By Dan Christensen,BrowardBulldog.org
Gov. Rick Scott
Before the Legislature convenes in Tallahassee next Tuesday, Coral Gables healthcare tycoon Miguel B. “Mike” Fernandez will host a Sunday afternoon BBQ with Gov. Rick Scott, his wife Ann, and key members of the governor’s campaign finance team.
Fernandez, dubbed “Florida’s newest billionaire” last year by Florida Trend, was named finance co-chair for Scott’s campaign in January. In the announcement, the governor called Fernandez a “close friend.”
But Fernandez, chairman of MBF Healthcare Partners, is more than Scott’s friend. He’s also a huge contributor to his re-election campaign and the owner or co-owner of fast-growing healthcare companies that under Scott’s administration have been awarded multiple, multi-year state contracts potentially worth hundreds of millions of dollars.
Most of those lucrative contracts involve Florida Medicaid, which is implementing managed care changes, including the Managed Medical Assistance program. The program is expected to begin in May.
Better Health Plan, which does business as Simply Better Health and is an affiliate of Fernandez’s $450 million Simply Healthcare Plans, won contracts from Florida’s Agency for Health Care Administration (AHCA) last year to provide general services in three of Florida’s 11 Medicaid managed care regions, including Broward County.
Clear Health Alliance, a Medicaid plan offered by Simply Healthcare Plans, was awarded AHCA contracts to provide “specialty” services to Medicaid patients who are HIV positive or have been diagnosed with AIDS.
The Florida Times-Union first reported Fernandez’s ties to Better Health and Clear Alliance in January after Scott appointed Fernandez to his campaign team.
AHCA disclaimed any partiality in contract awards in a statement released by agency spokeswoman Shelisha Coleman.
“Every company that won an award in SMMC (Statewide Medicaid Managed Care program) rightfully earned its award. No companies received an award as a result of favoritism. The agency followed Florida’s strict procurement laws…in letter and in spirit at all times.’
Fernandez, reached Tuesday via email, said, “Companies in which I have invested in have Medicaid contracts, totaling in the billions since 1990. This includes contracts with the State of Florida under the leadership of multiple governors, including a contract under Governor Crist. All contracts save the state much needed funds and improved care to our patients.”
In October 2012, BrowardBulldog.org reported that Fernandez was a silent partner in a $44.8 million contract awarded by Florida’s Department of Children and Families (DCF) to manage mental health services in Broward.
The multi-year department contract went to the Broward Behavioral Health Coalition, a nonprofit led by former DCF boss and state attorney general Bob Butterworth, and its for-profit partner, Concordia Behavioral Health of Miami.
Fernandez was a major Concordia shareholder. His name was disclosed to top department officials, but was omitted from DCF records about the procurement.
Fernandez’s invisibility regarding the Broward procurement meant that no one took note of his $125,000 contribution to Let’s Get to Work, a fundraising organization set up with the governor’s support, on Jan. 25, 2012 while the procurement was pending.
Previously, during Scott’s 2010 campaign, Fernandez and his MBF Family Investments gave Let’s Get to Work $500,000.
Asked about those large contributions in 2012, Katy Sorenson, head of the Good Government Initiative at the University of Miami, said, “It sounds like maybe Gov. Scott is running Florida like a business – doing business with his friends.”
Fernandez’s money continues to gush the governor’s way.
On November 2, 2013, as the governor’s re-election campaign was stirring, Fernandez personally gave $1 million to Let’s Get to Work. No one else has written a check that large in support of Scott’s re-election.
Little River Plantation home
Sunday’s get-together at Fernandez’s opulent Little River Plantation, not far from Tallahassee, is a by invitation only event. The public is not invited.
Miami Herald political reporter Marc Caputo recently obtained a copy of the invitation and accompanying email:
“As an important member of Governor Rick Scott’s finance team, Mike Fernandez is opening his home to you. He is not a public person and believes we need to meet each other in person and in a social setting…Nothing formal (casual jeans and casual setting.) We will chat, have BBQ and see beautiful horses…We need to come together so we can deliver victory together,” the email said.
Little River Plantation features a 7,000 square foot home with six bedrooms, seven baths, a full gourmet kitchen and a great room, according to its web site. There’s a smaller lake house nearby.
“Your every whim will be coddled within the walls of our fabulous homes away from home,” prospective guests are told.
By Dan Christensen, BrowardBulldog.org
Miami-Dade County Court Judge Steven Leifman
Two more South Florida judges may have violated ethics rules by serving on the board of a private company that controls public health care spending.
Those Miami-Dade judges sit on the board of a nonprofit corporation that is paid by the Department of Children and Families to administer tens of millions of behavioral healthcare dollars.
A Florida Supreme Court ethics committee issued an advisory opinion in June that said judges should not serve on such boards.
Four judges, including the chief judge of the Fourth District Court of Appeal, recently quit a similar healthcare board in Broward because of the ethics ruling.
Nevertheless, Miami-Dade County Judge Steven Leifman and Circuit Judge Jeri Beth Cohen, the court system’s gurus for mental health and substance abuse, have chosen to remain as volunteer board members of the Miami-based South Florida Behavioral Health Network. Leifman is board chair.
Leifman and Cohen say the Judicial Ethics Advisory Committee’s June 11 opinion is a narrowly drawn ruling that doesn’t apply to their situation. They are resisting it out of concern that their forced departure would seriously weaken an organization that “really serves the public,” said Cohen.
The judges together have asked their court’s general counsel to research the ethics ruling with an eye towards possibly getting the situation changed.
“We’re getting a second opinion,” said Leifman, a county court criminal division judge. “We’re in a holding pattern.”
Both judges said that if becomes clear they should step down, they will.
Cohen said the circumstances in Miami-Dade are not the same as in Broward.
“I think it’s a very different situation than what happened in Broward,” said Cohen, a circuit court judge in the unified family and juvenile divisions. “We were never put there to impress anybody.”
The Supreme Court’s ethics committee offers advisory opinions to judges and judicial candidates about whether their conduct might violate Florida’s Code of Judicial Conduct.
While opinions are only advisory, conduct consistent with an opinion may be evidence of good faith on the part of the judge in disciplinary proceedings.
SPIN OFF ISSUE
Whether judges should serve on the boards of private companies that have or are seeking government contracts arose as an issue as DCF spins off services it once handled.
An unidentified judge in Palm Beach asked the ethics committee its opinion after he was asked to serve on the board of a managing entity being set up there to administer $52 million “as part of the privatization of DCF funds.”
The ethics panel, made up of a dozen judges and lawyers from around the state, said judges should not serve on the board of a managing entity because it is “in essence a governing entity” – an inappropriate place for a member of the judicial branch.
Oversight of government spending “is a clear responsibility of the executive branch, no different than the operations of the police and fire departments,” the opinion says.
Miami-Dade Circuit Judge Jeri Beth Cohen
Judges Leifman and Cohen acknowledged that their board service may require them to vote on a contract or payout – but it is unusual.
“Rarely or never do we vote on money going to a particular provider,” said Leifman. “Bids are put out, people bid and there’s a point (ranking) system. There are committees that none of us board members sit on that decides who gets what.”
Leifman acknowledged that the board influences contracting indirectly through its personnel and policy decisions.
Relationships with private companies also can lead to conflicts, especially if the managing entity “is viewed as a conduit or agent for (a) vendor,” the opinion says.
It cites Canon 2(b) of the Code of Judicial Conduct: “A judge shall not lend the prestige of judicial office to advance the private interests of the judge or others.”
That was a problem for the judges on the board of the Broward Behavioral Health Coalition, which is chaired by former DCF Secretary Bob Butterworth.
The names and titles of three of the judges were used in bid documents submitted to DCF last winter by Butterworth. Records show their presence on Broward Behavioral’s board impressed DCF negotiators.
Broward Behavioral signed a $44.8 million-a-year contract with DCF effective Nov. 1. The contract ends June 30, 2016.
Miami-Dade’s South Florida Behavioral Health Network became a DCF managing entity two years ago, with Leifman as chair.
Unlike in Broward, there was no bidding process when the Health Network got the contract “so there was no issue about someone using the prestige of the office to become a managing entity,” Leifman said.
Further, said Leifman, the June ethics opinion “flies in the face” of previous opinions that allow judges to serve on boards that have an impact on the administration of justice.
Leifman and Cohen, judges since the mid-1990s, will consider their options after they get their “second opinion.” Leifman said that could include asking the Supreme Court itself for its opinion.
Said Cohen, “We’re not interested in corralling money for treatment. We’re just interested in having a system that really serves the public…but without our expertise, it won’t be as good as it is now.”
By Dan Christensen, BrowardBulldog.org
When Bob Butterworth filed a bid last winter on a $44.8 million-a-year Department of Children and Families private management contract he signed a “Statement of No Involvement.”
By signing the statement, the former Florida Attorney General certified that neither he nor anyone else at the non-profit Broward Behavioral Health Coalition was involved in developing the DCF program for the project his company was bidding on.
Yet as DCF Secretary in 2008, Butterworth oversaw the state’s push to shift the job of administering local substance abuse and mental health services to private “managing entities” like the company he now chairs.
Butterworth described his involvement at Broward Behavioral’s inaugural board meeting last month.
The approved minutes of that Oct. 1 gathering say, “Chair Butterworth provided (a) history of managing entities created under his leadership in 2008 as DCF secretary with the goal of making local decisions and to advise the state how to best serve the community.”
The minutes also note: “At this time, the Department of Children and Families (DCF) has six (6) statewide ME’s and is now looking to Broward County to contract.”
Butterworth signed a four-year contract with DCF effective Nov. 6 to oversee government-funded programs in Broward. The deal was delayed for months by a competitor’s unsuccessful bid protest that alleged DCF illegally steered the contract to Butterworth’s group.
DCF will pay Broward Behavioral up to $162.6 million through June 30, 2016, the contract says.
‘TO INSPIRE PUBLIC CONFIDENCE’
DCF operating procedures require potential vendors to sign a “Statement of No Involvement” to promote fair competition “and to inspire public confidence that contracts are awarded equitably and economically.”
Fort Lauderdale attorney Joseph M. Goldstein, author of the Florida State Procurement Handbook, said the state relies on certifications made by those it does business with.
“There would be contractual and potentially criminal ramifications if you falsely certified in (bid documents), even if it’s not sworn,” he said.
In an interview last week, Butterworth downplayed his involvement in the creation of managing entities.
He said that while he supported their use as a way to increase local control, and recommended Gov. Charlie Crist sign the bill authorizing their implementation, managing entities were not a major emphasis of his administration and he was not actively involved in advocating for them.
“I don’t recall the issue coming up. It was a small portion of a large bill. I thought it was a good idea,” he said. “I asked my legislative director later on after I got involved, ‘What role did we play?’ He said we basically went along with the bill that the (service) provider organizations were pushing.”
BUTTERWORTH MADE MONEY
Broward Behavioral’s for profit partner in the deal, Concordia Behavioral Health, paid Butterworth and his Fort Lauderdale law firm, Fowler White Boggs, to represent them in the matter.
“Yes, I received compensation, but my total representation was at a drastically reduced rate and I didn’t bill all my hours because it was something I believed in,” he said.
However, Butterworth declined to say how much he and Fowler White were paid by Concordia.
BrowardBulldog.org reported last month that Concordia’s owners include a silent partner, Coral Gables healthcare entrepreneur Miguel B. Fernandez, who is a major contributor to Gov. Rick Scott.
Gov. Rick Scott
A Hollywood resident, Butterworth is a longtime Democrat and Florida political insider whose five decades of public service includes stints as Broward sheriff and judge.
Gov.-Elect Crist named Butterworth to head DCF in December 2006 amid a barrage of negative publicity focused on its failures to safeguard children under its protection. Butterworth served until August 2008.
PUSH TO REFORM
Butterworth said that as secretary his “major emphasis” was on restoring the agency’s reputation and reforming its foster care system.
State records, however, show that DCF under Butterworth was also focused on the development of managing entities as a “new business model” for the delivery of behavioral health services. In fact, it was a “strategic initiative” of the agency in its Substance Abuse and Mental Health Services Plan for 2007-2010.
In 2007, “the department began to strengthen community systems of care by encouraging the development of managing entities,” says a 2009 DCF report on their statewide implementation following the passage of enabling legislation the previous year.
Former DCF staff analyst John N. Bryant said he helped write the bill that ultimately passed the Legislature and was signed into law by Gov. Crist. Bryant said several people at DCF, including then Assistant Secretary Bill Janes “worked actively for its passage.”
Janes said he recommended the bill to Butterworth, but noted that Florida’s provider organizations, not DCF, initiated and developed it. ”It was the department’s role to provide comment on the bill,” he said.
Janes, who reported directly to Butterworth, said managing entities were then a “new concept” for DCF and Butterworth was not particularly familiar with them. “But I’m not going to head in a direction he doesn’t approve. He’s my boss. If he doesn’t agree with it, it’s not going to move forward,” Janes said.
QUIRK IN LAW
DCF Secretary David Wilkins announced in October 2011 that non-profits could submit bids for the job of Broward “managing entity.” Broward Behavioral was incorporated the same month.
Broward Behavioral and the Partnership for Community Health, a group of established local health care providers, were the only bidders. The Partnership ranked higher and state evaluators also deemed Broward Behavioral’s proposal “nonresponsive” because it did not include paperwork required to demonstrate financial stability.
Because there was only a single responsive reply, a quirk in state bid rules allowed DCF to ditch the sealed bid process in January and negotiate with anyone.
Two months later, Wilkins awarded the contract to Broward Behavioral.
By Dan Christensen, BrowardBulldog.org
Broward Circuit Judge Michele Towbin-Singer, left, and ex-Judge Marcia Beach
A state appeals court chief judge and three Broward Circuit Court judges lent their names to Bob Butterworth’s private push for a $44.8 million-a-year state mental health management contract, state records show.
The judges are recently resigned members of the board of directors of Broward Behavioral Health Coalition, a nonprofit that teamed up with Miami’s for-profit Concordia Behavioral Health to win the deal.
A multiyear contract is to be signed this week that establishes Broward Behavioral as the county’s new “managing entity” for substance abuse and mental health services.
Three judges who joined the board early on are identified by name and title on bid documents submitted to the Florida Department of Children and Families last winter by Butterworth, a former DCF secretary who is president and chairman of Broward Behavioral. Biographies of the judges were included.
Florida’s Code of Judicial Conduct, however, prohibits judges from lending “the prestige of judicial office to advance the private interests of the judge or others.”
The judges are Fourth District Court of Appeal Chief Judge Melanie May, Broward Circuit Judges Michele Towbin-Singer and Marcia Beach – who recently retired, and county mental health court Judge Ginger Lerner-Wren. Towbin-Singer succeeded Beach in drug court.
Each of the judges resigned from Broward Behavioral’s board this month after a state judicial ethics panel ruled in June that judges may not serve on such boards. Earlier, Butterworth had assured DCF negotiators the judges would not step down.
Fourth District Court of Appeal Chief Judge Melanie May
The last to resign: Judge May, who quit minutes before Monday evening’s board meeting. She could not be reached for comment Tuesday.
The ethics opinion has not stopped judges around the state from serving on the boards of other DCF managing entities.
For example, in Miami-Dade Judges Steven Leifman and Jeri Beth Cohen serve on the board of the South Florida Behavioral Health Network. Leifman chairs the group.
DCF’s contract award in Broward last March prompted a bid protest from a competing group that claimed the contract had been illegally steered to Butterworth’s group by unnamed state officials. The protest was dismissed, but the corruption allegations were not investigated.
JUDGES’ NAMES MADE AN IMPRESSION
Records show the judges’ presence on the board impressed DCF’s negotiators. Shortly before the contract was awarded last March, negotiators cited the judges as a reason to look favorably on Broward Behavioral’s bid, a review of audio recordings show.
BrowardBulldog.org reported last week that a silent investor in Concordia, Broward Behavioral’s profit-seeking partner, is a deep-pocketed political insider who has given heavily to Gov. Rick Scott’s campaigns.
On Jan. 25, while DCF’s Broward procurement was pending, Concordia shareholder Miguel B. Fernandez gave $125,000 to Let’s Get to Work, an organization raising money for Scott’s 2014 re-election campaign.
Fernandez, a wealthy Coral Gables healthcare entrepreneur, and one of his companies, MBF Family Investments, together have contributed $625,000 to Let’s Get to Work since September 2010, records show.
JUDGES AND ETHICS
The connection of big campaign money to the Broward managing entity contract is particularly problematic for judges who are generally supposed to steer clear of political influence.
But there was another problem.
The June 11 ethics opinion that held judges should not serve on the boards of private, not-for-profit corporations that – like Broward Behavioral – are organized to administer tens of millions of dollars in DCF funds.
A judge in Palm Beach County had sought the opinion from a Florida Supreme Court committee that advises judges so they can steer clear of trouble.
“Of particular concern in the present case is the nature of the managing entity. Viewed one way, the managing entity is a stand-in for an agency of the executive branch,” the opinion says. Judges who serve on such boards “could be said to be involved in the granting of governmental funds and overseeing their use.”
The opinion cited another concern: that judges who serve on such boards could be perceived as conduits or agents for vendors like Concordia.
“Whether or not the (unidentified vendor) is itself a corporation not for profit, a judge should take care not to lend the prestige of judicial office to advance its interests,” the opinion says.
Broward County Court Judge Ginger Lerner-Wren
Judges May, Towbin-Singer and Beach served on Broward Behavioral’s board for months after the ruling. In September, records show, then-Judge Beach even participated with Butterworth in a contract negotiation session with DCF.
Judge Wren was not identified to DCF as a board member until Oct. 1.
BUTTERWORTH WANTS A BETTER ANSWER
Butterworth, a politically connected Democrat and former judge and sheriff, discussed the ethics ruling during an Oct. 9 negotiation session. He said Broward Behavioral’s judges had “been advised they don’t have to resign at this time” and that “every judge to the best of my knowledge” would continue to serve.
The state’s former top attorney also declared that he wanted to go back to the ethics committee with a reframed question in search of a better answer.
“We are attempting to work on an appropriate question to ask the committee and we hope we get a different response,” Butterworth told the DCF negotiators.
By last Thursday, however, the status of at least some of the judges had changed.
Hollywood attorney Larry Davis, a Broward Behavioral board member, informed the DCF negotiators that it was now decided the judges “can’t serve at this point” and that a search was on for replacements.
In an interview Friday, board member and County Commissioner Lois Wexler said that Judges Towbin-Singer, Beach and Wren had stepped down from Behavioral’s board.
Judge May, however, remained on the board. Earlier in the month, Butterworth had told DCF that the Fourth District Court of Appeal “is not covered by the advisory opinion,” but did not explain why.
On Monday, May arrived at Butterworth’s Fort Lauderdale law office about 15 minutes before the meeting and went to his office.
She expressed concern about “the negativity that’s around her participation” on the board, said Wexler.
Shortly after that, the judge resigned.
By Dan Christensen, Browardbulldog.org
Gov. Rick Scott
Another political insider – this time a major contributor to Gov. Rick Scott – has cropped up in a $44.8 million-a-year government-business deal to manage mental health services in Broward County.
The Florida Department of Children and Families awarded the multi-year contract in March to Broward Behavioral Health Coalition and its for-profit partner Concordia Behavioral Health of Miami.
Bob Butterworth, the former head of DCF and an ex-Florida Attorney General, orchestrated the deal as president of Broward Behavioral. State officials say they expect to sign a deal by Nov. 1.
Now, BrowardBulldog.org has identified a second insider, this time as a silent partner.
Public records show that on Jan. 25, while DCF’s Broward procurement was pending, Concordia shareholder Miguel B. Fernandez gave $125,000 to Let’s Get to Work, a fundraising organization set up with the governor’s support.
Fernandez, a wealthy Coral Gables healthcare entrepreneur, and a company he controls, MBF Family Investments, together have contributed a total of $625,000 to Let’s Get to Work since September 2010, the records show.
“It sounds like maybe Gov. Scott is running Florida like a business – doing business with his friends,” said Katy Sorenson, head of the Good Government Initiative at the University of Miami.
“It smells, and it’s not the way to encourage public confidence in the process. Even if it’s legal it doesn’t make it right,” she said.
Bob Sharpe, president of the Florida Council for Community Mental Health and a critic of how the contract was awarded, said, “I think we now need to know more. I’m not necessarily going to tie (Fernandez’s) contribution to his participation in the plan…That’s kind of like business as usual.”
KEEP A LID ON IT?
The DCF appears to have tried to keep a lid on Fernandez’s connection to Concordia.
Several hundred pages of public records released by DCF to BrowardBulldog.org about the Broward managing entity procurement make no mention of Fernandez.
And a DCF spokesman said in an interview that while the names of Concordia’s shareholders were disclosed to the department, they were not written down on paper and no one could remember them.
“I spoke to (lead negotiator) Tom Lewis, (Assistant Secretary) Rob Siedlecki – the two key guys – and Secretary (David) Wilkins and to a person none of us knew about Miguel Fernandez’s name or any contributions he may or may not have made,” said spokesman Joe Follick.
Follick added that Gov. Scott did not contact Secretary Wilkins about the contract.
BrowardBulldog.org contacted Concordia chairman and chief executive Carlos Saladrigas this week and asked about the company’s investors. He confirmed that Fernandez, who runs the private equity firm MBF Healthcare Partners, and Martin Perez, co-founder of Miami’s Medica Health Care Plans, are fellow Concordia shareholders.
“They are passive investors and it’s not even in a personal capacity. It’s through some of their funds,” said Saladrigas, reached by phone while traveling in Japan.
FUEL FOR A CONTROVERSY
The disclosure that a major contributor to Gov. Scott’s re-election committee stands to profit from DCF’s Broward contract seems likely to ratchet up controversy about the lucrative deal won by a team whose public face is Butterworth.
Butterworth, a Hollywood resident, has long been a political powerbroker. In Broward, he’s also served as sheriff and judge.
The DCF is privatizing the state’s current job of managing government-funded substance abuse and mental health services for adults and children in Broward. It is a change that is happening across the state.
Shortly after the award, a competitor, the Partnership for Community Health, filed a 22-page bid protest alleging that unidentified state officials had illegally steered the contract to Butterworth’s nonprofit. Likewise, it alleged that Broward Behavioral is a front for its putative subcontractor, Concordia.
DCF administratively rejected the protest and an appeals court tossed out the matter in August because the Partnership did not post a required appeal bond. The underlying accusations were not examined.
Bid documents submitted by Broward Behavioral describe detailed plans to implement “an innovative operating model” intended to save money and improve access to care. The documents also cite Concordia’s role in the new care system and describe the backgrounds of its management team, which includes Saladrigas and his daughter, psychologist Elisa Saladrigas.
The documents offer little detail about Concordia’s owners: “Concordia is well capitalized from private investors to fund its operations.’
But it is the financial muscle of those investors who are making DCF’s contract with Broward Behavioral possible.
BID INITIALLY REJECTED
In January, Broward Behavioral’s original bid was deemed “nonresponsive” because it did not include information the state requires to demonstrate financial stability.
To make up for that, Concordia’s owners offered to provide personal guarantees and/or a letter of credit to the state worth $750,000, according to records obtained by BrowardBulldog.org.
DCF negotiator Lewis endorsed the idea in a Feb. 23 email to Siedlecki and department General Counsel Marion Drew Parker that was not among the documents made public.
“Concordia’s three major shareholders are well known, financially substantial and respected investors with significant expertise in managed health care,” Lewis wrote. I “would intend to sit down and review the financial statements of the three guarantors to be sure the guarantee has substance.”
Lewis does not identify the shareholders in the memo, and apparently never reviewed their financial statements before forgetting their names.
Saladrigas said Monday he expects those guarantees to be signed upon his return to Florida this week.
Fernandez did not respond to a request for comment. Perez declined comment.
INSIDER AND PHILANTHROPIST
Fernandez, whose MBF Healthcare boasts in excess of $500 million in capital to invest in healthcare businesses, is a major philanthropist who has built and sold a number of South Florida businesses and given millions away to charity.
Recipients of his largesse include the University of Miami’s business school, St. Thomas University and Miami Children’s Hospital.
Fernandez is also among South Florida’s most active political donors – mostly to Republican candidates and causes.
Besides the money he sent Gov. Scott’s way, state records show that since 2010 Fernandez has personally contributed $540,000 to the Republican Party of Florida. His MBF Family of companies kicked in thousands more.
The Florida Democratic Party received $25,000 from Fernandez in the same period.
Fernandez is also a strong supporter of Republican Mitt Romney’s presidential bid. He and MFB Family have contributed $1 million to Restore Our Future, a Super PAC supporting Romney.
Another $100,000 spent during the current election cycle went mostly to the Republican National Committee.
Aside from Concordia, Fernandez and Saladrigas are business associates in MBF.
Saladrigas is on a three-person advisory committee at MBF Healthcare Partners that helps Fernandez vet investment opportunities. Both men are on the board of directors of MBF Healthcare Acquisition Corp.
In 2010-2011, another MBF company run by Fernandez and incorporated only in Delaware, was registered as the owner of short-lived Concordia Healthcare Ventures.
CHV was voluntarily dissolved on Aug. 19, 2011 – two months before the October public announcement of the Broward managing entity procurement.
Four days later, on Aug. 23, another ownership group – Concordia Healthcare Limited Partnership – was formed. Its general partner was another company, Concordia Healthcare Management.
Concordia Healthcare Management lists a single officer and director, Carlos Saladrigas.
Miguel Fernandez’s name is nowhere to be found.
By Dan Christensen, BrowardBulldog.org
Ex-Department of Children and Families Secretary Bob Butterworth lobbied heavily this year to convince his former agency to award his nonprofit company – and its for profit partner – a $44 million-a-year state management contract.
Butterworth, however, is not registered in Tallahassee to lobby state officials.
The Broward Behavioral Health Coalition, Butterworth’s group, won the competition in March to become Broward’s new “managing entity for substance abuse and mental health services.”
Today, after months of delay caused by an unsuccessful bid protest, Butterworth is negotiating final contract terms with DCF. A signed deal is expected by Nov. 1.
As president of Broward Behavioral, Butterworth led the company’s campaign to secure the lucrative, multi-year contract. Their bid was chosen over one made by Partnership for Community Health, a group of established Broward healthcare providers.
State procurement records obtained by BrowardBulldog.org show Butterworth assembled, signed and submitted a lengthy bid proposal on behalf of Broward Behavioral and its partner, Miami-based Concordia Behavioral Health.
Butterworth, a former Florida Attorney General and Broward County Sheriff, later participated in pre-award negotiations that included direct correspondence with DCF’s lead negotiator in which Butterworth advocated the merits of “BBHC/Concordia team’s” cost savings proposal.
HOLE IN THE LAW
One state ethics expert said Democrat Butterworth – also a former judge and prosecutor – may have taken advantage of holes in the lobbyist law.
“It’s like Swiss Cheese,” said Philip Claypool, the retired executive director and general counsel for the Florida ethics commission.
Florida law broadly defines lobbying as “seeking, on behalf of another person, to influence an agency with respect to a decision of the agency in the area of policy or procurement.”
But its definition of lobbyist is narrower, turning on questions of a person’s employment, pay and job description.
“I think there is an argument on both sides,” said Claypool. “The question would have to be determined by knowing who paid whom, for what, and when, as well as what communications were made, when and under what circumstances.”
The Florida ethics commission can investigate alleged failures to register or to submit a required compensation report. It does not initiate probes, but responds to sworn complaints.
Violators may be reprimanded, censured or prohibited from lobbying for up to two years. They can also be fined up to $5,000.
Butterworth declined several requests to discuss his push to obtain the DCF contract and explain why he is not registered to lobby executive branch agencies.
Butterworth, who also serves as Broward Behavioral’s chairman, told Sun-Sentinelcolumnist Michael Mayo in June that Concordia – owned by Miami businessman Carlos Saladrigas – was paying him as both a lawyer and a lobbyist.
That potentially conflicting relationship is not disclosed in Broward Behavioral’s proposal submitted to DCF, an agency that he ran from January 2007 to August 2008.
Butterworth’s financial arrangement with Broward Behavioral also is not discussed in the proposal documents. Company bylaws allow officers to be paid “reasonable compensation for their services.”
Nova Southeastern University law and legal ethics professor Robert Jarvis said Butterworth should have registered.
“We say we take seriously government in the sunshine. So having to register as a lobbyist is just part and parcel of that effort to make government as transparent as possible,” Jarvis said.
Carla Miller, a former federal prosecutor who now heads Jacksonville’s ethics office, said Florida’s lax lobbying requirements have allowed many to skate through without registering, including presidents of companies.
“There is an appearance that we are doing something to protect citizens when we aren’t, and that’s the bottom line,” said Miller, who founded CityEthics.org a dozen years ago to promote ethics in government. “Bob Butterworth has probably figured out the lobbying law. “
The idea of using managing entities to privatize oversight of state substance abuse and mental health services was a DCF initiative under Butterworth, according to department documents.
The idea: to save millions of dollars in expenses that can be redirected to improving care in a state where such government-funded services have long lagged the rest of the nation.
In 2007, DCF held a public meeting to hear comment on “the role and functions of a managing entity” in advance of a planned procurement in southeast Florida, records say.
Last fall, DCF Secretary David Wilkins announced an “intent to negotiate” for the job of managing entity for Broward.
DCF Secretary David Wilkins
He said he expected “a significant number” of qualified nonprofits to submit sealed bids.
But there were only two bidders: Broward Behavioral and the Partnership for Community Health.
The Partnership was ranked higher by six of the state’s eight evaluators. It also had the highest score.
Broward Behavioral was deemed to be “nonresponsive” because it did not include required paperwork to demonstrate its financial stability.
Nevertheless, as DCF’s general counsel Marion Drew Parker has put it, a “wrinkle” in the competitive process allowed DCF to scrap the idea of sealed bids.
Negotiations started over, now with just a single DCF employee – instead of a committee – charged with recommending a winner, and Broward Behavioral came out on top.
The deal was delayed when the Partnership filed a 22-page bid protest alleging, among other things, that the contract award was illegally steered to Butterworth’s group.
DCF quickly denied the protest. The Partnership sued, but an appeals panel dismissed the case in August because it had neglected to post a required protest bond
The underlying corruption allegations were not addressed. A DCF spokesman has denied any impropriety.
Broward Bulldog reported last week that DCF awarded the contract to Butterworth’s group without required rules in place to promote public scrutiny.
By Dan Christensen, BrowardBulldog.org
Former Department of Children and Families Secretary Bob Butterworth
Florida’s Department of Children and Families awarded a $44 million-a-year contract to privatize the management of mental health services in Broward without required rules in place to promote public scrutiny.
The Broward Behavioral Health Coalition, an upstart not-for-profit led by former DCF Secretary Bob Butterworth, won the award last March amid allegations of bid manipulation.
Final contract negotiations are underway and state officials expect a contract to be signed by Nov. 1.
But documents obtained by Broward Bulldog.org show DCF has not adopted administrative rules prescribed by the Legislature in 2008 that specify how regional managing entities like Broward Behavioral should be chosen and run.
DCF Secretary David E. Wilkins acknowledged his agency’s inaction in a June 26 letter to State Sen. Ellyn Bogdanoff, the Fort Lauderdale Republican who co-chairs the Legislature’s Joint Administrative Procedures Committee.
“The department’s approach to implementing managing entities…has been in a process of refinement over the past several years,” said Wilkins.
“With our approaches and strategies regarding managing entities changing over time, rule-making was not appropriate.”
Bogdanoff queried Wilkins after receiving a May 2 letter from the Florida Council for Community Mental Health, a statewide association of health-care providers. The council complained that DCF was looking to award contracts without rules “that meet any standard for public scrutiny, transparency or public participation.”
Bogdanoff later told Wilkins, “The department appears to be acting outside the scope of the…rule making process, which is designed to ensure public participation.”
She also asked Wilkins to halt the procurement process “until rules are formally adopted” – including the Broward Behavioral deal
That did not happen.
BOGDANOFF BACKS OFF
But Bogdanoff said Friday that she had a different view after speaking with Wilkins.
The secretary, she said, sincerely wants to make DCF more efficient and “deserves some latitude” as he seeks to achieve estimated savings of $177 million over the next four years – dollars Wilkins has pledged will be redirected to patient care.
The money is to come from mandated administrative cost reductions.
“He was not necessarily violating the rule-making process,” said Bogdanoff, who is currently running for re-election. “He does not believe that this is different from any other procurement issue and that the department didn’t need rules. I don’t think he’s wrong about that.”
Florida, the nation’s fourth most populous state, currently ranks 49thin the nation in per capita funding for mental health services, according to the DCF’s website.
State Sen. Ellyn Bogdanoff, R-Fort Lauderdale Photo by: Mark Foley
In his reply letter, Wilkins told Bogdanoff that “entrenched interests” were opposing his reform efforts.
DCF is actively privatizing oversight of substance abuse and mental health services around the state. Those duties include administration of an array of government-funded services such as crisis intervention and detoxification.
By law, only nonprofits can serve as managing entities. But several groups , including Broward Behavioral, have major for-profit subcontractors – fueling accusations that the nonprofits are mere front organizations.
Broward Behavioral’s subcontractor is Concordia Behavioral Health, a Miami company led by Miami businessman Carlos Saladrigas.
Butterworth, a former Broward sheriff, judge and Florida attorney general, is the chairman of Broward Behavioral and also its lead negotiator with the state.
Butterworth did not respond to a request for comment, but in June he told Sun-Sentinel columnist Michael Mayo that Concordia is paying him to serve as its lobbyist and attorney.
The loser in the race to become Broward’s first managing entity was the Partnership for Community Health, a group of established mental health providers led by Dr. Steven Ronik of Fort Lauderdale’s Henderson Behavioral Health.
Broward Behavioral and Partnership for Community Health were the only two companies last winter that submitted sealed bids for the work.
WINNER LACKED PAPERWORK
Six of eight state evaluators ranked Partnership for Community Health higher, and it received the highest total score. Moreover, those officials deemed Broward Behavioral “non-responsive” because it did not include paperwork demonstrating financial stability.
Typically, companies that submit non-responsive bids are disqualified.
But a “wrinkle” in the process – as described by DCF’s general counsel – instead allowed DCF to bypass competitive bidding and negotiate directly with whomever it wanted.
This time, Broward Behavioral came out on top.
The Partnership for Community Health filed a bid protest shortly after the decision that later landed in court. It alleged unnamed state officials had steered the contract to Butterworth’s group and also insulated themselves from administrative and judicial review.
An appellate panel dismissed the challenge because the Partnership for Community Health did not post a required appeal bond.
The court did not address the underlying corruption allegations, but a DCF spokesman said they were false.
In his June letter to Bogdanoff, Wilkins said DCF now has sufficient experience to begin the rule-making process. An initial workshop meeting was held July 30. Officials said they expect the process to take 18 months.
By Dan Christensen, BrowardBulldog.org
Department of Children and Families Secretary Bob Butterworth (right) being honored by Henderson Mental Health Center's Steven Ronik in 2008
An appeals court has pulled the rug out from under a bid protest alleging that a $44 million a year state management contract was illegally steered to a nonprofit led by former Florida Attorney General Bob Butterworth.
The court tossed the case last week without looking at the underlying corruption allegations.
If the decision stands, no official review will be made of the Florida Department of Children and Families’ controversial decision last March to award the lucrative contract to Butterworth’s Broward Behavioral Health Coalition (BBHC).
Butterworth, who turns 70 next week, is among Broward’s best-known politicians, with a varied career that includes stints as Broward sheriff and head of the Department of Children and Families under Gov. Charlie Crist in 2007-2008.
The 22-page bid protest was filed in April in Tallahassee by the Partnership for Community Health, BBHC’s competitor to become Broward’s new “managing entity for substance abuse and mental health services.” Those duties include oversight of a range of government-funded services, including crisis intervention, detoxification and mental health services for emotionally disturbed kids.
The Partnership is a group of established Broward healthcare providers led by Dr. Steven Ronik of Fort Lauderdale’s Henderson Behavioral Health.
Among other things, the protest alleges the state’s bid process was “manipulated” by unnamed state officials to “ensure” that Broward Behavioral would win, and to insulate the award from both administrative and judicial review.
It contends, too, that Butterworth’s group is fronting for its for-profit “partner,” Miami’s Concordia Behavioral Health. Managing entities, which hold considerable power to decide which local care providers will receive future state funds, are required by law to be federally approved nonprofits.
In 2010-2011, more than 118,000 Broward children and adults received state and federal subsidized substance abuse or mental health services, according to DCF.
HARDBALL POLITICS OR HURT FEELINGS
Butterworth, a lawyer at Fort Lauderdale’s Fowler White, did not respond to requests for comment by phone and email. In June, he told Sun-Sentinel columnist Michael Mayo that Concordia – led by Miami banker Carlos Saladrigas – was paying him for his services as both a lawyer and lobbyist.
Court records show that earlier this year Butterworth corresponded with the DCF’s chief negotiator, Tom Lewis, about the terms of what he referred to as the “BBHC/Concordia team’s” proposal.
Butterworth, however, is not registered to lobby in Tallahassee, Broward or Miami-Dade for either Concordia or Broward Behavioral. Concordia was incorporated in May 2011.
DCF officials deny any impropriety.
“Simply put, any insinuations that this particular bid process was illegal, tainted, or had any goal other than enhancing the quality of substance abuse and mental health treatment in Broward County is false,” department spokesman Joe Follick said this week.
DCF General Counsel Marion Drew Parker ascribed the Partnership for Community’s Health’s bid protest to “hurt feelings” because of the state’s decision to change the way it does business.
“They don’t like it. If they wanted to negotiate with us in the negotiation process and had been on board with the changes we desired to make they probably would have been chosen,” said Parker. “But they didn’t want to, and as a result now they have hurt feelings.”
Parker said DCF intends to resume negotiations with Butterworth’s group toward the end of the month and hopes to have the new regime in place by the end of the year.
Ronik did not respond to requests for comment. Daniel Thompson, a Tallahassee-based attorney for the Partnership for Community Health, declined comment.
The decision to privatize what is today DCF’s oversight of Broward’s state-funded substance abuse and mental health services is intended to further cut millions of dollars in spending in an area where Florida has long lagged the rest of the nation.
According to DCF’s website, Florida, the nation’s fourth most populous state, ranks 49th in the nation in per capita funding for mental health services. Florida is 37th in spending targeting substance abuse.
DCF issued its invitation to negotiate for the Broward managing entity job last October. At the time, Secretary David Wilkins said he expected “a significant number” of nonprofit bidders for a multi-year contact involving as much as $176 million between now and 2016.
“WRINKLE” IN RULES
Only two companies – the Partnership for Community Health and Butterworth’s newly minted Broward Behavioral Health Coalition – submitted sealed proposals as to how they would spend the state’s millions.
Six of eight state evaluators ranked the Partnership higher than Broward Behavioral. The Partnership also received the highest total score.
Under other circumstances, Broward Behavioral would likely have been out of the running. But the combination of its own inadequate bid proposal, and a quirk in state bid rules, created what Parker called a “wrinkle” in the process that ultimately allowed Butterworth’s side to prevail.
Broward Behavioral’s proposal was deemed to be “nonresponsive” because it did not include paperwork required to demonstrate financial stability. Normally, that would have disqualified Butterworth’s company, Parker said.
Instead, because there was only a single responsive reply, DCF was allowed to employ a provision in state procurement law that Parker said allowed it to bypass the sealed bid process.
“The agency gets a pass and can negotiate with whomever it wants,” Parker said. “We left the ITN (invitation to negotiate) process, for lack of a better way to describe it.”
With the idea of sealed bids scrapped, and the previous scoring out the window, DCF began open negotiations with both nonprofits last winter.
According to the Partnership’s bid protest, those negotiations were stacked in favor of Butterworth’s side.
Court papers say the Partnership was “consistently required” to go first in the negotiations over pricing and other contract terms, and Broward Behavioral was allowed to undercut it “immediately before the department decided to post the award.”
The complaint also alleges that DCF negotiated privately with BBHC and Concordia, and provided them with details about their competitor’s proposal. “Similar information was not given” to the Partnership, the court papers say.
“The department’s actions…were illegal, arbitrary, dishonest or fraudulent rule policies,” the complaint says.
Under the sealed proposal process, the state was required to retain and publicly identify a panel of seven negotiators. When the ITN process was dropped, however, that requirement ended and only a single negotiator, DCF employee Tom E. Lewis Jr., was used. Lewis, a lawyer, is the department’s director of performance and support services.
According to Parker and Follick, Lewis recommended to Secretary Wilkins – a former sales executive who also serves as Florida’s chief operating officer – that the contract go to Broward Behavioral “because it provided a better service at a better price.”
The Partnership sued after DCF rejected its administrative protest. The case was fast-tracked.
Ultimately, a three-judge panel of the First District Court of Appeal in Tallahassee rejected the challenge because the Partnership failed to post a required protest bond.