CalOptima Rocked by Allegations

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As board members for CalOptima, the county health plan for the poor and elderly, prepare to meet Thursday, the panel is grappling with having two board members accused of conflicts of interest or violating California’s open meeting laws.

Little has been made public about one set of allegations. Even the name of the accused board member hasn’t been disclosed.

The second set was highly publicized by the county Board of Supervisors on Feb. 28, when it publicly called for a county grand jury investigation to determine whether anonymous charges against CalOptima Board Chairman Ed Kacic are true.

Supervisors didn’t follow through, however, and as of Monday, nothing had been sent to the grand jury requesting the probe, according to a county spokesman. The county hasn’t given any reason for the delay. Kacic has said he hoped the grand jury would act quickly so he could clear his name.

Kacic said that as soon as he received a copy of the anonymous allegations and before news organizations or supervisors publicized them, he sent them to the CalOptima compliance officer and asked her to investigate their accuracy.

Denise Corley, CalOptima director of compliance, told the CalOptima board March 23 that she received two sets of allegations against a different board member. She said an anonymous call came into the CalOptima hotline in February.

“Within 24 hours,” she told the board, a second set of allegations against that same unnamed board member were made by a departing CalOptima employee in an exit interview.

Corley said nothing like it had ever happened before. The allegations, she told the board, covered “lots of different kinds of complaints involving conflicts of interest and Brown Act violations and things like that.”

Her job is to take appropriate action when allegations of fraud or other misdeeds are made against employees or medical providers in the $1.4-billion federal- and state-financed health plan for about 400,000 Orange County residents, most of them children.

“I felt very strongly that at this point we needed to be very sensitive to the allegations and be sure there was no impropriety or even potential for impropriety as we did this look,” she told the CalOptima board.

“I felt we needed some real expertise that was not affiliated here in the county, that did not have any ties here, did not have any conflicts here. That we needed to have someone who was very expert in public agency law, Brown Act law, and that was my recommendation.”

Corley initially went to Kacic for advice but when the unrelated anonymous allegations against him came in, he turned the issue over to the board’s vice chairman, Jim McAleer.

Corley’s position is intended to protect her from peers or others who might try to influence her decisions on how best to handle allegations of wrongdoing. Her budget includes some money for legal advice.

McAleer said he agreed with Corley on the need to go outside CalOptima for legal advice on what, if any, laws might have been violated.

“Because it was a complaint against a sitting board member,” he told the board, “we felt that there was a potential, because of relationships between staff and board, that it was best to be completely clean and clear by going outside of the county. …”

And, he said, “given the high level of scrutiny this board has been under in recent months,” he wanted to be sure “that whatever we undertook, that from its outset, it was so clean and clear that there was no predisposition to any conflict.”

McAleer and Corley contacted several law firms and hired Sacramento-based Olsen, Hagel & Fishburn, which specializes in government law. Once he and Corley had clear advice on which laws, if any, applied to the allegations, he said they planned to take the information to the full CalOptima board.

But during the March 23 meeting, Supervisor Janet Nguyen objected.

“You’ve been conducting business on behalf of this board without this board’s authorization,” she told McAleer. “This should have been brought to the board’s attention in a closed session item.”

She said the CalOptima board should have voted on whether to hire the outside firm for legal advice and CalOptima’s internal lawyer should have been included in discussions.

“That would have been the process at the county Board of Supervisors,” she said. “Any allegation. Any complaints. That’s how we do public work.”

She disagreed with McAleer that it was important to have the initial analysis done by lawyers who wouldn’t be potentially subject to influence by the board.

In the end, the CalOptima board voted to include the CalOptima internal lawyer in discussions of the scope of work that the outside firm will perform.

And they said they separately will develop a policy on how to handle future complaints against board members.

As for complaints that don’t involve board members, Nguyen said, “when the Board of Supervisors talked and discussed about Mr. Kacic’s reappointment [Feb. 28], we did it publicly. He knows what will be sent to FPPC [Fair Political Practices Commission]. He knows what those issues will be addressed. We don’t hide behind, regardless of who it involves, it needs to be brought to this board.”

A spokeswoman for the FPPC said as of this week, the agency had received no complaint against Kacic.

Kacic said in a telephone interview this week that, in spite of the public statements made by members of the Board of Supervisors, no one from the grand jury, any agency or any of the supervisors’ offices has contacted him to determine whether the anonymous accusations against him are true.

“I have heard from no one,” he said.

— TRACY WOOD

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