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Larry Hogan(The Daily Record/Bryan P. Sears)

Hogan alleges Brown benefits from pay-to-play scheme

Republican candidate for governor calls for widening of a federal probe on the state health exchange to include contributions made to the Democratic Governor's Association.

ANNAPOLIS — Republican gubernatorial candidate Larry Hogan said a federal probe into the state’s failed health benefit exchange should be widened to include corporate donations to Democratic Party fundraising entities from businesses awarded state health care contracts.

Hogan said Lt. Gov. Anthony G. Brown now benefits from the donations made to the Democratic Governors Association in the form of financial support for his campaign from the association. The Republican candidate called for an investigation in letters to Maryland U.S. Attorney Rod Rosenstein, Attorney General Douglas F. Gansler and Maryland State Prosecutor Emmet C. Davitt.

“We have formally requested broader federal and state investigations into the heath care debacle, as well as other inappropriate, clearly unethical, and potentially illegal contracts awarded to large donors to (Gov. Martin) O’Malley, (Lt. Gov. Anthony) Brown and the groups with whom they are directly involved including the Democratic Governors Association,” Hogan said.

Hogan acknowledged that any investigation was unlikely to be completed before the Nov. 4 General Election.

While Brown’s campaign had no immediate response, a Democratic Party aide said the allegations were baseless and that the Republican governors group had received similar amounts of money from the companies.

The Office of the Inspector General of the U.S. Department of Health and Human Services is already undertaking an investigation of the Maryland Health Benefit Exchange. Last month, Republican Rep. Andy Harris said that agency had issued subpoenas though state officials said they were not the target. A spokesman for the inspector general has declined to comment on the ongoing investigation.

Hogan laid out what he said was a pattern of donations made to the association that O’Malley chaired from 2010-2012. During that time the governor boasted of record fundraising for the organization, and he currently serves as its finance chairman.

Included in that list were $425,000 in donations from United Health Group and its Columbia, Maryland-based subsidiary Optum/QSSI; $525,000 in donations from the national Blue Cross and Blue Shield Association and $65,000 in donations from DeLoitte and its federal political action committee chairwoman.

Noridian Healthcare Solutions, the original developer of the state health exchange, is a subsidiary of Noridian Mutual Insurance Company, one of 37 Blue Cross Blue Shield licensees. Noridian Healthcare Solutions was fired earlier this year and replaced with Optum/QSSI in what Hogan called  ”a $14 million no-bid contract to fix the failed website.”

The state announced in April that it would adopt the Connecticut health exchange site, which was developed by DeLoitte.

The Democratic Governors Association also received $9.4 million in additional donations from health care, gambling, energy, and transportation interests during the same period. Hogan said those same companies received $2.6 billion in contracts — $1.7 billion of which went to United Health Group.

Hogan said the donations show a pattern in which state officials attempted to circumvent state laws prohibiting unlimited campaign donations to state campaigns by donating to an eligible federal political action committee.

“Allowing a pay-to-play culture of corruption to take a stronghold in our state government threatens every business and individual in Maryland,” Hogan said. “Even the perception of this practice prevents and honest and open bidding process for all job creators who may wish to do business with the state.”

The association, which backs Democratic gubernatorial candidates across the country, plans to spend $750,000 in Maryland in support of Brown.

Colm O’Comartun, executive director of the Democratic Governors Association, was a top aide to O’Malley from 2006-2010 when he left to run the association at the same time O’Malley was chairman.

A spokesman for the Brown campaign was not immediately available for comment.

A worker for the Maryland Democratic Party stood outside Hogan’s campaign headquarters handing reporters a written response from the party claiming the assertions were without merit and were recycled from earlier complaints Hogan has made.

“Larry Hogan’s baseless assertions ignore the reality that the companies he’s making accusations against have given virtually equal amounts to both the Democratic Governors Association and the Republican Governors Association,” the statement said. “Larry Hogan also made this exact same attack almost one year ago through his Change Maryland campaign organization — now he’s trying to trick reporters into covering it as news.”

Hogan, in response, said the documentation released today was not included as part of that earlier release by Change Maryland.

Hogan’s complaints about the donations came on the same day that the Maryland State Board of Elections determined that the Republican improperly accounted for the cost of a poll prior taken to the official start of his campaign.

The complaint was filed by the Maryland Democratic Party.

Hogan paid for the poll through his Change Maryland organization. After declaring his candidacy, the campaign Hogan nearly $80,000 to purchase the assets of Change Maryland.

The board ultimately voted to waive a $50 fine.

“Despite all of his finger pointing and accusations, Larry Hogan is the only candidate in this race who has been found to have broken election law,” said Maryland Democratic Party Spokesman Jared Smith in a statement. “If Larry Hogan can’t even follow the law during his campaign, how can Marylanders expect him to act as governor?”


An earlier version of this story incorrectly noted the source of donations made by the Blue Cross Blue Shield Association, of which Noridian Mutual Insurance Company is a licensee.