Getting to Know Kamala Harris How Biden’s running mate blocked a hospital rescue to help the SEIU.
https://www.wsj.com/articles/getting-to-know-kamala-harris-11597273754?mod=opinion_lead_pos1
Joe Biden and Kamala Harris made their first appearances as a campaign ticket on Wednesday, and Americans still know little about the running mate who may be President sooner rather than later. One way to fill in the gap is to inspect Ms. Harris’s record as California’s Attorney General, and one revealing episode is the way she used her power to blow up a deal to rescue struggling Catholic hospitals.
The saga started in 2014 when for-profit Prime Healthcare Services made an $843 million bid for six insolvent hospitals operated by the Catholic Daughters of Charity Health System. The hospitals had been bleeding cash for years due to inflexible labor contracts and miserly Medicaid payments.
Prime Healthcare was the only bidder that agreed to assume Daughters’ $300 million liability for worker pensions, and it scored high on the bidding criteria that included financial wherewithal and service quality. Nurses, physicians and the public supported the deal.
But the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), which represented 2,000 hospital workers at Daughters, opposed Prime’s takeover because the company refused to sign a neutrality agreement that would let them organize all of Prime’s hospitals. Only four of Prime’s 15 hospitals in California at the time were unionized.
California’s Attorney General must approve nonprofit hospital acquisitions, and Ms. Harris attached dozens of poison pills to the deal. They included requiring 24-hour nursing, surgery, anesthesia, laboratory, radiology and pharmacies for five years and mandating that hospitals offer an additional 12 to 18 “essential services” such as orthopedics for 10 years. These conditions were unprecedented.
Prime walked away from the deal and sued Ms. Harris for violating its due-process rights. According to the lawsuit, Daughters’ executives had told Prime that Ms. Harris would block the sale “or require financially crippling approval conditions” if Prime did not reach an agreement with the union. The lawsuit alleges that in return the union promised to support her with $25 million in political contributions.
Ms. Harris denied the accusations, and a federal judge in 2017 ruled that she had “qualified immunity”—the doctrine that shields public officials from liability for violations of constitutional liberties. This is ironic since Ms. Harris earlier this summer introduced a resolution in the Senate to abolish qualified immunity for police officers.
Later in 2015 Ms. Harris approved the Daughters’ hospital sale to the BlueMountain Capital hedge fund for $260 million including $160 million in debt. The SEIU supported that deal. While imposing similar conditions on BlueMountain as on Prime, Ms. Harris allowed the hedge fund to operate the hospitals as tax-exempt nonprofits for several years.
Yet burdened by debt and expensive collective-bargaining agreements, the hospital chain declared bankruptcy in August 2018 and was put up for sale. The federal Pension Benefit Guaranty Corp. assumed its pension obligations and slashed payments to workers and retirees. Two hospitals were sold to local governments for a pittance.
The state government this year leased two others that had been on the verge of closing in order to ensure ample hospital capacity to treat Covid-19 patients. Prime this spring offered to buy another, but the SEIU again objected to the takeover and refused to renegotiate its existing collective-bargaining agreements.
A bankruptcy judge recently said the SEIU had rejected Prime’s proposals “without good cause.” The judge said the hospital “would not continue to operate as a going concern, and all of the [union] represented employees would lose their jobs” unless the labor agreements were renegotiated. Ms. Harris’s successor as AG, Xavier Becerra, approved Prime’s acquisition last month.
Hospital workers, patients and taxpayers paid a fearsome price for Ms. Harris’s intervention on behalf of the SEIU. As troubling was Ms. Harris’s use of her authority to help a political supporter and punish a business she didn’t like. She was in the vanguard of the new progressive state AGs who use prosecutorial power against opponents. Watch for this in the Harris Administration in 2025, if not sooner.
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