Lobbying Firm to Pay $100,000 to Resolve Allegations of Inappropriate Contingency Fee Agreement
Lobbying Firm Allegedly Contracted with Hospital to Receive Percentage of State Funds Received As a Result of Legislative Lobbying
BOSTON – A lobbying firm will pay $100,000 to resolve allegations that they profited from an inappropriate contingency fee agreement with a Brighton hospital, Attorney General Martha Coakley announced today.
A joint disposition agreement was entered into today between the Commonwealth and the Brennan Group, Inc. (Brennan Group) in which the Brennan Group will return $100,000 to Franciscan Hospital for Children (FHC) for allegedly arranging contingency fee agreements in violation of lobbying laws.
“Lobbying firms are prohibited from entering into contingency fee agreements because they create an appearance of impropriety,” AG Coakley said. “Our office will continue to ensure that the relationships between lobbyists and their clients conform with the law.”
According to the disposition agreement, in July 2006, the Brennan Group entered into a new payment contract with FHC, a pediatric rehabilitation hospital located in Brighton, MA.
In this contract, the Brennan Group agreed to lobby the legislature on FHC’s behalf with respect to Pediatric Disproportionate Share Hospital (P-DiSH) Medicaid payments as well as funds from the New Essential Community Provider Trust Fund (ECPTF).
In return, FHC agreed to pay the Brennan Group a five percent fee on the first $1 million of any P-DiSH or ECPTF payments and a three percent fee on any subsequent P-DiSH or ECPTF payments received by FHC following legislative appropriation and disbursement of these funds by the Massachusetts Department of Health and Human Services.
Pursuant to the July 2006 agreement, following the receipt of P-DiSH and ECPTF funds, FHC made fee payments to the Brennan Group totaling more than $370,000.
In the disposition agreement, the AG’s Office alleges that the payments made to the Brennan Group by FHC pursuant to this agreement were contingent upon the passage of legislation and therefore violated state law prohibiting lobbyists from entering into contingency fee agreements with clients.
This case was handled by Assistant Attorney General Michael Pine, of Attorney General Coakley's Public Integrity Division, along with Massachusetts State Police assigned to the AG’s Office.
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