Malloy’s talks with Aetna were one-sided and futile

mark pazniokas :: ctmirror.org file photo

Gov. Dannel P. Malloy talking about Aetna’s future.

With a measure of flattery and an effort at common ground, Gov. Dannel P. Malloy wrote to Aetna’s chairman and chief executive, Mark Bertolini, on March 6, requesting a meeting to discuss how to keep one of the nation’s largest health insurers headquartered in Hartford after the failure of its merger with Humana.

The governor acknowledged Wednesday he never got his meeting with Bertolini. He and his staff talked to other Aetna officials, who never articulated what changes the company desired to see in its only corporate home since its founding in 1853 — not even after Connecticut made a written promise two weeks ago to match any relocation offer from another state.

“While I don’t have any indication that they have come to a decision relative to other state or city offers, I believe their lack of a direct response speaks volumes about their intentions, at least when it comes to their headquarters,” Malloy said.

Hartford Mayor Luke Bronin said in a separate news conference he believes Aetna’s decision to move its headquarters  was made “a long time ago.” Despite the company’s not making a formal announcement, he said, discussions with people “at the most senior level” lead him to believe a change is coming.

“I’ve had enough conversations to be confident that their intention is to move their headquarters,” Bronin said.

To Malloy, Aetna’s silence is confirmation of a blogger’s report it is moving its headquarters from Hartford, Conn., a financially struggling city and state that prides itself as a center of the insurance industry and home to a sophisticated and sympathetic regulatory structure.

In its only comment since blogger Kevin Rennie posted an item reporting Aetna was bound for Manhattan, a city Bertolini is known to enjoy, the company all but acknowledged its headquarters would be leaving, while saying it would remain a major employer in Hartford, a city it recently pledged to support with a major contribution.

“We are in negotiations with several states regarding a headquarters relocation, with the goal of broadening our access to innovation and the talent that will fill knowledge economy-type positions,” said T. J. Crawford, a company spokesman in New York. “We remain committed to our Connecticut-based employees and the Hartford campus, and hope to have a final resolution by early summer.”

Crawford said Aetna would have no further comment.

Malloy reacted with restraint Wednesday at a news conference, a tacit admission that Aetna, which has 5,800 employees in the state, is and most likely will remain a major employer in Connecticut, a company on which the city and state hope to remain on good  terms. He expressed hope that Aetna, like some other companies based elsewhere, will choose to keep the state as its home for regulatory purposes.

But the governor, who shrugged off a question about press reports that he and Bertolini had a hostile relationship, said not only did he not speak directly with Bertolini since writing him on March 6, they had no communication for years.

His letter sounded at times like an introduction.

“We have many things in common. We are both adept at being frank,” Malloy wrote. “We are both huge employers of thousands of greater Hartford residents. And, we both see the potential in Hartford and are committed to helping the city fulfill its promise.”

For a full page, Malloy talked about Aetna’s “esteemed” place in Hartford and beyond.

“Last week’s announcement of Aetna’s commitment in partnership with other Hartford corporate stalwarts to provide $50 million to Hartford over the next five years as part of larger stabilization of the city is commendable,” Malloy wrote.

He didn’t get to the ask until the second page. He mentioned the aborted merger with Humana, which was opposed by U.S. Sen. Richard Blumenthal as anti-competitive, and Bertolini’s “candid comments” about the continued viability of health exchanges under the Affordable Care Act.

In February, Bertolini made national news by proclaiming the exchanges were in a “death spiral.”

C-Span

Aetna CEO Mark Bertolini in a hearing televised by C-Span.

“These developments leave us both in churning waters,” Malloy wrote. “In light of all this, I’d like to propose we meet to discuss Aetna’s future in the state. I am fully aware of the concerns you have raised about doing business in Connecticut, and I’d like to work with you to address those that we can. Perhaps working together, we may be able to reduce the uncertainty we face and unlock unrealized potential.”

Malloy’s staff had looked for allies at Aetna, but the company’s board of directors has few connections to Connecticut. One director, Fernando Aguirre, was the chief executive of Chiquita Brands when the company moved its headquarters from Cincinnati to Charlotte, N.C., only to be sold three years later and abandon Charlotte.

The focus was on Bertolini, whose Twitter account often features pictures of events he is attending in New York.

“There is no book about corporate relocation that doesn’t make the following point: That where the chief executive wants to be is the most important factor,” Malloy said.

An admiring Tweet from Aetna’s CEO about Manhattan.

Malloy said Aetna’s reported desire to be in a larger, more vibrant city comes after General Electric’s departure from a suburban 1970s campus in  Fairfield for Boston. Those developments are reasons why the state needs to continue investing in cities.

“Connecticut needs to wake up and recognize that we are not competing for that demographic. Companies are telling you they want to be in cities,” Malloy said.

Bronin said he did not see Aetna’s decision as connected to Hartford’s financial struggles, which have caused the city to explore bankruptcy as a last option.

“Ultimately, I don’t think this decision by Aetna is being made based on Hartford’s fiscal challenges,” Bronin said. “I think it’s being made because Connecticut is late to recognize how important strong and vibrant cities are.”

Bronin also said he does not believe any decision is being driven by the cost of operating in the city. He said Malloy’s assessment – that the most important factor in relocating a corporate headquarters is whether a CEO likes where he or she lives – is “probably right.”

While Malloy said he has not spoken with Bertolini recently, Bronin said he has met with him “within the month” and on prior occasions.

All of those meetings were scheduled in advance, Bronin said. When pressed on whether he has seen Bertolini around Hartford, Bronin’s answer was succinct: “Nope.”