FHP International Denies Its Ex-Chairman’s Charges

FHP International Corp., accused last month by its former chairman of violating an agreement to keep an arms-length relationship with the nonprofit FHP Foundation, has told state regulators that the accusation is groundless.

Robert Gumbiner, former chairman of both the company and the foundation, contended in a Nov. 19 letter to the state Department of Corporations that the Long Beach-based health-care foundation’s nine-member board included four members of the FHP International board. The composition violated an agreement limiting the health maintenance organization to just three representatives on the foundation board, Gumbiner said.

But company President Westcott Price III argued in a letter to the state that current overlapping memberships are proper because only three members of the the foundation board are officers, employees or shareholders of FHP.

The fourth member of both boards, Cal State Long Beach President Robert C. Maxson, is listed as an independent trustee with the foundation because he has no financial ties to FHP International other than receiving regular directors’ fees, Price said.

Department of Corporations officials said last month that they are looking into Gumbiner’s complaint.