The criminal trial against former state Rep. Stephen LaRoque began in earnest Tuesday, with testimony from former board members of his non-profit and federal agriculture officials who oversaw the rural lending program he ran.

Yet to be mentioned are a dozen replica Faberge eggs and jewelry the Kinston Republican is accused of buying with money he stole from his economic development non-profit, East Carolina Development Company. (Click here to read a past blog post about the eggs LaRoque bought, and a brief history of the eggs themselves.)

The trial is being held at the federal courthouse in Greenville in front of Senior U.S. District Court Judge Malcolm Howard.

Former ECDC board member John Melling, a New Bern insurance agent, said he served on the board of East Carolina Development Company for eight years and left in 2006 because he didn’t feel at ease serving a board consisting largely of LaRoques – Stephen, his brother Walter and wife Susan.

“I just felt uncomfortable,” Melling said. “You had three directors, they were all related. Stephen, his brother and his wife.”

Melling had also said he was pleased with the non-profit’s earlier work. Read More…

Legislative leaders and Gov. Pat McCrory gave a general outline Friday of how they plan on changing the state’s $13 billion Medicaid program, a program that affects 1.5 million North Carolinians and accounts for one of the state’s biggest expenditures.

House Speaker Thom Tillis, Senate leader Phil Berger and McCrory issued a joint press release Friday morning that says the Republican leaders will use the Senate budget plan to have the N.C. Department of Health and Human Services draw up a waiver proposal to ask the federal government for the Medicaid changes.

The Medicaid program uses a combination of federal and state funds to provide required health care for more than 1.5 million low-income of North Carolina’s disabled citizens, elderly residents and children.

The announcement of how the reform effort will progress came a month and a half after McCrory and his Department of Health and Human Services Secretary Aldona Wos announced they wanted to open North Carolina’s Medicaid program up to potential privatization.

Today’s announcement is the first time the McCrory administration has outlined how the path to reform will take place.

Though still light on details, it says that the Senate budget plan (which will be released to the public Sunday night) will include a provision calling on DHHS officials to draw up a waiver that will then be submitted to the federal Medicaid program for approval. The Senate budget is also expected to include a controversial tax reform proposal that will cut income and business taxes, and create a need for $1 billion in cuts over the next three years.

The Medicaid waiver will be subject to legislative approval as well, before being sent off to the federal government.

“The federal government must allow North Carolina to come up with its own solution,” McCrory said in a written statement. “We have a unique opportunity in North Carolina to ensure patients and taxpayers achieve the common goal of provide the best possible patient care in a system that is financially sustainable.”

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K12, Inc. bumped into another stumbling block in its attempt to break into North Carolina’s public education market, with a state legislator saying he will forgo legislation to put an online charter school’s application back in front of the State Board of Education.

State Rep. Jon Hardister, R-Greensboro, said he will pull language in a proposed committee substitute for House Bill 273 that references a virtual charter school application put forth by N.C. Learns, a non-profit organization that hoped to open up a charter school run by K12, Inc..

K12, Inc. is a Virginia-based company that runs online schools in 32 states, and attributes nearly 85 percent of its revenue to public dollars. Online, or virtual schools, allow students to take their classes through their home computers, instead of attending school through traditional classrooms.

The K12, Inc.-focused language was expected to be introduced at today’s House Education Committee.

At last week’s meeting, a proposed committee substitute that would have granted an automatic opening to the school was passed out before the committee meeting. Hardister took the issue off the day’s agenda after lobbyists for public education and a charter school group raised concerns with him about the proposed school.

“There are some questions that we need to answer about virtual charter schools before we move forward,” Hardister wrote in an email Monday about holding off on K12 legislation.

Among Hardister’s questions are whether state laws need to specifically state virtual charter schools can operate and what type of funding the schools should get, given that they don’t have the same type of overheard that schools with physical locations have.

“Clearly, virtual charter schools will not require the same level of funding as brick-and-mortar charter schools,” Hardister said.

Questions have been raised by critics about whether the company is more focused on finding profits for its Wall Street investors than delivering a quality education to schoolchildren. (The New York Times ran this lengthy piece in December 2011 about the issue.)

The company has had mixed results in other states, including Tennessee where the school performed well below the state average and in Colorado where graduation rates were in the teens. (North Carolina’s four-year graduation rate, to offer some comparison, is at 80 percent.)

Aldona Wos, Secretary for the N.C. Department of Health and Human Services, put the blame Friday on the state forgoing Medicaid expansion on Insurance Commissioner Wayne Goodwin, whose office advocated to have the state run the health care exchange that was part of the larger health care reform.

On Saturday, Goodwin called on Wos to apologize for what he said were false statements.

“I am offended and truly disappointed that Secretary Wos decided to incorrectly accuse me of being the cause for the state’s rejection of Medicaid expansion,” he said, in a statement released Saturday. “That decision was not within my constitutional authority. I trust that the Secretary will swiftly issue a correction and apologize for her statement.”

N.C. Health News’ Rose Hoban attended an informational talk Wos gave about her plan to change Medicaid in Reidsville Friday night, and first reported Wos’ remarks.

Wos said that Goodwin, a Democrat in the elected state position, was the reason why the state turned down the expansion, which would have given an estimated 500,000 low-income North Carolinians access to healthcare.

But Wos appears to have forgotten, misspoke (or not known) what actually happened.

It was the Republican-led state legislature and Wos’ boss Republican Gov. Pat McCrory that passed and signed, respectively, the law preventing North Carolina from setting up its own health care exchange and expanding Medicaid. The U.S. Supreme Court, in its ruling on the Affordable Care Act, found that Medicaid expansion was optional for states.

Goodwin and his office had spoken in favor of the state, and not the federal government, run the health care exchange during the debate about the bill. Goodwin’s office doesn’t manage Medicaid, which falls under Wos’ department.

Wos made her comments Friday in response to a family physician who had been critical of her department’s recent push to switch the $13 billion Medicaid program to more privatized managed-care system.

From Hoban’s story:

“In reference to your roundabout way of commenting about Medicaid expansion … in North Carolina, based on our constitution, the issue of Medicaid expansion or not, actually, was the commissioner of insurance’s,” Wos said. “Just so that you all know that and are aware of that.”

Wos left quickly after the forum wrapped up.

Wos’ spokesman, Ricky Diaz, told the News & Observer last night that Wos’ comments were taken out of context.

(UPDATE, Mon. 12 p.m.): Hoban posted the audio of the exchange here over the weekend, so you can listen for yourself.)

“The Secretary was talking broadly about the Insurance Commissioner’s oversight authority over the health care insurance industry in North Carolina, and it is unfortunate that her remarks were taken out of context,” Diaz said, according to the News & Observer.

Goodwin released his statement about Wos’ comments Saturday afternoon, calling for a public apology from her.

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