Source: Vanity Fair

Dark Side Of Mitt Romney’s Success

Inquiry Into Healthcare Provider Offers Evidence Of Deadly Deception

America’s most utilized tool in which we fight an opioid epidemic, as well as a more significant mental health crisis, is in peril. Franklin, TN-based Acadia Healthcare Company Inc. (Nasdaq: ACHC) faces mounting allegations of patients going missing as well as sexual assault in over a dozen of the domiciles in which the conglomerate operates. And, these only scratch the surface…

The Chicago Tribune recently described sexual impropriety allegations by six women who were patients at a Chicagoland subsidiary of Acadia. The women said a mental health practitioner named Michael Jacksa assaulted them, adding, “Former patients told police that Jacksa subjected them to rape, forced oral sex, digital penetration, and fondling beneath their clothes. He faces 62 felony charges.” Mr. Jacksa is currently in a county jail in Illinois. In Oregon (a state responsible for 70 foster children in Acadia’s care), State Senator Sara Gelser (D-OR) says that Acadia has

“turned our most vulnerable children and adults into nothing more than cash cows who are hidden away behind locked doors in communities far away from the people who care for them.”

State Senator Sara Gelsar (D-OR)

In the United Kingdom, journalist Ian Birrell tabbed Acadia’s former CEO Joey Jacobs as one of the eight “fat cats” profiting off of long term seclusion and mistreatment of autistic children. On December 16th (three days after hearings in parliament focused on these maladies) Jacobs was terminated, purportedly due to Acadia’s alleged role in these actions.

Source: Getty Images.

You may refute: “No way! Then, why haven’t I heard of that?!” Generally, the answer to that question is: “because someone doesn’t want you to hear about it!”

Two recent federal lawsuits, some questionable filings with the U.S. Securities and Exchange Commission, and campaign donation information compiled in an investigation appear to reveal suppression. When combined, these pieces of evidence show what seems as talented, albeit questionable political operations, if not a complete cover-up. What’s there to cover up? Well if the first two paragraphs aren’t enough motive; let’s take a trip back to 2012…

Dark Side of 2012

On June 18, 2012, published an article by Art Levine entitled “Dark Side of a Bain Success.” Levine identified Senator Mitt Romney (R-UT), the 2012 Republican Presidential nominee, as a beneficiary of various passive investments through Bain Capital (the investment firm Romney co-founded in 1984). The Bain-controlled company Levine expressed concerns about was Cupertino, CA-based CRC Health Group, Inc. CRC’s roots were methadone clinics scattered across America, four of which still operate today in the state Romney represents as its junior Senator: Utah.

Mitt Romney at Bain Capital in the 1980s. Source Getty Images.

Following Bain’s purchase of CRC in 2005, they expanded into care centers for troubled youths such as Aspen Education Group and fancy “drug rehabs” like Bayside Marin (CA) as well as Sierra Tucson (AZ). The latter is an Arizona hospital after which two-time major champion golfer John Daly named his daughter. Not only that, Sierra Tucson was the center in which fictional-White House Chief of Staff Leo McGarry from the Emmy Award-winning NBC show, The West Wing, sought care. Today, it is an embattled hospital at which four patients have died since 2014.

Levine’s 2012 article connected then-candidate Romney to various allegations of patient abuse, some even resulted in death at CRC, alleging that institutional investment in life-critical services may create moral hazard. The Huffington Post piled-on the following week. The two mainstream stories served to cripple the Romney campaign to some degree of significance. He ultimately lost the election to incumbent President Barack Obama and returned to the private sector, where the former Massachusetts Governor would remain until 2018.

Enter Acadia

Bain sold CRC in early 2015 to Franklin, TN-based Acadia Healthcare Company Inc. (Nasdaq: ACHC). Founded in 2005, Acadia is the largest standalone provider of behavioral healthcare services in the world. As of their most recent quarterly filing, Acadia says they operate 593 subsidiaries nestled in 40 states, Puerto Rico, and the United Kingdom. At the time of Levine’s article, they only operated roughly 40 facilities. Today, the tally of centers owned by Acadia that are nestled in Utah is six. This includes the four methadone clinics and two more treatment centers, one of which serves children and adolescents.

Acadia’s debt balloons and net income plummets since inception. Source: YCharts.

Despite the scourge that is America’s mental health crisis; many believe the treatment models as they present themselves today, are ineffective. The system, bolstered by 2008’s Mental Health Parity and Addiction Equity Act, saw insurance begin to pay, despite lax regulation and oversight. This, no doubt, bred a plethora of unscrupulous providers and widespread fraud amidst low barriers to entry. The result was legislative tailwinds pushing debt investments that roared from 2011–2015 before abruptly calming.

Since 2015, insurers have recognized there’s no clear and concise science behind treating addicts or lives suffering from behavioral health disorders. Therefore, reimbursements were slashed and, thus, cost-cutting ensued. Cost-cutting, no doubt, cuts quality too.

We’ve seen bankruptcies of well-known providers such as Promises Malibu and instances similar to (but sadly more egregious than) Levine’s findings. The recent and thorough investigation of Acadia revealed allegations of rampant multinational patient abuse. Alleged abuses include mysterious deaths, violence against (or seclusion of) patients, many of them young children, who are seeking Acadia’s care.

Acadia is “not cooperating” with the search for missing patient, Elizabeth Breck. Source: KVOA.

In addition to the allegations in the opening paragraph, on Monday, May 6, 2019, Acadia Healthcare reached a $17 million Medicare/Medicaid fraud settlement with the U.S. Department of Justice. Last month, the BBC reported that Acadia was found criminally liable and fined £300,000 for the death of a 14-year-old girl in the United Kingdom. Of the missing patients, only one, Elizabeth Breck, (Tucson Magnet High School teacher, and mother-of-two), age 47, has yet to be found. She went missing from Sierra Tucson on January 13, 2019.

Despite the above, in late 2018, we passed an overwhelmingly bipartisan opioid package that no doubt prolonged these industry-wide problems, with a 99–1 vote in the Senate.

Utah’s Senior Senator Mike Lee (R). Source: Getty Images.

Romney’s senior counterpart, Senator Mike Lee (R-UT), owned the sole ‘nay’ vote and said in a press release that the bill:

“includes dozens of new grant programs with little accountability for how the dollars will be spent and minimal measurement or analysis on their effectiveness…

…Good intentions are not enough. In the face of a crisis such as this, we cannot afford to waste precious funds on programs which likely won’t work.”

Senator Mike Lee (R-UT)

Ninety-nine senators are aloofly dowsing fuel on a fire — but Mike Lee ain’t one!

Acadia Healthcare Crisis Video. Source:

Well, Lee and the insurance industry make two. The insurance industry is appropriately positioned, funded, and incentivized to improve quality. However, we’ve seen our government condemn insurers for choosing to opt for alternatives that are less costly and more productive. Washington funds and supports an industry that Palm Beach County Attorney Dave Aronberg describes as

“not a case where a few bad apples spoil the whole bunch, this is a case where most of the apples are spoiled!”

- Palm Beach County Attorney Dave Aronberg

Asking for H.E.L.P.

On April 10th, 2019, I attempted to visit Miss Breck’s congressional representatives to advocate for the provocation of a federal investigation into her disappearance. This was according to several articles I have written this year about her virtually unsung and disturbing case. Her congresswoman: Ann Kirkpatrick (D-AZ), took an interest, while her Senators offered a run-around. Sen. Martha McSally (R-AZ) who has received $3k in lifetime campaign donations from Acadia, refused to meet. Senator Kirsten Sinema (D-AZ), a clinical social worker by trade as well as a co-sponsor of the “opioid package” and recipient of $1k in lifetime campaign donations from Acadia, canceled a planned meeting (at the last minute) referring us to a specific committee: The U.S. Senate Committee on Health, Education, Labor, and Pensions.

Brian Kaegi. Source: Acadia Healthcare

Today, the H.E.L.P. committee’s chairman is a Tennessee Republican, Sen. Lamar Alexander, a friend of Acadia’s leadership through one key and familiar political operative: Bryan Kaegi. Kaegi, Acadia’s Director of Federal Government Relations, was instrumental in former Senator Alexander’s political ladder-climb as the fundraising chair for each of his U.S. Senate elections and Kaegi raised funds for Romney’s 2012 presidential campaign. Alexander’s role with Kaegi’s presence alone is arguably an excellent reason to opine why Senate H.E.L.P. won’t be any help at all. Add $16.4k in donations made by Acadia to the Chairman’s Senate campaigns, and the perceived wall strengthens.

Senate HELP Committee Chair, Lamar Alexander (R-TN). Source: WCYB.

Since 2012, Acadia has poured over $65k into the campaign war chests (for any office) of those members presently manning the H.E.L.P. committee. In that same period, Acadia has poured nearly a $1 million overall (during its lifespan) into political pockets, 90% of which favors GOP candidates. Ironically, the small sum of money doled leftward included donations to now-Presidential candidates Beto O’Rourke (D-TX), Sen. Kamala Harris (D-CA) as well as Sen. Bernie Sanders (D-VT). Sanders also sits on the H.E.L.P. committee.

In 2005, Bain hoped to bolster investor returns from its CRC investment within a 10-year investment timeline. Romney’s FEC financial disclosure forms in 2012 and filings for his 2018 U.S. Senate campaign both corroborated the connection established by Levine.

In the 2015 handoff of CRC to Acadia, Bain received about $500 million worth of Acadia’s stock (the price was in the $60s). Acadia assumed over $900 million of CRC’s debt obligations and only about $350 million in real assets. Senator Romney’s money would remain invested in Acadia stock until August of 2017, then six months later Romney would announce plans to run for retiring Republican Senator Orrin Hatch’s seat. He easily won and was sworn in this past January. One of his first term assignments was a seat on the Senate H.E.L.P. committee.

2012 Romney fundraiser at the home of Reeve Waud. Source: Chicago Tribune.

Research reveals that Romney could be the one closest to the Acadia leadership. The Washington Post named Acadia co-founder and newly-minted Chairman, Reeve B. Waud, as one of Romney’s most successful fundraisers. Waud hosted a fundraiser for Romney at his Lake Forest, Illinois home in 2011. Waud also sat on the finance committee for the 2012 Romney campaign, according to The Chicago Tribune. Acadia, as a company, donated $28k to Romney’s 2012 campaign, according to

Smoke and Mirrors

A federal derivative lawsuit filed on Feb 21, 2019, by a client of Robbins Arroyo LLP in the U.S. District Court for Middle Tennessee alleges that Acadia’s leadership and board members traded on inside information and manipulated value, ultimately obtaining nearly $500 million illegally. This includes Waud, and Acadia’s former CEO, Joey Jacobs, who was fired by the board in December. Jacobs had served since Acadia went public in 2011.

Chris Gordon. Source: Bain Capital.

The suit also alleged that an Acadia director (appointed according to the conditions of the sale of CRC by Bain), Christopher Gordon made nine-figures of profit in stock sales, an utterly erroneous claim. They never were his shares, and he only served as the man, on-paper, who represented Bain Capital’s stake. Gordon received roughly 12k shares as compensation for his board role, but thorough review of SEC statements show he served as the excellent frontman for Bain’s massive stake.

Unlike other cases in which Bain (or virtually any other investment firm that owns a substantial stake in a publicly traded company) allows their name to sit atop the filings: The Acadia filings list Gordon, an employee of Bain, as the owner of the stock. However, one would have to find a reason to notice. indicates Gordon made the second and fourth largest insider trades of Acadia shares, ever. The very (unusual and abnormal) fine print in the SEC filings, footnotes explicitly, in a 2017 form 4 state these are Bain Capital’s shares, not Gordon’s. Digging deeper, Acadia’s ownership table indicates Gordon simultaneously held three roles: Director of Acadia Healthcare Company, Inc.; Managing Director of Bain Capital Investors, LLC; and as a member of the Global Private Equity Board at Bain — Confusing. However, the law allows this to occur, and it wipes Bain’s name off the cover of a controversial book if you will.

More confusion is spawned from the 2015 Acadia “proxy statement” (a filing ahead of a public company’s annual meeting that delineates who owns the company, how voting should occur) filed a month after they purchased CRC. The document lists Bain Capital Investors LLC as an 8.8% (5,860,976 shares) owner of Acadia Healthcare. Christopher Gordon is also listed (again, at face value) as an 8.8% (5,847,728 shares) owner–nearly identical amounts. The March 2016 proxy filing similarly lists both parties.

It’s the 2017 filing that fails to mention Bain — only listing Gordon and his footnotes, despite still owning shares. In late 2017, Bain Capital had exited their position entirely, as shown in form 4 mentioned above. Bain sold their stock in two halves during Q3 of 2015, and Q3 2017, entirely exiting six months before Governor Romney chose to announce his run for Senator Hatch’s vacant seat in February 2018.

Romney campaigns in Utah in 2018. Source: Getty Images

Searching ‘Chris Gordon Mitt Romney’ on Google revealed Gordon served Bain Capital since 1997 and he even played a role in Romney’s administration as Massachusetts’ governor from 2003–2007. A second lawsuit filed on May 23rd, 2019 alleges that “Defendant Gordon also negligently violated section 14(a) of the Exchange Act by causing Acadia to make misleading statements in its 2017 and 2018 Proxy Statements.” Serving as a defendant in Bain’s stead is undoubtedly a big bullet to bite in this case, without good reason!

The Money Trail

This confusing documentation produces a tall task for the media, a nitpicky voter, or opponent to connect Mitt Romney (through passive ownership) to Acadia or any of their blunders. Robbins Arroyo LLP, a securities law firm, (as evidenced by their failure to name Bain Capital as a defendant, as opposed to only Gordon the employee) couldn’t make the connection., myself (initially), as well as virtually all online market data sources all, overlooked this fine print. None of those mentioned above sources can claim to be “untrained eyes.”

Still not convinced? Well, why on earth would Acadia Healthcare, a company that (since they were founded in 2005) made donations totaling over $5k to Senator Hatch in all cycles in which he ran, then they fail to contribute to the 2018 Romney senate campaign? Is the relationship temporarily out of order, or is there a broken connection altogether?

Pensions: An Ironic Motive

For most of 2015, Acadia’s insiders, including Reeve Waud, Waud Capital, Acadia’s C-suite, as well as Bain owned roughly 30.1% of the company. On August 5, 2015, Acadia’s stock reached its all-time peak of $85.71 per share. Today, it hovers in the high $20s to low $30s, and insider ownership has fallen under 2%.

T Rowe Price is the largest share manager (holder) of Acadia Healthcare. Source: Getty Images.

In January, Christopher Gordon announced that May was when he would step down, and he did, after roughly 50 months on the Acadia board. With a substantial debt to pay (just north of $3 billion) and less than $50 million in cash-on-hand, Acadia has been kept afloat by what appears to be a mini-bailout.

What’s that mean? Well, look at the ownership today: 1.) T. Rowe Price and Company 2.) Wellington Management Group 3.) BlackRock, Inc. 4.) Vanguard Group 5.) Aristotle Capital Management 6.) Dimensional Fund Advisors 7.) JPMorgan Chase & Co., and so forth — roughly 98% “institutionally owned,” mostly pensions.

They owe more than they’re worth, and then some. Their “price to tangible book ratio” hovers in the high teens — actually, the negative teens. These shareholders resemble groups of various mutual funds as well as exchange-traded funds, such as Vanguard’s Healthcare ETF or the T Rowe Price MidCap Growth Fund. These are groups of hundreds of securities bundled together and often ignored. In contravention of its purpose, the Senate H.E.L.P. committee that should be the watchdog serving to avoid this is disincentivized to hold Acadia accountable. Will a U.S. Senator have to experience the agony of Elizabeth Breck’s daughters to act?

Side-by-side comparison of Acadia’s insider ownership, total debt, and stock price. Source: YCharts.

Comments were requested from Acadia Healthcare, all legislators mentioned herein, Brian Kaegi, as well as an in-person request in Senator Romney’s Washington office on April 10, 2019. I have also asked Sen. Lee’s chief of staff for comment. None have returned calls.

In terms of the recent settlement with the DOJ, prosecutors offered the following comment in a press release.

“Fraudulent billing by these Acadia/CRC drug treatment clinics, as contended by the government, limits the (government’s) ability to provide desperately needed addiction treatment services.”

Maureen R. Dixon, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Services.

That said, Levine’s article from 2012, the allegations of patient abuse, claims of insider trading, a missing teacher/mom-of-two, sexual assaults of children and vulnerable adults, the U.K. autism crisis, as well as this month’s announcement of a fraud settlement with the DOJ — all present a challenge to ask the question: what’s there to cover-up?

Entrepreneur & Investigative Journalist | Story Tips: Email your name, phone, and 2 paragraph summary.

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