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Last updated 12:06AM ET
March 2, 2021
Alabama
Alabama
Prosecutors Say Tapes Imply Medicaid Bribery
(2007-08-02)
(APR - Alabama Public Radio ) - An aide to former Alabama Gov. Don Siegelman testified Wednesday that in 1999 he gave confidential Medicaid bid documents to Dr. Phillip Bobo, who was seeking a state contract to provide prenatal care to poor pregnant women in west Alabama.

Bobo, 63, is on trial in federal court on fraud charges in what prosecutors say was an attempt by Bobo to pay off his competitor with help from the Siegelman administration. Bobo is accused of offering bogus Alabama Fire College contracts to persuade competitors to drop out of the running for the Medicaid contracts.

Defense attorney Bill Clark has said Bobo was best qualified to offer the maternity care and that prosecutors are trying to criminalize business negotiations for the contract.

Former Siegelman aide Nick Bailey said he provided Bobo with documents he got in a meeting with Siegelman cabinet members and advisers. Bailey said he knew the information was not to leave the meeting room. He said it contained bid numbers, information on previous bids and other information.

"I believe the information I was taking from the meeting would ultimately be helpful to Dr. Bobo in his bid process," said Bailey, who is cooperating with the prosecution and whose 18-month prison sentence was delayed so he could testify against Bobo.

On Tuesday, jurors heard tape recordings in which Bobo bragged about getting additional state funding for the Fire College and offered competitors incentives not to seek a Medicaid contract Bobo wanted.

Prosecutors played two tape recordings of 1999 telephone conversations with Bobo made by John Maxwell, who was the administrator of the Capstone Medical Center at the University of Alabama. U.S. District Judge Sharon Blackburn allowed jurors to hear the tapes despite objections by defense attorneys, who complained about the poor quality of the recordings.

In the tapes, Bobo told Maxwell that his proposal would help Capstone's ailing finances. Capstone was a partner in Alabama Health Network, which was seeking the Medicaid contract.

Bobo said on the tapes that his business, Neighborhood Health Services, was better qualified for the maternity work and that other money would be available for Capstone because of his relationship with Siegelman.

"I managed to get some additional funding put into the Fire College with the blessing of the administration and what we would like to do is contract with existing programs," Bobo said, according to a transcript of the tape recordings.

In one of the recordings played to jurors Tuesday, Bobo told Maxwell that the Fire College money would be available every year.

"Yeah. It's not a one-time deal ... pay it every year. So, I mean, y'all got a lot of that's a lot of incentive. This governor is going to be governor for eight years," Bobo said on the tape. Siegelman ended up serving one term.

In the conversations, Bobo expressed his determination to get the contract.

"We're going to get the bid, even if we have to lowball," Bobo told Maxwell in one conversation.

During cross-examination by Clark, Maxwell testified he made untrue statements to Bobo in the conversation about Capstone's finances and organization.

Siegelman was charged with Medicaid fraud in connection with the contract, but prosecutors dropped the charges when a federal judge gutted much of their case during a 2004 trial.

In a separate case, Siegelman and former HealthSouth CEO Richard Scrushy were convicted last year of bribery and other charges and are currently serving federal prison terms. Bailey was a key witness at that trial.

Bailey has pleaded guilty to bribery related charges and was scheduled to begin serving on Tuesday an 18-month federal prison sentence. U.S. District Judge Mark Fuller in Montgomery has delayed Bailey's reporting date until Aug. 31 so he can testify in the Bobo trial.

Bobo is charged with fraud, witness tampering and lying to federal agents.

He was convicted of similar charges in a 2001 trial, but that conviction was overturned by the 11th U.S. Circuit Court of Appeals. Prosecutors later obtained a new indictment against Bobo.


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