September 11, 2016; Marin Independent Journal
In June, former chief executive Kimberly Bond was “removed” from her position at the San Diego charity Mental Health Systems (along with her husband, Dr. David Conn) after a damning county audit detailed a string of financial and other irregularities in the nonprofit. Since then, she has reportedly been hired at another nonprofit, Center Point, where she is their new executive vice president. It may be relevant at this time to mention Bond recommended that Center Point take over some of the $31 million in contracts that MHS gave up when they were given a relatively short time period to clean up their management act. The contract Center Point ended up being awarded was for $7 million, which is a lot of money for an organization whose most recent tax filing reported revenue of only $18 million.
In an October letter to a California Department of Corrections and Rehabilitation director, Bond said Mental Health Systems was being singled out by a specific state staffer.
“We have made multiple requests for relief from these contract violations and for a change in the program manager assigned to these contracts, but have been met with either silence by CDCR or continued harassment,” she wrote.
But this contract manager is evidently not the only professional who had an ax to grind; it was the whistleblowing of Michael Hawkey, longtime CFO, which caught the attention of the county. Among other things, the CFO alleged that Bond had authorized seeking contract reimbursements for payments that had not been made even while she was writing checks to a for-profit subsidiary the nonprofit had purchased. At the point that the county released its report, the for-profit Novato CARES owed more than $5 million to MHS even as payments to vendors, staff, and doctors were held.
Hawkey said he warned Bond repeatedly that the acquisition was jeopardizing the nonprofit’s bottom line. “Our cash situation has been apparent for over a year, and Kim has received my regular warnings about this,” he wrote in a February 10th letter to MHS’ board. “This is my attempt to protect what is left of MHS by giving you information you may not have.”
One comment about this aspect of the story: A social enterprise was also implicated in the downfall of FEGS, with the same pattern of a cash-flow-dependent organization using the liquidity it had to support a marginal business. The abovementioned practice of holding checks aligns with this.
Additionally, around $1.2 million was paid to Open Minds, a Pennsylvania consulting firm, with no documentation to be found regarding what the payments were for. Bond’s husband, a senior vice president at MHS, is an advisor to Open Minds. The San Diego Union-Tribune reports that, “On the agency’s tax filings, ‘no’ is checked, in response to the question, “Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other officer, director, trustee, or key employee?”
Apparently, Bond went to some lengths to ensure that MHS could not be faulted on the direct supervisor front by assigning the supervision of her husband who was, on November 1, 2015, appointed to the Senior Vice President of Business Development & Government Relations position, to various folk. As recorded in the county audit:
- From November 1 to December 1, 2015, David Conn reported to Novata’s Chief Operating Officer
- From December 1, 2015, to February 10, 2016, he reported to MHS’s Chief Financial Officer
- Beginning February 11, 2016, one day later, he reports to MHS’s Chief Medical Officer
Hawkey was placed on leave by the board. The findings of the county investigation were turned over to the district attorney’s office and the FBI for review, and former MHS employees at Mental Health Systems report being interviewed by criminal investigators in recent weeks, though no charges have been filed.
Center Point, a penny for your thoughts?—Ruth McCambridge