By Dan Christensen, Browardbulldog.org
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.