Company Makes Admission in Response to Activists at Shareholder Meeting
Philadelphia – Representatives of Health Care for America Now (HCAN), the 1,000-member coalition that led the successful fight for health reform, confronted CIGNA Corp.'s CEO and board members at the company's annual shareholder meeting today, and company officials admitted for the first time that they secretly contributed funding for duplicitous anti-reform TV ads. The company made the comments in response to questions from HCAN members who attended the event while activists outside rallied around a golden parachute symbolizing former CIGNA CEO Ed Hanway's recently disclosed $111-million retirement package. The company also broke with precedent and barred the media from attending the meeting. Several reporters who expressed interest in attending the meetings—usually a highly scripted affair—were turned away in advance or at the door of an auditorium at the Philadelphia Museum of Art. CIGNA officials responded to questions from four HCAN members who were admitted by arrangement with several shareholders. Their questions pointed to the failure of CIGNA to act in the interest of the public or shareholders. CEO David Cordani confirmed that the company contributed secret funds over the last year to the industry trade group, America's Health Insurance Plans (AHIP), and the U.S. Chamber of Commerce to wage a duplicitous anti-reform campaign while industry lobbyists were professing to support reform, said Marc Stier, Pennsylvania state director of HCAN. Cordani would not disclose how much CIGNA spent on the effort, which he characterized as separate from AHIP and Chamber dues. Some of CIGNA's money was laundered through the Chamber of Commerce, which spent at least $20 million of insurance company funds on television commercials designed to scare Americans about health reform. The money laundering was a closely held secret until the National Journal disclosed the chamber's role earlier this year. "Today, for the first time, CIGNA admitted to making secret payments to the Chamber," Stier said. "They won't tell even their own stockholders how much money they sent through the chamber, but there is now no question they did so." CIGNA has spent $7.95 million on congressional lobbying since 2008, according to public records it is required to file. When asked whether the company would end the practice of dumping customers that file expensive insurance claims, known in industry parlance as "purging," Cordani expressed no interest in doing so. He remarked that "purging" was an "unfortunate" term he would work to change in the industry without addressing the practice itself. In answer to an HCAN question, CIGNA executives and board members defended the excessive retirement package granted to Hanway at the end of 2009 and vowed to leave unchanged the composition of the board's executive compensation committee. The panel consists of CIGNA board members who are the chief executive officers of other companies. "The CEOs of America scratch each other's backs to benefit themselves at the expense of their shareholders and the American public," Stier said. Cordani, who earned $6.6 million last year as chief operating officer before taking the top job on Jan. 1, said he had no qualms about keeping journalists from covering the shareholders meeting.
-30-