State Won’t Try Starr on Medi-Cal Charges : Insufficient Evidence Found to Prove Conflict of Interest in Ex-Medical Official’s Activities

The state attorney general’s office has decided not to seek conflict-of-interest charges against Robert (Nick) Starr, a former member of the California Medical Assistance Commission.

Investigators with the attorney general’s Medi-Cal fraud unit recommended in November that Starr be prosecuted, but Deputy Atty. Gen. John Dratz, who reviewed the case, said he concluded there was not enough evidence to obtain a conviction.

“We don’t feel at this time we have sufficient evidence to convict the defendant beyond a reasonable doubt,” Dratz said. “That is the standard we should be using before we file.”

But Dratz said some of the investigators’ findings will be forwarded to the Fair Political Practices Commission and the Los Angeles district attorney’s office for possible action.

The investigation revolved around Starr’s role in helping to launch a controversial Medi-Cal program, called Expanded Choice, in the San Fernando Valley and San Diego County. The pilot program, which was canceled before the date on which it was scheduled to begin early this year, would have dramatically changed the way many Medi-Cal recipients receive health care by requiring them to enroll in health maintenance organizations.

Investigators said they explored whether Starr, who chaired the commission’s Expanded Choice subcommittee, held secret interests in any medical groups that hoped to get patients through Expanded Choice.

Lawsuit Called Trigger

The state inquiry may have been triggered by allegations made in a lawsuit over the split-up of a small medical group that rented space in a North Hollywood building owned by Starr. A physician who invested in the group said he decided to invest only after Starr promised him the group would get patients through Expanded Choice.

Starr, 53, a Ventura resident who for years has run or worked for medical laboratories, characterized the investigation as a “fishing trip” and said he did not understand why he was a suspect.

The case, Starr said, “was closed as far as I was concerned the minute it was opened. I don’t know what they were looking for, quite frankly.”

Starr’s attorney, Katherine M. Quadros, criticized the attorney general’s investigators as overzealous and said she complained to Dratz about it twice.

State investigators “communicated to witnesses that they felt Nick Starr was guilty,” she said.

Dratz said the investigation, which the attorney general’s office disclosed in July, eventually expanded to include six to eight other persons in the health care field who may have conspired with Starr to benefit from the Medi-Cal experiment.

Difficult to Prove

But it was difficult to prove that there was a conspiracy to profit illegally from Expanded Choice because the program never started, Dratz said. The program, which the Deukmejian Administration had hoped eventually to implement statewide, was canceled in the wake of protests from the medical community, state lawmakers and advocates for Medi-Cal recipients.

Dratz said the information passed on to the Fair Political Practices Commission involves possible “technical violations” in economic interest statements filled out by Starr. In the statements, public officials must disclose financial interests that foreseeably could cause conflicts for them.

Dratz said the district attorney would be notified about Starr’s possession of some medical laboratory equipment “under questionable circumstances.” He said the matter probably is “a civil dispute,” but would not elaborate.

Starr said he has no knowledge of any problems on his disclosure statements. He does not own any laboratory equipment, he said.

Starr left the commission this spring after his term expired.

Michael W. Murray, executive director of the commission, said he was “glad to hear” that Starr would not be prosecuted. “I don’t think there was anything wrong” with the former commissioner’s conduct, he said.

The attorney general’s announcement apparently ends another chapter in Starr’s turbulent yet resilient political career.

In the late 1960s, Starr was found guilty of accepting a bribe while he was a Los Angeles harbor commissioner, but an appellate court overturned the conviction.