Issue: KO Public Affairs

Del. Geraldine Valentino-Smith had a question for the lobbyist testifying in March before her committee:

Who are you representing?

The lobbyist, Sean Malone, didn’t have a clear answer. He was there on behalf of a group called the Maryland Maternity Access Coalition, which advocates for the creation of a special fund for babies injured during birth.

“It’s a relatively broad organization: citizens, local organizations, health care providers –,” Malone said.

Unsatisfied, Valentino-Smith, a Democrat from Prince George’s County, cut him off. She pressed him to identify a couple of the organizations. Malone named six hospitals and health systems, most from the Baltimore area, that contributed to the coalition.

He also said he didn’t know where the organization got its money. When the delegate asked again if hospitals were the main participants in the coalition, Malone replied that he hadn’t looked at everyone who was a member.

“I can’t answer that,” he said.

Neither, apparently, will the coalition. The group has released public opinion polls, hosted a press conference and phone-in town hall discussion and produced a 60-second Internet commercial in support of the proposed fund, but it declined several requests from The Daily Record to discuss its members, its finances and the contributions it has received from local hospitals.

The story of the Maryland Maternity Access Coalition and how it operates is emblematic of the high-stakes and sometimes secretive business of public policy advocacy in Annapolis, other state capitals and the District of Columbia.

The rules of the game work like this: personalize a lobbying drive with average citizens as the face of the campaign; line up powerful institutional players to finance the endeavor behind the scenes; and enlist the services of well-connected public relations professionals to orchestrate a multimedia campaign.

The PR firm in this case – KO Public Affairs – is so interwoven with the coalition’s activities that the two have sometimes listed the same office location in Baltimore.

To be sure, the access coalition itself is up against one of Maryland’s lobbying behemoths, the state’s trial lawyers association, which rebranded itself as the Maryland Association for Justice in its own image-burnishing makeover a few years ago. The MAJ is dead-set against the birth injury fund proposal.

Hiring communications firms to publicize a cause is nothing new, but experts say using those firms to launch campaigns that give the impression of broad, grassroots support – a practice sometimes dubbed “AstroTurf lobbying” by critics – is becoming increasingly common.

Numerous instances have been reported in the health care and energy industries, and corporate heavyweights such as Wal-Mart and McDonald’s have been criticized for their roles in such campaigns.

Observers say this type of lobbying is alarming when the organizations aren’t transparent about their roots and their supporters – particularly if lawmakers can’t tell whose interests are really being advocated.

As Valentino-Smith put it in a recent interview with The Daily Record: Is the coalition “bubbling from the ground up or … an orchestrated presentation”?

 ‘Bad outcomes in babies’

A fund to compensate families for the injuries suffered during childbirth is an idea that is driven by numbers. Here are some of them:

In June 2012, there was a $55 million judgment – it was later reduced to $28.2 million — against The Johns Hopkins Hospital in a birth-injury case as well as a $20.9 million award in another suit involving a delivery at Washington Adventist Hospital. The following month, a jury awarded $21 million to the family of a baby born at MedStar Harbor Hospital. In 2013, jurors awarded $16.2 million in a case against Prince George’s Hospital Center.

These eight-figure awards have driven up malpractice insurance costs, advocates of the birth injuries fund say. Maryland’s increasingly perilous medical liability climate has led to a “looming crisis” that could leave the state’s women with insufficient access to obstetrical care in the future, they warn. Look at Philadelphia, where 13 hospitals shut down maternity wards over a 15-year period.

“A lot of the cases being brought are not about medical malpractice, they’re about bad outcomes in babies,” said Dr. John Chessare, CEO of Greater Baltimore Medical Center.

The proposed fund, modeled after existing systems in Virginia and Florida, would provide compensation for claims of injuries sustained during delivery as long as no lawsuits were brought by the victims. Similar funds have been used to compensate people exposed to asbestos; the federal government operates a fund to compensate those injured by vaccines.

By taking advantage of the fund, families would be able to get their claims resolved more quickly than with a malpractice suit that might be dragged out through the court system, said Carmela Coyle, president and CEO of the Maryland Hospital Association.

“Hospitals support making sure families are taken care of,” Coyle said.

Legislation that would create a Maryland birth-injury fund has been introduced in previous years by Del. Dan K. Morhaim, a doctor who represents Baltimore County, and state Sen. Catherine Pugh of Baltimore, both Democrats.

Pugh said her niece was injured during birth and that hospitals approached her to discuss creating a birth-injury fund before she first sponsored the bill in 2014.

The most recent version of the bill, which has died in committee during the last two legislative sessions, called for the state’s hospitals and obstetricians to pay annual premiums to support the fund. Officials estimate that about seven babies born in Maryland each year would be eligible for the fund.

Morhaim, who has backed the idea as far back as 2005, said the current system allows some children who suffered birth injuries to get help, but not others. He also recalls a pediatric emergency case he saw that dragged on for years before a settlement was reached.

But the proposed fund has drawn strong opposition from attorneys who represent the injured and their families.

“There’s no evidence of a looming crisis,” said attorney George S. Tolley III of the Maryland Association for Justice, formerly known as the Maryland Trial Lawyers Association.

The price of malpractice insurance in Maryland is lower now than it was 10 years ago and there’s more competition in the marketplace, Tolley said, citing annual reports from the Maryland Insurance Administration.

Concerns over large verdicts in malpractice suits are also overblown, Tolley told the House Judiciary Committee earlier this year.

Take, for instance, the $55 million judgment against Johns Hopkins. That judgment was first reduced, then overturned by the Maryland Court of Special Appeals in 2013, he noted.

The fund would also take away the civil rights of the brain-injured children it seeks to protect by depriving them of their right to sue when they are still babies, Tolley told lawmakers.

“Contingency fee arrangements are the way the Davids in these conflicts can have a chance against the Goliaths,” Tolley said. “Complaining about what lawyers are paid is a red herring.”

And one of the arguments used by advocates for the fund – that maternity wards at three Maryland hospitals – Laurel Regional, the University of Maryland Shore Medical Center at Chestertown and the University of Maryland Medical Center Midtown Campus in Baltimore – have been closed in recent years, is misleading: Those hospitals themselves say the closures were the result of declining birth rates.

Enter the coalition

In a recent news release, the Maryland Maternity Access Coalition describes itself as a group of “mothers, doctors, nonprofit medical institutions and engaged citizens aimed at protecting access to maternity care for women across the state.”

The articles of incorporation for the coalition, which are on file with the State Department of Assessments and Taxation, were signed Jan. 13, 2014.

The coalition’s president is Beth Laverick, who runs her own marketing and events-promotions company.

How did she get involved in forming the organization? In an interview, Laverick said she was asked to take the role of president, but declined to say who issued that invitation.

When it came to most questions asked by The Daily Record, Laverick deferred to Ron Boehmer, an associate of KO Public Affairs, one of the state’s powerhouse public relations companies. KO was founded in 2008 by Damian O’Doherty, once an aide to former Baltimore County Executive Jim Smith, and Steve Kearney, former director of communications for then-Gov. Martin O’Malley.

On its website, KO describes itself as a strategic communications firm “that helps clients win where business, government, politics and media meet” and lists “campaigns/coalitions/causes” among its specialties.

KO appears to have been associated with the Maryland Maternity Access Coalition since its inception. The witness who signed the organization’s incorporation documents is Howard Libit, the former chief operating officer of KO and now a spokesman for Baltimore Mayor Stephanie Rawlings-Blake.

A list of lobbyists and their employers published by the Maryland State Ethics Commission in August shows the address of the access coalition as 111 South Calvert St., Suite 2820 – the same office occupied by KO Public Affairs.

The Maryland Maternity Access Coalition also listed KO’s Calvert Street address when making its sole campaign donation, according to state campaign finance records.

The videos on the coalition’s website – which include interviews with Laverick, Coyle of the Maryland Hospital Association, lawmakers Pugh and Morhaim — were created by Center Maryland, a news aggregator website created by KO’s founders.

“It’s no secret that KO has worked with doctors, medical institutions and mothers to help with the communications efforts of Maryland Maternity Access Coalition,” KO’s Boehmer wrote in an email to The Daily Record. “Presumably, public relations professionals worked, years ago, with a group of lawyers as they established the Maryland Trial Lawyers Association – which was later rebranded as the Maryland Association for Justice.”

The IRS requires tax-exempt organizations to make annual returns and exemption applications available for public inspection upon request. But the coalition, which is incorporated as a 501(c)4, denied multiple requests from The Daily Record to produce copies of its tax filings.

Laverick wrote in an email that “we have and will file all required documents – which will be publicly available.”

Some information about the coalition’s finances can be gleaned from its filing with the State Ethics Commission. For the 2015 legislative session, the coalition’s expenses include $80,000 paid to lobbyists, including four representatives from the Baltimore firm of Harris Jones & Malone and five from the Annapolis-based firm Perry, White, Ross & Jacobsen.

At the hearing before the House Judiciary Committee in March, Malone named six health systems as financial contributors to the Maryland Maternity Access Coalition: the University of Maryland Medical System, Mercy Medical System, Dimensions Healthcare – which operates hospitals in Prince George’s County — Johns Hopkins, Saint Agnes Hospital and GBMC.

Only GBMC and Dimensions would acknowledge both their support of the coalition and say how much money they contributed: $40,000 each.

Spokeswomen for Saint Agnes Health, Johns Hopkins and Mercy Medical acknowledged supporting the coalition but declined to say whether they had given it financial support. UMMS officials said it had made a financial contribution, but would not divulge the amount.

MedChi, the Maryland Hospital Association, MedStar and Lifebridge,  though supportive of the coalition’s goals,  all said they have not given the organization any money.

In a Nov. 13 coalition press release, Laverick listed a dozen organizations that the coalition was “proud to work with” on the issue, but did not identify those groups as members or contributors; a call to the coalition for clarification was not returned.

Two of those groups, the Mid-Atlantic Association of Community Health Centers and the Maryland chapter of the American College of Nurse Midwives, said they supported the birth-injury fund, but had not given the coalition any money.

Another, Catholic Charities of Baltimore, gave the coalition $2,000 in 2014, according to its executive director, Bill McCarthy.

Mercy officials have been particularly outspoken in their support of a birth-injury fund, and have worked closely with the Maryland Maternity Access Coalition to promote the proposal.

Hospital spokesman Dan Collins said in an email that large settlements against two other health care providers in the city resulted in Mercy Health Services’ credit outlook being downgraded by Standard & Poor’s.

Those settlements contributed to a doubling of the health system’s insurance costs in fiscal 2013, according to Moody’s Analytics.

Electronic court records show Mercy also saw an increase in OB-GYN-related malpractice filings a few years ago, going from one case filed in 2010 and 2011 to five cases filed in 2012.

In 2013, Mercy announced it was cutting ties with a midwife practice that delivered at the hospital, in part due to the rising cost of malpractice insurance.

The coalition’s website includes a video interview with Dr. Cyrus Lawyer, an obstetrician at Mercy; Boehmer, acting on behalf of the coalition, arranged an interview with the hospital’s head of obstetrics and gynecology, Dr. Robert Atlas, for a story on obstetrical care that The Daily Record published last month.

Mercy representatives who have testified in support of the fund in Annapolis include Atlas; Thomas Dame and Ward Coe, attorneys for the hospital; Dr. Susan Dulkerian, head of the hospital’s neonatal intensive care unit, and Ryan O’Doherty, Mercy’s director of external affairs and strategic communications.

Ryan O’Doherty, who previously served as chief spokesman to Rawlings-Blake and spokesman for the Maryland Democratic Party, is the younger brother of KO Public Affairs’ co-founder.

 The growth of ‘AstroTurf’

Examples of these campaigns abound in Maryland and across the nation.

One of the highest-profile examples in recent years involved Wal-Mart and Edelman, its public-relations firm.

In 2006, after the retailer had faced criticism of its employment practices from union groups, a supposedly-grassroots group called “Working Families for Wal-Mart” sent a pair of bloggers across the country in a recreational vehicle to interview Wal-Mart employees – who were reportedly unanimous in their praise of the company.

But the blog was ultimately revealed to be a creation of Edelman, resulting in a backlash that prompted CEO Richard Edelman to apologize on his blog for “failing to be transparent about the identity of the two bloggers.”

In 2008, Japan Today reported that McDonald’s admitted hiring 1,000 people to stand in line at one of its restaurants in Osaka the day a new hamburger was released.

In 2011, when the Baltimore County Council was considering legislation to expand the number of speed cameras in the county, KO was hired by ACS State and Local Solutions, the company that held the county’s speed camera contract, according to reports on Patch.com.

Around that time, a Baltimore County Public Schools teacher and mother of two started a Facebook group supporting the installation of more speed cameras called “Slow Down for Baltimore County Schools,” which was spun-off into a separate website by the woman’s neighbor. The woman told Patch that the neighbor was Howard Libit, who was still working for KO at the time.

The county council ultimately voted to expand the speed camera program.

Donald F. Norris, director of the School of Public Policy at the University of Maryland, Baltimore County, said the campaign to repeal the estate tax – its now a staple of the Republican platform – could be seen as one successful example of the practice.

A report by the nonprofit group Public Citizen traced that campaign to a handful of billionaire families who financed outside groups such as the Club for Growth and the Policy and Taxation Group to lobby against the tax.

“It’s an incredibly widespread practice, and increasingly so,” said Edward Walker, associate professor of sociology at the University of California, Los Angeles and author of “Grassroots For Hire: Public Affairs Consultants in American Democracy.”

“In health care, this kind of thing is relatively common,” he said. Sometimes, companies will create a group out of whole cloth; sometimes they’ll find an existing group that aligns with their interests, Walker said.

Health insurers created third-party groups during the debate over the Affordable Care Act; WellPoint, now known as Anthem, started a group called the Health Action Network to rally support against the proposed law, Walker said.

While undisclosed AstroTurf is dangerous, some companies – Uber and AirBnB for example – have been open about the grassroots efforts they’ve supported to advance their interests, Walker said.

But to a local group dedicated to openness in government, the practice raises concerns about transparency and honesty, said Jennifer Bevan-Dangel, executive director of Common Cause Maryland, who did not comment on the Maternity Access Coalition itself.

“We’re fortunate in Maryland that our legislators really do have an open ear to their constituents,” Bevan-Dangel said. But lawmakers need to know they’re hearing from real people, she added.

What happens next?

As the 2016 General Assembly session approaches, it’s not clear whether the birth-injury fund will have any additional traction in Annapolis. But the two groups facing off on opposite end of the issue – the Maryland Association for Justice and the Maryland Maternity Access Coalition – are ready to engage in the battle.

The Maryland Association for Justice has made more than 300 political contributions since 2006, predominantly to Democrats, including giving $10,000 to the Democratic State Central Committee in 2010, 2011, 2013 and 2014, according to state campaign finance records.

The association also spent more than $130,000 on lobbyists for the 2015 General Assembly Session, including four representatives from the Annapolis-based firm Alexander & Cleaver.

The Maternity Access Coalition has made one political donation – $3,000 to the Republican State Central Committee of Maryland on Dec. 5, 2014.

A second workgroup studying access to obstetrical care in the state – this one led by the Maryland Hospital Association — was created by lawmakers in the 2015 session.

That workgroup, whose members include Tolley, is scheduled to deliver its final report by Dec. 1.

Pugh said she’s waiting to see the report before deciding whether she’ll resubmit legislation creating the fund during next year’s General Assembly Session.

Morhaim, who has called for the creation of such a fund for a decade, said he expects to do so again in the coming session.

“I put in bill long before there were coalitions,” he said. “It’s something I believe in.”

Daily Record reporters Bryan P. Sears and Adam Bednar contributed to this report.