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.

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