MOORLACH UPDATE — Covered California — October 2, 2013

October 1, 2013, will be remembered for a couple of reasons. It was the day the Federal government closed down for perhaps the 18th time in history. It was also the first day to enroll in what is now referred to as Obamacare. California allocated $43 million to conduct public awareness activities to the population eligible for Covered California programs. And, $37 million would be distributed among 50 organizations to reach individual consumers and small business (I guess Gov. Brown took the 14 percent cut; but that’s speculation on my part, based on observed trends). One of the 50 organizations received $500,000 and focused on the city of Anaheim and the San Gabriel Valley. So let’s split that in half, leaving $250,000 spent in the OC, or 0.6 percent, for a population that is more than 8 percent of the entire state. What to do? The OC Health Care Agency gets creative and decides to use Measure H funding from the Tobacco Master Settlement Agreement. Clever. At least it does not require the County to dig further into its reserves to fund non-reimbursable and non-mandated Federal programs, but forcing our good Coalition of Orange County Community Clinics to do something they would gladly do anyway seemed too clever for me. It diverts funding away from direct care at the clinics. I was the only vote in opposition to this item on yesterday’s agenda. It is discussed in the first piece below by the Voice of OC.

In the second article below, the OC Register covers a recent claim against the County, which, as the conclusion states, is a pre-cursor to a lawsuit. Consequently, it is best that I do not make any public statements on a personnel matter. As you know, I abide by the principle of letting managers manage. When the former CEO informed me that the Bustamante matter had been researched and resolved, I took him at his word. Many months later, when the Internal Auditor informed me of the contents of the research, a document prepared by an outside law firm, I immediately went to the County’s Equal Employment Opportunity (EEO) Officer and inquired when the Bustamante charges were first brought to his attention. His response was shocking. No one ever brought it to his attention. That should tell you something as to certain managers not managing, and what transpired after this brief meeting. All to say, it was a very demanding and difficult year as the Chair of Orange County in 2012. To be clear, the Chair of the Board of Supervisors is not the EEO Officer. And my office has no recollection or record of ever receiving a letter on the Bustamante matter during the previous time that I served as Chair in 2008.

Obamacare Exchange Launches Amidst Complaints From Supervisors


Orange County’s community health leaders marked the opening day Tuesday of the health purchasing exchange, a newly created marketplace to buy health insurance under the Affordable Care Act, with little fanfare, though high-profile festivities took place nationally and statewide, including in Los Angeles and San Diego.

Day one interest was high across the state. Within an 90 minutes after phone lines opened at Covered California, the state entity administering the exchange, more than 6,000 people called with inquiries. The sign-up area of Covered California’s website received 800,000 distinct page hits per hour, according to Sarah Sol, information officer with Covered California.

In turn, Orange County supervisors, who have been vocal in their opposition to Obamacare and refused significant health-care related grant funds from the federal government, voiced frustration over the shortage of outreach grants for Orange County.

Supervisor John Moorlach, who has led the board’s charge against Obamacare, termed the limited outreach grant funds slated for Orange County as “another example where somehow we are third cousins” when it comes to funding allocations from Sacramento and Washington, D.C.

Supervisor Janet Nguyen, who has been the most active board member on county health care outreach and services for the underserved, defended county Health Care Agency staff efforts to her colleagues, noting their tough position given the board’s position.

“Everybody knows these five supervisors don’t support Obamacare,” Nguyen said. “But it is the law of the land at this time.”

Covered OC, a coalition of about 50 community groups working to expand coverage to the county’s uninsured, is supporting enrollment efforts. Some of Covered OC’s members have received grants to fund outreach efforts for explaining the reforms to primarily non-English speaking communities and assisting enrollment in the exchange.

Nguyen announced Tuesday that last weekend she sponsored a town hall in Little Saigon featuring the participation of the county’s Social Services and Health Care agencies along with CalOptima, the county’s managed health care plan for the poor and elderly.

In addition, state Sen. Lou Correa and Assemblyman Tom Daly are co-sponsoring a town hall in Santa Ana to answer questions about the exchange. The meeting is scheduled Oct. 4 at the Southwest Senior Center, 2201 W. McFadden Ave.

There were also concerns raised this week about a website with a name similar to Covered California’s site, which is The other site,, is not yet operational and not affiliated with the purchasing exchange.

Health care reform supporters around the nation have expressed concern that opponents might create falsely named websites to disrupt enrollment. In fact, participants in a discussion at called for hackers to take down on the assumption that it is deceptive.

But the owner of the site, David Moore, an insurance broker based in Tennessee who was reached by Voice of OC Tuesday, said he has no political agenda and created the website to educate consumers on buying health insurance. He said he plans to start sites in every state. He also said Covered California has contacted him with their concerns about the site but that it is legal.

One of the next steps in instituting the purchasing exchanges is certification of insurance agents who can enroll consumers in the exchange. Some 15,000 agents have registered for certification, with the first 3,000 expected to be certified by the end of the week, Sol said.

Enrollment in the exchange will continue through March 31 of next year, but anyone seeking coverage beginning on Jan, 1 must enroll by Dec. 15.

Amy DePaul is a Voice of OC contributing writer and a lecturer in the UC Irvine literary journalism program. You can reach her directly at depaula.

Please contact Norberto Santana Jr. directly at nsantana and follow him on Twitter:

County officials scoff at Drakodaidis as ‘whistle-blower’

Documents and interviews partially confirm some allegations, but not others.

By Tony Saavedra

In her explosive $10 million damage claim, former Orange County Deputy CEO Alisa Drakodaidis, one of three top executives forced out after a bungled sexual harassment investigation, portrays herself as a “whistleblower” wrongfully terminated by county supervisors.

Her Sept. 11 claim was accompanied by a six-page statement detailing wrongdoing by various county officials and departments, most of them issues that have received little public scrutiny.

“Ms. Drakodaidis reported several legal and ethical irregularities … to her supervisors over her career. The many instances where she was a whistleblower are too numerous to account here,” the claim says.

But while the claim includes a number of eye-opening allegations, a review by the Orange County Register found most of them difficult to substantiate. Her claim does not include documents that would verify the most serious of the charges, and her attorney, Philip Dyson, did not respond to repeated requests for an interview.

County supervisors either expressed puzzlement or denied outright the most pointed claims leveled against them, noting that Drakodaidis, as the second-ranking county executive, was hardly someone who could be silenced or ignored.

“She had the power to fix this stuff,” said Supervisor Shawn Nelson.

In the document, Drakodaidis claims:

• She forwarded a sexual harassment complaint against former Public Works Executive Manager Carlos Bustamante to then board Chairman John Moorlach in 2008 — three years before the allegations against Bustamante became public. Bustamante was forced to resign in 2011 and was arrested the next year on 12 felony counts of sexual battery, sexual assault and other crimes over an eight-year period.

But Moorlach denied last week that he ever received a complaint about Bustamante from Drakodaidis in 2008 and said the county Human Resources Department did not either. “We’re over here scratching our heads,” Moorlach said. “We would have jumped on that immediately.”

• She told then-CEO Tom Mauk and County Counsel Nicholas Chrisos in 2012 that several trash haulers were being undercharged at county landfills, which had resulted in a loss to the county of more than $700,000.

Interviews and county documents obtained by the Register show that the situation at Waste and Recycling was actually worse: Undercharges – which amounted to more than $1.4 million in unpaid gate fees – were discovered during a billing review. Nine trash haulers were accused of misreporting the source of the waste they were dumping, officials said. (The rates are set according to whether the hauler is carrying trash from cities with a county contract.)

Three civil lawsuits were filed against uncooperative haulers but only about half of the missing money, $670,747, was recovered, documents and interviews show. County officials told the Register they settled for less than the full loss to avoid litigation costs and for fear of driving some of the companies into bankruptcy. But none of the documents or interviews revealed any whistle-blowing role by Drakodaidis, whose job would have included notifying Mauk and Chrisos, officials say.

“We were unaware of any whistle-blowing,” said Julie Chay, spokesperson for OC Waste & Recycling.

• County Supervisor Pat Bates tried to get favorable treatment for friends working at Dana Point Harbor. The claim said Bates told her “she needed to favor her friends with regard to county business, especially at the harbor, so that she could pay for her expensive campaigns.”

In an interview Bates called those allegations “patently false. To assert that’s how I make my decisions is ludicrous.”

• Drakodaidas referred a “high-profile” case against Supervisor Shawn Nelson to the county Equal Employment Opportunity office. County officials said Drakodaidis did try to file an EEO complaint on behalf of a female employee whom Nelson had criticized for not doing her job. The employee, however, did not sign off on the complaint, and the case was eventually dropped.

Nelson said the whole situation was ridiculous and an effort by Drakodaidis to “paint herself as a victim.”

• She reported to Mauk that a woman was solicited for sex by her supervisor in 2011 in the Public Works Materials Laboratory. She said that Human Resources “moved most of the female staff out of the laboratory and minimally disciplined the offending males.”

The Register confirmed through several sources that a woman filed a sexual harassment complaint against a supervisor in the Materials Laboratory. But The Register could only confirm one female transfer from the laboratory. County counsel officials, citing confidentiality, would not talk about the complaint, identify the offenders or say whether anyone was disciplined. No further information could be found on the incident.

The idea of Drakodaidis as a whistleblower was called far-fetched by many officials, who said complaints were supposed to go to her first and then to Mauk. Mauk was the only executive who stood between her and the board of supervisors.

“Mauk was her biggest fan, her biggest defender. He did not believe she was one not to be listened to,” Nelson said.

Drakodaidas was the third executive to leave the county after a series of botched investigations into sexual harassment complaints against Bustamante, who also was a Santa Ana councilman. Bustamante was placed on administrative leave in 2011 and allowed to resign. His immediate supervisor, Jess Carbajal was later fired. Mauk resigned under pressure in July 2012.

Drakodaidis went out on medical leave the same month Mauk resigned and attempted to return to work on Sept. 21, 2012, according to her claim.

One day before she was scheduled to return she was placed on administrative leave, the claim says, and was eventually terminated on March 15 of this year.

“The above retaliation is in direct response to Ms. Drakodaidas’ whistle blowing,” the claim concludes.

In an interview last week, Mauk would only say: “She was a very talented, hard-working, energetic employee for the county of Orange. If she feels she’s been wronged that is up to the legal system.”

A claim is considered a pre-cursor to a lawsuit. If denied by the board, Drakodaidis can then file suit.

Contact the writer: tsaavedra Staff writer Martin Wisckol contributed to this report


October 1


I had the privilege of writing a series on employee benefits for the Christian Management Report, and this edition’s submission was titled “Accident and Health Plans.” Sometimes those in an employer-provided medical plan forget what a significant component it is of the total compensation package that is received. Here is the conclusion:

The good news is that the 1986 [Tax Reform] Act has made all of the statutory employee benefit plan requirements uniform. The bad news is that it has also made the compliance requirements more cumbersome. However, the tax benefit to be gained by the employees through the exclusion of the benefit from their gross income still makes this an attractive benefit that can be provided by employers.


Teri Sforza of the OC Register provided a different perspective on a frequent story topic in “Merrill Lynch turns benefactor – BANKRUPTCY: The brokerage says its largess has nothing to do with the county bankruptcy and everything to do with good business.” A similar story was provided by the Associated Press, “Merrill Lynch offers a generous hand; getting a handshake is another story.” Here is the AP version:

Merrill Lynch & Co., vilified for three years as the corporate bad guy behind Orange County’s bankruptcy, has been offering an especially generous hand to local causes.

The county treasurer wants to offer Merrill a handshake in return. But since many people still blame the brokerage for contributing to the $1.64 billion collapse of 1994 _ the nation’s biggest municipal bankruptcy _ there is a lot of persuading to do.

Since June, when the largest U.S. broker agreed to pay $437.1 million to settle a lawsuit alleging it gave the county bad advice, Merrill has funded a string of worthy causes. They include: