Wade Fires Back At Critics
State Insurance Commissioner Katharine Wade responded Wednesday to critics who have been calling for her to recuse herself from overseeing the proposed merger of Anthem and Cigna, suggesting they had “grossly mischaracterized” her role in the process.
Wade spoke up as the 30-day public comment period ended on a petition asking the Citizen’s Ethics Advisory Board for a formal ruling on her potential conflict of interest. Wade is overseeing the proposed merger of her former employer, Cigna, with Anthem in what is being described as the largest insurance merger in history.
While her husband, Michael Wade, still works for Cigna, Katharine Wade last worked for the insurer in 2013 as vice president Public Policy, Government Affairs and U.S. Compliance. She also was head of the Connecticut Association of Health Plans, the lobbying group for Connecticut’s insurance companies, from 2005 to 2013.
Wade said that the Office of State Ethics assured her this year that she had no conflict of interest based upon steps that she and her husband had taken. Among those, in February Wade asked the Office of State Ethics whether it was appropriate for her husband to divest Cigna stock as it vested from February 25 through March 5. An email from the Office of State Ethics advised Wade that her husband could do that as long as she had not used any confidential information gained in her state position to influence her husband’s decision as to whether to divest the stock.
But the Office of State Ethics said Wade never sought a formal opinion from them about a potential conflict of interest regarding the Anthem-Cigna merger.
Meanwhile, the Citizen’s Ethics Advisory Board is expected to meet today to set a deadline to rule on the petition, which was filed by Common Cause, a good government advocacy group. More than 37 people submitted public comment, which was posted online by the Office of State Ethics. Most call for Wade to recuse herself from the merger proceeding.
“I believe my role has been grossly mischaracterized in the public arena,” Wade said Wednesday. “I welcome the opportunity to provide a thorough and accurate accounting of the process that I have undertaken to follow the letter of the state ethics law in order to carry out my duties as Insurance Commissioner. As I have always said, and continue to say, if the Office of State Ethics provides guidance that is different than what it has previously provided to me, I will absolutely follow it.”
Over the past few months calls for Wade to recuse herself have mounted with Democratic and Republican leadership in the General Assembly calling for Wade to step aside.
Senate President Martin Looney, D-New Haven, said Wednesday that Wade should recuse herself.
“I believe that it would be prudent for Commissioner Wade to recuse herself from oversight of the proposed merger of Cigna and Anthem,” Looney said. “Further, I have major concerns regarding this merger. I fear it will stifle market competition and negatively impact consumers by leading to higher prices.”
But Wade maintained her position.
“The Office of State Ethics has assured me both at the beginning of last year, and numerous times since, that there was no conflict of interest based upon the steps that my husband and I have taken,” Wade said in a statement Wednesday.
She said there’s no facts that have changed those circumstances.
Senate Republican Leader Len Fasano, R-North Haven, pointed out in his letter to the Office of State Ethics that Wade “attempted to distance herself” from the merger process by pointing out it was being “reviewed by staff.” However, they said the statute is clear and the commissioner has the sole authority to receive, review, and decide on Anthem’s application to acquire Cigna.
If the merger, which the U.S. Department of Justice is reportedly questioning, goes through, Anthem is offering $188 per share for the purchase of Cigna. Fasano pointed out that this is a benefit to Cigna employees and shareholders, so it’s disingenuous for Wade to say Cigna is not involved.
Wade told the Office of State Ethics when she asked for guidance on her husband’s stock options that “presently, there are no Cigna matters before me.”
The conflict of interest statute is there to make sure the public interest is served and “not corrupted by personal interests,” Fasano said.
Connecticut’s Insurance Department is playing a lead role in regulating the review of the Anthem-Cigna merger. The merger has received regulatory clearance in 12 states. Twenty-eight states have an opportunity to review the merger.
The U.S. Department of Justice’s anti-trust division and Connecticut’s attorney general are responsible for deciding whether the mergers would unfairly monopolize the industry.
Earlier this week, Bloomberg News reported that U.S. anti-trust officials are poised to file lawsuits to block Anthem takeover Cigna. And earlier this month, Connecticut Attorney General George Jepsen said he’s concerned about how the merger would impact competition.
“I am concerned that it could provide no discernible benefit to consumers while significantly altering the landscape for the provision of healthcare in the future,” Jepsen has said.
However, Jepsen has not reached a final decision on the merger and is still reviewing it.