How Blue Shield thwarted enforcement of its nonprofit duty to serve the public good and privatized billions of dollars in charitable assets

The facts and documentation

• March 2025 letter to DMHC Director Mary Watanabe detailing falsehoods in Blue Shield’s application for approval to transfer ownership of the nonprofit health plan and its billions of dollars in charitable assets to a newly established Delaware corporation. The letter also calls for the director to rescind her approval of the transaction and to take specified additional steps to enforce Blue Shield’s nonprofit obligations, including imposing a requirement that Blue Shield provide public benefits worth at least 5% of its total assets annually.

  • Exhibit 1: Description of Filing

  • Exhibit 2: Comment Table

  • Exhibit 3: DL Division of Corporations Status

  • Exhibit 4: DL Division of Corporation Field Descriptions

  • Exhibit 5: CA Corporate Registration

  • Exhibit 6: BSC “White Paper on Charitable Trust”

  • Exhibit 7: BSC Opening Brief to OTA

  • Exhibit 8: Hassard Excerpt

  • Exhibit 9: Civil Code Section 593(a)

  • Exhibit 10: Civil Code Section 605(c)

  • Exhibit 11: BSC General Counsel Ltr to DMHC General Counsel

  • Exhibit 12: Amend 7 to 2015 Filing

  • Exhibit 13: Amend 5 to 2015 Filing

  • Exhibit 14: FTB Response Brief to OTA

  • Exhibit 15: 2015 Undertakings

  • Exhibit 16: BSC 1995 Amend to Articles of Incorporation

  • Exhibit 17: BSC 1995 Ltr to Sen Ins Comm Chrmn

  • Exhibit 18: 2024 Undertakings

  • Exhibit 19: PA Order & Determination

• April 2025 letter to the DMHC raising questions about whether Blue Shield’s newly established Delaware-incorporated parent company is a bona fide nonprofit, as Blue Shield claims.