Saturday, Nov 10 2012 10:30 PM

Now we have proof of supes' bogus secret meetings

By LOIS HENRY Californian columnist

This must stop.

The Kern County Board of Supervisors has, indeed, been discussing items in closed session that aren't listed on the agenda.

Related Info

Lois Henry hosts Californian Radio every Wednesday on KERN 1180 AM from 9 to 10 a.m. You can get your two cents in by calling 842-KERN.


In the course of reporting out stories, reporters gather lots of bits and pieces of information. Some doesn't make it in the story because of room, relevance or just plain, "hmmm, not sure what to make of this."

When I began reporting on the county's health care plan in mid-July and its stance on keeping the Segal report under wraps, one of the first people I called was Supervisor Ray Watson.

I asked if he was familiar with the issue and if he'd seen the report.

The first words out of his mouth were: "This hasn't been discussed in closed session that I can recall."

Uh, OK. I didn't ask about that, but thanks.

He went on to say he knew Segal had an opinion on the allegations of conflict of interest but that he had not seen a report.

Now that I know Segal submitted a report to the county in April and another in June, and that supervisors indeed discussed the report in closed session "two to three times" according to CAO John Nilon's deposition, I had to wonder.

Was Watson's odd blurting about closed session a kind of guilty Freudian slip?

I called to ask him about it, but he never got back to me.

Like I said, hmmm.

How do I know?

I got it straight from the horses's mouth, so to speak, County Administrative Officer John Nilon.

He didn't tell me directly, of course.

He disclosed that tidbit, and more, under oath during a deposition early last week.

He said supervisors had met and discussed the so-called "Segal report" in closed session "two or three times."

I'll get to what the Segal report is and why it's important in a minute.

But lets stick with Nilon for now.

Though he argued during the deposition that the county followed the Brown Act in putting the required closed session information on the public agenda, Deputy County Counsel Mark Nations acknowledged that the Segal report, under that name or any other, was not listed on any agendas.

It was discussed under the category "labor negotiations."

I'm not even going to dignify this "category" ruse as technically being within the bounds.

It is not.

It is deceptive. And purposely so.

Nilon also said in his deposition that supervisors took some sort of action in relation to the Segal report. I looked through the minutes of every single Board of Supes meeting starting in April, when the report was submitted to the county.

At all but one meeting, labor negotiations is listed for closed session. The minutes for every single one of those closed session items states "NO REPORTABLE ACTION" was taken.

Considering the Segal report potentially sorts out allegations of conflict of interest regarding a $100 million a year health care contract, I'm betting the public would be keenly interested in any action taken by supervisors.

Instead, we aren't informed supes are even talking about the report. And whatever action they took, per Nilon's statement, isn't for our ears either.

The only way I got wind of it was because Dr. Donald Cornforth was so fed up with the secrecy he sued the county to get at the report. Nilon's deposition was taken in conjunction with that suit.

Something is seriously amiss in this county.

Doing the public's business in the open goes to the heart of our representative system. It's supposed to be how we maintain trust with those in power.

The games this board of supervisors is playing with transparency have broken that trust.

District Attorney Lisa Green needs to revisit her investigation of such questionable practices. If not, Green, then the Attorney General's office.

Now, back to the Segal report.

The Segal Group is the county's independent health benefits consultant.

It was asked to look into issues of possible conflict of interest in regards to Managed Care Systems , which has been administering the county's largest employee health plan since 2009.

Critics of MCS, including Cornforth, had complained that MCS, which is owned by GEMCare, which, in turn is partnered with Memorial and Mercy hospitals, was unfairly hijacking patients out of competitor hospitals and shutting out non-GEMCare specialists.

Yes, Cornforth was one of those specialists and said he saw his county employee referrals drop by nearly 30 percent after MCS took over the contract.

Cornforth owned Quest Radiology, which he sold to San Joaquin Hospital. He also used to serve on San Joaquin's board as well as a San Joaquin-affiliated physicians group that had competed with MCS for that county contract. He has since resigned from both boards.

He is paying for the lawsuit personally and insists his concern is solely over the county's secrecy.

Cornforth was an early complainer about MCS.

But it doesn't appear the county took the complaints seriously until April 2010.

That's when Nilon first appears to bring it up with GEMCare chief executive officer Bob Severs in an email (also shaken loose courtesy of Cornforth's lawsuit).

In it, Nilon states: "With regard to your comments on credibility and the potential conflict of interest that MCS now has related to negotiating contracts with Mercy and Memorial Hospitals, I would like to meet with you again at your convenience."

They meet in July 2010 and have a little more email contact, including an offer by Severs to give up the part of the contract that involved negotiating with hospitals.

Then nothing until April 2011 when the Segal group writes to MCS saying the county has engaged it to do a study of the "impact to the County, its medical plan participants and its network providers of recent organization and ownership changes at Managed Care Systems and GEMCare."

Segal was seeking raw data to look at patient referral patterns, whether competitors' cost information was being shared within the GEMCare conglomerate and whether hospital rates were similar.

Segal finally got the raw data in late December 2011, according to emails.

In February 2012, Segal analyst Tom Morrison emails MCS' CEO Brent Boyd about some patient referral trends Morrison says he's seeing and they discuss reasons for those trends.

It's important to follow these bits of conversation because they show the county's focus was to use the data to see if there was a pattern that would support the conflict of interest charges.

The county is trying to hide the Segal report and quash Cornforth's lawsuit under two theories -- 1. That it's a draft report and 2. That the report was solicited to look at alternative health plans which would be subject to confidential union negotiations.

There are actually three reports done by Segal, according to Morrison's deposition.

The first in April, the second was submitted in June and a third. He testifies he's unclear on whether it has been completed and submitted or just completed.

As to whether the reports are drafts, Morrison goes back and forth. Ultimately, he explains the reports are looking at the same data from different perspectives. They are separate reports, he insists, which leads me to believe they are not "drafts."

Draft or not, it's a thin legal skirt for the county to hide behind anyway. California Public Records law allows a public agency to withhold draft reports, but doesn't require it to do so.

Meaning, it's up the county.

The second argument about the report being used for labor negotiations is just plain hogwash.

Nowhere in the emails, letters and memos going back two years does anyone talk about Segal's report exploring health plan alternatives for consideration during labor negotiations.

Nilon does say in his deposition that a secondary aspect to Segal's report was "maximizing our health plan, maybe even creating new exclusive provider organizations."

But all existing outside evidence (the emails, letters, etc.) shows the Segal report's sole purpose was to looking at the conflict of interest charges.

In fact, Nilon confirms in his deposition that the report was never mentioned in the county's negotiations this past year with its unions. And a major issue in those negotiations was health care and health care costs. If the county had some kind of report on "alternatives" in its back pocket, surely that would have been the time to put it on the table.

All these issues will come before a judge Nov. 13 who will decide whether the county was right to withhold the information or the public deserves to see what it's paying for.

Meanwhile, the MCS contract is up at the end of this year. The county did not put out a request for proposals (RFP) until this past September. That's despite the fact that Morrison said in his deposition Segal had prepared and submitted the RFP by April.

The county withdrew the RFP saying it didn't get any decent bids and extended MCS' contract by six months. Now I see it's back out on the county's website and will come up at this week's supervisors' meeting.

Interestingly, the county seems to be breaking at least one piece of the contract off so no single organization will have total control.

Whatever happens with the contract from here out is almost incidental.

Supervisors can't outrun the stink from the mess they've made up to this point.

Opinions expressed in this column are those of Lois Henry, not The Bakersfield Californian. Her column appears Wednesdays and Sundays. Comment at, call her at 395-7373 or e-mail LOIS HENRY: Now we have proof of supes' bogus secret meetings

Have something to share? Comment on this story
Today's Daily Deal
Daily Deal Image
Tutti Frutti Yogurt Shop
$20 of Yogurt for $10
  • Value
  • Savings
  • Bought
Buy Now
What do you think?