A failed Roxbury health center stopped reimbursing the state for workers’ unemployment benefits in 2010, when the center was still operational and businessman Ronald L. Walker II — now the state labor secretary — was president of its board, according to a legal claim filed in court by the state.
The 45-year-old Roxbury Comprehensive Community Health Center, known as “RoxComp,” buckled under the weight of financial mismanagement in 2013, leaving many of its employees out of work and filing for unemployment benefits. Both the US attorney’s office and the state attorney general’s office are investigating what went wrong.
Walker, chairman of RoxComp’s board for 12 years, stepped down 18 months before the closure. But the facility owed the state thousands of dollars in delinquent payments long before the shutdown.
Of the $761,400 in principal and interest being sought by the state, nearly $46,700 dates to Walker’s time as president of the board, according to its claim for payment filed with RoxComp’s court-appointed receiver. While the health center was open, it should have been reimbursing the state for employees who lost jobs through no fault of their own and sought unemployment benefits.
As Governor Charlie Baker’s new labor secretary, Walker oversees the state Department of Unemployment Assistance, which lost more money than anyone in RoxComp’s collapse.
Walker would not speak directly to the lapse, but a spokeswoman said Walker was not aware at the time that the state was not being reimbursed.
“As volunteer chairman of the RoxComp board, Ron Walker’s role was focused on oversight and planning, not the day-to-day transactions of the health center, which received a clean bill of fiscal health from independent auditors just prior to his stepping down from the board,” said Ann Dufresne, communications director for the Executive Office of Labor and Workforce Development.
Federal regulators began citing the center for problems in the summer of 2011, when Walker was still present, the Globe previously reported.
An inquiry by the federal Bureau of Primary Health Care found the health center to be out of compliance with 13 of 19 program requirements in July 2011. The bureau also criticized RoxComp for paying Walker’s for-profit company, Next Street Financial LLC, substantial consulting fees for strategic planning and board development.
During the last three years Walker served on the board, as the Globe reported, Next Street Financial charged RoxComp nearly $250,000, at a $2,500 daily rate that the US bureau later criticized as “excessive for a nonprofit organization in a precarious financial state.”
Two of those years overlapped with the years RoxComp owes unemployment fees.
In an interview after the Globe’s initial story in January about Next Street’s consulting fees, Walker repeatedly cited the health of RoxComp at the time of his departure, saying he left it in “good financial stead.”
Walker also refused to release the contracts Next Street had with RoxComp, citing confidentiality agreements. He said he no longer has a financial interest in Next Street.
Asked whether the state’s unemployment office should be compensated by RoxComp for its losses, Walker offered no opinion, saying that will probably be “decided by the courts.”
It remains unclear what caused the health center to lose its footing. Walker has not been interviewed by either state or federal investigators, an administration official said.
“Our review will determine the reasons why the Roxbury Comprehensive Health Center suddenly collapsed and whether the board contributed to its failure,” said Christopher Loh, a spokesman for Attorney General Maura Healey.
The facility had been a neighborhood mainstay for 45 years, providing medical services, lab testing, and a methadone clinic on Warren Avenue in Roxbury. But the state forced its lab to close in June 2012, after finding mislabeled samples and expired medical supplies. By the time the center shut down in March 2013, about 100 people had been working without paychecks for a month. Then-Attorney General Martha Coakley appointed a receiver, attorney Joseph Feaster, to manage and liquidate what was left of the center’s assets.
But nearly two years later, the process is languishing. The anticipated sale of RoxComp’s properties at Warren and Townsend streets, across from Boston Latin Academy, is already more than a year behind schedule. Eighteen employees who have been trying to intervene in the receivership case in Suffolk Superior Court have been frustrated by the pace.
“It’s been hard for everybody. Not getting a month’s salary — we’ve got bills to pay,” said a former staff member, who did not want to be named for fear of jeopardizing her claim. “I wish they would come to some kind of solution quickly.”
For the first time, though, an attorney for those employees recently convinced the court they should be allowed to begin making their case for back pay and establishing what they are owed. The workers will try to prove they are owed statutory damages under the Massachusetts Wage Act, which allows employees to recoup three times their lost wages and benefits, including vacation time. One lawyer estimated that their claims could reach $1.5 million.
The receiver began steps to sell the RoxComp property in July 2013, awarding an exclusive listing to Taylor Smith Group LLC, a real estate development consulting and construction management firm led in part by Richard Taylor, another Baker appointee. Taylor resigned from Baker’s transition team after the Globe questioned him about unpaid taxes and business judgments of more than $1 million.
A property sale may be around the bend. At an October community meeting, the receiver told residents he has a letter of intent from Bridge Boston Charter School, which wants to relocate and whose officials presented plans at the meeting.
However, a closing is not expected until May and is contingent upon approval from the city Zoning Board and the Boston Redevelopment Authority for the building’s change in use.