Health charity targeted for state control

JEFFERSON CITY, Mo. -- Attorney General Jay Nixon says a Southeast Missouri lawmaker's proposal to turn the state's largest charitable foundation into a political subdivision of the state is illegal, dangerous and bad public policy.

State Rep. Nathan Cooper, R-Cape Girardeau, on Wednesday filed a bill that would make the Missouri Foundation for Health's board of directors political appointees of the governor.

The private foundation, which has a $1.1 billion endowment, was created in 2000 to settle a lawsuit Nixon brought against the former Blue Cross Blue Shield of Missouri after that not-for-profit corporation shifted assets it built over decades of tax-exempt status into RightCHOICE Managed Care Inc., a for-profit insurance company. Under the settlement, the foundation was awarded 80 percent of RightCHOICE's stock, which it has since divested.

Cooper said the taxpayers of Missouri deserve government oversight of the foundation.

"This settlement was reached with the state of Missouri. These moneys belong to the people of Missouri," Cooper said. "When you are talking about a billion dollars, people need accountability for that money."

Nixon said the state has no legal power impose its authority on a private organization.

"These are not state assets, and I don't think the legislature should be about the task of saying private assets are public," Nixon said. "What's next? The United Way? The Red Cross? This could dramatically chill contributions to charity if donors think the state is going to step in and take over."

Cooper said the health foundation is different from other charities because it was founded with assets provided by the public, albeit in a roundabout way, through Blue Cross Blue Shield's tax-exempt status.

"I do not consider the United Way, the Danforth Foundation or any other private foundation to be similar," Cooper said. "These foundations were created by private wealth."

Requests for comment from the foundation were referred to Dr. James Kimmey, the foundation's president. Kimmey was traveling Friday and couldn't be reached.

The foundation's mission is to fund health services for uninsured and underinsured residents of 84 Missouri counties plus St. Louis city, the former coverage area of Blue Cross Blue Shield. Last year, the foundation awarded $55 million in grants for a variety of health-care programs and plans to distribute the same amount this year.

The foundation is governed by a 15-member board of directors. Nominees for vacancies are chosen by a 13-member community advisory committee. Nixon, a Democrat, picks the advisory panel members.

Cooper said the foundation board is politically slanted in favor of Democrats. His bill would add another member to the board, with the membership to be divided equally between the two major political parties. Appointees would be subject to Senate approval. The advisory committee would be abolished.

Cooper said making the foundation board part of state government would provide public accountability. Although he has no quarrel with any decisions the board has made to date, Cooper said tighter controls are needed to prevent future abuse.

"It has no accountability to the people of the state of Missouri," Cooper said. "Any time you have an organization with this much authority, it is not a good idea to sit and wait for problems to arise."

Cooper's legislation wouldn't dictate to the board how the foundation's money should be spent.

Nixon said there is ample oversight of the foundation, which as a not-for-profit charity is subject to countless state and federal regulations. Under the terms of the settlement, the foundation also must follow Missouri's open meetings and open records law, which typically only applies to government bodies.

The legislature would be taking a "huge step backward" by even considering Cooper's bill, Nixon said.

"This is so dangerous, to send the message to the charities of this state 'Either do what Nathan Cooper wants or we'll politicize it,'" Nixon said. "This is bad public policy and bad law -- not necessarily in that order."

A similar charity called the Health Care Foundation of Greater Kansas City was recently formed as the result of another lawsuit Nixon brought. It serves three Missouri counties in the Kansas City area plus another three Kansas counties.

The bill currently doesn't apply to that foundation, but Cooper said it could be included later.

The bill is HB 605.

mpowers@semissourian.com

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