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Mendo Mental Health Is Nuts

What's even more shady than the “appearance” of a conflict of interest solidly documented by the recent Grand Jury report on the County's mental health privatization? The  ongoing conflict of interest by former Ortner Employee Tom Pinizzotto.

Pinizzotto, and several of his County subordinates, were in charge of the contracting process that awarded the contract to his former employer, Ortner Management Group (OMG!). Pinizzotto is Assistant Health & Human Services Agency Director at a salary of almost $92k per year. Not only was he “involved” in the contracting process that gave a multi-million dollar contract to his former employer, he oversaw and supervised most of the other people in the proposal evaluation process. So he was not, as the Grand Jury implied, just a participant — Pinizzotto boss-hogged the process.

A responsibly managed County would fire Pinizzotto and put the entire contract out for re-bid. The County could be sued for various contracting violations as listed in the Grand Jury report.

But now we have this same former senior employee of Ortner, the ubiquitous Mr. P. overseeing the County’s contract with his former employer as he informs his County employers that Ortner is doing a great job with a contract he steered to Ortner in the first place. In addition, it wasn't that long ago that Anna Shaw, wife of (former) Mental Health Board Chair (at the time of the privatization) was heading up the Ortner mental health activities at Hospitality House, which is one of Ortner's Mental Health subcontractors on the Coast.

Ortner Management Group
Ortner Management Group

In spite of this compounded series of ongoing conflicts (not even mentioning Ortner's “insider remodel” of a mental health facility on the Coast documented in these pages last month by Malcolm Macdonald), nothing seems to have raised a red flag at County administration out on Low Gap.

It's not as if insider dealing and waste in Mental Health's privatization comes as a surprise to anyone. The entire state of North Carolina privatized its mental health care system in 2001. A recent comprehensive study of that effort found: “The quality of care that North Carolinians with mental illness have received has declined while allegations of fraud and waste have increased.”

All we've heard from Official Mendo regarding Pinizzotto's hustles are bland assurances from people who have a vested interest in the Ortner contract that everything's hunky-dory. All the independent voices on the subject of Ortner, from former and present county employees, to parents of mental health patients, to Coast Copwatch organizer (and AVA contributor) Malcolm Macdonald, to, most recently, Coast Supervisor Dan Gjerde, have raised concerns and questions about the Ortner contract. Those concerns are casually dismissed as either coming from disgruntled or biased observers — one County official arrogantly described critics as “delusionals who are immune to facts and logic” — or are explained away as normal problems stemming from simple chronic underfunding.

In the past, we've seen performance audits — Social Services in the 90s, The Sheriff's Office in the 90s and the 2000s — for much weaker reasons than the well-documented problems surrounding Ortner's contract and performance. The primary difference between those prior audits and the Ortner situation is that in the earlier audits, Mendocino County didn't have a former employee of the Company in question running interference for the department being audited.

For a perfect example of how wasteful the contracting process is (in light of the recent conflict of interest report from the Grand Jury), let's review our summary of the billing provisions of Ortner’s contract that we described a few months ago:

Exhibit B of the contracts with the Ortner Management Group and Redwood Management Company, the two companies which will provide mental health services for Mendocino County under the new privatization regime, describes the payments that Ortner and Redwood will get for their services. You might think that lawyers are well-paid for their “billable hours,” and you’d be right. But Ortner and Redwood take that one step further with a schedule for “billable minutes.”

Ortner and Redwood will get $2.61 per minute for “assessment/plan development/case conferencing therapy (individual, group and family)/ collateral services rehabilitation services (individual & group)”; and for “therapeutic behavioral services.” They’ll get $2.02 per minute for “case management linkage.” $3.88 per minute for “crisis intervention.” And $4.82 per minute for “medication management and support.” (Note: $2.02 per minute is about $121 per hour. $2.61 per minute is about $157 per hour. $3.88 per minute is about $233 per hour. And $4.82 per minute is about $290 per hour.)

At an average of, say, $3.00 per minute with Ortner's current annual contract value estimated to be $6.7 million, the taxpayers would be paying Ortner for up to the equivalent about 18 people charging by the minute for one year (substantially less if you take out Ortner's management and overhead cut).

The contracts also call for the County to provide technical assistance training to Ortner’s contract staffers, most of which is to teach the contract staff how to fill out and file their bills. We assume they're getting $3 a minute just to sit and be trained on something they should already know how to do.

Since many of Mendo’s mentally ill are so-called “dual diagnosis” patients (i.e., their mental illness is intermingled with their addiction to drugs both legal and illegal), there’s a bottomless pit of clients to generate billable minutes with, whether it’s talking to the client, writing things down about the client or going to court to get the client institutionalized. Or detailing their bill down to the minute.

Billable minutes. That may be the single biggest reason not to privatize mental health services. Reducing mental health services, some of which we’ll concede may help the client or his/her family at times, to how many billable minutes are involved in dealing with them is about as impersonal and inhumane as you can get.

Official Mendo can't even bring itself to ask for a report of such basic things as how many billable minutes per client and by client category, how much Ortner rakes off, what category of client gets what kinds of services (by the minute!) or how many layers of subcontracts are involved in Ortner's service delivery and how much actually goes for direct mental health services.

We wouldn’t be surprised if Tom Pinizzotto writes the County’s response to the Grand Jury report saying Pinizzotto has a conflict of interest.

Eric Wilcox (Former Mental Health Department staffer) writes: “Mental Health money. All the money is going to Redwood Children’s Services (the majority of it) and the rest goes to OMG, Ortner Management Group, who are to provide the adult mental health services for Mendocino. To account for the money, the Mental Health Board could easily set up a committee to audit the two companies. Last October at a Mental Health Board meeting I attended, Dina Ortiz (a Mental Health Board member) suggested such a thing: a committee to audit the money given to OMG. Tom Pinizzotto was attending (Director of Mental Health and ex-employee of OMG) shook his head no, and Ms. Ortiz’s movement was stopped. Of course, Jim Shaw was also the chair of the MH Board and husband to Anna Shaw who runs the Hospitality Center who are financially tied to Tom Pinizzotto and OMG to provide adult mental health services to Fort Bragg.”

James Marmon (former Social Services Social Worker) writes: “I doubt that the County is willing to call for an audit which might lead to them having to admit that they may have made some grave mistakes with their privatization of mental health services in Mendocino County. I also have concerns about Mr. Pinizzotto’s control of the Mental Health Board, especially in light of the recent Grand Jury Report which clearly indicates that Mr. Pinizzotto’s involvement of the privatization efforts appeared to be unethical. The board, along with the citizens of Mendocino County, need to ask questions, think for themselves and evolve. ‘Groupthink exists’.”

Echoes of Kendall Smith, the former 4th District Supervisor threatened with prosecution by DA Eyster before she paid back the money she'd chiseled from travel reimbursements. It took four grand juries to finally get action on Smith. (Supervisor Colfax was also stealing but he was smart enough to keep no record whatsoever of his travel; it was obvious he was doing it, but not obvious enough from his non-records to move on him.) These cases, though, illustrate the relentlessly sleazy context, and the plethora of sleazeballs to populate the context, that is the public's business in Mendocino County.

In Pinizzotto’s case, as confirmed by the GJ, you have a County employee — Pinizzotto — engineering what amounts to a large give-away of public funds to a private mental health outfit not long after being transferred from that same outfit to County consulting and then on to County Officialdom during the privatization process. All of it's nicely documented by this year’s grand jury. We think the DA ought to take a long, hard look at this one.

Of course, if it's legal that Mendocino County can sell essential services to private parties without even putting the service out to a genuinely fair and open bidding process…


  1. John Sakowicz July 9, 2014

    Excellent article, Mark. This conflict of interest with Tom Pinizzotto is so serious that I think the Grand Jury should have referred the case to District Attorney David Eyster.

  2. Sonya Nesch July 10, 2014

    When Pinizzotto packed his committee to evaluate the privatization proposals, he included Jim Shaw who was groveling for dollars for his wife Anna Shaw (of the homeless shelter) who thought as an Ortner subcontractor she could deliver medical mental health services without any medical providers, including patient crisis and recovery services for the Coast .

    I was shocked that Sheriff Allman voted for Ortner and figure Pinizzotto must have said yes to his every request. I wonder how that’s working for him and if he’s seeing a decrease in mental health patients at the jail.
    Sonya Nesch

  3. james marmon July 10, 2014

    Where was the County Counsel’s office during all of this? Shouldn’t they have seen the possible conflict of interest looming before they approved the privatization contracts with Ortner and Redwood? Isn’t that their job? All those lawyers and they didn’t see this coming?

    It’s not as though Mr. Pinizzotto’s prior employment was a big secret, SEIU officials screamed bloody murder about his involvement during the whole privatization process, only to be ignored.

    • Sonya Nesch July 10, 2014

      The County Counsel guy that worked with Tom Pinizzotto left a few months ago. Where did he go and why?

  4. Joan Hansen July 10, 2014

    Mr. Scaramella Thank you for helping me understand more clearly the total lack of mental health care for adults here in Fort Bragg. I have been asking where the money allocated is going. It is past time for an investigation into the money trail. It is pathetic that the money has not helped the mentally ill and their families, and these victims continue to wander the streets.

  5. Eric Wilcox July 14, 2014

    It should go to the Attorney General of California.

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