Friends in high places
Dr. Prem Reddy is an active political fundraiser who counts California Atty. Gen. Jerry Brown among his friends.
In a recent interview, Reddy confirmed that his foundation donated $100,000 to the Oakland Military Institute, a public charter school serving low-income youth that was founded by Brown, former mayor of Oakland. Reddy says he is now trying to raise $500,000 for a new gymnasium at the school.
Because the hospitals Reddy has purchased were nonprofit entities when he bought them, Brown’s office has had to approve their switch to for-profit status. In February, the attorney general’s office approved the sale of Paradise Valley Hospital outside San Diego to Reddy and his company, Prime Healthcare Services Inc., but did not disclose Brown’s connection with the buyer.
In an e-mail, Brown spokesman Gareth Lacy said Brown met Reddy once, at a November fundraiser for the school in Los Angeles, where Reddy contributed the $100,000 through his foundation. Lacy said Brown did not participate in the Paradise Valley decision and saw no conflict of interest. He said the decision was made by three Brown deputies.
Ned Wigglesworth, a spokesman for California Common Cause, a political campaign reform group, said Brown did not have to disclose the donation under law but should have.
“It smells bad,” Wigglesworth said. “Obviously, at a minimum, it raises the appearance the donor got something in exchange for his financial contribution.”
Brown’s office was expected to rule this week on Prime Healthcare’s request for a change in tax status for Anaheim Memorial Medical Center, which the company recently agreed to buy.
Lacy said Brown had no plans to participate in the decision, but neither did he expect to recuse himself from the case.