Investigation Finds Ousted Cardinal CEO Deleted Texts and Emails, Took Company Files
Cardinal Innovations Healthcare is suing its ousted CEO Richard Topping for his severance payment of nearly $1.7 million. Cardinal hired an outside law firm to investigate Topping's actions. It revealed that Topping took personnel files and deleted texts and calls the state told him to save.
The public organization handles behavioral health care payments for Medicaid and uninsured patients in Mecklenburg and 19 other counties.
Alex Olgin joined WFAE’s Mark Rumsey on “All Things Considered” to talk about the meeting where the results of the investigation were revealed.
Highlights of the conversation:
Cardinal Innovations Healthcare filed the lawsuit Monday morning. It alleges that ousted CEO Richard Topping breached his contract and therefore owes Cardinal his severance payment. Cardinal is seeking to recoup the nearly $1.7 million he took in severance and to stop any continuing payments in the form of healthcare. The suit also seeks at least $125,000 in other damages.
The suit alleges Topping didn’t act in good faith, breached his fiduciary duties and took confidential files from Cardinal for his personal use.
Topping said, “I’m disappointed they filed the complaint. Their claims are simply inaccurate. I intend to vigorously defend myself against the allegations.”
According to the investigation, it appears Topping was trying to start his own company.
Text messages between Topping and the former Chief Information Officer Peter Murphy show on the same day he was asking the board to terminate him with two years severance, he was taking files from Cardinal’s internal drives. The files possibly included business information and strategies, reports, proprietary data and personnel records.
Investigator Kurt Meyers said Topping sent Murphy a text that said, “It’s already done. It’s backed up at home.” Murphy responded saying it was a smart move. Then Topping sent back an emoji with a finger over its mouth.
Meyers said it appears Topping was looking to start a new company. He referenced a drawing found Topping’s office that seemed to show how his new company would contract with Cardinal.
An investigation found a problematic relationship between Topping and the former board chair.
The investigation also found problems with the way former Board Chair Lucy Drake communicated with Topping and the rest of the board. Drake didn’t share a legal opinion about how much Topping should be paid in severance with other board members. Topping didn’t find that legal opinion satisfactory because it only recommended 1-year severance, so he had his own lawyer write another opinion that would give him two years severance. Those opinions weren’t shared with the rest of the board, even though requested, until shortly before the meeting where his severance was voted on.
How the current Board of Directors and CEO are reacting to the investigation:
The new board and the new CEO Trey Sutten appear to be open and committed to resolving these issues.
Sutten was brought on permanently at the board meeting this weekend, he had been serving as interim CEO. He said Monday that Cardinal is committed to openness and transparency. Sutten said severance now caps out at a year and executive employees don’t have the same language in their contracts that tie their severance to his departure.
Carmen Hooker Odom, the vice chair of the board, said Cardinal is - without a doubt - a public entity.
“There is absolutely no ambiguity on the part of the board,” Odom said. “This is a public organization and it needs to act like a public organization.”