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Koch brothers to fund San Diego paramedic takeover

AMR Rural/Metro about to be flipped in $2.4 billion deal

American Medical Response Inc., proprietor of AMR Rural/Metro of San Diego, the city's always-controversial but politically munificent paramedic operator, is about to get a new owner itself, though Republican mayor Kevin Faulconer doesn't appear eager to spread the word.

But while local politicos feign ignorance, some city councils where AMR does business across the nation are meeting to ponder the possible impact of the company’s$2.4 billion takeover by Wall Street hedge-fund giant KKR & Co from current owner Envision Healthcare Corp.

David Koch
Charles Koch

Adding an especially political angle to the deal is co-financing by Koch Industries, the multibillion-dollar private operation of the brothers Charles and David Koch — major donors to conservative Republican causes — which is expected to contribute an unspecified portion of the $300 million in preferred equity, according to Reuters.

Under the plan, AMR would be merged into KKR-owned Air Medical Group Holdings, which would take on about $2.1 billion in debt to raise the balance of the cash.

“The deal makes a lot of strategic sense, combines Air Medical’s expertise with helicopter transportation with AMR’s leading ambulatory business,” an unidentifed Wall Street banker told the wire service.

"There should be meaningful synergies in cross-selling air and ground transport to municipalities and other customers.”

That, critics say, could mean even higher costs and problematic dealings for local taxpayers as costly state-of-the-art services are pushed out to municipal customers and operating expenses are slashed to pay back the billions in takeover debt to Wall Street.

Even before the latest control bid, AMR's San Diego operation has persistently drawn tough questions and complaints regarding late response times, with the company slapped with a $71,000 penalty last year for exceeding required emergency arrival times.

Total 2016 penalties were $291,000, TV station KNSD reported.

Jason Sorrick, director of communications and government relations for AMR acknowledged to the station last year that the firm had "exceeded the citywide response time requirement each and every month. However, because of a local and national paramedic shortage, we have recently been short of our response time goals in select zones."

AMR has frequently showered politicos and their favored organizations with campaign contributions and personal gifts. In 2012, then-city councilwoman Sherri Lightner, a La Jolla Democrat, even reported getting “congratulatory flowers” and a “tower of sweets”worth $64 from the paramedic provider.

In her race for city attorney last year, Democrat Mara Elliott picked up a total of $500 in campaign cash from two AMR employees, including Walnut Creek–based president Thomas Wagner.

Chris Cate

Last week, the paramedic provider was featured on a list of sponsors for Republican councilman Chris Cate’s D6 Charity Toss Tournament, formerly known as Cate's Cornhole Tournament, which was also backed by $5000 each from Walmart and SDG&E.

From March 2006 through the close of the most recent campaign disclosure reporting period this June, AMR employees have kicked in a total of $26,127 to city political causes and candidates, including $5800 for GOP mayor Jerry Sanders. Democrat Myrtle Cole's 2018 council reelection bid has so far raised $1000 from AMR sources — and Cate's 2018 campaign getting $500. Faulconer’s 2016 reelection effort received $1600, an analysis of the data shows.

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American Medical Response Inc., proprietor of AMR Rural/Metro of San Diego, the city's always-controversial but politically munificent paramedic operator, is about to get a new owner itself, though Republican mayor Kevin Faulconer doesn't appear eager to spread the word.

But while local politicos feign ignorance, some city councils where AMR does business across the nation are meeting to ponder the possible impact of the company’s$2.4 billion takeover by Wall Street hedge-fund giant KKR & Co from current owner Envision Healthcare Corp.

David Koch
Charles Koch

Adding an especially political angle to the deal is co-financing by Koch Industries, the multibillion-dollar private operation of the brothers Charles and David Koch — major donors to conservative Republican causes — which is expected to contribute an unspecified portion of the $300 million in preferred equity, according to Reuters.

Under the plan, AMR would be merged into KKR-owned Air Medical Group Holdings, which would take on about $2.1 billion in debt to raise the balance of the cash.

“The deal makes a lot of strategic sense, combines Air Medical’s expertise with helicopter transportation with AMR’s leading ambulatory business,” an unidentifed Wall Street banker told the wire service.

"There should be meaningful synergies in cross-selling air and ground transport to municipalities and other customers.”

That, critics say, could mean even higher costs and problematic dealings for local taxpayers as costly state-of-the-art services are pushed out to municipal customers and operating expenses are slashed to pay back the billions in takeover debt to Wall Street.

Even before the latest control bid, AMR's San Diego operation has persistently drawn tough questions and complaints regarding late response times, with the company slapped with a $71,000 penalty last year for exceeding required emergency arrival times.

Total 2016 penalties were $291,000, TV station KNSD reported.

Jason Sorrick, director of communications and government relations for AMR acknowledged to the station last year that the firm had "exceeded the citywide response time requirement each and every month. However, because of a local and national paramedic shortage, we have recently been short of our response time goals in select zones."

AMR has frequently showered politicos and their favored organizations with campaign contributions and personal gifts. In 2012, then-city councilwoman Sherri Lightner, a La Jolla Democrat, even reported getting “congratulatory flowers” and a “tower of sweets”worth $64 from the paramedic provider.

In her race for city attorney last year, Democrat Mara Elliott picked up a total of $500 in campaign cash from two AMR employees, including Walnut Creek–based president Thomas Wagner.

Chris Cate

Last week, the paramedic provider was featured on a list of sponsors for Republican councilman Chris Cate’s D6 Charity Toss Tournament, formerly known as Cate's Cornhole Tournament, which was also backed by $5000 each from Walmart and SDG&E.

From March 2006 through the close of the most recent campaign disclosure reporting period this June, AMR employees have kicked in a total of $26,127 to city political causes and candidates, including $5800 for GOP mayor Jerry Sanders. Democrat Myrtle Cole's 2018 council reelection bid has so far raised $1000 from AMR sources — and Cate's 2018 campaign getting $500. Faulconer’s 2016 reelection effort received $1600, an analysis of the data shows.

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Comments
4

Any takeover by the Koch Brothers will insure low wages, low/no benefits and huge employee turnover. AMR is the Walmart of ambulance service. You get what you pay for and in this case the taxpayers will pay but get far less than they pay for.

Aug. 15, 2017

Once again we are all about to be had by the 1%ers, as the Koch Brothers pull an SDG&E on our rate payers a.k.a citizens. After receiving a bill from AMR for $2850 which included the base run $2500, Mileage, Linen and a night run fee for a 3 mile run to the hospital all of this after the Chula Vista Fire Paramedic did all of the triage and initial first aid, I gotta ask what's the profit margin in privatized ambulances? I am currently awaiting to see what, if anything my insurance is going to pay and what their pre-negotiated rate really is. As a citizen and consumer of these services do our elected city officials know how offensive and oppressive these rates are? I would assume Mr. McCann in CV would know after his use of the service a couple of years ago. I do not see any value to the consumer, you and me, if the Koch's see AMR as a good asset, maybe to help pay for their helicopters at Air Medical Group, maybe one or two are not ambulances? BBQ

Aug. 15, 2017

I was take from Kaiser medical offices in La Mesa to Kaiser hospital on Zion Ave. It was a transport and not a code 3 run. The ambulance had two EMT's and I was attended by an RN. Kaiser paid $150 for the transport which was a fair price as I was hooked up to a heart monitor etc.

Aug. 16, 2017

I was forced to use these guys once to get to the VA hospital and they hounded me for months for payment after I advised them to contact the VA literally a dozen times or more. I think the bill was over 1600 for about 2-3 miles to the hospital. I walked into the ambulance and out at the hospital. The paras were both clinically obese and disheveled. I was kind of paranoid just from their physical appearance and demeanor. Not the confident professional you like to encounter when you think your health is in jeopardy. When I complained to my councilman at the time, his honor himself sir eagle or whatever his name is, I was treated like I offended the candidates mother and told to take a hike.

Aug. 15, 2017

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