The Boston Globe from Boston, Massachusetts • 114

Comics F10-11 Classified F12-20 The Boston Globe Friday, February 15, 2002 Markets The US dollar 1.1434 euro 0.0052 10-year Treasury 4.95 0.04 Bloomberg Mass. index 210.54 1.64 Housing help In a new program expected to aid corporate retention and recruitment efforts, the Greater Boston Chamber of Commerce announces plans to assist employers in helping workers buy or rent homes. F3 The Pitch After eight months Of development -and focus-group research, Boston jeweler Shreve, Crump Low is targeting gays and lesbians with advertising (left) in mainstream publications showing off a new line of "commitment rings." F3 Dow Jones Nasdaq 10,001.99 1,843.37 For updated market quotes and news: Glob Onllna at www.botton.conibuslnMs fl- -j fist Soma nak IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII Illlllllll Iltlllltllllt MIIIMMIIIIinMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIHIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMIIIIIMIIIIIIIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII Steve Bailey Power straggle Utilities, critics claim vindication in study of electric costs I Downtown Success i story The headlines from Corporate America are all about companies that are turning out to be less than they appear. In Massachusetts, we read every day about a state government ij fiddling in the face of a growing fiscal disaster. It is a good moment, I think, to revisit the story of Harvard Pilgrim Health Care, a company rt that turned out to be more than it seemed not so very long ago, and managed to get through 1 1 its hour of crisis with the unusually creative assistance of the state.

It was two years ago when Harvard Pilgrim discovered a series of accounting blunders that I made a bad situation intolerable. Attorney General Thomas F. Reilly didnt hesitate: That very night he forced the insurer into receivership. It was the biggest financial crisis in the history of the state's $38 billion-a-year health I 't I I ft I I I 1 1 1 I 1 I care system, and you IIIIIIIIIIIIIIIIIIIIIIIIIIIIMII Back in the black 1 Harvard Pilgrim's operating gains and losses $30m 1999 2000 i could have gotten some attractive odds if you had been willing to bet against Harvard Pilgrim being a survivor in an industry that felt like it was coming apart But Harvard Pilgrim has staged a remarkable turnaround. Consider the numbers: In 1999 the nonprofit insurer reported a staggering operating 2001 csunitne Jobless face delay in getting benefits House skips vote on aid extension to focus again on stimulus plan BySueKirchhoff GLOBE STAFF WASHINGTON Unemployed workers are going to have to wait a little longer for help from Congress.

House Republican leaders yesterday opted not to take up the targeted 13-week extension of unemployment benefits passed by the Senate last week. Instead, the House, on a 225-199 vote largely along party lines, approved the third reij-dition of a $150 billion economic stimulus bill that includes business and personal tax breaks, unemployment benefits, and aid to New York. Democrats accused Republicans of jeopardizing aid to the unemployed in order to push a stimulus bill that has no chance of passing the Senate. After voting on the measure, the House left town for a week. This isnt going anywhere," said Senate majority leader Tom Daschle, a South Dakota Democrat "I think the Republican leadership should be embarrassed for what they're doing." The Senate, by voice vote, called again yesterday for a 13-week extension of bene-UNEMPLOYMENT BENEFITS, Pag F2 Airline faces bias complaint By Chris Reidy GLOBE STAFF A 32-year-old Arab-American who worked at Draper Laboratory plans to file a discrimination complaint today that alleges American Airlines barred him from boarding a Boston-to-Los Angeles flight three months ago and publicly humiliated him because of his "Arab name." A few hours after the man was barred from one flight, an American Airlines employee gave him a first-class ticket to Los Angeles on another, which took off without incident "We havent seen the filing, but we're familiar with the complaint," said airlines spokeswoman Sonja Whitemon.

"Based on what we know the crew acted appropriately. We have apologized to him for the inconvenience. Because this matter is in litigation, we cant comment further." Since Sept. 11, the American-Arab Anti-Discrimination Committee has tracked about 50 discrimination complaints by Arab-Americans against various airlines. In several cases, pilots have barred passengers from boarding planes.

SOURCE: Harvard Pilgrim illlillllilllllllililiiillliiili loss of $225 million; 2000 the firm cut the loss to $17 million. This month Harvard Pilgrim is expected to report it had an operating gain of about $30 million in 2001, according to ik Nwnr imprna mpmnrnprnn rwpK Tn a Vipnlth nnrt world ac frafrilp as nurs Harvard riignm stui nas some uungs 10 prove. I For starters: Can it compete for customers? Membership has dropped from 1.3 million to 5 735,000 today, including a slight loss in the latest enrollment period. In addition, Harvard Pilgrim is still several years of profits away from having the reserves it will need to free it-'! self of the court-ordered oversight of the Insur- ance Division. "It is definitely going in the right direction," says Reilly.

"We are two years down the road, and they are doing what they said they would I do. That is all you can ask." What Reilly found when he got inside Harvard Pilgrim in those desperate days in January 2000 was a good management team with a GLOBE FILE PHOTO Smokestacks of the Brayton Point coal-burning electric plant in Somerset. By Peter J.Howe GLOBE STAFF lllllllllllllllllllllllllllllllllllllllllllllll II III Illlllllll Illlllllll II I lllll lllllllllllll Illlllllll Who's generating electricity New England has a total of 26,428 megawatts of electric generating capacity within its borders, most of it controlled by nine companies. wo years after New land power plant owners plan to deal with a crisis years in the making. Through the receivership and some accounting began facing accusations they were manipulating the region's new wholesale electric market to i gouge consumers, grid Percent of New England Company Total megawatts National Energy 4,581 NRG 2484 Sithe Energies 1,904 Northeast Utilities (regulated) 1,649 17 8 7 6 NU Generating Services 1 1,631 6 Energy L338 managers yesterday released a long-awaited report that was quickly claimed as vindication by both generating companies and their critics.

From May 1999 to September 2001, New Englanders paid 4 percent to 12 percent more for wholesale electricity than they should have under a theoretically perfect market, according to economists James Bushnell and Celeste Saravia of the University of California Energy Institute. That happened to some extent be- cause a handful of big plant owners can exercise "market power" to raise prices, ELECTRICITY, Pag F4 Other 35 9,132 megawatts 5 Mirant 45- rCalpine lit: i. WI5Ve5l 4 1,323 1,016 980 975 GLOBE STAFF CHART -1 Duke Energy NOTE fimms do not add to 100 perctnt dut to rmn Saras: ISO-New England, IWwnity of Calrrorrtarwiwlretrrutt sleight of hand to write up the company's net worth, Reilly bought Harvard Pilgrim some breathing room. Charlie Baker, Harvard Pil- grim's chief executive, has cut administrative 51 costs in half, folded its unprofitable Rhode Is- land operation, outsourced its computer and claims departments, simplified contracts with hospitals and doctors, and sold off most of its i health centers. Not to be overlooked: double-J digit premium hikes, which have been a power- ful tonic for all insurers.

a "I am happy to be worrying about the same things my competitors are worrying about, and only those things," says Baker, the former Bill Weld deputy who many (me Included) would like to see run for governor one day. The most important lesson of Harvard Pilgrim Is that reasonable people can get even 1 very difficult things done if they stay focused on the results. The next big test: CareGroup, Boston's second-largest hospital system, which finds itself where Harvard Pilgrim once was. Both Harvard Pilgrim and CareGroup are products of botched mergers. Both share a res- ervoir of goodwill In the community.

Like Har-l vard Pilgrim, CareGroup needs to shed unprof-' itable businesses: Harvard Pilgrim faced its most painful choice in Rhode Island; Care-I Group faces just as painful a choice in Wal- tham. But In some real ways the CareGroup turnaround is even toughen The doctors, the source of patients, will have more to say about the future of Beth Israel Deaconess than they did about Harvard Pilgrim. The attorney gener- al has far less ability to help restructure the debt this time around. Harvard Pilgrim just proved what can be done. Charlie Baker's advice to Paul Levy, the man now on the spot at Beth Israel Deaconess? "Time is not your friend." lllllltllllllllltllllllllllllll'ltllllllllll(lltllllltl)lltllllll(llllllllllllllllllllllllllllllllllllllllllllllllllllllllll(IIIIIIIIIIllllllllllIIMtftlll Illllllllltllttllll DISCRIMINATION CASE, Pagt F4 BRA approves project for waterfront area By Thomas C.

Palmer Jr. GLOBE STAFF The Boston Redevelopment Au thority board yesterday unanimously approved construction of a hotel and open lots and one- and two-story buildings across from Jimmy's Harborside restaurant Developer Joe Fallon, managing partner of South Boston Waterfront Development LLC, said he hoped to break ground by the first of next year. He is in negotiations with a hotel chain but would not say which one. Susan Hannon, deputy director for project management of the BRA, said BRA, Pag F4 apartment complex on three blocks at Northern Avenue and Street in South Boston. A 440-room hotel, 460 residential apartments, retail shops, and a restaurant if and when financed In a difficult economic climate will replace Steve Bailey can be reached at 61 7-929-2902 or byemailatbaUeygbbe.com.

The planned mixed-use development will cover about 3.4 acres.