The ‘insider-itis’ of the nonprofit world
A COZY board of insiders helped Cleve L. Killingsworth fashion his golden parachute from Blue Cross Blue Shield of Massachusetts.
But politicians — from the governor to regulators to legislative leaders — sound curiously reluctant to second-guess it. Or maybe their reluctance is not so curious. Maybe it’s due to contributions Killingsworth reliably made to Democratic causes.
When he campaigned against Republican Charlie Baker, Governor Deval Patrick also campaigned against Baker’s $1.7 million salary as chief executive of Harvard Pilgrim Health Care. Baker’s pay was excessive, the Patrick campaign charged, especially when measured against rising health care premiums paid by companies and individuals. An ad painted Baker as a fat-cat health care executive out to gouge the little guy.
Patrick is much less outraged over the huge payout to Killingsworth, who last year left Blue Cross Blue Shield of Massachusetts with a $8.6 million exit deal, and another $2.7 million in severance pay due over the next two years. “My focus is on getting health care costs down, not on compensation,’’ said Patrick, when asked to respond to the Killingsworth package.
According to the State House News Service, Killingsworth contributed $500 to Patrick in 2007, 2008, and 2009, as well as $5,000 to the Democratic Party in 2008. Beyond that, Blue Cross also helped sponsor Patrick’s inauguration this year with a $10,000 contribution, the news service reported.
Killingsworth also contributed to Attorney General Martha Coakley, Lieutenant Governor Tim Murray, Senate President Therese Murray, and House Speaker Robert DeLeo, the news service said.
Murray also sounds less than outraged about the Killingsworth severance package. She pronounced it “good news’’ that new employment contracts at Blue Cross aren’t as rich as the old ones.
Pressed to respond, Coakley is now pledging to review the Killingsworth matter. This follows the AG’s review of an earlier Blue Cross parachute — $16.4 million in retirement benefits to former chairman and chief executive Bill Van Faasen.
Killingsworth — who was basically paid to leave as head of the state’s largest health insurer — said he got exactly what he deserved: “The payment I got was consistent with my contract — no more, no less.’’
He’s right. He got exactly what Blue Cross board members agreed to give him. They have no shame. Why should he?
His reward can be understood in the context of the insular crew of movers and shakers who run Boston’s nonprofit world — and in the case of Blue Cross board members, earn between $60,000 and $84,000 annually.
But his reward also has a political overlay; Blue Cross board members are also tied in tightly to the Patrick agenda. For example, Philip W. Johnston is a former chairman of the Democratic State Committee who runs a health care consulting business. Gloria Larson, the president of Bentley University and a former state secretary of economic affairs, endorsed Patrick in 2006.
Other board members include Paul H. Guzzi, the president and chief executive of the Greater Boston Chamber of Commerce, who is working with the administration on plans to bring down health care costs; Marian L. Heard, a management consultant and former head of the United Way; Ralph C. Martin, a former district attorney and managing partner at Bingham McCutchen, who is now a senior vice president and general counsel at Northeastern University; and Robert J. Haynes, president of the Massachusetts AFL-CIO.
“Insider-itis’’ is common on Boston nonprofit boards, and it was on display at Beth Israel Deaconess Medical Center, after CEO Paul Levy acknowledged an inappropriate relationship with a woman he hired and then shuffled around to various jobs.
Several hospital board members knew about the relationship, yet did nothing. After Coakley reviewed the situation, she urged BIDMC board members (who are unpaid) to do “some soul-searching.’’ Exit Levy, with a $1.6 million severance package.
Levy’s parachute is not as golden as Killingsworth’s, but it was yet another exit negotiated by another nonprofit board that put private interest ahead of public trust. In both cases, the departures were initially framed as voluntary.
Shaking up the comfy status quo in Boston’s nonprofit world takes political will. Partisan politics should not drive that will.
Joan Vennochi can be reached at firstname.lastname@example.org.