Harry Teague's companies cut health care

May 10, 2010

When he ran for Congress in 2008, businessman Harry Teague boasted that he provided health insurance for all of his employees back home in New Mexico.

But once he won his seat, Teague, a Democrat, voted twice against his party’s health care reform bill because “it tells businesses to do the right thing and provide insurance for employees but doesn’t guarantee or require affordable options.”

What Teague didn’t say at the time: At the very moment he was voting against the bill, his own companies were eliminating health care coverage for employees.

On Dec. 21, 2009 — as the health care debate was raging in Congress — a human resources manager at Teague’s Cavaloz Energy sent a memo to 250 employees of Teague-affiliated companies:

“Please be aware that effective Feb. 28, Cavaloz Energy Inc., Teaco Energy Services Inc., ABC Rental Tool, Eunice Well Servicing, Teaco Drilling will no longer offer health insurance to [its] employees. We would ask that all employees currently covered under the company’s insurance policy begin to seek an alternative solution.”

“We apologize for any inconvenience this may cause,” the notice added. “Know that we value your employment here at Cavaloz.”

Teague spokeswoman Kara Kelber said there’s no contradiction between the company’s cutbacks and Teague’s campaign-year boasts about providing health insurance.

Teague “thinks employers should provide health insurance coverage for employees — that’s what he did when he was running a company,” Kelber said. “But he also knows that the economic downturn has forced many small businesses to make tough choices to survive. While he is not involved in day-to-day operations of the company anymore, he deeply regrets that the rising cost of health insurance forced the company to make this decision. Ultimately, it came down to cutting the high-cost benefit or cutting jobs.”

While Teague is no longer involved in the daily operations of the business, his son is in charge and Teague himself is still the majority owner of Cavaloz, an investment valued last year at around $39.6 million.

Teague touted his business experience when he ran for Congress — in particular, the way he’d treated his employees.

One campaign ad in the 2008 race said that “Teague provided health care and educational scholarships for all of his employees and helped to create over 2,000 jobs in Lee County.”

Teague repeatedly slammed his GOP opponent, Edward Tinsley, for opposing an increase in the federal minimum wage.

And his congressional website still talks up the importance of employers’ providing health insurance for their employees.

“He knows what it is like to not have access to medical care,” Teague’s congressional website says. “That’s why, as a small-business owner, Harry provided his employees and their families with affordable health care options.”

Teague has said his views are shaped by personal experience.

“When Harry was 17 years old, his father became ill. The family did not have health insurance, so Harry went to work in the oil fields for $1.50 an hour to help pay the bills,” the official Teague biography records.

With a net worth of more than $41 million, Teague is one of the richest members of Congress. In 2008-2009, his holdings in Teaco assets yielded more than $3.3 million in dividend payments and provided him and his wife an additional $255,000-plus in salary from the company, according to his financial disclosure form.

On Dec. 28, seven days after Cavaloz Energy informed its employees that it was dropping its health insurance plans, Teague publicly declared that he was divesting himself of his holdings in Teaco Energy and the other affiliated firms.

But that divestment had yet to take place as of last week, meaning Teague still owns a majority interest in them, according to his office.

Teague is being challenged this November by former Rep. Steve Pearce (R-N.M.), who held the seat from 2002 to 2008 but gave it up for an unsuccessful run against now-Sen. Tom Udall (D-N.M.).

A recent internal Teague poll said the freshman Democrat held a razor-thin lead over Pearce, although an independent poll showed Pearce with a small edge.

The southeastern New Mexico district has a GOP voter-registration edge, and Sen. John McCain (R-Ariz.) carried it by 1 point in the 2008 presidential campaign.

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