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Medicaid expansion means millions for the House Speaker’s boss (updated)

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House Speaker Mark W. Eves (D-North Berwick) has been the driving force behind the Maine Democrat’s relentless campaign to expand Medicaid under the federal Affordable Care Act, commonly known as Obamacare.

Speaker Eves wrote a Feb. 26 opinion editorial in the Sun Journal, for example, arguing that expanding Medicaid eligibility is morally and financially proper. And, in his very first floor speech of the 126th Legislature, Eves descended from the rostrum to deliver a resounding call to expand Medicaid.

In addition to his public service, Speaker Eves has served since October of 2011 as the Director of Business Development for Sweetser – a Saco-based non-profit that receives tens of millions in Medicaid dollars.

A provider of social and health services, Sweetser offers mostly services that are subsidized by Medicaid and thus stands to benefit hugely from the expansion of Medicaid eligibility – a policy Eves has doggedly pursued, stating repeatedly that expanding the welfare program is not only good policy, but is morally right.

Yet in the light of Eves’ employment with a major Medicaid beneficiary, it appears the Speaker’s strident push to make nearly 70,000 Mainers eligible for the taxpayer-funded services Sweetser provides may be a conflict of interest.

In a statement provided by the Speaker’s staff, Eves said he would see no personal financial gain should Maine expand Medicaid.

“I have not received a pay check from Sweetser since January,” said Eves, who officially became Speaker of the House on Dec. 5.

Eves’ decision to forego a paycheck indicates that the Speaker’s office is acutely aware of the appearance of a conflict of interest and took precautions in advance of the inevitable debate over Medicaid expansion. However, it also raises the question of payments Eves received throughout 2012, when he was merely the Democrat’s mouthpiece on the Health and Human Services Committee.

Sweetser President and CEO Carlton D. Pendleton said the social services agency he has run for 35 years will likely benefit from the proposed expansion of Medicaid.

“We knew this could have happened when he became Speaker,” said Pendleton, in reference to Eves’ possible conflict of interest.  “We’re probably 80 percent dependent on state and federal matching funds,” said Pendleton.

Pendleton said the potential conflict played a role in the decision to remove Eves from Sweetser’s payroll. “After he was elected Speaker, we decided it would be best for Mark to take a leave of absence,” he said.

Although he recognizes the potential conflict of interest, Pendleton said such issues are part of what it means to have a citizen legislature.

“This is an honorable man,” said Pendleton. “He’s squeaky clean.”

He said Eves has worked with Sweetser off and on for nearly 10 years, but despite high praise for his employee, Pendleton said the Speaker has no guarantee of reemployment with Sweetser should his tenure as an elected official come to an unexpected end.

Medicaid Expansion Means Millions for Sweetser

Sweetser is a 185 year old social services agency providing child and adult welfare services to 20-30,000 Mainers. According to Sweetser’s most recent tax filing, the organization took in $63,334,255 from July 1, 2011 to June 30, 2012. Pendleton, who serves as President and CEO, made $296,922 in that period.

According to an analysis of Sweetser’s past tax filings, payments from Medicare and Medicaid amount to more than half of the organization’s total revenue. Sweetser’s 2001 Form 990 indicates that the organization, which files as a “private school,” brought in $49.7 million in gross receipts. Of that revenue, $28.1 million derived from Medicare and Medicaid payments.

Sweetser maintains a vigorous lobbying effort, spending $70,000 or more each year on legislative education. Although the organization has not filed any lobbying paperwork for this legislative session, state records indicate that it did lobby on the first Medicaid expansion. According to its website, “Sweetser perennially urges lawmakers to … provide adequate funding for medication management therapy for individuals who use both MaineCare (Medicaid) and Medicare.”

Following Maine’s first expansion of Medicaid enrollment in 2002, the non-profit saw an increase of 25 percent in Medicare- and Medicaid-related revenue, according to tax documents. The Medicaid expansion proposal presently under consideration is significantly larger than the 2002 expansion, meaning Sweetser’s slice of taxpayer pie could grow even more.

Expanding Medicaid eligibility as Democrats have proposed could mean an increase of $20 million or more in Sweetser’s taxpayer-funded revenue stream, as Medicaid would pay for up to 70,000 new taxpayer-funded clients.

Republican lawmakers are investigating whether to pursue a formal ethics complaint, but time may be running out.

State House sources said Sunday night that a vote on the Democratic proposal to expand Medicaid is imminent and could come as early as Monday or Tuesday.

UPDATE: The House voted 89-51 Monday morning to pass legislation (L.D. 1066) that will expand Medicaid. 

S.E. Robinson
Maine Wire Reporter
srobinson@mainepolicy.org

About Steve Robinson

Steve Robinson is the former editor of The Maine Wire and currently producer for the Howie Carr Show. Follow him on Twitter @Stevie_Rob or send him an email at Steve@HowieCarrShow.com.

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