Specific, and iSense, another Dr. Paul Rhodes-founded firm, are paying more than $10 million to the federal government in penalties to “resolve allegations of mischarging federal grants.”

Rainmaker’s run-in

Fresh from a $1.8 billion March 2021 buyout by Roche of his previous employer, San Diego-based GenMark Diagnostics, the company’s chief financial officer Johnny Ek signed on in with Specific Diagnostics of Mountain View in the same role. “Johnny brings the perfect set of skills and experience to Specific at this dynamic time in our commercial growth,” proclaimed Dr. Paul A. Rhodes, Specific’s chief executive officer, in an August 2021 news release. “Beyond his deep finance and accounting expertise, Johnny brings considerable credibility and relationships in the public investor community, as well as hands-on commercial operations experience directly within our product space.”

Scott Mendel made his GenMark, then took on a Specific project.

A month later, in an October 2, 2021, release, Rhodes announced that former GenMark CEO Scott Mendel was joining Specific’s advisory board. “His 8-year experience helping to navigate GenMark to a superb outcome in a competitive market speaks for itself. I look forward to working with him closely across a wide range of activities,” Rhodes said in an October 5 statement. Then last spring, Specific was sold for about $426 million to French pharmaceutical giant bioMérieux in a deal said by the financial website Evaluate.com to be the fourth largest drug firm buyout so far that year.

But now, according to a December 21 U.S. Justice Department news release, Rhodes, along with Specific, and iSense, another Rhodes-founded firm, are paying more than $10 million to the federal government in penalties to “resolve allegations of mischarging federal grants.” The alleged misdoings, which occurred before the arrival of Ek and Mendel at Specific, included “allegations that from January 1, 2015, to December 31, 2019, iSense, owned primarily by Dr. Rhodes, knowingly misallocated to itself costs incurred by Specific, which was partially owned by Dr. Rhodes,” says the document.

Other charges settled in the case, per the release, related to “National Institutes of Health grants in which iSense submitted the costs for employee work hours from July 1, 2014, to June 30, 2019, in amounts that exceeded the applicable salary cap and otherwise overcharged for hours worked by employees. Specific is alleged to have engaged in similar conduct from February 1, 2017, to December 31, 2018. Lastly, the settlement agreement resolves allegations that from February 1, 2018, to July 28, 2020, Specific and Dr. Rhodes knowingly submitted backdated services agreements with iSense as properly dated.”

Said U.S. Attorney Stephanie M. Hinds in a statement: “This office continues to combat fraud wherever it lurks in Silicon Valley. Federal awards for biotech research are a critical aspect of this country’s strategy to promote and support innovation and research. Regrettably, some recipients mislead auditors and divert funds to enrich themselves — misconduct that we will tirelessly pursue.”

Ups and downs

County supervisor and state Senate hopeful Nathan Fletcher, widely expected to benefit from a $1.1 million political fund made up of leftover political contributions to his wife, ex-Assemblywoman Lorena Gonzalez, is already transferring previously collected campaign cash. Money from his Nathan Fletcher for Democratic Central Committee 2024 fund has been shifted to the newly established Nathan Fletcher for State Senate 2024 committee, state disclosure records show. Recent transactions include $8800 originally given to Fletcher’s central committee by home medical insurance provider Unicare Systems, Inc. of Chula Vista on October 20, 2022...

Democrat Toni Atkins’s Yes on 1 pro-abortion state constitutional amendment campaign committee, which won its November ballot battle, was still collecting cash through December. Disclosure filings show that the Thoroughbred Owners of California, a longtime Atkins giver, contributed $8100 to the state senator’s cause on December 12, with Blue Shield of California coming up with $5000 on December 6.

Toni Atkins: winning is no reason to stop taking donations!

As a shortage of elevator inspections and increasing breakdowns across the state become a growing California contagion, San Diego police are looking after their own by installing a new high-speed set of vertical conveyances in their downtown headquarters. “California has a serious backlog in elevator inspections,” reports the Palo Alto Weekly in a December 16 dispatch, which calls out inspector shortages. “Cal/OSHA acknowledges the need for elevator inspectors to ensure this critical work can be accomplished in a timely manner,” says an agency statement cited. “Hiring is a top priority for the Division."

Meanwhile, back in San Diego, officials aren’t waiting for relief from Sacramento. The city has posted a January 5 request for proposals for Police HQ Elevator Modernization. “This project consists of the full modernization of four passenger elevators within the Police HQ building located in Downtown San Diego,” says the document. Among mandatory requirements is “installation of a new Elevonic control system that is a digital closed‐loop microprocessor‐based control system. The RSR Plus® software dispatches elevators based upon real‐time response to actual demands on the elevator group. The software is designed to maintain optimum elevator system performance by evaluating and reassigning hall calls quickly in response to changes in elevator demand or performance.” A new Seismic Operation System, along with a “New Emergency Service and Intercom,” are also part of the project, as well as “upgrading the existing machine room(s), associated electrical systems, sprinkler system, and life safety systems to comply with building code sections affected by elevator upgrades.”

— Matt Potter

(@sdmattpotter)

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