The Coast News Group

FPPC clears Tri-City duo of conflict of interest

OCEANSIDE — The state’s political ethics watchdog has cleared Tri-City Healthcare District’s former CEO and a current board member of having an alleged conflict of interest when they pushed for the hospital to enter into an agreement with a Carlsbad insurance underwriter.

The Fair Political Practices Commission made the announcement in a pair of letters to former Tri-City CEO Larry Anderson and current board member RoseMarie Reno earlier this month.

“I am very pleased and feel vindicated by the FPPC’s determination,” said Reno.

Anderson released a statement through his attorney, George Rikos, saying he is “very pleased with the correct result by the FPPC.”

The FPPC initiated the investigation following The Coast News’ story in 2014 on a lawsuit filed by the hospital that, among other things, accused the two officials of having an illegal conflict of interest as it pertained to the hospital’s complex lease-leaseback arrangement with Carlsbad-based Medical Acquisition Co., and its president and founder, Charles Perez.

The hospital is also involved in an eminent domain lawsuit to determine the fair market value of the building, which Tri-City took possession of last year.

In the closure letters dated Oct. 9, the FPPC stated that it found insufficient evidence to conclude Anderson violated the state Political Reform Act, which defines and outlines the penalties for conflict of interest, and any evidence that Reno violated the act.

When asked about the subtle difference in the letters, FPPC spokesman Jay Wierenga said semantics aside, the result of the investigations were the same.

The lawsuit, which is aimed at voiding the agreement between Tri-City and Mac, alleged that Anderson pushed the lease arrangement even though it had a clause that virtually guaranteed him employment for eight years while Perez had bought him various gifts, including a home-security system, guns and other gratuities.

The lawsuit also alleges that former board chairwoman Reno, who is still currently on the board, failed to recuse herself from voting on the deal even though Perez, through MAC’s services, paid for $200,000 worth of medical expenses for her grandson who had been in a car accident, and who was later hired as a company driver.

Instead of not participating in the lease negotiations, the suit alleges that Anderson and Reno were major proponents of the arrangement, with Anderson going as far as misleading the board with incomplete, faulty and misleading information about MAC, its financial strength and construction experience.

In a statement, MAC representatives said they felt vindicated by the FPPC’s decision.

“With the FPPC’s ruling, we are hopeful that the issues between MAC and Tri-City can now be narrowed, and the focus be put on the value of the building that Tri-City has taken in eminent domain,” said MAC’s Vice President and General Counsel, Tara Lusher.  “There was no conflict of interest.  We feel vindicated by the FPPC’s findings. MAC built a gorgeous building that we hope will serve Tri-City and the community well. We look forward to seeing the building be put to productive use.”