Arkansas Talk Business: (Bluedog) ROSS REVEALS MORE DETAILS OF PHARMACY SALE TO USA DRUG

[mod mom]

Wednesday, September 23, 2009 - 9:55:55 PM
ROSS REVEALS MORE DETAILS OF PHARMACY SALE TO USA DRUG



Rep. Mike Ross (D-Prescott) has been on the hot seat for the sale of a business to a prominent Arkansas pharmacy chain, which prompted the Fourth District Congressman to release more details of the two-year old deal.

Yesterday, ProPublica, a nonprofit newsgroup, and Politico, a Washington, D.C. web site, reported that Ross and his wife, Holly, were overcompensated in the sale of their Prescott pharmacy to Pine Bluff-based USA Drug, a charge that Rossvehemently denies.

Today, a D.C. watchdog group, Citizens for Responsibility and Ethics in Washington (CREW), filed a complaint with the U.S. Department of Justiceseeking an investigation.

Ross contends that CREW is a right-wing group with an agenda against him for his health care positions and that their complaint has no merit. “Anybody with a typewriter and a blank piece of paper can write the Justice Department and call for an investigation,” Ross tells Talk Business.

He argues that left-of-center groups are also angry at his stance on health care reform, which led to the original report at the center of the controversy.

“The story was written by a left-leaning, self-described investigative journalism web site out of New York that has been funded by the same people MoveOn.org and ACORN,” Ross said.

Talk Business has obtained new financial information related to the transaction, including the purchase price of the land and buildings sold, how the inventory was valued, and details of a non-compete agreement between the Ross family and USA Drug. Ross had requested a waiver in a confidentiality agreement with the pharmacy chain in order to make more information public. You can access a two-page summary of the transaction at this link.

The purchase price for the assets sold by Ross to USA Drug was $724,420.10, which included buildings, inventory, prescription files, accounts receivable, goodwill and other items.


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http://www.talkbusiness.net/Weblogs/WeblogItemDetail.aspx?WebLogItemID=166e583d-a22c-482c-a8b2-177a1cd1c7bb&WeblogID=cc24fc6b-d9a7-4647-b991-53b1cec2eec4

Documents here:

http://www.talkbusiness.net/assets/documents/USADrug.pdf

A couple things I notice:

1. Last sentence in OP is incorrect as the buildings are NOT included (see document pg 1) The building/land was sold @ $420,000, plus a lease for an off site remains.

2. Someone w expertise might want to examine price paid for assets. $ 25,000 in GOODWILL, besides being paid a $110,000 do not compete payment?

and who knew CREW was a "right-wing site with an agenda"?


Background:

Rep. Ross Lashes Out At News Org As 'Leftist Group' After Pharmacy Sale Story Runs In Politico
Justin Elliott | September 23, 2009, 7:01PM

Yesterday, Politico and ProPublica published a story suggesting Rep. Mike Ross (D-AR) sold his family pharmacy in Prescott, Arkansas, to a big drug store chain for above market value.

In response, Ross, who is the lead Blue Dog Dem working on the health care bill, has responded only partially to the story's substance, without denying the key issue, and has repeatedly attacked ProPublica as illegitimate and "leftist."

Meanwhile, good government group CREW today asked the Justice Department to investigate whether Ross committed "bribery and honest services fraud by selling a piece of commercial property for more than its worth to a pharmacy chain with an interest in pending legislation." Ross calls the charge baseless.

A quick summary of the Politico/ProPublica story: Ross sold his family pharmacy to USA Drug back in 2007 for $420,000. But the county assessor valued the property at just $263,000. And an outside appraiser put the price at $198,000 for ProPublica.

The Rosses were also paid $500,000 to $1 million for the pharmacy's assets (such as drugs on the shelf) and $100,001 to $250,000 to sign a non-compete agreement. Ross's wife still works behind the counter at the store. Soon after the sale, the owner of USA Drug, which has an obvious interest in the health care bill, gave Ross a $2,300 donation.

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http://tpmmuckraker.talkingpointsmemo.com/2009/09/ross_lashes_out_at_news_org_as_leftist_group.php?ref=fpb

[mod mom]

1. Here is some relevant info on Ross:

2. Personal Ties to Health Industry: A pharmacist, Ross founded Ross Pharmacy Inc. He sold the business in 2007, but according to his 2008 financial disclosure form (here -- pdf), he and wife Holly still "own 100% of stock" in the company, which pays dividends over $100,000 a year. Holly Ross is also listed as employed by Super D Drug Acquisition Co.

3. Campaign Money: The health industry was the #1 sector contributing to Ross last year. OpenSecrets.org lists $261,000 in contributions from individuals and PAC's from health care businesses.

WHAT'S HIS DISTRICT LIKE?

Rep. Ross points to his small-town Arkansas district to position himself as an advocate for rural America and explain his moderate-to-conservative positions. His district also has the 17th-lowest median household income in Congress and 20% of his constituents live in poverty. The demographics are diverse: Nearly a quarter of Ross' constituents are African-American.

WHAT'S THE HEALTH CARE SITUATION IN HIS AREA?

According to the Census Bureau, 17.6% of Arkansas residents are without health insurance . The situation is even worse in Ross' own district, where 21.8% are uninsured.

75% of the state's insurance market is controlled by one company -- Arkansas Blue Cross Blue Shield -- and state health insurance premiums skyrocketed 66% between 2000 and 2007. The situation in Ross' town of Prescott, Ark is especially grim, Kaiser Health News reports:

Many people in and around this economically depressed town can't afford insurance, even as the battered economy has made it harder for employers to provide coverage for workers. They're looking to Washington for help, and Ross, a conservative Democrat with a strong voice in the debate over health care legislation, says he's on their side.

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http://www.southernstudies.org/2009/07/meet-rep-mike-ross.html

AND THIS GUY IS WORKING TO PROTECT HC CORPORATIONS-WHAT AN ASSHOLE!