dollars

The money was part of $1.1 billion the company set aside to settle such claims in multiple states.

DeWine was already embroiled in a historic energy scandal in which his appointee to the state’s utility regulator took what Yost called a $4.3 million bribe and did favors worth hundreds of millions to FirstEnergy, the company that paid it, the company and federal prosecutors said in a deferred prosecution agreement. It was part of a broader conspiracy to pass a $1.3 billion bailout law that DeWine signed.

So you might think — especially heading into a tough election year — that DeWine would want to avoid any appearance of impropriety or special dealing.

But it turns out that Centene hired an old friend of the governor to lobby on its behalf just as Yost’s lawsuit was about to be filed.

On Jan. 1, Michael Kiggin filed paperwork with the Joint Legislative Ethics Committee saying that he’d bgeen hired by Centene to lobby DeWine, Yost, Lt. Gov. Jon Husted and the Medicaid department on “decisions regarding Medicaid managed care” — the service that Centene provided at great expense to Ohio taxpayers.

Kiggin and DeWine’s spokesman didn’t respond to questions for this story — including whether it’s proper for an old, close friend of DeWine to hire himself out to big corporations to lobby the governor on their behalf. But it’s clear that Kiggin  and DeWine go back.

According to a 2019 EyeonOhio report published by Cleveland.com, Kiggin and DeWine attended the Ohio Northern University College of Law together and were top officers in the Student Bar Association. Just after DeWine was sworn in as Ohio attorney general in 2011, Kiggin was taking money from a pair of lawyers to help them get a lucrative contract to collect state debts, the report said.
After DeWine’s election as governor in 2018, his “long-time friends Michael and Suzanne Kiggin” were selected as honorary chairs of DeWine’s inaugural committee.

And, once he took office, DeWine awarded Kiggin one of the juiciest plums a governor can grant — a seat on the Ohio State University Board of Trustees. There he serves with such luminaries as Abigail Wexner, wife of local billionaire Les Wexner, and Alex Fischer, president and CEO of the highly influential Columbus Partnership.

As with Kiggin and DeWine, Centene won’t say what DeWine’s friend did on the corporate dime. But Kiggin was on the Centene payroll during the critical period in March when, just after Yost accused the company of massive fraud, the state Medicaid department suspended a contract it was negotiating with Centene’s subsidiary for 2022.

“Buckeye Health Plan, as well as its staff and representatives, diligently complied with the blackout requirements throughout the (bidding) process,” a Centene spokesperson said in an email not quite responding to a question about Kiggin. “Buckeye ranked second in the (bidding.) We are pleased the contract was awarded based on merit and the high-performing track record Buckeye Health Plan has in Ohio. Buckeye looks forward to continuing to serve Ohioans with quality healthcare, coordinated services and new benefits into the future.”

Centene never did say it was sorry about the conduct that’s prompting it to pay more than a billion dollars to settle fraud claims in Ohio and elsewhere. Some of that conduct occurred in 2017, when an Ohio analysis found that pharmacy middlemen working for Centene and other Medicaid managed-care organizations billed taxpayers almost a quarter billion dollars more for generic drugs than they paid to the pharmacists who dispensed them.

In June, just after the news of the fraud settlement broke, Michael Neidorff, Centene’s lavishly paid CEO, emphasized to investors that the company hadn’t admitted doing anything wrong. Instead of promising to be a good steward of taxpayer billions meant to provide healthcare to poor people, he brazenly added that his No. 1 and No. 2 priorities were pulling in even bigger profits in the future.

By July, Neidorff seemed strangely confident that his company’s subsidiary would be doing business with Ohio come 2022. 

In an earnings call announcing yet another boost in profits for the nation’s 24th-largest company, Neidorff was asked if he expected that Buckeye would be in business with Ohio next year.

“Yeah,” he replied. “We continue to be very optimistic and expect a resolution in the very near future. They wanted some additional data, which we’ve had and our consultants provide them. And they’re analyzing that. And as we said with the settlement and the no harm and all court cases we moved everything, there is no reason for them not to reinstitute our bid. We did come in No. 2. And so I am very optimistic on it.”

Neidorff’s optimism turned out to be well-founded and Centene’s profit growth seems likely to continue. It’s unclear how lucrative its business will be under Ohio’s revamped Medicaid setup, but the company’s business with the state was worth $2.8 billion in 2020. 

In addition to Kiggin, Neidorff and Centene have paid some others connected to DeWine.

They include Dan McCarthy, who is now DeWine’s legislative affairs director. In 2018, while he was still president of the lobbying firm the Success Group, McCarthy was registered to represent Centene

The DeWine aide has drawn scrutiny since the energy scandal broke last year. 

In 2017, while still a Success Group lobbyist for FirstEnergy, the company at the heart of the bailout scandal, McCarthy founded a 501(c)(4) “dark money” group. FirstEnergy admitted it used the group to funnel money into a corrupt scheme that spent $61 million to buy a $1.3 billion ratepayer bailout. Former House Speaker Larry Householder, R-Glenford, and four associates have been charged in the scheme and two have pleaded guilty. A third died by suicide.

In early 2019, McCarthy joined the DeWine administration and helped shepherd the bailout bill through the legislature, the deferred prosecution agreement said. Through it all, DeWine has been steadfast in his support for McCarthy.

Now two of McCarthy’s former Success Group colleagues — Mike Toman and Anthony Aquillo — continue to lobby the DeWine administration on Centene’s behalf

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Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.