Billions in Tax Dollars Paid to State Agency Vendors

August 5, 2015

Investigative Reports

Print Friendly, PDF & Email

MoneyIn recent years, BlueCross BlueShield of South Carolina has easily ranked as the top-paid vendor – taking in more than $1.3 billion in fiscal 2014 – among all state agencies excluding public colleges and universities, state comptroller general records show.

And payments to the health insurer for public employees more than doubled from fiscal 2012 through fiscal 2014, while total payments to all listed vendors rose by 42 percent during the period, according to those records, though agency spokespersons contacted Tuesday by The Nerve couldn’t immediately explain the hikes.

Comptroller General Richard Eckstrom earlier this year released the highest-paid vendor database as part of his ongoing transparency initiative on the agency’s website. The site notes that expenditures of the state’s public colleges and universities are not included because “each of those entities operates its own stand-alone accounting system independent of the state’s central accounting system.

“The Comptroller General’s Office has vetted this data extensively in an effort to provide an accurate summary of state government’s purchasing levels with businesses,” the site says.

Following were the top-10 highest-paid vendors in fiscal 2014, which ran from July 1, 2013, through June 30, 2014, according to the site:

  • BlueCross BlueShield of South Carolina*:  $1.34 billion;
  • Catamaran PBM of Illinois Inc.:  $328.9 million;
  • Medco Health Solutions Inc. (New Jersey):  $303.1 million;
  • BlueChoice HealthPlan of South Carolina:  $71.4 million;
  • Nexsen Pruet law firm** (South Carolina): $56.1 million;
  • Bank of America (North Carolina):  $51.1 million;
  • R.L. Bryan Company (South Carolina):  $50.2 million;
  • Metropolitan Life Insurance Co. (New York):  $47.5 million;
  • J.B. Coxwell Contracting Inc. (Florida):  $47.1 million; and
  • Lane Construction Co. (Connecticut):  $40.6 million.

* includes payments through the S.C. Public Employee Benefit Authority and Department of Health and Human Services.

** includes payments by the state departments of Commerce and Agriculture.

Payments to BlueCross BlueShield, Catamaran, Medco, BlueChoice and Metropolitan Life went primarily through the S.C. Public Employee Benefit Authority (PEBA), the agency responsible for managing the state’s employee insurance and retirement systems, comptroller general records show.

Those records show that payments to BlueCross BlueShield skyrocketed from $488.7 million in fiscal 2012 to $1.34 billion in fiscal 2014, a jump of about $836 million, or 170 percent, over the period.

Contacted Tuesday afternoon by The Nerve, PEBA spokeswoman Megan Lightle couldn’t immediately explain the increase, though she said she would check into the matter.

Multiple state agencies listed payments to Bank of America in fiscal 2014, comptroller general records show. The S.C. Department of Education made payments to R.L. Bryan, a printing company based in Columbia, that fiscal year.

The departments of Commerce and Agriculture covered the majority of the total amount of payments in fiscal 2014 to the Columbia-based Nexsen Pruet law firm – $49 million and $7 million, respectively. Agency spokespersons didn’t return written messages Tuesday afternoon from The Nerve seeking comment about the payments.

The Nerve previously reported that Nexsen Pruet is considered in legal circles as the state’s go-to economic development law firm, negotiating, for example, the incentives agreement for Boeing’s assembly plant in North Charleston.

As for J.B. Coxwell Contracting and Lane Construction, their payments in fiscal 2014 were made primarily made by the state Department of Transportation, comptroller general records show. Other large transportation contractors made the top-10 highest-paid vendor lists in fiscal 2012 and 2013, including, for example, C.R. Jackson Inc. and Sloan Construction Co., which are members of a nonprofit organization, known as the South Carolina Alliance to Fix Our Roads, that pushed this year for an increase in the state’s gasoline tax, as The Nerve earlier reported.

Overall, total payments to all listed vendors in the comptroller general’s database, which contains more than 13,000 entries for each fiscal year and lists individual payments of $1,000 or more, rose to $4.37 billion in fiscal 2014 from $3.07 billion in fiscal 2012, an increase of about $1.3 billion, or 42 percent. But agency spokespersons contacted Tuesday by The Nerve couldn’t immediately explain the hike.

Update: After this story was published, Nexsen Pruet spokesman Kevin Floyd told The Nerve that the $49 million and $7 million paid by the departments of Commerce and Agriculture, respectively, were dispersed by the law firm as part of two real estate closings, and that private parties paid the firm’s legal fees related to both transactions.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.