Virginia is for givers.(Trigon Blue Cross Blue Shield; political and public relations behavior)(No Sacred Cows)

The wrongfully accused often ask, "Where do I go to get back my reputation?" Maybe they should go to Virginia, where they might not have lost it in the first place.

Take Trigon, Virginia's Blue Cross Blue Shield health insurance firm. Trigon's press clippings from the past year look like a study in nonprofit bungling, or worse. Trigon paid a $5 million fine to the state and had to refund some $73 million to policyholders,. who were paying more than their share in co-payments. And the federal government slapped Trigon with a $525,000 fine, the second-largest ever, for violating glass-ceiling laws.

In addition, it turned out that Trigon had paid Virginia House Majority Leader Richard Cranwell (D) and his law firm more than $385,000 in 1995, a legal arrangement that raises serious "appearance" questions. And the federal government has accused Trigon of pocketing some $58 million in discounts it squeezed out of providers and was supposed to pass on to customers. "We've had some difficult issues," says Trigon spokesperson Brooke Taylor, "but we are moving forward."

They certainly are. Trigon is well on its way to becoming a public for-profit that sells stock. With help from the state.

"Positively, it's a good idea," says state Sen. Joseph Benedetti (R), one of the sponsors of a bill to take Trigon public. "I think Blue Cross Blue Shield is going to be eaten up if they don't become one of the players, and the only way they can become a player is to become a stock company," he says.

Others are worried about how a public Trigon might operate. "If this is how they behave as a nonprofit, imagine what they'll do if there's a profit motive," says Jean Ann Fox, president of the Virginia Citizens Consumer Council.

How has lawbreaker Trigon generated so much lawmaker support? For one thing, Trigon promised to put more than $175 million into the state's general fund for Virginia officials to spend at their discretion, a small payback for decades of special nonprofit tax treatment.