Ethics questions raised about Missouri senator's bill handling

Editor's note: See the Associated Press correction at the end of the story text, posted July 28, 2011.

KANSAS CITY, Mo. (AP) — Ethics questions are being raised over a Missouri state senator’s handling of a medical malpractice insurance bill.

The Kansas City Star reported that Sen. Rob Schaaf, the vice chairman of the committee where the bill died, has a business that would have faced stricter regulations had the legislation passed.

“Where there’s such a particular financial interest at stake, it seems like he shouldn’t have been involved,” said Beth Rosenson, a political scientist at the University of Florida who studies legislative ethics.

For seven years, the St. Joseph Republican and family physician has been co-owner of the Missouri Doctors Mutual Insurance Co., known as MoDocs.

Schaaf began voicing objections soon after the medical malpractice legislation was introduced last spring. It would have required his company to boost its cash surplus and rewrite policies for charging customers.

The Star reported that those changes could have forced the company to raise hundreds of thousands of dollars, exposed it to new tax liabilities and, perhaps, undermined its competitiveness in the market.

Proponents of the bill said it was intended to prevent underfunded nonprofit insurers from being hit with major claims that wipe out their reserves and prompt their customers to drop coverage to avoid additional assessments.

But Schaaf said the reforms were more dangerous than any major claim.

“You don’t need to put a whole industry out of business over speculation,” Schaaf said. “That’s essentially what’s going on here.”

The bill was assigned to one of Schaaf’s committees, where it languished for months without a word of formal debate and then died when the session adjourned.

Schaaf said he could not remember attempting to influence the bill, but said if it had advanced to a hearing or floor debate, he would have opposed it and voted against it.

“I doubt I had much influence on the trajectory of the bill at all,” Schaaf said.

Missouri ethics laws and rules governing conflicts of interest give lawmakers wide discretion over how they influence legislation — as long as they disclose their conflicts and are not uniquely affected by the outcome.

But critics said stronger laws may be needed.

“In practice, it would be good to clear up these definitions and make sure there’s no way to misunderstand them,” said Rep. Jason Kander, a Kansas City Democrat who has sponsored several ethics bills.

Correction: Ethics Questions story

KANSAS CITY, Mo. (AP) — In a July 10 story about Missouri medical malpractice legislation, The Associated Press, based on a story by The Kansas City Star, reported erroneously that state Sen. Rob Schaaf is a co-owner of the Missouri Doctors Mutual Insurance Company. Schaaf is the co-founder, secretary, treasurer and chairman of the board, but the company is owned by the members it insures.

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