Wednesday, July 2, 2014
Imperial County Grand Jury report finds Heffernan Memorial Healthcare District expenses questionable, Heffernan says claims false
July 2, 2014
Imperial Valley Press
By Heric Rubio
CALEXICO — Calling the report biased and a distortion of the truth, officials on the Heffernan Memorial Healthcare District board are refuting many of the investigation findings published in the 2014-2015 Imperial County Civil Grand Jury regarding the district and its alleged misuse of funds.
A follow-up on work completed by the 2012-2013 ICGJ panel, the investigation looked into a complaint concerning the HMHD, finding that the district was in non-compliance from the previous year. Also investigated by this year’s panel was a complaint received regarding the MegaPark LLC land purchase involving HMHD, according to the ICGJ Final Report of Findings.
ICGJ’s findings following the investigation include “the appearance of improprieties of handling tax-generated money” in the district’s dealings with MegaPark LLC, the expenditure of approximately 94 percent of HMHD’s budget for the past five years on “administrative costs,” such as board stipends, staffing expenses legal fees and questionable donations and “no practical present reason for continuing with the operation of HMHD.”
However, HMHD board officials call these findings “unprofessional, and in some instances, plain false.”
“We’re very surprised at the report and surprised that they completely distorted facts,” said Eduardo Rivera, HMHD general counsel. “It’s such a falsehood that we are amazed at the temerity of the report writers in making these statements.”
Specifically, Rivera highlighted one section of the ICGJ report that states, “HMHD had elected to cover each member with full medical health care. That care averages $17,000.00 per member per year.”
“That’s an absolute falsehood,” he said. “Where they got that information we don’t know.”
Rivera made note that there used to be a $17,000 annual payment for board member public liability insurance, in case an instance such as a lawsuit against the board should occur, which he believed may be where the ICGJ investigative committee found that number.
“How can you confuse public liability insurance with health insurance?” he asked.
Also made public in the report’s findings was an average legal representation expense of $9,000 per month, with the jury committee unable to “get a good description of what the legal rep does for the board.”
“The legal representative’s bill was as low as $4,000 per month and up to $18,000 for other months,” notes the ICGJ report.
“My last billing was about $1,800 per month,” Rivera countered. “For them to take five years and round it out is wrong, unfair and doesn’t state the facts.”
He went on to defend his position by pointing out litigation in years past against HMHD, which may have resulted in higher lawyer fees due to the scope of work necessary at the time.
In regard to HMHD’s dealings with MegaPark LLC, an “unsecured property purchase ... derived from funds from the (Joint Powers Association),” the report states HMHD board members explained they were approached by MegaPark partners who “wined and dined” them, treating them “like they were on a trip to Disneyland,” which led to the HMHD board being convinced that the “purchase was perfect for the citizens of the district,” and using $500,000 of the district’s funds for what was essentially a non-refundable down payment on the land purchase and a new Environmental Impact Report.
When deadlines for the EIR went unmet, HMHD attempted to recoup the monies spent on the project, though not to the best of their abilities, according to the report.
“The ICGJ committee found no evidence of any effort from the HMHD to follow up on the ownership of the property,” notes the report, explaining that the investigating committee was unable to find evidence that the property was ever intended to be transferred to from MegaPark LLC to HMHD ownership.
“(HMHD) made no effort other than one letter (to MegaPark LLC),” said Roy Caldwell, ICGJ foreman. “They were just letting the money go.”
MegaPark LLC member Larry Bratton, who was unaware of the ICGJ findings, said his only statement was, “I thought this was all hashed out a year or two ago. All I know is we’re still going forward as if it’s still a good deal.”
Other report findings refuted by Rivera and board member Sylvia Bernal include a $650-per-month landscaping fee, money being held in multiple bank accounts for “no purpose other than to cast a shadow of a doubt on the accounting practices of the board” and donations made to local sports leagues.
“Never have we ever spent or done something we shouldn’t do,” Bernal said. “I am hurt and disappointed with the grand jury because they are putting out lies. Why would we put ourselves in a situation where it’s going to come back and haunt us? This is embarasssing for me, for people to think we’re stealing money. We would never do anything that would hurt the city of Calexico.”
Caldwell upheld all statements and findings published in the grand jury’s report, saying, “We have the backing of all their accounting books. It’s 19 of us doing these investigations. It’s not like it was just one person looking.”
He went on to explain that upon initial investigations, everything seemed fine, but as the committee delved deeper and spoke to people with knowledge of the district’s workings, more and more discrepancies began to appear.
“The thing I did get from everybody I talked to was that they did not feel these people were criminals,” Caldwell said, “but they did not feel they have the education to run a board like this. They were just running with it.”
The ICGJ finished its report with the recommendation that the HMHD board voluntarily dismantle itself and turn over all records to the Imperial County — California Association of Local Agency Formation Commissions and freeze all assets for review by the Imperial County Auditors Office.
Staff Writer Heric Rubio can be reached at 760-337-3442 or email@example.com