DeSantis ally Strum reels in sweet deal to run Broward Health with contract finessed by his lawyers

By Dan Christensen, FloridaBulldog.org

Shane Strum, the governor’s chief of staff, will become chief executive of Broward Health later this month with a handcrafted three-year contract worth $1.3 million annually, despite having no hands-on experience running a hospital.

Broward Health’s seven-member board, hobbled by three long-unfilled seats, unanimously voted 4-0 to approve the Fort  Lauderdale resident’s contract on Feb. 24 in what looked to be something of a rush toward the end of its regular meeting. Each of those commissioners was appointed by former Republican governor-now Sen. Rick Scott.

The deal’s political overtones are obvious, raising questions about whether the taxpayer-assisted North Broward Hospital District, as it is legally known, is backsliding toward the muck of political influence, corruption and scandal that it recently seemed to have moved past.

“It’s a bold gamble,” said one longtime Broward Health observer who asked not to be named. “If Strum is able to raise money and bring in government grants that have been sorely lacking,” his hiring will be a good thing. “If not, all the great plans for expansion and delivering more services will fall flat.”

Strum’s employment agreement with Broward Health included several last-minute changes inserted by Strum and his lawyers at the Atlanta-based law firm King & Spalding. The changes, which weren’t given to the board to read until the night before, were largely OK’d by Broward Health’s board, sometimes over cautions voiced by the district’s legal counsel, Linda Epstein.

One pleasing addition was the insertion of a clause granting Strum a “sign on” bonus of $25,000 “payable in cash within 30 days.” That’s in addition to his $920,000 annual salary with an “anticipated” 30 percent annual bonus. No reason was given for providing such an extra handout to someone who vied for the job against two more experienced competitors.

Strum and severance

Broward Health provided Strum with two years of severance – or $1.84 million at his current salary – if he’s terminated “without cause.” But the contract’s heavily reworked termination provisions expand “without cause” to include any decision by the board not to renew his contract should he want to stay, and also allowing Strum to collect severance if he quits “for good reason.”

Strum’s novel “good reasons” for resigning, as approved by Broward Health’s governing board, include: any cut in Strum’s pay or incentive bonus, any reduction in his authority or duties, including the appointment of someone above him, and any “material diminution” in Broward Health’s budget.

Likewise, the alterations also watered down the board’s ability to fire Strum “with cause.” For example, a contract provision that allowed dismissal for an “employee’s threatened or actual physical violence” was modified to add “at the workplace.” Threats of violence or violence outside the workplace are not grounds for termination.

Together, the changes essentially eliminate the contract’s three-year term, meaning Strum can leave most anytime and the public will have to pay him two years of salary as severance.

Protecting Strum

Commissioners Ray Berry and Nancy Gregoire were the most vocal in their support for Strum’s generous severance arrangements.

“I do believe that in the severance portions we need to make sure that somebody of Shane’s profile, who has played the political game for so long, doesn’t in two years when a new board is in place and a new governor is in place, get forced out because of some political shenanigans,” said Berry.

“I agree,” said Gregoire. “Whether we like it or not this tends to be a political organization.”

Still, General Counsel Epstein expressed her concerns about a number of contract provisions inserted by Strum that she said “may be disadvantageous to Broward Health.” She said that included one new section defining the meaning of “good reason.”

“We weren’t sure what some of this meant,” said Epstein, who supervises a team of staff attorneys. “For example, material diminution of the budget. Our budget changes year to year and it’s sometimes outside our control.”

Another example Epstein cited was new “termination language” in the contract that could make firing Strum “with cause” more difficult “and in my opinion, my legal opinion, could lead to litigation if that were the case.”

But almost as quickly as Epstein raised those concerns, Gregoire waved them away. “I think that language would be very appropriate if we were dealing with a stranger, but this is a hometown guy who is coming home, who’s been serving the state of Florida for a long time. But I think it’s important that you point these things out, and why we strike them down,” she said.

Strum takes charge March 29

Strum, 51, will take charge of leading Broward Health’s five hospitals and 8,200 employees on March 29. He replaces Gino Santorio, who left last month to become CEO of Mount Sinai Medical Center in Miami Beach.

Strum will take over a hospital system that under Santorio recently had bounced back after years of turmoil and infighting that torpedoed morale and the district’s credit rating, led some doctors to depart and others to publicly warn that mismanagement was impacting health care. Fraud and corruption led to a whistleblower lawsuit and federal intervention that resulted in Broward Health paying $69.5 million in 2015 to settle allegations that it had paid illegal kickbacks to nine doctors for referring patients to its hospitals. The scheme had gone on for more than a decade.

Another chapter in the ugly past is set to return again in May in a Fort Lauderdale federal courtroom in the bribery-conspiracy trial of former Broward Health purchasing director Brian Bravo. According to his indictment, between 2008 and 2015, when he was fire, Bravo collected $600,000 in illegal payments from four vendors who provided more than $22 million in goods and services to Broward Health. The illegal payments included not only cash and checks, but family vacations to Cancun, The Bahamas and Walt Disney World plus tickets and a trip to Brazil for Bravo to attend the World Cup of Soccer in 2014. His trial date is now May 24.

While Shane Strum doesn’t come with the healthcare knowledge for running a hospital system, he does bring a wealth of political and community connections that can lead to possibly big donations or appropriations for the non-profit hospital system.

Strum has long been active in politics, first as the leader of Broward County’s Young Republicans and later as chairman of the county’s GOP. Before he worked for DeSantis, he served as chief of staff or Gov. Charlie Crist and was an adviser to Rick Scott’s gubernatorial transition team in 2010. In 2011, he was hired as an executive at Keiser University.

From 2001 to 2009 Strum was a member of and chairman of the South Broward Hospital District, which operates as Memorial Healthcare Systems in Hollywood. He later served as vice president for strategic planning before being hired by Gov. DeSantis.

In Tallahassee, Strum is the highest-paid employee of the Executive Office of the Governor, with an annual salary of $180,250. DeSantis’s salary is $134,181.