Insurer vying for city contracts donates $550,000 on union leader’s behalf

NEW YORK — In 2021, as the city’s controversial push to privatize insurance coverage for 250,000 municipal retirees burst into public view, one company vying for the lucrative new contract made a series of donations to an eclectic array of nonprofits.

EmblemHealth, a nonprofit and one of the city’s long-time insurers, reported making nearly $113,000 in donations that year on behalf of one of its board members: Gregory Floyd, president of a local Teamsters union and someone with influence over Emblem’s fate in the contest.

It wasn’t the first time — nor would it be the last — that Emblem shelled out over six figures to charities selected by Floyd. The insurer has given roughly $550,000 on his behalf since 2018, Department of Labor and IRS records show. The payments, which have not been previously reported, benefitted organizations such as a Long Island church with ties to Floyd and a mysterious Maryland foundation called Eagle Club whose tax-exempt status has since been revoked.

As a nonprofit, Emblem is legally permitted to make grants or give other forms of financial assistance that further its charitable purpose. But the arrangement is striking given the influential role Floyd plays in determining whether the insurer wins lucrative city contracts.

Emblem reported making the donations in lieu of paying Floyd the typical six-figure compensation doled out to board members, according to a publicly-available financial statement. The City Charter allows public servants like Floyd, who works for the city-run hospital system, to serve on a nonprofit’s board on the condition that they receive no salary or other compensation.

The donations shed new light on Emblem’s close ties to New York labor leaders as it is vying against Aetna for a multi-billion-dollar deal to redesign the health benefits of hundreds of thousands of city employees. Leaders of the Municipal Labor Committee, an umbrella organization of local unions, will decide the winning bidder in conjunction with the administration of Mayor Eric Adams.

The new contract was expected to take effect Jan. 1 but is still mired in intense negotiations.

Emblem spokesperson Alex Gomez did not directly address a list of detailed questions about POLITICO’s findings.

"EmblemHealth abides by all laws and makes disclosures as required by law,” Gomez said in a statement. "There has been no improper conduct by EmblemHealth or Mr. Floyd."

Floyd did not respond to repeated requests for comment. In a statement on behalf of Floyd’s union, Teamsters Local 237, political consultant Hank Sheinkopf said POLITICO’s line of questioning was “smearing hard working labor leaders” but did not directly address any of the specific allegations.

Emblem has long been linked to New York City’s politically powerful organized labor community, particularly among its public-sector unions. In a sense, city government runs in its blood: The organization now known as Emblem grew out of the Health Insurance Plan of Greater New York, which was incorporated in 1944 by then-Mayor Fiorello LaGuardia to cover municipal employees. Today Emblem covers over 90 percent of eligible city workers, retirees and their dependents.

Floyd is not the only union leader who has sat on Emblem’s board, which must include representation for clients of the insurer’s health plans. But Emblem does not appear to have made charitable contributions on behalf of any other director, past or present, according to POLITICO’s review of over a decade of publicly-available financial disclosures.

Gomez did not answer a question about whether Emblem had done so.

The insurer has also repeatedly paid for tickets in an Emblem-reserved Barclays Center suite for Floyd and his union, each time for the purpose of “maintaining existing relationship with client and marketing products,” Department of Labor records show. The only other union to receive a similar perk from Emblem in the last decade was IBEW Local 1049, which represents Long Island electrical workers.

Floyd has served on multiple boards in the Emblem family since 2005. In earlier years, the insurer donated just $1,000 to $2,000 in stipends on his behalf — about how much it paid other directors for attending a single board meeting, Department of Labor records show. The amount skyrocketed in 2018, when Emblem began reporting about $90,000 in annual retainer fees to Floyd, on top of the stipends it had historically donated on his behalf.

That same year, Floyd boasted in his union’s newsletter that, as part of his position on Emblem’s board, “we were able to create a new health plan for city employees” that eliminated out-of-pocket expenses.

Between 2018 and 2022, Grace Lutheran Church and School of Malverne on Long Island, where Floyd chaired the search committee for a new pastor, received over $176,000 in stipends and retainer fees on Floyd’s behalf. The Green Hornets, a youth football team that plays in Valley Stream, Long Island, where Floyd lives, got $60,000. The Queens Nassau Comets, a travel baseball and softball team, received over $77,000.

“He stepped up for us,” said a coach for the Comets, who was granted anonymity to discuss the sensitive matter. “We’re doing a lot of things, and I depend on a lot of people like Mr. Floyd to help us.”

Representatives for the Green Hornets and Grace Lutheran Church did not respond to requests for comment.

Also in lieu of paying Floyd for his service, Emblem shelled out nearly $37,000 to a Maryland foundation called Eagle Club, which was granted tax-exempt status in November 2020. The organization’s purpose is unclear — as are its ties to Emblem. It has no apparent digital presence and never filed its required annual financial disclosures, which would shed light on its income and activities.

The organization is registered to the home of two pastors, one of whom confirmed that was her address but told POLITICO she did not know anything about Eagle Club, Emblem or Floyd. She did not respond to additional requests for comment.

Eagle Club’s tax-exempt status was revoked in May 2023, after it failed to file the required returns for three consecutive years, IRS records show.

While Emblem reported the donations on Floyd’s behalf to the Department of Labor, the insurer only disclosed $102,000 of them to the IRS, public records show. Nonprofits that report grants or other assistance of over $5,000 to domestic organizations or individuals must report those on their tax returns.

“EmblemHealth makes charitable donations only, we do not make grants,” Gomez said, despite the fact that Emblem reported the $102,000 in payments as grants in a 2021 tax return. He added that Emblem made an administrative decision beginning in 2021 to make its reporting on the tax returns consistent with Department of Labor records; Emblem's 2022 tax return is not yet publicly available.

Emblem does not appear to have monitored the use of the funds paid on Floyd’s behalf. In the 2021 tax return, the insurer wrote that the grants were “so small” that they “did not require the grantees to provide reports as to how the funds were expended.”

That was the year that Emblem, in alliance with the insurer Empire BlueCross BlueShield, was awarded a city contract to handle the health benefits of retired municipal workers eligible for Medicare. After a protracted legal battle, the contract was instead awarded to health insurance giant Aetna.

Today Emblem and Aetna are facing off again, as the two finalists vying for a lucrative city contract to design a new health plan for active municipal employees, according to a United Federation of Teachers presentation. (This time Emblem forged an alliance with UnitedHealthcare, the nation’s largest insurer, in its bid for the contract.)

During the fight over the Medicare Advantage contract, Floyd told the New York Post his position on Emblem’s board did not pose a conflict of interest because his vote for the insurer was not “the most influential vote” among the Municipal Labor Committee, for which Floyd serves as secretary.

The City Charter says public servants who serve on a nonprofit’s board must take no direct or indirect part in the organization’s business dealings with the city.

Floyd is not the only Municipal Labor Committee leader with ties to Emblem. Its co-chair, Teamsters Local 831 President Harry Nespoli, previously served on Emblem’s board as an unpaid director. He vacated his board seat in 2011, after attending just one of 13 board meetings in the prior couple years, a state review later found.

Sitting alongside Floyd and Nespoli on the Municipal Labor Committee’s executive leadership team are co-chair Henry Garrido and executive vice chair Michael Mulgrew. As the leaders of the city’s two largest municipal labor unions, District Council 37 and United Federation of Teachers, Garrido and Mulgrew hold the most influential votes on any contract decision.

DC 37 and UFT officials have also done stints on Emblem’s board. Other former directors include Arthur Pepper, a co-chair of UFT’s welfare fund and a member of the Municipal Labor Committee’s health benefits subcommittee, and the late Oliver Gray, longtime associate director of DC 37. Pepper left the board in 2016, after he hit the statutory ten-year maximum term; Emblem does not appear to have made any donations on his behalf.

But Emblem’s ties to Teamsters Local 237 are particularly close and long lasting. Floyd’s predecessor, the late Caroll E. Haynes, was also on Emblem’s board of directors. Emblem paid Haynes an annual retainer of $50,000 and meeting attendance fees of $1,500, according to a 2003 Department of Labor filing. There is no record of the payments being donated.