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Baker knocked by Coakley for winning outsourcing award

GOP hopeful was honored for 1999 deal that sent some Harvard Pilgrim jobs to India

It’s a photo Democrats might have only dreamed of laying their hands on. Republican Charlie Baker, the avowed jobs creator, receiving an “Outsourcing Excellence Award.” In a tuxedo.

But on Tuesday, Martha Coakley’s campaign circulated just such a photo, documenting the politically awkward award that Baker received in 2008 from the Outsourcing Center, an industry group, when he was chief executive of Harvard Pilgrim Health Care.

The Coakley campaign also pointed to an article posted on the Outsourcing Center’s website that describes Harvard Pilgrim hiring an outside vendor, Perot Systems, to take over its information technology and claims operations in 1999, when the insurer was on the brink of financial ruin.


The article describes how Perot Systems then moved some of the work overseas, to India.

Baker, during a campaign stop Tuesday, did not directly address the transfer to India but defended Harvard Pilgrim’s decision to move its IT and claims work to Perot Systems.

“The partnership that Harvard Pilgrim entered into with Perot Systems back in 1999 was one of the key elements to the successful turnaround and the saving of thousands of jobs at Harvard Pilgrim and at other health care organizations in Massachusetts,” Baker said.

The Coakley campaign said Baker’s award and those job transfers undercut his credentials as a business leader, which he began promoting in a new television ad.

“We’ve already learned that while Charlie Baker was turning around Harvard Pilgrim, he did it while raising premiums, cutting coverage for seniors, and tripling his own salary to $1.7 million,” Tim Foley, Coakley campaign manager, said in a statement Tuesday. “Now we learn that even after the turnaround was complete, he continued to send jobs overseas that could have been filled by hard-working men and women of Massachusetts.”

The Baker campaign acknowledged that a total of 800 Harvard Pilgrim employees went to work for Perot Systems in 1999, although they remained in Massachusetts and did not have to move from Harvard Pilgrim’s offices in Quincy and Wellesley.


Seven years later, in 2006, Perot Systems moved 200 of those jobs to India, although it was not clear if any Perot employees in Massachusetts lost their jobs as a result of that move, the Baker camp said.

Asked about the jobs that Perot Systems moved to India, Baker said: “The vast majority of the jobs stayed here in Massachusetts.”

The article on the Outsourcing Center’s website describes Bob Trombly, Harvard Pilgrim’s deputy chief information officer, visiting Perot Systems’ facilities in India.

In the article, Trombly said “the staff in India is very well trained, doing great work, and eager to take on more. I think that’s a sobering lesson to everyone about the global marketplace.”

The article also indicates that, after returning home from India, Trombly told his oldest son, who was heading to college that fall, “You better get off your butt because the rest of the world is ready to compete. It’s one thing to read ‘The World is Flat,’ it’s another to see it in real time.”

The outsourcing and sending of jobs overseas, which can be seen as a sign of efficiency in the private sector, has been kryptonite to business titans trying to break into politics.

Harvard Pilgrim’s turnaround is a pivotal chapter in Baker’s career and a key part of his argument that he will bring superior management skills to the governor’s office.


Many of the steps Baker took to rescue the company during that period have been hotly debated in this race and during his 2010 race for governor: He raised premiums, cut jobs, and pulled the insurer out of Rhode Island. He also invested in technology to improve customer satisfaction.

Coakley’s new attack seeks to undercut that story by zeroing in on a cost-saving step that has not gained as much notice: when Harvard Pilgrim and Perot Systems signed a 10-year, $700 million agreement in October 1999.

Perot Systems — founded by H. Ross Perot, the billionaire and maverick presidential candidate in 1992 and 1996 — specialized in helping companies streamline operations. It was acquired by Dell in 2009.

Harvard Pilgrim wanted the firm to help clean up its computer and claims operations, which were a mess after 11 years of acquisitions and mergers, according to a 2000 article in Network World.

The insurer was “incapable of tracking claims, unable to accurately set premiums, and blind to the financial disaster lurking ahead,” Network World reported.

Perot Systems’ helped straighten out those problems, Trombly told the Outsourcing Center in 2008. “There was a time when our providers said, ‘These people can’t find my claim, let alone pay it,’” he said. “Now we are best in class.’”

Baker echoed that argument Tuesday. He said that Harvard Pilgrim’s agreement with Perot Systems “was a winning combination and had a lot to do with us being the number one ranked plan for member satisfaction for seven years in a row.”


Jim O’Sullivan of the Globe Staff contributed to this report. Michael Levenson can be reached at mlevenson@ Follow him on Twitter @mlevenson.