Cardinal gets a new start with new board – and some holdovers

New board members of Cardinal Innovations Healthcare said Friday they hope to restore public trust in the beleaguered organization, though one lawmaker called the reappointment of three former members “bad optics.”

Among the former board members elected Thursday was Mecklenburg County Commissioner George Dunlap. He later sought to further distance himself from the old board by threatening legal action against it.

The developments mark the latest turn for Charlotte-based Cardinal, North Carolina’s largest public managed care organization.

Last month, after Cardinal’s board gave severance payments of $3.8 million to its former CEO and three other executives, the state Department of Health and Human Services stepped in, firing the board and taking control. DHHS orchestrated selection of a new board and 17 of 21 members were elected Thursday.

One new member from Charlotte is Carmen Hooker Odom, the DHHS secretary under former Gov. Mike Easley.

“I’m asking the public to hold this board accountable,” Odom said. “From the public trust perspective there is serious damage to rectify.”

In the past three years, Cardinal has paid out a total of $6.1 million in severances, including the package to former CEO Richard Topping. A state audit in May blasted Cardinal for “irresponsible” spending on board retreats as well as executive perks and salaries far outside the range allowed by law.

In addition to Dunlap, a committee of county officials Thursday elected former board members Marcelle Smith of Halifax County and Bryan Thompson of Winston-Salem.

Thompson was voted off the old board this fall after criticizing Cardinal’s spending and leadership.

“I am optimistic that the new board can partner with members, advocates, the Department of Health and Human Services and the General Assembly to rebuild the public trust and refocus on fulfilling the vital function Cardinal Innovations serves every day,” he told the Winston-Salem Journal.

Shortly after Thompson was kicked off, Dunlap resigned, saying he wasn’t informed about the severance packages. Dunlap has sought to separate himself from the old board, portraying it as dysfunctional. “They just didn’t get it,” he said last month.

On Thursday, Dunlap wrote the attorney for the old board threatening legal action if his name isn’t removed from court papers that challenge DHHS’s right to take over Cardinal. The papers, filed this week, came in response to the state’s request for a temporary restraining order on the old board.

Though Dunlap has distanced himself from the board, minutes of Cardinal board meetings show that he, like Smith, voted in September to restore Toppings’ salary to $635,000 and give him nearly $49,000 to compensate for three months in which had been reduced. He and Smith both abstained in November when the board approved Topping’s severance.

“That’s the only time they ever did that,” former board chair Lucy Drake said Friday. “(Dunlap) has done everything the board’s been accused of. But he says we’re a dysfunctional board.”

Some lawmakers said they hoped for a fresh start with new faces on the board.

“It’s bad optics,” said Sen. Jeff Tarte, a Republican from Cornelius. “They’ve got enough trouble. What you don’t need is baggage.”

Earlier this week GOP Sen. Tamara Barringer of Cary said she wanted to see a completely new board “to earn the confidence, the respect and the trust of the vulnerable people of North Carolina, and frankly all the people of North Carolina.”

Odom said people should give the board a chance.

“I believe in redemption,” she said, adding that the once-and-future board members “may be able to provide some very valuable insight on how decisions were made previously.”

Said Tarte: “You’d have to have a lot of really blind people to repeat what the past board did.”

This story was originally published December 15, 2017 at 1:49 PM with the headline "Cardinal gets a new start with new board – and some holdovers."