FPPC Will Not Open Probe Into CalOptima Conflict Allegations

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The state’s Fair Political Practices Commission has rejected a request from the Orange County Board of Supervisors to decide whether anonymous conflict of interest allegations disqualified CalOptima board member Ed Kacic from voting on board issues.

The anonymous letter was used by a three-member majority of the Board of Supervisors to delay Kacic’s reappointment to the CalOptima board of directors until the conclusion of an investigation that, nearly three months later, still has not been conducted.

Kacic repeatedly has labeled the accusations as false and urged the supervisors to investigate their accuracy. He said Monday he still wanted to be “vindicated.”

FPPC Chief of Enforcement Gary S. Winuk said because Kacic hadn’t voted on anything and no opinion was being given to the county, Winuk said there was no reason for the FPPC to investigate the facts of the issue.

“The whole thing sounds a little bizarre,” said good-government expert Robert Stern. “It’s really up to the board [of supervisors] to make those decisions, not the FPPC.”

Asked what the county would do now, Board of Supervisors Chairman John Moorlach said early Monday he hadn’t been told of the FPPC rejection letter but “it doesn’t surprise me.”

He said the three-member board majority — Supervisors Janet Nguyen, Bill Campbell and Pat Bates — “put this guy [Kacic] in limbo without any hope of getting it [an investigation] done in a judicious or quick manner.”

Initially, the board planned to ask the county grand jury to look into the issue but opted to go to the FPPC instead. It also could do its own research.

CalOptima, the $1.4-billion health care plan for 400,000 county poor and elderly residents, has been rocked by high-level resignations and turmoil since last fall, when Nguyen began pushing to remake its board of directors to give the county and the medical industry more influence. 

In the wake of all of the turmoil, more than half of CalOptima’s top executives have resigned to take jobs in private industry or for other government agencies.

CalOptima board Vice Chairman Jim McAleer quit this month and in a letter to the Board of Supervisors blamed Nguyen for damaging the organization.

Nguyen said Monday she hadn’t seen the FPPC letter and wouldn’t have a comment until she has had an opportunity to read it. She did say she and other board members weren’t deliberately delaying but had to act with “due diligence.”

The anonymous allegations first surfaced in February in faxes to reporters, CalOptima board members and the supervisors. It suggested Kacic, director of the nonprofit Irvine Health Foundation, had a conflict with a pending grant.

Kacic, the board of the Irvine Health Foundation and others familiar with details of the grant application strongly denied the allegations in interviews and in letters to the Board of Supervisors, but the supervisors never sought details.

Nguyen and other members of the reconstituted board are also investigating another of their colleagues but have not specified which board member. Kacic, meanwhile, has made his own inquiries regarding the conflict-of-interest allegations.

“I and the Irvine Health Foundation have done nothing wrong,” Kacic said again Monday. “I’m hoping someone will look into this whole situation. We can’t be vindicated without someone looking into it.”

In April, CalOptima Compliance Director Denise Corley said complaints were received about a separate board member whom she didn’t name.

The board this month held a closed-door session to discuss Kacic, who said he was told to leave the meeting, but it’s not known whether the second, unnamed board member was allowed to stay.

In its May 8 letter to County Counsel Nicholas Chrisos, the FPPC said it was refusing to act because it doesn’t answer hypothetical questions and the law requires the county to have permission from Kacic.

Kacic said no one at the county or anywhere else in government has asked him for information about the anonymous allegations. Chrisos’ letter never told the FPPC the conflict issue was in dispute or came from an anonymous individual or group.

Winuk said the FPPC actually received three letters about the Kacic case. Weeks before Chrisos sent his letter on behalf of county supervisors, a person or group sent an anonymous letter to the FPPC raising the same issue. The third letter came from Kacic, who urged investigators to contact him if they had any questions. He also laid out issues that he said were inaccurate in the anonymous letter.

Supervisor Shawn Nelson, who earlier criticized his colleagues for putting so much emphasis on an anonymous letter, said Monday, “I have no interest in serving on CalOptima, but I have a strong interest in seeing CalOptima run well.”

He referred to the departure of top executives and said, “These people aren’t being run out, they’re quitting in disgust.” Nelson said he’s spoken directly with some of the executives who have resigned in the past few months.

“CalOptima is too important,” he said. “We just can’t ignore it. At some point intervention from our board [of supervisors] will be mandatory.”

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

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