Shlomo Rechnitz's Cascade Of Corporations
If you're in business, you usually need a corporation. My wife and I have had a couple for years.
Larger businesses tend to have more corporations, which makes sense for operating across state lines.
But when your business is linked to corporations that metaphorically roll off an assembly line and extend to the horizon, that is usually an indication someone is trying to hide something.
Donald J. Trump is that kind of corporation man. He's got about 500 different entities. Ongoing reporting in the national media suggest his business dealings have been anything but transparent.
Another one of these corporation men owns a large chunk of the skilled nursing facilities in California.
That would be Shlomo Rechnitz of Los Angeles. He's gotten some copy for his charitable work, but he's a lot less forthcoming about his skilled nursing facilities, which comprise about 7% of the beds in California. Many of his properties have been criticized for subpar care that has endangered the lives of patients. Criminal charges were filed last year by Attorney General Kamala Harris against one of Rechnitz's facilities and two employees in connection with a patient's death. He's recently been denied licensure in an attempt to obtain new properties in California.
I learned about Rechnitz's reticence when I reported last week on the potential closure of three skilled nursing facilities in Humboldt County he owns. State officials are trying to take them over and keep them open, but it appears they will be closing down for good.
When I tried to track Rechnitz and his organization down for a comment for the story, I kept on encountering walls. That's primarily because the umbrella company for the 81 nursing homes he and his brother control, Brius Healthcare Services, has no corporate website. That's a distinct anomaly from just about every nursing home operator in the country.
Just about every document I ran into involving Brius and Rechnitz made mention of another corporation. A corporation called Rockport Healthcare Services (also website-free) supposedly controls the three nursing homes in Humboldt County. Meanwhile, it appears many, if not all, of the facilities under his control are contained within their own limited liability corporation.
Rechnitz's LLCs tend to contain a specific word or words. If you type “wellness” and “centre” into the state's corporation database, you get 65 different corporations, all at the same Los Angeles address. All have the same contact – an accountant ostensibly at the same address, but whose office is actually a few blocks away. Type in the word “eretz” – Hebrew for “land” – and you get another 71 LLCs with the same contact information. Type in the word “let” – Hebrew for “by” and another 37 LLCs appear.
By my count, there are least 174 corporations in California alone tied to Rechnitz on the nursing home and management end (he also operates a supply distribution company with its own college of LLCs). I did find an office across the street from the Los Angeles County Musem of Art for Rockport and its related LLCs, but a contact phone number was nowhere to be found.
After some deeper digging, I finally found a phone number, buried in the registration data for the non-functioning Rockport website. Rechnitz is not in that office's dial-by-name directory. A receptionist said he doesn't work out of that office, but didn't have another phone number for him either. I left a message for him to call me back. I'm also waiting for an answer from Rockport's corporate mouthpiece, PR crisis firm Mercury Public Affairs, on the fate of those three nursing homes.
Corporations are people, as Mitt Romney so famously declared during the 2012 Presidential campaign. Really, they are safeguards from people who don't want to lose their personal assets if their business goes sour.
But when you're in a business like skilled nursing facilities, where safety and human kindness are paramount and anyone with curiosity about that business encounters nothing but a cascade of corporations, Romney is indeed correct. And that cascade perfectly reflects the person running them.
Ron Shinkman is the Publisher of Payers & Providers.