Veering dangerously to the right

Veering dangerously to the right

It's time for the state's business establishment to get Blue Cross Blue Shield back on track

It's hard to explain (especially to newcomers who haven't lived here long), but there are few more important components in North Carolina's political system than its moderate business establishment. 

Unlike many other southern states in which the business elite is comprised almost exclusively of reactionary anti-government types (who, aside perhaps from the football team at good ol' State U., couldn't care less about public structures and systems), North Carolina has a long tradition of fostering and maintaining a class of comparatively moderate corporate oligarchs.

Here's one way to think about this reality: In many states, groups like the John Locke Foundation and the Pope Civitas Institute would be "insiders" who enjoyed regular access to the state's top political leadership. Here in North Carolina, of course, this is not the case.

Here, to their credit, even most conservative, pro-business elected officials usually roll their eyes and sigh whenever they're forced to endure the rants of the state's reactionary think tanks. At some basic level, these leaders generally "get" the fact that long-term progress requires vibrant public structures like good roads, strong schools and a clean environment. (As an aside, it is this exclusion from power that many surmise has always been at the heart of the ceaseless vitriol that emanates from the excluded conservatives).

The powers that be

There are many real world examples of North Carolina's moderate corporate oligarchy.  For decades, Jim Hunt was its chief spokesperson in the political world. More recently, the state Senate under the tag-team leadership of Marc Basnight and Tony Rand has been perhaps the preeminent exemplar.

On the institutional level, examples include the state's comparatively responsible banking industry, its somewhat less-avaricious-than-average power companies and, of course, the UNC system led by that paragon of the business establishment, Erskine Bowles.

Especially in recent years, yet another prime example has been the state's dominant health insurance provider, Blue Cross Blue Shield of North Carolina (Blue). As even a brief look at the history, connections and leadership of Blue makes clear, the organization has become intimately intertwined with the state's political leadership.

Whether it's leading various university boards, supporting other nonprofits with its foundation, or providing funding for any number of public purposes (including a goodly chunk of Mary Easley's salary at N.C. State), Blue has become the epitome of the connected, civic-minded, Democratic establishment institution. Its Board of Directors includes several well-meaning people who were plucked from the world of nonprofits and education.

Blue's Number Two executive Brad Wilson, for example, was once the lobbyist for Governor Hunt. Since joining Blue, he has chaired the UNC Board of Governors and played a leading role in multiple, high profile legislative study commissions that have no relation to health care, including the recently concluded 21st Century Transportation Committee.

Blue's rise in recent years has also coincided with a similar rise of Capstrat – the state's most high-powered Democratic Party-connected public relations firm. Over the past several years, Capstrat has parlayed its connections with Democratic establishment to win a bevy of extremely lucrative contracts with Blue as well as various government and government-funded entities. Ken Eudy, Capstrat's founder and CEO, is the former head of the state Democratic Party and was apparently even the best man at the wedding of Blue's grand poobah, Bob Greczyn.

Going off the tracks

Over the years, there has been a lot of good to come out of the moderate business establishment's sometimes-benevolent rule. From Raleigh's integrated schools to the Charlotte mass transit system to the state's world class universities to Smart Start to the general relegation of state's far right to the outer fringes of power, there is a formidable list of accomplishments to which this group has made significant contributions.

As with any powerful insider group of this kind, however, there have always been instances in which some leaders have strayed or lost their perspective. And over the last decade or so, Blue Cross has been one of the most frequent transgressors.  Consider the following:

  • Blue's ill-fated and ill-conceived effort to convert to a for-profit company in the 1990's,
  • Its repeated efforts to combat "mental health parity,"
  • Its maintenance of huge profits/surpluses and exorbitant salaries for its leadership team, and
  • Its hip-deep involvement in the recent troubles surrounding the State Health Plan.

This week, yet another disturbing action by Blue came to light when it was revealed by multiple news sources that Capstrat has been producing misleading TV ads on the insurer's behalf to attack the Obama health care plan. In the ads, Blue and Capstrat planned to all but mimic the infamous and misleading right-wing ads from the early-1990's that big business and right-wing activists used so successfully to derail the Clinton health care proposals.

As New York Times columnist Paul Krugman noted yesterday in a column entitled "Blue Double Cross," the ads are in direct contravention of a pledge made just last week by the nation's health insurance industry that it would play a cooperative role in the process of fashioning a new national health reform package.

More immediately and directly, given the centrality of health care reform to the President's agenda and the fact that Eudy was publicly one of Obama's biggest North Carolina campaign supporters, the ads are a remarkably brazen effort to stab the Obama administration in the back.

Though a Blue spokesperson attempted to defend its latest transgression with wonky rhetoric, it's patently clear to anyone with eyes and a nose that the ads are really about the same thing that Blue's previous escapades were about: money.

Time to change direction

Especially in light of the news about Blue's $40,000 annual contribution to Mary Easley's salary and the recent allegation that one of its lobbyists may have attempted to bribe a state legislator, Blue's policy double-cross makes clearer than ever that something in the "nonprofit" has gone seriously awry. Unless action is taken to get the insurer back on track, it risks careening out of control and perhaps even into the arms of the far right ideologues who crave just such a powerful and deep-pocketed ally.

All of which demonstrates why it is essential that some of the good people who Blue has placed on its Board – people like chairperson Jeffrey Houpt of UNC, activist and foundation leader Andrea Bazan, former Fayetteville State chancellor and community college system chief, Vic Hackley, UNC administrator Dr. Harold Martin and UNC-Asheville administrator Cissie Stevens – take strong and immediate action to get the nonprofit back on track.

Working with the other elements of the state's moderate business establishment (and maybe even the progressive nonprofit advocacy community for a change), it's quite conceivable that such a formidable group could help Blue to mend its ways – to become a nonprofit in more than name only and to be a real part of the solution to the health care crisis.

No one's expecting the insurer to become the North Carolina office of Consumers Union, but given the group's longstanding participation in the state's moderate business establishment, it would be a tragedy (and a real blow to the state's future) if Blue were to abandon all pretense of civic-mindedness and throw in once and for all with the "greed is good" crowd.    

With any luck, this latest profit and greed-motivated attack on the central domestic policy initiative of new and visionary president will be the last straw. North Carolina's moderate business oligarchy may be far from perfect, but it's a lot better than one finds in other states and we need it to remain strong. It should act now to get Blue back within the fold.

About the author

Rob Schofield, Director of Research, has three decades of experience as a lawyer, lobbyist, writer, commentator and trainer. At N.C. Policy Watch, Rob writes and edits frequent opinion pieces and blog posts, speaks to various civic groups, appears regularly on TV and radio and helps build and develop movements for change.