Cal-Mortgage Officer Tells of Silencing on Triad Loan

By IRENE WIELAWSKI

Feb. 23, 1994 12 AM PT

TIMES STAFF WRITER

SACRAMENTO —

Kathleen Staub, project officer on a controversial Cal-Mortgage loan guarantee to Triad Healthcare Inc., testified on Tuesday that she was ordered to omit her objections to the deal from her oral report to Cal-Mortgage’s advisory loan committee.

Staub, testifying before the Assembly Health Committee investigating the Triad transaction, said the order was given by Larry G. Meeks, then director of Cal-Mortgage’s parent agency, the Office of Statewide Health Planning and Development.

Meeks, she said, angrily rejected her opinion that the Triad deal was unsound and told her that he considered it an “excellent project,” Staub told the committee. He then ordered her to omit her recommendation that Triad’s application be turned down from her presentation to the loan committee.

Under questioning by committee Chairman Burt Margolin, (D-Los Angeles), Staub said she never before had been asked to censor her report in 10 years as a Cal-Mortgage project officer.

The Encino-based Triad got the loan guarantee and has since defaulted, leaving the program--and potentially state taxpayers--on the hook for the $167-million debt. Earlier this month, Triad, owner of two San Fernando Valley hospitals, filed for bankruptcy.

Margolin convened Tuesday’s hearing to investigate the Triad loan guarantee, the largest ever granted by the 25-year-old Cal-Mortgage program. Triad’s default last July forced state officials to suspend the program. Many health-care facilities rely on Cal-Mortgage to obtain low-interest loans.

“The way I can best describe it is a debacle, a total mess,” Margolin said of the Triad deal.

Meeks was invited to testify Tuesday but did not appear before the committee. He could not be reached for comment after the hearing. But Margolin later announced that he would call another hearing on Triad, and that Meeks was expected to testify at that one. No date has been set.

Triad owns Sherman Oaks Hospital and Health Center in Sherman Oaks and West Valley Hospital and Health Center in Canoga Park.