By Dan Christensen, FloridaBulldog.org
Five years after promising a sweeping review of scandal-plagued Broward Health’s contracts, Florida’s Chief Inspector General has released a scaled-back report that recounts the district’s seamy past while failing to mention its most politically explosive contract.
The IG’s office says its review followed up on unidentified information about suspected “fraud, waste and abuse” forwarded to it by the Florida Department of Law Enforcement. But because at least five other agencies, including the FBI, were doing parallel investigations, the IG limited its review to “nine selected contracts and Broward Health’s system of governance,” according to the report.
Those “selected contracts’’ did not include the unprecedented no-bid deal, for as long as 25 years, awarded by taxpayer-supported Broward Health’s board to an oncology company connected to Republican then-Gov. Rick Scott, now Florida’s junior U.S. senator. The deal was worth $20 million-$30 million a year. Notably, the health district’s board is appointed by the governor.
Scott, a multi-millionaire, was a substantial investor in Vestar Capital Partners, a private equity firm that then owned 21st Century Oncology. The contract to supply radiation oncology services to Broward’s biggest public health system was awarded in January 2012. 21st Century later contributed $400,000 to Scott’s re-election campaign.
Florida Chief Inspector General Melinda Miguel works in the executive office of the governor. In a Jan. 29, 2016 letter to the district she wrote, “I have received Governor Scott’s full support to conduct a thorough review of every contract North Broward Hospital District/Broward Health has entered into since July 1, 2012 and all correspondence, in any form, related to these contracts.”
Note that the cutoff for that “thorough review” was July 1, 2012 – conveniently six months after Broward Health approved its unheard-of contract with 21st Century Oncology. Miguel continues under Republican Gov. Ron DeSantis.
Results of the IG’s report
The upshot of the IG’s protracted inquiry into Broward Health: a 30-page report that repeatedly claims Broward Health did not provide it with documentation regarding how certain no-bid contracts were procured or awarded, identifies specific acts of apparent wrongdoing yet assesses no real blame and, bizarrely, even questions its own usefulness.
“While the review team received complaints and reports of, or general concerns relating to possible Board or Executive Staff misconduct and malfeasance, the team found no definitive support to validate the concerns that fell within the scope of the review,” says the report, noting that its work was complicated because most of the district’s governing board and its entire executive staff were replaced or had quit.
“The significance of these changes impacted the scope of this review and the [IG’s] ability to publish a meaningful report.”
Broward Health’s current chair, Nancy Gregoire, sent a reassuring six-page reply letter to IG Miguel listing a number of reforms instituted within the past 18 months to improve governance and address some of the report’s recommendations. “While the Board and District’s responses to your Report is not an attempt to justify or excuse any historical actions, we do want the Office of the Inspector General to be aware of all of the changes we have made and will continue to make,” Gregoire wrote.
The IG’s report comes on the heels of the first arrest arising from the FBI’s parallel five-year investigation of Broward Health’s purchasing department. Court records show the district’s former purchasing boss, Brian Bravo, was released Jan. 11 on a $200,000 personal surety bond following his Nov. 19 sealed indictment on five counts of bribery, conspiracy to commit bribery, money laundering and extortion under color of official right. Trial is now set for April 26 in federal court in Fort Lauderdale.
New documents filed in the case by prosecutor Jeffrey Kaplan disclose that Bravo has a prior criminal record, without providing details. “The government will also elicit testimony from co-conspirator 1 that he and defendant Bravo engaged in the same kickback scheme when Bravo was employed at a hospital in New York.” The hospital has not been identified, but co-conspirator 1 was identified as the “owner and founder of an unnamed company based in Port Reading, NJ” who allegedly began paying kickbacks to Bravo in 2008 when the company began supplying certain products to Broward Health.
IG’s report findings
The Jan. 25 IG’s report found a number of “inconsistencies” in the applicability of various governance controls toward the board and its members. One example: members of the board’s audit committee – which “best practices” suggest should be separate from members of any other committees – also serve on the finance and other committees. Audit committee members should be “independent of day-to-day operations,” the report says.
The IG’s report also found apparent violations by Broward Health’s board of Florida’s open meetings, or Sunshine Law, though the report does not state it directly. The violations happened at so-called “shade meetings” to discuss activities that should have been discussed in public. The public is legally barred from shade meetings under an exemption to the law that allows government bodies to meet privately with their lawyers to discuss pending litigation or a written strategic plan.
The report’s recommendations include one to the governing board that it “discontinue the use of ‘shade meetings’ except for those expressly permitted by Florida Statutes.” The report said the board should also institute a new policy to prevent it from further Sunshine Law violations when conducting “shade sessions.”
An example the report cites occurred on Oct. 30, 2015 when the board and key staff met behind closed doors to discuss a new emphasis on “marketing and advertising.” The report confirms for the first time that at that secret, apparently illegal gathering Fort Lauderdale’s Zimmerman Advertising was allowed to pitch a blockbuster proposal to handle Broward Health’s ads and promotions for up to six years for $71.4 million.
Accompanying CEO Jordan Zimmerman was then-Broward County Commissioner Chip LaMarca, a Zimmerman employee. Today, Republican LaMarca is a member of the Florida House representing Broward’s coastal region from Fort Lauderdale to Boca Raton.
Broward Health’s board publicly discussed the no-bid deal at its regular public meeting two months later, declaring its goal to increase in-patient and out-patient volumes. The idea was to begin July 1, 2016, the start of the new budget year. Meanwhile, the board immediately approved $5 million for Zimmerman, or about half of the $10 million annual being considered as of July 1.
A warning ignored
The board acted despite a warning from Broward Health’s chief financial officer, Robert K. Martin, that the deal had been built on phony statistics supplied by Zimmerman that vastly inflated its projected return on investment, hospital occupancy levels and profits.
Within weeks of his warning, Martin was out of the job he’d held since 2010. A knowledgeable source told Florida Bulldog at the time that Martin was fired and given a separation agreement with a substantial payout and a requirement that he keep his mouth shut.
Commissioners were to vote Jan. 27, 2016 to authorize Broward Health CEO Dr. Nabil El Sanadi to sign the full contract.
In the interim, LaMarca allegedly got so heavy-handed in the push to obtain the huge advertising contract that he threatened El Sanadi.
“I put you here, and I can take you out,” LaMarca said, according to Broward Health Vice President Doris Peek, whose statements are contained in a report presented to Broward Health’s governing board in March 2016. LaMarca denied making such a threat.
El Sanadi, an Egyptian by birth, killed himself on Jan. 23, 2016. His suicide triggered a series of disclosures about investigations and insider deals that rocked the public hospital system. It also ended up killing Zimmerman’s huge contract.
LaMarca “pressured” El Sanadi
Why El Sanadi shot himself is not known. He’d had heart surgery earlier in the month and reportedly was suffering some continuing pain. But the pressure heaped upon him as a result of the Zimmerman deal also may have influenced his decision.
The IG’s report offers some new insight. It says that then-Commissioner Sheela VanHoose reported that the district’s then-General Counsel Lynn Barrett told her that El Sanadi was “pressured” by Zimmerman representatives, including LaMarca.
“Commissioner VanHoose also stated Ms. Barrett commented to her that Mr. LaMarca and another Zimmerman advertising employee went to Dr. El Sanadi’s home to push for approval of the contract and further made contact with Dr. El Sanadi while he was hospitalized following surgery, continuing to push his support of the Zimmerman Advertising contract. It was then Commissioner VanHoose’s understanding that Mr. LaMarca had powerful influence over operations at…Broward Health because he recommended many of the appointees to the board.”
Barrett, a controversial figure at Broward Health, told the IG that El Sanadi was “pressured” about the contract and that between Christmas and New Year’s Eve 2015 told her “he had to support the Zimmerman contract expansion because then [Board] Chair [David] DiPietro said he had enough votes to terminate or get a vote of ‘no confidence’ from the board pertaining to Dr. El Sanadi and Ms. Barrett.”
DiPietro declined to be interviewed by the IG’s office, the report says.
The report documents how DiPietro pushed for the Zimmerman deal, including at the closed Oct. 30, 2015 board meeting. The report repeatedly cites him for acts that created “an appearance of improper involvement by members of the Board with the Zimmerman contract.” They included the lack of a competitive procurement, Zimmerman’s presence at the October 2015 shade meeting, improper ‘’polling’’ of board members at the shade meeting, “rapid escalation of the contract amount with little to no public discussion, and a lack of new contract terms or metrics tied to the revised contract amount.”
Amid all that, DiPietro’s wife, Broward County Court Judge Nina DiPietro, was the beneficiary of a June 25, 2015 political fundraiser hosted by advertising executive Jordan Zimmerman and his wife, Terry. It came seven weeks after Zimmerman Advertising signed an initial $2.1 million no-bid contract with Broward Health. Nina DiPietro’s campaign raised almost $22,000.
Zimmerman ad deal and DiPietro
A few months later, Zimmerman was back before Broward Health’s board seeking approval for the $71.4 million deal. At that closed meeting DiPietro “surveyed” his board colleagues regarding with their support for Zimmerman, the IG’s report says. “I suggest that we commit to $10 million,” DiPietro said, not Zimmerman’s less-expensive alternative proposal of $7.9 million annually.
The IG’s report often casts DiPietro as a principal negative actor in the Broward Health drama; someone who often took unilateral action during that tumultuous period despite a lack of specific policy authority. To do it, though, the report resorts without context to statements made by DiPietro’s political rivals and enemies, like Barrett and Myla Reizen, a lawyer for Foley & Lardner Barrett hired to represent Broward Health as outside counsel. Reizen is today a partner in the Miami office of K&L Gates.
IG Miguel, too, had a distaste for DiPietro. In March 2016, she sent a letter to Gov. Scott accusing DiPietro and board member Darryl Wright of interfering with her investigation by hiring outside legal counsel for the board, high-profile Democrat Mitchell Berger. Scott quickly suspended the pair, although DiPietro fought his suspension in the courts and won.
DiPietro further angered the governor when he later filed a whistleblower suit against 21st Century Oncology stating that it received its “extraordinary” contract with Broward Health due to “kickbacks.” The suit, made public in September 2017, went on to accuse former Broward Health CEO Frank Nask of paying hundreds of thousands of taxpayer dollars in “hush money” to grease the deal. Nask allegedly went along because Fort Lauderdale lobbyist William “Billy” Rubin, a close friend to Scott, offered Nask kickbacks of financial security and the governor’s political protection.
“Rubin also communicated the message to Nask that if he did not support the contract with 21st Century, then appointments to the board would not be his allies and his employment would be terminated,” the lawsuit said.
Nask’s salary was then about $680,000 plus bonuses and benefits. At the time, it had been publicly reported that the federal government was investigating the district’s contracts with 27 of its physicians and that Nask “needed allies.” Nask agreed, the lawsuit said.
That federal probe, the result of another whistleblower suit brought by an orthopedic surgeon, caused Broward Health in August 2015 to agree to pay $69.5 million in penalties to settle allegations it paid illegal kickbacks to nine doctors who referred patients to its hospitals in a fraud scheme that lasted more than a decade.
DiPietro folded his whistleblower lawsuit in 2018 after 21st Century Oncology filed for bankruptcy protection. In December 2019, Fort Myers-based 21st Century was acquired by GenesisCare, an Australian healthcare company. The Fort Myers News Press reported that the terms of the deal weren’t disclosed, but an Australian news outlet reported it was worth $1.5 billion.
Robert Bernstein / February 25, 2021 9:16 am
Regarding the 21st century deal, prior to Scott becoming involved, I was the commissioner who originally negotiated with 21st Century. Against political pressure I recommended against making a deal with the company for strictly business reasons.
At the time Broward Health had an annual patient population of @ 625 oncology patients that received advanced therapies that would have been covered by the potential contract with 221st Century.
21st Century had a population of patients receiving similar treatment at their facility in Deerfield Beach in the previous 12 months of 10.
The contract proposed by 21st Century’s CEO called for Broward Health to purchase all of the necessary equipment, and after all of the expenses were paid, to split the excess revenue 50/50.
So the math was pretty simple. We throw in 625 patients to their 10 patients, pay for all of the technology, and then we split the profits 50/50.
Recommending to the board we not consider the offer from 21 Century was an easy decision. As a board member appointed by then governor Bush, we were given the responsibility to make good business decisions.
Miguel Fernandez / February 25, 2021 2:23 pm
First off, there is a lot of information in this article that is not accurate. Here is what I recall:
1.) Broward Health purchased a linear accelerator and the 1st CyberKnife in Broward County in 200/6/2007. This $12M investment was a commitment to the community and to jump start the oncology program at BH.
2.) In 2008/2009 BH negotiated with 21st Century and an employed physician to run this department and decided to go with the physician and his team.
3.) Unfortunately after almost 3 years, this program was not successful and was a huge drain financially.
4.) In 2011/2012 BH reached back out to 21st Century and negotiated a new agreement with them where they paid BH to lease the equipment and take care of the patients. I don’t remember the specifics because it was 10 years ago, but the overall economic impact to BH was a positive $5M per year benefit by renegotiating this deal. BH went from losing $3M to making $2M or there about.
5.) The contract with 21st Century (no one on the Commission knew anything about Scott being an investor in this company) may have been a long term contract but it had an out clause if any party wanted out. Again, I believe the out clause was exercisable every year. So in reality it was a 1 year agreement that was automatically renewed if both parties were good with the agreement. To call it a 25 year agreement is inaccurate with the way this was presented and worked.
Bottom line is this agreement (21st Century Agreement) was a very good agreement for BH at the time and Scott had nothing to do with the decision.
Frank / April 18, 2021 2:12 pm
Of course di Pietro won’t comment. He’s a common coward. His actions led to “suicide,” he’s part of serious issues harming people, misusing his job, misappropriating funds, he’s claimed to be a victim of tracking when it’s he who’s for years been known to hack into computers and homes and conversations and phones of lawyers, judges, young women. He’s a disgrace. His “marriage” has been over for years. Jail is next.