Now, WellCare is busy promising to cooperate with federal and state authorities. While it has offered investors no details about the probe, the company has pledged to keep its board - and its audit committee in particular - informed about the situation. But that vow could prove less reassuring than it sounds.
Notably, the board counts Alif Hourani - cousin to CEO Todd Farha -- among its "independent" directors. Indeed, Hourani ranks as the only director who sits on WellCare's audit committee and its two other committees to boot.
Unlike Farha, who owns a large stake in WellCare despite some massive stock sales, Hourani has little to lose. After dumping most of his WellCare stock - and becoming a multimillionaire in the process - Hourani now has just 581 shares left.
The "independence" of a multimillionaire who has just made his multimillions from his cousin's "management" is what this is all about. What kind of governance do you get from your cousin who has just made several million dollars from your defrauding Medicaid? (Allegedly, that is, but we all know where this is headed.)
Funny, I've always heard that when something sounds too good to be true, it probably isn't. Too bad they never learned that at Merrill Lynch:
Years ago, in an article published by The Tampa Tribune, WellCare's own CEO predicted that the company would never post margins above 4%. This summer, however, analysts pegged WellCare's margins at 6% -- and even higher - instead.
"This quarter, you're up close to 7% for a government business," Merrill Lynch analyst Doug Simpson marveled during the company's second-quarter conference call.
Seven percent for a "government business" is 75 percent higher than Farha's own estimate of four percent. I guess the era of small government and accountability in spending is no longer a cherished Republican ideal.
Don't make the mistake of relying on "independent" Wall Street analysts to make sense of the whole mess. We learned only days ago about the glorious independence and stunning business insights of Merrill Lynch, with its $161 million payday for outgoing Stan O'Neal, CEO and Bush Pioneer, who managed to "earn" his rich rewards by losing a mere $8 billion.
This is the same Merrill Lynch that did more to enable Enron than even Arthur Andersen.
Does anybody even remember Andersen anymore? Oh, that's right, they were destroyed by the DoJ. That's exactly the punishment you get for auditing Halliburton while Cheney was CEO. No paper trail!
"Independence" is a myth. The entire Republican machine — from the boardrooms to the Oval Office — is a plutocratic circle jerk. The only ones left out of the celebration are the rest of the world, including non-upper-class Republican voters who got fooled by the bogus appeals to Christianity and "values." Nepotism and dynasties and fraud driven by crony capitalism are all they know, and greed is the only real value they hold dear.
WellCare is just a baby Enron. If only we could get it off America's tit...
If you're just tuning in, we last looked at Farha and WellCare here and here.
