RAFU STAFF REPORT
Less than a month after stepping in as president and chief executive officer of Keiro, Gene Kanamori finds himself grappling with the complexities of a class-action lawsuit brought by a donor alleging that the senior care organization fraudulently solicited donations.
On Dec. 28, 2018, Jonathan Kaji of Rancho Palos Verdes filed a lawsuit in Los Angeles County Superior Court alleging that the 2015 decision to sell Keiro’s facilities to a for-profit company changed its mission and misled donors.
“We have communicated to Mr. Kaji’s attorneys that we will fight these false and egregious allegations,” Kanamori announced in an April 10 statement.
“These allegations are not true and have no merit,” Kanamori asserts. “Our mission has been and continues to be to enhance the quality of senior life in our community. We will continue to look for ways to improve our services to our senior community through health education, grant-making, community partnerships and collaboration.”
Learning of the Kaji lawsuit, Koreisha Senior Care and Advocacy (KSCA), a group that is not a party to the litigation, issued its own response:
“It is time for Keiro to honor their commitment to our community by establishing culturally sensitive healthcare facilities for our seniors. Keiro’s funds should be used for its originally intended and specific purpose to provide for the residents in the facilities. Keiro should be held accountable for the millions of dollars and countless hours of services they received from the donors and volunteers of the community over the past 50 years.”
Kaji took the action as trustee of the Bruce T. Kaji and Frances M. Kaji 1982 Family Trust. Bruce Kaji, a longtime community leader and Japanese American National Museum founder, passed away in October 2017. His wife, Frances, passed away in November 2016.
Meanwhile, on Sunday, Jonathan Kaji launched an online fundraising campaign via social media to generate funds to be used for the lawsuit.
According to Kaji, “(Keiro) abandoned the 605 elderly residents and now sits on $82 million. “We want the funds to provide new senior housing and health care services for the residents before they are forced out.”
Kaji adds, “My parents and I were longtime financial supporters of Keiro Services. My parents donated funds towards the Living Treasures Endowment Fund and actively raised funds (for) the South Bay community for Keiro facilities with the understanding that those funds would go towards supporting the facilities-based care of the elderly residents.
“At no time did Keiro seek or obtain permission from my family or the thousands of other individual, family, and corporate donors to sell the facilities.”
Among other allegations, the suit points to Keiro’s 50th-anniversary fundraising dinner held in 2011, during which “every written and verbal communication…indicated that the funds raised at the event would be used to ensure the continuance of Keiro’s senior care facilities.”
The Kaji Trust contributed $60 at the time. However, Kaji estimates that the Trust has donated “at least $50,000” to Keiro over the years.
Kanamori disagrees with Kaji’s characterization of Keiro, saying, “In 2018 alone, Keiro advanced a culturally responsive palliative care program, a social services resource program for those with pressing needs and social innovation programming as well as continued a grants program that supported dozens of local community organizations’ older adult services.”
The sale of Keiro Services facilities, consisting of the Keiro Retirement Home and Intermediate Care facility in Boyle Heights, the Keiro Nursing Home in Lincoln Heights, and the South Bay Keiro Nursing Home in Gardena, was completed in February 2016.
Although the lawsuit seeks unspecified damages, Kaji’s press release explains, “It has been made clear to Keiro that what is really being sought is the continuation of Keiro’s original mission.”
My name is Carmen Tsuboi Chan, Co-Chair of Keiro NW Family Council, along w/Jeannie Yee. We believe Keiro NW is in a similar situation to yours going to yours. We feel there has been no transparency nor accountability by the CEO nor Board. May 7, 2019 we were blindsided by the Board’s decision to close our nursing home. Seven of the 12 Board voted to close & five wanted to explore affiliation, but a vote was never taken. Now Keiro NW is closing its Keiro skilled nursing+ 4 programs (Home care, transportation, catering, and Nikkei Concerns Educational program by the end of this year, and the fate of Nikkei Manor assisted living + Kokoro Kai (adult daycare) may be in jeopardy too. My 95-1/2 yr old Nisei father+ 93 yr old Toisanese speaking Mom , along w/100 LTC residents need to relocate by Oct 1+ 260 employees will lose their jobs. Our roots w/Keiro NW are deep~ my grandmother was@the original Keiro NW 44 yrs ago+ several of my relatives. We would like you to please contact me to see if there is anything we can do to prevent the closing. I can be reached@email@example.com or cell: (206) 229.3287. Thanking you in advance ~ Carmen
Services and quality of life are being cut for residents at the nursing homes, all of whom are in wheelchairs and many with dementia. Same for residents at the retirement home and yet, the rent and fees keep rising. How does “health education, grant-making, community partnerships and collaboration” help them, the group that the original founders of Keiro intended to help? The most vulnerable seniors in our community have been kicked to the curb. Evidently, Keiro does not share the same level of concern and empathy as the rest of the JA community.
The new CEO at Keiro has an opportunity to right the ship after the calamitous course followed by the previous CEO and board. Assemblymember Al Muratsuchi was able to pass a law that prohibits non-profits
from selling to for-profits without a public hearing. Since the law was enacted in response to Keiro’s actions, the new Keiro board should honor it and hold a belated public hearing. (Note: Judge should be reminded of this law.)
Keiro had about $70M in cash and investments after the sale but now they have about $80M. Mr. Kanamori, please explain that.
I support this lawsuit and am glad that Jonathan Kaji has filed it. Many people in the Japanese community, most of us good-hearted people, donated to support what they thought was a community institution. They donated in good faith because they trusted that Keiro was the guardian of the facilities which were providing a home and culturally-sensitive care for our seniors. Many had envisioned that Keiro was going to be a part of their futures when they enterered their own twilight years, thus the donations were also seen as “investments.” My Issei grandfather lived at the Boyle facility and lived his last days happily at the Lincoln Heights facility. It breaks my heart that these facilites were sold away from our hands and that now the current residents are suffering from lower quality care and are not being taken care of like they used to be.
What is the Keiro Board doing with the $82,000,000.00? Kanamori’s citing of the programs initiated as if they are some glorious use of the funds is nothing short of insulting. Where are the nursing and retirement homes facilities that people donated to? Where is the transparency?
I agree with Jonathan Kaji’s characterization of Keiro and will raise it one more level: It is morally and ethically wrong to steal tens of millions of community funds for private gain.
The lawsuit is true to the rich, genuine, Japanese American community-oriented spirit of the Kaji family legacy.
Thank you, Jonathan Kaji!