Anonymous Charges Against CalOptima Leader Go to FPPC

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The Orange County Board of Supervisors has asked the state Fair Political Practices Commission to decide whether CalOptima board Chairman Ed Kacic has a conflict of interest that would keep him from serving another term.

The board’s request is based on an anonymous letter containing allegations of improprieties that Kacic and others named in it have strongly denied.

The letter, sent to the CalOptima board of directors in February, asserted, “Kacic is using his position as chair and member of the CalOptima board to steer millions of dollars the agency funds to his foundation.” The letter offers no evidence to support the accusation.

Kacic, who is president of the Irvine Health Foundation, has repeatedly said he wants an investigation to clear his reputation.

Supervisors initially said they would ask the county grand jury and the FPPC to resolve the issue but delayed acting for six weeks. The letter to the FPPC finally was sent April 17.

“I’m looking forward to a complete and thorough investigation,” Kacic said in an interview. He said the county didn’t send him a copy of the FPPC letter, but a reporter emailed him a copy so he could comment.

The county’s handling of the letter has added to the controversy surrounding CalOptima since last year, when Supervisor Janet Nguyen began an ultimately successful effort to reconstitute the board of directors of the county’s $1.4-billion health plan for poor and elderly people. The new structure gives more control to Nguyen, county officials and the medical industry.

The anonymous letter, which was faxed to the Board of Supervisors and media organizations as well as CalOptima, came as supervisors were deciding who would fill the seats on the redesigned CalOptima board. Among other things, the supervisors needed to decide whether to reappoint Kacic.

The letter alleged that the Irvine Health Foundation stood to financially benefit from a federal grant it was seeking on behalf of Managed System of Care, a group of health organizations that includes CalOptima, the county Health Care Agency, hospitals, clinics and other healthcare providers.

But Kacic, his board of directors and the director of Managed System of Care said the Irvine Health Foundation simply acted on behalf of the Managed System of Care because it hasn’t yet formed its own nonprofit. Before the grant application was submitted, Kacic told everyone involved that his foundation wouldn’t accept any money, he and others said.

“We are incensed that the authors of this vicious smear did not have the decency to check their facts with IHF [Irvine Health Foundation] before acting,” stated a Feb. 27 letter from the foundation’s directors to the Board of Supervisors.

The county’s letter to the FPPC, written by County Counsel Nicholas S. Chrisos, does not state that most of the information comes from the anonymous letter. Instead, it states“it has come to the Board’s attention that certain allegations regarding a potential conflict of interest” have been leveled against Kacic.

The letter asks investigators to decide whether the relationships it describes are a conflict of interest for Kacic.

Leaders of the groups named in the anonymous letter sent their own official letters to the Board of Supervisors in February, detailing what they said was wrong in the anonymous report.

But Chrisos didn’t include those letters in the information he sent to the FPPC. His two-page letter includes 155 pages of attachments, most of it a full CalOptima agenda package with issues that have nothing to do with the conflict of interest question.

Gary S. Winuk, FPPC chief of enforcement, said once his agency receives the county’s letter, it will determine whether there is enough substance to open an investigation. If the FPPC decides to investigate, it “absolutely” will contact Kacic and give him an opportunity to present his information, Winuk said.

He said it’s impossible to estimate how long an investigation might take until he and his staff have an opportunity to review all of the allegations.

Originally, the county was supposed to refer the issue to the grand jury, according to the supervisors’ public discussion and a staff directive sent out after the meeting.

But county spokesman Howard Sutter said Chrisos’ letter was directed instead to the FPPC because “after looking at the issue, it was decided that the FPPC was the appropriate body to review the matter.”

Kacic said that he hopes “someone with appropriate authority” attempts to find out who wrote and sent the anonymous letter, as he believes that the author was trying to damage his reputation and that of CalOptima, the other named organizations and another board member.

“If the FPPC’s authority is not broad enough” to determine who wrote the anonymous letter and whether the writer stood to benefit personally or politically, Kacic said “I would hope that another agency with the appropriate authority” would be brought in to investigate.

Please contact Tracy Wood directly at twood@voiceofoc.org and follow her on Twitter: twitter.com/tracyVOC.

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