Cardinal CEO aims to restore trust
The Cardinal Innovations board of directors will hear details about a former federal prosecutor Cardinal hired to investigate the severance paid to former executives last fall at its meetings this weekend.
"The board will receive an update on the investigation into the activities leading up to the termination of and severance payment to the previous CEO," Cardinal spokeswoman Ashley Conger said.
State Sen. Tommy Tucker, R-Union, said that the new interim CEO Trey Sutten told legislators last week that Cardinal had hired a former federal prosecutor to try to retrieve the severance that had been paid out. The prosecutor, Kurt Meyers, is an attorney with McGuireWoods in the government investigations and white collar litigation group. He was formerly chief of the criminal division in the U.S. Attorney's Office, for the Western District of North Carolina.
Just before the state seized control of Cardinal last year, the former board fired CEO Richard Topping and gave him $1.7 million in severance. Three other executives got packages totaling $2.1 million.
Tucker said that hiring an investigator to look into the severance shows that Sutten is taking seriously what Tucker said was a misuse of Medicaid dollars.
Cardinal board chair Bryan Thompson said he intends to recuse himself during the presentation because he was a member of the former board and has no comment on the investigation. The former board had kicked off Thompson before it was disbanded by the state.
Tucker hopes the outcome of the investigation will be that the former leaders are held accountable, he said. “I don’t know how anybody who took that money can sleep at night,” Tucker said.
The board also could consider whether to continue leasing space in the uptown NASCAR Plaza offices, at a cost of $148,283 a month for this year.
Tucker said he hopes Cardinal moves its corporate headquarters to other buildings it already leases, calling the NASCAR Plaza space "extravagant excesses of a rogue board.”
After the state takeover, North Carolina lawmakers urged state officials to recover the money paid out from the executives themselves.
The board’s spending on expensive retreats and Topping’s salary — three times allowed by state law — drew criticism last year in state audits and by lawmakers.
New policies prohibit the board from hosting retreats at high-end venues, bans charter flights and bars the use of agency money to purchase alcohol.
As another part of its efforts to restore trust, Cardinal is using savings from what it had reserved for administrative expenses to launch a $3.8 million — the same amount as the severance — community investment fund. It will pay for high-impact projects by nonprofits and governmental entities.