Wednesday, July 09, 2008

Dan DeRose Takes the Stand in Ford Trial

by:Marc Perrusquia

NASHVILLE -- Only one or two top executives at a TennCare contracting firm knew details of then-state Sen. John Ford's secret consulting job for the firm, according to witness testimony and documents presented by prosecutors Tuesday.

The closely held secret of Ford's $190,000-a-year job for state contractor Doral Dental began leaking out in late 2004 after the Wisconsin-based firm was sold to its current New England owners.

Ford, 66, is on trial in federal court here on six counts of corruption connected to payments he received from Doral and another state contractor.

Steven Pollock, Doral's current president, testified that he and others found out around the time of the sale that Ford was involved with two partners in Managed Care Services Group, a firm set up to help Doral win a contract with TennCare, Tennessee's expanded Medicaid program.

Doral started paying Managed Care $40,000 a month -- 40 percent of it going to Ford -- weeks after Doral won a lucrative TennCare contract in 2002.

Pollock said he began asking questions in November 2004 when Ford and his two partners traveled to Milwaukee in hopes of saving their Doral consulting deal, which had come under internal review.

"I asked (an employee) to check whether Sen. Ford was a sitting state senator,'' Pollock told jurors.

Asked why he did that, Pollock replied, "Obviously, as a government contractor, there's typically prohibitions (against) working directly with state officials.''

Pollock said Doral eventually terminated Managed Care's consulting contract, but not before the news media began reporting on Ford's connection. Doral severed the contract in February 2005, just a few days after The Commercial Appeal first reported that Ford was receiving hundreds of thousands of dollars through Managed Care -- income he didn't report to state regulators.

Although he was then Doral's general counsel and vice president of market development, Pollock said he didn't know what Managed Care did for the firm. A succession of Doral executives, including senior vice president Robert Lynn and former chief financial officer Lisa Sweeney, testified similarly over the past two days.

Pollock said that two top executives -- Doral founders Craig Kasten and Greg Borca -- had authority to enter consulting agreements. Neither has testified. Testimony on Monday indicated that Managed Care was formed after Ford and Kasten began discussing a potential TennCare contract.

On Tuesday, prosecutors introduced a 2005 spreadsheet listing Doral's consultants that characterized Managed Care as "a political organization, (with) public officials tied to this organization including Senator Ford. ... Greg (Borca) worked out the relationship.''

The spreadsheet went on to say that when a rival firm had threatened to sue Doral, "MCSG intervene(d) and no suit was filed. Well connected and influential.''

The passage appears to be a reference to FORBA, a Colorado-based manager of Medicaid-funded dental clinics for poor children. Two current and former FORBA officials have testified that they built and briefly opened a clinic in Memphis in 2003 but were forced to shut down after Doral would not let them into the TennCare dental network.

Dan DeRose, FORBA's former CEO, testified Tuesday that Ford had tried to discourage him from suing Doral. Echoing testimony from a lobbyist a day earlier, DeRose also said Ford tried to solicit payments from him for his legislative influence.

"He asked me if I knew what his nickname was. I said no. He said, 'They call me Mr. 15Percent,''' DeRose said. Prosecutors asked DeRose if he had asked Ford what he meant by Mr. 15Percent. DeRose responded that he had, saying, "His response was 'I can take care of your problems.'''

DeRose stood his ground when defense attorney Isaiah "Skip" Gant suggested he had made inconsistent statements regarding the Mr. 15Percent comments.

"I'll always remember it,'' DeRose said on redirect. "It was startling. ... I'd never been solicited for money like that.''

The very idea that Dan DeRose is on the witness stand trying to say his hands are clean in this just blows my mind!!!!

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