Orange County Supervisor Janet Nguyen defended herself Wednesday against a withering grand jury report, declaring that, among other issues, no hospital lobbyists influenced major changes to the board of directors of CalOptima, the county’s $1.5-billion health care plan for more than 400,000 of the county's most vulnerable residents.
“This is outright wrong,” Nguyen told a news conference, referring to the grand jury’s allegation that lobbyists for the Hospital Association of Southern California (HASC) “helped rewrite” the ordinance.
“The lobbyists did not help to write the amendment that changed the composition of the CalOptima board,” she said.
Nguyen blasted the grand jury as irresponsible because it failed to interview her as part of their inquiry. And she also argued the panel had a fundamental misunderstanding about the role of HASC lobbyists in two ordinance approvals - one in April and another in December.
But according to interviews and emails obtained by Voice of OC, HASC was very active behind the scenes pulling together both 2011 ordinance changes.
Issues highlighted by the 15-page grand jury report also included campaign fundraising in connection with the major changes to CalOptima.
Nguyen, in her rebuttal, widened that issue, saying she’s not the only one on the five-member Board of Supervisors to get financial support from the health care industry.
“Six months prior to reelection, you hold as many fundraisers as you can,” she said in answer to questions about how political fundraising meshed with health industry support for changes to the CalOptima board of directors.
“We hold fundraisers throughout the year,” Nguyen said. “You want to make sure you are not vulnerable.”
But County Supervisor John Moorlach, who served on the CalOptima board for four years before Nguyen, questioned that kind of fundraising.
“I don’t have frequent fundraisers. I am not someone who is continually building a major reserve for whatever is next. I have not abused my donors.”
At the time, Orange County had a $1,800-per-candidate limit on campaign donations from individuals and organizations. County supervisors raised that limit to $1,900 this week.
Without providing specifics, Nguyen did acknowledge at her press conference meeting with HASC representatives before final approval of the ordinance change in December 2011.
“We met with anyone who asked for a meeting,” she said.
Despite repeated questions, she declined to go into specifics of how donations were arranged from groups like the health care industry or how HASC wanted the ordinance changed. Among other changes, the amended ordinance gave Orange County hospitals a permanent seat on the CalOptima board.
In the nine months after the proposed changes to the CalOptima board of directors were made public in early October 2011, Nguyen received about $50,000 from the medical industry. She ran for re-election in early June and won easily.
Former CalOptima board Chairman Ed Kacic said Tuesday that shortly before the proposed ordinance went to the supervisors for a vote on Oct. 4, HASC lobbyists Julie Puentes and Jim Lott told him and CalOptima board Vice Chairman Jim McAleer “in a face-to-face meeting” that the “draft had considerable input from HASC.”
The draft ordinance originally gave Nguyen a permanent seat on the CalOptima board because her district has the most disabled, low-income and elderly residents who qualify for the state and federally financed program.
The ordinance was made public less than a week before its first Board of Supervisors hearing. But the HASC board apparently already was on board.
In an Oct. 1 email to Kacic three days before the first public Board of Supervisors meeting on revising the CalOptima board, Lott, the Los Angeles representative for HASC, wrote:
If you think it would help, Julie Puentes and I are available to meet with you to help provide insight into the hospital community's support on a 21-1 vote in favor of the proposed ordinance change. I hasten to add that this invitation to meet and confer should not be construed or referenced in any way by you or us as a recommendation to delay consideration of or action on the proposed ordinance change. Rather, Julie and I simply want to offer you an opportunity to gain more insight into why the hospital community so strongly supports restructuring your board. Again, if you think this would be helpful, please let me know and I will ask Julie to set up a meeting with us and whomever else you think should attend.
Puentes stated in an email Wednesday: “The policy of our company is still to not comment on investigative reports and studies performed by government watchdog agencies. Thanks for your understanding.”
At Wednesday's press conference, Nguyen portrayed herself as a reformer on the CalOptima board -- one that confronted a broken organization rife with conflicts and a "rubber stamp" board -- one that included her colleague, Moorlach as the supervisors' appointee.
Moorlach, along with several former board members and non-profit leaders, defend CalOptima arguing the agency was in solid health when Nguyen arrived. Since her arrival, at least 16 top administrators have left the agency for other jobs within the industry.
Kacic said in a telephone interview Wednesday that as soon as the draft of the proposed changes to the CalOptima board was made public in the fall of 2011, he sent an email to the full board and its provider and membership advisory committees urging them to read it and weigh-in at the Oct. 4 supervisors meeting if they supported or opposed it.
Among other actions, the planned changes would have eliminated the seats of almost all existing board members, including Kacic.
Shortly after his email went out, he said, he received a telephone call from Nguyen, who was “screaming” because he hadn’t told her he was going to send his email.
Kacic said Nguyen “threatened to rewrite” the proposed ordinance “to throw you guys off” right away, rather than waiting until early 2012.
He said she “hung up on me” after he told her, “You and I both know what you are up to [removing existing board members],” he said.
Nguyen didn’t return a telephone call seeking comment.
At her news conference, Nguyen said the grand jury report was “out-and-out wrong” when it said the ordinance change that remade the CalOptima board of directors began in March 2011.
She said the March 2011 ordinance change applied only to prohibiting CalOptima from participating in health exchanges, which were being set up in California in anticipation of the new national health care law that takes effect next year.
At that time, Puentes, on behalf of HASC, publicly opposed allowing CalOptima to participate in the exchanges. Opposition also came from Republican members of the state Legislature who represented Orange County and from the all-GOP Board of Supervisors.
According to emails obtained by Voice of OC, Puentes also was active behind the scenes on that issue.
“Attached please find the latest version of the [health exchange] Ordinance,” Deputy County Counsel Paul M. Albarian wrote April 8, 2011, to CalOptima’s in-house lawyer, Gary Crockett. “As discussed, I will be sending this version to HASC for review and comment. I plan to discuss with Julie Puentes on Monday. After that I will advise you of any additional changes or concerns that may exist …”
Three days later on April 11, Albarian sent Crockett an email that began: “Gary: Good news. Julie Puentes was agreeable to the Ordinance language we discussed on Friday evening …”
It’s not clear from those emails when discussions began with HASC about changes in the CalOptima board of directors that would ultimately be approved in December.