The Coastal Post - June 1999

Grand Jury Missed The Big Picture On Marin General Hospital


By Linda Remy

The Marin Grand Jury has called for binding arbitration of the civil lawsuit the Marin Healthcare District filed against its tenant Sutter/MGH, one of the nation's ten largest healthcare conglomerates. The suit seeks to recover $1.3 million in debts Sutter/MGH owes the District and to restore quality healthcare provided at the District's publicly-owned Marin General Hospital.

In the last few months, members of the Marin Board of Supervisors have called the dispute "tiresome". Others critics have called the District Board "contentious" or "divisive".

These critics want the publicly elected Board -- charged by state law to protect the health of the residents of the District and the District's publicly-owned assets -- to capitulate to the positions advanced by Sutter/MGH through their amply-financed public relations machine.

The effect of their posture would be for the District Directors to let stand the indefensible position that public officials who profit personally from a contract made while representing the public (thereby violating California's anti-corruption statute, Government Code Section 1090) and who are able to conceal the extent and nature of their deed at public expense for a mere four years, can avoid all liability for their corrupt acts and escape any requirement to return their ill-gotten gains.

This is an outrageous contention. Especially in the present instance, where the Grand Jury agrees with the undisputed facts: Henry Buhrmann was the District's Chief Executive Officer when he signed the lease as CEO of the tenant corporation.

Combined with the anti-corruption Section 1090 is a history of California case law dating back to 1898. In a long, unbroken string of decisions, the courts have held consistently that no Statute of Limitations bars the public from recovering its unlawfully transferred assets. This line of cases includes a recent one permitting an action to go forward after a 40-year time lapse.

Understand this: An adverse decision on the Marin case would not be limited to a dispute over public healthcare district assets.

The issues in the Marin Healthcare District suit apply not just to MGH and not just to hospitals, but to every public transaction carried out in the State of California.

An adverse arbitration would create open season for corrupt, greed-driven deals by elected officials and their employees.

Most elected officials hold four year terms. If public officials withheld for four years the full extent of their corruption and complicity in actions which definitively violate anti-corruption laws, it is unimaginable that California law would permit them to walk away with hundreds of millions of illegal gain to the public detriment.

No public official can be permitted to believe that, after a mere four years, it is possible to retain with no adverse consequences public assets obtained by breaking corruption laws. California's public assets would be ravaged. Such a result would be contrary to every concept of public accountability and integrity contemplated by anti-corruption law.

The defendant Sutter/MGH has sought to cast this case as a garden variety contract claim, involving mere contractual matters, a fight between a large healthcare conglomerate and a local community, which it certainly is.

This is not to say that such factual issues are trivial from the perspective of California consumers, patients, and taxpayers. Indeed, they are so important that the District has sued to recover over $1.3 million Sutter/MGH owes the District and to obtain a court decision binding Sutter/MGH to more responsible corporate behavior regarding their obligation to offer quality patient care 24 hours a day so long as they benefit from the lease of Marin's publicly-owned hospital.

However, the central issue of the District's case is whether the courts will apply a 4-year statute of limitations when the facts include: (1) violating anti-corruption statute Section 1090 by entering into a contract regarding taxpayer assets from which the participants (public officials) anticipated personal benefit, (2) benefiting from such contracts (to the extent that his personal gain is in the public record, Buhrmann's pay package rose six fold), and (3) continuing to gain from their illegal acts.

The majority of the current Directors of the Marin Healthcare District believe it is imperative to have a government of public officials who demonstrate integrity and truthfulness, and who cannot benefit financially from contracts they draft, consult on, or authorize. If the position Sutter/MGH seeks to advance becomes a matter of law, what will this say about public officials who step aside and let this to happen?

Publicly elected directors of three California public healthcare districts agree. They presently are fighting valiantly to reverse egregious public wrongs perpetrated 5 to 14 years ago. The alleged public wrongs consisted of elected officials, their employees, and/or counsel profiting from contracts which privatized hundreds of millions of dollars of public assets. The fact that public officials benefited from such contracts is exactly what Section 1090 was intended to prevent. If the act occurred, the contract is void. At this time, two trial courts (one improperly following the unpublished decision of the other), have agreed with the positions of the well-moneyed defendants by holding that California taxpayers have only four years to obtain return of public assets, even when there is no dispute that public officials have violated Section 1090. These cases, in various stages timewise, are on their way to different courts of appeal.

The public bodies fighting to return control of public assets to the taxpayers are considerably outspent by their wealthy healthcare conglomerate opponents. Indeed, as the Grand Jury observed, the Marin Healthcare District has no tax revenues. It receives only $200,000 annual cash rent. This from an improperly obtained "lease" of a $200 million public asset to a wholly-owned subsidiary of Sutter Healthcare, one of the nation's ten largest healthcare conglomerates.

All California residents, including publicly elected officials, should be concerned about the far-reaching nature of the potential precedent that could come out of these cases.

Public officials must never give any legitimacy to the notion that public officials who act in a corrupt manner and thereby benefit can be permitted to enjoy their ill-gotten gains and suffer no adverse consequences due simply to the passage of four years.

The publicly elected District Directors have no conceivable prospect of personal gain from their actions. They make no money, are paid no salary, are voluntary trustees. They are motivated only by their statutory responsibilities to protect the health and welfare of the residents of this District and to protect the public from the detrimental results of illegally privatizing publicly owned healthcare assets.

The Directors of the Marin Healthcare District Board, along with several other Healthcare District Boards, have made clear that they will not countenance the possibility of crippling California's anti-corruption law.

We will not let it be said that California lost the bedrock foundation of public responsibility and accountability because the Marin Healthcare District gave up the fight, because we wanted not to appear "contentious" or "tiresome". We didn't run for this public office to join the country club.

The issue will be pursued to the highest courts. It is too important.

The Grand Jury missed the big picture.

Linda Remy is an elected member of the Marin Healthcare District.

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