By Dan Christensen, FloridaBulldog.org
When Broward Health General Counsel Lynn Barrett started an “independent” investigation that led to last December’s ouster of popular hospital district President/CEO Pauline Grant, the two law firms she retained to investigate and advise about Grant had deep, undisclosed ties to Gov. Rick Scott.
As governor, Scott oversees Broward Health and chooses the taxing district’s governing board of commissioners. The hiring of two out-of-state law firms used by Scott suggests the inquiry was not independent and that the lawyers who investigated Grant were conflicted.
“Was I aware of that? No. It wasn’t disclosed, but it should have been, of course,” said former Commissioner Maureen Canada, the only Broward Health board member to vote against firing Grant.
Canada testified Sept. 27 before a Broward grand jury that’s investigating possible Sunshine Law violations relating to Grant’s termination and other matters at Broward Health.
The American Bar Association has said there are more than 45,000 law firms in the U.S. Hundreds of those firms specialize in healthcare law. Yet the two firms Barrett chose were Nashville, TN.-based Waller, Lansden, Dortch & Davis and Birmingham, AL.-based Bradley Arant Boult Cummings.
Waller Lansden has represented healthcare giant HCA for decades, including in the mid-1990s when Scott was the chief executive of what was then called Columbia/HCA. Scott departed in July 1997 amid a federal Medicare and Medicaid fraud investigation that ultimately cost the company a record-breaking $1.7 billion in criminal fines and civil settlements. Scott, however, took with him a separation agreement from HCA worth upwards of $16 million.
Bradley, the brand name of Bradley Arant Boult and Cummings, was the law firm for Richard L. Scott Investments, the governor’s Naples-based firm before his election in 2010. Bradley partner Stephen T. Braun was Columbia/HCA’s general counsel under Scott and he and his firm have represented Rick and Ann Scott in various stock transactions.
Broward Health lawyers represent Scott family’s investment firm
Bradley also represents G. Scott Capital Partners, the Connecticut-based “family” investment firm run by Gov. Scott’s former employees where the First Lady is a part owner and has invested tens of millions of dollars, some of which apparently came from the $62 million sale of walk-in clinic operator Solantic, which the governor transferred to her shortly after taking office amid allegations of conflict of interest.
“We only invest the capital of one family,” Scott Capital, as it is known online, told InvestmentBank.com in an interview last year. “We tend to focus on deals in the $20 (million) to $50 (million) range.’’ In 2016, Scott Capital reported to the Securities and Exchange Commission that it had $291 million in family assets under management.
Broward Health General Counsel Barrett did not respond to emailed questions inquiring whether the governor’s office provided any input when she chose the Waller Lansden and Bradley firms.
Grant is suing Broward Health in circuit court for breach of contract. In a separate lawsuit, she is asking the court to declare that Barrett and Broward Health’s board violated the Sunshine Law to void her termination and order the board to hold a hearing “in the sunshine” to address both the investigation and her employment.
Her attorney, Fort Lauderdale’s Eugene Pettis, called Waller Lansden’s report about Grant “the most biased, one-sided piece of work I’ve ever seen,” adding that it omitted information from “essential witnesses” that exonerates his client.
Pettis said news of the ties between the district’s outside law firms and Gov. Scott confirmed his suspicions that outside forces had orchestrated events. “I think this playbook is coming from a higher level than the North Broward Hospital District,” said Pettis, using Broward Health’s legal name. “What the final chapter is going to be we’ll see, but clearly Pauline Grant and her insistence on following proper protocols and ethical guidelines is not what they wanted to confront in a CEO.”
Barrett disclosed the Grant investigation Dec. 1 at the outset of a hastily arranged special meeting of Broward Health’s board.
“I was in absolute shock by what was going down,” said Canada. “As commissioners, we are supposed to be given material prior to the meeting to educate ourselves on what’s happening, but in this case that did not happen.”
Minutes of the Dec.1 board meeting detail what happened. In sum, Barrett told commissioners that Waller’s “independent” lawyers had concluded that Broward Health’s chief executive had committed a “probable violation of the Federal Anti-Kickback Statute.”
No details about the investigation were provided to the board that day. But Jack Selden, a Bradley lawyer and former U.S. Attorney in north Alabama, warned the board about potential civil and criminal fallout that could result from the Waller firm’s findings and advised that the district should take “appropriate actions.”
Selden and Barrett reassured board members about the integrity of the probe, describing it as “independent” more than a half-dozen times. That imprimatur of fairness set the stage for the board’s 4-1 vote to fire Grant with little discussion minutes later.
Concerns about possible violations of the Anti-Kickback law were of heightened concern for the board. Two years ago, Broward Health paid about $70 million to settle a federal whistleblower lawsuit alleging it paid illegal kickbacks to nine doctors who referred patients to its hospitals.
As part of that settlement, the North Broward Hospital District signed a five-year Corporate Integrity Agreement requiring, among other things, that it report suspected wrongdoing to the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services.
Florida Bulldog obtained a copy of a nine-page letter written by lead Waller attorney Richard W. Westling to OIG Senior Counsel Laura E. Ellis laying out the case against Grant. The letter, documenting what Westling called a “reportable event” under the Corporate Integrity Agreement, was written a week after Grant was terminated.
‘A substantial independent investigation’
“It represents the culmination of a substantial independent investigation by outside counsel, which included multiple interviews, document review, and factual legal analysis,” Westling wrote.
Westling reported that his team determined that the way contracts had been awarded for on-call orthopedic surgeons at Broward Health North while Grant ran that hospital was illegal and possibly criminal.
“Our investigation revealed that the administration of North’s paid orthopedic trauma call did not comply with longstanding OIG guidance in this area in that it failed to treat physicians equally and, instead, favored physicians who were able to bring additional referrals to North,” Westling wrote.
Westling’s report says that in November 2015 an orthopedic surgeon, identified only as “Dr. A,” complained about Grant. Broward Health board minutes identify Dr. A as Dr. Steven Silverfarb of Margate.
The complaint alleged Grant was involved in kickback violations regarding unequal treatment “in connection with the management and oversight of the hospital’s PPUC [Physician Payment for Uncompensated Care] orthopedic trauma call panel in that calls were not being dispersed equally among the physicians on the panel,” the letter said.
The letter goes on to recount Silverfarb’s years of trying to gain acceptance to the PPUC and, upon finally getting in, his allegations of unequal treatment in receiving assignments.
The letter notes Grant’s denials of wrongdoing, but concludes “we did not find her credible.”
“Moreover, while we did not find any evidence that Ms. Grant received any direct payments from anyone in connection with the call service, she was eligible for a bonus if Broward Health and [Broward Health] North hit certain financial targets,” the letter says.
The letter does not say whether Grant ever received such a bonus.
Westling’s letter leaves other questions unanswered. Was any investigation made of others with control over the call panel? Who decided the call rotation? Why were decisions made? What did witnesses have to say about Grant? Who were those witnesses? What did documents show?
Toward the end of the Dec. 1 meeting, Commissioner Canada announced that she would not seek reappointment when her two-year term ended in mid-December 2016.
“She would just like to close today with saying that she believes today is a very sad day for Broward Health and she is beginning to question the moral compass of this board,” the minutes say.
On Dec. 5, Canada wrote Gov. Scott to tell him of her decision and explain her reasons, including Barrett’s “incompetence” regarding the requirements of the Sunshine Law and how her legal advice could lead to lawbreaking. She noted that Broward State Attorney Mike Satz had just commenced an investigation of possible Sunshine Law violations that “will necessarily focus on Ms. Barrett’s potential role as a conduit between commissioners.”
Because of that, Canada wrote that she had asked Commission Chair Rocky Rodriguez to put an item on Broward Health’s next agenda to discuss Barrett’s “future employment” at the district. But the meeting wasn’t scheduled until a week after her term ended, so Canada asked Gov. Scott to “allow me to serve as commissioner until such time that my request can be considered by the board.”
That didn’t happen. Instead, Scott moved Beverly Capasso from her soon-to-expire at-large seat – to which she’d been appointed two months before – into Canada’s District 1 seat with its four-year term.
“That silenced my request,” said Canada. In May, the board named Capasso, a former chief executive of Miami’s Jackson Memorial Hospital, as Broward Health’s interim President/CEO.