Despite heated opposition, new contracts approved for hospital CEO and CFO

Accusations of corruption heat up health care meeting as board approves two-year contracts for CEO Ken Underwood and CFO Mark Robinson

The San Benito Health Care District Board of Directors by a 3-1 vote Nov. 17 renewed the contracts of Hazel Hawkins Hospital CEO Ken Underwood and CFO Mark Robinson for two years (down from the previous four-year contracts), along with 12-month severance packages if they should be terminated without cause.

Board members Gordon Machado, Mary McCullough and Josie Sanchez voted in favor of the contracts, while Dr. Parveen Sharma voted “no” and Jim West was absent.

The contracts were renewed despite contentious claims from some doctors and nurses in the room that included accusations of corruption on the part of the board and Underwood. While Underwood did have supporters at the meeting, many, including board member, Sharma, objected to the outgoing board approving the contracts, recommending instead to hold them over for the incoming board members to consider.

The tenor throughout the meeting was as much an indictment of the impacts of social media as it was the board and Underwood.

During the public comments portion of the meeting, family physician Dr. Arminda Tolentino, who has worked at Hazel Hawkins for 20 years, said she was appalled by what she has been reading on Facebook. She said that after reading what she termed lies about the hospital, she felt compelled to speak up.

“This is a small medical community,” she said. “Our purpose is to serve the people of San Benito County. Facebook has to go. This community should recognize and thank the CEO, Ken Underwood, and our current board member, Gordon Machado, for advancing the hospital for our services and the quality outcomes we have, and for significantly improving our specialists, medical staff coverage, and expanding our clinics.”

Arminda Tolentino’s sister and fellow doctor, Anita Tolentino, a pediatrician, said that in 22 years working at the hospital, she had never been to a board meeting. She added that she has seen CEOs come and go and Underwood’s contributions to the hospital and community were significant. She also said she felt compelled to come to the meeting because of what she had been reading on Facebook.

“It is so disgusting,” she said. “A hospital community should not be basing things on such crap.”

Dr. Sylvia Morgan, practices obstetrics and gynecology in Hollister. As she stood within the crowd that overflowed out into the hallway, she, by far, made claims of corruption against the board and Underwood. She said that during a July 2014 executive board meeting, she had presented each member with a copy of a claim for damages, which she claimed to have previously delivered “in a sealed envelope.” Afterward, she said each board member denied receiving the letter. She said after Machado claimed he never saw the letter, she produced a letter in response to it from Underwood.

“He was opening your mail,” Morgan charged. “And you said you had never seen it. I asked you to investigate whether he had done this in the past. You did not do that. Instead, you wrote me a letter stating, ‘we did have a meeting and we decided on what he did,’ but you couldn’t have possibly because you (claimed) you had not seen my document at that point in time.”

She further accused the board of colluding with Underwood and, “…you covered his a**. I didn’t appreciate the board not investigating if he had done this before and I gave you two incidents in which I knew he had done it before,” she continued. “I’ve only wanted the best for this hospital, but it comes from the top down, and if you have corruption from the very top, it is bad.”

When Machado signaled that her time was up, Morgan declared, “My three minutes isn’t up!” As she tried to continue, Machado held up a clock and said, “Do you want to see my clock?”

Then Dr. Ariel Hurtado, who defeated Machado in the recent election for a spot on the board, said, “That tone that you have is very disrespectful.”

Then Machado promptly rapped his gavel on the table, and responded to Hurtado, “You haven’t been recognized by the chair. You’re out of order.” Then the board’s legal counsel interjected, “She has about 20 seconds left.”

Morgan went on to claim that a number of records had been falsified, and reiterated, “…unless you get the corruption from the top down gone first, you will not make a better hospital.” Then she pointed at Underwood. “This man lies and you can’t do a good job by not knowing information that is being brought forward to you.”

Dr. Sonny Underwood, Ken Underwood’s wife, said she had been with the hospital for 16 years, working with end-of-life care. She said she wanted to bring peace to the meeting.

“Let there be peace on earth, and let it begin with me,” she said. “I’ve been at the bedsides of hundreds of people who are dying. When I talk to the families, what I brag about the hospital is we’re a family. We have our differences.”

She said it is possible to discuss differences without shouting or hurting one another. She compared those at the hospital to birds in the sky.

“We’re all the same,” she said. “I came from the other side of the country. I’ve been in wars and have seen things, and all I wish for is peace and love. Let us all get along. If somebody makes a mistake, let’s not hold a grudge, and forgive. That’s where the healing comes to us and to others.”

Sharma addressed Machado directly, telling him that even though they may have their differences, and no matter what she thought about him or how much he disliked her, he needed to remember the vision, mission and values of the organization.

“Your first duty is to the community and those who offer services in the community, not to who is sitting next to you (Underwood),” she said. “When it comes to expenses and financial problems, you have to look at what would happen if we don’t make this decision, and what would be the impact of the finances of the people who take over.”

When the agenda item about approving the contract extensions came up for discussion, one individual commented that she had heard from an anonymous source that it was illegal to approve a contract when new board members were coming in. Counsel told her that was not true and that the present board had the authority to make the decision.

Machado commented that in the past 10 years, there has not been a contract for the CEO. He said the subject comes up occasionally, but has never been acted upon. He added that Assemblyman Luis Alejo brought about legislation that dictated that district hospitals must have contracts.

“That’s why this is before us tonight,” Machado said. “Last year’s contract was for four years with 18 months’ severance pay. This time it’s two years with 12 months’ severance.”

He supported his case for the current board approving the contracts by pointing out that later in the meeting that the CFO would be presenting an “evaluation report.”

“Therefore, it’s only appropriate that the current board does the evaluation for Ken, and somewhere in BenitoLink (an incorrect claim later refuted in the meeting by Frankie Gallagher, Hazel Hawkins directory of marketing and public relations) said he requested $450,000,” he said. “There’s no request on his part, whatsoever.”

“I’m sorry, Gordon, what if the current board is a little corrupt?” Morgan called out.

Machado struck the gavel and declared she was out of order. Morgan started to speak and again Machado again struck the gavel and repeated, “You’re out of order!”

Then Machado began to explain why the current board was discussing and voting on the employment agreement. He said that “only” board treasurer Jim West felt he didn’t want the obligation to bound another board coming in. Sharma corrected Machado, stating that she had spoken against West’s idea. A protracted conversation evolved in which others at the table said they did not remember hearing Sharma speak up and there was no mention of it in the minutes. Sharma appeared astonished that no one remembered she was opposed to the current board voting on the contracts and had said so. Machado continued as Sharma looked out into the audience at Hurtado and asked him if he had heard her. He agreed with her that she had spoken against the current board acting on the employment agreement. Machado told Sharma she had made her point.

Machado went on to say that nothing has been done in several years about the contract. He admitted that despite there being a state law, the board had procrastinated. He pointed out again that the proposed contracts had been modified from four years to two years, and said the new board would have the opportunity to work with Underwood, and they would have two years to see if they wanted to continue with the contract.

Sharma objected to the 12 months’ severance stipulation. McCullough, vice president of the board, commented that the 12 months was a reduction from the originally proposed 18 months. Sharma was not swayed, and insisted it was too generous. She said a normal severance would be three to six months. She said she did not have a problem with signing the contract, but did not think the timing was right, noting that the right time would be when the new board took over.

“We are saddling them with a financial burden that they don’t deserve,” Sharma insisted. “The hospital is doing badly, right. We canceled the Christmas dinner because the hospital is doing badly. And we are not giving them turkeys this year because the hospital is doing badly.”

The room erupted in applause.

Sharma said the contract was too lucrative and the decision to sign the contract should be left to the new board and asked why the old board was doing it at the last minute. Again, applause and cheering filled the room. She said the board had not done anything in the two years since the Alejo bill was passed. She questioned why they couldn’t wait another week until the new board took over and wondered if the present board didn’t have respect or confidence in the new board’s capabilities.

“We have to do it because we (the current board) know everything,” she said, sarcastically, then added, “No, we don’t. I think they should be given the chance to do that.”

Machado answered her concerns with, “We replaced the turkeys with gift certificates.”

Sharma stated flatly, “I stand corrected.”

She started to add that there are a number of items the current board could be addressing, when Machado interrupted her, stating that three board members with years of experience working with the CEO and CFO were leaving. Then he insinuated that the three new board members would not have sufficient knowledge for a “long time” to be able to work with a “multi-million dollar corporation and understand the functions of our staff.” He supported his line of logic by stating it took him a year “just to learn the acronyms.”

Sharma stood by her conviction that the new board was perfectly capable of understanding the operation of the hospital, saying, “It’s not rocket science,” and asked, “Why the urgency?”

Loretta Martin, clerk of the board, answered, “We’re trying to clean up the business that we’ve been at for a long time. We don’t want to burden the new board.”

“This is not ethical,” Sharma insisted. “It is not the right thing to do.”

“You’re entitled to your opinion,” Machado responded and then opened up the discussion to the public.

Morgan reiterated her allegation that she had asked repeatedly for an investigation of Underwood.

“What I am asking is why is there going to be a contract when you have never done the investigation of him interrupting and getting your mail?” she said. “It’s a logical thing for you guys to at least do an investigation prior to giving him another contract. It’s a matter of him getting your mail and censoring it and giving you what he wants you to see and have.”

Machado started to respond and legal counsel told him he couldn’t. He asked her why he couldn’t and she told him, “Why would you want to?” He said, “Because it’s not the truth.” There was a back-and-forth between Machado and Morgan until she said she had more than 20 witnesses to the previous exchanges in 2014, and then stated, “I’d be willing to bet they’re not all going to lie for Ken Underwood.”

Machado responded calmly, “That was an insult, but I understand. That’s your perception.”

Rolan Reséndiz introduced himself as a member of the public and urged the board not to vote to renew Underwood’s contract and said he agreed with Sharma.

“It’s not that it isn’t a good contract, but the timing is highly questionable,” Reséndiz said. “We’ve seen things like this transpire in the past. In the minutes, they said they were going to defer it and wait for the new board. Then all of a sudden, it’s back on the agenda tonight. I’m pretty sure we’re wasting our breath and it’s going to pass tonight.”

Then he addressed the earlier comments about Facebook, saying the board cannot ignore the digital information age in which everyone lives today.

“It’s a quick and convenient means of distributing information,” Reséndiz said. “It increases and encourages transparency, which I think the board needs to re-address. Whether you agree or disagree, it’s not going anywhere. You’re advertising online and we have someone in the media (referring to BenitoLink) here who’s entirely on the Internet. And I think it’s hypocritical of people to come here and say that they’ve never been to a board meeting in all of the years that they’ve been here and they’re here tonight because of what they saw on Facebook.”

George Ball, Sharma’s husband, said he did not think there was a need to rush.

“If Mr. Underwood is going to resign, you need to make a decision, but if he is not, then wait for the new board,” he said.

One resident referred to Sharma’s concerns by asking, “What can we afford? What will be the impact if we make this decision? What will we pass on to our successors?”

She said that as a member of the public, she believed contract and salary negotiations generally go hand-in-hand. She also mistakenly referred to a salary figure as having been quoted in BenitoLink to support her contention that it was equivalent to “one nurse.” She said the impact is already happening.

“You’re losing quality nurses in droves,” she claimed, “while simultaneously marketing into new communities to gain more patients. If you approve the salary hike, you’re knowingly placing this community at risk by ignoring the current critical staffing shortage of your hospital.”

She commented that she had heard the word “deplorable” during the election and said, “these actions would be the definition of ‘deplorable.’”

The current board, she added, would be passing on a mess to the next board, and then described the working conditions for the nurses as, “…16 hours without breaks. Going home for as little as six hours, and coming back and doing it the next day.”

Nurses, she said, are creating, “…miracles out of life-and-death situations with little support from the board or management. I pose these questions to this board and the incoming board, what’s going to happen to your hospital when there are no more nurses left who are willing to place their careers on the line to work here?”

Again, Machado insisted they were discussing a contract that “has nothing to do with salary.”

Dr. Amit Mathur, said one of the new board members — Hurtado — had been elected by the people and knows what the people want.

“I don’t think anybody on this current board making the comment that it is going to take years for them to learn, that’s not right,” he said. “The people have told him what to do. This is a public institution. So, why would it take him so long?”

“Don’t you think we know what the public wants?” McCullough asked him. “The people I talk to are very supportive of the hospital. They’re amazed at how far we’ve come along mostly over the last 16 years.”

Hurtado stood up and asked to speak in order to, “clear the air.”

“I was the only one that ran for election,” he said. “I campaigned and talked to people. I walked to over 700 homes. I talked to people in my neighborhood and in the forgotten districts. Then I ended up winning with 78 percent of the vote. When I say I know what the people want, I know what they want.”

He said he was not speaking to put his opinions on the board, but to encourage a process.

“We are not politicians,” he said. “I see us as citizens’ oversight. And, yes, it takes time to learn things, but that should not be the way it is. The argument is ‘you have to learn the job; therefore, you’re not qualified.’”

Hurtado said he appreciated the fact that the current board has worked with Underwood and then asked for his written evaluations and a blueprint of how they worked with him, if they had those documents.

“If you don’t, that’s the problem, because we’ve always lagged behind,” he said. “Unfinished business for six years? We need to get this hospital up to modern guidelines in everything. If you sign off on something constituents don’t want, I’m going to hear about it.”

Hurtado told the board that Millennials now outnumber Baby Boomers and it’s time to start thinking like them and the board has to embrace the ways in which Millennials communicate, including Facebook.

Machado and McCullough answered him by saying they had listened to the concerns of the people and had modified the contract by shortening it to two years. Machado indicated that the contract was not binding and the new board could dismiss Underwood without cause if it wanted. McCullough was explaining that it was time to do what the government was telling the board to do and Hurtado was saying he did not have an agenda when Machado told Hurtado he already had used his three minutes of public speaking time.

“Then stop talking to me,” Hurtado scolded Machado, who said the board had the right to listen to the people and Hurtado told him to, “Stop asking me questions.” Machado came back with, “You chastise me for being rude.” Then Morgan jumped in, shouting that Machado was rude to her.

“You’re out,” Machado said to Morgan. “What do you want me to do, lady?” He pounded the gavel repeatedly as she hurled accusations back at the board, saying, “rubber stamping anything he (Underwood) says.” McCullough stopped the heated rhetoric by asking if anyone else had comments on the agenda item.

Ariana Sanchez, R.N., described herself as one of the, “beautiful, 120 rag-tag nurses that work at Hazel Hawkins.” She said she was speaking on behalf of all the nurses in asking the board to either vote “no” on the contract or to at least wait and not make a rash decision. She started to ask if it took a year and a half to negotiate the nurse’s contract when Machado interrupted her by saying there were multiple contracts with the nurses. As he was saying this, Sanchez noticed McCullough shaking her head, which she did a number of times, and said, “If you want to shake your head in disrespect and think I don’t know what I’m talking about, but I’m asking for respect for the community and the employees who work here.”

Sanchez accused the board of not walking the halls to talk to the employees and show them respect. She discounted the gift certificates and asked why they don’t ask how individual employees are doing.

“Simple, little things show respect,” she said, and added that she was speaking out of passion. “I’m a young nurse, and I guess you would call me a Millennial, and I do work with passion, and I want to see a difference at Hazel Hawkins, starting with education. Do we have an education program here? I don’t know. I’ve asked for three years. I submit it to my manager and ask ‘how do we fix this?’ Do I hear a response? No. It’s little things that matter.”

She concluded, “I’m asking that you either not vote on this tonight, hold off on the vote, or vote ‘no.’”

Body language seemed to be important to the nurses as they saw McCullough shake her head, appearing to be dismayed by Sanchez’ comments. One whispered, “That’s so disrespectful.” Sanchez said, “That’s OK. I can take the hits.” Then she said forcefully to the board, “It’s your employees you’re disrespecting and not just me.”

“You’re placing that burden on the public and not just the board members,” Reséndiz chimed in as Machado rapped his gavel to silence him.

Machado and Morgan tangled yet again and Machado asked her if he needed to call the police to remove her from the meeting. She more or less dared him to do so, and he said she knew he wouldn’t.

As the agenda item continued, Sharma objected numerous times to moving too fast and made a number of suggestions, all of which were acknowledged, but quietly discounted as the remaining three board members remained united in approving the two-year contracts.

During a five-minute break, Hurtado told BenitoLink that he is fighting for transparency and accountability.

“I just want everybody to know what their jobs is and that job should be graded and evaluated, then if they’re worth what their contract says, you go ahead and give them what they want,” he said. “You look at objective requirements for any position from the top all the way to the bottom.”

Hurtado said he did not like coming in to a hostile environment.

“It shows really poor judgment to having the public relations fiasco of having nurses on strike,” he said. “And it’s obvious you don’t pass a contract at the very last meeting with outgoing board members because that leaves me a big mess that I have to deal with, along with the ire of the nurses. We’re going in the wrong direction, and that’s not what the public wants.”

He said the board should have postponed the contract in order for the new board to move forward with a structured, open evaluations.

“There are better ways to go around it,” Hurtado said. “First, mend fences with the nurses, and then the leadership could possibly stay, but it’s tying my hands when poor decisions keep being made.”


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John Chadwell

John Chadwell is a freelance photojournalist. He has many years' experiences as a photojournalist, copywriter, ghostwriter, scriptwriter, and novelist. He is a former U.S. Navy Combat Photojournalist and is an award-winning writer, having worked for magazine, newspapers, radio and television. He has a BA in Journalism and Mass Communications from Chapman University and graduate studies at USC Cinema School. John worked as a scriptwriting consultant, and his own script, "God's Club," was produced and released in 2016. He has also written eight novels, ranging from science fiction to true crime, which are sold on Amazon. To contact John Chadwell, send an email to: [email protected]