The Hartford Courant Jon Lender column

April 19--Newly elected state Rep. John Scott, R-Groton, owns an insurance agency that serves as a broker for state-sponsored student health insurance at UConn, which all full-time students must obtain if they don't have their own personal policy or aren't carried on their parents' policy.

Scott's business, The Bailey Agencies Inc. in Groton, receives annual fees of more than $300,000 -- $70 for each of the 2,200 undergraduate and graduate students who obtain coverage through the brokerage arrangement, and $80 for each of about 2,200 graduate assistants covered by the plan.

His agency and its fee structure are written into a contract between UConn and Consolidated Health Plans Inc. of Springfield.

Because of that, people noticed when one of Scott's first acts as a newly sworn-in legislator in January was to introduce a bill to prevent students at colleges and universities from "opting out of a student health care plan" if they qualify under low-income guidelines for state Medicaid health coverage.

The fewer UConn students covered under the university-sponsored plan, the less Scott's agency collects in per-student fees.

Asked if his bill could have affected his business, Scott said it's "hard to say."

But others didn't think it was a hard question at all.

"His proposal is clearly a conflict of interest as he could stand to benefit if students were prohibited from opting out of UConn's health care plan," a UConn graduate assistant, Madelynn von Baeyer, testified to the legislature's higher education committee on Feb. 10 during a hearing on a bill calling for a study of issues involving student health coverage and Medicaid.

She opposed the study bill, Senate Bill 864, which would examine possibilities, including Scott's proposal. The bill is still alive and awaiting Senate action. Meanwhile, Scott's House Bill 5354, calling for the outright prohibition against students "opting out" of university health coverage, has gone nowhere.

"We did not raise [Scott's] bill for a public hearing because of the issues you raised. So it will not be heard," the committee's co-chairwoman, Rep. Roberta Willis, D-Salisbury, told von Baeyer on Feb. 10.

None of the comments about Scott made any news at the time, and even though his bill is now dead, questions persist, starting with why Scott would introduce legislation that he could benefit from.

In an interview last week, the freshman legislator said he never intended to benefit himself, and was "trying to get students better coverage."

Even if students are financially needy enough to qualify for Medicaid health coverage, Scott said, "Medicaid programs aren't necessarily the best coverages for college students" because of issues that include a lack of coverage if the student travels out of state.

"Medicaid doesn't offer as broad coverage," he said. "There are lots of holes in the Medicaid program that are filled in by a [state-sponsored] student health program."

As to whether his bill posed a conflict between the public interest and his private interests, Scott said, "I did talk with our [Republican House caucus] legal staff before I put the bill in, to make sure that I wasn't stepping on a 'third rail.'"

He said he was advised "that because I am not the only insurance agent that works in this field -- that there are others, many others -- that it wouldn't be a conflict of interest" under the state statutes that are known as the Code of Ethics for Public Officials.

'I'm In The Clear'

"I've talked at length [with House GOP caucus officials] and they feel strongly that I'm in the clear as far as any perceived conflicts of interest," he said.

That advice may well be right, based on past legal interpretations of Connecticut's permissive standards concerning conflicts of interest.

Although state officials tout Connecticut's ethics laws as among the toughest in the nation (Connecticut ranked second nationally in the Washington-based Center for Public Integrity's 2012 "State Integrity Investigation," including an "A" grade for ethics enforcement), those ethics laws are not extremely strict. That should give some indication of how the ethics standards are everywhere else.

Time and again, when questions have been raised about Connecticut legislators taking actions that could benefit themselves, state ethics officials have said the statutes permit legislators to sponsor and vote on legislation that could financially benefit a class of people that includes them, as long as it's not they who benefit directly.

In other words, John Q. Legislator, who is an automobile dealer, can vote on a bill affecting auto dealers statewide, as long as the bill doesn't benefit only John Q's Used Cars.

Don't forget, it's the legislators who pass the ethics laws that govern their own actions.

State officials' explanation for the wide leeway on conflicts of interest has always gone like this: The jobs of state representative and senator are part-time, so they have to make a living somehow in the real world, and that means they'll bump up against issues that could, at least indirectly, affect them, their families and friends financially.

The issue has arisen for many years, and officials talk about trying to tighten the laws, but that rarely happens. For example, two decades ago, ethics officials found no problem or violation when:

--Dennis Cleary, then a Republican state representative from Wolcott, took an active role in legislation affecting nursing homes even as he worked as an administrator and part-owner of a nursing home.

--Robert Landino, then a Democratic representative from Old Saybrook, spoke against a measure that would have given local zoning boards greater authority to reject development proposals such as those sometimes submitted by Wal-Mart, with which Landino's design firm did business.

"We have a part-time legislature, and by definition we have day jobs -- lawyers, engineers, doctors, a lot of things," Landino said at the time, adding that if such actions were considered improper, "how could we get active, involved members of society to run for office?"

In explaining his recent actions, Scott said that there are about 20 other colleges and universities in Connecticut, nearly all of which have their own student health insurance arrangements that would have been affected by his bill.

Regardless of the strict legal question, Scott was asked if, in light of the questions raised, he would act differently if he could do it all over again. "I don't know if I'd want to do that again," he said. "I think now that someone had broached the subject, I probably will avoid the subject so there's not that appearance in the future."

"I guess when you're a freshman, there's some learning curves," he said.

Ethics: No Comment

The director of the Office of State Ethics, Carol Carson, declined comment Friday on Scott's actions. She confirmed in general that Connecticut statutes don't consider it a problem if a public official takes an action that benefits him no more than any other person in his field of business.

But she added: "The Office of State Ethics neither confirms nor denies that we have received any allegations, nor whether we are conducting any investigation."

Scott's bill to block students from bailing out on their university-sponsored health plans wasn't the only one he introduced. He also proposed House Bill 5355, which was a study bill similar to the one pending that Willis' committee put together.

That committee-approved measure, Senate Bill 864, would require the state Department of Social Services and university officials to study whether Medicaid funds should be used to pay the cost of financially needy students' premiums in university-sponsored health insurance plans such as UConn's, and also whether students should be prohibited, as Scott proposed, from "opting out" of university-sponsored health insurance to go on Medicaid.

Scott said he never checked with the Office of State Ethics, only his GOP caucus' legal advisers, but UConn records show that he did ask the university a year ago whether it would jeopardize his status as a vendor to the university if he got elected to the General Assembly.

"I am currently a UConn vendor that supplies the student health insurance for both the undergraduate and graduate programs," he wrote in an email to a UConn staff member in late March 2014. "It is a contract that goes out to a competitive bid every five years and ... we have been fortunate enough to win the contract over the course of many years. ... My concern is this: I am being courted locally to run for the state legislature and am concerned about any implications that running for the position and/or winning the position might have on my contract with the University."

The UConn staff member forwarded the inquiry to the Office of State Ethics and received this reply from Cynthia Isales, the ethics agency's assistant general counsel: "As far as running for statewide office, there is nothing in the Code of Ethics that would prohibit it. If he wins, he may serve and keep the contract with UConn but he may need to recuse himself if a conflict should arise."

Jon Lender is a reporter on The Courant's investigative desk, with a focus on government and politics. Contact him at jlender@courant.com, 860-241-6524, or c/o The Hartford Courant, 285 Broad St., Hartford, CT 06115 and find him on Twitter@jonlender.

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