Former CEO Who Wrecked St. Rose Hospital, Took $1.28M Severance, Named To ‘Measure A’ Blue Ribbon Committee

Michael Mahoney

ALAMEDA COUNTY | Michael Mahoney once ran one of the most crucial safety net hospitals in Alameda County. His mismanagement coupled with the dim realities of running a hospital in pre-Obamacare America led to the near bankruptcy of St. Rose Hospital in Hayward last year and a $1.28 million severance package from the county for his work.

Mahoney, who Alameda County Supervisor Keith Carson once publicly accused of lying to the Board of Supervisors during a meeting in 2012, is now part of the Blue Ribbon Task Force charged with renewing the wildly successful health care tax, known as County Measure A, for the 2014 ballot.

The Alameda County Board of Supervisors last week named Mahoney to the 32-person task force created earlier this month by Supervisor Nate Miley. The working group will study the pros and cons of renewing the tax which sunsets in 2019 for either the June primary ballot or November midterms. The original Measure A half-cent transactions and use tax has generated nearly $1 billion in revenue to fund the county’s health care safety net since 2004. Mahoney’s nomination to the task force was one of five placed by Supervisor Richard Valle last week, who has been linked the former hospital CEO in the past.

In fact, Mahoney’s connections to Valle have been a source of his income since being driven out of his post at St. Rose Hospital. After receiving his $1.28 million severance, Mahoney quickly moved on to a management position at Union City’s Tri-CED, a non-profit recycling company founded by Valle. Later, Mahoney was rumored to be a candidate to become the CEO of the Alameda County Fairgrounds, but that opportunity fell through.

Once viewed as affable and businesslike, Mahoney’s tenure at St. Rose was viewed as positive until the wheels began to fall off the safety net hospital, known for attracting some of the largest percentages of uninsured and Medicare patients in the county. Mahoney’s severance was discovered when the new operator of St. Rose refused to include the package in its purchase agreement. As the hospital’s financial missteps multiplied at an increasing rate, Mahoney asked and received from the Eden Township Healthcare District a $3 million short-term loan to pay employees.

However, Mahoney struggled to pay back the healthcare district and nearly defaulted on the loan. Meanwhile, to buy time, Mahoney was less than truthful with some county supervisors over the true health of the facility. During a meeting in March 2012, the normally staid Carson said Mahoney briefed the board in the morning saying the hospital was doing fine, but followed it up later that day by asking the board for an infusion of cash.

“Mike lied to us. He sat here and lied to us. We asked him what the financial status was in the morning. It’s perfect. We’ve got money. We’re good,” said Carson. “That afternoon we got a letter saying we need money. We can’t make payroll.”

A few days later, Cal Mortgage, which financed St. Rose’s earlier loan, put pressure on the county to remove Mahoney. After several twists and turns, the hospital is now run by a separate operator with subsidies from the county. Now, Mahoney’s public reemergence includes deciding whether taxpayers should fund struggling facilities like the one he previous led.

12 thoughts on “Former CEO Who Wrecked St. Rose Hospital, Took $1.28M Severance, Named To ‘Measure A’ Blue Ribbon Committee

  1. I won't prejudge what this blue ribbon committee should include in its recommendations to the Supervisors. However, since both San Leandro Hospital and Alameda Hospital are affiliating with the Alameda Health System, a continuation of the current 75% of Measure A fund distribution to AHS would result in the increased proportionality called for by the commenter here, since the AHS distribution would support three Hospitals instead of just one, along with the numerous clinics and other inpatient services run by AHS.

    We should keep in mind that San Leandro Hospital has been run by Sutter Health during the entire time Measure A has been in effect, so SLH was not run by an organization which wanted to take care of the specific people Measure A is required to help. It is extremely doubtful Sutter sought Measure A funds; instead, they wanted to report the biggest financial losses possible so that they could close the Hospital.

    Finally, the appointment of Mr. Mahoney is politically tone deaf. He's still just one of 32 people appointed by the 5 Supervisors, and based on Supervisor Carson's statement we can presume that he and other Supervisors will appoint many people who will view Mahoney's recommendations with a skeptical eye. For a County resident to decide they're going to oppose Measure A even before a new proposal has been presented is enormously shortsighted. Any one of us might need the health care Measure A funds could provide in the future, and Alameda County residents with poor health hurt our communities and public budgets. I feel Measure A has been a wise investment so far.


  2. Shady news indeed. However, Measure A has a very big flaw as currently written – 75% of collected funds go to Alameda County Health Center (now Alameda Health System). Although few would argue that Highland and accociated clinics don't have a unique and important role to play in the health safety net, the measure provides disproportionate funds to Highland/etc which help perpetuate inefficiencies in care there. With every care provider in the county outside of the AHS system scrabbling over the 25% of what is left, it is not surprising that other safety net hospitals such as San Leandro and St. Rose are constantly in trouble.

    It's tough, as the population of the county is quite large and we have an extremely large number of un and underinsured residents who require care. This probably won't change much under Obamacare, so the need for county residents to provide some safety net for themselves is there, and Measure A fills some part of that need. However, for reauthorization, the disproportionate way the money is distributed must be fixed. Residents of San Leandro, Hayward, Union City, Pleasanton, and Livermore should not have to subsidize care going on in Oakland when they have needs that are not being met at their local hospitals.

    Reauthorize Measure A, but have the funds be proportionally distributed, and let the distributions be *transparent* so county residents know what they are getting for their $$$.

    The baggage of Mr. Mahoney's tenure at St. Rose makes his placement on this board controverisal for sure, however I do think he will advocate for a proportional distribution of funds from a new measure. I hope he does and that he is succesful at it.


  3. MW: of course the assertions are true. 🙂

    Also, good point about Valle being on the St. Rose board for the entire time Mahoney served as CEO and until being appointed county supervisor last year.


  4. By MW:

    Concerning the comment of 8:49, Nate Miley has insisted that he is so extremely ethical that therefore it is okay if he takes election campaign contributions from absolutely anybody, and no matter how sleazy the source of those election campaign contributions, since he has stated that his decisions are not affected by who gives him money.

    Still furthermore, Nate Miley is a law school graduate, and we know that no one who went through and graduated from law school would lie or do anything unethical or dishonest, and as Richard Nixon, Spiro Agnew, Bill Clinton, and John Edwards all “proved.”

    So therefore I am confident that the fact that Nate Miley's son, in other words Chris Miley, is collecting a salary because of fellow Supervisor Valle would not affect Nate Miley's conduct or actions.


  5. Shady! As shady as when Valle served on St Rose board and said nothinf about Mahoney's performance as CEO. Then Valle hires him at Tri-Ced.

    This must be political payback from Miley to Valle for keeping his son on payroll and giving him a raise. Wonder what Wilma Chan is getting out of their deal?


  6. He's the perfect politician a Lier And Thief
    Hopefully the word will get he's behind it and will vote it down

    He has absolutely no scruples !!!!


  7. By MW:

    If the assertions made in this article are true, then it is just one more example of the fact that the Bay area is the world's largest, craziest, and most insane circus, and a place that normally rewards, worships, promotes, and gives pay raises and awards for incompetence and sleaze.

    For example Willie Brown, and who over the last few decades has gotten far more money from the tobacco companies than any other politician in the entire country, and as a result has been the tobacco companies' co-conspirator in arranging laws that have resulted in the murder of at least tens of thousands of Californians by the tobacco companies, had the Bay area chapter of the American Cancer Society give him its Humanitarian of the Year Award.

    And some of the most prominent people in the Bay area, and such as Willie Brown and SF mayor George Moscone, were among the strongest backers of Jim Jones (later of Jonestown infamy), and among those who “definitely knew” that Jim Jones was one of the greatest, finest, and most reputable people of all time. In fact, they even gave him testimonial diners and at which they praised him to the skies.

    And I could give tons more examples of Bay area insanity.


  8. I will not support reauthorization of the measure; in fact, maybe I will write the opposition to the ballot measure. Note over 80% of the money goes to operate Highland Hospital in Oakland. San Leandro hospital does not benefit from any of the funds. Unless some funds come to SL Hospital, I recommend everyone in San Leandro not support he ballot measure. Tony Santos


  9. Thank you for reporting this cause it's an absolute disgrace that Valle would appoint Mahoney to this task force.


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