AG Harris Sued Over Daughters Deal

Although Prime Healthcare walked away earlier this year from a deal to acquire the Daughters of Charity Health system, it has yet to let go.

The Ontario-based Prime has sued California Attorney General Kamala Harris, claiming she entered into a scheme with the Service Employees International Union-United Healthcare Workers West to ensure Prime would not be able to acquire the six-hospital Daughters of Charity chain. The suit was filed on Monday in U.S. District Court in Los Angeles.

Harris had attached extensive conditions to Prime's $843 million acquisition of Daughters of Charity, which Prime had rejected last spring as too onerous. They included keeping the hospitals open for at least the next 10 years -- more than the five years recommended in an independent review authorized by Harris’ office -- along with other mandates preserving specialty care and contracts with the Medi-Cal program.

According to the suit, the conditions wereapplied as part of a deal between Harris and the SEIU-UHW in part because “Prime rejected UHW's extortionate demands to unionize workers at all Prime hospitals and did so in a quid pro quo exchange for the union's continuing financial support of (Harris') political career, including her current candidacy for the U.S. Senate.” As a result, “Attorney General Harris' supposed 'approval'' of the DCHS-Prime sale under the (California) Non-Profit Hospital Transfer Statute was pure political theater designed to protect her from political fanout if the (Daughters of Charity) hospitals went into bankruptcy as a result of the transaction-terminating conditions that she imposed and to insulate her decision from judicial review.”

The suit suggested that Harris had broken state and federal laws by in essence securing a bribe.  

Prime has had a long history of tangling with labor unions, including the SEIU-UHW, although it was not named as a defendant. The suit seeks unspecified monetary damages.