A Feb. 7 Annapolis Notebook item contained inaccurate information about the firing of two employees of the Maryland Governor's Office of Crime Control and Prevention. Letters telling Stephen P. Amos and Sonya T. Proctor to resign or face dismissal by the new administration were prepared, but not delivered, on Thursday. (Published 2/8/03)

CareFirst BlueCross BlueShield's chief executive warned lawmakers yesterday that if Maryland regulators kill a $1.37 billion deal to sell the nonprofit insurer, major for-profit competitors will enter the market and cherry-pick the company's most profitable subscribers.

That could force the tax-subsidized company to serve primarily the poor and hard-to-insure, as some lawmakers would like, and could result in bankruptcy, William L. Jews told the House Health and Government Operations Committee.

The state's insurance commissioner is expected to decide this month whether the CareFirst sale is in the public's best interest, but the General Assembly has reserved the right to review his decision. D.C. and Delaware regulators also must review the sale.

Since coming on board a decade ago, Jews told lawmakers, he has turned a company that was on the brink of bankruptcy into a profitable enterprise, nearly tripling revenue and more than doubling subscribers to 3.2 million.

His presentation was interrupted with pointed questions from lawmakers about the compensation and bonus packages that he and seven other executives at the nonprofit company were to have received under an initial merger deal negotiated with WellPoint Health Networks.

Those packages, worth up to $119 million, have been dropped as company officials struggle to salvage a deal that lawmakers, in the words of Senate President Thomas V. Mike Miller Jr. (D-Prince George's), "have no appetite for." Instead, WellPoint has offered the executives two-year contracts worth less than half that amount.

Jews was unapologetic about the bonuses. CareFirst's board approved the compensation, he said, and the total could have been far lower depending on various scenarios.

Jews said WellPoint can offer CareFirst's customers more efficient service and can afford to participate in state programs such as Medicaid, which CareFirst dropped.

Anti-Crime Agency Officials Fired Gov. Robert L. Ehrlich Jr. has fired two top officials in a state anti-crime agency that is being investigated by a federal grand jury, his aides said yesterday.

Stephen P. Amos, director of the Governor's Office of Crime Control and Prevention, and his deputy, Sonya T. Proctor, received letters ordering them to clear out their desks in the agency's Towson headquarters. An agency employee who spoke on condition of anonymity said Amos received a standing ovation from his staff before leaving the office yesterday afternoon.

Ehrlich (R) has dismissed about three dozen state employees appointed by Democratic administrations.

The office, which had been overseen by then-Lt. Gov. Kathleen Kennedy Townsend (D), came under scrutiny last spring, when a federal grand jury issued subpoenas seeking information about how the office disbursed millions of dollars in federal crime-fighting grants. The investigation is continuing, and the office received another subpoena just last month.

The inquiry was an issue in the gubernatorial campaign between Townsend and Ehrlich. After the investigation came to light in July, Townsend dismissed it as "political garbage," while Ehrlich said he believed prosecutors had uncovered a "political slush fund."

Ehrlich Seeks Health Secretary Nelson J. Sabatini, who served as health secretary when William Donald Schaefer (D) was governor, is in negotiations to return to his old post, Gov. Robert L. Ehrlich Jr. said yesterday.

Sabatini is a vice president of the University of Maryland Medical System, which includes a major teaching hospital and Maryland Shock Trauma Center. As health secretary, he helped guide the department through the recession of the early 1990s when a budget crisis forced cuts in dozens of critical programs.

The top post at the Department of Health and Mental Hygiene is the only one that remains unfilled in Ehrlich's Cabinet. Health care representatives praised Sabatini's selection, calling it a solid choice.

"Nelson recognizes the tough choices that need to be made, but he will balance them with compassion and concern for the citizens of the state," said John Stierhoff, a lobbyist for health care providers.

Steele Defends Charter School Plan Proposed charter school legislation drew passionate testimony yesterday from Lt. Gov. Michael S. Steele, who told lawmakers that the alternative schools could give options to "parents of students mired in poor-performing schools across the state."

But the three-hour hearing before the Senate Education, Health and Environmental Affairs Committee also brought sharp questions about monitoring charter schools, which would operate outside the traditional public school system.

"Who's accountable for their failure?" asked Sen. Paul G. Pinsky (D-Prince George's).

Steele said the charters would be held to high standards and offered to clarify the legislative language. "We will have checks in place so these do not operate as renegade schools," he said.

In addition to two bills submitted by lawmakers, the General Assembly will consider a sweeping charter school measure proposed by the governor.

Police Settlement Gets Second Look Gov. Robert L. Ehrlich Jr. told members of the Legislative Black Caucus yesterday that he will not rush into signing a settlement of a racial-profiling suit against the state police.

The governor and State Police Superintendent Edward T. Norris said that the agreement is a top priority but that there may be flaws in the documents negotiated during the administration of Ehrlich's predecessor, Parris N. Glendening (D).

"The only thing we are asking is a chance to look at it and make it our own," Norris said.

Norris said he agrees with the goal of making sure that state police do not stop and search minorities more often than other drivers, but he said he thinks the agreement could be improved.

Staff writers Lori Montgomery and Theola Labbe{acute} and the Associated Press contributed to this report.