Retaliation and Bullying of City Employees
High Costs of City Attorney’s Advice
Spurious legal arguments creatively developed by Deputy City Attorneys to fight lawsuits against the City — often with the supervisory approval of the City’s Chief Labor Attorney and probably City Attorney Dennis Herrera himself — may be so misguided as to be costing the City millions of dollars, year in and year out, and may be damaging the reputation of the City Attorney’s Office.
The City Attorney and the City appear to be laboring under the age-old adage that there’s plenty of money for “Defense” (of City officials), but no money for “Butter” — relief for plaintiffs harmed who are forced to sue the City.
Troubling developments in Dr. Derek Kerr’s settlement agreement against the City for $750,000 have occurred since the Westside Observer first published details of his settlement terms in our April issue.
In addition, new information has surfaced regarding the 105 settlement agreements involving prohibited personnel practices against the City that have cost taxpayers at least $12.1 million over a six-year period, showing a disturbing trend in how the San Francisco City Attorney’s Office mounts its legal defense in these cases.
But the costs are substantially higher when City Attorney costs are added in … a total of 40,828 hours at a total cost of $7.726 million, above and beyond the $11 million settlement…””
“The City Attorney tried to use every pretext, lie, and smear used by the Defendants in my case to deny their whistleblower retaliation. The evidence from sworn depositions and subpoenaed documents — plus their pitiful contradictions — sank their defense,” says Dr. Derek Kerr, who was awarded monetary and non-monetary damages in his wrongful termination lawsuit settled against the City last month.
Developments in Kerr’s Settlement Agreement
As the Observer reported, Dr. Kerr’s settlement agreement included five non-monetary terms. Following the Board of Supervisors unanimous passage on second reading of Kerr’s settlement agreement on March 26, the City appears to have already deliberately mucked up at least three of Kerr’s non-monetary settlement deals.
First, the non-monetary provisions ordered the City to issue a formal retraction signed by Director of Public Health Barbara Garcia in the same format that former Director of Public Health Mitch Katz jointly issued with Laguna Honda Hospital (LHH) CEO Mivic Hirose in 2010, falsely accusing Drs. Kerr and Maria Rivero of not only being “detractors,” they publicly claimed Kerr and Rivero had made, and would continue to make, “false statements” — publicly defaming the two doctors as dishonest and liars.
But Garcia’s initial “retraction” notice was not signed by her, and was not in the same format that had been issued by Katz, which had been a key requirement of Kerr’s settlement agreement. Since the settlement agreement takes place under Court supervision, Kerr is required to report any departure from agreed-upon terms to his attorneys, in order to prevent any breach of his non-monetary settlement terms. After Garcia’s departure from Kerr’s settlement agreement terms was reported to the City Attorney, she was required to issue a “do-over,” and a revised retraction notice in the correct format has now been posted on the Department of Public Health’s web site.
Second, the City’s required public apology to Kerr at a meeting of the City’s Public Health Commission was improperly announced via a deficient agenda notice for the Health Commission’s April 2 meeting.
On Friday, March 29, the Health Commission released its April 2 meeting agenda, which listed agenda item seven merely as an “LHH Update.” The item carried only a subheading, not any “meaningful description” required by the Sunshine Ordinance and the Brown Act. Members of the public had no way of knowing the “LHH Update” item would include Dr. Kerr’s public apology so they may have chosen to attend the meeting, had there been a clear agenda description. Only by a stroke of accident did Kerr’s associate, Dr. Rivero, discover over the weekend that the “LHH Update” item would include Kerr’s public apology.
Once alerted, Dr. Kerr’s supporters were quickly notified, and 32 speakers attended the Health Commission’s April 2 meeting, all unanimously testifying in support of Kerr’s contributions to Laguna Honda Hospital’s hospice program. Had there been sufficient agenda notice, Kerr estimates attendance would have easily doubled.
Nobody spoke in support of Kerr’s oppressors, particularly not in support of Mivic Hirose, LHH’s CEO. Perhaps Hirose didn’t want her lackey subordinates and supporters to witness her having to publicly apologize to Kerr. Curiously, LHH’s highly-paid public information officer, Marc Slavin, was missing in action as a no-show, rather than standing beside his incompetent boss, as he typically does during public meetings.
Given the deficient agenda notice, a Sunshine Ordinance Task Force complaint has been filed by Dr. Rivero and this author regarding the Health Commission’s ongoing, deficient agenda notices. We’ll keep you posted on how the Sunshine Task Force rules on the complaint.
Third, Kerr’s settlement agreement provided that Hirose would read into the minutes of LHH’s 40-member senior Leadership Forum the commendation letter co-signed by Dr. Colleen Riley, LHH’s Medical Director and Dr. Steven Thompson, LHH’s Chief of Staff. But Hirose instead read the letter into the minutes of LHH’s much smaller Executive Committee on April 23, after which Kerr stated “We are glad that we exposed misconduct. If any of you want to blow the whistle, please contact us, ” as he was leaving handouts for the Executive Committee. Like Garcia, Hirose was required to make a “do-over.” On May 8, Hirose finally read Kerr’s commendation letter into the minutes of the Leadership Forum, as Kerr and Rivero wore home-made “Speak Truth to Power” ID badges after being asked not to bring handouts to the Leadership Forum do-over.
“Guns” or “Butter”?
There’s little injured-party relief (“Butter”) when it goes to legal Defense costs (“Guns”).
On April 16, the San Francisco Examiner carried an article by Chris Roberts regarding the $11 million awarded in the 103 prohibited personnel practice cases, which Dr. Kerr uncovered through a public records request to the City Attorney and which this reporter performed a secondary data analysis of. Roberts reported that the 103 cases filed by City employees includes “$3 million paid out in 18 racial discrimination cases and more than $1 million in 25 disability discrimination cases.” [Editor’s Note: The $11 million Mr. Roberts reported was subsequently confirmed to be even higher, at a minimum of at least $12.1 million, due in large measure to under-reporting by the City Attorney’s Office of actual settlement amounts to Dr. Kerr.]
As the pie chart in Figure 1 shows, settlements for prohibited personnel practices between 2007 and 2012 also include over $1 million awarded for “general harassment” of employees, at least $1.4 million for “wrongful termination,” $553,837 for “sexual harassment” cases, and over $4.8 million for various types of other prohibited personnel actions.
The $12.1 million doled out to settle what were at least 105 cases is one clue that there’s a lot of bullying of City employees, cases oftentimes pure, thinly-disguised retaliation involving personnel practices already prohibited by law.
But the costs are substantially higher when City Attorney costs are added in for the time Deputy City Attorney’s (DCA) spend defending the City against these lawsuits. According to a further public records request, DCA’s spent a total of 43,195 hours at a total cost of $8.3 million — above and beyond the nearly $12.1 million in settlement awards — defending the 105 cases against the City involving prohibited personnel practices. Combined, between actual settlement awards and City Attorney time fighting the cases, we’re talking at least $20.4 million in preventable waste of taxpayer funds — preventable precisely because they involve personnel practices long prohibited by law.
In the Doe and Raskin v. the City of San Francisco 9–1–1 dispatcher’s case, they were awarded $726,000, but the City spent $304,508 fighting Doe and Raskin. In the Derek Kerr, MD v. the City of San Francisco case that awarded him $750,000, the City spent $450,493 (1,740 hours) fighting Kerr!
In one of the racial discrimination cases a City employee won, he was awarded just $322,750, but new data shows the City Attorney’s Office racked up 3,107 hours fighting his case, at a total cost of $526,597. In one wrongful termination case, a City employee was awarded just $15,000, but data shows the City Attorney racked up $247,772 fighting his case. In another racial discrimination case, although the Plaintiff was awarded $1.6 million, the City Attorney spent $488,022 and 2,817 hours fighting the settlement.
Disturbingly, in a lawsuit settlement involving compensation to a City employee, while the City Attorney’s office reported the Plaintiff had only been awarded $109,583, according to the Board of Supervisors’ January 17, 2008 Rules Committee agenda, the Plaintiffs was awarded $755,000, suggesting data from two City agencies don’t jive. The City Attorney’s Office reported in had spent 1,855 hours, at a cost of $341,946, fighting the case.
The City Attorney’s Office appears to have initially under-reported to Kerr — by at least $1.47 million — the amount of settlements actually awarded to 15 of the 105 plaintiffs. The data discrepancies were uncovered by comparing data provided by the City Attorney’s office in November 2012 to data gleaned from the Board of Supervisor’s Rules Committee agendas and the full Board of Supervisors meeting minutes. The City Attorney’s Office under-reporting of actual settlement awards in the 15 cases represents 12% (almost $1.5 million) of the $12.1 million reported by the Board of Supervisors.
Of the remaining 90 cases, the City Attorney reported to Kerr the correct settlement award amounts for 19 cases, but it is not yet known whether 71 of these cases were accurately reported by the City Attorney to Kerr, or if the $12.1 million will soar even higher if additional inaccurate under-reporting of actual settlement awards is uncovered.
There are many other examples of small monetary settlements to City employees for various prohibited injuries, after the City Attorney racked up large sums in costs fighting the settlements every step of the way. And that’s without considering the costs of staff time spent by City department managers during lawsuit litigations, which staff time and associated costs are not tracked at the department level.
According to a retired senior human resources professional in the City who spoke recently on condition of anonymity, the City considers the costs of on-the-job bullying, retaliation against employees, and wrongful termination, to be a “cost of doing business.”
We’ve heard this justification before, including from San Francisco General Hospital nurses who acknowledge that the City may consider the failure to fix problems at SFGH that result in preventable patient outcomes, as another cost of doing business.
Supervisors Settle 305 Lawsuits Against the City
Across the same six-year period between 2007 and 2012, a total of 305 legal settlements filed against the City — for a whole host of lawsuits and other unlitigated claims beyond just prohibited personnel practice cases — were heard before the Board of Supervisors’ Rules Committee prior to referral to the full Board for consideration and approval. The 305 cases cost taxpayers a total of $104.7 million — without including the costs of City Attorney time fighting the lawsuits.
Although Dr. Kerr obtained a breakout of the types of prohibited personnel practice cases through a public records request to the City Attorney’s Office, the Board of Supervisors are required only to publish “notice” on its agendas of the major categories of cases, whether for settlements of lawsuits, settlements of unlitigated claims, or settlements for other types of cases. So it’s unclear how many of the 305 settlements involved lawsuits for Muni accidents versus, say, poor healthcare delivered at City hospitals — or bullying of, and retaliation against, City employees.
As the pie chart in Figure 2 shows, 214 of the cases heard by the Board of Supervisors involved settlements of lawsuits, fully 86.6% of all settlements. The Board heard another 60 cases involving unlitigated claims, 6 other claims, and the remaining 25 cases involved a variety of types of settlements.
It appears that the 105 cases involving prohibited personnel cases represent 34% of the 305 cases referred to the Board of Supervisors for settlement approval, and account for 11.5% of settlement awards. Clearly, the prohibited personnel practice cases and costs are completely preventable, if City managers would simply follow existing laws regarding prohibited personnel actions.
In February 2012, ABC-TV Channel 7’s KGO “I-Team” investigative journalists reported that one attorney said that all of the lawsuits and claims — not just the personnel cases — are preventable. During the six-year period it examined (a five-year period one year earlier than data reported in this article), the I-Team reported that thousands of claims and lawsuits — 10,000 of which resulted in no financial payouts whatsoever — totaled more than $212 million to resolve, plus at least $53 million in City Attorney time and costs to fight the 10,000 cases receiving no payout, ballooning to $265 million in total.
In response to an I-Team’s question about whether the $265 million was considered just a cost of doing business, City Attorney Office spokesman Matt Dorsey callously responded saying that when you consider that San Francisco spends $6.8 billion every year to run City government, “You know, it is. It’s the cost of … running a major city.” Dorsey said most of the claims and lawsuits stemmed from the vast amount of vehicles San Francisco has on its streets, without offering any proof that the $265 million in costs were attributable mostly to MUNI.
This is the same Matt Dorsey who claimed in 2004 that the wrongful termination case of Dr. John Ulrich from Laguna Honda Hospital in 1998 over First Amendment free speech issues that resulted in a negotiated $1.5 million payout to Ulrich from the initial $4.3 million jury award, was “not an instance of reprisal,” and that the City Attorney’s Office “… considers this outcome [Ulrich’s award] … [to be] an aberration.”
Dorsey probably also figures that City employees who file lawsuits regarding prohibited personnel practices such as racial discrimination and wrongful termination to be just another “aberration” to be chalked up to the costs of doing business.
High-Priced City Attorneys
At the end of calendar year 2012, San Francisco’s City Attorney’s Office alone employed 318 staff paid a combined $38.5 million in total pay, excluding 30% to 40% fringe benefits. Of the 318, the City Attorney employed 182 attorneys across seven job classification codes, paid a combined $27.8 million in total pay. Of the 138 Civil and Criminal Attorneys, 76 of them earned over $165,000, while the remaining 44 supervising attorneys averaged $190,905 in total pay, both excluding fringe benefits. Deputy City Attorneys are paid at their highest salary step of somewhere between $82.97 and $98.44 hourly (up to $204,000 or more annually), although what they charge back to City Departments and Plaintiffs per hour is significantly higher.
Although attorney’s employed by the City are paid, at most, $98.44 per hour, data provided by the City Attorney shows that in the 105 prohibited personnel practice cases, total costs of City Attorney time and expenses ranged from $165 per hour to $263 per hour, suggesting that the City Attorney bills back at an hourly rate far higher than salaries paid to lawyers employed by the City Attorney.
For his part, elected City Attorney Dennis Herrera earned $216,129 in total pay, excluding fringe benefits. He’s paid that, a taxpayer might think, to ensure his employees know what they are doing. And you might think given these attorney’s high salaries, the City’s lawyers would offer expert legal advice and would know what they we’re doing. You might be wrong, on all counts.
Questionable Rationales for “Summary Judgment”
As Mr. Roberts reported in the San Francisco Examiner on April 16, two recent and prominent City employee retaliation cases include “a pair of 9-1-1 [public safety] dispatchers who received $762,000 after City employees violated federal communications law, a jury found,” and Dr. Kerr, who received a $750,000 settlement involving wrongful termination, after complaining about misuse of the Laguna Honda Hospital patient gift fund.
In both cases, the City Attorney attempted to convince both judges in these two cases to grant a “Motion for Summary Judgment” (MSJ), a legal process in which judges make a summary judgment regarding disputed facts prior to a case advancing to jury trial. In both cases, the rationales Deputy City Attorneys used to seek summary judgment calls into question their understanding of the law.
Summary judgment is appropriate when there are no genuine disputes regarding “material” facts in a case; material facts are those that may affect the outcome of a case. Disputes as to material facts are “genuine” when there is sufficient evidence for a reasonable jury to return a verdict for the party in a case who had not sought summary judgment. The party requesting summary judgment bears the initial burden of informing the Court of the basis for its MSJ, and of identifying those portions of a case that might demonstrate the absence of a genuine dispute of material fact.
Deputy City Attorneys in both cases had to have known genuine disputes of material facts did, in fact, remain — and that there was no absence of genuine dispute — but they still petitioned both Judges for summary judgment, possibly driving up unnecessarily the costs of litigation.
Flagrant MSJ Rationale: “No City Municipal Liability”
The most flagrant issue raised in the City’s MSJ in Dr. Kerr’s case involved whether there was any municipal liability at all; municipal liability is determined using the Monell standards.
In the Defendants’ 32-page Notice of Motion for Summary Judgment against Dr. Kerr dated July 5, 2012, creative City Attorneys used four pages to claim that Kerr could not establish that the City was liable for the retaliation Kerr alleged. Defendants claimed Kerr could not assert “respondeat superior” liability against the City under Monell v. Department of Social Services, claiming it is “well settled law that ‘municipalities are answerable only for their own decisions; [and] are not vicariously liable for the constitutional tort of their agents’.” [Note: “Tort” refers to an act that injures a party in some way, for which the injured party may sue a wrongdoer for damages; here, San Francisco tried to assert that it is not vicariously liable if one City employee injured another employee.]
Respondeat superior — Latin for “let the master answer” — is a common-law doctrine that makes employers vicariously liable for actions of their employees, when their employees actions take place within the scope of employment. The doctrine was established in seventeenth-century England to define the legal liability of employers for the actions of their employees, and provides a better chance for injured parties to actually recover damages from injuries caused by an employers’ “agent” working within the scope of their employment.
Defendants attempted to assert there was no Monell liability in Kerr’s case because “Defendants Katz and Hirose did not have final policy making authority” over Kerr’s termination. The City contended it was entitled to summary judgment because Kerr had not established that Katz was a “final policymaker,” arguing instead that it was the Civil Service Commission that had final “policymaking” authority regarding San Francisco employment matters, not Katz or Hirose.
On August 9, 2012, Defendants filed an additional 26-page Reply Brief in Support of Motion for Summary Judgment, using another five pages to claim there was no municipal liability under Section 1983, arguing that Defendant Mitch Katz’s decision-making authority was constrained by other City policies prohibiting retaliation. Defendants brazenly argued that to the extent Dr. Katz or Ms. Hirose had possibly departed from policies prohibiting retaliation, their conduct could not be attributed to the City, arguing in part that Katz could not delegate to Hirose authority he didn’t possess as a final policymaker. Remind me: What rubbish is this?
In her 47-page Order ruling on the 58 pages between the City’s two MSJ briefs, Judge Wilken had to wade through issuing an eight-page analysis dissecting whether Defendants held municipal liability under Monell. Among other observations, Wilken noted the Ninth Circuit Court of Appeals has previously held that City employees to whom decision-making power is delegated, are “not authorized to violate the law,” and it is not sufficient to “insulate a governmental entity from [Monell] liability, ‘without more’.”
While Defendants argued that neither Kerr nor Rivero had subsequently applied for other vacancies on LHH’s medical staff that had become available, the DCA’s neglected to consider that since Katz as the “appointing officer” had made the decision to remove Kerr, Katz would not have been likely to rehire Kerr.
The Defendants tried to argue that a number of Civil Service Commission (CSC) rules for exempt employees constrained Dr. Katz’s ability to terminate Dr. Kerr. Wilken had to remind City Attorney’s that the Defendants’ own CSC “expert witness” had testified that “in general, no one reviews decisions” the Director of Public Health makes to lay off exempt physicians, nobody had the “authority to overrule the director of [public] health’s decisions,” and claimed the Directors’ “decisions can’t be prohibited by law.”
The Defendants’ own “expert witness” also noted that the City’s Human Resources Director does not review lay-off decisions when a complaint involves retaliation based on whistleblowing.
So Judge Wilken had to remind the Defendants’ City lawyers that “by the City’s own admission [the CSC rules] did not constrain Dr. Katz’s decisionmaking or provide for review in any way applicable to [Kerr’s termination],” as the City wrongly claimed.
Wilken observed that the City regulations Defendants cited do not provide for review of termination decisions, and simply required Katz to comply with the law. She further noted that Section 4.115 of San Francisco’s Campaign and Government Conduct Codes that can sanction officers or employees who engage in retaliation does not provide any mechanism for review or reversal of unlawful decisions. Although Defendants suggested Kerr and Rivero could have appealed, the DCA’s failed to acknowledge that there are no appeal procedures whatsoever for exempt employees who are terminated by their “appointing authorities.”
Wilken noted that, by its own terms, Section 4.115 only sets policies prohibiting retaliation against employees who file formal complaints or participate in formal investigations, but does not provide retaliation protections for employees who engage in using First Amendment free speech and subsequently face retaliation.
When will voters demand that San Francisco’s Charter be changed to include basic First Amendment protections for City employees?
After wading through reading 105 pages of motions for and against summary judgment and Judge Wilken’s Ruling, it looks to this author like the weight of evidence in Derek Kerr v. City and County of San Francisco; Mitchell Katz, Mivic Hirose, and Colleen Riley caused the Defendants’ case to fall apart.
Wilken ruled that Plaintiff Dr. Kerr had presented sufficient evidence of Monell municipal liability against the City, and denied Defendant’s MSJ to dismiss Kerr’s Section 1983 claim, putting the City on the liability hook.
City’s “Uncontroverted Facts” Claim Washes Out
At the tail end of Defendant’s MSJ dated July 5, 2012, they petitioned the Court to grant summary judgment in their favor, alleging five separate times that the Defendants “were not on notice” of Kerr’s complaints. They claimed that even if Defendants lost summary judgment, they asked the Court “to issue an order specifying certain facts were uncontroverted in order to narrow the scope of issues for trial.” Instead, Judge Wilken ruled otherwise.
Although Defendants raised many objections to evidence — which evidence and objections Judge Wilken considered — she only discussed and ruled in her Order Granting in Part and Denying in Part Motion for Summary Judgment on the admissibility of the evidence that made a difference in the case, overruling the Defendants’ other objections as moot — irrelevant.
Although Defendants contended the City Charter removes exempt employees such as Kerr through Civil Service Commission rules, Wilken noted that “even if this were true, the Charter and Administrative Code … specifically exclude exempt employees from the authority of the Civil Service Commission for removal procedures,” observing that exempt employees serve at the pleasure of appointing officers such as Dr. Katz, who are allowed to remove employees holding exempt positions without any further review, or an appeals process.
Just as DCA’s in the 9-1-1 dispatcher’s case smeared Ms. Raskin (below), City Attorney’s unnecessarily smeared Kerr. In its August 2012 Reply Brief, DCA’s wrongly claimed “It was Kerr’s enduring sense of entitlement — his refusal to shoulder the heavier workload that every other doctor agreed to — that differentiated Kerr from his peers.” This was clearly a disputed fact, which Kerr’s lawyers disproved. Defendants further smeared Kerr, writing “Plaintiff Derek Kerr likes to swim upstream. He had a comfortable existence at Laguna Honda Hospital, where many of his peers took … divergent paths to address … [needs of the patients]. Kerr refused to follow the [downstream] current.” I wondered, did the City smear Kerr again, really alleging he didn’t address his hospice patients’ needs?
The City Attorney hadn’t originated the smears, he was just “representing” the ad hominem smears, lies, and pretexts concocted by the guilty Defendants he was representing, who were grasping at straws to extricate themselves from their bungled, retaliatory hit-job against Kerr.
As a layperson having read many legal filings, this author was shocked that Defendants resorted to using smears in their legal briefs, smears clearly irrelevant and disproven by factual evidence:
· KGO, ABC Channel 7, I-Team News Reports, May 2010: Defendants objected to evidence of the multiple investigative news reports that alleged mismanagement of LHH’s patient gift fund, claiming the evidence wasn’t relevant, lacked foundation, and was hearsay. Judge Wilken ruled the Defendants objections were overly vague and failed to provide any explanations why they believed the evidence was objectionable. Wilken noted that evidence of the broadcast news reports was clearly relevant, the evidence had been offered to prove Kerr’s assertion he was terminated as a result of the news reports, and ruled the broadcasts weren’t hearsay. Instead, Wilken ruled that Kerr had established a material dispute of facts as to whether his termination was carried out in retaliation for the ABC7 news reports. Wilken denied summary judgment on the issue.
· Audit of Patient Gift Fund: The Defendants objected to the City Controller’s audit report of LHH’s patient gift fund, stating the audit was also not relevant evidence, lacked foundation, and was hearsay. Wilken ruled the audit report was clearly relevant to Plaintiff’s claims, and noted that “The fact that the City’s own Auditor found later that there had in fact been misuse of the [patient] Gift Fund is probative [evidence] of Defendants’ motives in terminating Plaintiff.” Wilken also noted that since the audit was issued by the City and was a public record, the report was either non-hearsay or subject to a hearsay exception. Shouldn’t the DCA’s employed by the City Attorney know these rationales won’t survive summary judgment?
· Protected Speech: Next, although Defendants didn’t dispute that Plaintiff’s formal complaints constituted protected speech, Defendants did argue that Kerr’s public discussion of the Ja Report and gift fund records requests didn’t constitute protected speech. Defendants asserted in their MSJ that Plaintiffs’ public records requests were not protected speech, and were nothing more than requests for information. Defendants further claimed that Plaintiffs’ August 2009 speech concerning the Ja Report during a medical staff meeting — which report recommended replacing doctors with nurses, social workers, and psychologists — was speech that “didn’t address matters of public concern” (as if reducing access to physicians would not be of public concern), it was only speech regarding personnel disputes, and the speech wouldn’t reach the public at large. Judge Wilken disagreed, concluding Kerr’s critique of the Ja Report was protected speech, and that there was a material dispute of fact regarding whether Kerr’s gift fund records requests constituted protected speech.
· Conflicts of Interest: Defendants claimed that the Plaintiff’s critique of the Ja Report “had not raised any allegations of a conflict of interest,” and that the Plaintiff had first raised the conflict of interest allegation in March 2010. However, Wilken noted that the Plaintiff had, in fact, submitted evidence that the conflict of interest issue had been raised in a September 18, 2009 whistleblower complaint, long before the eventual decision to terminate Kerr had been made. How could highly-paid City Attorney’s have missed this important timeline dispute?
· Labor Code Violation: Plaintiff had claimed Labor Code Section 1102.5(b) provided protection against retaliation for disclosing information to a government or law enforcement agency if they believed the information disclosed violated state or federal statutes. Defendants argued that Plaintiff had not engaged in protected 1102.5( b) activity, claiming Kerr did not reasonably believe his complaints disclosed an alleged violation of federal or state law; he had not pointed to a specific statute, rule, or regulation that had been violated; and he had not clearly identified prohibited conduct to place the City “on notice” of its potential legal liability.
Although Wilken noted the conflict-of-interest allegations “could have violated several state laws” and that Kerr’s “media and formal complaints about mismanagement of the patient gift fund implicated several state laws,” she ruled that his gift fund records request didn’t point to specific violations of sections of laws (that Wilken then thoughtfully identified), and that media reports were not complaints to a government or law enforcement agency in order to provide Kerr with Labor Code 1102.5(b) retaliation protection. Wilken split her ruling on summary judgment of the 1102.5(b) issue, granting Defendants’ MSJ claim only to the extent Plaintiff alleged retaliation for his formal whistleblower complaints, records requests, and media reports about the gift fund, but denying Defendants’ MSJ claim regarding Labor Code 1102.5(b) to the extent Plaintiff had alleged retaliation for his critique of the Ja Report.
Given her rejection of many of the City Attorney’s dubious rationales seeking summary judgment in Kerr’s case, Wilken ordered that a previous ruling be maintained to begin a ten-day jury trial on November 13, 2012.
It may have only been then that the City began to negotiate in earnest to develop settlement terms with Kerr, perhaps fearing a jury trial might further unravel the City’s nincompoop defense of Katz, Hirose, and Dr. Colleen Riley, and risking greater monetary settlement awards to Kerr.
Specious MSJ Smears of 9–1–1 Dispatchers
In the 9-1-1 dispatcher’s lawsuit, Jane Doe and Anne Raskin v. City and County of San Francisco, the Deputy City Attorney (DCA) claimed there were no disputes involving material fact, and requested that eight claims for relief be granted in their MSJ. In its MSJ, Defendants also smeared Plaintiffs, claiming “Plaintiff Ann Raskin lived a charmed life at DEM prior to the e-mail incident,” a snide statement wholly out of place in a legal filing.
U.S. District Court Judge Thelton Henderson granted only one of the City Attorney’s dubious claims for summary judgment, and denied the City’s other seven claims, including:
· Federal Stored Communications Act. Plaintiff Jane Doe claimed her private e-mail had been improperly searched by Defendants over an 18-month period on a shared computer, and was bullied and harassed by supervisors as a result. Defendants asserted there had been no search of any kind, and that Plaintiffs had no expectation of privacy — and even if the e-mails had been searched, it wasn’t a “serious” offense, which Plaintiffs refuted. DCA’s snarked, “Doe and Raskin decided that their best defense was a good offense,” and asked for summary judgment to dismiss each of the Plaintiffs claims.
DCA’s asserted that Defendant’s inadvertent discovery of Plaintiffs work-related, but personal e-mail account documents viewed on a shared computer, did not constitute a “serious invasion” of Plaintiff’s privacy. Since both sides had presented evidence supporting each version of events, Judge Henderson ruled there was a genuine issue of material fact for the jury, denying Defendants claim for summary judgment on the issue.
· Privacy Claims: Plaintiffs alleged there was a reasonable expectation of privacy, given their union contract that explicitly states “employees [covered by the contract] shall have a reasonable expectation of privacy,” which labor agreement City lawyers must have known about. Ignoring the union contract, the DCA’s argued there was no such reasonable expectation. The Judge ruled that facts around the alleged violation of Jane Doe’s e-mail account were clearly in dispute, such that summary judgment wasn’t appropriate.
· California Labor Code Claims: Defendants moved for summary judgment on Labor Code claims contending Plaintiffs had failed to exhaust administrative remedies through other channels. Since the Plaintiffs conceded they had not exhausted administrative remedies, the Judge granted summary judgment only on this single issue.
· Gender Discrimination Claims: Plaintiffs alleged that the abusive mistreatment they received from their female supervisors would not have occurred had the Plaintiffs been men, since men in their workplace would not have been treated in the same manner. Defendants argued that the Plaintiffs claim of woman-on-woman discrimination seemed improbable, as if City Attorneys have never heard that women can, and do, discriminate against one another, just as men do. Since the facts underlying this claim were in dispute, the Judge ruled it a proper issue for a jury’s determination, and found it inappropriate to grant summary judgment.
· Sexual Harassment Claim: Plaintiffs pointed to case law allowing circumstantial evidence of gender-based abuse, and contended the conduct they endured had occurred. DCA’s representing the Defendants contended the conduct was nothing more than reprimands concerning the Plaintiffs work performance, not sexual harassment. Judge Henderson ruled that there were actual disputes to the material facts regarding this issue, ruling summary judgment was inappropriate.
· Failure to Prevent Claims: The Defendants entire argument was that there was no triable issues involving Plaintiffs claims of discrimination, harassment, or retaliation and, therefore, no misconduct had occurred that could have been prevented. Therefore, if the Court found there was a triable issue on these claims, the Defendants had made no other argument as to why the claims should be decided on summary judgment. Plaintiffs pointed out it is unlawful for employers to “fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring, but that the City and County of San Francisco did nothing to step in, or investigate” Plaintiffs complaints. Since material facts underlying the claim were in dispute, Judge Henderson again ruled summary judgment would be inappropriate.
· Retaliation Claims: The Court noted that Defendants “largely lump their retaliation argument in with their argument about the Plaintiffs’ whistleblower claims.” While the Defendants presumably disagreed with Plaintiffs contention that bullying, abuse, and negative treatment had occurred in the workplace, the Defendants devoted their argument to Plaintiffs’ “failure to exhaust remedies.”
Judge Henderson noted that the Defendants’ argument was undermined by another court case that held that employees who suffer employment-related discrimination are not required to exhaust internal administrative remedies before filing discrimination claims. Again, shouldn’t the City and its DCA’s have known this all along? Judge Henderson noted the disagreement between the two parties regarding retaliation claims was factual and was, therefore, inappropriate for summary judgment.
· Intentional Infliction of Emotional Distress: Defendants appear to have wrongly asserted that Plaintiffs’ emotional distress claim duplicated their Fair Employment and Housing Claim. The Court had to point out to Defendants’ DCA’s that it is established law that Plaintiffs can allege both employment discrimination and additional intentional infliction of emotional distress. Yet again, shouldn’t the DCA’s — or at least their supervisor, the City’s Chief Labor Attorney Elizabeth Salveson, who was paid $184,827 in calendar year 2012 — have known this?
Instead, the DCA’s contended the conduct in question didn’t rise to emotional distress, and was merely “rigorous, difficult training that dispatcher’s must go through.” Judge Henderson again ruled the dispute involved a question of fact that had to be presented to a jury, not determined via summary judgment.
As with Dr. Kerr’s case, the City attempted to claim that the 9-1-1 dispatcher lawsuit had not identified specific violations of law by citing a particular statute, rule, or regulation that prohibited an illegal activity that was violated by the conduct complained of. The City claimed that for a complaint to be protected and upheld, the complaint must specify violations of law by citing a relevant statute that was violated.
“The Truth [of Retaliation] Was True”
By denying seven of the Defendants’ eight claims for summary judgment, Henderson effectively moved Jane Doe and Anne Raskin v. City and County of San Francisco to trial. At trial, the jury ruled in Doe and Raskin’s favor, and they were eventually awarded the $762,000 settlement, suggesting that the City — City Attorney Dennis Herrera and his legal defense teams — often barks up the wrong tree, tossing out flaky defense strategies hoping to see what will stick on the wall.
To do that, Herrera’s team not only resorted to using ad hominem smears against Plaintiffs Kerr and Doe and Raskin, they used wrongful claims and disingenuous arguments, and ended up acting just like their clients — the Defendants.
Such strategies drive up the time and costs of litigation, costing taxpayers millions of dollars, and forcing opposing counsel and judges to wade through the muck of what is, essentially, garbage proffered as the City’s legal defense. Desperate to prevail, the City Attorney continues doing so, anyway.
“The City Attorney used every trick in the book — but the evidence of Laguna Honda Hospital’s wrongdoing was so overwhelming, that they were forced to settle,” notes Dr. Rivero. “It took us three years to convince the City Attorney — and the Court — that the truth was true,” she laments.
If Kerr’s and the 9-1-1 dispatchers lawsuits prove nothing else, the two cases demonstrate that all too often the City Attorney defends City officials against City employees and the very citizens paying the miscreant officials’ bloated salaries.
After all, between the settlement awards and the City Attorney’s costs fighting the prohibited personnel practices, we’re talking about a minimum of at least $20 million that was a completely preventable, unnecessary expense, had careless City managers who bullied City employees simply followed existing personnel law.
It’s long past time to confront the City Attorney’s spurious legal advice, which appears to be costing taxpayers millions that could be better spent on other City needs.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: firstname.lastname@example.org.
A Comical Postscript
In a comical twist of irony, City Attorney spokesman Matt Dorsey rises again.
On May 16, the San Francisco Examiner reported that the day before a former internal affairs attorney for the San Francisco Police Department — Kelly O’Haire — filed a wrongful termination and whistleblower lawsuit in San Francisco Superior Court against Police Chief Greg Shur, against the Police Department, and presumably, against the City.
O’Haire’s job involved investigating and prosecuting misconduct claims against San Francisco Police Department members, and bringing misconduct cases before the Police Commission. O’Haire alleges she was fired in retaliation for having investigated Greg Shur when he was a high-ranking official before being appointed Police Chief. She sought Suhr’s termination in 2009 for an alleged pattern of misconduct and policy violations. Following Suhr’s appointment as Police Chief in April 2011, O’Haire was terminated within a month.
Dorsey is comical: On May 15, the Marin Independent Journal carried an article by Gary Klein reporting on O’Haire’s lawsuit. Dorsey, City Attorney Dennis Herrera’s spokesman, asserts O’Haire’s lawsuit “lacks merit.” Dorsey was quoted as saying “The City Attorney is going to vigorously defend the Police Department, and we’re going to do everything we can to protect taxpayer dollars.”
This is the same City Attorney’s Office that settled the 105 prohibited personnel practice cases for the princely sum of $12.1 million, and the same City Attorney who spent $8.3 million fighting the 105 cases, for a combined waste of $20.4 million in taxpayer funds. And that’s not including the $1.3 million of taxpayer funds racked up in City Attorney time wasted during the City Attorney’s inept proceedings on behalf of Mayor Ed Lee to oust Sheriff Ross Mirkarimi for alleged official misconduct. After wasting fully $22 million, Dorsey now wants us to believe the City Attorney is trying to “protect” taxpayer dollars?
Supervisor Jane Kim noted during the Board’s vote to remove Mirkarimi that the charges against the Sheriff — developed by the City Attorney on behalf of the Mayor — did not rise to the City Charter’s definition of official misconduct, and that the Ethics Commission had not found that Mirkarimi had used his official duties to commit wrongdoing. Kim voted against removing the Sheriff, indicating that a clear, articulable test to remove public officials had not been established. To that extent, the persecution of Mirkarimi was a complete waste of $1.3 million in City Attorney time, at taxpayer expense, which appears to have escaped Mr. Dorsey.
Chances are that as O’Haire’s case plods through the court system, the City Attorney will likely mount spurious reasons for a motion for summary judgment. But O’Haire will likely prevail and will probably win a significant settlement amount, while the City Attorney wastes more taxpayer funds spending thousands of hours fighting O’Haire.
After all, this is San Francisco, where whistleblowing City employees who expose wrongdoing of high-level members of the “City Hall Family” — for example exposing the City Family’s former Director of Public Health Mitch Katz, former Housing Authority Director Henry Alvarez, and now Police Chief Greg Suhr — face 100% retaliation, bullying, and wrongful termination. Is the 100% retaliation rate a new San Francisco “value”?
The print edition of this Westside Observer article was a condensed version; this expanded version — providing additional details of the spurious rationales the City Attorney used seeking summary judgment, a status update on Kerr’s non-monetary settlements, and data regarding costs of prohibited personnel practices —Is available on-line at www.westsideobserver.com.
Laguna Honda Hospital’s Whistleblower Retaliation
The $750,000 Wrongful Termination Affair
|Retaliation against Laguna Honda Doctors reveals how the City does business|
Three years after jointly filing three whistleblower complaints with his colleague Dr. Maria Rivero, Dr. Derek Kerr’s wrongful termination settlement agreement was finally approved on second reading by San Francisco’s Board of Supervisors on March 26, awarding him $750,000 in monetary damages and other non-monetary awards.
Kerr’s settlement is one of the largest pre-trial (out-of-court) settlements in San Francisco history, although post-trial settlements have been larger.
Like many great mysteries, the great Laguna Honda Hospital Patient Gift Fund scandal of 2010 started with some curiosity, ethical concerns, and a compelling public-interest question: If the fund was nearing “bankruptcy,” what had happened to the money?
…they believed the law … which clearly prohibits termination, demotion, or suspension of City employees as retaliation for reporting waste, fraud, and inefficiencies in City government to the Ethics Commission, City Controller, District Attorney, or
When former Laguna Honda physicians Kerr and Rivero put on their detective hats, neither expected that the age old question “show us the money” would quickly result in prompt retaliation, harassment, and wrongful termination. Neither did they expect Kerr would eventually win the largest pre-trial settlement in City history.
At the outset of their sleuthing, they believed our democracy functions only when citizens know what our government is doing. Believing public participation is essential to our democratic process, the two doctors take seriously their role to speak as patient advocates.
The sordid patient gift fund mystery started with a classic example of mismanagement over a small issue — reimbursement to Dr. Rivero for a mere $100 she had spent for tacos for LHH’s Spanish Focus ward in September 2009. The taco luncheon was to celebrate Fiestas Patrias — Latin America’s Independence Day — on a ward where the majority of patients had various forms of dementia. Told that the $2 million gift fund was nearing insolvency and couldn’t reimburse her, Rivero and Kerr became gumshoes when they requested and began researching 10 years of gift fund public records on October 31, 2009.
|Official Apology from Laguna Honda to Dr. Derek Kerr: Buried in an update to the Health Commission, the apology, rarer than hen’s teeth and even more valuable, possibly saved the City more than a million dollars. Had they refused to apologize and continued through with the lawsuit, so many laws were broken that a jury would probably have awarded considerably more.|
After examining thousands of pages of public records and placing serial records requests, the pair felt they had no ethical choice but to file an Ethics complaint on March 2, 2010, which clearly documented mismanagement of the patient gift fund. Just hours after submitting copies of their whistleblower gift fund complaint with the Ethics Commission on March 4, it reached the District Attorney and retaliation against them was set in motion, after they had simply exercised their First Amendment rights to free speech.
When San Francisco Department of Public Health officials wrongly retaliated by notifying Kerr orally on Friday, March 5, 2010 that his employment would be terminated, the officials had to have done so willfully. The officials should have known that they would be violating the First and Fourteenth Amendments to the U.S. constitution, other Federal law, at least three State laws, and San Francisco’s own Administrative Code that prohibits retaliation.
This has so many themes that reverberate throughout City Hall – the influence of
private money, the misapplication of
purpose of the money, the automatic defense of incompetent administrators, and most of all the acceptance of corruption as “business as usual” all the way to the top."
If the City had hoped to silence Kerr by firing him, the retaliation backfired, leading the whistleblower doctor to not only speak out more forcefully, the retaliation led to a huge settlement when Kerr prevailed in his wrongful-termination lawsuit.
As Dr. Kerr and Dr. Rivero wrote in their July 2012 Westside Observer article, “Secret Investigations,” whistleblowers should not be silenced in the resolution of the alleged misconduct they risked their careers to challenge. But that’s exactly what the City of San Francisco attempted to do: To silence the pair of doctors.
When Dr. Kerr and Dr. Rivero filed a trio of Ethics complaints, they believed that a collection of laws would protect them from retaliation. They believed that their fundamental First Amendment rights to free speech and their Fourteenth Amendment rights to due process would protect them from exposing fraud, waste, and corruption. They believed 42 U.S.C. §1983, which provides protections for citizen’s injured by deprivation of Constitutional rights and which provides redress for violations of due process, would help protect them. They hoped that the federal Whistleblower Protection Enhancement Act of 2012 might help protect them.
They believed that California Government Code §53298, California Health and Safety Code §1432, and California Labor Code §1102.5 — which each provide separate prohibitions against employee retaliation — would protect them.
And they believed the letter of the law in San Francisco Administration Code §4.115, Protection of Whistleblowers, which clearly prohibits termination, demotion, or suspension of City employees as retaliation for reporting waste, fraud, and inefficiencies in City government to the Ethics Commission, City Controller, District Attorney, or City Attorney.
Kerr and Rivero were wrong. None of these so-called “laws” ended up protecting them, and Kerr was forced to sue after being wrongfully terminated.
“I didn’t want to sue the City,” Kerr testified to the Board of Supervisors Rules Committee on March 7, 2013. “But Dr. Maria Rivero and I stumbled upon wrongdoing involving Laguna Honda Hospital’s CEO that we couldn’t ignore,” he testified. [Editor’s Note: Kerr was diplomatically referring to Mivic Hirose, LHH’s then- and current-CEO.]
A Public Spanking: Kerr’s Settlement Award
Kerr and Rivero were represented by the law firm of Kochan & Stephenson — Deborah Kochan and Mathew Stephenson — whose law practice is devoted entirely to representing employees who have suffered discrimination, harassment, retaliation, or — as in Dr. Kerr’s case — retribution for whistleblowing.
Dr. Rivero testified, “What is the message you send when a CEO … is still in office?
It shows that you condone whistleblower
retaliation and violations of laws that
protect whistleblowers.” Rivero added,
“It shows that you will accept executives
who pilfer public funds donated to the poorest of the poor, violating a sacred trust.”
In addition to Kerr’s $750,000 settlement award, there were a number of non-monetary concessions that amount to a public spanking and public apology that are important to him, including:
- A retraction of the “Statement Concerning the Laguna Honda Gift Fund” posted on LHH’s website by Katz and Hirose on September 2, 2010 alluding to Kerr and Rivero as “detractors” who had intentionally made false or inaccurate statements regarding the patient gift fund, since the September 2010 letter presented incorrect representations of the two doctors. The retraction will be via a notice signed by the Health Department’s current director, Barbara Garcia, to be posted on DPH’s web site within 10 business days following final approval of the settlement by the Board of Supervisors on March 26, for a minimum 10-month period.
- LHH must install a plaque as soon as practicable in a clearly visible location, recognizing Kerr’s contributions to the hospital generally, and his contributions to LHH’s Hospice and Palliative Care Program in particular, in either LHH’s new Hospice or the gazebo/garden area, once it is completed.
- LHH must provide Kerr, within 10 business days of the final settlement approval, a commendation letter signed by defendant Colleen Riley, MD, and LHH’s Chief of Staff, Steven Thompson, MD, stating that Kerr was a physician in good standing and widely respected by his LHH colleagues for his skills and accomplishments as a hospice and palliative care physician, and commending his work establishing and running LHH’s hospice and palliative care program.
- LHH’s CEO, Mivic Hirose must announce at both the next scheduled meeting of the Health Commission and the next meeting of LHH’s 40-member Senior Staff/Leadership Forum, both the pending installation of Kerr’s plaque and read into the minutes the letter signed by Riley and Thompson.
- The City must provide training to LHH’s Executive Committee regarding whistleblower rights, and First Amendment rights, of City Employees.
For their part, Kerr’s lawyers Kochan and Stephenson, note: “In our experience, negotiating non-monetary terms as part of a settlement is relatively rare. But here, we believed it very important that LHH’s administration publicly acknowledge the lies they told about Drs. Kerr and Rivero, as well as acknowledge the extraordinary service the two MD’s provided to the community during their long and distinguished careers at LHH.”
As for the two doctors, the monetary and non-monetary awards help convey that their complaints had all along been valid, and that wrongful, retaliatory termination and harassment had ensued.
Dr. Kerr — a former physician in good standing at Laguna Honda Hospital for over 21 years — filed a lawsuit seeking monetary and non-monetary damages, in part, to recover his good name.
Named as defendants in his lawsuit were the City and County of San Francisco and three named individuals — Dr. Mitchell Katz, former Director of Public Health; Mivic Hirose, RN, Laguna Honda Hospital’s Executive Administrator; and Colleen Riley, MD, Laguna Honda Hospital’s Medical Director.
Legal documents filed in the case show the defendants may have been motivated by retaliatory animus towards Kerr. They subjected him to retaliation for having brought complaints related to the care of patients and services at LHH. Had Kerr’s case proceeded to trial, it is very likely a jury would have concluded the defendants had been highly motivated to silence Kerr by subjecting him to retaliatory termination — and a jury would likely have awarded him much more than three-quarters of a million dollars, if for no other reason than sympathy for LHH’s patients.
Basis of Kerr’s Lawsuit
Dr. Kerr’s Complaint for Damages and Demand for Jury Trial lawsuit filed in San Francisco Superior Court on November 16, 2010 — subsequently transferred to a Federal District Court over First Amendment freedom of speech issues — listed five causes of action for violations of Federal and State law:
- • Deprivation of his First Amendment freedom of speech activities;
- • Deprivation of due process rights guaranteed by the Fourteenth Amendment;
- • Violation of California Government Code §53298 that prohibits reprisals against employees who file complaints regarding gross mismanagement or a significant waste of funds, or an abuse of authority;
- • Violation of California’s Health and Safety Code §1432 that prohibits discrimination or retaliation against employees for initiating or participating in proceedings relating to care, services, or conditions of a long-term health facility; and
- • Violation of California Labor Code §1102.5 that prohibits retaliation against any employee for disclosing information to a government or law enforcement agency when an employee has reasonable cause to believe that the information discloses a violation of state or federal statutes, or a violation or noncompliance with a state or federal rule or regulation.
Four of the five causes of action noted that the individual defendants participated in, directed, or knew of the retaliatory termination, and they collectively failed to act to prevent it. The causes of action also alleged that the gross retaliation by the individual defendants was done with malice, fraud, or oppression, in reckless disregard of Dr. Kerr’s constitutional rights.
The Set Up: Pretext for Termination
According to Kerr’s lawyers’ “Plaintiff’s Opposition to Defendants’ Motion for Summary Judgment,” dated August 9, 2012, there were a number of reasons to suspect the defendants manufactured various pretexts to justify terminating Kerr.
It appears that Dr. Katz and Ms. Hirose had already determined by December 15, 2009 that they were going to lay off Dr. Kerr, hoping to shut him up. They needed a pretext, or pretexts, to do so, since Kerr and Rivero’s Sunshine requests on October 31, 2009 for patient gift fund records had put Katz and Hirose on notice that they were under scrutiny for a host of improper, if not illegal, practices. Hirose had to have known there was a lot at stake over her management, or mismanagement, of the patient gift fund, and that she was likely in deep trouble.
After all, by that point Kerr and Rivero had already filed in September 2009 two Whistleblower complaints about DPH contracts tainted by conflicts of interest, and had put the City on notice with their October 31 request for 10 years of patient gift fund public records that the two whistleblower doctors were serious about investigating the gift fund scandal. The defendants knew Kerr’s and Rivero’s records requests were very serious, and that the two doctors had a demonstrated record of investigating and thoroughly analyzing data. Hirose was on notice that she was under Kerr’s and Rivero’s microscope, and that it could be damaging to Hirose’s career.
Much of the City’s defense regarding Kerr’s termination was pretextual — pretexts the City manufactured to justify his dismissal, but were actually pretexts for retaliation. The pretexts to lay off Kerr included false claims that:
- Kerr was terminated as a mid-year budget savings reduction, claiming a budget crisis. During FY 09-10, DPH had nearly 8,000 employees on its payroll, but only one employee — Dr. Kerr — was terminated, ostensibly to “save money.” Notably, LHH’s Medical Services Department staff increased by 10% after Kerr’s layoff, and the physician who replaced him — Dr. Denis Bouvier — quickly zoomed to being the City’s highest-paid employee, earning $332,000 that year. In addition, the City added a Clinical Nurse Specialist, Anne Hughes, RN, PhD, to the Hospice’s budget, paying her $160,000 annually. LHH’s expenses on Hospice, and throughout the hospital, went up after Kerr’s “mid-year budget reduction” layoff. Obviously, money wasn’t the problem, but a clear pretext for retaliation.
- Kerr had limited himself to a 25-patient case load and was unwilling to take on additional patients, even if keeping his job depended on it.
- The hospice physician in the new hospital would have to carry a 60-patient case load, which didn’t apply to doctors on admitting wards, such as the Hospice where Kerr was an admitting physician.
- Kerr wouldn’t cover wards outside the Hospice, clearly disproven during depositions.
- The hospice would be undergoing a “fundamental program change,” which Hirose eventually testified there had never been any discussion about a “program change.”
- Kerr was terminated for budgetary reasons, which was false because when Kerr left LHH in June 2010, he was immediately replaced by another budgeted physician.
Another glaring pretext was Hirose’s claim that her decision in mid-December 2009 to terminate Kerr was based on information Dr. Riley had provided indicating Kerr was unwilling to take on covering additional Wards.
During depositions, Riley indicated that she hadn’t reported to Hirose Kerr’s reluctance to take on additional ward coverage until late February 2010, and that she, Riley, had never asked Kerr if he was willing to take on more patients if retaining his job depended on it.
During Hirose’s own initial deposition, she was unable to explain the impossibility of knowing in mid-December 2009 an allegation about Kerr from Riley, since Riley testified she had not shared this information with Hirose until late February 2010. The conversation with Riley that Hirose claimed to have relied on to terminate Kerr wouldn’t happen for at least a month until after she and Katz had already cooked up a pretext to eliminate Kerr.
In a follow-up to Hirose’s deposition nine months after her first deposition, Hirose sill couldn’t explain the “timing problem” that had made her explanation to terminate Kerr clearly impossible, given Riley’s false claim that Kerr wouldn’t take on additional patients. As set-ups and pretexts often are, Hirose’s claim that Kerr wouldn’t provide additional Ward coverage was completely insane.
Depositions: Discovery Mountain
Given public records in the case, the mountain of evidence against the City obtained during discovery and depositions in Kerr’s case was appalling.
During depositions and discovery, one defendant after another was crushed. Kerr’s lawyers deposed a dozen or so City employees; the City Attorney, in return, deposed only Kerr and Rivero. The City didn’t bother deposing Kerr’s union, UAPD, knowing that the union’s deposition would likely be damaging against the City. Kerr’s lawyers obtained approximately 3,000 pages of documents and issued multiple interrogatories.
Eventually, the City realized how bad their case looked for Laguna Honda and the Department of Public Health after its own witnesses performed poorly during depositions, and when plenty of smoke rose during discovery.
The City stonewalled Kerr’s lawsuit for two years, until his case was finally scheduled for jury trial on November 13, 2012. In mid-summer 2012, the City submitted a Motion for Summary Judgment that would have effectively dismissed Kerr’s case had the motion succeeded. Kerr’s lawyers submitted a Plaintiff’s Opposition to the City’s Motion for Summary Judgment on August 9, stating that given the “genuine issues of disputed fact … the defendants’ motion for summary adjudication … should be denied.”
Judge Claudia Wilken denied the City’s Motion for Summary Judgment in part and approved it on other parts in a 47-page ruling dated September 6, 2012. Wilken’s Order Granting In Part And Denying In Part Motion For Summary Judgment noted: “Plaintiff has offered sufficient evidence that he disclosed to his government employer possible violations of state or federal law based on the conflicts of interest involving Dr. Ja and Ms. Sherwood in [Kerr and Rivero’s] “A Job Half Done” critique, and that this was causally connected to his termination.”
Wilken also wrote: “[Kerr’s] media and formal complaints about the mismanagement and misuse of the Gift Fund also implicated several state laws … However, the public records requests related to the Gift Fund did not show any reasonable belief on Plaintiff’s part that he was disclosing alleged violations of [several] sections [of California’s Business and Professional Code]. The media reports about the Gift Fund were not complaints directed to a government or law enforcement agency, as required to come under the protection of [California Labor Code] section 1102.5(b).”
Wilken’s partial denial — which kept Kerr’s lawsuit alive and headed to jury trail — suggests the City then knew it had to settle with Kerr or risk a jury’s outcome, since it appeared Kerr had a potentially valid case. Only when the City realized it was on notice to proceed to jury trial did it conclude negotiating an equitable settlement with Kerr.
Laughably, the defendants appeared to have argued that Kerr’s speech was not protected by the First Amendment because it “did not address matters of public concern,” and would not reach the public at large, as if the raid of funds intended for patients didn’t concern public donors to the fund. The City also lamely tried to exonerate the defendants by claiming that Kerr’s and Rivero’s serial requests for gift fund records was not protected speech because it was “nothing more than a request for [public] information.” To support its defense, the City ignored that defendant Hirose had lied repeatedly about the status of the Gift Fund as it existed in late 2009, according to legal documents.
The City also attempted to exonerate Director of Public Health, Mitch Katz, claiming Katz wasn’t a policymaker “decider,” he was simply a decision-maker. Katz had delegated to Hirose the decision of which staff to lay off (terminate), but Kerr’s lawyers adroitly noted that layoff decisions were within the sole discretion of the Director of Public Health, Katz, responsibility for which could not be avoided by delegating that decision to Hirose.
The City also attempted to assert that the Civil Service Commission, not the DPH’s Department Head, had final policymaking authority to remove Kerr, though that assumption is supported neither by facts nor applicable law, since appointments of doctors are exempt from Civil Service merit system protections and, instead, serve at the pleasure of their appointing authorities.
The defendants conceded that Katz made a deliberate choice fingering Kerr for layoff from among several competing proposals on how to implement mid-year budget reductions. Katz could have, but failed to, rescind Kerr’s layoff notice. Instead, Katz participated in, and explicitly supported, Hirose’s decision to terminate Kerr.
Commenting on the discovery and deposition process, Kerr’s lawyer Deborah Kochan says, “The deceitfulness and small-mindedness exhibited by members of LHH’s administration and its Human Resources Department was, at times, breathtaking.”
“The City was boxed in by the inconsistent accounts of its own witnesses and the absolute nonsense of some of their testimony on critical issues,” adds Kochan’s law firm partner, Mathew Stephenson.
Acting Under “Color of Law”: A Federal Crime
42 U.S.C. §1983 provides that every person acting under the “color of law” who causes any United States citizen to be deprived of any Constitutional rights shall be liable to the party injured. “Color of law” involves actions taken that superficially appear to be within an individual’s lawful power, but are actually in contravention of the law. Acting under “color of law” is misuse of power, since it involves acting under real or apparent government authority by people who misuse their authority to violate rights guaranteed by federal law. Depriving a person of his or her federal civil rights under color of law is illegal and grounds for a cause of legal action.
The City acted under the color of law when it deprived Dr. Kerr of his First Amendment rights to freedom of speech. He was terminated, in part, because he had spoken out on various matters of public concern; he had spoken as a private citizen, not as a public employee; and his protected speech was a substantial or motivating factor in the City’s termination of him.
By reaching a settlement agreement with Kerr for monetary and non-monetary damages, the City has effectively acknowledged that Riley, Hirose, and Katz had engaged in misuse of power and misuse of their authority, depriving Kerr of his Federal civil rights. Despite this, Riley and Hirose are still employed at Laguna Honda Hospital, while Dr. Katz suddenly and mysteriously vanished.
Katz abruptly moved to Los Angeles after the LHH patient gift fund scandal exploded, and after Kerr and Rivero had filed their complaints about tainted DPH contracts. Katz’s sudden departure may have been coincidental, but it was completely odd, given he had previously stated he wanted to remain as Director of Public Health until the rebuild of the new San Francisco General Hospital was completed. It’s unknown whether the City Attorney, or other City Hall Family insiders, had advised Katz to quickly resign when the issue of his HMA consulting fees income became widely known.
During the Board of Supervisor’s Rules Committee meeting on March 7, 2013 at which it recommended approval of Dr. Kerr’s settlement agreement, Dr. Rivero testified, “What is the message you send when a CEO [such as Hirose] who retaliated against a whistleblower is still in office? It shows that you condone whistleblower retaliation and violations of laws that protect whistleblowers.” Rivero added, “It shows that you will accept executives who pilfer public funds donated to the poorest of the poor, violating a sacred trust.”
That Hirose and Riley remain employed at LHH is shocking in a City that pays a lot of lip service claiming it believes in transparent, open government and public accountability.
Series of Whistleblower Complaints
Drs. Rivero and Kerr filed three complaints through the Controller’s Office and the Ethics Commission regarding fraudulent practices in the Department of Public Health, including:
- On September 18, 2009, Kerr and Rivero filed their first complaint alleging an improper award of a contract to a City employee’s relative, regarding what became known as the “Ja Report.” In July 2009, Davis Ja and Associates prepared a report examining mental health services for LHH’s residents; defendant Hirose served on the selection panel that awarded Ja his first contract to survey LHH. The Ja Report recommended replacing Laguna Honda doctors with social workers, psychologists, and nurses.
Drs. Kerr and Rivero regarded the reduction in the number of physicians as a threat to, and would negatively impact, the quality of patient care. The Ja report was so deeply flawed that Kerr and Rivero co-authored a 25-page Critical Analysis: The Ja Report – A Job Half Done, highlighting the flawed methodology of Ja’s report and recommendations. Of 22 physicians on LHH’s regular Medical Staff, 20 (91%) co-signed a petition supporting Rivero’s and Kerr’s thoughtful Critical Analysis, which detailed serious, ethical conflicts of interest involving several high-level managers in the Department of Public Health. Subsequently, Ja was awarded an additional multi-million dollar contract.
Kerr and Rivero then discovered the additional contract had more than likely been steered to Ja by his wife, Deborah Sherwood, a senior manager in the Health Department’s Community Behavioral Health Services unit. Despite the two doctors’ numerous attempts to bring this improper and probably illegal contract award to the attention of City officials, nearly two years after filing their whistleblower complaint regarding Ja, the City Controller finally stepped in and abruptly terminated Ja’s additional contract, withholding over $400,000 in remaining contract funds.
- Three days later, on September 21, 2009, Kerr and Rivero filed a second complaint alleging that the then Director of Public Health, defendant Mitch Katz, may have engaged in a conflict of interest by accepting — according to FPPC public records — somewhere between $30,000 and $300,000 in consulting fees from Health Management Associates (HMA), a City contractor performing consulting services for the Department of Public Health. Both San Francisco’s Conflict of Interest policies and the California Political Reform Act prohibit government employees from participating in making of contracts with companies in which they have a financial interest.
- On March 2, 2010, Rivero and Kerr filed their third complaint regarding the raid of LHH’s patient gift fund, which scandal has been thoroughly reported in past issues of the Westside Observer over the past three years. The scandal was also broadcast in two KGO I-Team investigative reports in May 2010, which defendants Katz and Hirose had viewed, and which Katz and Hirose had responded to by publically posting on LHH’s web site a statement that Kerr and Rivero were mere detractors who were making false statements.
The two doctors had discovered that patient funds had been quietly diverted to three separate accounts for staff perquisites and amenities, and increasingly used for the “comfort and benefit” of staff and administrators, instead of patients. This feat was engineered by LHH’s then Executive Director, John Kanaley, who had quietly authorized setting up accounts for staff training within the patient gift fund, and had permitted inter-account transfers for staff amenities.
The City Controller’s audit of the clear misappropriation of charitable contributions intended for patient amenities languished for months, but the Controller’s highly-publicized audit finally ordered in November 2010 return of $350,000 improperly removed from the gift fund. [Editor: The City Controller’s restoration of funds to the patient gift fund is available in the Westside Observer’s December 2010 issue, at “Controller Restores $350,000 to Laguna Honda’s Patients.”]
Who Are These Two Doctors?
Rivero and Kerr take their professional and ethical obligations as doctors seriously. They passionately believe, having taken the Hippocratic oath to first do no harm, that among their responsibilities is to fully embrace advocating for patients.
Derek Kerr, MD, CNA attended Harvard Medical School, did his residency at Harlem Hospital and his Oncology Fellowship at Memorial Sloan-Kettering Cancer Center. He has the rare distinction of being Board Certified in three separate medical specialties: Internal Medicine, Medical Oncology, and Hospice and Palliative Medicine. Following his medical education and years of practicing medicine, he went back to school and became a Certified Nursing Assistant in 1988 to better understand patient care from a nursing perspective. Kerr was the Attending Physician of Laguna Honda’s Hospice for 21 years, was listed as LHH’s Palliative Care Consultant on the Medical Staff roster, and had been the Attending Physician assigned to LHH’s “Hospice and Palliative Care” service since 1994. During his tenure, LHH’s Hospice was widely acclaimed, receiving a national award. Kerr was Chair of the Bioethics Committee at Fairmount Hospital prior to employment at LHH.
Maria Rivero, MD, FACGS, graduated from UCSF Medical School and completed her residency at Beth Israel Hospital/Harvard Medical School. She is Board Certified in both Internal Medicine and also Geriatrics, and is a Fellow of the American College of Geriatrics Specialists. She also has been a Certified Eden Alternative Associate since 1998. Rivero worked at Laguna Honda Hospital for 22 years, and served as LHH’s Medical Director and its Assistant Medical Director between 1997 and 1999.
As former co-workers at LHH, Rivero and Kerr were highly regarded by hospital staff as among the best doctors in the hospital. As a team, they became whistleblowers at great professional risk to their careers; their core belief in ethical behavior led them to become whistleblowers, even though they never imagined initially that they would ultimately become involved in exposing fraud and corruption.
Correcting the Record: “No One Spoke Up”
In April 2012, as Kerr’s lawsuit dragged on, another former physician at Laguna Honda Hospital, Dr. Victoria Sweet, published her 348-page memoir about the hospital, titled God’s Hotel, which was riddled with errors and which, among other flaws, contained not one date to place her reporting into chronological or historical perspective. Among many other errors, Sweet incorporated three glaring untruths about Dr. Kerr. Sweet should have known better, since events in Kerr’s lawsuit had been unfolding for fully two years before she published her memoir. Sweet never bothered fact checking with Kerr or Rivero during the years she spent writing her memoir.
First, Sweet wrongly reported that a “Dr. Talley” — the pseudonym Sweet assigned to Laguna Honda’s medical director, Dr. Colleen Riley, one of the named defendants in Kerr’s lawsuit — claimed that it had been she, Dr. Talley, who had made the decision to terminate Dr. Kerr. Sweet reported that “Dr. Talley” announced during her first meeting as Medical Director of Laguna Honda’s medical staff, that it had been “entirely her decision” to lay off Dr. Kerr, and that then Director of Public Health Mitch Katz and LHH’s Executive Administrator Mivic Hirose had had nothing to do with the decision to terminate Kerr.
In fact, Mivic Hirose herself has claimed elsewhere that it was entirely her decision — not Dr. Riley’s — to terminate Dr. Kerr. Indeed, during depositions in Kerr’s case, it appears that Katz and Hirose decided on December 15, 2009, or earlier, to lay off Dr. Kerr, several weeks before Riley was appointed Medical Director at the end of December. When she learned of Katz’s and Hirose’s decision to target Kerr, Riley did nothing as Medical Director between January and March to stop the clear retaliation.
Next, Sweet wrongly opined that one of Dr. Kerr’s “principles” was that he would only take care of his own patients [at LHH, and that] he “almost never took call, or helped out, or covered other wards. So no rebellion broke out [when Kerr was terminated], and no one spoke up [when the Bell Tolled for Dr. Kerr].” But during discovery in Kerr’s case, LHH produced Ward Coverage Schedule records showing Kerr had, indeed, often provided coverage on other wards, took call, and often “helped out.” During depositions, Kerr’s lawyers showed that Kerr had, in fact, performed ward coverage, even more so than Dr. Riley had in some years. Other doctors also testified under oath that Kerr had done his share of coverage.
Sweet’s claim no one spoke up, and no rebellion broke out was a complete lie. A second petition opposing Dr. Kerr’s and Dr. Bouvier’s proposed layoffs — which requested both layoffs be rescinded — was signed by 16 physicians, including Dr. Sweet herself. The second petition, a “Statement of Concern,” was sent to defendant Dr. Colleen Riley and to Steven Thompson, MD, the Chief of Staff of LHH’s Medical Service, who forwarded it to Ms. Hirose.
Of the 20 doctors on the regular staff (excluding MD administrators), Kerr had 18 supporters, 16 of whom signed the petition — representing 80% — who were strongly opposed to Kerr’s layoff; thus, well over three-quarters of the regular Medical Staff had indeed spoken up, which Sweet had to have known but elided. [Although Bouvier’s layoff was rescinded and he went on to become the City’s highest-paid employee, Kerr’s layoff wasn’t rescinded.]
In addition, despite the environment of fear among LHH staff resulting from the culture of intimidation generated by LHH’s administration, all six members of the Hospice team risked their careers by signing and submitting a letter of support opposing Kerr’s layoff. Along with Rivero, the Hospice’s nurse manager, its social worker, and Dr. Monica Banchero-Hasson and Dr. September Williams also risked their careers by publicly testifying against Kerr’s layoff at a meeting of a Health Commission subcommittee — LHH’s so-called Joint Conference Committee made up of senior hospital administrators and three Health Commissioners.
Dr. Williams — a nationally recognized expert on Ethics, and a member of LHH’s Bioethics Committee — stated during the LHH-JCC’s March 23, 2010 meeting that she “protests the layoff of Drs. Kerr and Rivero because it will impact the provision of quality care to Laguna Honda’s most vulnerable and needy residents, and is against the principles of beneficence.” Sweet had to have known of the groundswell of support by those who, in fact, did speak up defending Kerr.
Third, Sweet also misreported the sequence of Kerr’s lay off and the timing of filing of his whistleblower complaints. Sweet sloppily reported Kerr had filed a whistleblower [law] suit “the day after his layoff … ‘alleging’ that his investigation of the drained Patient Gift Fund was the reason he was laid off.”
Sweet had to have known Kerr wasn’t making a mere “allegation,” since many of LHH’s physicians knew of the problems with the patient gift fund. The major story that Sweet completely elided from her memoir and which she had to have known of, was that everyone — including doctors on LHH’s medical service — knew Kerr was being eliminated in an act of retaliation.
In fact, the timeline shows that Kerr and Rivero submitted their patient gift fund whistleblower complaint to the Ethics Commission at 12:02 p.m. on March 4, 2010, which was promptly faxed to San Francisco’s District Attorney. Two hours later, Dr. Riley confirmed during a Medical Staff meeting that the only planned physician cut was a previously announced cut of a half-time position that wasn’t Dr. Kerr’s position.
But three-and-a-half hours later on the same day, March 4, Kerr’s Union (the Union of American Physicians and Dentists) was informed by LHH’s H.R. department that Kerr would be receiving a permanent layoff notice. Kerr was orally notified of his layoff on Monday, March 8 and was handed the printed layoff notice that was signed on Friday, March 5. It was ten days later — not one day later under Sweet’s misuse of literary license — when Kerr filed a Whistleblower Retaliation Complaint (not a lawsuit) with San Francisco’s Ethics Commission. Sweet should also have known that it was fully eight months later, on November 16, 2010, when Kerr filed his wrongful termination lawsuit in Superior Court, not the day after receiving his layoff notice, as she deliberately misreported.
Lightning Strikes Twice
The wrongful termination of Kerr in 2010 follows on the heels of Laguna Honda Hospital’s wrongful termination of Dr. John Ulrich, Jr. in 1998. Ulrich — who had also spoken up in 1998 about patient care during a Laguna Honda medical staff meeting and called the health department’s decision to cut two medical staff positions “an injustice to patients” — was summarily terminated by Laguna Honda Hospital, just as was Dr. Kerr. Ulrich was forced to sue the City, after the state medical board had cleared him of any medical wrongdoing and found no problems with Ulrich’s care of patients.
Ulrich, whose case had advanced to jury trial, won a $4.3 million judgment in federal court in 2004, subsequently reduced to a $1.5 million negotiated settlement. As the Pittsburgh Post-Gazette newspaper reported in its June 24, 2004 issue, a U.S. District Court of Northern California jury concluded that LHH “had violated Ulrich’s first amendment rights to free speech, and denied him a fair hearing to clear his name.”
Strikingly, the then San Francisco City Attorney spokesperson, Matt Dorsey, claimed in 2004 that Ulrich’s dismissal was “not an instance of reprisal.” Dorsey went on to claim there was “not a shred of credible evidence to indicate wrongdoing on the part of the City.” Dorsey foamed, “We consider this outcome [Ulrich’s award] an aberration.”
A decade later, Dorsey is still the City Attorney’s spokesperson. Given Kerr’s settlement, it’s clear Dorsey may be unable to distinguish an aberration from a clear pattern.
Given Kerr’s precedent-setting settlement award, it’s also clear there is a past- and current-practice pattern documenting that LHH’s senior management engages in wrongful termination and willful retaliation against employees who exercise their First Amendment rights to free speech.
The pattern isn’t limited to just Laguna Honda Hospital; it happens all too frequently in many City departments.
The Costs of 100% Retaliation
The Ethics Commission did nothing to protect Kerr’s career after he submitted his patient gift fund whistleblower complaint with Dr. Rivero. Instead, he was told to get a lawyer, and Ethics took two years to complete investigating Kerr’s complaint.
“In retrospect, a lawsuit was our only hope, because Ethics hasn’t sustained a single whistleblower retaliation claim since it was founded, not one,” Kerr laments. “Many studies show that reprisals against whistleblowers are common, with retaliation rates up to 90%. But with San Francisco’s Ethics Commission, the retaliation rate is always zero,” Kerr says.
Kerr was referring to the fact that in November 2012 the City Attorney’s Office reported that between 2007 and 2012, the City settled 103 cases involving prohibited personnel practices for a total of $11 million, including wrongful, retaliatory termination; racial-, age-, and disability-discrimination; sexual harassment; and other prohibited personnel practices.
Despite the City Attorney having concluded that at least 13 wrongful termination settlement cases have cost the City $1.3 million since 2007, San Francisco’s Ethics Commission has dismissed every whistleblower retaliation complaint filed at Ethics. Ethics has “dismissed” at least 18 cases alleging prohibited retaliation, for a 100% “clearance” rate, hoping to suggest there is zero retaliation against City employees. Studies show that nationwide, retaliation against whistleblowers is common, with rates up to 90%.
Only in San Francisco would our Ethics Commission dismiss every retaliation complaint received, claiming that zero retaliation ever occurred. Despite Ethics’ nonsense that there have been zero retaliation cases, it appears that, in fact, San Francisco may well have a 100% retaliation rate.
Prominent San Francisco open government, public-interest, and accountability advocate James Chaffee — who was an inaugural member of San Francisco’s Sunshine Ordinance Task Force serving as its first Vice Chair, and is now affiliated with San Francisco’s ad hoc Sunshine Posse — wrote to the Board of Supervisors on March 30, 2013, noting “Dr. Kerr’s case has many themes that reverberate throughout City Hall — the influence of private money; the misapplication of purpose of the money; the automatic defense of incompetent administrators; and, most of all, the acceptance of corruption as ‘business as usual,’ all the way to the top.”
Drs. Kerr and Rivero, for their part, hope some public benefit will come from the delayed justice they have endured.
As William Bennett Turner, a faculty member who teaches courses on the First Amendment at U.C. Berkeley noted in his book “Figures of Speech: First Amendment Heroes and Villains” published last year, First Amendment heroes are those who say what they believe, and have the courage to face the consequences.
Villains — such as the defendants in Kerr’s lawsuit — are those who want to suppress free speech that they disagree with.
Kerr and Rivero accidentally became First Amendment heroes. We owe them a debt of gratitude for risking their careers exposing fraud and corruption, and for advocating on behalf of LHH’s patients, who are often the poorest of the poor.
Kerr’s monetary and non-monetary settlement awards don’t begin to adequately reimburse him for the damage to his and Rivero’s careers. But there’s a vast community grateful for his and Rivero’s courage to speak out.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: email@example.com.
On March 26, 2013 — at the same hour that the Board of Supervisors voted to approve Kerr’s monetary and non-monetary settlement terms — Drs. Kerr and Rivero, and this reporter, instead attended a meeting of the LHH-JCC (Joint Conference Committee), consisting of three Health Commissioners and LHH’s senior leadership, which meets every other month.
Following Hirose’s customary Executive Administrator’s report, the JCC took public comment. Kerr, for his part, testified that bullying and getting rid of whistleblowers is both counter-productive and illegal. As he began to testify that his retaliation settlement agreement requires that LHH’s Executive Committee be provided a one-hour training on employee’s whistleblowing and First Amendment rights — which training Kerr feels should be expanded to all LHH senior managers — Hirose began to openly smirk, just seconds after I took this photo.
I blurted, quite out of order, “There’s nothing funny about this Mivic, why are you smirking?” She quickly wiped the smirk off of her face, glaring at me, obviously not contrite. Hirose clearly doesn’t get it, or seem to understand the gravity of the $750,000 settlement plus the City Attorney’s hefty legal fees spent defending the pretext that Hirose, Katz, and Riley were was innocent of retaliatory termination. Maybe she thinks money grows on trees in LHH’s new orchard.
Next, Dr. Rivero testified on March 26 that a recent Coalition on Compassionate Care award to LHH’s Hospice and Palliative Care Service tells a different story than Hirose’s and LHH’s new press release. Rivero noted that the award honors 25 years of hospice care, which couldn’t have happened without Kerr’s 21 years as Hospice physician. Rivero testified that it is shameless self-promotion to aggrandize LHH and Anne Hughes, RN, by ignoring the founder of the hospice program, Dr. Kerr.
Later, I testified that the City’s and Defendant’s defense pretext that Hirose was innocent is over, or Kerr’s settlement deal would never have been reached. Hirose has clearly cost taxpayers over $1 million — at minimum — between Kerr’s $750,000 settlement and the $350,000 ordered restored to LHH’s patient gift fund.
I testified that the Health Commission should recommend that DPH terminate Hirose at once, the sham of her “I’m innocent!” pretext being over.
But there were just more smirks and blank stares all around the table.
As Mr. Chaffee has noted, the acceptance of corruption as “business as usual, all the way to the top,” is what runs San Francisco’s so-called “City Family.” Just ask the current mayor. Or our former mayor, Willie Brown, who both probably view the $11 million in prohibited personnel actions and wrongful termination settlements awarded during their tenures as mayor— and the ensuing damage to the careers of innocent employees — to just be a cost of doing corrupt business-as-usual. Between corrupt friends, perhaps $11 million is considered chump change.
The High Cost of City Government
Voracious Management Salaries Rob the City’s Lowest-Paid Workers
Even while skyrocketing salaries for upper management in San Francisco City government now costs $1.6 billion, excluding fringe benefits, the City has proposed imposing a “reverse pay equity” (pay cut) for 45 lower-paid job classification codes for new hires, creating a two-tiered salary structure for performing the same work.
Bloated salaries for San Francisco’s top City managers contribute significantly to the purported $4.4 billion in so-called unfunded City pension contributions, since City salaries drive pensions paid out.
Warning: Taxpayers who want to know what our local government is up to with our tax dollars, extensive salary data is presented ahead, which clearly shows City Hall's penchant for robbing from the lowest-paid in order to feed the voracious appetite of upper-management salaries. It's a story of robbing form the poorest to feed the already reich.”
Inequities in salaries of City employees deserve a close look-see, since nearly one-quarter — 7,327 — of all City employees are half-time or less, employees who averaged just $12,492 in annual base pay in FY 10-11. Fully 32 percent — 11,783 City employees — earned less than $50,000 in base pay in calendar year 2012, averaging just $22,491 in total pay.
Contrast that to the glut of City staff who in calendar year 2012 earned over $100,000 in base pay — 7,864 such employees, or 21.6 percent — who averaged $124,715 in base pay and averaged a staggering $143,131 in total pay. Or contrast it to the 12,309 employees — 33.5% — who earned over $90,000 in total pay in calendar year 2012, averaging $110,473 in regular pay and $129,622 in total pay.
Given the salary inequities between the lowest- and highest-paid City employees, the stench of probable political patronage using taxpayer funds begins to waft through the air.
Chops to the Lowest Paid
The City has proposed trimming 10% from new-hire salaries for payroll and personnel clerks, certified nursing assistants, and hospital eligibility workers, claiming they are overpaid compared to the Bay Area market. The City also proposes a seven-and-a-half percent pay cut for psychiatric technicians, child support officers, legal process clerks, legal secretaries, psychiatric social workers, and museum guards. The City also wants its pharmacists, custodians/porters, medical social workers, various health care workers, employment and training specialists, and diagnostic imaging technicians to take five percent new-hire pay cuts.
At the same time, the City is not proposing pay cuts from the 722 senior managers earning more than $90,000 in base pay in the 0900-series of management job classifications, who averaged $136,242 in base pay.
Between calendar years 2008 and 2012, the City has already eliminated 734 positions across the 45 job classifications the City now proposes to cut salaries of, pocketing $20 million to $30 million in base pay from the lost 734 positions, and probably transferring the duties to higher-paid employees. Should its new pay cut proposal prevail for the 45 job classifications, the City may realize approximately $13.7 million in additional “salary savings” — albeit, spread across several decades — through attrition and replacement with new hires who will be paid at the lower salaries.
At the end of June 2011, the 3,864 employees remaining in these 45 job classifications earned average base-pay salary of just $49,061. Of the 3,864 remaining, fully 18%, nearly one-fifth, worked less than half-time status, averaging salaries of just $12,389. Only 49.5 percent of employees in these job codes worked full-time, at an average salary of $60,913. The City will likely convert many of the new hires in these job classifications to part-time status, and extract pay cuts of up to ten percent from half-time employees who are already averaging just $12,389 in base pay.
This follows on the heels of “de-skilling” of clerical and secretarial employees in the 1440-series, who forfeited 452 positions between calendar years 2008 and 2012, allowing the City to pocket another $13.4 million in salaries. “De-skilling” involves assigning the work of higher job classification clerical employees to lower-paid clerical staff — or alternatively, of handing the work of skilled clerical employees to highly-paid management staff, where the work is performed for much higher pay, if at all.
In FY 2010-11, the City’s 1,600 clerical employees in the 1400-series job classification codes averaged just $42,026 in base pay, but the sad fact is that of those 1,600 clerical employees, 21 percent worked less than half-time and averaged just $7,970 in base pay.
Combining the 452 clerical positions eliminated between calendar years 2008 and 2012, and the 734 positions already eliminated from the 45 job classification codes, the City has eliminated at least 1,186 lower-paid and part-time positions, pocketing between $33 million and $50 million, which the City then used to increase the number of, and salaries of, highly-paid managers.
Much of the work formerly performed by clerical workers has been given to far-higher-paid managers, although the City has attempted to hire so-called “as needed” public service aides to fill the gap. Knowledgeable and experienced clerical workers are being replaced by aides.
In the three-year period between FY 08-09 and FY 10-11, the City added 587 part-time public service aides in the 9900-series job classifications to replace the 452 clerical employees eliminated in the 1440-series, bringing the total number of public service aides to 1,309, of whom 1,211, 92.5 percent — work less than half-time (so the City doesn’t have to pay them any fringe benefits), and who averaged just $4,590 (yes, less than $5,000 each, on average) during FY 10-11.
The City has also forced many of the higher-skilled secretaries formerly in the 1440-series into the lower-paid 1406 Senior Clerk classification. During the same time period of the public service aide hiring binge, the City added 106 additional 1406 Senior Clerks, who now average just $43,665 in base pay; 12.4 percent of the now 201 Senior Clerks work less than half time, averaging just $10,543 in base pay annually.
Another example, to be clear, of the part-time direction the City is headed in, is that 494, 21.2 %, of 2,330 Muni drivers earned average salaries in FY 10-11 of just $11,030, having worked less than 1,040 hours, which is half-time, or 0.5 FTE (“full-time equivalent”) status.
Across all job classification codes in FY 10-11, fully 21.3 percent, 7,327 City employees, were half-time (or less), averaging just $12,492 annually in base pay. They stand in stark contrast to the 7,864, or 21.6 percent, of employees who earned over $100,000 in base pay and averaged $143,131 in total pay.
Excesses for the Highest Paid
After former Supervisor Tom Ammiano first noted in 2003 that City managers earning over $90,000 were a problem, voracious management salaries have climbed steadily upward for over a decade. Indeed, on February 20, Matier and Ross lamented in the San Francisco Chronicle that the days when it was news that a handful of City managers were earning $100,000-plus salaries were long gone — now such highly-compensated employees has somehow become acceptable.
Matier and Ross reported that approximately 572 San Francisco city employees are paid more than Governor Jerry Brown’s $173,987. Indeed, San Francisco does have 379 City employees who were paid more in base pay in 2012 than the governor earned; those 379 averaged an astounding $193,415 in base pay each, sucking out a combined $78.6 million in total pay from the City’s payroll. They also reported that 195 City employees made more than $200,000, and that one quarter of City employees make more than $100,000 without overtime.
Across the decade since 2003, the City has added another 553 managers in the 0900-series job classification codes, bringing the total to 722 of such managers in 2012. Of the 722 managers, we have 570 in the 0922 to 0943 manager series (up to Manager VII), and another 131 Deputy Directors of Departments and Department Heads (Deputy Directors I through V and Department Heads I through V) in the 0951 to 0965 series, even though the City’s core business has not changed sufficiently in the past decade to warrant the hiring of 533 more managers in these job classifications. This single increase costs taxpayers an additional $82.4 million annually, and now costs at least $101.5 million in base salary alone for the 722 incumbent senior managers.
Why does San Francisco need at least 722 senior managers — or more, since there are many other job classification codes that include the word “manager” in their job titles — to run just (approximately) 60 City departments?
Matier and Ross failed to note that in the five years between 2007 and 2012, the City felt the need to add an additional 1,461 employees earning over $150,000 in total pay, at an increased cost of $269.3 million. The City now has 2,777 employees earning over $150,000 annually in total pay, at a combined cost of $496.1 million.
While City Hall turns a blind eye towards the City’s $4.4 billion in purported unfunded pension contributions, it is simultaneously turning a blind eye to the ever-escalating unfunded liability of salaries for top City managers who apparently feel an entitlement to excessive salaries. Their top salaries drive top pensions, just as night follows day.
Until taxpayers say enough is enough, expect these City managers to keep earning far more than our State governor, the president of the United States, and private sector CEO’s, while the City’s lowest-paid workers are robbed of their jobs, or face drastic pay cuts.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: firstname.lastname@example.org
Laguna Honda’s Continuing Scandals
A Sordid Tale of Two Non-Profits
The recent sordid history of two non-profits that purport to serve residents of Laguna Honda Hospital (LHH) appears to have resulted in the dissolution of one of the non-profits, declining contributions to the hospital from the other, and an eight-year low in public contributions to Laguna Honda Hospital’s patient gift fund.
“We were so shocked at being driven out of Laguna Honda, right after reporting irregularities with the Patient Gift Fund in 2010, that we figured we had touched on major violations that Laguna Honda and the Department of Public Health were desperate to hide,” former Laguna Honda Hospital physicians Dr. Maria Rivero and Dr. Derek Kerr said.”
All of this may have been avoidable. But a confluence of factors appears to have contributed to unintended consequences for all three programs. Former City Attorney Louise Renne’s unfortunate statements in June 2004 may have set the stage for their downward trajectory.
Renne—who claims that she was responsible for the ground-breaking lawsuit against tobacco companies that provided much of the rebuild funds, when it was former Supervisor Angela Alioto who accomplished that feat—and though she failed to raise a single dime towards new furnishings for the rebuilt hospital, Renne was awarded an engraved plaque in Laguna Honda’s new facilities.
Renne appears to be finally throwing in the towel, and is reportedly dissolving her foundation following an apparent investigation by the Registry of Charitable Trusts, a division of California’s Attorney General.
RIP Laguna Honda Foundation
In response to a fairly innocuous “show us the money” request placed on January 13 by this Observer columnist for audited financial statements of Ms. Renne’s Foundation, Melanie Beene, CEO and President of Community Initiatives—the “fiscal sponsor” handling the books of Renne’s non-profit Foundation—responded unexpectedly on January 14, that Renne’s foundation is no longer a sponsored project of Community Initiatives.
This loss means Renne can no longer shield her Foundation’s revenues and expenses by aggregating them under lump-sum reporting by Community Initiatives to the IRS. She has lost her IRS cover.
Beene also volunteered that, to the best of her knowledge, the Foundation is dissolving.
By mid-week, a source who spoke on condition of anonymity reported that the Attorney General’s office—presumably the A.G.’s Registry of Charitable Trusts that oversees operations of non-profits in California had either investigated or audited the Foundation.
The source further reported that Renne’s Foundation may have had to return a $50,000 grant to one of its donors, and may have expended the last of the foundation’s funds responding to the A.G.’s investigation. The A.G. noted that it is highly improper and very unusual business practice for a foundation that has received independent non-profit, public-benefit corporation status from the IRS—as Renne’s Foundation has—to also operate as a so-called “project” of fiscal-sponsor entities such as Community Initiatives.
By January 18, not only had Laguna Honda Hospital removed from its web site its previous philanthropy web page link to the foundation, Attorney General investigators also reported they would neither confirm nor deny any investigation.
“We were so shocked at being driven out of Laguna Honda, right after reporting irregularities with the Patient Gift Fund in 2010, that we figured we had touched on major violations that Laguna Honda and the Department of Public Health were desperate to hide,” former Laguna Honda Hospital physicians Dr. Maria Rivero and Dr. Derek Kerr said.
“So we reported our findings about the patient Gift Fund; Volunteers, Inc., and the Laguna Honda Foundation to the Attorney General’s Registry of Charitable Trusts, the U.S. Attorney’s Tax Division, and the IRS. Had we not been ‘laid-off’ and harassed, we would have reported solely to the City’s Whistleblower Program,” the two doctors disclosed. The Attorney General’s office apparently followed up on their ethical concerns.
Dissolution the Foundation appears to be delayed fallout from the scandal involving Laguna Honda Hospital’s raid of its patient gift fund in order to fund staff amenities, set in motion by previous Executive Administrator, John Kanaley, who died in 2009. The gift fund was eventually restored some $350,000, following a long-delayed audit by the Controller.
Gift Fund Donations Plummet Again
The “Annual Report of Gifts Received,” issued by the Department of Public Health’s CFO, shows that in Fiscal Year 2011-2012 ending in June 2012, private giving to Laguna Honda’s patient gift fund dropped to just $7,042, excluding a one-time $20,000 donation from Safeway, Inc. for a nutrition project in the hospital.
That $7,042 represents the lowest level of private contributions to the patient gift fund since FY 2006-2007, when donations to the gift fund were 14 times higher, at $97,915. Even going back to FY 2004-2005, the year after the Foundation’s formation, donations to the gift fund were ten times higher, at $77,003.
Of interest, donations to the patient gift fund took a drastic “fiscal cliff” fall between Fiscal Years 2006–2007 and 2007–2008, plummeting from $97,915 to just $28,656, the year after Renne installed, former Deputy City Attorney Marc Slavin, as Laguna Honda’s Director of Communications in 2007.
Slavin’s abrasiveness with members of the public may have contributed to the decline in donations to the patient gift fund.
Volunteers, Inc. Support Dries Up
Since 1957, Laguna Honda’s Volunteers, Inc. has financially supported both the patients at Laguna Honda, and its cadre of volunteers. In March 2012, Volunteers, Inc. re-branded itself, changing its name to “Friends of Laguna Honda.” It also decamped from Laguna Honda Hospital, and moved its offices from 90 New Montgomery to an address in Mountain View, after its former president Joseph Lehrer stepped down.
As the graph of data from the Health Department shows, donations from Volunteers, Inc. to Laguna Honda and its Volunteer’s Department have declined in the past five fiscal years, dropping by half—from $91,292 in FY 2006-2007, to just $46,294 in FY 2011-2012. But the CFO’s data only shows part of the story.
Turning to Volunteers, Inc.’s Form 990 tax returns from calendar year 2010 to calendar year 2011, grants awarded by Volunteers, Inc. to Laguna Honda for patient recreation and other services (including bus trips off campus) plunged from $171,261 in 2010 to just $20,018 in 2011 (albeit, the $20,018 grant more than likely came from Safeway, and may have been misreported by DPH’s CFO as a donation to the patient gift fund).
The $151,243 outright reduction in Volunteer, Inc.’s grants to Laguna Honda also tells only part of the story. Overall, Volunteers, Inc. reports on its tax returns that it had spent $394,250 on patient amenities, recreation, refreshments, and other “program services” to hospital residents in 2010, but cut that amount to $179,731 in 2011, a net loss of $214,519 in various services to patients.
In 2011, the $179,731 in program services for residents translates to 49.4% of Volunteers, Inc.’s total expenses of $363,932, down from 56.9% spent on program services from its total expense spending in 2009. The remainder in both years was eaten up by fundraising and management-and-general expense categories.
Charity watchdog groups, such as GuideStar.org and Charity Navigator, suggest that the standard benchmark for non-profits is to spend at least 70% of their total expenses on “program services” to serve actual beneficiaries. Volunteers, Inc.’s spending of just 49.4% on program services in 2011 fell short.
Although Volunteers, Inc. awarded $14,990 to LHH’s Volunteer Services in 2010, its tax return shows that it eliminated any financial support whatsoever to the Volunteer Services Department in 2011, in addition to the $151,243 grant reduction for patient amenities.
Between curtailing support to patients and completely eliminating support to actual volunteers of the hospital, Volunteers, Inc. cut its total spending on program services by $230,000 across a single calendar year. Across the same period, its tax returns show Volunteers, Inc. tripled its spending on public relations, from $11,072 to $33,693.
Who Does PR Slavin Work For?
Renne hand-picked Marc Slavin who had been her public information officer when she was the City Attorney.
Slavin informed this author shortly thereafter that his job was to “stop the negative publicity.” He never clarified whether it was to stop negative publicity for Renne’s Foundation, or for the Department of Public Health (DPH), which never had a PR officer assigned to LHH for 100+ years until Slavin’s arrival.
Between his base salary and fringe benefits, Slavin has cost taxpayers over $950,000 in six short years. His assistant, Linda Acosta, adds another $500,000 in salaries and benefits. Between them, $1.5 million in taxpayer funds may have gone up in P.R. smoke and mirrors.
Slavin, of course, is the P.R. wizard who told the I-Team’s investigative reporter Dan Noyes that LHH’s “patient gift fund isn’t for patients.” His propaganda campaign continues.
Magical Commingling of Funds
The unholy commingling of private and public sector funds began when Volunteers, Inc. awarded $375,000 to hire staff for Renne’s new Foundation in 2003. This was an expense completely unrelated to the exempt purposes for which the IRS awarded non-profit status to it.
As the Observer has reported in “A Foundation’s Dirty Laundry” (Dec ‘12), the commingling of public and private funds between the City, the Foundation and Volunteers, Inc., has never been audited, adequately or otherwise.
In addition to the $1.5 million in salaries and benefits funded by SF’s general fund for Slavin and Acosta to perform liaison work for Renne’s Foundation across the past six years, the City has provided free office space in Suite A-150 to house Renne’s Foundation, replete with janitorial services supplied by City employee staff, and free utilities.
Shooting Herself in the Foot
Renne published a guest opinion piece in the San Francisco Chronicle (“Laguna Honda needs more than what bonds provide” (6/3/04), claiming that the driving purpose governing formation of her Foundation was to raise private-sector funds for furniture, fixtures, and equipment for the new LHH. But by claiming that “regardless of the [patient] population mix receiving services at Laguna Honda—a policy decision in the hands of the city’s director of public health”—her Foundation had been established to meet the immediate needs of residents and other users. And she claimed the new LHH would move LHH “from a traditional medical model to a social residential model of care.”
Renne’s phrase “regardless of the patient population mix,” may have unwittingly sent the message that displacing the frail elderly and disabled that Laguna Honda had traditionally served was OK, and that using the hospital for psychosocial mental health rehabilitation, instead, was acceptable and a decision best left to then-Director of Public Health Katz.
That op-ed may have directly led to a drop in donations to LHH’s patient gift fund, and may have effectively killed any chance to attract donors. After all, Renne announced a major shift in the hospital’s mission that may have chilled philanthropic donors. Charitable donations to the elderly are one thing; but “psychosocial rehabilitation” has a much smaller universe of donors.
Ms. Renne Fails to Respond
Ms. Renne was offered an opportunity to confirm or deny whether she is, in fact, dissolving her foundation, and if not, what her plans may be, but failed to respond by press time. She appears to have chosen to withhold information again, just as she has from the IRS, the Health Commission, and the charity-donating public, any and all details concerning her foundation’s revenue and expenses.
SF’s Health Commission still has work to do: it should fully audit the commingling of funds at LHH and unplug its PR division .
The Health Commission has an ethical responsibility to formally notify Renne that the Commission expects any funds and all assets remaining in the foundation upon dissolution be donated only to Volunteers, Inc., or to LHH’s patient gift fund, for direct patient benefit.
Renne shouldn’t be let off the accountability hook quite so easily.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: email@example.com.
Laguna Honda Foundation
A Foundation’s Dirty Laundry
Additional planning for use of Laguna Honda Hospital is again being discussed without input from the public — and probably without input from the hospital’s own patients — including outsourcing of Laguna Honda’s Gerald Simon patient auditorium, the on-going lack of a patient gift shop, and conversion of Laguna Honda’s old buildings into assisted living housing units.
(Photo: Louise Renne and Foundation’s Board of Directors VP Derek Parker at SF Health Commission Meeting)
To no one’s surprise, former City Attorney Louise Renne’s “nonprofit,” the Laguna Honda Foundation, which has no formal written agreement with the City, is embroiled in the discussions, and some complain that she’s being both secretive and disingenuous. Although Renne appears to have been planning the outsourcing of the patient auditorium for over a year and a half, her plans only became public on March 6, when her Foundation was hauled in front of SF Health Commission to provide an update of her Foundation’s activities and finances.
The Health Commission has tried repeatedly across the years to obtain the Laguna Honda Foundation’s financial data but they’ve been repeatedly rebuffed by Renne, who stridently refuses to cooperate.”
The Recalcitrant Foundation
Ever since Renne formed her Foundation in 2004 — without a written memorandum of understanding (MOU) with either the City or Laguna Honda Hospital — the Health Commission has been worried about the lack of reporting concerning the Foundation’s finances. As previously reported, when the City agreed to a preliminary $25 million settlement with Ms. Renne for furniture, fixtures, and equipment for the new Laguna Honda facilities, the Health Commission publicly fretted about how it would recover that planned settlement.
Since that time, there has been extensive coverage about the failure of Renne’s Foundation to disclose either its income and expenses, or the three categories of spending the IRS requires non-profits report on Form 990’s: Fundraising, Management and General, and Program Services spent on actual services. The three categories are used to evaluate the financial accountability of non-profits. All of the Foundation’s Form 990’s submitted to date to the IRS have reported zero income and zero expenses, even though it has been reported in the media that Renne’s Foundation has earned at least $766,531 since its incorporation eight years ago. But she’s never provided detailed tax returns itemizing how much she has raked in, and what she’s spending it on.
The Health Commission has tried repeatedly across the years to obtain the Laguna Honda Foundation’s financial data but they’ve been repeatedly rebuffed by Renne, who stridently refuses to cooperate.
The Artful Dodger’s Testimony
In preparation for a December 14, 2011 meeting with then Health Commission president Steven Tierney and its then vice president, Sonia Melara, Ms. Renne submitted a letter to the Health Commission dated December 8, in which she outlined her Foundation’s activities since it was incorporated.
True to form, Renne claimed in a footnote that her Foundation had difficulty raising funds because “two hospital physicians and others then employed at the hospital made public assertions that the hospital was unable to safely accommodate the flow of patients from San Francisco General Hospital.” Renne has been unable to admit that the damage to the hospital’s reputation was not done by the two physicians she wrongly accuses; instead, perhaps the damage to the hospital’s reputation was done by former Director of Public Health, Mitch Katz, whose notorious “flow project” made patient safety at the hospital a major issue.
Apparently resulting from Tierney’s December 14 meeting with Renne, the Health Commission placed an agenda item about Renne’s Foundation onto its March 6, 2012 meeting agenda. During the March 6 meeting, Renne presented orally much of the flawed testimony in her December 8 letter.
When she testified that she set up her Foundation “right after Proposition A” was passed by the voters in 1999, she was stretching the truth; her Foundation wasn’t incorporated until almost five years later, in 2004. She claimed her Foundation had funded something related to lift apparatus to transfer patients safely into bath tubs, but she didn’t say how much was donated, when, or for what items. When she testified that her Foundation had funded working with the Center for Health and Design, she claimed it was among gifts to the City and hospital.
Derek Parker, Vice President of the Board of Directors of Renne’s Foundation, accompanied her to this hearing. Parker co-founded the Center for Health Design, known for its Pebble Projects, a theory that “evidence-based design” can contribute to measurable improvements in patient outcomes. Parker has served in various roles at Anshen + Allen, the architects who designed Laguna Honda’s new facilities, including as a principal, as its former CEO, as a member of its Board of Directors, and as its Director Emeritus.
Renne forgot to note her Foundation’s funding to the Center for Health Design benefited an entity Parker co-founded and was a board member of, while simultaneously serving on her Foundation’s board. She also failed to note that the City filed a lawsuit against Anshen + Allen, Stantec Architecture (which acquired Anshen + Allen), and other entities in December 2011, seeking recovery of damages for breach of contract, professional negligence, indemnity, and other declaratory relief involving the dispute that arose from the design and construction of the Laguna Honda Replacement Project. The lawsuit involves over $70 million in design errors.
When she testified that her Foundation had helped provide money for training and consultants, she failed to mention the hospital already had a $10 million “transition budget” supplemental stash from the general fund for that purpose. She claimed her Foundation had helped fund the hospital’s opening festivities and ribbon cutting ceremony, but again, the City had a separate budget line-item for that. She claimed her Foundation had made a grant to Laguna Honda to help pay for a gardener. She asserted, “All of the money that we spend is requested by the Hospital or the City. And if the Hospital makes a request, it goes through them.”
She claimed that her Foundation had made several gifts and grants to the City, often directly to the hospital. She went so far as to say, “Any money that we spend at Laguna Honda certainly is a matter of public record,” but that’s pure hubris, since there are no public records concerning her Foundation’s expenditures. Renne isn’t likely to make any records available, anytime soon.
Poor Health Commissioner Jim Illig; he took Renne’s bait, and pressed her. Illig noted that the Health Commission has a Charter responsibility to obtain an annual report of gifts and grants to public health entities from each agency affiliated with the Health Department. He noted that the Public Health Foundation, Friends of Laguna Honda (formerly Laguna Honda Volunteers, Inc.), and the San Francisco General Hospital Foundation all comply with this Charter requirement, and each entity provides their revenues and expenses to the Health Commission.
Perhaps to his downfall, Illig pressed harder, contradicting Renne publicly by saying, “We have no record of grants [from your Foundation] that have come to Laguna Honda, because it would have been reported to us, as the Health Commission.” [Editor’s note: Nine days later on March 15, the Mayor declined to re-appoint both Commissioners Illig and Tierney, who were both hold-over appointments. The timing between Renne’s forced appearance before the Health Commission and the abrupt removal of the two Commissioners who had pushed for the hearing into her finances is obviously problematic.]
Indeed, four subsequent public records requests — to the Health Commission, to the City Controller’s office, to Laguna Honda Hospital itself, and to the Department of Public Health — for any “accept-and-expend” resolutions documenting specific Laguna Honda Foundation gifts and grants to the City between 2003 and today’s date each yielded the same four responses: There were no responsive records from any of the four City agencies. Illig had been correct: The City has absolutely no record of any gifts or grants to any City agency made by Renne’s Foundation since its inception, despite her testimony to the contrary.
The “No Public Money” and “Anonymity” Canards
Ms. Renne appears to be confused about the source of funds to her non-profit organization. On March 6, she stated, “All — all! — of our contributions come from private individuals. And consequently, there is no public money.” What Ms. Renne may not understand is that the key litmus test to obtain IRS non-profit designation is what percentage of contributions is considered “public support.” Private donations to any non-profit foundation are public funds donated to advance a charitable public purpose, and those contributions typically come from members of the public. All funds donated become “public money,” entrusted to fiduciary stewards of the non-profit.
What Renne is confounding is that only “sometimes” — by her own admission — her Foundation receives money from donors who wish to remain anonymous. This is a complete canard, since IRS rules already permit withholding of the names of individual donors for confidentiality reasons. This is no reason for Renne to completely withhold reporting her total revenues in their entirety, simply to provide donor confidentiality.
There are IRS protections already in place to ensure full financial disclosure, without disclosing donor names. Can’t the Health Commission see that Renne is hiding behind donor disclosure concerns, to deliberately avoid full financial disclosure?
And what of Renne’s claim that her Foundation has been falsely accused of taking tobacco settlement revenues? To our knowledge nobody has raised such an accusation, except Renne herself.
Outsourcing the Patients’ Auditorium
Without the Health Commission’s March 6 hearing on the Laguna Honda Foundation’s status, Ms. Renne’s plans to outsource operations of Laguna Honda’s patient auditorium would still be in the dark.
Named in 1963 for local businessman Gerald Simon, who founded Laguna Honda Volunteers, Inc. in 1957 to raise funds for the hospital’s patients, the patients’ auditorium has long been a focal point of hospital activities. During the decade between May 1999 and November 2009, patient activities were expertly conducted by the nearly 40 activity therapists employed by the hospital, each of whom had advanced specialized training in therapeutic activities. (Laguna Honda’s activity therapists have a broad range of specialties, from art therapy to dance therapy and everything in between, and are skilled at cognitive stimulation of frail elderly patients.)
After over 50 years of conducting programs in the patient theater, including hosting Bing Crosby concerts, suddenly last March 6 Renne alleged, “…the [Laguna Honda] staff there is so busy that there’s no way they can run the theater, I just don’t think it’s humanly possible.” Then we learned that sometime in the spring of 2011, Renne’s Foundation contracted with AECOM to assess operations of Gerald Simon Auditorium. By July 2011, AECOM had issued its draft report prepared for the Laguna Honda Foundation, entitled “Demand Assessment for Gerald Simon Theater.”
The assessment claims that Gerald Simon auditorium needs to be “re-branded” as distinct from the hospital itself, probably with a new name to convey it’s a community theater, not exclusively for patients. After 50 years of operations, suddenly Mr. Simon’s good name on the auditorium isn’t good enough for Renne or the hospital.
The assessment analyzed the demand for various types of activities that community organizations may hold to rent Gerald Simon Theater, and what type of management model would be appropriate. In order to raise an estimated $176,000 annually to run the theater — $107,000 of which represents new management salaries for staff in addition to existing hospital employees — various cost factors are assessed.
It’s clear Renne is seeking a dedicated funding stream for her Foundation.
The report notes that resident use of the auditorium will be of concern when scheduling rental events. The report is very vague on what will be done to accommodate residents in the hospital’s chapel that is being constructed next to the auditorium, or whether worship services would have to be moved elsewhere in the hospital when there are scheduling conflicts. The report notes caution will be needed to prevent displacing resident activities, but mentions nothing about what may happen to long-scheduled resident activities in the event urgent or lucrative community events might require bumping resident activities in order to meet monthly theater rental quotas.
The report notes that the 600 parking spots on Laguna Honda’s campus will be of significant interest to planners considering holding potential events at Laguna Honda, but the report does not mention where LHH’s staff, who each pay $75 monthly or more for on-campus parking, will park their cars on days when rental events might require them to give up their parking spaces. The report notes that another “plus” is the hospital’s new Café Kitchen on the second floor that could be creatively scheduled for use as a private event catering kitchen. But again, the report does not discuss how use of the kitchen for private events might adversely impact preparation of routine meals for patients.
The report notes that there are $360,000 to $700,000 in required, or highly-desired, construction improvements to the theater to attract rental tenants, costs which are not included in the hospital’s replacement project budget, nor are funding sources identified in the Demand Assessment.
Shouldn’t those construction improvements have been included in the design of the hospital when construction plans were drawn up a decade ago? Why are design changes needed now, two years after moving into the new facilities? Shouldn’t a demand assessment for the theater have been conducted before construction began in 2003?
It’s unknown whether Laguna Honda has told its Residents Council of Renne’s plan to take over operations of its patient auditorium. Should the auditorium rent out for an entire month, patients may not have access to their auditorium and its adjoining chapel?
Notably, the report indicates that in order to generate about $156,000 in annual revenue, a community theater at Laguna Honda would have to hold approximately 12 events each month. But the report does not address what funding source will be tapped to cover theater operating expenses in the event that rental income is insufficient to pay the bills. For example, if only 6 rental events are held in a month when 12 were projected, who will be on the hook to cover the shortfall in revenue? Will the City’s General Fund be tapped to make up any operating losses from outsourcing operations of the theater? When rental income is insufficient, will the theater’s operating funds come out of Laguna Honda’s general fund operating budget intended to pay for patient medical care?
Still No Gift Shop, Other Unanswered Questions
Renne claimed, on March 6, that her Foundation is also assessing whether to re-open Laguna Honda’s patient gift shop. Although residents moved in to the new facilities fully two years ago, Laguna Honda’s other non-profit foundation, Volunteers, Inc., abandoned its decades-long funding of the gift shop, and the hospital has operated without one for the past two years, perhaps the only hospital in the Bay Area without a gift shop. If Renne’s Foundation has taken over two years to decide whether it should fund operations of the gift shop, how can it be expected to actually operate a community theater?
After all, AECOM recommended in its analysis, that operating a theater at LHH might be best done using a non-profit management model — surprise, Ms. Renne’s own non-profit gets AECOM’s nod — rather than using an in-house management, or contracted management model, in part because the hospital might potentially be given a seat on the Board of Directors of Renee’s Foundation. Renne adamantly told Commissioner Illig that she would not appoint a member of the Health Commission to her Foundation’s Board, so she could avoid “politics.” What makes the Health Commission believe that Renne would now appoint a hospital employee to her Board, when she wouldn’t appoint a Health Commissioner?
Renne’s “Assisted Living” Canard
Also on March 6, Renne asserted that her Foundation is standing by to assist with securing funding for assisted living housing on Laguna Honda’s campus. Readers may recall that in 2007, disability rights activists and others were sticker-shocked when the City announced its feasibility study for assisted living on the Laguna Honda campus would approach over $250 million to construct.
The senior rights activists rightly noted that converting Laguna Honda’s old buildings — the so-called “finger wings” fanning out from the main corridor on each floor — into assisted living housing was a bad idea. Although the finger wings were budgeted for asbestos abatement prior to demolition, cost overruns have eliminated from the project scope any asbestos abatement. Instead of demolishing the finger wings, plans have changed and the Health Department is now budgeting to rent out space in those buildings, or lease them for assisted living housing, rather than demolishing them.
Although senior housing advocates noted in 2006 that assisted living facilities deserve to be seismically safe, too, there was no funding available to retrofit Laguna Honda’s finger wings for seismic safety in 2007, and there is no funding for seismic safety available now.
If Renne’s Foundation was unable to raise one single penny during nearly an entire decade to assist with the $45 million it had pledged to raise for furniture, fixtures, and equipment, who really believes that her Foundation will be able to help raise over $250 million for assisted living housing any time soon?
Sadly, at the Health Commission’s November 6 meeting, San Francisco’s current Director of Public Health, Barbara Garcia, indicated the City might get some financial data if the Health Department signs an MOU with Renne to fix up Laguna Honda’s patient auditorium. Is Garcia engaged in magical thinking, expecting that Renne will actually sign an MOU and consent to providing financial data? Barbara: Will such disclosure be retroactive?
And would an MOU really be binding on Ms. Renne to actually raise an agreed-on amount towards assisted living? Or is this just more of Renne’s smoke and mirrors?
The Health Commission has no business awarding an MOU to operate Laguna Honda’s patient theater to an organization that it has previously fought tooth and nail to obtain basic, full, financial disclosure. Since Renne’s Foundation has refused to disclose revenue data for the first eight years of its initial operations, what makes the Health Commission believe it will start doing so now if it is granted a contract to operate the patient auditorium?
The Health Commission would never tolerate this level of secrecy from any of its other non-profit partners. Why is the Commission tolerating this behavior from former City Attorney Louise Renne? Is it because she’s above the law, or is it that open accountability is beneath her patrician sensibilities, much like Mitt Romney’s tax returns were too much for public disclosure?
Almost a decade into Renne’s stone walling, the Health Commission should simply sever all ties with her Foundation. The City should put a red light on any future collaboration with Renne until she starts accurately reporting her Foundation’s income and expenses. San Franciscans have had it with Renne’s dirty laundry.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: firstname.lastname@example.org.
“Consensus Mayor’s” Sour Grapes
A legal theory holds that any law that “forbids an act in terms so vague that men of common intelligence and understanding must guess as to its meaning and differ as to its application violates the first essential of due process of law.” Mayor Lee was mistakenly advised he could go after his political foe, Sheriff Ross Mirkarimi, by invoking San Francisco’s overly-vague definition of official misconduct.
The lack of ethical reasoning and hypocrisy — when not sheer stupidity — emanating from San Francisco’s City Hall with its cadre of Deputy City Attorneys, is shocking to San Franciscans.”
Although former Mayor Willie Brown has advised Mayor Ed Lee to get over and move beyond the Supervisors’ reinstatement of Sheriff Mirkarimi (“Mayor Lee, bury hatchet over sheriff case,” SF Chronicle, Oct. 27), Lee continues to pout sour grapes. “Slick Willie” should have advised Lee that continuing to harass Mirkarimi may well result in Lee being a one-term mayor.
After all, San Franciscans have not ceded our democracy to the vagaries of mayoral case-by-case “discretion,” nor have voters granted Lee the authority to replace our rule of laws with either his own rules of “decency” or his so-called “sound judgment.”
As Citireport editor Larry Bush noted in a recent post (“Big Mouths, Little Brains”) regarding the Supervisors’ vote to reinstate Sheriff Mirkarimi, “There has been so much stupidity to choose from that it’s hard to know where to start.” Bush was referring to the botched Ethics Commission and Supervisors hearings “consensus” Mayor Ed Lee launched.
The lack of ethical reasoning and hypocrisy — when not sheer stupidity — emanating from San Francisco’s City Hall with its cadre of Deputy City Attorneys, is shocking to San Franciscans.
Stupidity of Mayor Lee’s Lawyers
There’s no sympathy to be found for Ed Lee’s reliance on the legal strategy developed by Deputy City Attorneys Sherri Kaiser and Peter Keith, most probably with the concurrence of their boss, Dennis Herrera.
Forget for a moment that the Ethics Commission threw out the official misconduct charges Lee initially filed and that the Ethics Commission then rejected all six of the amended charges the Mayor substituted. Forget that in order to move the charges to the Board of Supervisors, the Ethics Commission hastily incorporated portions of the Mayor’s amended counts four and five into a new hybrid charge just minutes before voting on August 19, depriving Mirkarimi’s lawyers of an opportunity to prepare a defense against an eleventh-hour new charge.
Look to the testimony of Ms. Kaiser during the Board’s hearing. Throughout the Ethics trial, Kaiser convinced the Ethics Commissioners that there had to be a “relationship test” between “official duties” and an official’s behavior. But at the Board’s hearing, Kaiser changed her tune, first saying that the decision to remove an elected official should be made on a case-by-case basis by relying only on the “sound judgment” of the Mayor, Ethics Commission, and the Supervisors. Then, Kaiser changed her tune again, saying that it is entirely a discretionary — not a “sound judgment” — decision and that it is not up to the Board of Supervisor’s to use their personal views of what the standards of conduct should be for the Sheriff.
Kaiser repeatedly said on October 9 that it would be “really wrong” to leave the removal of the Sheriff to a recall election. She claimed that voters had given the Mayor and Ethics Commission a clear definition of official misconduct, that voters “have determined for themselves how they wish to be governed,” and that they “would like to be governed” by asking their “Mayor, their Ethics Commission, their Board of Supervisors, to take action to protect them” via the official misconduct process, rather than a recall.
Kaiser went so far as to compare Mirkarimi to a hypothetical Animal Control Officer who might be running a dog fight ring on his private time. When Kaiser said, “No one wants Michael Vic in control of the Animal Control Department,” she was booed by the audience for blurting out such a stupid analogy, but she charged ahead, anyway.
Kaiser stated that the Mayor “certainly does not agree with Commissioner Hur’s decision to emphasize the need for a bright-line rule” that would clearly, and narrowly, define official misconduct. Kaiser claimed that voters had intended to infer broader, not narrower, interpretation of official misconduct.” She went so far as to say that a so-called bright line rule seeking “clarity simply for the sake of clarity, predictability simply for the sake of predictability, is not a reason to … narrowly constrict ethical duties of officers.”
More so than Supervisor Christina Olague, Supervisor Jane Kim peppered Kaiser with astute questions. Kim noted that Kaiser testified to the Board that the “relationship test” was not enough (which was odd, since Kaiser had focused heavily on the relationship test during the Ethics hearings). Kim asked Kaiser: “So it would be a relationship test, plus what the Mayor and the Ethics Commission [determined], what we deem as falling below the standard of decency, and that is [on] a case-by-case basis?” At first, Kaiser responded, “Yes, that’s correct.” Then corrected herself, saying “I think it is a discretionary decision … I think that it is, at bottom, a judgment call.”
Kaiser’s waffling startled Kim, who then asked “Does that open us up to the vagueness issue, which may make that clause then unconstitutional, because then a person may not reasonably be able to predict when their behavior is official misconduct or not?” Honing in on the “standard of decency” clause added to the Charter in 1995, Kim noted that any standard of decency may change over time, depending on who is appointed to the Ethics Commission, who has been elected Supervisor, and who is the elected Mayor, opening the question of whether the definition is too vague to determine what is or isn’t official misconduct.
That’s when Kaiser replied it is not up to the Supervisor’s personal views, and the standards of decency and conduct are “position-specific” that should be discerned with the help of people in a given profession, not by the Board. If that’s the case, why were the Supervisors even involved?
Kaiser Falsely Claims “No Legislative History”
Kaiser repeated that the voters put the official misconduct tool in the Mayor’s and Board’s hands to serve the people’s will to remove officials without the trouble of a recall election. She claimed that there was “no legislative history, no ballot history, that sheds light” on the intent of the authors of the Charter’s official misconduct provision.
In a contrary opinion, Mr. Bush notes that he covered every session of the Charter Revision Committee in ‘94 and ‘95 that wrote the official misconduct language, and the drafter’s intent had not been to update the Charter language to address the Superior Court ruling in Airport Commissioner Larry Mazzola’s case. Bush asserts the intent of the Committee was to address “concerns that a ‘moral character’ provision was a left-over of the language used to bar people from professions based on sexual orientation.” Bush notes that neither the Ethics Commission nor the City Attorney bothered going to the Main Public Library where the Committee’s minutes are archived to see the legislative and ballot history.
Other observers have noted that the 1995 voter guide contained a digest by then City Attorney Louise Renne that explicitly described the changes in our ethics law as insignificant. Clearly, voters weren’t told in ‘95 that they would be giving new powers to the Mayor, or that they would be ceding to the Mayor authority to make discretionary decisions to remove elected officials without a recall election. Had voters been told that the Mayor would gain such authority the amendments would not likely have passed and we’d still have the “moral character” provisions.
Vague Is as Vague Does
Ms. Kaiser testified that the people — the voters — put the official misconduct language into the City Charter. She asserted that the language isn’t “vague,” the language makes it more “nimble” when determining official misconduct.
Kaiser was completely misguided during her Board testimony. Voters never get to choose the actual legal text of ballot language put before them, unless it involves a citizen-initiative measure. Voters have no say over the language chosen for measures placed on the ballot by the Mayor or Board of Supervisors.
California courts permit vague ballot measures because they are sensitive to the need of government in large urban areas to delegate broad discretionary power to administrative bodies without paralyzing local jurisdictions.
Ms. Kaiser now claims that if the official misconduct language is too vague, it’s because the voters chose to approve the vagueness put before them written by someone else, over preciseness.
Seven Stupid Supervisors
October 9 was a very dark day for San Franciscans, because only four of our eleven Supervisors voted to reinstate Sheriff Ross Mirkarimi. Supervisors Christina Olague, Jane Kim, David Campos, and John Avalos reached the correct conclusion: That Mirkarimi’s behavior — deplorable as it may have been — did not rise to the definition of official misconduct.
In stark contrast, the remaining seven District Supervisors — including Mark Farrell, Sean Elsbernd, Malia Cohen, Carmen Chu, Scott Wiener, Board President David Chiu, and Eric Mar — knowingly voted to hand the Mayor unlimited precedent-setting power to bring official misconduct charges against political foes, a process ripe for political shenanigans and mayoral abuse. All seven also knowingly voted to accept the Ethics Commission’s constitutionally vague interpretation of official misconduct. Had these seven Supervisors prevailed, they would have knowingly handed to some future court proceeding — as Mr. Bush reports — clear evidence that the official misconduct charges against Mirkarimi were unconstitutionally vague, since the Mayor and the Ethics Commission never adequately defined official misconduct (and can’t, unless they ask voters to change the Charter again).
In a clear example of irony, four of the seven Supervisors who voted to oust Mirkarimi were referred by the Sunshine Ordinance Task Force to the Ethics Commission over probable official misconduct themselves. The four — the Board’s then Land Use and Economic Development Committee composed of Supervisors Mar, Cohen, and Wiener — along with Board President Chiu, appear to prefer handing the Mayor unlimited power to bring official misconduct charges on a case-by-case, unconstitutionally-vague basis, without any clear standard of the definition of official misconduct that would apply to all City employees.
Ed Lee’s Unequal “Discretion”
Mr. Bush notes: “None of this can obscure the reality that it was Ed Lee who is responsible for the defeat of his Official Misconduct charge.” Bush reported that Lee testified under oath at the Ethics Commission that he had not given any attention to the City Charter’s requirements for official misconduct charges, admitted he had no written policy regarding official misconduct, and then insisted that even if an individual case involved a criminal conviction, he would still use his “discretion” on whether to pursue official misconduct charges on a case-by-case basis. Bush notes this may end up being a text book example of the description of “vague” as one can find, which judges all too often find objectionable.
Bush has documented Mayor Lee’s and the Board of Supervisor’s unequal application of “discretion.” For instance, although the Ethics Commission referred a case of official misconduct against Library Commission president Jewelle Gomez to the Mayor, requesting that the Mayor remove her from an appointed position, the Mayor has ignored the Ethics Commissions recommendation for over a year, and has not taken any action against Gomez.
Worse, on June 14, 2011, ten of our current Supervisors (excluding Olague [she was not yet appointed]) confirmed by a unanimous 11-to-zero vote the appointment of Julius Turman to the Police Commission, despite the fact that the Board of Supervisors knew (or had to have known), that Turman had been arrested over domestic violence charges. Turman’s former boyfriend, Philip Horne, had accused Turman of beating him up on January 2, 2006, giving Horne a bloody nose, scratches, and a loosened tooth. Horne alleged that then-District Attorney Kamala Harris didn’t prosecute because of Turman’s political connections. Despite the fact that the felony domestic charges were dropped by prosecutors, Turman settled out of court with Horne for an undisclosed amount. Is there no “nexus” between Horne’s domestic violence history and his duties as a Police Commissioner?
While Supervisor Jane Kim dissented in the Rules Committee regarding Turman’s appointment, indicating she had concerns about appointing people to a police oversight body if there were questions about an applicant’s past and experience that might weaken their oversight “capacity,” Kim nonetheless voted along with the full Board to appoint Turman, despite his domestic violence history.
Not only did the Board unanimously appoint Turman to the Police Commission, apparently no domestic violence prevention agency publicly opposed Turman’s confirmation. Neither Andrea Shorter, a political consultant who chairs the City’s Justice and Courage Oversight Panel, nor Kathy Black, director of La Casa de las Madres, a shelter for domestic violence victims, spoke up to object to Mr. Turman’s appointment, despite the initial felony domestic violence charges against him. Are Shorter and Black, and the rest of the domestic violence prevention community, selectively holding Mirkarimi to a different standard than they apply to Turman, on a case-by-case basis?
Then there’s the problem of unequal treatment of Fire Chief Joanne Hayes-White. Mr. Bush notes that “over the past several years, cases involving high profile or politically connected individuals have been dropped. This includes a police report on Fire Chief Joann Hayes White, accused by her husband of hitting him repeatedly in front of their children.” Seems that neither the Mayor, the Board of Supervisors, nor the domestic violence prevention community wants to hold Chief Hayes-White to the new “standard” they invented to hang the Sheriff. More hypocrisy and selectively unequal treatment for favored politicians and City officials.
Supervisor Wiener Requested a “Do-Over”
Just thirty seconds before the Board of Supervisors were to cast their votes determining Mirkarimi’s fate, misguided Supervisor Scott Wiener asked whether the Board could have a “do-over,” asking “Are we able to sustain any charge alleged by the Mayor, whether or not the Ethics Commission recommended sustaining of that charge?”
Scott Emblidge, the special attorney advising both the Board and the Ethics Commission — as if there was no conflict of interest between a single lawyer advising both bodies — responded that the Board “[is] able to sustain any charge,” but that the Board needed to be voting on the same thing.
This shocked observers, who believed that the Board could only consider charges brought by the Mayor that the Ethics Commission had actually sustained. Wiener — and everyone else — knew at that point in the proceeding that the Board was about to hand Mr. Mayor an embarrassing loss on a 7-to-4 vote, when the Mayor needed at least nine votes to prevail.
But Wiener wanted to turn the clock back to reconsider charges that the Ethics Commission had clearly already rejected. Despite being advised that the Board could reconsider what Ethics had rejected, Wiener curiously decided not to pursue a do-over and let the issue go, even though he appeared eager to resurrect the Mayor’s flawed charges against Mirkarimi.
On October 10, the day after the Board of Supervisors voted 4 to 7 to reject the Ethics Commission’s recommendation against Mirkarimi, the San Francisco Chronicle published an editorial (“Shame on four supervisors”), alleging that the four “rationalized” their votes by raising “the question of whether a man elected to be sheriff could commit official misconduct before actually taking office.” The Chronicle was disingenuous: The Board of Supervisors had not raised that question; indeed, that whole question had been raised by the Mayor and an all-too-eager-to-please Ethics Commission that did everything it could to avoid answering that question. The question Ed Lee posed to the Ethics Commission, and the question the Board of Supervisors were asked to answer (but avoided), was whether there has to be a “nexus” between any official duties, and actual behavior.
For her part, Melissa Griffin over at the San Francisco Examiner, opined on October 18 that since the sexual battery charges against District 5 supervisorial candidate Julian Davis is a misdemeanor, the four Supervisors (who did not find a nexus between Mirkarimi’s official duties and his wife’s bruised arm) had somehow concluded that Mirkarimi’s behavior had been acceptable for a public official to commit. Like Deputy City Attorney Sherri Kaiser before her, Griffin attempted to draw parallels between Mirkarimi’s wife’s bruised arm, and child abuse, elder abuse, assault, battery, and hit-and-run cases that occurred after-hours, or before assuming office.
Griffin then lamented that an “unsuspecting public” has been “burdened” by the task of mounting a recall effort against Mirkarimi, making “it easier for abusers to remain in office.” Griffin asserts the four supervisors are “cowards” for foisting an expensive, time-consuming, recall process against Mirkarimi onto voters. But Griffin mentions nothing about the expensive $1.14 million in City Attorney costs the Mayor has racked up mounting a failed effort to oust Mirkarimi during the Ethics Commission’s probe. Worse, Griffin studiously ignored Deputy City Attorney Kaiser’s assertion that a recall election is the wrong approach.
Notably, Griffin mentions not one word about abuser Turman remaining in office as a Police Commissioner. Perhaps that’s because Turman and Jewelle Gomez are both African Americans; both are appointees, not elected officials; and both are reportedly gay or lesbian, as opposed to Mr. Mirkarimi, who appears to be straight. Indeed, Griffin wails about violence against women, but mentions nothing about the domestic violence against men inflicted by Turman and Hayes-White.
For its part, the Examiner editorialized on October 14 (“People deserve a say in the Mirkarimi case”), that if voters are unhappy with the way the four Supervisors interpreted the City Charter in Mirkarimi’s official misconduct case, voters should mount the very recall process Griffin believes is “burdensome,” and which recall process the Mayor’s own attorney, Ms. Kaiser, believes is “wrong.”
Never mind that the four Supervisors correctly interpreted the City Charter, the Examiner wails. What’s important, the Examiner asserts, is that “any incident of domestic violence is inexcusable.” The Examiner appears to have turned a blind eye to the domestic violence allegations against both Turman and Hayes-White. By its lack of logic, the Examiner appears to believe that Turman’s and Hayes-White’s behavior was excusable, but that Mirkarimi’s was not.
In addition, while Mirkarimi has now been thoroughly “investigated” by the Mayor, the Ethics Commission, and the Board of Supervisors, the Examiner now asserts that although Mirkarimi appears to have been absolved of the official misconduct charges by the official processes put in place to protect voters, Mirkarimi now deserves to be handed double-jeopardy by being “tried” all over again via a recall election. How many times is the guy going to get tried for a single “crime”? If our elected leaders can’t, and haven’t, agreed on whether “official misconduct” occurred, how can the Mayor, Ms. Kaiser, and the Examiner believe that voters — the vast majority of whom are neither lawyers, nor have likely been trained in ethical issues — should now be expected to discern definitively what legal scholars and ethicists were unable to discern?
Consensus Mayor’s Sour Grapes
On October 10, the day after Mirkarimi was reinstated by the Board of Supervisors, District Attorney George Gascón released a statement demanding that Mirkarimi recuse himself from the supervision of domestic violence activities in his department. Gascón reportedly threatened Mirkarimi with “legal action” if he didn’t recuse himself.
Larry Bush notes that Gascón’s demand appears to have little meaningful impact, as there is nothing in the Charter that permits the District Attorney to demand an elected official — abandon duties set in the Charter.
Bush notes that a CitiReport investigation revealed Police Department records showing 3,515 police reports of domestic violence were filed, but that Gascón’s District Attorney staff filed only 245 misdemeanor cases and 240 felony cases — totaling just 14 percent — of the 3,515 police reports. Bush also reports that a San Francisco Public Press investigation revealed Gascón’s District Attorney Domestic Violence Team reviewed about 8,600 criminal cases but dropped about 6,200 of them without going to court, and that the incidence of dropped cases has actually increased under Gascón’s tenure.
Given Gascón’s domestic violence track record, he’s displaying pure hubris demanding anything from Mirkarimi. And where are Ms. Black and Ms. Shorter in this? Why aren’t they screaming their heads off over Gascón’s pathetic domestic violence record, selectively focusing only on Mirkarimi? How can Mayor Sour Grapes look anyone straight in the face — or himself in the mirror — refusing to bury the hatchet and actually work with Mirkarimi, while throwing his mayoral arms around hypocrite Gascón? And why has Melissa Griffin all but ignored Gascón’s lousy record, while she foams at the mouth over Mirkarimi?
Not to be outdone, on October 26 Mayor Lee wrote to Mirkarimi, now alleging that certification of batterers’ intervention programs “may be in jeopardy.” [Note Lee’s use of “may be,” not “are,” and that Lee appears to have raised this issue only after the Supervisors reinstated Mirkarimi.] Turning the screw, Lee now asks Mirkarimi why he’s qualified to oversee the Sheriff Department’s domestic violence programs. It appears that the sour grapes Mayor just can’t let go of his loss at the Board of Supervisors.
On Monday, October 29, news broke that Mayor Lee’s prominent ally — Silicon Valley billionaire Ron Conway and his wife Gayle — formed an independent expenditure committee to oppose Supervisor Olague in next week’s District 5 election. Previously, the Conway’s contributed $500 each to Olague’s election campaign, but their new independent expenditure committee — which can raise an unlimited amount of money — has quickly amassed, at minimum, $120,000 to go after Olague in retaliation for her vote to reinstate the Sheriff.
Can anyone say, “Citizen’s United”? How much meddling will the out-of-towner billionaire Conways do on behalf of their friend, Ed “Sour Grapes” Lee? How much money-equals-speech will the Conways throw against Olague to unseat her by buying an election? The Mayor is misjudging San Franciscans’ tolerance for sour grapes.
Will the Conways also target Supervisor Jane Kim’s re-election campaign in 2014?
On a personal note, I am offended that the Mayor continues to equate the bruise Mirkarimi’s wife sustained to the sexual molestation my three sisters endured from our father (leaving one of them with life-long mental illness), and my father’s intermittent psychological abuse of my mother for 22 years. The Mayor’s insistence that a bruise is somehow equal to what they endured is a slap in the face to my sisters and mother — and by extension, a slap in mine — denigrating their collective trauma.
When the Mayor and District Attorney Dennis Herrera run for re-election, voters should toss them both out of office — Herrera for allowing his subordinates to mount this ridiculous case against Mirkarimi, and Lee for pouting like a child after losing a blatant, politically motivated witch-hunt.
If voters don’t rout both men from office, they’ll be handing our democracy over to demagogues, and billionaires buying City Hall influence.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: email@example.com.
Democracy San Francisco Style
Swimming in “Official Misconduct”
Is San Francisco governed by its rule of law, or by the law of its rulers?
The hypocrisy of San Francisco’s Board of Supervisors and its Ethics Commission no longer comes as a surprise to most open government observers; hypocrisy clearly visible in two cases is currently shedding light on the death of democracy in San Francisco.
It will now be up to the Board of Supervisors to explain how the Ethics Commission could be permitted to violate the City Charter in the Mirkarimi matter, while the Supervisors make false claims against the Task Force.”
The first case involves the Board of Supervisors, which wrongly alleged that the Sunshine Ordinance Task Force (SOTF) violated the City Charter, when in fact the Task Force had not. Supervisor Scott Wiener — who the Task Force found engaged in official misconduct regarding the Parkmerced development deal — went so far as to allege that the SOTF had engaged in “official misconduct” when the Task Force had done no such thing.
The second case involves the Ethics Commission’s recommendation now submitted to the Board of Supervisors to remove Sheriff Ross Mirkarimi from office for “official misconduct;” to reach that recommendation the Ethics Commission itself appears to have violated the City Charter by exceeding its authority.
It will now be up to the Board of Supervisors to explain how the Ethics Commission could be permitted to violate the City Charter in the Mirkarimi matter, while the Supervisors make false claims against the Task Force.
Sunshine Task Force Shut Down
The Observer reported in its last several issues that the Board of Supervisors has effectively shut down our local Sunshine Ordinance Task Force, the quasi-judicial body with which citizens can file administrative complaints regarding open access to public meetings and public records. As reported, the Task Force has not met and conducted any of the people’s business since the end of May.
Because the Board of Supervisors improperly removed the ordinance-required physically disabled Task Force member and failed to appoint another physically disabled member, the Task Force was forced to abruptly adjourn its June 6 and July 7 meetings, and cancelled its August 1 and September 5 meetings since the body was not in compliance with Sunshine Ordinance section 67.30(a) that requires a physically-disabled member sit on the Task Force at all times.
Although the Board of Supervisors had to have known of this legal requirement since at least June, the Supervisors have not appointed a disabled member during the past four months. Unfortunately, on Wednesday, September 19, the Task Force also cancelled its October 3 meeting, because a disabled member had still not been appointed when the Board of Supervisors rejected re-appointing Bruce Wolfe a second time. The Task Force, and citizens who have filed legitimate Sunshine complaints, have been immobilized for five months.
Supervisors Invoke “Let’s Get Even” Retribution
As previously reported, the issue that launched the Board of Supervisors ire and their “let’s get even” retribution involved a Sunshine complaint regarding the Parkmerced development deal, which resulted in four members of the Board of Supervisors referral by the Sunshine Task Force to the Ethics Commission over allegations of official misconduct. Pastor Lynn Gavin — a candidate for the Board of Supervisors in District 7 and a resident of Parkmerced, until being unjustly evicted — filed a Sunshine complaint alleging that the Board of Supervisors wrongly considered 14 pages of last-minute amendments to the Parkmerced development agreement just minutes before voting on the matter, but without providing the amendments to members of the public prior to their vote. The Task Force ruled the last-minute amendments violated the Sunshine Ordinance, and referred the matter to the Ethics Commission for enforcement of official misconduct against four City supervisors, including David Chiu and Scott Wiener.
Reportedly, the Board of Supervisors were not as annoyed so much by the SOTF’s referral to Ethics as they were by the Task Force’s additional referral of the Parkmerced violation to the District Attorney. The Task Force began referring official misconduct complaints to the D.A. following years of inaction on official misconduct cases referred to the Ethics Commission, which has dismissed without public hearings all previous official misconduct cases referred to it by the Sunshine Task Force, except the case against Library Commission president Jewelle Gomez.
Supervisors Haven’t Learned Their Lesson
During the full Board’s September 18 meeting, the Supervisors considered the Clean Power SF public power measure with Shell Oil. Supervisor Wiener, along with other Supervisors, complained during the September 18 hearing that they had been handed several amendments to the Clean Power SF measure just as they were walking into Board chambers to cast their votes. Clearly, members of the public weren’t provided copies of Clean Power SF amendments before the September 18 hearing, repeating the same situation as the Parkmerced amendments.
This suggested that the Board of Supervisors hasn’t learned its lesson about complying with the Sunshine Ordinance, given that it again willfully engaged in what can only be considered “official misconduct.”
Ethics Commission Violates City Charter
San Francisco’s mainstream daily news media have reported only the most superficial information about the issues underlying Mayor Ed Lee’s official misconduct charges against Sheriff Ross Mirkarimi. In stark contrast, a detailed, dispassionate analysis was posted anonymously on September 9 in a blog article titled “San Francisco Ethics Commission Official Misconduct Proceeding Against Sheriff Ross Mirkarimi — Thoughts on Final Hearing – August 16, 2012.”*
The anonymous author thoughtfully presents successive observations about the deliberations of the Ethics Commission, raising about ninety well-reasoned arguments of how the Ethics Commission went astray.
In a series of tables, the author examines each of the Mayor’s six counts against Mirkarimi—counts that had to be revised and reintroduced after the Ethics Commission rejected the Mayor’s initial charges. Notably, none of the Mayor’s revised six counts were sustained in full by the Ethics Commission, which rejected four of the six counts outright, and then created a single hybrid new charge by picking and choosing portions of the remaining two counts. The hybrid charge was raised just minutes before the Ethics Commission voted four-to-one against Mirkarimi, depriving him of the information, vital to his defense, of what charge he was actually fighting until just seconds before the Commission’s verdict.
The author illustrates quite clearly that the only sustained supporting fact (Mirkarimi’s wife’s bruised arm on New Year’s Eve) did not relate to any of the Sheriff’s duties of office, so it can’t possibly be “official misconduct” related to Mirkarimi’s official duties.
The author examines the new “relationship” tests the Ethics Commission dreamt up to evaluate whether any relationships existed between Mirkarimi’s alleged wrongdoing and the office(s) he held. The Ethics Commission went to great lengths to dream up new relationships to support the Mayor’s charge that Mirkarimi’s conduct had fallen “below the standards of decency, good faith and right action impliedly required of” elected officials. Ethics Commissioner Paul Renne considered it pointless to discuss any “relationships” at all. But Commissioners Liu, Studley, and Hayon held to their moral certainly that Mirkarimi was guilty, and through “backwards reasoning,” they simply made up a middle-ground “relationship” test.
But the made-up requirements are so diluted that they amount to no requirement at all, exactly what Commissioner Renne had insisted: No direct relationship between duties of office held and alleged conduct was necessary.
The anonymous author concludes that a court will likely conclude in the future, and reject out of hand, Renne’s blatantly unconstitutional interpretation of the definition of official misconduct. The author also believes that with just a bit more effort, a court will also reject the “backwards reasoning” Commissioners Liu, Studley, and Hayon used to arrive at the same unconstitutional conclusion.
The analysis concludes with two key points: First, the Ethics Commission was strictly limited to a single legal question: Did a public official commit “official misconduct” as defined in City Charter Section 15.105(e), or not? The Ethics Commission didn’t answer this question.
“Upgrading” Charges Exceeded Commission’s Authority
Instead, they made up their own rules. The author notes, “Voters never granted the unelected five-member Ethics Commission the authority to make recall decisions for them. Its authority is strictly limited to a legal question. … The Ethics Commission may not exercise authority it has never been granted by ‘upgrading’ non-official misconduct to ‘official misconduct’ merely because the Ethics Commission is confident — even certain — that voters would not have elected the official had they known what the Ethics Commission has since learned.”
The only way the Ethics Commission could do that would be by substituting their own political judgment for the judgment of voters, but they have no authority to do that, either.
Second, how far back in time can a Mayor or Ethics Commission look to uncover evidence of former improper misconduct in misguided attempts to find relationships to previous conduct and an elected or appointed office held? Eight months? Two years? An entire lifetime?
If this new “standard” is upheld, every City employee could face removal by a vindictive Mayor. Who would ever choose to become a public servant or public employee with rules like that in place? If Mayor Lee is allowed to make up these rules as he goes along, what’s to stop him from fabricating charges against, say, Supervisor Sean Elsbernd or Supervisor Scott Wiener? Is any employee safe with this sort of a precedent, and does the Board of Supervisors really want to hand such open-ended authority to the Mayor in perpetuity? How would that work under a really rotten mayor?
By making up the rules of the misconduct proceedings against Mirkarimi as they went along, the Ethics Commission appears to have violated the City Charter itself by exercising authority it has not been granted.
*Further reading: The dispassionate, anonymous analysis of the Ethics Commission’s handling of Sheriff Ross Mirkarimi’s case can be found online at http://rjemirkarimi.blogspot.com/2012/09/ethics-commission-proceeding-against.html. It is well worth the read.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. He received the Society of Professional Journalists–Northern California Chapter’s James Madison Freedom of Information Award in the Advocacy category in March 2012. Feedback: mailto:monette-shaw@westsideobserver.
Wiener Out of Control
Skullduggery at Board of Supervisors leaves City Hall wide open for corruption to run rampant
San Franciscans should not only be alarmed by the now four-month complete shutdown of our local Sunshine Ordinance Task Force (SOTF), we should pay close attention to how the shutdown of the SOTF came to pass.
Last Sunshine Task Force: Suzanne Manneh, Allyson Washburn, Vice Chair Bruce Wolfe, Jay Costa, Richard Knee, Jerry Threat (City Atty), Chair Hope Johnson and SOTF Administrator Andrea Ausberry
As the Observer reported in July in “Who Killed Sunshine?” Supervisor Scott “The Tinkerer” Wiener single-handedly killed open government by shutting down our local Sunshine Task Force, leaving San Franciscans without any citizen oversight of access to public meetings and access to public records, and leaving City Hall wide open for corruption to run rampant. To support his false claim that the Sunshine Task Force engaged in official misconduct of its own and had undermined transparency in government, Wiener failed to provide any evidence and lied at least four times during a full Board of Supervisors meeting on May 22.
To support his false claim that the Sunshine Task Force engaged in official misconduct of its own and had undermined transparency in government, Wiener failed to provide any evidence and lied at least four times during a full Board of Supervisors meeting on May 22. ”
He wrongly claimed on May 22 that the Task Force had exempted itself from the San Francisco Charter, and wrongly claimed the Task Force had said “How dare you shine sunlight on us?” when the Task Force had never claimed any such thing. Wiener claimed he asked for an “audit” of the costs of compliance with the Sunshine Ordinance, when in fact he asked for a “survey.” Wiener also inflated the average number of times City employees had to attend hearings to resolve Sunshine complaints.
Official Misconduct Clearly peeved that the Task Force had referred him to the Ethics Commission for official misconduct 1n September, 2011 over the Parkmerced development deal, Wiener engineered kicking physically disabled member Bruce Wolfe off the SOTF on May 22, filling the remaining “member of the public” seats with non-disabled appointees.
Photo: Bruce Wolfe with his guide dog Lady
Wolfe was the only physically handicapped member of the Task Force, which now has been unable to meet for four months due the lack of a physically disabled member. The Board of Supervisors knowingly removed the only disabled member of the SOTF and failed to appoint a disabled replacement, as required by Sunshine Ordinance Section 67.30(a). The Supervisors did this, despite the fact that over half of them are lawyers who should have known of this legal requirement in the Sunshine Ordinance — including Supervisor Scott Wiener, a Harvard Law School graduate and a former SF Deputy City Attorney.
Non-Compliance Adjournments On both June 6 and July 11, the Task Force voted to adjourn its meetings without taking any action on its agendas due to not being in compliance with Sunshine Ordinance Section 67.30(a). The Task Force subsequently cancelled its August meeting for being non-compliant with Section 67.30(a), and will also have to cancel its September meeting, as a disabled member has not yet been appointed to the Task Force.
Wiener’s Latest Misinformation
On July 17, during a hearing to re-appoint Michael Antonini to the Planning Commission, Supervisors David Campos and Jane Kim criticized Wiener’s handling of the SOTF appointments on May 22. Campos and Kim noted that the SOTF members removed on May 22 were ousted because they took a “different approach” than members of the Board of Supervisors may prefer.
History Re-written True to form, Wiener didn’t skip a beat, using revisionist history to lie again. Wiener claimed that the actions to remove Task Force members on May 22 were “primarily taken by the Rules Committee and to a lesser extent by the full Board [of Supervisors].” Wiener repeated his remarks that “the Sunshine Task Force was being run in an incompetent manner which violated the City’s Charter,” and that it was the Rules Committee that “recommended removing almost all the [SOTF] incumbents except for one and the [full] Board voted to remove that final incumbent. So the majority of the removing happened before [the nominations] got to the full Board,” Wiener testified.
This is patently untrue, and Wiener’s revisionist history-making.
First, the Rules Committee forwarded a recommendation to re-appoint Member Wolfe, and it was, indeed, the full Board that overturned the Rules Committee recommendation, the lie being that the full Board did not play a “lesser extent” role, they played a very aggressive role under Wiener’s insistence to remove Wolfe.
Second, of the 10 vacancies on the Sunshine Task Force considered on May 22, only half (five) were new appointees. Wiener incorrectly claimed on July 17 the remaining five were removed by Rules, since one member (Wolfe) was actually recommended for re-appointment by Rules, and the other four were continued to the call of the Rules Committee’s chair.
“Different Approach” Proviso Indeed, several of the Supervisors expressed concern on July 17 that removing appointees such as Antonini or Wolfe from boards and commissions based solely on whether the appointees exercise a “different approach” than would the Board of Supervisors will open a can of worms. Indeed, what seems to annoy “The Tinkerer” Wiener the most is that, while the Board of Supervisors can review or modify decisions of the Planning Commission, the Board has no authority to review or modify decisions made by the Sunshine Task Force.
How Did We Get Here?
On Thursday, May 17, 2012, the Rules Committee considered the nominations of 23 applicants for appointment to 10 of the Sunshine Task Force’s 11 seats. Following testimony and debate, the Rules Committee forwarded to the full Board of Supervisors the names of six applicants recommended for appointment to six of the SOTF’s seats, including Bruce Wolfe for Seat 8, the seat Wolfe has held for a number of years. For unknown and unstated reasons — but most likely at the Wiendr’s request — Supervisor Mark Farrell introduced a motion on May 17 to “divide” the recommendations for Wolfe’s appointment from the other five recommendations; but Wolfe was recommended separately for re-appointment.
The Rules Committee also recommended to place appointment of four other SOTF seats to the “Call of the Chair,” continuing those appointments to a future Rules Committee meeting when its chairperson schedules a subsequent hearing to finalize the four remaining appointments.
The SOTF appointments were first received on May 9, and assigned to the Rules Committee for a hearing eight days later on May 17. The full Board considered the Rules Committee recommendations during a Committee Report on May 22, when Wiener engineered overturning the Rules Committee recommendation to re-appointment Wolfe — throwing Wolfe off the Task Force, as the Westside Observer reported in our July issue.
Wiener’s Crony Appointment Wiener’s nominee to replace Bruce Wolfe was Todd David, who appears to have had no qualifications to serve on the Sunshine Task Force. Indeed, Mr. David’s application listed no qualifications to serve. Mr. David’s Form 700, Statement of Economic Interests — a document required as part of SOTF’s application process — failed to include the pre-printed form, Schedule B, Interests in Real Property. Instead, Mr. David submitted a written statement in lieu of Schedule B in which he neglected to report the appraised value of a multi-family residential property he owns at 384 Eureka Street appraised at $2.1 million, and neglected to report rental income he receives from the multi-unit property.
Notably, although the Rules Committee had only considered David’s typed statement, rather than the required Schedule B, the Rules Committee did not recommend Mr. David for appointment to the Task Force. It was Wiener who chose to substitute Todd David in place of the Rules Committee’s recommended appointee, Bruce Wolfe.
Complaints Following a Complaint to the Board of Supervisors that it should not have accepted a typed statement in lieu of the Schedule B, a Board clerk replied that it would be disclosed only if Mr. David submitted the actual Schedule B to the Ethics Commission; the Board’s clerk appeared unwilling to ask Mr. David to re-submit the required form.
On a complaint filed with the California Fair Political Practices Commission (FPPC) regarding Mr. David’s substitution of a typed statement in lieu of Schedule B. The FPPC determined David had violated California’s Political Reform Act by failing to disclose his interests in real property and issued a warning letter to Mr. David on August 22, after he submitted the proper Schedule B.
More of Mr. David’s Forgetfulness
During a Board hearing on his appointment to SOTF, David stated that “There’s nothing more important for government than to be transparent so that the voters who have elected you know that you’re making really good decisions.”
David’s “transparency” seems to be entirely opaque. In addition, there were a number of other oddities on his application to the SOTF, and his responses to transparency questions are troubling.
Discrepancy When asked why his application hadn’t indicated that the California Secretary of State suspended “TSD Capital, LLC’s” (Todd Stuart David Capital) privileges to operate as a business entity in California in December 2011 for failure to meet franchise tax requirements because he failed to file a return or failing to pay taxes, David responded only that he needed to speak with the Secretary of State about this “discrepancy,” since David claims he filed a “final” tax return for his TSD Capital business “three or four years ago” dissolving that business. Why the State took action in December 2011, and Mr. David is only now learning that a “discrepancy” exists with State records is curious, at best.
Can’t Recall When asked why he submitted his application on April 27, he couldn’t recall. The date April 27 is significant as being the last date of any SOTF appointee’s term, and the date on which previous member’s appointments were scheduled to end.
Insider Maneuver When asked why he faxed his SOTF application to Supervisor Wiener’s fax machine, instead of the Clerk of the Board, David lamely claimed he had Wiener’s fax number handy, and had asked Wiener’s staff to just walk his application down the hall to the Clerk of the Board. Why did David seek Wiener’s intervention, when Wiener doesn’t sit on the Board’s Rules Subcommittee?
Notably, Wiener does sit on the Board’s Land Use and Economic Development Subcommittee, which subcommittee may be asked in the future for a land use change to convert a parking lot in Noe Valley into a mini-park to prevent the parking lot being sold and turned into condos. Mr. David serves as the president of Resident’s for Noe Valley Town Square, an organization planning to secure a $2 million Open Space Funds commitment from the City’s Recreation and Parks Department. Asked if anyone is hoping that by Mr. David serving on the SOTF it may help the Resident’s for Noe Valley Town Square secure the $2 million in Open Space Funds, he responded that “the project will or will not receive funding base [sic] on its own merits.”
“I don’t recall” When asked why he hadn’t listed several of his civic affiliations on his SOTF application — as Executive Director of edMatch, and as a steering committee member of Parents PAC (a political action committee) — David replied “I don’t recall” why he had omitted both affiliations from his application, calling into question whether Mayor Ed “I Don’t Recall” Lee is now coaching others on how to use former Mayor Willie Brown’s “I don’t recall” line of defense.
Parallels to the Mirkarimi Case
On August 16, the Ethics Commission deliberated its findings against Sheriff Ross Mirkarimi. Troublingly, Mirkarimi’s lawyer David Waggoner noted that the Ethics Commission had not sustained in full any of the six charges in the amended charging document with which Mayor Ed Lee eventually charged Mirkarimi. Waggoner noted that the Ethics Commission had instead substituted some sort of a single hybrid charge that it made up on the spot on August 16, combining portions of separate charges that weren’t completely sustained into a fresh new charge that surfaced just seconds before Ethics concluded its deliberations, a new charge Mirkarimi hadn’t even been aware of during the Ethics Commission’s months-long kangaroo court.
Waggoner also noted that if the Ethics Commission rejected some of the counts against Mirkarimi, by the clear language of the Charter, the Commission wouldn’t be sustaining all of the charges, and if Ethics wasn’t going to sustain all of the initial charges, then the Commission couldn’t recommend Mirkarimi be removed, because the Charter’s clear language doesn’t give the Ethics Commission the option to pick and choose among some charges, but not other charges.
Grave Concerns To his credit, Ethics Commission president Benjamin Hur was the lone dissenting vote against finding Mirkarimi guilty of official misconduct. Hur indicated he had “grave concerns” that overly-broad interpretations of which behavior constitutes official misconduct may give mayors a “strong tool” — and perhaps free license — to attempt to remove political opponents inappropriately.
The parallels between the Mirkarimi case and the SOTF appointments are striking: Unsupportable and false accusations were simply tossed out by Mayor Lee against Mirkarimi as they were by Supervisor Wiener against Wolfe to see if they would “stick.” Then, both the Ethics Commission (in Mirkarimi’s case) and the full Board of Supervisors (in the Bruce Wolfe case) simply made up processes along the way to wrongly remove political opponents.
It’s a sad state of affairs when complaints have to be filed with the FPPC to obtain accurate Form 700 Statements of Economic Activity from SOTF appointees. It’s also sad that another member of the community had to file a complaint against Supervisor Wiener with the State Bar of California for possible violations of ethical codes of conduct required of lawyers. The State bar complaint involves the SOTF’s September 3, 2011 official misconduct finding referred to San Francisco’s Ethics Commission regarding Wiener’s role in the Parkmerced development deal. The complaint asks the State bar to investigate whether Wiener violated Business and Professional Code sections 6128 and 6068 that prohibit all lawyers in California from providing false statements and prohibits all forms of deceit (including selective presentation of incomplete facts).
While many — including Bruce Wolfe — try to do the right thing to protect the rights of citizens to know what our government is up to, there are powerful forces and people such as Wiener for whom truth and transparency appear to be inconvenient, and who may prefer to deny access to either. Now is the time to pay attention, and demand that the Board of Supervisors reappoint. Wolfe to the SOTF immediately so the Sunshine Task Force can resume citizen oversight of City Hall.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. He received the Society of Professional Journalists–Northern California Chapter’s James Madison Freedom of Information Award in the Advocacy category in March 2012. Feedback: Monette-Shaw
Ask Supervisor Scott “The Tinkerer” Wiener:
Who Killed Sunshine?
Has Supervisor Scott “The Tinkerer” Wiener single-handedly killed open government “Sunshine” in San Francisco, however temporarily? Sunshine has left the City, leaving the Sunshine Task Force in official limbo.
Clearly peeved, Wiener kicked physically disabled member Bruce Wolfe off of the Sunshine Ordinance Task Force on May 22, filling the remaining “member of the public” seats with non-disabled appointees. Wolfe was the only physically handicapped member of the Task Force, which now can’t convene while lacking a physically disabled member.
To support this claim, Wiener lied at least four times. One tiny problem: None of what Wiener claimed had happened; none of it was true.”
Sunshine Ordinance Section 67.30(a) has long required that “At all times, the Task Force shall include at least one member who shall be a member of the public who is physically handicapped and who has demonstrated interest in citizen access and participation in local government,” a requirement lawyer Wiener either didn’t know about, or studiously ignored. [Note: “Handicapped” refers to a person having a physical disability.]
What was Vice Chair Wolfe’s “crime” that warranted being removed from the Task Force? Wiener claims Wolfe had “been part of the Task Force when all of these things have happened,” ostensibly including when it found Wiener guilty of official misconduct on September 27, 2011.
Wolfe may have earned Wiener’s enmity a second time a month later on October 24, 2011, when Wolfe publicly opposed Wiener’s Prop. E and Prop. F November 2011 ballot measures during the West of Twin Peaks Central Council endorsement session. Wiener left that meeting in speechless shock after retired Judge Quentin Kopp questioned Wiener about why we even need an Ethics Commission.
Removing Wolfe smacks of political payback. Wiener presented no specific charges against Wolfe, just that Wolfe had “been around.” Wiener was referring to things he classified as “bad,” but were clearly within the Task Force’s legitimate purview.
Wiener went so far as to state conclusively during the May 22, 2012 Board of Supervisors meeting broadcast on cable (SFGOV TV) that the Sunshine Ordinance Task Force had engaged in official misconduct. He didn’t qualify his accusation with “allegedly,” or “potentially,” or “perhaps” had engaged in misconduct.
Wiener went further May 22, claiming not only that the Task Force had engaged in official misconduct, but also that “the current Sunshine Ordinance Task Force … frankly, has undermined both the Ordinance and transparency in government … in several ways.”
To support this claim, Wiener lied at least four times. One tiny problem: None of what Wiener claimed had happened; none of it was true.
What had been the Task Force’s crime? As the first of his lies, Wiener whined “This Task Force purported to exempt itself from the San Francisco Charter.”
The Task Force did not exempt itself from the City Charter. Instead, the Task Force had amended its bylaws in April 2011, a lawful act. Because of ambiguities in Charter Section 4.104 — a section not clear that it even applies to the Task Force — the Task Force disagreed with an opinion from City Attorney Dennis Herrera regarding how many members need to be present during meetings to pass motions.
Indeed, before voting to change its bylaws, the Task Force recognized that the types of entities listed in Charter Section 4.104 excluded task forces; referred only to entities of the Executive Branch, since the Sunshine Task Force is an entity of the Legislative Branch; and that this section of the Charter specifies only entities created by Legislative acts, not to entities created by the electorate (i.e., members of the public otherwise known as “voters”).
When the Task Force adopted its rule, changing to a majority of members present rather than a majority of all members, those who voted for the bylaw change did so believing that they were not flouting the Charter or any other law, they just didn’t agree with Herrera’s interpretation, since City Attorney “interpretations” and “opinions” don’t carry force of law.
Wiener Slanders the Task Force
Wiener stated, as if he were both the judge and jury, “And frankly, that was official misconduct, in my personal view.”
He didn’t afford the Task Force an opportunity to respond or defend itself; he just falsely accused the Task Force and concluded with no debate or evidence, and without a hearing presenting any charges, slandering the Task Force in the process. After the Task Force lawfully amended its bylaws, why did Wiener wait for a whole year before making this an issue?
Was it retribution for the Task Force having found Wiener guilty official misconduct six months after it had adopted its bylaws change?
Perhaps Wiener is taking cues for slander from Mayor Ed Lee, who appears to have slandered Sheriff Ross Mirkarimi by claiming, as the mayor did on June 20, that Mirkarimi had “engaged in beating his wife,” appalling many observers by not qualifying it with “allegedly.” Lee reached this conclusion before the Ethics Commission or the Board of Supervisors completed their investigations of the wildly inflated charges against the Sheriff. Both Lee and Wiener are throwing false accusations against the wall, hoping to see which libelous accusations may stick.
Ironically, although Wiener stated on May 22 that “The Sunshine Ordinance, and transparency in government in general, is incredibly important,” he’s sponsored measures to lessen campaign finance disclosure transparency, and the Task Force found that Wiener violated the Sunshine Ordinance himself, as this article explores.
Second, Wiener lied claiming that he had asked the Board’s Budget and Legislative Analyst, Harvey Rose, for an “audit,” inferring an audit of the Task Force. In truth, Wiener had requested a survey of each City department’s costs to comply with the Sunshine Ordinance, not an “audit” of the Sunshine Task Force’s revenue and expenses.
Third, Wiener claimed on SFGOV TV that the Task Force had responded by saying, “How dare you! How dare you shine sunlight on us?” No Task Force member had ever said any such thing, even remotely; Wiener clearly lied on broadcast TV during a Board hearing.
In truth, the Task Force’s only response was a March 22, 2012 letter to Wiener, respectfully noting he had not extended the courtesy of informing the Task Force of his intent to conduct such a survey, and asking for clarification about his motivation for requesting the survey. The Task Force asked what benefit Wiener expected the public to receive from such a survey, since he had not asked Rose to estimate or quantify the benefits of Sunshine, just expenses. Wiener failed to ask that costs of compliance with the California Public Records Act be reported separately, which turns out to be the major “driver” in costs of compliance with local and state open government laws.
The Task Force was within its rights when it appropriately requested an explanation from Wiener, and it extended an open invitation to him to discuss any issues regarding the Sunshine Ordinance and the Task Force’s procedures. It never once said “How dare you!,” as Wiener falsely claimed.
Fourth, Wiener claimed on May 22, “On average, City employees had to spend 1.9 Task Force hearings to get complaints against them adjudicated. … They couldn’t go the first time and get it done,” which Wiener then found to be unacceptable because “It creates enormous inefficiencies.”
Here, Wiener was relying on Rose’s flawed analysis. Rose had included 21 Sunshine complaints filed in 2010 in his estimate of the costs of Sunshine that was to have focused on 2011. As well, Rose had excluded 31 of the 86 Sunshine complaints filed in 2011 — a full 36% — that may either never had a Sunshine hearing (perhaps dismissed or resolved before requiring a hearing) or were not heard until 2012. Of the remaining 55 complaints filed in 2011, six — or 11% — were resolved in just one hearing.
If 31 complaints never received any hearing, the claim of 1.9 average hearings begins to fall apart.
So in potentially 47% of the Sunshine complaints filed in 2011, the Task Force did a commendable job resolving those cases with one hearing per case or less, which Rose clearly overlooked. But Wiener blames the Task Force for multiple hearings, when indeed many of the cases that required multiple hearings were because respondent departments failed to show up at the first hearing — something obviously beyond control of the Sunshine Task Force — which Rose never quantified and which Wiener ignores.
In order to be more efficient, the Task Force changed its procedures, eliminating the requirement that all complaints be heard first by its Complaint Committee, requiring a second hearing only in cases where the Task Force’s jurisdiction was questioned. It’s also unclear whether Rose counted as “multiple hearings” the vast majority of cases where a five-minute agenda item to determine jurisdiction at a full Task Force meeting preceding a second agenda item to hear the particular complaint was double-counted as two “hearings,” when in fact it may have involved a single meeting with a two-part agenda item, perhaps inflating Wiener’s claim that City employees couldn’t just go once to get cases against them heard.
A Harvard Law School graduate, Wiener is known as a hard worker, but he’s not faced much adversity in terms of advancing his political career. Wiener worked five years as an attorney at Heller Ehrman White & McAuliffe, where he focused on financial, accounting-related, and commercial litigation. In 2002, he took a position with the San Francisco City Attorney’s Trial Team representing City departments in civil litigation. In both positions Wiener was thought to have a lily-white reputation.
Perhaps while a Deputy City Attorney, Wiener may have ran across the Sunshine Ordinance as a result of knowledgeable litigants who had used the City’s open government Sunshine law during legal discovery. Then he ran for District 8 Supervisor, and his reputation began getting black marks.
Luckily for San Franciscans, Wiener has faced a number of setbacks to his various schemes tinkering with lessening transparency at City Hall. Here’s the timeline that reduced Wiener to vindictiveness:
Wiener’s Tinkering Timeline
On September 27, 2011 the Sunshine Task Force heard a complaint from Parkmerced resident Pastor Lynn Gavin that Board of Supervisors President David Chiu and the board’s Land Use and Economic Development Committee — composed by Supervisors Eric Mar, Malia Cohen, and Scott Wiener — had violated local and state open-meeting laws by sneaking in 14 pages of amendments to the Parkmerced development deal only minutes before approving it. Pastor Gavin asserted the amendments were so drastic that the Board’s agenda didn’t accurately reflect the real deal under consideration, and that voting to approve it without sufficient time for review by members of the public violated open-meeting laws. The Sunshine Task Force ruled in Gavin’s favor, finding Wiener and the other three supervisors had committed official misconduct, and referred the four Supervisors to the Ethics Commission for enforcement.
On November 8, 2011, San Francisco voters rejected Proposition “E” that Wiener had sponsored. Initially, Wiener had proposed granting the Mayor and Board of Supervisors authority to amend or repeal measures placed on the ballot by the Mayor, four or more Supervisors, or by citizens signature petition initiatives. Facing intense public criticism in the spring of 2011, Wiener toned the measure down and eventually convinced only seven of the Supervisors on July 19 to place a modified version on the ballot, to allow amendments to, or repeal of, measures that only the Board or Mayor had placed on the ballot, but not to citizen measures, or Charter amendments and bond measures. Opposed by the Friends of Ethics — founded by five former Ethics Commission members — Prop. “E” went down to defeat on November 8, handing Wiener a second public embarrassment.
Another Wiener-sponsored ballot measure also went down in flames on November 8, handing him a third embarrassment. Prop “F” would have: Redefined who would be required to register as campaign consultants; raised the threshold of campaign consultant earnings from $1,000 to $5,000; eliminated filing of paper reports, requiring only electronic reports instead; amended the annual fees to no longer depend on the number of clients campaign consultants represent; and would have allowed the City to change campaign consultant ordinance provisions without further voter approval. Voters saw right through this, defeating Prop “F” and slapping Wiener with a third embarrassing defeat.
Humiliated three times in as many months, Wiener next asked Budget and Legislative Analyst Harvey Rose on December 13, 2011 to conduct a one-sided “Survey of Costs of Compliance with the City Sunshine Ordinance.” Wiener told neither his Board colleagues nor members of the Sunshine Task Force that he had placed this furtive request to Rose, as if Wiener had never heard the words “transparency in government” before in his life. Wiener was reportedly concerned about the costs of overtime for City employees to attend Task Force hearings.
Of the 41 City departments that responded to Rose’s “Costs of Sunshine” survey instrument, just three departments — the Ethics Commission, the Planning Department, and Muni — reported overtime costs. City Departments claimed 14,000 hours of effort theoretically complying with Sunshine (over three-quarters of which would have been required by the California Public Records Act anyway), and reported just 77 hours of overtime. The overtime was estimated at just $5,678 out of approximately $2.5 million in salaries and fringe benefit costs. Notably, the Sunshine Task Force’s two paid employees — its then-administrator Chris Rustom, and Deputy City Attorney Jerry Threet — earned no overtime in 2011 according to the City Controller’s payroll records. Wiener shouldn’t have been in a tizzy over less than $6,000 in overtime.
On April 8, 2012, Harvey Rose released his analysis that Wiener had asked Rose to prepare. However inadvertently, Rose slapped Wiener with a fourth public embarrassment: That fully 77% of the costs identified to comply with open government regulations “would continue to exist under current State law [the California Public Records Act and the Brown Act] even if the City did not have the Sunshine Ordinance.” Rose noted that the net costs attributable solely to the Sunshine Ordinance were just $997,676, representing less than two-hundredths of one percent of the City’s then $6.8 billion annual budget. Wiener could not have been happy learning that the costs to comply with Sunshine is less than a million dollars, costing just $1.24 annually for each of the City’s 805,000 residents.
Rose, however, did not calculate any savings or benefits the Sunshine Ordinance may have brought to taxpayers, including costs avoided involving court cases concerning access to public records. As this reporter has previously noted, $350,000 was restored to the Laguna Honda Hospital patient gift fund as a result of public records requests filed by Drs. Kerr and Rivero, and the City is now pursuing in Superior Court $70 million in Laguna Honda Hospital replacement project “change orders,” which change-order cost overruns were also uncovered through public records Sunshine requests.
Given these embarrassments, Wiener apparently engineered on May 22 stripping Bruce Wolfe of his seat on the Task Force. Wiener also supported the Rules Committee recommendation to hold up approving four nominations for appointment to the Task Force by demanding that three nominating agencies — the Society of Professional Journalists, the League of Women Voters of San Francisco, and New America Media — submit multiple nominees from each agency, rather than single nominees (as they have since Sunshine became law) be forwarded to the Board of Supervisors Rules Committee for appointment. Those four appointments to the Task Force also remain in limbo.
On June 6, following advice from its advising Deputy City Attorney, the Sunshine Task Force voted to adjourn its regularly scheduled meetings until such time as a physically handicapped member is re-appointed to the Task Force, as the Sunshine Ordinance requires; without a disabled member, Task Force votes on its action items could be legally challenged. Supervisor David Campos noted during the June 6 meeting — speaking as a member of the public, not in his role as a City supervisor — the embarrassment the City will suffer from shutting down its Sunshine oversight body due to failure to comply with disability rights provisions in the Sunshine Ordinance.
A day later, on June 7, Wiener was slapped again, this time by his Board “colleagues” on the Rules Committee. Again carrying water for the Ethics Commission — despite the resounding rejection of Props. “E” and “F” by voters last November — Wiener introduced an Ordinance that would have, among other things, “modified and streamlined reporting requirements for candidates and third parties spending funds in local elections,” and to “eliminate the overall contribution limit on contributions to all candidates on the ballot in a single election.”
Wiener’s proposed ordinance would have, according to some observers, strengthened application of the U.S. Supreme Court case Citizen’s United in San Francisco by undoing contribution caps. After hearing from a number of former Ethics Commissioners who spoke during public comment on June 7, and after hearing Supervisor Campos’ many concerns, the Rules Committee didn’t forward Wiener’s latest ordinance to the full Board of Supervisors for adoption; it sent the legislation back to the Ethics Commission for further work. Poor Wiener just can’t get anything right.
Here it is a month later, and Wiener-“The-Tinkerer” remains unrepentant. He single-handedly shut down Sunshine in San Francisco, and he’s in no hurry to let the Sunshine back in. For all anyone knows, Wiener may be counting on keeping the Sunshine Task Force deadlocked and shut down for as long as possible.
The longer the Sunshine Task Force is in limbo, the more likely it will be for City Hall to engage in backroom deals without sufficient public oversight. Call the Mayor’s Office on Disability at 554-6789 and ask them for its support in getting Bruce Wolfe reinstated so the Sunshine Task Force can resume its operations.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. He received the Society of Professional Journalists–Northern California Chapter’s James Madison Freedom of Information Award in the Advocacy category in March 2012. Feedback: monette-shaw@westsideobserver.
Errors Haunt “God’s Hotel”
One wonders whether God’s Hotel — just published by former Laguna Honda Hospital physician Victoria Sweet, MD, PhD — uses LHH as a backdrop to illustrate her career, or to lament the loss of long-term care skilled nursing beds, a necessary component of the “Slow Medicine” she advocates for.
While in many places the book is insightful, to those who worked there and know the hospital’s history intimately, the book’s omissions and factual errors are disturbing.
…Sweet notes she saved the healthcare system approximately $400,000 by making the correct diagnosis that an artificial hip had been dislocated from its socket, detected by a relatively inexpensive X-ray. “If doctors were going to be held accountable for [healthcare] costs,” Sweet writes, “why shouldn’t we get some kind of credit for savings?””
Glowing reviews of God’s Hotel have appeared in publications ranging from the Wall Street Journal, to the Boston Globe, to the Huffington Post. But those reviewers hadn’t witnessed events that transpired at Laguna Honda as this reporter has for 13 years, and aren’t aware of key errors in, and omissions from, God’s Hotel.
Aware since May 2010 Sweet’s book was in development, during an invitation-only April 28, 2012 book launch party this reporter was startled when Dr. Sweet indicated — literally while passing — “Patrick, I hope you won’t be too disappointed by what I left out,” (or words to that effect).
I wondered: Why had Sweet anticipated disappointment?
The book is an amalgam — part memoir, part a story involving Sweet’s journey acquiring a PhD in the history of medicine, and part an extended Op-Ed arguing for a return to “slow medicine” — set against a backdrop of a very selective history of nearly two decades of patients and staff at Laguna Honda as it was transformed from a “medical model of care” for poor, safety-net patients to a “social rehabilitation model of care” for San Francisco’s homeless.
A central character in God’s Hotel — a title taken from the French “Hôtel-Dieu,” a Middle Ages “almshouse” taking care of the chronically disabled — is twelfth-century mystic, nun, and medical practitioner Hildegard von Bingen, whose idea was that human bodies are more like a plant to be carefully gardened, rather than a machine of broken parts. Sweet’s premise is that doctors should be more like gardeners than mechanics, and that many non-desperate illnesses might be better treated by Slow Medicine, by nurturing viriditas, the natural greening power of healing.
Throughout the book, Sweet offers many insights that take your breath away. In one patient vignette about having an accurate diagnosis, Sweet notes she saved the healthcare system approximately $400,000 by making the correct diagnosis that an artificial hip had been dislocated from its socket, detected by a relatively inexpensive X-ray. “If doctors were going to held accountable for [healthcare] costs,” Sweet writes, “why shouldn’t we get some kind of credit for savings?”
In another vignette, Sweet acknowledges that “almost every patient I admitted had incorrect or outmoded diagnoses,” often taking medications for diagnoses they didn’t have and placing patients at risk for adverse outcomes. Many of the misdiagnoses Sweet attributes to over-zealous medical student interns at San Francisco General Hospital, who are apparently never held accountable for misdiagnoses that drive up healthcare costs and endanger patient outcomes.
She wonders how outcomes might be improved with correct diagnoses, instead of incorrect ones, and visits to emergency rooms avoided if doctors are provided sufficient time to spend with patients. These insights — and others — make God’s Hotel an important read.
But maddeningly, although Sweet acknowledges Hildegard “took care to mention dates in her writing … to preserve her work for the future,” Sweet avoided including any dates throughout God’s Hotel’s 348 pages (although a few dates do appear in the end notes at the end of the book), making it all but impossible for readers to place events at LHH and during her PhD studies into perspective. How could any historian with a doctorate in medical history write a book with no dates documenting a hospital’s history?
From the vignettes, Sweet concludes LHH’s three principles are “hospitality,” “community,” and “charity.” She relates these principles by examining the etymology of many Latin words, including curare, splitting cure (doctors) and care (nurses), that has long fueled a battle for command and control of hospitals. Which model — care (nurses) or cure (doctors) — would triumph at Laguna Honda?
Sweet notes that during the French Revolution, medicine began to change; doctors wanted control of the Hôtel-Dieu in Paris to correlate medical treatments with patient outcomes. The nuns, of course, objected on moral grounds that using patients as experimental things was a bad idea; they protested, refusing to serve under the doctors and refusing to leave. Eventually, administration rescinded its order giving doctors control, returning control of the Hôtel-Dieu to the nuns providing nursing, until they left after it was secularized in the 1900’s.
Much of Laguna Honda’s history during the past 20 years parallels the same battle for control, a feud between doctors, nurses, and administration played out in most hospitals to this day. For her part, Sweet acknowledges the dynamic between the Nursing, Hospital Administration, and Medicine departments needs to be kept in close check to advance optimal patient outcomes.
In a long vignette about a patient with transverse myelitis, an inflammation of the spinal cord, Sweet’s point of view changed from focusing on her patients “vaguely surrounded by his environment.” Instead, she stepped back and learned to focus on the environment surrounding her patients, asking herself when anything interfered with her patient’s natural healing powers and their environments, what she could do to remove it.
Throughout the book, it becomes clear that Sweet didn’t venture into the political environment at Laguna Honda, and didn’t become involved in efforts to stop the transformation of its medical model of care, or efforts to permanently alter LHH’s environment.
Sweet acknowledges that the same disability rights activist lawyers who disastrously shut down state mental hospitals around the country are now the same people hell bent on shutting down skilled nursing facilities caring for the frail elderly. Their test case was shutting down Laguna Honda Hospital.
Sweet erroneously reports that just after John Kanaley was appointed as Laguna Honda’s Executive Administrator in 2004, Sister Miriam Walsh requested a meeting with him. In fact, within the first month of his tenure, Kanaley summoned three vocal LHH staff members to his office in a bald attempt to exert his authority. None of the three had requested meeting with him.
First, he summoned Sister Miriam Walsh to his office for a discussion about her advocacy against the “flow project” involving the transfer of psycho-social patients from San Francisco General Hospital to LHH. When asked what Kanaley wanted, Sister Miriam reported “He wanted me to agree to a deal to keep Laguna Honda’s name out of the media and asked me to pipe down. I told him, ‘No deal,’ and that was the end of the meeting.”
In short order, Kanaley summoned Dr. Maria Rivero and this reporter, separately, to his office for the same talk, and we both essentially told him the same thing: “No deal.” Kanaley’s attempt to bully vocal staffers by intimidation set the tone for the duration of his bull-in-a-China-shop administration.
In another act of bullying, in June 2008 — following Sister Miriam’s May 2008 Westside Observer article “Farewell to Laguna Honda’s Clarendon Hall” — Kanaley wrongly accused this author of abusing Sister Miriam as a frail, elderly woman to advance my political and personal “gain,” because he falsely assumed I had written her article, which was a complete lie.
Many Minor Errors …
• In In the chapter “Wedding at Cana,” Sweet describes the wedding of two patients — the “Teal’s” — in LHH’s chapel, comparing it to Jesus’ first miracle, the transformation of water into wine at a wedding in Cana. From this, Sweet concludes — quite ironically — that Laguna Honda’s second principle is “community.”
Sweet asserts “almost all of Laguna Honda” poured into LHH’s Chapel for the Teal’s wedding, but observers report that attendance was actually quite low. Some observers wonder whether the stretched attendance was carried over into other areas of God’s Hotel for literary effect. The exaggeration, in itself, wasn’t terrible, but why do it, they wonder?
But the irony is that the low turnout may have been because most staff at LHH were painfully aware that Bride Teal was, in fact, already married to another man; many staff may have stayed away from the wedding, not wanting to witness polygamy being blessed. Why a minister was brought in — ostensibly with LHH administration’s approval — to conduct marriage vows for a woman already married amounted to sanctioning polygamy. Bride Teal didn’t want her family to know about her latest wedding. Rather than providing her with a reality check that she could have a party with her new love, but couldn’t throw a full-fledged wedding because she was already married to someone else, a handful of staff chose to “enable” Bride Teal, fueling her fantasies. Could Sweet’s new definition of “community” involve polygamy? Why did Sweet choose this story to illustrate “community,” when there were so many other examples of real community at LHH that she could have drawn from?
• Sweet reports that voters passed Prop. “A” in 1999 to rebuild LHH for $500 million, and that half would come from a general obligation bond and half from the tobacco settlement revenue account. This is untrue: First, voters were told the hospital’s replacement budget was $401 million, not $500 million (although the cost overruns 12 years later pushed the cost to well over $593 million). Second, the bond was for $299 million, and just $100 million was to come from the TSR account, not half and half.
• Sweet accurately reports there were two committees involved in the 2006 Prop. “D” ballot measure: “San Franciscans for Laguna Honda,” and the “Committee to Save Laguna Honda.” But she misreports that doctors Kerr and Rivero were members of both committees. This is patently untrue. The latter committee was formed by this author, Sister Miriam, Virginia Leishman, LHH resident Robert Neil who was then president of the Resident’s Council, and family members of the Traumatic Brain Injury Support Group. At the time, Kerr and Rivero made the correct ethical decision that they could not violate their doctor-patient relationships by joining an advocacy group that included patients of the facility.
• Sweet asserts the hospital’s 1,200-bed replacement plans had included three identical six-story buildings. In fact, the third residential tower eventually eliminated was a 420-bed, seven-story building containing crucial infrastructure elements like the data center that then had to be shoehorned into one of the two remaining 320-bed six-story buildings.
• Sweet reports that following a meeting between Sister Miriam and Mayor Gavin Newsom, Newsom ordered then Director of Public Health Mitch Katz to halt the many incarnations of the so-called “Flow Project” shuttling SFGH patients to LHH. Since this reporter attended that meeting, I can vouch that meeting wasn’t with the Mayor, it was with his Chief of Staff Steve Kawa, who has long been considered San Francisco’s real mayor ever since Willie Brown’s tenure. Earlier, this reporter had also attended a meeting between Sister Miriam and Mayor Newsom, which also included former City Attorney Louise Renne — the chairperson of the Laguna Honda Foundation — but Sweet makes no mention anywhere in God’s Hotel about Renne’s meddling in Laguna Honda’s affairs.
There are a host of other minor errors.
… Along With Many Major Errors
• When Sweet turned her attention to the U.S. Department of Justice’s first letter to then mayor Willie Brown in May 1998, she speculates the DOJ had been “tipped off” to investigate LHH. Sweet dissembles, first speculating it may have been doctors Kerr or Rivero who contacted the DOJ, before Sweet then speculates it may have been LHH’s forty-four-year Director of Nursing Virginia Leishman who provided the DOJ a tip, an allegation Leishman adamantly denies. (Leishman has, reportedly, received numerous calls since God’s Hotel was published, some encouraging her to consider slander.)
Observers at the time note that it may have been a former LHH Executive Administrator who may have “tipped off” the DOJ if anyone had, since he may have been miffed when plans to hand him a job converting the Department of Public Health into an “enterprise” department that would receive no City General Fund support fizzled, along with his promised job. Regardless, there is no proof that the DOJ had received any tips, and may have launched its investigation simply by reviewing sentinel event, or annual inspection, reports.
• Referring to the same first letter from the DOJ, Sweet asserts the DOJ was initially concerned only about LHH’s Nursing department, saying the DOJ blamed Nursing for almost everything, except LHH’s old-fashioned wards and aging infrastructure. This is also patently untrue. The DOJ, in effect, also blamed the Department of Medicine — which had then rightfully contained the sub-specialty of physical medical rehabilitation, including speech therapy, occupational therapy, and physical therapy, all components of physical medicine — for failing to provide specialized rehabilitation therapy. The DOJ asserted in 1998 that only 50 residents were receiving physical, occupational, or speech therapy — which services require referrals from physicians — to prevent functional decline, failing health, and premature death.
Speech Therapy, the DOJ claimed, had only assessed one-third of residents at LHH who were at risk for aspiration, and had assessed only 70 of 700 residents requiring eating assistance.
As a result of the DOJ’s claim in 1998, Laguna Honda hired within a year a new senior physical therapist, an occupational therapist, and a speech pathologist charged with developing a functional maintenance and restorative care program that subsequently hired four therapy aides to implement the program, which initially proved to be a success. (Unfortunately, that program has fallen into disrepair, given intermittent curtailment of restorative care services on long-term care units.) Before each return DOJ visit across the next decade, LHH physicians increased their rehabilitation physician orders to avoid further DOJ wrath. That meant doctors were finally paying attention to writing rehab referrals.
The DOJ was also critical in 1998 of LHH’s Activity Therapy Department for not providing meaningful activity needs of LHH residents. The DOJ’s concerns weren’t attributable solely to Nursing.
• Sweet reduces to a single page the 2006 Proposition “D” ballot measure to protect Laguna Honda for the frail elderly with skilled nursing needs, as voters were promised by Prop. “A” in 1999. Sweet wrongly regurgitates — with no critical analysis — the lies Prop. “D” opponents used to defeat the measure: That the proposition would permit the Residential Builders Association to build for-profit residential care facilities on city land, would put a zoning administrator in charge of making hospital admission decisions, and would require LHH to discharge 300 Alzheimer’s and AIDS patients, all of which were lies.
The RBA had no interest in building residential care facilities. The land use attorney who crafted the language for Prop. “D” — being an associate of former City Attorney Louise Renne who now operates the Laguna Honda Foundation — slipped in arcane language thought required for Planning laws, but was actually twisted into possibly allowing for for-profit private development. Nothing in Prop. “D” allowed for-private development, but once City Attorney Dennis Herrera wrote that Prop. “D” would provide a “land grab” by private interests, the lie stuck, despite being a canard uncovered by a respected journalist who looked into the issue and exposed it to be false.
Worse, lacking further critical analysis, Sweet omitted that LHH’s then Rehabilitation Coordinator was the only LHH staff member not affiliated with Prop. “D” who had correctly noted in 2006 that Prop. “D” used the exact same language that was contained in Title 22 and LHH’s own admission policies; he had read Title 22. The dullards running the anti-Prop. “D” campaign — including the Director of Public Health Mitch Katz, Mr. Kanaley, Mivic Hirose, and many MD’s on LHH’s staff — all appeared to have turned a blind eye to Title 22, as if they’d never read it.
• Sweet doesn’t report that in March 2006 — despite a prohibition in San Francisco’s Administrative Code Section 12G against using city funds to attempt influencing political activity, including ballot measures — then City Controller Ed Harrington, City Services Auditor Leticia Miranda in the Controller’s Office, and Health Management Associates employee Nicola Moulton exchanged a series of e-mails outlining the Prop. “D” ballot initiative and “themes” that might be used to defeat the measure, including whether 300 Alzheimer’s and Parkinson’s patients were part of those who would face discharge if Prop. “D” passed. Harrington and Miranda had to have known — if Sweet didn’t — that Health Management Associates was a contractor receiving city funds who had made recommendations in 2005 to alter Laguna Honda’s service mix. They also had to have known that using a city contractor to help develop arguments to defeat a ballot measure clearly violated Section 12G. Sweet mentions nothing of this.
Nor does Sweet mention that prior to publication of God’s Hotel, she had to have heard news that San Francisco’s Director of Public Health Mitch Katz had been paid $30,000 over a three-year period by Health Management Associates, the same firm he had steered a contract to.
• Sweet reports that Dr. Katz had given Mr. Kanaley an additional $10 million for more “administrative staff,” but she neglected to mention the $10 million was for transition planning to the new facility, including a host of duplicative doctors and nurses — not administrators — to ensure regulatory compliance. And Sweet omits that much of the $10 million wasn’t encumbered until after the move into the new facility had been completed; was possibly not used as intended by the initial earmark; that as of May 2012, only 74% of the $10 million had been spent; and that the remaining 26% ($2.6 million), had been cost-shifted to funding “facility maintenance contracts,” instead
There are other major errors too long for this review.
• Sweet mentions nothing about the closure of LHH’s adult day health care program, nor does she discuss the loss of 200 to 300 assisted living facility beds planned for the facility. Nor does she discuss the impact of the loss of LHH’s 420 skilled nursing beds on the rest of the city, and its effect on discharge locations, either. None of this is discussed in relation to “slow medicine.”
• There is no mention of the $190 million in cost overruns of the replacement facility, nor the shoddy workmanship in the new buildings (mold in the new kitchen is but just one problem) that will cost additional millions to repair.
• While Sweet acknowledges LHH’s current medical director relocated her offices to the front of the building to signal that the Medical Staff was falling into alignment with the Hospital’s Administration to transform LHH, Sweet fails to note that this medical director also jettisoned the medical staff’s autonomy when she permitted Rehabilitation Services — whether or not with concurrence by LHH’s Chief of Rehabilitation Services Lisa Pascual, MD, and LHH’s then Rehabilitation Coordinator, Paul Carlisle — to be placed under the auspices of the hospital’s Facility Operations Department. As far as is known, no other physical medicine rehabilitation department or their parent medical services department in Bay Area hospitals have permitted being placed under the control of facilities operations staff.
• While Sweet reports doctors Rivero and Kerr had filed a whistleblower complaint about abuse of LHH’s patient gift fund, Sweet never mentions that following a long-delayed City Controller’s audit of the gift fund the hospital was eventually ordered to restore over $350,000 misappropriated from patient benefit.
• Similarly, while Sweet notes that doctors Kerr and Rivero had authored a “brilliant” rebuttal to the Davis Ja report that recommended “higher-salaried physicians be replaced by registered nursing staff, social workers, and psychologists,” Sweet excluded reporting that over 20 physicians at LHH had signed a letter of support, finding that the Ja report had been illegal, unethical, and harmful to patients, since Ja lacked professional qualifications to assess physician services.
Although Sweet rightfully lambasts in God’s Hotel the “social rehabilitation” grant LHH’s Executive Administrator Mivic Hirose secured that became the focus of a heated, politically charged Board of Supervisors hearing in 2005, Sweet failed to note that during the final PowerPoint presentation at the end of the grant, the Nursing Team involved admitted it had not actually implemented any Nursing “intervention” portion of the grant designed to prove to the funding source the efficacy of social rehab interventions, a glaring admission of failure.
Nowhere does Sweet delve into the LHH public relations director’s spin control “deconstruction”; he’s the guy who claimed “LHH’s patient gift fund isn’t for patients.” Marc Slavin was hired in 2007 to squelch “negative publicity about LHH” to help out his benefactress, former City Attorney Louise Renee, now head of the Laguna Honda Foundation non-profit that refuses to release any details of its income and expenses, a fact Sweet must have know about for years, but doesn’t address.
To her credit, Sweet does acknowledge that San Francisco mounted no legal defense against either the Davis lawsuit or the Chambers settlement agreement; the City, with Slavin’s help, simply capitulated to the disability rights activists intent on shutting down Laguna Honda Hospital, contributing to the abuse of this civic institution.
Slavin is reportedly pursuing a PhD degree. While Sweet rightfully wonders about efforts to re-brand a public hospital with a new name that Slavin had proposed eliminating “hospital” from, she doesn’t wade in to whether Slavin’s marketing efforts over the years are designed to re-frame, for advertising purposes, that LHH can be used for just about anything, perhaps part of his pursuit of a PhD. He and Renne are at it again, now trying to “re-brand” LHH’s patient auditorium into a revenue-generating community theater to support Renne’s non-profit Laguna Honda Foundation.
Sweet never addresses LHH Administration’s ascendancy under Slavin, and the negative impact Administration has had on patient outcomes, while casting Nursing and Medicine asunder.
God’s Hotel is certainly no match against Slavin’s considerable skills in on-going deconstruction, and may be too little, too late to stop the transformation in how we provide “slow medicine” to care for the sick poor.
Despite errors haunting God’s Hotel, it may still be worth a read.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. He received the Society of Professional Journalists–Northern California Chapter’s James Madison Freedom of Information Award in the Advocacy category in March 2012. Feedback: mailto:monette-shaw@westsideobserver.
Budget Analyst Short Circuits Supervisor Wiener
Supervisor Scott “The Tinkerer” Wiener is at it again, tinkering with San Francisco’s Sunshine Ordinance, our local open government law that San Francisco voters adopted in November 1999 to supplement the California Public Records Act (CPRA) and the Brown Act covering open meetings. Westside Observer readers may wish to see part one of this story last month.
Rose’s survey instrument was deeply flawed.
The survey makes no attempt to discover how much our local Sunshine ordinance has saved the City by exposing or preventing backroom deals, and furthermore, it’s difficult if not impossible to measure how much the Task Force has saved the City in legal expenses by eliminating the need to take Sunshine-related complaints to court…”
Of the 41 City Departments that responded to the Board of Supervisors’ Budget and Legislative Analyst Survey of Costs of Compliance With the Sunshine Ordinance, a preliminary analysis conducted by this author reveals that City Departments first claimed expenses of approximately $8.2 million. A follow-up records request resulted in the Department of Elections revising its initial submission on March 3, adjusting its initially claimed 28,013 hours down to just 3,886 hours, and removing un-recouped photocopying expenses — eliminating between the two areas $2 million in costs wrongly first asserted.
Of the remaining $6.16 million claimed across City departments, another $2.24 million to $3.36 million in costs were dubiously reported and were perhaps not justified, potentially reducing total costs to approximately just $2.8 million.
Luckily, the Budget Analyst released his analysis, which became publicly available on April 25, in which he concluded that the costs of compliance with Sunshine directly attributed as unique to the Sunshine Ordinance is less than a million dollars (of a $7 billion City budget), and just $4.2 million between complying with local and state open records laws. Rose has short circuited Tinkerbelle Wiener’s attack on Sunshine, if only temporarily.
Clearly the $8.2 million in piled-on costs were the result of City departments wildly over-estimating their costs. Rather than the more probable $2.8 million in costs — not all of which would have been unique to our local laws — Budget Analyst Harvey Rose let it stand at $4.2 million.
Sunshine Ordinance Task Force member Richard Knee, a freelance journalist in San Francisco and a noted Sunshine activist, is deeply concerned about the Board of Supervisors’ Budget and Legislative Analyst survey of the costs of sunshine law compliance being conducted at Wiener’s surreptitious request.
Knee said, “There is a good deal of concern among Sunshine advocates that Wiener and/or at least one of his fellow supervisors might be planning a ballot measure that would abolish the Task Force and/or weaken the Sunshine ordinance in some other way.”
Knee was appointed directly to Sunshine Task Force Seat #3 by the Board of Supervisors in 2002, and has served admirably on the Task Force for a decade. He was nominated by the Society of Professional Journalists–Northern California Chapter to succeed San Francisco Bay Guardian editor/publisher Bruce Brugmann in Seat #2 in 2004, 2006, 2008 and 2010; in all cases, Knee’s nomination was confirmed by the Board of Supervisors, and he served as Task Force Chair in 2009–10 and 2010–11.
What gives rise to the sunshine advocates’ worry is that Rose’s survey instrument was deeply flawed. “The survey makes no attempt to discover how much our local Sunshine ordinance has saved the City by exposing or preventing backroom deals, and furthermore, it’s difficult if not impossible to measure how much the Task Force has saved the City in legal expenses by eliminating the need to take Sunshine-related complaints to court,” said Knee.
He’s not alone. Ethics professional Allen Grossman notes, “Much of the data being fed to Harvey Rose in the Legislative Analyst’s office was based on differing assumptions made by City departments and the lack of critical eyes when pulling their data together. They mixed apples and oranges, along with pears and bananas,” Grossman notes.
As www.CitiReport.com publisher Larry Bush reported in March 2011, Grossman is a retired attorney noted for forcing the Ethics Commission to divulge its records of complaints referred for enforcement by the Sunshine Ordinance Task Force, which receives complaints when City agencies don’t follow public records disclosure and open meeting laws. Grossman — recognized as highly knowledgeable on government transparency and open access laws, and a volunteer consultant to the Task Force — ultimately filed suit in Superior Court to force the Ethics Commission to comply with the California Public Records Act; Ethics eventually settled the case, provided the documents, and awarded attorney fees to Grossman, needlessly costing the City over $25,000.
The “Sunshine-Related” Misnomer
Are “public records” the same as “Sunshine-related information”? The answer is partly “Yes,” but mostly “No.”
Rose’s flawed survey instrument started off on the wrong foot. In question 4a, he asked each City department to identify the job classification codes for each employee, and the estimated or actual number of regular and overtime hours, involved in “providing Sunshine Ordinance-related information to the public, separate from responding to formal public information requests,” which Rose claimed was “required” by Sunshine §67.21.
This question provided no guidance to City departments on what “Sunshine-related information” meant, separate from formal Sunshine requests, enabling City departments to simply pile on.
Importantly, Rose failed to remind City departments that §67.21 does not deal with “Sunshine-related information,” it deals with access to public information — defined as the “content of public records” — and provides processes for administrative remedies and appeals when City departments fail to release contents of public records. More importantly, the Sunshine Ordinance indicates that “public information” is “public records defined in the California Public Records Act (CPRA),” but the survey introduced a misnomer confusing public information as somehow distinct from public records.
Rose did not instruct City departments to itemize only public records costs resulting from the Sunshine Ordinance, separate and distinct from public records required for disclosure under CPRA. Rose simply called it “Sunshine-related information.” So while public records must be disclosed (the “Yes” part of whether the two categories are the same), that does not mean “Sunshine-related information” is the same thing (the “No” part). With this barn door opened, boy did City Departments wrongly pile on, failing to distinguish between CPRA-required and Sunshine-required public records!
Grossman recommended that Rose start over by going back to each department with a set of standard directions about what was to be included or excluded, how data is to be identified within various categories, and how each dollar amount be supported by an appropriate schedule detailing the individual components that went into each claimed expense.
Of the 47 City departments asked to complete the survey, only 41 did (notably the Board of Supervisors itself did not respond to the survey by the initial February 3 deadline, apparently granted an extension; as this issue goes to press the Board appears to have failed responding to its own Legislative Analyst’s survey). Initially, the 41 City departments asserted approximately $8.2 million in total costs to comply with Sunshine, including first asserting that providing public records information in Question 4a cost $1.687 million, just under the $1.740 million responding to formal, actual Sunshine requests asked in Question 4b.
The worst transgressor was Evan Kirk, a job class 1842 Management Assistant at the Elections Department, who first claimed on February 3 that he assumed “all activities that provide public records (information) are ‘Sunshine-related tasks’.” He claimed Elections had worked 28,013 hours, at a calculated cost of $1.159 million, to provide “Sunshine-related information” in response to Question 4a, and just 2.75 hours responding to formal Sunshine requests in Question 4b. He also initially claimed Elections had spent $1.046 million in un-recouped photocopying expenses.
Kirk coyly included that his first response was due to legal posting requirements, and voter education and outreach. In fact, Kirk lumped together reporting hours for voter “outreach” workers, precinct services employees, voter services employees, poll workers, and publications and warehouse staff to inflate his initial response.
In response to this reporter's question on February 19 for details about the reported 28,013 hours, Kirk submitted a revised response on behalf of the Elections Department on March 3 to the Budget analyst — to his credit and without being asked. His revised submission eliminated $996,223 in claimed expenses (24,127 fewer hours) spent for Question 4a (Sunshine-related information), and also eliminated the $1,048,853 he had first claimed in un-recouped photocopying charges, reducing the total cost of Sunshine compliance by $2.04 million in one fell swoop from $8.2 million to $6.2 million, even before Harvey Rose started asking questions.
Kirk rationalized his changes by indicating the revised submission belatedly recognized that the Elections Department’s major function is to proactively provide public information, which he should have known all along wasn’t a cost of Sunshine, but a cost of his department’s proactive “mission.”
Not so at the Recreation and Parks Department, and at the City Attorney’s Office.
Rec and Park’s Olive Gong — the secretary who unsuccessfully defended her boss, Phil Ginsberg, Recreation and Parks General Manager, in a Sunshine complaint filed by George Wooding eventually referred to the Ethics Commission for official misconduct — tried to muddy the waters, claiming a distinction between “formal” and “informal” records requests.
Gong, like Kirk, isn’t alone. Over at the City Attorney’s Office — which is designated in the Sunshine Ordinance as being the City’s Supervisor of Records — senior Confidential Chief Attorney II Therese Stewart, who earned $214,390 in FY 2010-11, simply lumped together costs for responding to public records (in Question 4a) with the City Attorney’s costs of responding to formal Sunshine requests (in Question 4b). Stewart’s estimate claims 794 hours in City Attorney time, at a cost of $82,786, but doesn’t stratify how much of that time was devoted to simple public record requests vs. formal Sunshine requests. Nor does she stratify how much of these costs are attributable to CPRA, rather than to Sunshine.
But these departments weren’t alone; there were seven City departments who reported either no costs for providing “Sunshine-related information” (a.k.a., “public records”) distinct from formal Sunshine requests, or they may have simply lumped those costs together with costs of responding to formal Sunshine requests, as the City Attorney had done. Rose’s April 12 report analyzing Sunshine costs mentions nothing about this, although Rose did indicate in his report that “caution” should be considered in light of flawed reporting.
Rose threw out costs that smelled of double-reporting, particularly double-reporting potentially by the City Attorney.
Rose Selectively Corrects Flaws in the Glass
Rose concluded a total of $4.27 million is attributable to complying with local and state open records legislation. Of that $4.27 million, he claims $3.13 million is attributable to City department Sunshine costs reported from their five-page surveys. He then concluded just $997,676 of the costs were attributable “uniquely” to the Sunshine Ordinance and the balance would have been required under CPRA, even if San Francisco did not have its own local Sunshine Ordinance.
In effect, Rose acknowledges that 76.7% of open records costs for San Franciscans to know what their government is doing on their behalf is attributable to the State’s CPRA laws, and just 23.3% are attributable to our local Sunshine Ordinance. But even those cost allocations may be wildly mis-estimated by Rose’s staff.
First, Rose acknowledges in footnote number 2 that he “assumes” 10% of public records requests and 20% of “other costs” were unique to the Sunshine Ordinance. His assumptions are not provable.
His analysis acknowledges that the Sunshine Ordinance includes just a handful for expanded access requirements not provided by CPRA, including draft documents and draft memos; litigation records; certain personnel information; certain law enforcement information; contracts, bids, proposals and other communications from those seeking City contracts; and budgets and other financial information. But Rose provides no analysis about how many of the purported 5,833 formal Sunshine requests had actually requested information provided by the expanded categories covered under our local requirements not required by CPRA, nor did Rose analyze whether the 99 official Sunshine complaints filed with the Sunshine Task Force had focused on records unique to our local open records expanded categories. Without such an analysis, Rose’s guesswork that 10% of costs should be attributable solely to the Sunshine Ordinance is, well, just guesswork, when not another faulty assumption.
Second, while Rose acknowledges, “it is likely that without the Sunshine Task Force, some portion of complaints would be directed to other public bodies, such as the [Superior] courts, which would in turn incur costs,” he failed to estimate what increased City legal costs might look like. Rose is using code words to obfuscate that without the Sunshine Task Force, the City would likely face significantly higher costs from lawsuits against the City, which potential costs he made no effort to quantify or include.
As the Westside Observer reported last month, Wiener didn’t ask for — nor did Rose bother to consider and include — any benefits (as in a cost-benefit analysis) of either CPRA or our local Sunshine Ordinance, including the “benefit” of restoration of $350,000 in misappropriated funds to Laguna Honda Hospital’s patient gift fund (which would not have happened were it not the result of records requests having been placed by Drs. Kerr and Rivero), nor the benefit of the City pursuing Superior Court recovery of $70 million in “change orders” related to the $183,000 million cost overrun to rebuild Laguna Honda Hospital, which change orders were also uncovered via the “benefit” of public records requests.
Rose did toss out over $3 million in unsupported costs, including a $640,102 “typo” wrongly reported by the Children and Families Commission (which was actually zero dollars) since it did not submit a revised survey, $1.2 million the City Attorney wrongly claimed, and $812,692 Muni (MTA) tried to tack on, among other City department’s over-reporting.
To his credit, Rose indicates his office reviewed costs submitted on the initial 5-page forms, and “returned them to departments for clarification” when the reported amounts didn’t seem reasonable or were well above or below costs submitted by other Departments.
The Mayor and His Misguided Managers
Some City departments noted in personal communications that they had contacted the Mayor’s Office regarding responses to the survey instrument. Elsewhere, there is news the Mayor’s Office was involved placing follow-up calls to City departments about their survey responses. Many City managers labor under the misbelief that the Sunshine Ordinance is far broader than CPRA requirements, which isn’t true. These managers assume that when records requests are placed that invoke neither the Sunshine Ordinance nor CPRA, that the records sought are magically and automatically assumed to be Sunshine requests, when more often than not, they aren’t and may be CPRA requests.
They labor under this misconception from City Attorney Dennis Herrera’s so-called “Good Government Guide,” which mistakenly fails to instruct City managers and all City employees that in 76.7% of records requests, they must still comply with CPRA, even while they attempt to obstruct Sunshine requests.
Sunshine Trumps Secrecy
Where would we be without an administrative appeal route? The Sunshine Ordinance is a non-judicial enforcement mechanism to comply with open government requirements. If Supervisor Wiener attempts to weaken or eliminate it, City officials will still be required to comply with the Brown Act and California’s Public Records Act. In addition Section (b)(1) of Article 1 of California’s constitution stipulates that “people have the right of access to information concerning the conduct of the people’s business, and, therefore, the meetings of public bodies and the writings of public officials and agencies shall be open to public scrutiny.”
By tinkering with, or eliminating the Sunshine Ordinance, Wiener would deprive complainants alleging public records and public meeting violations of any administrative remedy other than Superior Court lawsuits. The Ordinance is the only available administrative forum San Franciscans have to resolve public access disputes and to deter City bureaucrats from obstructing public access. The only comparable alternative offered by CPRA and the Sunshine Ordinance is filing lawsuits in Superior Court, which few citizens have access to, or can afford.
Grossman may be right: We may be being fed fruit salad — apples and oranges, pears and bananas — in a bald attempt by Wiener, emboldened by Harvey Rose, to obfuscate the true costs and benefits of our local Sunshine laws. The price we pay for transparent government may include the price of eternal vigilance over Supervisor Scott “Tinkerbelle” Wiener, to short circuit whatever motives he may be up to.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. He received the Society of Professional Journalists–Northern California Chapter’s James Madison Freedom of Information Award in the Advocacy category in March 2012. Feedback: mailto:monette-shaw@westsideobserver.
City Hall Watch
Supervisors Tinker With Open Government
Since taking office to represent District 8 on the Board of Supervisors in November 2010, Supervisor Scott Wiener has distinguished himself by repeatedly tinkering with various San Francisco’s open government laws; in some quarters he’s referred to as Scott “The Tinkerer” Wiener. Others refer to him as “Tinkerbelle.”
He’s at it again, tinkering with San Francisco’s Sunshine Ordinance, our local open government law adopted to supplement the California Public Records Act (CPRA), and the Brown Act covering open meetings.
As deplorable as Mirkarimi’s off-duty behavior may have been, it had nothing to do with his duties as Sheriff, and occurred before he was officially sworn in.
In stark contrast, Lee hasn’t acted regarding the on-duty official misconduct charges against Gomez, or against the on-duty misconduct of the four supervisors in the Park Merced matter.”
Surprisingly, Supervisor Jane Kim, also elected in 2010 to represent District 6, may also be tinkering with the City’s boards, commissions, and advisory bodies mandated to provide public oversight.
The Sunshine Task Force meets the last Tuesday of the month in room 406
On November 1, 2011 the Sunshine Task Force issued an Order of Determination, finding that Supervisor Eric Mar, Chair of the Land Use Committee, Board president David Chiu, and Land Use Committee members Supervisor Scott Wiener and Supervisor Malia Cohen had collectively violated several sections of the Sunshine Ordinance by failing to provide the public with copies of 14 pages of amendments to the Park Merced Development Agreement.
The amendments had been provided to the Board of Supervisors in connection with an agenda item by Chiu, who had allowed the introduction of last-minute, substantive changes to the agenda without adequate public notice. The four Supervisors were also cited for failing to publish a meaningful agenda indicating the substance of the item involving the 14 pages of Park Merced amendments, in order to adequately inform the public about the nature of the proposed development deal’s amendments.
The Sunshine Task Force referred all four Supervisors to the Ethics Commission and District Attorney, citing willful failure (to comply with the Sunshine Ordinance) and official misconduct.
As an aside, although Mayor Ed Lee referred official misconduct charges against Sheriff Ross Mirkarimi to the Ethics Commission, it has taken no action on the official misconduct charges against the four supervisors who sought to withhold the 14-page amendments of the Park Merced deal. Similarly, after the Sunshine Task Force referred official misconduct charges against Library Commission president Jewelle Gomez to the Ethics Commission on July 11 for on-duty misconduct, the Ethics Commission concurred Gomez had erred and forwarded its first-ever official misconduct charges to Mayor Lee. Eight months later, Lee has taken no action against Gomez.
In 1980 a state appellate court ruled in then-Airport Commissioner Joseph Mazolla’s appeal that levying official misconduct charges requires a direct relationship of alleged wrongdoing to an office held. As deplorable as Mirkarimi’s off-duty behavior may have been, it had nothing to do with his duties as Sheriff, and occurred before he was officially sworn in.
In stark contrast, Lee hasn’t acted regarding the on-duty official misconduct charges against Gomez, or against the on-duty misconduct of the four supervisors in the Park Merced matter.
For her part, Supervisor Kim was found by the Sunshine Task Force on June 7, 2011 to have violated the Sunshine Ordinance by not responding to a request for records concerning the Shelter Monitoring Committee in a timely manner, for failing to justify withholding of documents, and for failing to keep documents withheld to a minimum. She was ordered to produce the requested records within five days.
Sometime earlier in 2011, Supervisor Kim secretly requested, without public notice or during an open-to-the-public meeting, that the Board of Supervisor’s Budget and Legislative Analyst, the Harvey Rose Consultancy, perform a confidential cost-benefit analysis of the City’s 86 boards, commissions, task forces, and other advisory councils, 34 of which are authorized by the City Charter; the remaining 52 by the City’s Administrative Code. Rose’s May 13, 2011 analysis estimates the annual costs for boards, commissions, etc. totaled $6.495 million, of which $1.2 million — nearly 20 % of all costs attributable to boards and commissions — funds just ten Commission Secretaries serving nine City departments, each of whom have unique job classification codes and who collect median salaries and benefits of $126,880.
Despite having been asked by Kim for a cost-benefit analysis, Rose wasted not one drop of ink in his 39-page analysis of any benefits of boards and commissions.
Nowhere in Rose’s confidential analysis for Supervisor Kim (obtained through a public records request), does he note that the purported — and likely inflated — estimate of $6.495 million to operate the boards and commissions represents just one-tenth of one percent of the City’s $6.834 billion budget (of which total budget Rose must surely be aware), a fractional amount most observers believe to be a small, necessary price to pay for oversight of City government.
In his analysis for Kim, Rose deliberately took a swipe at the Sunshine Task Force by alleging that its Executive Secretary III earned more ($79,524) than the Police Commission’s Executive Secretary I ($65,796). In fact, SOTF’s secretary earned only $75,728, and no overtime, but Rose reported the highest pay step, not that secretary’s actual earnings. And Rose failed to report that minutes of the Police Commission show that its “secretary” during 2011 was then-Lieutenant III Timothy Falvey, who earned $165,112 in 2011, including $16,700 in overtime. (The Police Commission’s new “secretary” in 2012 is a Police Inspector I, John Monroe, who earned $152,228 in 2011, including $22,363 in overtime.)
The $75,278 for SOTF’s secretary pales in comparison to the $165,112 Falvey earned as the Police Commission’s secretary, which Rose failed to note.
If Jane Kim really wants to lower the costs of boards and commissions, she should start by taking sworn officers out of desk jobs and back to actual police work, and use more appropriate civilian clerical employees.
It’s unclear whether Ms. Kim will publicly admit to requesting this confidential analysis, whether she will ever hold a public hearing to release Rose’s analysis, or what her motives are tinkering with board and commission oversight bodies.
As for Tinkerer Wiener’s track record, he has sought to dilute historic preservation at the Planning Commission, and sponsored ballot Proposition F last November to weaken campaign finance disclosure by redefining upwards the threshold of consulting service total fees so fewer consultants would be subject to disclosure. Prop. F would also have allowed the City to change any campaign consultant ordinances without further voter approval.
Wiener also sponsored Proposition E, that would have granted the mayor or Board of Supervisors expanded authority to amend or repeal, not just clean up, ballot measures put before voters by the mayor or members of the Board of Supervisors three years following passage. He had initially introduced Prop. E to permit amending or repealing all ballot measures, including signature initiatives placed on the ballot by citizens, but had to tone down Prop. E following widespread voter outrage.
Luckily, the Friends of Ethics — a committee formed by five former Ethics Commissioners and Larry Bush, proprietor of www.CitiReport.com who just received the Society of Professional Journalists’ James Madison award in the Community Media category — stepped in to stop Wiener’s busybody and nannyish tinkering; their efforts led to the defeat of both E and F.
Facing the twin disgrace of having been referred to the Ethics Commission over Park Merced misconduct on November 1, and slapped at the ballot box by voters on November 8, Wiener went back to his tinkering rabbit hole and on December 13 requested that Rose’s Budget and Legislative Analyst team survey each City department’s costs to comply with San Francisco’s Sunshine Ordinance.
Wiener discarded the niceties of requesting a cost-benefit analysis of complying with Sunshine, asking Rose to provide a one-sided cost analysis, apparently presuming no benefits accrue from the Sunshine Ordinance. Rose dutifully complied, again asking respondents no questions about the benefits side of the equation, just as he did on the Kim flawed survey instrument.
Like Kim before him, Wiener also did not request this analysis during an open-to-the-public meeting, nor did he issue a public notice announcing his request. Indeed, neither the Clerk of the Board nor Sunshine Task Force members were aware until late January that Wiener had placed his request to Rose, and it’s not known whether Wiener even told the other ten Supervisors what he is up to.
Wiener’s request claims to be evaluating the “effectiveness and efficiency” of implementation of the Sunshine Ordinance. His request claims “once we know how much the City spends to comply with the Ordinance, we can work to ensure we are getting the best value for our investment.” In truth, he’s engaging in payback to the Task Force, alleging the Task Force itself is the root problem for being “inefficient.”
The five-page survey Rose’s staff sent to each City department is both highly flawed, and clearly riddled with multiple biases.
First, the survey does not ask departments to quantify how many of their records requests are requested under the Sunshine Ordinance vs. what proportion were requested under the state’s CPRA statute. Obviously, the costs to comply with CPRA should be subtracted from the costs of the Sunshine Ordinance, but that question wasn’t even asked.
Second, the survey contains no data verification procedure to weed out incorrect data entries, in part because the survey provided no guidance to departments on how to complete each question. For instance, the Elections Department initially reported 28,014 hours spent responding to information requests, wrongly including hours for poll worker, precinct level, and other mandated duties. Following a records request I placed, Elections submitted a revised survey to Rose, adjusting the inflated total down to just 4,847 hours.
Similarly, MUNI initially reported 1,877 formal Sunshine requests, but when I placed a request for its records requests log book, the log suddenly showed just 322 formal records requests (that MUNI appears not to have reported as a revised number to Rose).
Other departments reported incorrect job classification codes of employees providing public records, and at least three departments submitted revised surveys to Rose following my fact checking.
Third, multiple biases are involved, including “negative respondent bias,” involving those with an animus to Sunshine who may be overstating estimated costs.
Rose’s survey relies on “retrospective recall bias,” in which employees were asked to report from foggy memories estimated vs. actual hours spent responding to records requests. (Of the 41 City department responses received to date, just 4 of 264 staff members who reported having spent time responding to formal Sunshine requests indicated they were reporting actual hours; 120 reported estimated hours; and 140 failed to report whether their time was estimated or actual.) Of the claimed 48,787 hours initially reported for this question (before the data were challenged and revised downward), just 658 hours (1.3%) were reported as “actual,” 12,018 hours (24.6%) were “estimated,” and the balance — 36,110 hours (74%) — failed reporting whether estimated or actual.
It’s well known that retrospective recall is affected by a number of factors, including how far back in time respondents are asked to recall vague memories, ambiguity of questions asked, importance or aversion to the topic being asked, and motivations of those being questioned. Those harboring animosity to open government may have deliberately inflated their estimates.
Rose must surely know caution needs to be exercised with retrospective recall estimates, since errors due to confounding and bias are more common in retrospective studies than in prospective studies.
Fourth, Tinkerer Wiener did not request Rose evaluate benefits to taxpayers and the public of Sunshine, since the analysis focuses simply on “costs,” not a full cost-benefit analysis. For instance, we now know Dr. Kerr’s and Dr. Rivero’s dogged Sunshine requests led directly to restitution of $350,000 wrongly misappropriated from Laguna Honda Hospital’s patient gift fund, just one of many clear benefits of Sunshine.
My persistence researching and publishing articles about change orders regarding Laguna Honda Hospital’s $183 million in rebuild cost overruns may have contributed to the City finally suing Laguna Honda’s architects in Superior Court, hoping to recover $70 million of the now-admitted $87 million in change orders.
Surely there are other examples of Sunshine benefits related to Sunshine records requests, which Wiener ignores and Rose isn’t examining — just as Rose failed to examine for Ms. Kim any benefits the City’s 86 boards and commissions bring to public oversight.
Fifth, Rose’s flawed survey asks for neither the types of records requested — many of which are codified for disclosure by other laws — nor the types of requestors.
For example, the Department of Emergency Management dutifully reported it had received 1,221 formal records requests, and admirably provided its records request log to George Wooding, which reveals that just 59 requests — a scant 4.8% — were for information that were not related to the City’s 9-1-1 call center for computer-aided dispatcher records. Of those 59 requests, fully 25% were placed by insurance companies, lawyers, or the media. Of the remaining 1,168 CAD-related 9-1-1 requests, 34% were placed by insurance companies, lawyers, and the media.
Over at the Mayor’s Office, of 102 public records requests, just 44% requested the mayor’s appointment calendar, his correspondence, or miscellaneous records. The remaining 56% of information requests to our mayor concerned development issues, public policies, Occupy SF, appointments to boards and commissions, the City budget, and assorted issues. And of those 102 requests to the mayor, 40.2% were placed by members of the media, 44.1% placed by private citizens, and the remaining 15.7% were placed by lawyers, organizations, political candidates, intergovernmental organizations, and other requestors.
Rose isn’t likely to report on either the types of records requested or the categories of records requestors, and Wiener may not understand — despite being a Harvard University-trained lawyer and former deputy city attorney who must have heard of the First Amendment, if only while in law school — that the media and lawyers are expert at using state and federal laws to pry loose public records, with or without our local Sunshine Ordinance, even if Wiener’s agenda may be to weaken San Francisco’s own open records laws.
Rose isn’t likely to report, either, about the increased costs of Sunshine compliance caused by a handful of recalcitrant City departments who fight open disclosure every step of the way, often on advice they claim was provided by City Attorney Dennis Herrera’s office. Herrera claims well over $1 million was spent advising City departments about Sunshine. Rose may not factor into the costs of Sunshine compliance the cost of deliberate non-compliance fueled by the City Attorney’s bad advice to City departments stalling disclosure.
While it may be an admirable goal to determine costs of Sunshine, Rose can’t do that with the deeply flawed survey data he’s collecting.
The value of open government far outweighs the cost. If Rose also wrongly estimates Sunshine costs are $6.5 million — as he did estimating costs of boards and commissions for Supervisor Kim — that will again represent less than one-tenth of one percent of the City’s $6.834 billion budget, a paltry sum to provide right-to-know information to the public about what our government is up to.
Instead of swatting at potentially two-tenths of one percent of the City budget spent on boards, commissions, and compliance with Sunshine, Supervisors Kim and Wiener might more appropriately focus on the City’s escalating overtime budget approaching $300 million, fixing potholes, or finding a way to reduce the City’s now $1.49 billion spent in “total pay” excluding benefits for the City’s 11,756 highest-paid employees now earning over $90,000 annually.
After all, picking on Sunshine is bullying by any other name. Bullies Wiener and Kim must surely know this, even as they tinker attempting to change open government using Rose’s flawed analyses as fodder.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: firstname.lastname@example.org.
Westside Observer’s Reporter Patrick Monette-Shaw Wins Madison Award for Laguna Honda Series
The Northern California Chapter of the Society of Professional Journalists (SPJ) will honor Patrick Monette-Shaw, long-time contributor to the Westside Observer, with its annual Freedom of Information Advocacy honor—the James Madison Award. The SPJ has conferred its FOI awards for the past 27 years to individuals and organizations who
Patrick Monette-Shaw has been reporting on the twists and turns of the money trail and the many scandals surrounding Laguna Honda Hospital for over two years, a subject that has been ignored, in large part, by the major news sources.
“Being honored along with the other 11 James Madison Award category winners is humbling, given the stature of the editors, lawyers, and other journalists also receiving awards this year,” Monette-Shaw said, “I’m thrilled to receive this award in the same year as two of my mentors, lawyer Allen Grossman, a prominent Sunshine expert, and Larry Bush, editor of CitiReport.com, who focuses on ethics in City government.”
Monette-Shaw began looking into the mismanagement of LHH’s patient gift fund in May 2010 after KGO-TV aired Dan Noyes’ I-Team investigation of the gift fund and termination of two LHH doctors who had first exposed it in a formal Whistleblower Program complaint over probable misappropriation of patient funds. “My continuing coverage of the gift fund scandal in the Observer helped to force an audit of the fund — which City Hall wanted to sweep under the rug — that eventually resulted in restitution of $350,000 misappropriated from patient use,” he said.
“It is a great honor to have Patrick’s work recognized with the Madison Award,” said Mitch Bull, publisher of the Westside Observer and Castro Courier newspapers. “In this day and age of ‘sound bite’ journalism San Franciscan’s are truly fortunate to have publishers and writers with truly-local neighborhood papers that are willing to investigate stories that otherwise wouldn’t be touched by the dailies. That’s our mission at the Westside Observer and I couldn’t be more proud of Patrick and our entire team that brings important news stories to our readers each month.”
“I’m grateful that the Observer has included me among their contributing columnists for the past three years, providing me an outlet for my articles,” Monette-Shaw said, “its an honor in its own right,” .
“Our monthly publications focus on what’s important on a hyper-local level,” Publisher Bull said. “Schools, zoning, crime, health-care and the local economy are all issues that affect each of us and are ones that we care about. In addition we aim to provide neighborhood specific information that might not interest the larger publications.”
Laguna Honda Hospital
Amid Noise Complaints, City Sues Architects
Most homeowners in the neighborhoods surrounding Laguna Honda Hospital initially had no reason to believe that the $584.9 million replacement hospital — which has actually cost $615.8 million, including furniture, fixtures, and equipment and other costs — may end up lowering their property values.
The Tax Assessor’s Office has apparently informed some homeowners that they should ask for a $50,000 reduction on their tax basis due to on-going noise problems LHH hasn’t resolved for over two years. Midtown Terrace homeowners have also been advised by a prominent San Francisco legal observer that they should sue.
Separately, the City is now suing Laguna Honda Hospital’s architects in Superior Court for professional negligence in a case filed against Stantec Architecture, Inc. on December 12, 2011.
…a new noise began emanating from LHH that proved to make normal life almost unbearable for neighbors surrounding the new hospital.
The hospital installed air cooling equipment and several generators that emit continuous high pitched noises…"
Following a decade of listening to the construction noise during LHH’s rebuild, surrounding neighbors were happy the new hospital was substantially completed in 2009. But little did anyone realize that the real noise problems at LHH were just beginning.
Thousands of alarms and hospital bells had to be tested, an understandable noise annoyance. But aside from the alarms testing that went off continually throughout the day and night, a new noise began emanating from LHH that proved to make normal life almost unbearable for neighbors surrounding the new hospital.
The hospital installed air cooling equipment and several generators that emit continuous high pitched noises. Unfortunately, the generators and air handling equipment were installed on the roof of the new hospital, at the same elevation as neighboring homes. Hospital administrators claim the noise is just below the legal limit on decibels, but the noise is unbearable to many neighbors who can no longer use their backyards or parts of their homes.
Neighbors have complained continually about the noise problem for the last two years. Although LHH tried a variety of methods to eliminate the source of the noise, all attempts have failed.
Compounding the new noise problem is the completely unfriendly attitude of LHH’s hospital staff. LHH’s director of communication, Marc Slavin, is now trying to blame the neighbors who complain about the incessant noise.
Terry Thompson, a neighbor on Dellbrook Avenue directly behind LHH, was told after making his first noise complaint that LHH had existed for over one hundred years and he should have known about LHH’s potential noise problem before purchasing a house adjacent to LHH in 2008. Arla Escontrias, LHH’s former Director of Community Affairs, reportedly callously told Thompson early on that he “shouldn’t have bought a house near a hospital.”
During the December 29, 2011 meeting of the LHH Joint Conference Committee (JCC) — a committee comprised of senior hospital managers and Health Commissions Sonia Melara, James Illig, and Margine Sako — hospital Executive Administrator Mivic Hirose reported to the JCC that there were only one or two neighbors who were complaining about the noise emanating from LHH. During that meeting, Commissioner Illig peppered Slavin about how many neighbors were complaining. Slavin sought to minimize the problem, focusing principally on Mr. Thompson.
On January 31, 2012, eight neighbors attended the JCC’s next meeting to testify to the Health Commissioners that upwards of sixty-five neighbors had signed a petition circulated by Mr. Thompson regarding the noise nuisance. To Slavin — an expert in spin control — 67 means “2.” The three commissioners were joined by Health Commission president Dr. Steven Tierney on January 31. None of the four commissioners looked happy following testimony by neighbors who directly challenged Slavin’s and Hirose’s veracity, testifying that their calls are not being returned, and they aren’t getting honest answers about what LHH’s administrators are going to do about the noise.
One neighbor, who attended on January 31, was surprised by another item on the agenda, LHH’s Resident Satisfaction Survey. This badly designed survey was dreamt up to document that the “built environment” — LHH’s new digs — may improve patient outcomes.
Neighbors were under-impressed by the marginal change in Resident Satisfaction scores between the old and new buildings, in part given that taxpayers paid $615 million for the new buildings.
In the post-move survey in 2011, only 39% of patients rated their Overall Satisfaction as “excellent,” up from 28% who had rated their Overall Satisfaction as excellent in the old buildings in 2009. On another measure of Quality of Care, the survey moved just four percentage points — from 32% in 2009 to 36% in 2011 — for those indicating their Quality of Care was “excellent” post-move.
Former LHH physician Dr. Derek Kerr noted during the meeting that expenditures from the patient gift fund during the six-month period between July 1 and December 31, 2011 were just $48,177, which may annualize to less than $100,000 for the year. This is the lowest ever gift fund expenditure level, down from $456,545 in 2006–2007.
Even health commissioners present on January 31 were skeptical about the results of the Resident Satisfaction Survey. Commissioner Illig commented that the drop in expenditures on patient activities could correlate with the satisfaction surveys regarding Quality of Life indicators.
During public comment, Kerr, who was terminated for blowing the whistle on LHH’s patient gift fund scandal, commented that one question in the survey reporting the least satisfaction involved staff responsiveness to patient concerns, since patients may mistakenly believe there isn’t enough staff even though LHH has the highest staffing ratio of any skilled nursing facility in the area.
The Eden Alternative, a philosophy of humanizing facilities as places where Elders live in habitats designed for human beings rather than facilities for the frail and elderly, believes that staff treat patients the way that staff are treated by their supervisors. So, if staff isn’t treating patients well as reflected by patient satisfaction surveys, observers need to look at the way administration treats staff. In other words, Mivic Hirose’s top-down management style may not be working well.
Hirose claims LHH has sent 40 staff for Eden Alternative training, but Dr. Kerr and his colleague Dr. Maria Rivero may have been the only trained Eden Alternative Associates at LHH since 1998. Rather than listening to Kerr and Rivero, LHH hired Lumetra Consulting for $250,000 to teach staff that patients are experts in patient care, and staff knows the most about patients.
Logically, LHH’s administration should support staff so its staff can better care for patients, but observers agree that no amount of training will fix LHH with Hirose in place, in part because she doesn’t dare make a move without Slavin’s consent. Her management style, (and possible role in abuse of the patient gift fund), is the antithesis of Resident-Centered Care, a mantra foisted on staff for the past decade with scant improvement in resident satisfaction.
That brings us to the lawsuit the City has filed against Stantec Architects, Inc., a joint venture that began when Anshen + Allen Architects, in a partnership with Gordon H. Chong Partners, were first awarded the contract to design LHH in 2000. In 2007, Stantec acquired Chong Partners when it dissolved. Throughout construction of LHH’s new campus, Turner Construction has also been involved.
The City’s lawsuit filed on December 12 alleges, among other issues, that the replacement project’s costs exceeded the budget by at least $100 million, and that architectural design defects include improper building envelope waterproofing; lack of coordination between mechanical, electrical, and plumbing systems; cooling system design deficiencies; building code non-compliance; lack of compliance with the Americans with Disabilities Act; incomplete design of the radiology suites; deficient design of cart-wash areas in the kitchen that resulted in water damage and mold; and other eye-popping defects.
The lawsuit also alleges that the “change order” process — design changes that occur mid-way through a project — resulted in excessive design modifications reflecting an incomplete, inaccurate, and inadequate design that fell below the standard of care. The City alleges construction drawings and specifications in formal Construction Documents were incomplete, inaccurate, inadequately coordinated, not compliant with applicable codes, and contained numerous conflicts, ambiguities, and other design errors and omissions.
As readers may recall, I wrote about LHH’s change order snafus in the Observer’s May 2010 issue (“LHH Lessons Unlearned Impacts All Bond-Financed Projects”). At that point, LHH claimed just $71.6 million in change orders. As recently as January 26, 2012, LHH now admits the change orders total $87.45 million, a $16 million increase in change orders between May 2010 and December 2011 that still doesn’t address the full $183 million in costs overruns.
The lawsuit claims about $70 million in change orders that the City wants to recover, plus compensatory damages and general damages, among other demands for relief. But there’s no relief for LHH’s neighbors mentioned in the lawsuit, who have had enough with the noise problem emanating from LHH.
And there’s no relief offered for patients, who express dissatisfaction with basic services, like operational elevators.
The City’s lawsuit surprisingly alleges it was the architects who recommended eliminating 420 of LHH’s planned beds, in order to control costs. Is San Francisco now this much poorer for skilled nursing beds for our frail elderly because an architectural firm (that may not have understood the patient environment it was designing) made multiple goofs?
Along the way, there have been extensive design scope reductions, many of which may have unwittingly contributed to the Resident Satisfaction Survey responses.
For instance, LHH’s morgue, which was designed to house a stainless-steel upgrade, was outsourced to Emeryville when the 16-unit freezer was delivered, only to discover that it was too tall to fit into the space the architects had designed. Now, families have to travel 11 miles out of the City to recover the remains of deceased family members.
Galley dining — long touted as an Eden-like alternative to being fed by tray in patient rooms — has been eliminated. A dialysis center at LHH has still not been built, causing patients to still undergo transport off site for dialysis treatment.
Lights in the main lobby of LHH’s new entrance periodically and unexpectedly go out, worrying security staff. The two new elevators in the hospital’s new entrance have failed on more than one occasion, both at the same time, jeopardizing safe patient transport during emergencies. For that matter, stroke and brain-injured patients admitted for physical medicine rehab at LHH — including physical, occupational, and speech therapy — cannot be transported from their patient rooms to the Rehab Services department on the floor below when elevators go missing in action.
Indeed, LHH staff was shocked to learn in early 2005 that the architects had been unaware when they first designed the buildings that fully 60% of LHH’s patients used wheelchairs for mobility. That percentage may have increased since then.
This may explain why one entrance to the Rehab Services training kitchen was built too narrowly to allow wheelchair users to access that training area, and why the Rehab training bathroom was built with a shower too narrow for most patients to enter, or use, safely.
LHH has never enumerated what design scope reductions have been made at each step of the way. San Francisco’s Citizen’s General Obligation Bond Oversight Committee charged with monitoring bond expenditures, has never inquired about, and has not followed up on for over two years, either the change order debacle or project scope reductions at LHH that may contribute to power patient satisfaction scores.
Notably, the City’s lawsuit doesn’t bother mentioning the Board of Supervisor’s approved “design-build” and so-called “value engineering” approach that permitted contractors to suggest cost saving design changes during bidding in 2004, and whether either approach contributed to design defects.
No small wonder the City is belatedly suing LHH’s architects. Will neighbors be the next ones to sue?
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: email@example.com.
Laguna Honda Hospital Scandal
Laguna Honda Hospital’s 2010 Fundrasing Dinner
Black-Tie Gala Event’s $260,788 Expenses
Who knew that it took spending over a quarter of a million dollars to throw a fundraising party that barely returned 34% of event proceeds to benefit actual patients?
Although Laguna Honda Hospital, and its two affiliated non-profits — Laguna Honda Volunteers, Inc. (recently renamed Friends of Laguna Honda) and the Laguna Honda Foundation run by former City Attorney Louise Renne — have refused for over 18 months to release financial information about its June 2010 fundraising Black Tie Gala Dinner, the truth was bound to come out eventually, since truth always trumps myth and secrecy.
Here it is a year-and-a-half following the June 2010 event, and the public is just now learning about the event’s financial shenanigans.
In December 2011, the IRS provided a copy of Laguna Honda Volunteers, Inc.’s Form 990 tax return for the period ending December 2010. The tax return exposes the myth that the Black Tie Gala Dinner would principally benefit Laguna Honda’s patients, since facts in the return show that only $189,504 (34%) of the $558,821 raised by this event appears to have been retained by Volunteers, Inc. whose mission is to support patient benefit.
It is unknown how many party-goers attended the Black Tie Dinner event, so the cost-per-head may never be known to explain why the dinner cost $108,095 just for food and beverages, nor why there was an additional $58,943 in other non-food expenses, totaling $167,038 in event expenses, fully 30% of the event’s proceeds.
But that’s without the lucrative professional fundraising fee of $93,750 paid to Supervisor Sean Elsbernd’s preferred event fundraiser, Nichelle Lyons, who snagged nearly 17% of the Gala Dinner’s event proceeds for conducting “fundraising” (Volunteers, Inc.’s 2010 Form 990, Schedule G, Part I, Line 2b). Her steep fees, perhaps guaranteed for a percentage of the take, is eerily reminiscent of the fundraising scandal involving the San Francisco AIDS Foundation and its former fundraiser, Pallotta and Associates. After being gouged by excessive fundraising fees for years by Team Pallotta, SFAF had to go to court to end its unholy contract with its fundraiser.
I reported last February that Volunteers, Inc.’s 2009 Form 990 IRS tax return showed it had paid Lyons $10,000 in 2009. In addition, Community Initiatives — Lousie Renne’s so-called fiscal sponsor for her Lagund Honda Foundation — reported on its IRS Form 990 for the period ending June 2009 that it had paid Ms. Lyons another $42,998 for fundraising related to Supervisor Sean Elsbernd’s 2009 crab fest to raise funds for Renne’s Foundation. While Elsbernd’s 2009 Crab Fest raised a total of $151,000, Lyon’s fundraising fee took almost one-third from that event’s purse, returning just $108,652 to Renne’s Foundation.
The 2009 tax returns show Lyons had been paid at least $53,998. Tack onto that the $93,750 Ms. Lyons earned from LHH’s Black Tie Dinner reported on Volunteers, Inc.’s 2010 tax returns, and she’s nearing the $150,000-in-fundraising-fees pinnacle.
Beyond the $260,788 spent in 2010 just to throw this fundraising party, including Ms. Lyon’s fee, Volunteers, Inc.’s tax return for 2010 shows that it also awarded a $108,529 “grant” to Louise Renne’s Laguna Honda Foundation. Before the Black Tie event, Supervisor Elsbernd tried to push off on party goers that the June 2010 Gala event would benefit Laguna Honda Volnteers, Inc., apparently exclusively, even though Melanie Beene, CEO of Community Initiatives (the fiscal sponsor for Renne’s Foundation) had indicated that there may have been a pre-event revenue-sharing agreement in place with Renne’s Foundation.
The purpose of the 2010 Volunteers, Inc. “grant” awarded to Renne’s Foundation is reported to be to “support the new Laguna Honda Hospital building and other hospital patient services,” but that is not the primary exempt purpose for which Ms. Renne’s Foundation had been formed. When she applied for non-profit status, Ms. Renne told the IRS she would raise $15,000,000 for furniture, fixtures and equipment for LHH’s new digs (which she never did, and which appears to being funded by taxpayers through the General Fund and perhaps “Certificates of Participation”), and to raise funds for long-term care research. There was never any mention that Renne’s Foundation would be involved in providing services to hospital patients, or in supportng the hospital’s new buildings.
Unfortunately, Volunteers, Inc.’s tax return does not reveal whether Renne’s separate Foundation received not only the $108,529 grant, but perhaps also received a portion of the Black Tie event’s proceeds in addition, since Ms. Beene had indicated Renne’s Foundation was on track to share donations to the event.
In stark contrast, Volunteers, Inc. donated just $48,743 in cash grants in 2010 to Laguna Honda Hospital to make resident outings possible, spending about half for resident outings than it paid to Nichelle Lyons for “fundraising.” Another way of looking at this is that Volunteers, Inc. also spent over twice as much on a grant to Louise Renne’s Foundation — for God only knows what purpose — than it spent for patient outings.
Between overhead for throwing the Black Tie Gala Dinner and the “grant” to Renne’s Foundation, fully 66% of the Black Tie event’s proceeds appear to have been spent on everything but patient amenities.
Although Volunteers, Inc. claims it spent $409,240 on actual program services in 2010, $108,531 is attributed to “Laguna Honda Hospital and Rehabilitiation Center ‘Promotions’,” a new category not previously reported and not defined, an amount just $2 more than the $108,529 reported as having been awarded to Renne’s Foundation. Nobody has a clue yet what the “Promotions” category of spending is intended to fund, or how it is “Program Services” — or whether the “Promotions” spending was the same funds given to Renne’s Foundation.
Only 63.5% ($409,240) of Volunteer, Inc.’s 2010 expenditures in 2010 were for actual program services (which may be inflated by the giving to Renne’s Foundation). The remainder — 36.5% ($235,228) — was spent on “management and general” and ”fundraising,” almost evenly split at 18% each. This is the first year that Volunteers, Inc.’s fundraising expenses reached 18.5% ($119,148) of all expenditures.
Has Laguna Honda Hospital, and it’s affiliate non-profit organiztions, forgotten that Sunshine always trumps secrecy?
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback: firstname.lastname@example.org.
Laguna Honda Charitable Giving Plummets — Again
Laguna Honda Hospital's patient gift fund, and the separate Laguna Honda Foundation run by former City Attorney Louise Renne, are once again in the news.
On October 18, the Department of Public Health presented its annual gift fund report for Fiscal Year 2010-2011 to the Health Commission. Of note, contributions to Laguna Honda Hospital's patient gift fund have dropped to their lowest levels across seven years.
In DPH's Annual Report of Gifts Received in FY 2010-11, fiscal year ending June 30, 2011 contributions from private donors to LHH's patient gift fund reached $20,098, up from the $10,206 donated from private sources in Fiscal year 2009-2010, but the second lowest amount of private giving since Fiscal Year 2004-2005.
Also in the fiscal year ending June 30, 2011, Laguna Honda's partner, Laguna Honda Volunteers, Inc. — renamed in 2011 as the "Friends of Laguna Honda" — donated just $33,209 to the patient gift fund, down from its $76,581 donation in Fiscal Year 2009-2010.
Between private donations and donations from Volunteers Inc., LHH's patient gift fund received just $53,307 in Fiscal Year 2010-2011 — the lowest amount the gift fund has received across seven years, and approximately only half of what it received in Fiscal Year 2009-2010.
Following the report presentation, several Health Commissioners peppered DPH staff with questions.
Commissioner Edward Chow asked about the status of the Laguna Honda Foundation, because there was no data in DPH's report about this separate foundation. As previously reported, when former City Attorney Louise Renne incorporated her Laguna Honda Foundation in 2004, she did so without setting up a memorandum of understanding between the City, DPH, LHH and her foundation, a continuing source of consternation to the Health Commission since the San Francisco General Hospital Foundation has always had a memorandum of understanding with the City.
Mivic Hirose, LHH's official Executive Administrator, responded that San Francisco's Administrative Code doesn't require financial information be provided by Renne's Foundation. Hirose failed to mention that while the City's Administrative Code doesn't require reporting of non-profit financial information, IRS rules do require detailed financial reporting.
Minutes of the Health Commission's October 18 meeting report that Hirose stated, "The LHH Foundation declined to submit data, as they have in the past." As far as anyone knows, Renne's Foundation has never submitted data for DPH's annual gift fund report.
Moreover, Renne's Foundation has contributed not one dime to LHH's patient gift fund across the years, per previous DPH reports of annual gift fund charitable contributions.
Commissioner Chow is concerned that Renne's Foundation is using a City hospital's name to raise funds, but isn't forthcoming about its finances. Commissioner Sonia Melara, Chair of the LHH-JCC, asked if the Renne Foundation's charter states that it would raise funds on behalf of LHH. Ms. Hirose replied that she would review the Laguna Honda Foundation's charter and would report back to the LHH-JCC in November.
Commissioner David Sanchez then recommended that Health Commission President Steven Tierney and Commissioner Melara meet with a few members of the Laguna Honda Foundation's board of directors, which is comical when not sad, because Ms. Renne has adamantly refused to disclose any financial information about her Foundation to anyone.
It's unfortunate that the Health Commissioners are so unaware of the Renne Foundation's primary exempt purpose. According to Laguna Honda Foundation's 2009 IRS Form 990 for the period ending in June 2010 posted on www.Guidestar.com, the most recent data available, Renne claims her foundation was "established in order to support Laguna Honda Hospital ... by providing an organizational structure for a $15,000,000 capital equipment campaign for the hospital's replacement project" and to "serve as the Hospital's Center [of Excellence] for advancing research and educational programs focused on improving the healthcare and quality of life for frail elderly and disabled persons in institutions or in community-based care."
The furniture, fixtures, and equipment for LHH's replacement facility eventually cost over $40 million, but there have never been any reports that Renne's Foundation ever raised any of the $15 million it told the IRS it would raise when seeking its non-profit designation.
Finally, during the Health Commission's October 18 meeting, minutes show that Commissioner Jim Illig asked for information on the IRS 990 forms from the fiscal agent for Renne's Laguna Honda Foundation, because "the Foundation's IRS 990 forms only provide basic information regarding the fiscal agent it uses."
Illig was referring to the fact that the Laguna Honda Foundation's Form 990's filed with the IRS since it first began reporting after being founded in 2004 has not once reported any income, and no expenses. Renne's Foundation has always reported that it is "operated as a project of" either the San Francisco Foundation, or more recently, of Community Initiatives, and its IRS Form 990's have always reported zero income and zero expenses.
The San Francisco Foundation spun off some of its projects in 1996, creating Community Initiatives for organizations that did not have their own IRS non-profit designations. Renne's Laguna Honda Foundation is one of the few clients of Community Initiatives that actually has independent IRS certification. Community Initiatives is a separate non-profit organization that handles the books for Renne's Laguna Honda Foundation, and "rolls up" Renne's Foundation finances into Community Initiatives' own IRS filings.
If Commissioner Illig expects that Community Initiatives will suddenly cough up data on Renne's non-profit Laguna Honda Foundation, he's sadly mistaken.
I requested financial information about Renne's Foundation from Community Initiatives in early 2010. On March 8, 2010, Melanie Beene, CEO and President of Community Initiatives, sent me an e-mail stating that Louise Renne had demanded that all requests for information about her Foundation's finances be directed to Renne.
In August 2010, Beene indicated she would ask Community Initiatives' Board of Directors to consider releasing summarized financial records of revenue and expenditures of its "client," the Laguna Honda Foundation, if the Foundation refused to provide the requested financial records.
But on March 28, 2011, Ms. Beene changed her tune, e-mailing me that "After consultation with legal counsel, we have received verification that neither Community Initiatives, nor its fiscally sponsored project, Laguna Honda Foundation, is required to provide a public requester with any program data other than what appears on each organization's [Form] 990 filed with the IRS."
If Illig is able to obtain data Renne's Foundation has refused to provide to members of the public, more power to him. But he's likely barking up the wrong tree, and will continue to do so until the IRS revokes Renne's IRS non-profit designation.
Renne has installed her minion, former Deputy City Attorney Marc Slavin, as LHH's de facto Executive Administrator, and his office at LHH is still reported to be in the space that Renne renovated for her Foundation at taxpayer expense. A reader of this column reported they had called Community Initiatives and was told that Slavin was a Laguna Honda Foundation employee, ostensibly at the same time he was a City employee at LHH — which would create obvious conflicts of interest — but I have been unable to obtain independent confirmation.
The various scandals involving Renne's Foundation will likely never change, ruining the good reputation of — and charitable contributions to — LHH's patient gift fund.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback: email@example.com.
Six Deadly Ballot Measures
As I wrote last month, the dueling pension reform ballot measures both have it backwards:Neither measure addresses salary reform, a necessary precursor that must come first, since salaries drive pensions.
The alphabet soup of ballot
measures on the November 8 ballot represent six deadly sins, and six misguided
ballot measures, some of which are being bankrolled by billionaires seeking to
overwhelm the electoral process, now that the U.S. Supreme Court case Citizen's
United has permitted unlimited spending by corporate voices.
"B" will only spend $148 million of the $248 bond measure on actually repairing roads, which should be covered by the City's General Fund, to avoid incurring interest on long-term
debt.The interest payments should
be better spent on actually funding road repair rather than feeding junk-bond
dealers more of our tax dollars.Vote "No" on Prop B.
"C," bankrolled by
billionaires, claims in its campaign materials that Prop. "C" does not expose
the City to a "significant legal challenge."This is untrue, since it bundles both pension reform and
health care reform into a single ballot measure, which is precisely what doomed
Jeff Adachi's November 2010 Prop. "B" ballot measure.If Prop. "C" passes, it will most surely end up facing legal
New data on the unfunded
pay raises for senior managers surfaced on October 3, when Matier and Ross
reported in the San Francisco Chronicle
that the City now has 2,325 employees (fully 6.7% of all employees) earning
over $150,000 annually, though Matier and Ross neglected to mention that is
costing taxpayer's $407.6 million, a staggering 16% of total payroll —
plus benefits — just for these 2,325 employees.
A quick three-hour jaunt
through the database provided to Matier and Ross, which they neglected to
report, is that data released by the City Controller in February 2011 for the calendar year ending December 2010
differs from slightly different data the City Controller released to Matier and
Ross for the fiscal ending six months
later, in June 2011.Comparing the
City Controller's two data sets, across those six months the total payroll was
reduced by $49.8 million, something set in motion by former Mayor Gavin Newsom,
not by Interim Mayor Ed Lee.
Comparison of the calendar
year to fiscal year data shows that in just six months, there was a decrease of 1,541 fewer City employees
earning less than $60,000 annually, saving the City $40 million.This represents a decrease to the
payroll of 1.25% for those earning less than $60,000.
Across the same six-month
period comparing calendar year to fiscal year data, there was a $34.6 million increase in salaries paid to City
employees earning over $100,000 annually, increasing the payroll for those
earning over $100,000 by 2.3%.
Was the $40 million
decrease to those earning less than $60,000 then used to award $34.6 million in
salary increases to those earning over $100,000?
Given this data, you have
to ask who's fattening at the trough, because without salary reform you still
have lipstick on a pig masquerading as pension reform.
Prop. "C's" campaign
materials claim it does not "single out certain employees for better or worse
treatment," and alternatively claims there "will be no special treatment for
one group of workers over another."This is fiction at its worst — or an outright lie — since
Mayor Ed Lee negotiated a backroom deal that singles out safety employees for
Prop. "C" campaign material
claims that the same billionaire backers of Adachi's 2010 Prop. "B" are
supporting Prop. "D," but Prop "C" is not acknowledging that it has a different
set of billionaires backing its own measure.Worse, Prop. "C" campaign literature accuses Adachi of having
written his competing measure in secret, when in fact, the pension measure
backed by Mayor Lee was completely developed in secret and not released until
the deal with safety officers was already struck.
Both measures refused to
meet with actual retirees of multiple City unions, shut out of both
"D," also bankrolled by
billionaires, is similarly deeply flawed, as I reported in the last issue.
In his September article in
the Westside Observer, Jeff Adachi
claims San Francisco's retirement system is underfunded "by anywhere between
$2.5 billion and $7.0 billion."This is simply untrue, and not the first time Adachi has
played loose and fast with data (for instance, Adachi has repeatedly claimed
City employee average salaries are $93,000, when in fact data released by the
City Controller on August 3 indicates average City salaries are just $73,636).
Adachi has repeatedly cited
erroneous data for his multiple pension reform measures long before his
November 2010 Prop. "B" measure failed.
"The City's pension fund is
underfunded by $1.5 billion, but is 91% funded according to our last annual
report. It's among the best-funded
plans in the country," says Herb Meiberger, an elected member of the San
Francisco Retirement Board.
"The plan's market value as
of June 2010 was $13.1 billion, and is now at $15.4 billion as of June 2011," he
adds, another $2.3 billion improvement.Meiberger notes "The fund's returns were 12.55% for FY 2010, and 21.85%
for FY 2011, ending June 2011."
That sounds to me like strong
performance over the past two years, despite Prop. "C's" and "D's" unsupported,
wild claim an actuarial 7.75% projected return will bankrupt the pension
Adachi also quoted Northwestern University Professor Joshua Rauh as saying San
Francisco's public employee pension fund will run out of money in the year
2032. "The probability of our
pension system running out of money is miniscule.The retirement fund would have to have horrible returns for
quite some time to become insolvent," says Meiberger.
Following the West of Twin
Peaks Central Council-sponsored mayoral debate on October 1, I approached Mr.
Adachi and asked him where he got the $7 billion unfunded pension liability
figure from.Adachi pointed to
fellow mayoral candidate Tony Hall, and said that he had relied on Hall's data.If Adachi is willing to pull data out
of thin air — which is patently false — do we really want him to
become our next Mayor, and do we want to pass a ballot measure that is based on
false assumptions and outright disinformation?
Don't forget that if Prop
"D" passes, a key provision of the police officer's contract engineered by
Interim Mayor Ed Lee will kick in, exempting public safety employees
(firefighters and police officers) from additional contributions until 2015, a
backroom deal Ed Lee announced only after he had jumped into the mayor's
race.Vote "No" on both "C" and "D."
"E" will allow the Board
of Supervisors to amend or potentially repeal ballot measures initially passed
by voters.Sponsored by freshman
Supervisor Scott Weiner, passage of Prop. "C" would mean that you can only
challenge decisions made at City Hall if they allow you to.Otherwise, they'll just repeal your
vote, effectively ending democracy in San Francisco.
As George Wooding notes in
the San Francisco Neighborhood Voting
Guide, "Look upon Proposition E as a test of your own Intelligence Quotient
(IQ): If you are dumb enough to vote for giving away your vote, you shouldn't
be voting."< Vote "No" on E.While
you're at it, consider donating to the Friends of Ethics, a committee opposed
to Measures "E" and "F" at http://www.facebook.com/friendsofethics.
"F" will allow the
Ethics Commission to rewrite hard-won local law on campaign consultants,
without voter approval.The
campaign to pass propositions "E" and "F" is funded in part by a right-wing
multimillionaire who has declared "We need to take back our City [from the
progressives]." Props "E" and "F"
are opposed by mayoral candidates Jeff Adachi, John Avalos, Tony Hall, Phil
Ting, and Leland Yee. Vote "No" on both "E" and "F"!
"G" provides for the
very real possibility of pushing San Francisco's sales tax to over 10%,
assuming that the State will eventually restore its one-percent sales tax that
has been temporarily suspended.Prop. "G" claims it will split the estimated $60 million in anticipated
revenue equally between public safety programs and public safety net services
for seniors and children.But the new
poison pill in Prop "G" is that the Board of Supervisors or Mayor will be
permitted to change how the revenue is shared between the two "beneficiaries"
with a two-thirds vote by the Board, without allowing the citizens to further
vote on changing the allocation of this new revenue source.Vote
"No" on "G."
Send the six deadly
billionaire-backed measures packing: Vote
"No" on Prop.'s "B" through "G"!
Monette-Shaw is an open-government accountability advocate, a patient
advocate, a member of California's First Amendment Coalition, and a write-in
candidate for Mayor.Feedback: firstname.lastname@example.org.
Patrick's October submission is in Pro and Con
Laguna Honda Hospital Scandal
Patient Gift Fund Records Referred to D.A. and Feds
As I reported in the Westside Observer's July-August edition, fallout from the Laguna Honda Hospital gift fund scandal has expanded, with citywide implications into City Hall's ethical mess. It's amazing that Laguna Honda Hospital's CEO, Mivic Hirose, has retained her job.
The two Sunshine ordinance complaints filed by this author to unearth gift fund records have now been referred to the District Attorney's Office and the Ethics Commission for enforcement. Both the Ethics Commission and the City Controller's Office have refused, willfully, to release public records.
In another action, access to the Whistleblower Program's investigative files has moved into Federal court, in part for failure to release the same records.
In June, the Sunshine Ordinance Task Force issued two separate Orders of Determination to both the Ethics Commission and the City Controller's office, ordering that the records requested must be produced, since the City failed to demonstrate a valid exemption under California's Public Records Act justifying reasons for withholding the records.
The Task Force's compliance committee ruled unanimously on July 12 that both the Controller's Office and the Ethics Commission had failed to comply with the Task Force's two Orders of Determination. The subcommittee returned the two complaints to the full Task Force, with a recommendation that the Task Force find that Tonia Lediju, the manager of the City Controller's whistleblower program, and John St. Croix, Executive Director of the Ethics Commission, engaged in willful failure and official misconduct for failure to comply with the SOTF's initial Orders of Determination.
The SOTF's referral for enforcement to the D.A. cited City Charter section 15.105(e), Official Misconduct, and Sunshine Ordinance Sections 67.34 (regarding willful failure) and 67.21(e) (requiring the D.A. to insure compliance when records custodians refuse to comply with a Sunshine Order).
On July 26, 2011, the full Task Force adopted the recommendation from its Compliance and Amendments Subcommittee, adding that in addition to referring the two cases to the District Attorney and the Ethics Commission, the two new "Referrals for Enforcement" should also be sent to Interim Mayor Ed Lee and to the San Francisco Civil Grand Jury.
The final determination by the SOTF highlights the City's resistance to releasing any patient gift fund records.
It will be interesting to see if appointed District Attorney George Gascón, who is busy running to be elected as one of our top law enforcement officials, will step up to the plate and order enforcement, or whether he's too busy with his election campaign to uphold his oath of office.
Surprisingly, news just surfaced that the Ethics Commission's Chief Enforcement Officer, Richard Mo, who unsuccessfully defended the Ethics Commission when my Sunshine complaint was heard on April 26, is suddenly no longer employed at Ethics, effective mid-August. His defense didn't work, and now he's gone?
It will also be interesting to see what our Interim Mayor, Ed "The Liar" Lee, does with the referrals on the Sunshine complaints.
In another development, former Laguna Honda Hospital hospice physician Derek Kerr's wrongful termination and whistleblower retaliation lawsuit has moved into Federal court. Kerr's legal team sought access to both the Ethics' and Whistleblower Programs' investigative files involving the Laguna Honda Hospital patient gift fund scandal, and sought in their Federal motion to compel depositions from Ethics and Whistleblower Program staff. Both agencies declined allowing some of their respective employees to be deposed in Kerr's lawsuit.
On August 11, the Federal Magistrate assigned to Kerr's case requested all documents acquired to date during discovery. He apparently wanted to review them all, in addition to a potential in camera review of other whistleblower program records. In camera reviews allow judges to determine admissibility of documents before they are presented in open court. On August 24 the Magistrate ordered release of any documents showing communication between the Ethics Commission and the Whistleblower Program to and from anyone in the Department of Public Health's staff, for the Magistrate's further in camera review. The Magistrate will then decide whether to order that additional staff be deposed.
The good news is that there has been some movement on the other whistleblower complaints doctors Kerr and Rivero filed that I mentioned in the last issue. Sadly, there has been no action regarding the whistleblower complaint against former Director of Public Health Mitch Katz, who I reported last month had received consulting fees from the Chicago firm, Health Management Associates. HMA collected $103,000 from a DPH consulting contract, during the same period it paid $30,000 to Katz over three years.
Belatedly, City Controller Ben Rosenfield (himself) finally took action on Kerr's and Rivero's whistleblower complaint about Davis Ja and Associates, which involved conflict-of-interests between DPH employee Deborah Sherwood and her husband Davis Ja, who had been awarded a $1.9 million consulting gig. It turns out that because Sherwood co-wrote the RFP eventually awarded to her hubby, Ja; was the Project Manager for the contract; was an official answering questions about the RFP and possibly the final contract; and had allowed a direct-report to serve on the interview panel, Controller Rosenfield belatedly cancelled the contract "for convenience," after he recently "discovered" through a public records request, that there was a problem.
This may potentially result in a refund to the City of some $400,000, based on scheduled payments to Mr. Ja that were canceled on July 29, 2011
Rosenfield only canceled the Ja contract on July 29, almost two years after the whistleblower complaint had been submitted. Rosenfield claims he's informed of all "high-risk" whistleblower complaints, but now claims he only learned of this case just weeks ago through a public records request. Rosenfield didn't admit the new records request was placed by doctors Kerr and Rivero, even though they had filed a whistleblower complaint fully two years ago.
Sherwood, whose pal is her husband Davis Ja, was formerly supervised by Dr. Bob Cabaj, who abruptly resigned from the Health Department in May 2011. Two months later, Ja's contract was suddenly revoked, and Richard Mo also suddenly vanished.
What's wrong with this picture? Could any of this be related?
Despite Rosenfield suddenly yanking the contract, the Ethics Commission is still dragging its feet and may still be "investigating." Why did it take the City Controller two years to arrive at yanking Ja's contract, and why is Ethics still investigating it? Should we start referring to this as the "Jerwood scandal"?
The Civil Grand Jury released its report on the Whistleblower Program after the Observer's last edition went to press. Their report is highly critical of the Controller's whistleblower program, noting that the Ethics Commission's efforts to protect City employees against retaliation for exposing wrongdoing aren't working.
During the Citizen's General Obligation Bond Oversight Committee's hearing on August 11, Controller Ben Rosenfield's proposed "response" to the Grand Jury's findings was debated. Remarkably, CGOBOC approved the Controller's response to the Grand Jury that there is no need to implement an "appeals" process for whistleblowers who are not satisfied with the disposition of their cases.
Rosenfield brazenly responded to the Grand Jury that citizens and employees can petition a court, or can appeal to the Board of Supervisors' heartstrings, if the outcomes of their whistleblower complaints aren't resolved satisfactorily. Rosenfield's slap in the face is appalling, since most citizens can't afford mounting a Court challenge, nor do they have easy access to an incompliant Board of Supervisors. The idiocy of CGOBOC's stamp of approval on Rosenfield's response is appalling, but may be explained by who appointed each CGOBOC member to their "oversight" seats.
It's not too surprising Rosenfield "disagreed" with most of the Grand Jury's findings. Had he "agreed," he would be admitting the whistleblower program is a failure, as the Grand Jury tried to explain. Even the San Francisco Examiner published an editorial spanking Rosenfield for resorting to "damage-control," rather than restoring public faith in the whistleblower program.
It took CGOBOC seven years to even get around to forming a subcommittee to review whistleblower complaints, despite clear language in the 2003 Prop "C" measure requiring them to investigate all whistleblower complaints. The subtext of CGOBOC's remarks on August 11 is that they may want to reevaluate what their role is in investigating whistleblower complaints. They still don't know what their role is, going on eight years later.
Candidate for Mayor Dennis "The Ultimate Clean-Government Menace" Herrera, and his so-called "public integrity unit," have been missing in action, and haven't lifted a finger in any of these whistleblower and sunshine complaints. Neither has George Gascón's — or his predecessor, Kamala Harris' — public integrity unit lifted a finger.
Is this what Laguna Honda patients — robbed of probable misappropriated funds — or we the voters, deserve by way of an ethical government? So far there have been no consequences of these abuses of government powers.
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback: email@example.com.
Laguna Honda Hospital Fallout
Watchdogs, Whistleblowers, and Grand Juries
Fallout from Laguna Honda Hospital's patient gift fund scandal just keeps expanding, with citywide — not just District 7 — implications.
Between two Civil Grand Jury reports, and two Sunshine Ordinance complaints involving access to public records, San Francisco's Ethics Commission and the Controller's whistleblower program aren't faring well as a result, nor is the City's Department of Public Health.
One focus of its report is that Ethics Commission executive director John St. Croix wields excessive influence over Ethics Commission members, and appears to overreach his authority.
Another finding is that no City employees have ever been disciplined for failing to adhere to the Sunshine Ordinance.
The Grand Jury noted that one Ethics Commissioner acknowledges there is an expectation that Ethics Commissioners are to blindly support decisions made by executive director St. Croix to dismiss cases. Shockingly, all cases referred to Ethics are first reviewed by a single individual —St. Croix—to determine the merits and disposition of cases. The Grand Jury recommends that the Commission hold hearings to review and vote on investigations recommended for dismissal by St. Croix.
A second Grand Jury report released in June—Hunters Point Shipyard: A Shifting Landscape—alleges SF's Department of Public Health should "rigorously enforce conflict of interest guidelines governing dealings between its officials and the companies they are monitoring." It's about time somebody noticed rampant conflict of interest violations within DPH.
As I reported last month, the Controller's whistleblower program and the Ethics Commission were found by the Sunshine Ordinance Task Force to have violated state public records law to release records, since both agencies seem hell bent on preventing release of whistleblower complaints that may expose potential wrongdoing at the highest levels of City government.
Two separate Sunshine Complaints filed by this author resulted in both agencies being ordered to provide the requested records within five business days. Both agencies have refused to provide public records for over six months. Both agencies are flouting the Sunshine Task Force's Orders, asserting they will not comply.
On June 13 and June 24, St. Croix notified the Sunshine Task Force that Ethics will not release the records requested, validating the Grand Jury's finding that Ethics simply ignores the Task Force's rulings. Tonia Lediju, the City Controller's manager of its whistleblower program, responded to the Task Force's order saying that the Controller's Office "respectfully disagrees" with the Task Force's Order of Determination, and she refuses to attend the Task Force's Compliance Committee hearing.
Lurking behind St. Croix's and Lediju's refusal-to-comply is City Attorney Dennis Herrera, whose office provides legal advice to both agencies. Some observers suspect the City Attorney is the ultimate barrier to open government in San Francisco.
Given their flat refusal to comply with the Orders of Determination, will Lediju and St. Croix be disciplined? Under the Sunshine Ordinance "willful failure shall be official misconduct." Such discipline is the purvue of the Ethics Commission.
Whistleblower and Grand Jury
Even before two former doctors at Laguna Honda Hospital—Derek Kerr and Maria Rivero—filed their third whistleblower complaint regarding misappropriation of Laguna Honda's patient gift fund in March 2010, they had previously submitted two other whistleblower complaints.
Their first whistleblower complaint in September 2009 alleged a potential conflict of interest involving Dr. Bob Cabaj and Davis Ja & Associates who may have been awarded a contract by Deborah Sherwood, Dr. Cabaj's Research and Quality Management Director in DPH's Community Behavioral Health Services section, in a clear conflict-of-interest situation.
Their second whistleblower complaint, also in September 2009, was against Mitchell Katz, former Director of Public Health, regarding payments Katz received from Health Management Associates, a Chicago firm. HMA was first awarded a $250,000 consulting contract in 2005 to examine integration of long-term care services between Laguna Honda Hospital and San Francisco General Hospital, and the "medical model of service" at LHH. The contract was amended to add another $30,000 in services. Conclusions in HMA's 2005 report appear to have been written even before that consulting gig began.
The City Controller's vendor on-line payment system shows that,in two years HMA has been paid $87,233, with an outstanding balance of $161,516, totaling $248,749. Other records show that, since 2005, HMA is thought to have received over $500,000 in contracts with San Francisco.
In 2008, Dr. Katz started receiving fees from HMA, which he collected through 2010. In 2009 HMA was awarded a new contract recommended by Katz and approved by the Health Commission.
Katz reported on his Form 700 Statements of Economic Interest that he received $10,000 as a consultant to HMA in each of calendar years 2008, 2009, and 2010, for a total of $30,000. DPH contracts Katz approved with HMA is another obvious conflict-of-interest case. Could it be that the whistleblower conflict-of-interest complaint is what drove Katz to suddenly resign to take a job in Los Angeles?
It's probably no coincidence the two whistleblower complaints in 2009 led the Grand Jury to acknowledge conflict of interest problems are rampant at DPH.
Foot Dragging at Ethics
Notably, the City Controller's Office and the Ethics Commission lumped Kerr's and Rivero's two separate September 2009 whistleblower complaints into a single investigation, on the dubious pretext that both complaints were against the same City department and involved similar issues.
The Ethics Commission reportedly referred the combined complaints to the District Attorney and the City Attorney in November 2009. The City Attorney declined investigating, but the District Attorney sat on the case for nine months before declining in July 2010 to press criminal charges and returned the case to Ethics, which has now been investigating the case for an additional 11 months.
While Ethics is charged with investigating conflict-of-issue complaints, it has literally sat for two full years on the two complaints against DPH officials.
The Grand Jury report noted that Sunshine Task Force actions deserve timely hearings before the Ethics Commission, and that waiting for the District Attorney or City Attorney to inform the Ethics Commission they are not going to pursue a case causes unnecessary investigative delays.
Just as there is nothing in the City Charter that prevents the Controller from concurrently investigating cases while Ethics is investigating the same case, there's also nothing that prohibits the Ethics Commission from concurrently investigating cases. The Grand Jury recommends that after the 14-day window, Ethics investigations should start promptly.
The Grand Jury's "Sleeping Watchdog" report also noted that the failure of the Ethics Commission to enforce Sunshine Task Force actions weakens open government.
"The Ethics Commission is denying justice to the public through its delays and burial of complaints," said Dr. Rivero. "It should be reorganized or disbanded, since it appears to be wasting taxpayer money."
The Grand Jury is believed to still be working on yet another report regarding the City Controller's whistleblower program; the third Grand Jury report is expected to be released after the July edition of the Observer goes to print.
Isn't it a pity that although San Francisco voters have tried multiple times to strengthen our local whistleblower and open government laws, the two agencies charged in the City Charter with routing out government fraud and inefficiency — the Ethics Commission and the City Controller's whistleblower program — are asleep at the wheel, and it is only by profound luck that the citizen's Civil Grand Jury is now exposing the corruption of San Francisco's open government legislation?
It shouldn't take six months of wrangling to order release of records under the Sunshine ordinance. And it shouldn't take two years to investigate whistleblower complaints that should be made public.
Where will this end? When will this end? When all of the "Get Out of Jail Free" cards, or "Get Out of Town Free" cards are issued to City officials to let them off of the "transparency and accountability" hook?
Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback: firstname.lastname@example.org.
Who could have predicted that Laguna Honda Hospital's (LHH) patient gift fund scandal would eventually evolve into an investigation of San Francisco's Whistleblower program?
Who could guess the Whistleblower program would morph from being about investigating complaints involving city services, and government waste, fraud and inefficiency, into a "risk management" program assessing the the "relative materiality of possible loss to the City"?
In March 2010, former Laguna Honda Hospital (LHH) doctors Maria Rivero and Derek Kerr filed a whistleblower complaint concerning potential misuse of patient gift funds donated for patient amenities.
Had the gift fund scandal never been exposed, perhaps the commingling of public and private funds by the City, Laguna Honda Hospital, and two non-profit organizations, Laguna Honda Volunteers, Inc. and former city attorney Louise Renne's separate Laguna Honda Foundation, may not have come to light. The second scandal is still unexplained.
Now it appears clear that the LHH patient gift fund scandal led to exposing a third scandal — the corruption of the voter-approved whistleblower program.
What started out as a model whistleblower program has become a betrayal of open government, with apparent collaborative consent of the City Attorney's Office, the Controller's Office, and the Ethics Commission.
Proposition C in 2003 created the whistleblower program that requires the Controller to investigate whistleblower complaints unless the Ethics Commission states in writing that an investigation would substantially impede or delay the Ethics Commission's own investigation of whistleblower complaints.
A Sunshine complaint was filed to obtain any and all routine, but non-investigatory, correspondence between the City Controller's Office and the Ethics Commission regarding Kerr's and Rivero's gift fund whistleblower complaint. When both agencies refused to provide the correspondence, the author filed a Sunshine complaint on March 6.
The Ethics Commission claimed that all of its records, including routine correspondence between the two agencies, were totally confidential.
Amazingly, Deputy City Attorney Jerry Threet combined Kerr's and Rivero's gift fund whistleblower complaint, which had not alleged a conflict of interest, with two other whistleblower complaints the doctors had submitted that did involve conflicts of interest. By lumping all three cases together, Threet wrongly sought to justify that the Ethics Commission had jurisdiction over all of the gift fund whistleblower complaints.
City Charter Section C3.699-13 applies only to cases involving Ethics Law, not Public Records Access Law. On April 26, Sunshine Task Force members voted unanimously that both agencies had violated sections 67.27, 67.26, and 67.25 of the Sunshine Ordinance regarding untimely response from the Controller, that withholding of records must be kept to a minimum, and that materials not exempt should be redacted rather than withheld entirely.
The City Attorney's office apparently believes the Sunshine Ordinance does not apply to the Ethics Commission, despite the fact that there is nothing in the Ordinance that exempts any City department, board, or commission.
Garrett Chatfield, Ethics Commission investigator would neither confirm nor deny that Kerr and Rivero submitted a whistleblower complaint, though both doctors were present during the hearing. Chatfield repeatedly refused to disclose whether the investigation was on-going or closed, claiming Commission regulations pre-
vented him from all disclosure.
Task Force member David Snyder introduced a motion which passed unanimously, finding that the Ethics Commission had violated California's Public Records Act (CPRA).
A second motion, asserting that the Ordinance expands state law by requiring that withholding be kept to a minimum, and that the Commission violated that requirement, introduced by the Task Force's Hope Johnson, passed.
Chatfield relied on a single in-house Ethics Commission ruling that all their records are confidential.
The Task Force members were shocked.
"Since the Task Force agreed in the first motion that the Ethics Commission had not appropriately cited a CPRA exemption for withholding records, my second motion provides direction to the Ethics Commission ... for disclosure," Ms. Johnson said.
Along the way to these two Sunshine victories, the Controller's Whistleblower Program released its policy and procedure manual highlighting that its "risk assessment" of whistleblower complaints hinges, in part, on the criteria of evaluating risk based on "rating potential monetary loss to the City, level of staff involved [elected officials or department heads], potential reputation damage, and the use of ARRA [Recovery Act 'stimulus'] funds."
All whistleblower complaints are rated according to "risk of loss to the City"; they are rated as high-, medium-, and low-risk to the City. Complaints and whistleblowers are seen as threats and risks, which explains why whistleblowers are not protected against retaliation. The City Controller's whistleblower website does not disclose the use of such risk profiles—they are kept secret.
When voters passed Prop C in 2003, they were told the City Controller would investigate whistleblower complaints, not that the various City departments who may have engaged in government waste, fraud, and inefficiencies would be permitted to investigate themselves. But by December 2010, the policy and procedure manual was revised. Rather than having a semi-independent entity investigate whistleblower complaints, departments are allowed to investigate charges against their own departments. The 2010 revision of the policies also introduced the risk assessment of whistleblower complaints, involving three categories of relative risk to the City. The highest risk category, involving loss to the City of more than $50,000 or cases involving elected officials and appointed department heads, was created to limit the City's liability, not to expose wrongdoing at the highest levels of City government.
Monette-Shaw is an open-government accountability advocate, a patient advocate. Feedback: email@example.com.
Commingling of Public and Private Funds
The on-going scandal of Laguna Honda Hospital’s patient gift fund reveals that not only did administrators in charge of charitable contributions divert funds intended for patients for use by staff, other ethical lapses occurred involving the commingling of public and private funds between two separate non-profit affiliates and this public City hospital.
The chief finding of the City Controller’s audit of LHH’s patient gift fund determined that LHH needs to improve the management of its gift fund. The audit report outlined many sloppy accounting practices at LHH that appear to be a result of confusion about whether funds are private or public, and administrators who apparently believed they could spend public and private funds however they pleased.
On March 24, the Board of Supervisors’ Government Audit and Oversight Committee held a hearing on the City Controller’s audit of LHH’s patient gift fund. At the end of the hearing, Supervisor David Campos asked whether there was a clear finding of fact that money intended for the benefit of patients had not been used for the benefit of LHH’s staff. Campos wanted a reassurance that, in fact, that had not happened. Tonia Lediju, director of the Controller’s audits program, first tried to claim the problem wasn’t with expenditures, the problem was with donations; she couldn’t bring herself to say that the problem with donations incorrectly deposited into staff subaccounts obviously led to expenditures from staff subaccounts for the benefit of staff, even though the audit eventually restored $350,000 in improper spending back to patient subaccounts.
Campos pushed harder, asking whether there was a guarantee that no money donated for the benefit of patients was in fact used for the benefit of staff. When Lediju replied that had not been the case for the 212 expenditure transactions reviewed during the audit, Campos asked whether funds intended for patients but potentially spent on staff may have occurred for expenditures not in the 212 audited transaction sample pool. Lediju — remarkably — finally admitted for the first time that it could be possible patient funds were spent on staff for expenditures that weren’t audited.
This substantiates the audit report’s statement in Finding 3.3 that the audit team was unable to determine the cause of discrepancies, nor could it determine in many cases whether subaccounts had been incorrectly charged.
Campos continued the hearing to the call of the chair, providing an opportunity to hold a follow up hearing. What is clear is that private funds raised to benefit patients were used for perks for City employees, whether or not those funds were subsequently refunded as a result of the long-delayed audit.
Laguna Honda Hospital’s “rebranding” public relations spending. Although the Public Health Department already had a public information officer paid $129,000 annually, LHH spent an additional $819,441 between 2008 and 2010 on just salaries for its in-house PR department. It’s believed those salaries came from the City’s General Fund.
LHH’s PR salaries will reach $1 million by December, across four years. In response to a public records request, LHH has refused to disclose its total PR budget.
LHH’s PR spending isn’t meant to enhance its image with safety-net Medi-Cal patients it purportedly serves, who have nowhere else to go. It’s meant to assure Laguna Honda Foundation philanthropic donors everything is hunky-dory at LHH. That’s public funds being used to “market” a non-profit entity to private donors, eerily reminiscent of CSU’s commingling of public and private funds.
LHH’s Priest’s Quarters were remodeled in 2003 and 2004 using City funds; the A-150 wing of LHH was specifically remodeled to house the offices of former City Attorney Louise Renne’s non-profit entity, Laguna Honda Foundation, which eventually moved into the remodeled space in 2004. The remodel was designed around the operational needs of Renne’s Foundation, possibly with its input.
In response to a public records request, the Controller’s Office — after Gregg Sass, CFO of the Public Health Department initially claimed he could find no “responsive” records — later acknowledged that LHH’s Priest Quarters remodel in 2003 cost only $50,095, funding provided by LHH’s annual $900,000 capital improvements and facilities maintenance budget from the City’s General Fund. The remodeling included lighting and electrical work of approximately $16,000; flooring work of approximately $16,000; and painting of windows, floors, and ceiling of approximately $17,000.
But the furniture for the Priest Quarter’s remodel; a photocopier, fax machine, and kitchen appliances purchased; other telecommunication work thought to have been performed by the City’s Department of Technology and Information Services, potentially including pulling cable into the Priest’s Quarters; and additional electrical work was not included, and hasn’t been itemized by the City despite a public records request for additional information, nor has the source(s) of funding for this additional scope of work been revealed. Was this additional work performed using private or public funds, or a combination of both? How much more did this work cost, above the first $50,095?
As previously reported, Supervisor Elsbernd’s February 2009 crab fest raised $151,000 according to the tax returns for Community Initiatives, the separate fiscal sponsor that handles finances for the Laguna Honda Foundation. But after Nichelle Lyons was paid $42,998 for fundraising expenses — almost one-third of the event’s purse — only $108,652 reached Renne’s Foundation.
Nine days before LHH’s former executive director John Kanaley died on March 19, 2009, news had already broken on March 10 that Elsbernd’s February 27, 2009 crabfest fundraiser for Renee’s Laguna Honda Foundation had raised $110,000.
It’s remarkable that in the 11-day span between February 27 and March 10, 2009 the event’s net proceeds later reported on IRS tax Form 990’s had already been determined, or at least approximated. Here we are 10 months after LHH’s June 2010 Gala Dinner, and we still don’t know how much money was raised, or who the proceeds benefited.
But in 2009, the March ‘09 minutes of LHH’s Executive Committee show that Marc Slavin, LHH’s Director of Government and Community Relations, and Arla Escontrias, LHH’s then Director of Community Affairs, were tasked with “looking into” — soliciting — putting money from Renne’s Foundation and the separate Volunteers, Inc. into public relations materials for the hospital. Neither Renne’s Foundation nor Volunteers, Inc. have an IRS designation to fund PR materials, but it appears private donations solicited to fund either patient amenities or furniture, fixtures, and equipment for the new hospital were likely used to fund PR materials for the public hospital, instead.
Clearly, public funds are being used to support PR efforts and the salaries of City employees performing PR work that accrues to the benefit of Renne’s Laguna Honda Foundation, in addition to private funds probably being used to fund PR materials for the public hospital. In addition, LHH’s web site — likely paid for from City General Fund expenditures — directs Laguna Honda Foundation’s potential donors to call LHH’s PR staff, who now occupy the Priest’s Quarters that were renovated to house Renne’s Foundation.
The commingling of public and private funds at Laguna Honda Hospital mirror the scandal of commingling public and private funds at California State University. Both cases point to a need that finances of these entities be brought under the purview of the California Public Records Act to allow for greater public scrutiny, in part because the tax returns for the Laguna Honda Foundation continue to report zero revenue and zero expenses to the IRS, when clearly commingling of private and public funds is occurring.
Because the large amount of funds involve a “substantial nature” and there is reasonable cause to believe the gift fund whistleblower complaint was well-founded, records of the Ethics Commission’s and City Controller’s investigations of Drs. Kerr’s and Rivero’s gift fund whistleblower complaint should be made public. And a completely independent audit of the gift fund should be redone — given provisions in the Charter to hire independent auditors — since the City Controller has a potential conflict of interest auditing City employees who may have knowingly commingled public and private funds.
Monette-Shaw is an accountability advocate and a member of California’s First Amendment Coalition. Feedback: firstname.lastname@example.org.
Snoozing at Laguna Honda's Gift Fund Wheel
While some progress continues to be made with Laguna Honda Hospital's patient gift fund, many problems remain unaddressed.
How many City administrators are asleep at the wheel, or snoozing? Mayor Edwin Lee might want to consider cutting LHH's public relations staff budget, since Marc Slavin earned $132,470 in 2010 and his assistant Linda Acosta — hired as, and sitting on, a job requisition for a 2588 Health Care Worker IV Activity Therapist, but is performing public relations work, instead — earned $66,742. Shouldn't activity therapists be working with patients, rather than doing public relations work?
This totals $199,212 in salaries Mayor Lee could easily trim.
Slavin, LHH's director of public relations, appeared to need a short snooze on January 25 when the Health Commission's sub-committee, the LHH Joint Conference Committee, met suddenly to discuss changes to LHH's patient gift fund policy and procedure.
Many of the recommendations made by former LHH doctors Maria Rivero and Derek Kerr have finally been returned to policy #45-01, including reinstating the Gift Fund Management Committee, which had suddenly been disbanded in April 2010 thought to be from Slavin's editing. LHH's Resident Council president has been reinstated to the Gift Fund Management Committee, restoring a patient representative. The policy change also restores reference to the City's Administrative Code, which authority reference had been deleted from the policy in April 2010.
The sub-accounts for staff amenities have finally been removed from the policy, since the fund was expressly created to only benefit patients.
This reporter testified on January 25 that the policy changes don't go far enough. The policy still permits LHH's Executive Administrator to add new sub-account grant codes in the future without consulting the Health Commission first. Although the revised policy gives the City Controller's office the "right to conduct final review and approval of all expenses," there is nothing in the policy requiring the City Controller to perform an audit or review of gift fund activity annually.
The January 25 draft changes to the policy restored quarterly reports of gift fund activity to the Health Commission as Kerr and Rivero had recommended, but neither the Health Commission, nor the Residents Council, nor the reinstated Gift Fund Management Committee would be involved in actively managing proposed stock portfolio transactions of bequests to the patient gift fund.
There are reports that the Residents Council's previous request to receive quarterly reports of gift fund transactions, was rebuffed by LHH's executive administrator Mivic Hirose, and isn't addressed in the revised gift fund policy.
And there is still no provision for LHH staff to donate to the gift fund via payroll deductions through the annual Combined Charities Campaign; this should be codified in the gift fund policy, because in October 2009 LHH staff were told they could no longer donate to the gift fund through Combined Charities. When I asked Health Commissioner Jim Illig to look into this restriction on January 25, he tried to suggest that Louise Renne's separate Laguna Honda Foundation had been set up to accept donations from the public to benefit patients.
I had to point out to him that Renne's Foundation's tax exempt status had been granted by the IRS to fund a $15 million furniture, fixtures, and equipment acquisition program (which her Foundation never raised), not donations for direct patient benefit, and that her Foundation wasn't granted tax exempt status to raise funds for patients.
The JCC took no formal action on January 25 in open session to adopt the proposed gift fund policy changes, and made no motion to forward the policy to the full Health Commission. An audio tape of the January 25 JCC meeting shows Commissioner Illig realized only after going into closed session that they should have taken a vote during open session. Just as the closed session began, Illig noted they would forward the policy changes to the full Commission with recommendations from the JCC, but revealed no information about what the JCC's recommendations would be; whether they voted in closed session isn't known, since recording was then turned off.
When the Health Commission then met on March 1, there was suddenly a new version of the proposed policy changes different from the January 25 version. Suddenly, the Gift Fund Management Committee was added as a reviewer of proposed stock transactions, a welcome improvement. But the quarterly updates of gift fund activities to the full Health Commission was changed; now only the Commission's JCC sub-committee will receive the quarterly reports. The full Commission will only receive annual reports instead.
The full Health Commission hasn't discussed the City Controller's audit of LHH's gift fund as a full agenda item with public comment, beyond Commissioner Melara asking during the Commission's January 4 meeting to have a PowerPoint presentation about the audit (but not the actual audit report itself) e-mailed to all Commission members. In response to a records request to obtain the audio tape of the Commission's January 4 meeting, this reporter was told that the audio recording system had failed — akin to Rosemary Woods' infamous erasure of a portion of an audio taped key meeting with President Nixon — and no recording of the meeting had occurred.
Also suddenly, a new sub-committee of the Citizen's General Obligation Bond Oversight Committee (CGOBOC) held a hearing on February 3, with little advance notice, regarding the Controller's audit of LHH's gift fund. While CGOBOC was initially created to monitor use of voter-approved general obligation bonds on capital improvement projects, Proposition "C" passed by voters in 2003 creating the City Services Auditor program increased CGOBOC's duties to provide oversight of audits and whistleblower complaints by creating a Citizen's Audit Review Board. It took seven years before CGOBOC got around to creating its Audit Review Board "Audit Sub-Committee."
The Controller's Office made another presentation about LHH's gift fund to the Audit Sub- Committee on February 3, but it is not yet clear whether the sub-committee will refer the audit to the full CGOBOC for further discussion. It is clear that the Civil Grand Jury has taken an interest in the whistleblower program, in part as a result of Kerr's and Rivero's whistleblower complaint. And there is some movement that the Board of Supervisor's Government Audit and Oversight committee may finally be taking an interest in the LHH gift fund audit.
Many questions linger about the audit of LHH's patient gift fund. As I reported in the Observer's January-February issue, the City Controller's audit of LHH's patient gift fund quietly ordered restitution of at least $350,000 to sub-accounts that directly benefits patients. That's just the tip of the iceberg.
The Controller's audit didn't go far enough and failed to examine a number of relevant problems. Questions about hundreds of thousands of dollars in donations directed to benefit actual patients still haven't been adequately answered.
First, there are still unanswered questions about what happened to approximately three-quarters of a million dollars in bequests to the patient gift fund, which the City Controller's audit didn't even address.
Second, according to IRS tax returns for Laguna Honda Volunteers, Inc. — a non-profit organization formed in the 1950's to benefit only Laguna Honda's patients and volunteers — there are questions about two separate $187,500 donations, totaling $375,000, that Volunteers, Inc. reported on its tax returns for 2003 and 2004 as being paid to its "affiliate," Laguna Honda Hospital, separate and above what it donated for actual patient and volunteer support.
Those two $187,500 transactions weren't investigated, because the Controller's audit team restricted the audit period to cover gift fund activity only between November 1, 2004 and June 2010. Maybe nobody wanted to audit whether the two transactions went first to Laguna Honda Hospital and then possibly were diverted to another entity.
Additionally, Laguna Honda Volunteers, Inc.'s tax returns for 2006 and 2007 reported that it authorized $133,063 and $33,027, respectively — a total of $166,090 — for so-called "Board Directed Special Projects," reported to the IRS as "Program Services." Despite inquiries to find out what the Board Directed special projects involved, Volunteers, Inc. hasn't responded.
Adding the two payments Laguna Honda Volunteers, Inc. made to Laguna Honda Hospital in 2003 and 2004 to the 2006 and 2007 board-directed special projects totals $540,090, which was not examined during the City Controller's audit.
Between unanswered questions about bequests and Volunteer Inc. tax returns, we're talking about $1.12 million in unexplained expenditures.
Volunteer, Inc.'s IRS Form 990 tax returns for 2009 were recently posted on GuideStar.org. The forms show Nichelle Lyons, Supervisor Sean Elsbernd's preferred fundraiser, was paid $10,000 in 2009 for fundraising for Volunteers Inc., but it is not clear for what event she raised funds. The only publicized LHH fundraiser in 2009 was Elsbernd's February 27, 2009 crab fest, but that event was to benefit Louise Renne's separate Laguna Honda Foundation, not Volunteers, Inc.
A third non-profit — Community Initiatives, which acts as a fiscal sponsor for Renne's Foundation — reported on its Form 990 tax returns for 2009 that Ms. Lyons was paid another $42,998 as a fundraiser for Elsbernd's February 2009 crabfest, out of $151,650 in gross receipts. Lyons pocketed fully 28% of the crabfest's revenue just from Community Initiatives. If her additional $10,000 earnings from Volunteers, Inc. was payment related to Elsbernd's crabfest, she may have pocketed 35% of that event's proceeds.
It will be interesting to learn how much Volunteers, Inc. and Community Initiatives may have paid Ms. Lyons in 2010 for coordinating LHH's June 24, 2010 Black Tie Gala Dinner, since that fundraising event was designed to benefit both Volunteers, Inc. and Renne's Laguna Honda Foundation. Elsbernd, Volunteers, Inc. and Renne's Foundation still haven't released publicly how much money Lyons raised for them at the June 2010 Black Tie Dinner.
Why is the interrelationship between Laguna Honda Hospital, Laguna Honda Volunteers, Inc. and Renne's Laguna Honda Foundation sounding more and more liked the tangled web of the CSU Stanislaus Foundation scandal, whose critics have complained that foundations have been used as a sort of secret checking account? Accountability advocates argue that auxiliaries and affiliated organizations should be subject to the state's Public Records Act so their finances can be scrutinized.
Slavin, who controls content posted to LHH's web site, still hasn't returned the missing gift fund instruction page to LHH's web site, which was deliberately removed under his control in September, eight months ago.
If Commissioner Illig wants gift fund donations to increase, why is he asleep at the wheel, ineffectual in getting that web page reposted? Is sleepy Slavin, on behalf of Renne, somehow stopping Illig?
Monette-Shaw is an accountability advocate and a member of California's First Amendment Coalition. Feedback: email@example.com.
Health Commission Misses the Point
Laguna Honda’s Gift Fund Scandal
As I reported in the December issue of the Observer, restitution of at least $350,000 to the Laguna Honda Hospital patient gift fund is a good first step, along with recommendations to improve oversight of the gift fund. It’s too bad that it took nearly a year to obtain both outcomes.
Lingering questions remain unanswered, following foot-dragging by San Francisco officials.
Although Mivic Hirose, LHH’s Executive Administrator, and other Department of Public Health staff keep asserting that the audit of the gift fund “definitively ends any question” about whether gift funds were used strictly for patient benefit, observers note this isn’t the case. Questions about the audit, and use of the patient gift fund, abound.
One unanswered question: whether another $56,209 was transferred from LHH’s patient gift fund to a capital project account or some other account, and whether that $56,209 pushes the amount restituted for patient benefit to over $400,000, rather than the $350,000 restitution amount reported earlier.
On December 3, a Health Commission subcommittee — the Laguna Honda Hospital Joint Conference Committee — held a hearing at LHH to officially receive the City Services Auditor’s 36-page report on its audit of LHH’s patient gift fund. Tonia Lediju, the City Controller’s director of audits, admitted that the Whistleblower Program team — who reports to her — had not conducted an investigation of the LHH patient gift fund whistleblower complaint filed in March 2010 by former LHH doctors Derek Kerr and Maria Rivero.
During that meeting, Health Commission president James Illig, noted that the “biggest mistake” made with the gift fund was that the hospital’s administration team had lost track of the requirement for the Health Commission to approve changes to the gift fund policies. Illig couldn’t bring himself to admit that the real “biggest mistake” was when LHH’s administrators started to think in 2004 that the $2 million patient gift fund was a slush-fund account they could — and did — raid for staff use.
Illig also praised the whistleblowers for having brought to light the gift fund problems. But he brazenly suggested it was “incumbent on” Drs. Rivero and Kerr, this reporter, and George Wooding, president of the West of Twin Peak Central Council, to help LHH with the “processes of reconnecting with the community … to ensure that donations continue to come in” to support patients.
In reality, it is incumbent on City officials to reconnect with donors, not incumbent on the concerned citizens who had uncovered the abuse of the restricted patient funds.
On December 8, the Department of Public Health’s chief financial officer, Gregg Sass, testily replied to a records request indicating that the $56,209 in question was “not another transfer from the gift fund, but rather is just a clean-up, funds in and out, within the gift fund.” But he did not elaborate on why the $56,209 was transferred on November 16, 2006 on the same date that the $176,480 was transferred to a capital account, since both amounts appear to have initially been involved in clearing a “cash deficit,” and both amounts appear to have been returned to LHH’s patient gift fund on September 27, 2010 while the gift fund audit was well underway.
But neither Ms. Lediju’s November 22 audit report, nor her Quarterly Update report to the Citizen’s General Obligation Committee (CGOBOC) on January 11, mentions the $56,209 amount.
A document provided by the Controller’s Office indicates that “no one at the Controller’s Office or Laguna Honda could explain why the Gift Fund had been used for this purpose,” referring to the transfer of gift fund monies into a capital account.
Given the gift fund scandal, donations to the gift fund may have fallen off even further since July 2010, but the Commission and LHH seem to be in no hurry to fix the fund’s reputation. They fail to see it is incumbent on them to restore adequate oversight to the gift fund.
Sadly, the December 3 LHH-JCC meeting ended on a thud, when Health Commissioner Sonia Melara — who had bemoaned that her “reputation was on the line because people had asked [her] about the gift fund” and the media situation had not been a very nice one on her side since she “happens to be related to folks in the media” — recommended to accept the audit report, and chose to accept a motion not to take any action by choosing not to make the audit report an “action item,” portending the full Health Commission will not take any action on the audit report, either.
The audit report failed to note that 56 separate $50 employee-of-the-month awards to staff totaling $3,342 had been paid for out of the gift fund, unrestored.
The audit report also failed to note that of the 50 deposits into the gift fund, fully 25 deposits — 50 percent, which represented 80% of all contributions wrongly initially allocated to staff sub-accounts — had been improperly made. Observers wonder what other errors Laguna Honda administrators may be making with accounting transactions — beyond just the patient gift fund.
Several of the audit report’s conclusions trivialize the root cause of the patient gift fund misappropriations, and may be misleading. For at least 11 years, LHH’s existing policies complied with the City’s Administrative Code and donor intent. “The gift fund’s problems were never about a lack of policies and procedures. The problem was a willful alteration of long-standing, patient-centered, and law-abiding policies and procedures by the very folks in charge,” says Dr. Derek Kerr.
“Several of the administrators who made these policy changes still make decisions at LHH,” Kerr adds.
Illig and other City officials continue to stonewall on restoring LHH’s gift fund web-page informing the public about how to contribute directly to the patient gift fund. That web page was taken down five months ago, in early September; it remains missing in action as of January 23.
In addition, this year for the first time Laguna Honda executives prohibited hospital employees from donating money directly to the patient gift fund through the City employees combined charities campaign; employees were restricted to donating to Louise Renne’s Laguna Honda Foundation or to Laguna Honda Volunteers, Inc., both separate charities. Illig needs to investigate how this restriction will adversely affect sustainability of the gift fund, and should order the web page reinstated immediately in order to increase donations to the gift fund.
Several agencies remain interested in the audit of the gift fund and the City’s whistleblower program.
Lediju’s January 11 quarterly update to CGOBOC included only a four-and-a-half line summary of her CSA’s 36-page audit report of LHH’s gift fund; her summary didn’t bother mentioning the $176,480 restored to the patient gift fund.
When CGOBOC met January 20, its Audits Review subcommittee took up the gift fund audit report, and will report back to the full CGOBOC recommendations on a public hearing on the LHH audit, since CGOBOC is mandated by Proposition C passed by voters in 2003 to monitor and hold hearings on the City’s whistleblower program and disposition of audits.
“Obviously, because administrators of Laguna Honda Hospital and the Health Department haven’t learned their lesson, CGOBOC should hold public hearings on the LHH gift fund audit, since there could easily be a repeat of the patient gift fund scandal,” says former LHH physician, Dr. Maria Rivero. Other observers concur with Rivero.
“Although Ms. Lediju’s January 11 quarterly report to CGOBOC referenced $151,739 inappropriately spent from the fund, several issues were missing from her update, including the $176,480 wrongly transferred from the gift fund to a capital project account, and steps being considered to prevent a recurrence of the fund’s mismanagement,” notes Sherrie Matza, an LHH gift fund contributor and prominent advocate for Alzhiemer’s patients.
“Since DPH’s director and others flatly refused to acknowledge significant mismanagement of funds even after it was crystal clear that misappropriation of funds had occurred, CGOBOC needs to schedule a hearing on the whistleblower program and the integrity of LHH’s gift fund,” Matza adds.
The fallout from LHH’s gift fund scandal doesn’t seem to be over, and may have implications for potential abuses of other charitable contribution programs administered by the City.
Patrick Monette-Shaw is an accountability advocate. Feedback: firstname.lastname@example.org.
Controller Restores $350,000 to Laguna Honda’s Patients
An audit of Laguna Honda Hospital’s (LHH) patient gift fund conducted by the City Controller appears to vindicate the majority of allegations former doctors Maria Rivero and Derek Kerr raised in multiple whistle-blower complaints about potential mismanagement of patient gift funds.
However, the audit was clearly flawed. Initially, the Controller’s office white-washed the gift fund scandal, and stalled as long as possible before beginning an audit in September. Along the way, Supervisor Sean Elsbernd attempted to broker a “limited audit” focusing only on eight of the initial complaints.
The City also claimed it lacked funds to conduct an audit, until a Sunshine request uncovered the fact that the City Services Auditor had been allocated $400,000 for audits at LHH.
The compromised audit findings have resulted, surprisingly, in restitution of approximately $350,000 to the gift fund to actually benefit patients. Had the audit’s flawed methodology been modified, it is thought that thousands of dollars in additional restitution may potentially have been required.
Had whistle-blowers not filed complaints, not one nickel of the $350,000 in wrongfully-diverted patient funds would have been returned to patients.
The Controller’s demand, resulting in restitution of $350,000, is clear proof that misappropriation of patient funds occurred. The Controller wouldn’t have ordered restitution, if there had been no malfeasance.
But the City Controller’s audit appears to ask readers to believe that hospital officials were clueless about how the patient gift fund was being mismanaged. Or perhaps they knew, but didn’t care. Official response to the audit, and director of public health Mitch Katz’s comments in the Chronicle were appalling.
Katz, for his part, told the Chronicle on November 23 that “not a single nickel of patient money was spent on anything but patients.” As recently as September 2, Katz implied that only $37,102 intended for patients may have been improperly deposited into staff accounts.
If Katz was correct, why would the Controller have directed that $350,000—nearly ten times more than Katz admitted —be returned to the patient’s benefit?
LHH Executive Administrator Mivic Hirose claimed, in her response to the draft audit report, that the audit “definitively ends any question about whether the money donated for patient benefits were used strictly for patient benefit.”
Hirose is wrong: The audit has not ended many questions about the fund, and it is unclear whether all of the recommendations included in the audit report will be implemented.
The audit team noted that administrators could not provide supporting documentation for 112 expenditures. In other cases approval of expenditures was inconsistent to other similar transactions, or didn’t have supervisory approval. Other transactions didn’t identify the purpose of expenditures, and still other transactions had no supporting invoices.
The Controller noted that “the risk increases that improper accounts will be charged and funds for specific purposes may be misspent,” contributing to the appearance of a lack of transparency. The Controller recommended administration improve its filing system so staff are familiar with how to file documents. Also that LHH “retain all documents in accordance with an established record retention policy,” both basic accounting chores. LHH failed to explain why its “customs and practices” led to incomplete files and missing records.
George Wooding, president of West of Twin Peaks Central Council said, “The audit results are very sad for the residents. The audit recommendations couldn’t put the administration in a much worse light.”
Of the $350,000 restitution the Controller’s audit found that $151,739 was incorrectly deposited into staff accounts and must be refunded to patient accounts.
The Controller also found an additional $176,481 taken from the patient gift fund during former Executive Administrator John Kanaley’s tenure, improperly moved into a capital fund to “clear a cash deficit” must be refunded. While the Controller’s Office admitted it had approved the initial $176,481 capital fund adjustment, it reverse the decision when additional information was supplied later during the gift fund “performance audit.”
These two amounts total approximately $328,000 which has been, or will be, restituted, but that excludes approximately $20,000 in interest on the $176,481 wrongfully that must be also repaid.
In its rebuttal to the Controller’s audit, LHH and DPH claimed that audit results hadn’t been vetted during an audit exit conference and claimed exceptions might not have been accurate. In the City Controller’s rebuttal to administration’s response, the Controller bit back, noting that the response cited incorrect information and wasn’t entirely accurate.
The report noted the hospital failed to obtain Health Commission approval before changing its gift fund policy, a violation of the Administrative Code, and failed to report gift fund expenses to the Health Commission, also required by the City’s Administrative Code.
Importantly, the audit recommended that LHH restore its Gift Fund Management Committee with a patient representative, and that detailed quarterly expense reports presented to the Health Commission be resumed—all recommendations that doctors Rivero and Kerr advocated.
Many of the Controller’s audit recommendations mirror issues Kerr and Rivero had first reported between March and September 2010.
The Controller’a audit report notes that LHH’s chief financial officer (presumably Tess Navarro) brought the $176,481 adjustment to the Controller’s attention.
This is nonsense. Drs. Rivero and Kerr first pointed out the $176,481 discrepancy in a records request on September 16, specifically asking that the City’s auditors look into this questionable transaction. Administration’s public relations officer, Marc Slavin, refused to supply the records sought on September 16, saying he couldn’t release them while the audit was underway.
There is no provision in the Sunshine Ordinance that permits withholding of documents simply because the records sought are being audited.
The Controller admits it conducted a performance, not a forensic audit. Professional accounting staff believe that the Auditor team should have reviewed all expenditures, not just 2,000.
The Controller set out to examine 2,000 gift fund expenditures between 2004 and 2010, but used a sampling methodology. They selected 324 expenditures for review, but in the end reviewed just 212 expenditures — approximately 10 percent of all expenditures — since LHH claimed it didn’t have supporting documentation for 112 (35%) of the 324 expenditures.
Laguna Honda’s accounting staff claims that the lack of documentation for the 112 records was because various public records requests caused the misplacement of documents.
Since approximately 1,800 expenditures weren’t even reviewed by the audit team, there is no definitive proof that unreviewed expenditures may have involved funds in patient subaccounts that were potentially spent on staff, instead.
For instance, this author placed a records request on October 16—before the audit had concluded—specifically asking for the source of funds used for $50 employee-of-the-month incentive awards. The Controller’s Office has stalled for over a month and has failed to respond to this request. If the $50 rewards were funded by the patient gift fund, thousands of dollars in employee-of-the-month incentives may also need to be restored to the gift fund for patient use.
Hirose has not acknowledged that the $350,000 should never have been diverted from patient subaccounts. Further, the Controller was unable to “determine the cause of the discrepancies, nor determine in many cases, whether the subaccounts charged were incorrect.” Givin these circumstances, how can this “definitively end questions?”
Although the audit concluded that multiple sections of the City’s administrative code appears to have been violated, the audit report fails to note why other City oversight agencies have failed to look into the patient gift fund abuses.
Dr. Maria Rivero concludes, “The Controller’s audit recommendations may not be enough. We already had codes, policies and rules, but they didn’t help. Preserving the patient gift fund requires continued public oversight and follow-up audits.”
Restitution of $350,000 to patient benefit is a good first step, and the improved oversight recommended by the Controller is a good result. It has taken over a year to obtain both outcomes.
“At the very least, LHH’s administration owes a huge apology to its residents and donors who contributed believing they were assisting LHH’s residents,” Mr. Wooding said.
Monette-Shaw is an accountability advocate, Feedback: email@example.com.
Laguna Honda Hospital’s Red Flags
It is thought all City employees are bound to comply with San Francisco’s Administrative Code, since none of them are thought to be above the law or hold authority to amend the Code, unilaterally.
When last month’s issue went to press, I reported Deputy City Controller Monique Zmuda was scheduled to return to LHH to conduct a review of LHH’s gift fund accounting practices. On August 25, Zmuda indicated her “audits group” would conduct a “review” of LHH’s patient gift fund to determine whether LHH had administered the fund in accordance with the municipal code. She indicated re-allocation of $100,000 in “interest earned” might be re-performed based on the “reasonableness” of the initial interest allocation to staff education accounts (as reported recently on Ch. 7) rather than to patients. She also indicated if there was a departure from the Administrative Code, her group would determine under what authority practices had been amended.
Whistleblower doctors Derek Kerr and Maria Rivero are former LHH physicians who have been investigating disbursements from LHH’s patient gift fund for nearly a year. It appears from their research that there were few accounting controls in place and that the patient gift fund may have been used like a petty-cash drawer, since many of the checks and balances to prevent abuse of the funds had been eliminated.
Without an independent audit, the accounting red flags will likely increase.
San Francisco’s Director of Public Health, Mitch Katz, MD, issued a press release on September 2, claiming DPH had requested the Controller’s Office conduct a “detailed audit” of LHH’s patient gift fund. Even before the audit was underway, he prematurely concluded that “there has not been a single instance in which funds designated for patients were used for any other purpose.” Katz is wrong. There appear to be multiple instances in which patient funds were used for other purposes.
On September 1, 2010, doctors Rivero and Kerr submitted a second report to the Health Commission, Civil Grand Jury, and the Whistleblower Program administered by the City Controller’s Office, regarding potential cost-shifting of previous hospital operating expenses onto LHH’s patient gift fund account, suggesting $745,000 may have gone missing from LHH’s patient gift fund between 2004 and 2005.
The next day, Dr. Katz issued a press release, claiming a minor error in deposits of funds intended for patients, “had no impact on expenditures for patients,” and “in no way influenced the amount of money available for patient activities.”
The following day, September 3, the City Controller’s Office released for the first time news that an “Investment Balance” sub-account may exist within the patient gift fund. It was news to everybody who has been following this scandal.
Could it be that the various detailed analyses by Drs. Kerr and Rivero gave the City no choice but to finally conduct a deeper audit?
Among other red flags Kerr and Rivero uncovered, they report depletion of major bequests and trusts left to the patient gift fund. In the six years between 2004 and 2010, almost $2 million vanished from the bequests and trusts donated for LHH patients exclusively, depleting these sub-accounts. Some $1,581,882 was pulled out of the three big bequests (the Martin Heller, William Lenahan, and Marie Lewis bequests) in 2005 alone!
A second red flag the two doctors uncovered involves re-shuffling of gift fund sub-accounts in 2005. Within six months after John Kanaley became LHH’s Executive Director in 2004, most gift fund “index” codes were changed. For example the “Miscellaneous” sub-account was switched from HLMGFT to HLMISC. The Martin Heller bequest was changed from HLMHEL to HLMBQ, etc. When asked why these changes were made, LHH’s Chief Financial Officer, replied “I don’t know.”
Once the account codes changed, money appears to have been transferred from old to new accounts, and elsewhere. Following what money went where became difficult to track, and “restricted” patient bequests appear to have been poured into new unrestricted accounts.
The re-shuffling of codes obscures transformation of a patient “trust fund” into a “slush-fund.”
A third red flag involves the misallocation of interest earnings.
Interest and dividends generated from bequests to the patient gift fund should belong to LHH patients. But on February 18, 2010, $100,485 was taken from the gift fund interest account (Index Code: COUNGR) and deposited into four staff sub-accounts. This enormous allocation — which Zmuda indicated she would investigate — was based on existing balances in these staff accounts, most of which came from dubious deposits. The “interest earned” allocation to staff accounts appears to be a violation of the City Charter and should be restituted to patients.
A fourth accounting red flag involves a disbursement from the gift fund in fiscal year 2006-2007 of $176,481, during a year in which total disbursements totaled a whopping $456,545, 50% higher than the preceding or any following year, much higher than any other year. The $176,481 expenditure came directly from the gift fund’s interest account, but there’s no explanation of what was purchased with the funds.
Katz’s sudden new claim the patient gift fund balance has reached $1.9 million through the present rests on the September 3 release of information that the gift fund had up to $835,000 in an investment account not revealed during the past four months. Katz appears to be claiming that combining the “cash balance” with an “investment balance” solves the problem
If there has been no adverse impact on patients as Katz claims, why was LHH staff told that the patient gift fund is bankrupted, and patient bus outings sharply curtailed by 65%, resulting in a State citation?
Lingering questions remain about how $649,685 may have gone missing in the gift fund’s “cash balance” between 2004 and 2010, and how the “total balance” may have decreased by $585,688 across this time period.
It’s unclear whether Zmuda’s new investigation will distinguish between “trust” and “slush.”
Peg Stevenson, the City Services Auditor who works closely with Zmuda, has indicated some $400,000 in “Proposition C” City Services Audit funds are designated for LHH. A small part of the $400,000 could be used for an independent, CPA-directed audit of the LHH patient gift fund, to prevent Zmuda’s potential conflict of interest from tainting the results of a full, impartial audit.
Zmuda admitted on August 25 that the gift fund’s cash balance stood at only $726,808.
Only an independent audit — conducted by an external agency — will keep Katz and the City honest about LHH’s patient gift fund.
Without an independent audit, the accounting red flags will likely increase.
Monette-Shaw is an accouExaminer.com. Feedback: firstname.lastname@example.org
advocate, and the at San Francisco Hospital Examiner
Black Holes At Laguna Honda
Laguna Honda Hospital’s (LHH) unresolved scandal with its patient gift fund, additional construction problems and potential cost over-runs exacerbate already-poor relationships with the community, donors, and its patients.
Construction Problems In recent months, there have been anecdotal reports that: 1) Air conditioning compressors, or some other units placed on the roofs of LHH’s new buildings, have been emitting a high-pitch noise disturbing patients and surrounding neighbors. Sound-dampening blankets reportedly failed to work because they were exposed to the elements and weren’t water-proof; 2) Passageways between the old building that will remain and the new “connector” building linking up with the new “Pavilion building” have encountered unexpected construction problems that may prevent safe patient transport on moving day; 3) A boiler in the new “connector” building may have had a blow-up, and may not be operational until February 2011; and 4) Inadequate cooling systems may be affecting the main telecommunications and data center in new computer server rooms. The equipment may have been turned off to avoid damage, because of inadequate air cooling, “value engineered” out of the plans to trim costs.
At a July 27 meeting of the LHH–Joint Conference Committee (LHH-JCC, a subcommittee of the Health Commission that jointly includes senior hospital managers), John Thomas, the LHH Replacement Project manager, noted that unexpected repairs to a significant portion of the roof structure of the existing old buildings, and newly-discovered “cracks and voids” in the concrete of the existing buildings, has added another $1 million in costs for the cracks and voids and costs to repair the roof were not estimated.
LHH’s staff assured the Health Commission members that patients would move in to the new facilities in October. But the move-in likely won’t happen until December, or the first of the year, months past the already-delayed April 2010 date that for the scheduled move.
Cost Over-Runs At the LHH-JCC’s meeting, Thomas reported on potential problems with a “contingency” involved $57 million budgeted for the remodel of the old buildings that will remain. $44.5 million for the remodel work has been “executed” to date, indicating a “fair amount of contingency” —to adjust the scope of the work within the remaining $12.5 million remodel budget.
Thomas also indicated that the $23 million budgeted for Site Work package #3 — for demolition of the existing building wings D through O, the east parking lot and an access bridge, an ADA-accessible pathway — scope is being reviewed, which will be “key on whether we’re able to stay within that $584 million” overall project budget.
The total project budget may be increased $5 million, along with further reduced scope in the final package.The “scope” of the project was reduced by $17 million in Budget Revision #14, and another $9 million in Budget Revision #15 to address “unfunded operating costs for the DPH.” Now, the City Controller’s “Discussion of the Mayor’s FY 2010-11 Proposed Budget” indicates that the LHH Project returned $2.1 million in “year-end surplus” savings from FY 09-10 to the Mayor’s proposed budget for FY 10-11, apparently to the General Fund.
This totals at least $26 million in “scope” features initially planned that have been cut, plus another $2.1 million in unexplained “surplus,” representing a black hole of at least $28 million. Why isn’t Louise Renne, chairperson of the Laguna Honda Foundation, looking into this?
Black-Tie Dinner Months after the June Black-Tie Gala Dinner, to”benefit Laguna Honda Volunteers, Inc.,” ostensibly for patient benefit, the amount is unknown.
At least $450,000 was potentially raised by the various major sponsors (“Gold,” “Platinum,” etc.), excluding an unknown amount added to gross receipts raised by individuals purchasing $250 and $350 event tickets.
Supervisor Sean Elsbernd’s recent Form 803 reports indicate he made personal “bequests” (personally solicited requests) that raised $165,000 for the Gala Dinner, plus another $40,000 for Volunteers, Inc.
Community Initiatives, a separate non-profit organization that now acts as the “fiscal sponsor” for Renne’s Laguna Honda Foundation (LHF), says her Foundation will share in proceeds raised at the Gala dinner, but refuses to disclose how much will be diverted to the Foundation, claiming event expenses are still unknown and the net amount raised is still unclear. Donors beware.Refuses to Disclose On August 12, Renne, refused when asked for summary-level non-profit financial data: how much was spent in the past three years on “program services,” “management and general,” and ”fundraising.” These three categories of information are typically used to evaluate non-profits, and are required by the IRS.
“I’m not taking a lot of time because I see no reason to put everybody to the trouble of doing busy-work” Renne said, she sees “no reason to provide details.”
Asked for her Foundation’s top five contractors for “professional services” in each of the past three years, and her top five contractors who provide “other services,” that the IRS requires 501(c)(3) organizations to report, along with grants made under required “grantmaking” purposes, Renne suddenly declared, “Enough!” refusing to provide any data, or to answer further questions.
This is summary data Renne must have, and should release, illustrating yet another enormous black hole.
Patient Gift Fund Scandal Don’t believe public service announcements reporter Dan Ashley on Channel 7, claiming LHH’s misspent patient gift funds “went back to patients” as a result of KGO TV’s I-Team single broadcast on May 20. It simply isn’t true, since there has been no audit, and no restitution of missing patient funds.
Indeed, Deputy City Controller Monique Zmuda is scheduled to return to LHH the week beginning August 30 to conduct yet another “review” — apparently not an actual audit — of LHH’s patient gift fund. Her “audits group” will ostensibly determine under what “authority” LHH may have departed from the Municipal Code in administering gift funds earmarked to benefit actual patients, and whether the patient gift fund was administered in accordance with stipulated mandates, before potentially re-performing allocation of over $100,000 in interest earned, diverted to staff sub-accounts, after determining ”reasonableness” of the diverted funds.
Zmuda will need to dig deeper to quell concerns, since former LHH doctors Maria Rivero and Derek Kerr have recently uncovered, through additional public records requests, that massive “cost shifting” of expenses from the hospital’s operating budget was pushed onto the patient gift fund beginning in 2004, despite provisions prohibiting use for routine hospital operations.
Basic patient care provided under hospital operating budgets is defined by Federal and State regulations governing skilled nursing facilities.
In the first eight months following John Kanaley’s appointment as LHH’s executive administrator in 2004, $745,000 appears missing from the patient gift fund, when the fund plummeted from $2 million to $1.3 million.
Since 2004, the two doctors suspect, LHH has improperly cost-shifted at least $550,543 for catering costs, basic patient activities and amenities, and patient transportation costs from its operating budget to the patient gift fund. Another $76,013 has been diverted for staff amenities: catered meals, travel expenses, employee recognition awards including $50 “thank you” checks to employees-of-the-month, and employee training expenses.
The patient gift fund has been depleted of at least $1,360,065 in questionable expenses since Kanaley first began cost-shifting in 2004; staff amenities questionably charged to the gift fund appear to have spiked in 2009 after Mivic Hirose became executive administrator.
Zmuda’s new “review” of the gift fund sub-accounts — still avoiding a full, impartial audit and still lacking actual restitution of misspent funds — may continue to whitewash LHH’s various black holes.
Monette-Shaw is an accountability advocate, and the San Francisco Hospital Examiner at Examiner.com. Feedback: email@example.com
Laguna Honda Hospital
Unanswered Questions Remain for the Patient Gift Fund
Ribbon Cutting Ceremony at Laguna Honda masks the
turmoil that is going on behind the scenes
Since a Whistleblower complaint about potential inappropriate spending from Laguna Honda Hospitals (LHH) Patient Gift Fund was filed last March, no corrective action has been taken.
After KGO TV’s “I-Team” investigative journalist Dan Noyes aired a story on May 20, nothing meaningful has been done. Numerous public records requests subsequently placed have lead to only more questions, and few answers.
LHH was cited by California’s Licensing and Certification (L&C) Division for a fairly serious “deficiency” involving patient choice in therapeutic activities, as a direct result of potential misappropriation of donations to LHH’s Patient Gift Fund. In a citation involving “misappropriation of property/activities,” L&C issued an “E” deficiency — citing a violation of Federal law — against LHH on May 19, the day before Noyes’ story aired. The State citation documented that patients now wait up to three months for bus trip outings to culturally-appropriate restaurants.
An “E” deficiency involves a “pattern” having a potential for more than minimal harm, but not immediate jeopardy and without actual harm.
It is thought that the State is required to report potential violations of Federal regulations to the U.S. Department of Justice, which remains concerned about the welfare of residents at LHH.
The day after the KGO story aired, City Controller Bed Rosenfield recommended on May 21 — following a cursory “review” to determine whether LHH’s accounting practices were consistent with City policies — that in order to avoid continuing questions regarding the Patient Gift Fund, the Department of Health should “create a separate account … for employee training and development,” effectively ordering DPH to segregate funds donated to benefit patients from funds for staff luncheons, education, and development.
Deputy City Controller Monique Zmuda acknowledged on May 25 the Controller’s review was “not an audit.” Indeed, no audit has been performed to anyone’s knowledge or the City would have already released results.
Later, Zmuda provided documentation indicating there are 20 separate sub-accounts within the Patient Gift Fund, four of which are for staff education purposes used mostly to fund catered meals for staff. The staff education accounts remain embedded within the Patient Gift Fund.
A patient was potentially denied funding from the Patient Gift Fund in the current fiscal year for a mechanical lift needed for discharge.
In stark contrast to the $2,500 needed to purchase the mechanical lift, documents provided responding to public records requests placed by former LHH physicians Dr. Maria Rivero and Dr. Derek Kerr revealed that in current fiscal year 2009–2010, the Patient Gift Fund spent at least $12,675 on catered meals for senior hospital staff members.
LHH suddenly, and deliberately, revised its Patient Gift Fund policy #45-01 on December 2, 2004 one month after former LHH Executive Administrator John Kanaley was hired, removing a patient representative from its Gift Fund Management Committee and a required quarterly report of gift fund activity to the Health Commission, weakening oversight. When LHH suddenly revised the policy again on April 15, 2010, the Gift Fund Management Committee was simply eliminated.
Shortly after LHH’s 2004 revisions to its Patient Gift Fund policy, increases in gift fund expenditures benefitting LHH’s staff, rather than patients, soon skyrocketed, after three staff education sub-accounts were created on August 12, 2005 shortly after Kanaley took control; the other education account was created in January 2008.
Although Dr. Rivero and Dr. Kerr have proposed a six-point action plan to restore the charity-donating public’s trust in the Patient Gift Fund, none of their proposed remedies have been implemented since KGO’s May 20 story aired.
Their action plan requested an independent fiscal audit of the gift fund’s income and expenses for the past five years; full restitution for any misspent donations intended for patients; reinstatement of the Gift Fund Management Committee; appointment of a patient representative or ombudsman to the Gift Fund Management Committee; inclusion of approval of any disbursement over $500 from the Patient Gift Fund in published minutes of monthly meetings of the Gift Fund Management Committee; and submission of quarterly reports itemizing all donations and expenses to the Patient Gift Fund to the San Francisco Board of Supervisors’ Budget and Finance Committee for public review.
Other remedies proposed include returning the gift fund policy to its pre-December 2004 status, and a mission statement describing the intended uses and “restricted purposes” for each of the 20 sub-accounts must be restored and posted on LHH’s web site.
In mid-2009 LHH’s current Executive Administrator Hirose combined previously-held community meetings with her monthly Town Hall staff meeting, opening the combined meeting to the public. But in reaction to the KGO story, on June 4 LHH’s combined meetings went closed, locking out the public.
“After two years of arm twisting by neighbors demanding LHH hold community meetings, now we can’t even get return calls or email replies. Denying us access to community meetings to ask whether our donations to the Patient Gift Fund and Volunteers, Inc. have been misappropriated is an affront,” says George Wooding, president of the West of Twin Peaks Central Council.
On May 24, Dr. Kerr and Dr. Rivero submitted a complaint to the California Attorney General’s Registry of Charitable Trusts, requesting that the State audit LHH’s Patient Gift Fund. They have since submitted supplements to the Registry documenting additional problems.
They documented that at least $188,442 in questionable allocations and expenses that should have benefitted patients, did not. The City has provided some conflicting public records highlighting potential accounting discrepancies. Rivero and Kerr are still investigating what has happened to three major bequests, and are concerned about irregularities with the Hospice sub-account.
“Various oversight authorities have an obligation to investigate,” Kerr maintains, convinced LHH’s patients and Patient Gift Fund donors deserve no less than a full audit.
To that end, Dr. Kerr and Dr. Rivero have asked that the U.S. Attorney for the Northern District of California, Joseph Russoniello, investigate and conduct a full audit, since his office pursues restitution on behalf of victims and violations of federal law.
The Patient Gift Fund balance was $2,086,872 in December 2004. The Controller’s Office confirmed as of June 6, 2010 the current balance dropped to only $726,808, indicating that within five-and-a-half years it shrank by $1.3 million. Of the remaining balance, 17% ($123,517) is dedicated for staff use, and only $603,291 remains in sub-accounts for patients.
At the rate of current earnings and spending, the Patient Gift Fund may be completely insolvent within three years.
Three donations totaling $54,502 from Laguna Honda Volunteers, Inc. likely intended for direct patient benefit were deposited into sub-accounts for nursing, administration, and physician education, instead.
Like most of us, patients enjoy going out to enjoy a meal at a nice restaurant Patient bus trips to restaurants plummeted 66 percent between first quarter 2009 and first quarter 2010, even while staff education sub-accounts earned $89,998 in interest on May 11, 2010. In first quarter 2009, 487 patients went on restaurant outings; by first quarter 2010, the number of patients provided restaurant trips plummeted to only 166.
The monthly bus trips provide unique opportunities for social dining, culturally meaningful meals, and connection with San Francisco’s greater community. The interest deposited into the staff education accounts could have funded an additional 464 restaurant outings for patients.
Supervisor Sean Elsbernd attempted to justify the reduced bus trips on the drop in LHH’s patient census and that current patients have a higher acuity, implying they are too sick for outings. He offered no proof LHH now has higher-acuity patients. And Elsbernd had his dates wrong; LHH’s census had already dropped to 790 patients by March 2009, and it had 760 patients in January 2010, indicating that the census had fallen by just 3.7 percent — which doesn’t justify cutting the restaurant bus trips by 66%.
When a donor to Laguna Honda Volunteers Inc. requested its board of directors support calls for an audit of LHH’s patient gift fund, the board’s administrative consultant responded that Volunteers, Inc. had been assured by LHH’s staff and the City Controller that “there was no impropriety” regarding funds Volunteers, Inc. donated for patient benefit. Details in the multiple complaints Dr. Rivero and Dr. Kerr submitted to various regulatory agencies reveal many improprieties in expense and revenue records.
Why would Volunteers, Inc. believe the very LHH staff thought to be responsible for potential misappropriation of funds from trust purposes to non-trust purposes?
To his discredit, Supervisor Elsbernd — who has the power to do so — hasn’t called for a full audit, nor has he held any hearings to explore potential Patient Gift Fund abuses. Donors and patients have a right to know what happened to these restricted-use donations.
Monette-Shaw, an accountability advocate, is a San Francisco Hospital Examiner at Examiner.com. Feedback: firstname.lastname@example.org.
Behind the Scenes at Laguna Honda Hospital
Raiding the Public’s Trust
Why does Laguna Honda Hospital (LHH) continue trampling on, and raiding, the public’s trust? Trust once lost, is difficult to regain.
On May 20, ABC-TV “I-Team” investigative journalist Dan Noyes aired a story about Laguna Honda’s Patient Gift Fund, setting off a firestorm of outrage. The investigation revealed LHH’s Patient Gift Fund solicits donations for patients, then spends large sums on staff parties, but hasn’t informed donors of this bait-and-switch.
In an e-mail to staff the next day, LHH Executive Director Mivic Hirose claimed Noyes’ broadcast “distorted facts”; in truth, it’s Hirose and LHH public relations flack, Marc Slavin, distorting facts and deceiving the public, which is amazing since they’re both public servants collecting six-figure City salaries.
Noyes learned California’s Licensing and Certification Division (L&C) may investigate possible violations of the gift fund policy; his phone calls to Hirose went unreturned. Unsuccessful at reaching Hirose, Noyes attended a public meeting, but was accosted by Slavin, who refused to let Noyes ask Hirose any questions.
Slavin’s on-camera performance was offensive, deeply troubling, and unprofessional.
Among the I-Team’s revelations, Slavin claims Patient Gift Fund is “ … not a gift fund for residents.” If this new policy stands, why should donors continue making charitable contributions?
Last March, two LHH physicians—Maria Rivero, MD, a geriatrician and Derek Kerr, MD, CNA who developed the award-winning Hospice at Laguna Honda—submitted a detailed set of concerns regarding the Patient Gift Fund to the City’s Whistleblower Program administered by the City Controller. Among irregularities they uncovered through Sunshine Requests as private citizens, over $60,000 in questionable gift fund expenditures during fiscal year 2008–2009 had been made. They questioned payments to a non-existent organization, expensive catering of staff luncheons, reports that $2 million in LHH Gift Fund assets intended for the “comfort, welfare, pleasure and happiness” of patients had been depleted, risking the solvency of the fund, and the composition of the Gift Fund Management Committee, among other issues.
The Last Heroes: Laguna Honda's Patient Advocates
Whistleblowers: Dr. Maria Rivero and Dr. Derek Kerr, join a long list of former-employees who have been fired or have resigned in protest of patients rights issues..
Statements of concern filed by Doctors Rivero and Kerr to the Controller’s Whistleblower Program and SF Ethics Commission between 9/09 and 3/10:
1. LHH Patient Gift Fund in 3/10 (also reported to California State Department of Health Services). The issue was a departure from the City Charter provisions governing the Gift Fund as well as LHH’s own Policy both of which stipulated that expenditures from the Gift Fund were restricted to the benefit and comfort of patients.
2. Dr. Mitchell Katz’s potential conflict of interest due to his employment as a paid consultant by Health Management Associates who were awarded a contract by the City (approved by the Health Commission) in 2009. This case was referred by the SF Ethics Commission to the SF District Attorney’s Office where it is under investigation.
3. Dr. Bob Cabaj, Director of Community Behavioral Health Services for potential conflict of interest. Cabaj hired Davis Ja & Associates on a $25,000 contract later increased to $49,000 to do a study of behavioral health services at LHH in 2009. Davis Ja resided with Deborah Sherwood, Director of Research, Evaluation and Quality Management for CBHS who reports directly to Dr. Cabaj. Ms Sherwood also co-owned the Davis Ja & Associates office on Victoria Street in San Francisco. This case was referred by the SF Ethics Commission to the SF District Attorney’s Office where it is under investigation.
Employment status with the DPH and LHH:
Dr. Derek Kerr was given a “permanent layoff” that was not able to be reversed despite negotiations and appeals by the Union of Physicians and Dentists (UAPD) to both the DPH and the Mayor’s Office (Steve Kawa, Mayor’s Chief of Staff).
Dr. Maria Rivero resigned in protest and under pressure.
*Editor’s note: Our contributing writer, Patrick Monette-Shaw,
a patient advocate who has authored many articles about LHH
was transfered from his position at Laguna Honda six months
ago, then terminated at Rec-Park in April in retaliation.
His termination followed the protest resignation of staunch
patient advocate Sister Miriam Walsh, who died shortly thereafter.
Laguna Honda’s remaining staff serve in fear of retribution,
except for Marc Slavin.
They requested the Whistleblower Program audit the Patient Gift Fund, and sought restitution of potentially misspent funds. How much more money has been diverted from the Patient Gift Fund in previous and more recent years to fund staff perks?
They also documented curtailment of off-campus bus trips for dementia patients, which Slavin and Hirose deny has occurred;, bus trips have been curtailed as LHH staff know. “Many residents can’t speak for themselves, so that’s why we’re here — to speak for them and say this is wrong,” said Dr. Rivero.
In 2008, Laguna Honda Hospital Volunteers, Inc—a separate entity from the Gift Fund—awarded the Gift Fund $71,574, restricting the grant “to make resident outings possible.”
LHH’s gift fund policy #45-01, dated December 2, 2004, had gone unchanged for nearly six years before LHH completely re-wrote it on April 15, 2010. The 2004 version, a three-page document, stated its “purpose” was “To ensure that LHH Gift Fund expenditures ‘add comfort, welfare, pleasure and happiness’ to the residents,” and noted the gift fund was a “restricted” fund not intended to support the City’s obligation to operate the hospital nor to fund routine City expenditures. Rather, the fund was established to benefit residents and enhance their quality of life.
The sudden April 15 policy rewrite, reduced to two-pages, completely eliminated the original purpose statement; the new “purpose” is merely to “ensure effective management” of the gift fund. The December 2004 version’s “policy” section clearly established a “Gift Fund Management Committee” charged with coordinating, planning, and recommending approval of projects to be funded, including approving all expenditures over $500. Kerr and Rivero had asked that the Committee be expanded to include a patient representative.
Instead, the April 2010 revision completely eliminated the Gift Fund Management Committee, leaving no oversight committee whatsoever and no patient representative. So much for LHH’s claim of “resident-centered care.”
The December 2004 version specified various subaccounts, each restricted; none included “staff support.” The April 15 revision — thought possibly to be a plan-of-correction response to State L&C — suddenly created three new subaccounts for nursing, physician, and administrator education. For decades, educational reimbursement was built into the nurse, physician, and management executive’s union contracts, requiring the City to set aside education funds for each of these three professions.
But the Whistleblower complaint and Noyes’ investigation exposed the Patient Gift Fund is being used to fund expensive meals for highly-compensated staff who in 2009 earned, on average, $91,165 (physicians), $126,234 (administrators), $135,825 (clinical nurse specialists), or $152,280 (nurse managers). They apparently feel entitled to free meals.
The April 2010 gift fund policy revision suddenly removed the “Authority” section included in the December 2004 version, which referenced San Francisco’s Administrative Code Section 10.100-201, Public Health Gift Funds, that clearly states the “LHH Gift Fund, a public trust, is intended for the general benefit and comfort of patients of Laguna Honda Hospital.” This section of the Administrative Code hasn’t been revised since December 2000; it provides no authority to use these restricted funds for staff education or staff meals.
The day after the gift fund policy revisions were approved on April 15, Dr. Kerr was reportedly instructed to transition his Hospice patients to another doctor and conclude administrative issues within two weeks. He was relieved of clinical duties well before being permanently laid off, in possible violation of Whistleblower Program protections. The timing of gift fund policy revisions and Kerr’s lay-off appear related.
While Slavin and Hirose may have intimidated LHH’s staff into changing policy #45-01, it appears they’ve done so without legal authority, since it’s unlikely the Board of Supervisors will risk changing Admin Code 10.100-201; what politician would dare to remove the exclusive use of the Patient Gift Fund for the benefit of patients by adding new provisions to permit food expenditures for highly-paid City employees?
Sherrie Matza, a donor to the Gift Fund and an expert Alzheimer’s patient advocate said, “I want to know whether or not funds were misspent, and if they were misspent, I want them replenished.” Like many, she expects funds she contributes will directly benefit patients, not Laguna Honda’s staff.
In an earlier, unrelated Whistleblower complaint, Rivero and Kerr raised questions about potential conflict-of-interest problems with a contract the Department of Public Health awarded to Davis Ja and Associates to assess LHH substance abuse and mental health services. The Controller’s Whistleblower Program reportedly forwarded their complaint to both San Francisco’s Ethics Department and San Francisco’s District Attorney’s office for investigation.
It’s clear that gift fund expenditures for non-patient expenses violate the public’s trust. Reportedly, the Whistleblower Program similarly forwarded Rivero’s and Kerr’s gift fund concerns to both San Francisco’s Ethics Department and San Francisco’s District Attorney’s office for follow-up.
“People who try to address these problems get marginalized; sometimes they get terminated,” Kerr said.
Considering the public trust, where is San Francisco District Attorney Kamala Harris in this mess? On May 23, ABC-TV/Channel 7 aired a debate of candidates for Attorney General, in which Harris participated. She noted citizens have a duty to step forward to report crimes, public officials’ oaths of office mandate that the most vulnerable should be protected, and that she had created a Public Integrity Unit in the DA’s office to investigate violations of the public trust.
If it were an in-home healthcare caregiver bilking money from an elderly home-bound, disabled woman, Harris would be all over prosecuting the caregiver for elder financial abuse, and interrelated elder neglect caused by patients losing their quality of life—reducing their “comfort, welfare, pleasure, and happiness.” Why would Harris hold caregiver-administrators to a different standard over the Patient Gift Fund intended to benefit its patients? Why hasn’t Harris’ Public Integrity Unit initiated an investigation?
Harris is seeking to become California’s Attorney General yet she won’t investigate potential white-collar mismanagement of restricted Patient Gift Funds intended for the City’s most vulnerable patients, after receiving a well-documented complaint forwarded by the Whistleblower Program to her office?
Harris should investigate, at minimum, whether donations made by Volunteers, Inc and others that contained “restricted” uses have been diverted to “unrestricted” uses, potentially illegally. After all, the Attorney General administers California’s Registry of Charitable Trusts, which is charged with investigating allegations that restricted funds are misspent improperly for unrestricted purposes.
If, as Slavin asserts, the Patient Gift Fund isn’t for patients anymore, why should donors continue generously supporting the fund? Please contact Volunteers, Inc’s board of directors, Laguna Honda Hospital Foundation’s board members, the Board of Supervisors, and Mayor Newsom to demand that the Patient Gift Fund policy be reinstated to its December 2004 version, and that Slavin be fired immediately. Donors should tell them they’re suspending gift fund and Volunteer, Inc contributions until this matter is resolved.
Until they get hit in the pocketbook, it’s unlikely the Patient Gift Fund will be restored exclusively for patient benefit, or that Slavin’s policy will be overturned returning the gift fund to the residents.
At a minimum, an independent audit, or an audit by the State Attorney General, whose purview includes non-profit fraud, should be conducted on behalf of the Patient Gift Fund.
When Laguna Honda holds its ribbon-cutting ceremony on Saturday, June 26 at 1:00 pm, either boycott the event (telling the Mayor why you did), or attend and ask him and other dignitaries about this unethical raid of Patient Gift Funds, and the raid of the public’s trust.
Monette-Shaw, an accountability advocate and a contributor at Examiner.com, operates www.stopLHHdownsize.com. Feedback: email@example.com.
Photo courtesy of ABC-TV/Channel 7’s “I-Team”; used with permission. http://iteamblog.abc7news.com
Laguna Honda Hospital Rebuild:
LHH Lessons Unlearned Impacts All Bond-Financed Projects
Have any lessons been learned from the rebuild of Laguna Honda Hospital (LHH)? Or will LHH rebuild mistakes be repeated on other City construction projects — like San Francisco General Hospital — because LHH’s lessons weren’t learned?
Photo caption: Shortly following excavation, the Health Commission was
told in June 2004 of a $25 million cost overrun; in five short
years, overruns skyrocketed to $183.4 million, largely due
to “change orders.” Where was the CGOBOC?
When LHH prematurely hosts its black-tie dinner tentatively scheduled for June 24, and holds its gala ribbon cutting ceremony on June 26 — it will actually open several months later somewhere between August and October, if then — there will be plenty of oohing and aahing over its new artwork, and the look-and-feel of LHH’s new digs.
But lurking inside is a sordid story of cost overruns and construction problems; the project wasn’t managed by either gold standard of “on time” or “within budget.”
Taxpayers should remember when they ooh and aah that the project is two years behind schedule and $183.4 million (47%) over budget. What went wrong?
"San Francisco’s Citizen’s General Obligation Bond Oversight Committee
has never discussed publicly LHH’s cost overruns by the various
change order categories. Nor has the CGOBOC discussed whether
LHH’s “design-build” contracting has actually increased change orders
to correct design errors and omissions potentially introduced by subcontractors."
The answer involves “change orders” — changes introduced after construction plans and specifications were completed. Change orders include those: 1) Necessary to resolve and correct errors made during design; 2) Necessary to resolve and correct omissions due to a lack of information that should have been considered during design; 3) Resulting from unforeseen site conditions encountered during construction; 4) Involving client- or owner–initiated requests to add, change, or delete scope to the project after design was completed; 5) Necessary to comply with construction codes revised after completion of design and the issued permits; or 6) Issued to incorporate cost savings.
A public records request inquiring about LHH’s change orders reveals, remarkably, that LHH disingenuously claims only $71.6 million (39%) of the $183.4 million project budget overrun was caused by change orders. The City’s response may wrongly allocate cost overruns between change orders vs. other costs.
Of the $71.6 million, the City claims $7.9 million (11.1%) are change orders to correct “errors” made during design. Isn’t that a lot of errors by whoever drew the plans, or who performed plan-checking?
The City claims $10.5 million (14.2%) of the $71.6 million are change orders to correct “omissions” during design. Between correcting design errors and omissions, this represents 25% — totaling $18.4 million — of the change orders the City admits to.
But 25% due to errors and omissions appears excessive, since the City hired an independent firm in 2003 to perform review of drawings for inconsistencies. A 2005 City document noted a Commissioning Agent had been hired, contractors were to perform “constructability reviews” during bidding, and Turner Construction was performing aggressive reviews hoping to mitigate potential change orders that Turner projected in 2005 might reach $11 million. How did we get from $11 million to $71.6 million in change orders, and an overall cost overrun of $183.4 million, in just four short years?
In its response, the City attributes nearly $44 million (61.4%) of the $71.6 million in change orders to unforeseen site conditions discovered during construction. Among this $44 million, the City claimed $30.3 million was due to “extended overhead costs for the contracting team related to the delays to the schedule.” Overhead costs related to resequencing of work should probably not have been attributed to site conditions, but attributed to other categories — such as resequencing of work due to errors, omissions, or owner-requested changes. When the $30.3 million of overhead costs are reallocated, changes due to actual site conditions drop to $13.7 million, only 19.1% of change orders.
The City claims merely $9.1 million (12.7%) of the $71.6 million in change orders were requests made by the client or owner. While a significant amount, this is likely very under-estimated, since LHH is known to have placed a large number of owner-initiated changes, and continues doing so.
Remarkably, the City’s response showed zero change orders to incorporate cost savings. Did LHH’s “design-build” contracting approach — introduced during the 2004 bidding phase — really result in no cost-saving changes?
The City claimed cost savings related to so-called “value engineering” incorporated in 2004 was included in the project’s May 2005 revised budget. A report issued to the Citizen’s General Obligation Bond Oversight Committee (CGOBOC) five years ago acknowledges $4.4 million savings due to value-engineering, then reports delays to the project’s schedule rapidly increased bids by $3.4 million — a $1 million savings, at best. “Value engineering” changes were eliminated by continuing project escalation costs that remain on-going.
So what does the City attribute the remaining $111.8 million in “non-change order” budget increases to?
The City creatively asserts an increase of $20.5 million to remodel administrative wings of the current main building hasn’t involved change orders. Shouldn’t that have been charged to unforeseen site conditions, or design errors and omissions? The City claims another $19 million of the total overrun is due to “staffing increases,” but much of the increased staffing is thought necessary to process change orders, redesign building plans, and resequence work. Surely staffing increases can be attributed to the various change order categories, particularly to client-initiated requests.
The City simply describes $81.2 million — 44% of LHH’s $183.4 million overrun — as “initial escalation impacts,” without acknowledging that deleted or added scope resulting from escalation had to be requested as client-requested change orders. In December 2008, the City initially reported $206.3 million in escalation; how did “initial escalation” drop somehow to only $81.2 million by March 2009?
Another $9 million is attributed to scope deleted in March 2009 — but as a negative number that should have been added (pushing the overrun from $183 million to $192 million), which should probably be charged as a client-requested change order deletion. Mysteriously, the City didn’t include another $17 million of scope deleted during Budget Revision 14 in March 2008. At minimum, there has been at least $26 million in scope deleted from the initial $401 million project budget that should have been reported as client-requested deletions — and the City expects us to believe that only $9.1 million in client-requested change orders to add, change, and delete scope has occurred, when a minimum of $26 million has already been deleted?
As recently as March 2, 2010, the Health Commission was informed of additional owner-requested changes, including adding bed-pan washers in patient rooms, modifying nurse call units to accommodate bed-exit alarms, and converting 13 storage rooms into laundry rooms to accommodate patient’s laundry needs.
Since the CGOBOC first began holding hearings on the LHH replacement project, CGOBOC has never conducted a meaningful analysis of LHH’s change orders or discussed publicly LHH’s cost overruns by the various change order categories. Nor has the CGOBOC discussed whether LHH’s “design-build” contracting has actually increased change orders to correct design errors and omissions potentially introduced by subcontractors. Project reports to the CGOBOC present great detail about how much of a project’s budget has been encumbered, but almost nothing about change orders. How can anything be learned if the CGOBOC simply evades conducting change order reviews?
On April 8, the CGOBOC presented a skimpy 11-page annual report for 2009 to the Board of Supervisors Government Audit and Oversight Committee concerning a number of bond-financed projects — including the LHH bond, SFGH rebuild bond, Branch Libraries bond, and two Recreation and Park bonds. All CGOBOC could muster reporting about the LHH bond was “[we’re] disappointed with the overall circumstances concerning the Laguna Honda Hospital replacement Program. … and a cost nearly double the ... amount approved by the voters somewhat dampens enthusiasm for the new Laguna Hospital.”
That’s it? Disappointment and dampened enthusiasm?
There’s not one word anywhere in CGOBOC’s 11-page annual report about change orders affecting any other bond-financed projects, despite the fact that the Department of Public Works is thought to be tracking six or seven change order categories for capital improvement projects in an internal database. Why isn’t DPW sharing all change order analyses with CGOBOC?
Construction industry project-delivery tools like “construction-manager at risk, “value engineering,” “design-build” contracting, “constructability reviews,” and “commissioning agents” — tools touted for bringing projects in on time and within budget — all appear to have failed miserably on the LHH Replacement Project.
As I asked in my February column, what is it going to take for City officials to provide accountability about the LHH rebuild — and other bond-financed projects — in a truly transparent and timely manner? How many other City-sponsored capital improvement projects face the same types of cost overruns because change order accountability lessons from the LHH rebuild haven’t been learned?
Monette-Shaw, an accountability watchdog, operates www.stopLHHdownsize.com.
Laguna Honda Hospital Won’t Discuss Delay
Reasonable people think that news released in late December indicating Laguna Honda Hospital (LHH) has again delayed the opening of its replacement facilities by somewhere between three and six months would be shared openly with the public, since it appears the delayed move-in may be a result of possibly failing one or more required State inspections.
Other reports that have surfaced since late December speculate that the State inspections may have involved:
1. Fire alarms, or fire alarm systems, in LHH’s new buildings being unreliable.
2. Furniture may have been moved into the new buildings before the State completed required fire alarm / sprinkler inspections.
3. Pipes in the new, or existing, facility may have burst, causing damage.
4. Failure to pass a “substantial completion” inspection and certification thought to be scheduled in December 2009.
5. Failure to pass a review of LHH’s policies and procedures in another December inspection.
6. Reports from exterminator’s that big rats are getting into the building because door jams aren’t tightly sealed and the hungry critters may have damaged electrical wiring or other things.
But Laguna Honda Hospital’s Executive Administrator, Mivic Hirose, appears to be following the playbook from the famous saying, “While Rome burned, Nero fiddled,” since she refuses to answer questions raised by members of the public.
For over nine months, the president of the West of Twin Peaks Central Council has attempted to ask a series of questions on behalf of his members about LHH’s replacement digs and the hospital’s plans for the future, but has run up against the proverbial brick wall of silence offered up by Hirose.
When, without forewarning, LHH announced on December 22, 2009 that it had suddenly postponed its move-in date to its new facilities from April 2010 until “June or July,” it apparently notified LHH’s staff, and potentially residents of the hospital. The December 22 announcement may explain why LHH had also suddenly canceled a meeting five days earlier of a joint subcommittee of the Health Commission and Laguna Honda’s executive staff scheduled for December 17.
But it was almost as if the Grinch had stolen Christmas, since LHH doesn’t appear to have notified the media, taxpayers, or policy and oversight agencies, that it had suddenly short-sheeted the long-scheduled move date into its new buildings.
Reports quickly surfaced that the move-in date may be, more realistically, September or October, adding significant expense to the rebuild project, and potential fines against the bond financing.
Facing potential fines or penalties, you’d think LHH would want to communicate the delayed move-in date to taxpayers. You’d be wrong.
Facing (at last report), that each month of delay on the construction project would cost an additional $1.5 million monthly, you’d think a potential five- to six-month delay that may cost $7.5 million to $9 million in additional expenses would be something LHH would want to communicate to taxpayers footing the bill. You’d be wrong.
Facing a $522 million deficit next fiscal year, the City doesn’t need surprising new expenses, so you’d think that the increased cost of operating both LHH’s current facilities and its new facilities — long feared by City officials as a dual-expense — would prompt LHH to communicate with the community. You’d be wrong.
Facing a delayed move-in date, you’d think LHH (given its handsomely-paid three-member Communications Department) would update its web site and its separate Replacement Project web site with information regarding the postponed grand opening. You’d be wrong, since as of January 18, a month after announcing to its staff the postponed move date, neither web site has been updated announcing the delay. (Indeed, the LHH web site’s “New Construction” feature “What’s New – Project Updates” links you to a one-page project status report dated January 2009 — a year-old document! Has nothing significant happened with construction during an entire year?)
And there’s more that LHH hasn’t communicated to you.
In a January 5 letter to Mivic Hirose, the president of the West of Twin Peaks Central Council, George Wooding, raised a number of questions about the postponed move-in date, asking detailed questions about what may have caused the delay. He requested that LHH re-establish communications with the local community, specifically asked Hirose to respond to each question raised in his letter, and asked for a date on which LHH intends to hold a community forum.
Hirose’s response was characteristically pathetic, completely evading answering any questions raised by Wooding and artfully dodging answering whether LHH will hold a Town Hall meeting with the community any time soon. Of note, her response failed to confirm or deny the six potential reasons that the LHH Replacement Program may have failed State inspections of its repacement facilities.
But her reply needs to be placed in perspective. Hirose’s evasiveness has been ongoing since her appointment as the interim, and then actual, Executive Administrator of Laguna Honda Hospital following John Kanaley’s death last March.
On April 16, 2009 Wooding had e-mailed a list of questions to Hirose regarding plans for the new hospital and whether there were any plans to integrate patients at SFGH’s Mental Health Rehabilitation Facility as patients at LHH — in effect turning LHH into a mixed-use facility serving both elderly and disabled patients with patients having primarily mental health diagnoses in a single facility. After no response from Hirose, he e-mailed her again asking pretty much the same questions, but she again never responded. So on June 25 he sent an e-mail to Hirose requesting a meeting. After several delays, Wooding and two associates were able to obtain an appointment with Hirose on August 14, four months after he contacted her in April.
From his standpoint, the August meeting in Hirose’s office was a failure since no opportunity to ask LHH about policy questions was permitted, and no policy questions answered. Hirose eventually agreed that LHH wanted to be good neighbors. At the end of the meeting, she agreed to introduce herself to the community at a West of Twin Peaks Central Council meeting.
Provided a five-minute slot on the October WOTPCC meeting agenda, Hirose introduced herself, but according to reports from attendees didn’t discuss any LHH policy questions other than to state that “LHH cares about helping its residents and is proud of its newly built hospital.” By reports, Hirose went over her allotted time by spending approximately eight minutes discussing her background, and spent another seven minutes showing pictures of the artwork proposed for the new campus and discussing the “success stories” of two or three of LHH’s residents. She apologized for having only brought only one copy of LHH’s annual report for 2009, failing to mention that it is readily available on LHH’s web site.
At the time of the October meeting — seven months following John Kanaley’s untimely death — LHH had not answered one policy question that had been asked.
Three months later, Hirose claimed in her January 5 response about the postponed opening of LHH’s new facilities that she had attended the October WOTPCC meeting, so she doesn’t “understand why” anyone would say she has not communicated with neighbors.
How can a woman of her education and experience as a City employee not understand that now 10 months following Kanaley’s death, still not one policy question about LHH has been answered for the community? How can someone of her purported stature pretend that her October presentation can be construed as effective community outreach by LHH?
The last community forum LHH sponsored was in September 2008; since then it has failed to do any community outreach, despite having a staff of three people in its Communications Dept. paid $380,000 annually (including fringe benefits), and despite the Nov 2008 Wide Angle Communications consultant report that recommended increasing community outreach.
If one of LHH’s public relations goals is to hide information from the surrounding community and the broader public, it has done a great job.
Will it take placing public records requests with California’s Office of Statewide Health Planning and Development (OSHPD) to uncover whether LHH’s delayed move-in date is the result of failing one, or more, required building inspections? And once that material becomes available publicly, will LHH then start communicating to all San Franciscans the status of its $584 million replacement buildings that are way over budget and approximately four-and-a-half-years way behind schedule?
Or will District 7 Supervisor Sean Elsbernd — with his seats on the Board of Supervisors Budget and Finance Committee, and the Board’s City Operations and Neighborhood Services Committee, the latter of which has authority to hold hearings on issues involving public works, infrastructure, public health, seniors, and the disabled, among others — perform his ministerial duties to schedule and hold a hearing on Laguna Honda’s newest delay?
What is it going to take for City officials to provide accountability about the Laguna Honda bond measure to San Franciscans in a truly transparent and timely manner?
Monette-Shaw, an accountability watchdog, operates www.stopLHHdownsize.com,
where reports cited in this column can be found.
Déjà Vu Haunts Laguna Honda
When it comes to Laguna Honda Hospital, community members often experience the illusion they’re reliving the past, even if it is the first time they’ve encountered Laguna Honda accountability issues. But the term déjà vu has evolved to include repetitive events and actions, and is also used to describe boring familiarity and tedium, along with repetitiveness. Each of these meanings haunt Laguna Honda’s house, in part because officials continue to evade members of the public they ostensibly serve. Let’s stroll down LHH’s déjà vu lane.
Diversion of Funds:The tobacco settlement revenue (TSR) account intended to rebuild LHH had previously been raided of at least $41.3 million: In 2003, former Mayor Willie Brown diverted $25 million from the TSR account in order to balance his final city budget. In July 2008, Mayor Newsom diverted $18.3 million in TSR’s to help balance the Department of Public Health’s budget and to fund new community-based housing subsidies.
Déjà vu: A new report from the LHH Replacement Project presented to the Citizen’s General Obligation Bond Oversight Committee on October 22, 2009 indicates Newsom has diverted another $9 million in TSR’s to “address unfunded operating costs” in the Dept. of Public Health’s current fiscal year ‘09–‘10 budget. This brings the total of diverted TSR’s initially earmarked for the LHH rebuild to $50.3 million. City Controller Ben Rosenfield and Nadia Sesay, the Mayor’s Director of Public Finance, indicated on October 22 that unlike other sources of LHH rebuild funds, TSR’s can be diverted to the City’s general fund.
Changes in Project Scope: Leading up to now, San Franciscans have seen the scope of the LHH rebuild project reduced in multiple ways: First, there was Newsom’s decision to reduce the replacement hospital from a 1,200-bed skilled nursing facility to only 780 beds, cutting 420 beds from the project scope. Then, the Assisted Living component of the replacement project, which had been planned to add a continuum of housing for an additional 200 people, was scuttled from the project. Following that, LHH’s on-site Adult Day Health Care (ADHC) center was closed, and plans for LHH’s award-winning hospice was cut by 50 percent, from 30 beds to only 15.
Déjà vu: Fast forward to 2009. Included in the $9 million of TSR funding reduction are plans to eliminate space for the ADHC in the replacement facility, meaning that it is effectively gone. Still unknown is whether LHH renewed its ADHC’s license by November 15, or whether it let the license expire, knowing the State has a moratorium against issuing new ADHC licenses. As well, previous planning to keep a 15-bed hospice appears to remain on the “project scope” potential chopping block. In addition, previous “key plans” describing the use of each floor in the replacement facility had indicated the “acute” hospital and admitting unit beds would be located in the residential towers; now they are being moved to the Rehabilitation unit in what is known as the Pavilion Building, decreasing the number (scope) of skilled-nursing rehabilitation beds from 45 to 28. There will be fewer beds available at LHH for people needing skilled-nursing rehabilitation to recover from strokes, brain injuries, motor vehicle- and bicycle-accidents, and cerebrovascular accidents brought on by old age.
Laguna Honda’s annual report for 2009 posted on its web site reports on page 10 that up to 45% of its capital construction costs could be paid for using federal dollars. So if the project may be reimbursed $158 million by the feds for 45% of the approximate $350 million construction portion of the Laguna Honda rebuild, why is $9 million now being cut from the project (including the ADHC space), when it could be reimbursed by the feds? (Note: The total cost of the project, now being reduced from $593 million to $584 million, includes approximately $234 million in so-called “soft costs,” including architectural design and consultant services.) Offsetting the $9 million in scope reductions eliminating space for the ADHC, is a déjà vu new increase of $4.6 million in architectural and engineering consultant services.
Failures to Meet With Neighbors and
the Community: Neighbors so concerned about unilateral changes made by the Department of Public Health to Laguna Honda’s admission policies and LHH’s “mission” held a Town Hall meeting at St. Brendan’s Parish Hall on December 4, 2004. Neighborhood concerns led to the June 2006 Proposition D ballot measure to protect Laguna Honda residents. Three years after the defeat of Prop. D, neighbors remained so concerned about the displacement of senior citizens at LHH needing skilled nursing care, that they convened another Town Hall meeting held May 10, 2007 at the Forest Hills Christian Church. Neighbors have had lots of questions about the LHH replacement project over the years, but all along have received few answers from City officials.
Déjà vu: Late in the fall of 2009, a small community delegation met privately with LHH’s new executive administrator, Mivic Hirose, but again they received few answers to a laundry list of community concerns. She was subsequently invited to speak at the West of Twin Peak Central Council’s September 28 meeting, but reportedly went far over her allotted time discussing her career progression, issues related to the move into the new facility, and selected “success stories” of Laguna Honda residents. Legitimate neighborhood questions remain unanswered, since reportedly Hirose avoided addressing substantive issues. Taxpayers are increasingly asking for answers and information, not new-building tours, since there have been no community meetings held despite the Wide Angle Communications recommendation in November 2008 that Laguna Honda should hold more meetings with neighborhoods. A year has elapsed, and déjà vu, no community meetings have been held. And no neighborhood newsletters have been distributed, which Wide angle had also recommended, despite LHH’s three-member Communications Department costing nearly $400,000 in salaries and fringe benefits. the community’s mantra, “Answers, not tours!” is being ignored.
Continuing Government Secrecy: A November 3, 2004 meeting scheduled by the Laguna Honda Replacement Project was suddenly cancelled, potentially to stifle public debate about the future of LHH. Similarly, meetings of the Health Commission to discuss LHH’s future have also been cancelled on short notice, including the then long-awaited November 16, 2004 full Health Commission meeting at LHH.
Déjà vu: A Health Commission sub-committee known as the LHH-Joint Conference Committee inexplicably changed its decades-long monthly meetings to quarterly meetings in early 2009, shortly before the untimely death of LHH’s former executive administrator John Kanaley. It is widely believed that the LHH-JCC, under the stewardship of Health Commission president Jim Illig, wants to stifle public comment during its meetings. Illig has made a number of changes to how the JCC meetings are conducted, and has refused to take public comment during some of the meetings. So it was another instance of déjà vu when the long-scheduled quarterly meeting of the LHH-JCC on October 21, 2009 (that DPH wrongly then claimed was scheduled for October 28) was suddenly cancelled and rescheduled to December 9. Why Illig canceled a JCC meeting just six months before LHH’s new facility is scheduled to open is shocking. Will the now December 9 JCC meeting also be cancelled, in another bald attempt to limit public accountability and citizen involvement?
When the City decided to change the mission of the Mental Health Rehabilitation Facility (MHRF) on the grounds of San Francisco General Hospital, a Blue Ribbon Committee was formed in response. When CPMC announced that it wanted to change the operation of St. Luke’s Hospital in the Mission District, another Blue Ribbon Committee on the future of St. Luke’s was formed. Why is there no Blue Ribbon Committee being formed to examine the implications of changes at Laguna Honda Hospital, particularly given the dearth, when not complete absence, of meetings with the community? (Kanaley must be rolling in his grave over LHH’s retreat into a bunker mentality following his death.)
Laguna Honda’s Changing Mission: Over the years, neighbors and others have been concerned about Laguna Honda’s changing mission during the Newsom administration, which the City has adamantly refused to discuss openly. Beginning in 1999, when LHH’s elderly residents with chronic and progressive medical conditions were pushed out to make room for six psychosocial wards, LHH’s mission to provide long-term care for the frail elderly has been hijacked by the 2004 “flow project” to move San Francisco General Hospital’s patients to LHH (which is still occurring today). This came to a head in 2005 when Mayor Newsom was pressured into ordering the Department of Public Health to re-instate LHH’s previous admissions policy.
Déjà vu: The recent Davis Ja report recommends, among other issues the report raised, that a new organizational effectiveness consultant review LHH’s mission — again! Laguna Honda is still an island of safety for complex geriatric patients who may also have mental health needs. The pattern of inadequate care for complex geriatric patients, which is a huge problem, will continue as long as consultants such as the Ja report’s authors continue recommending replacing medical care and medical staff with behavioral care — without adequately evaluating either set of patients for both their medical care and behavioral care needs. Not surprisingly, the committee appointed to implement the Ja report recommendations are also meeting in secret — a Newsomian tradition — and will likely never hold meetings open to the public.
LHH isn’t talking with the community about any of these changes. Until the community demands, and gets, an open-to-the-public Blue Ribbon Committee addressing the future of Laguna Honda, you can expect that LHH’s roller-coaster déjà vu track record will continue to haunt it — and us — with boring repetitiveness.
Monette-Shaw, an accountability watchdog, operates www.stopLHHdownsize.com, where reports cited in this column can be found.
Laguna Honda’s Unkindest Cut
Efforts underway to de-skill Laguna Honda Hospital’s (LHH) doctors and certified nursing assistants is the unkindest cut of all: Cutting medical care. De-skilling nursing home staff often precipitates a slide into substandard healthcare.
When newspapers reported the tragic murder–suicide at Oakland Springs Health Care Center nursing home involving a mother in failing health killing her brain-injured daughter, I was reminded of the Observer’s September staff report about LHH’s identity crisis and the so-called “Ja report” — which recommends replacing LHH’s doctors with nurses, psychologists, and social workers in order to increase mental health and substance abuse services at LHH.
Diana Harden had filed a series of complaints over the care of her daughter Yvette at Oakland Springs, which unlike Laguna Honda is a “free-standing” nursing home (one not affiliated with a hospital). But like LHH, Oakland Springs has had more than its share of complaints lodged with the State. Among the 152 complaints against Oakland Springs in the past five years, several involved residents waiting days or weeks to receive medical care. A common thread linking the two stories is the need for sufficient in-house physician staffing in nursing homes.
“Traveling” doctors serving free-standing nursing homes like Oakland Springs are only authorized to visit patients monthly, or every 60 days, unless patients have a documented medical necessity. Traveling MDs carry huge case loads, often covering more than one free-standing nursing facility.
By contrast, LHH has a staff of in-house MDs with relatively manageable case loads. LHH’s consistent physician staffing provides clinically-meaningful relationships with patients. LHH, to its credit, has never received licensing complaints involving residents having to wait weeks to receive medical care. At LHH, Yvette Harden would have been referred to its traumatic brain injury program.
The Ja report suggests replacing in a cost-neutral way supposedly “higher salaried” physicians with (ostensibly lower-paid) nurses, psychologists, and social workers, but fails to discuss how this will be done cost neutrally.
Salary data from the City Controller shows that in 2008, LHH had 21 physicians on staff involved in direct patient care, paid $2.9 million in total pay. By contrast, LHH had 37 nurse managers, clinical nurse specialist’s and nursing supervisors not involved in direct patient care, paid $5.2 million in total pay. The highest paid clinicians were three psychiatrists paid $600,000 in total pay, including $173,000 in “other pay” for carrying pagers as on-call staff; one of them is only a half-time psychiatrist, despite his pay. Only nine physicians earned more than $150,000; all three psychiatrists and 23 of the nurses did, due to overtime and “other” pay. Ja’s assertion LHH physicians are higher paid is erroneous.
In March 2009, the professional journal Annals of Internal Medicine published a peer-reviewed article about nursing home physician specialists, in which it noted that the quality of care in nursing homes is directly linked to physician practice, particularly for nursing home residents who have complex, multiple, comorbid conditions; chronic illnesses; and functional limitations. The article acknowledged a direct association between having physicians on staff, and the enhanced quality of care provided to residents, resulting, in part, from physicians knowledgeable about long-term care practice. Ja mentions none of this.
The Ja report recommends increasing LHH’s SATS (Substance Abuse Treatment Services) staffing, but presents scant evidence of need. It notes there were 348 SATS referrals between April 2006 and December 2008, but didn’t analyze the significance. Assuming a constant rate of referrals, the total is approximately 130 SATS referrals annually. During Ja’s study period, LHH had four SATS staff members; this translates to approximately 32 referrals per SATS staff annually. How does this compare to benchmark caseloads at similar facilities? Is it a valid rationale for Ja’s recommendation to increase behavioral staffing while cutting physicians? Does Oakland Springs employ SATS staff, whether “traveling” or otherwise?
Nowhere in the Ja report is there any analysis of caseloads for either physician or “behavioral health” staff, as if this wasn’t even considered before recommending reducing medical staff and increasing behavioral staff. From a Human Resources perspective, it’s inconceivable caseload benchmark levels at comparable facilities wasn’t evaluated.
Similarly, Ja presents no data whatsoever about the volume of services provided by physicians to the 1,263 residents in LHH’s medically-ill “control group” before recommending doctor positions be reduced. If one goal of Ja’s report was to assess capacity and needs at LHH and in the community that either discipline is able to provide, an impartial analysis of quantitative data regarding volumes of workloads in both disciplines is missing from the Ja report.
The Ja report wrongly claims LHH certified nursing assistants (CNAs) have not received training on de-escalating behavioral problems; he apparently wasn’t told CNAs already receive SMART and specialized dementia training, but he recommends increasing CNAs skills even though their pay is being drastically cut. The City has issued layoff notices effective November 15 to 289 CNAs, almost all of them at LHH. An unknown number of new “Patient Care Assistant” positions paid 20 percent less than CNAs will be created as part of the de-skilling of LHH staff. In addition, LHH has cut another 18 CNA positions and is replacing them with “Home Health Aides” paid 35 percent less. Some LHH residents have already voiced concern about how this may affect their quality of care.
Among Ja’s “study group” of patients with behavioral health needs, 31 percent died; among the “control group” of people with chronic illnesses, 45 percent died. Across the two groups, nearly 40 percent died either at LHH or post-discharge. This suggests both groups were severely medically ill and in need of medical care, which Ja all but ignores, since he didn’t discuss the medical reasons patients are admitted to LHH. He also failed discussing how either group is to access both medical and behavioral care post-discharge.
Rather than recommending augmenting existing medical staff at LHH by adding behavioral health staff, the Ja report recommended a “replacement” approach to subtract medical staff and shift resources from medical services to behavioral services in order to remain “cost neutral.” This is poppy-cock, and may involve actual, or perceived, conflicts of interest from not adequately acknowledging his personal relationships with staff employed by the City’s Community Behavioral Health Services department which commissioned the Ja study.
Insufficient availability of medical care at Oakland Springs Health Care led to a tragic murder-suicide. Subtracting physicians and certified nursing assistants at LHH — both of whom provide direct patient care — is not the answer, and may lead to increased rates of premature mortality. Is this really what we want for San Franciscans who rely on LHH for part of their medical care?
Twenty LHH physicians signed a resolution rejecting the Ja report’s recommendation to reduce physician staffing, due to Ja’s bias, inadequate data, flawed methodology, and lack of professional qualifications to assess physician services at LHH. You can join them by contacting Mayor Gavin Newsom and Supervisor Sean Elsbernd and urging them to reject the Ja Report recommendations.
Monette-Shaw, an accountability watchdog, operates www.stopLHHdownsize.com, where the Ja report and a critical analysis of it can be found.
Laguna Honda Hospital: Pot-bellies
One outcome of California Pacific Medical Center’s (CPMC) plans to close three of its San Francisco hospitals and build its new Cathedral Hill hospital on Van Ness Avenue, is that the lack of planning for skilled nursing beds in San Francisco has become painfully evident.
There are multiple failures to plan thoughtfully. In March 2005, then-Health Commission president Lee Ann Monfredini requested that Director of Public Health Mitch Katz update his 1998 White Paper regarding needs for long-term care skilled nursing facility (SNF) beds. Now four years later, Dr. Katz hasn’t produced an updated report. In May 1997 the Hospital Council of Northern and Central California authored its San Francisco Nursing Facility Bed Study, which now hasn’t been updated in twelve years. Both studies predicted San Francisco faced a potential 4,207 SNF-bed deficit by 2020, but a number of their assumptions proved false.
The Council’s 1997 study predicted the then-existing stock of both “freestanding” and “hospital-based” SNF beds would be “maintained.” That hasn’t happened: San Francisco has already lost 746 SNF beds since 1997, and CPMC plans to eliminate another 180 licensed SNF beds, which will soon bring the total close to 926.
When I reported in “Mortgaging Laguna Honda Hospital’s Future” in the Observer’s May issue that voters weren’t told in 1999 that, rather than building critically-needed SNF beds at LHH for elderly and disabled San Franciscans, we’d get — instead — community amenities, hiking trails, and street improvement projects, I was unaware of new facts.
First, I didn’t know CPMC’s plans include reducing its total licensed capacity from 1,498 beds in 2004 to just 842 beds by 2015, a loss of 656 acute, psychiatric, and SNF beds. CPMC’s plan to close 180 of its short-term SNF beds will leave it with only 38 SNF beds in-house. CPMC’s plans to outsource operation of only 63 short-term SNF beds will supplant, by eliminating, long-term (defined as longer than 90-day) “custodial care” SNF beds in private facilities.
Even while admissions to Laguna Honda Hospital (LHH) have been severely restricted — and while San Francisco faces a twin epidemic of a significant shortage of SNF beds, combined with a huge surge in the number of elderly who will eventually need some level of nursing home care — planning efforts to ensure sufficient bed capacity across various levels of care is woefully inadequate, since the City refuses to plan for long-term care beds in nursing homes, claiming they are “institutions.”
Second, I didn’t know that on June 11, the Mayor’s Long-Term Care Coordinating Council (LTCCC) would pass a resolution calling for citywide health planning for acute care, post-acute care, rehabilitation services, and transitional care, but pointedly eliminated calling for planning for SNF level of care, an obvious planning need. The LTCCC completely eliminated from its final resolution a statement contained in its June 3 initial draft that said CMPC’s plans “will have a significant and negative impact on the overall availability” of SNF beds for vulnerable adults.
LTCCC member Herb Levine, who is Executive Director of the Independent Living Resource Center and a fierce hater of anything involving Laguna Honda, stated he couldn’t support including long-term care SNF bed planning in the resolution eventually adopted on June 11. This is the same Levine who told me in September 2004 that “If the right supports were in place to provide community-based alternatives to LHH, there would be a need for zero beds at LHH.” He’s misguided, at best, since he conveniently forgets the LTCCC’s mission statement specifically includes guiding development of “institutional” services for older adults.
The Council’s resolution claims a nationwide trend to eliminate hospital-based SNF beds. If other San Francisco hospitals follow CPMC’s lead closing SNF beds, we may lose another 200 SNF beds on top of the 926 already closed. Although the resolution calls for not closing CPMC’s SNF beds until “reasonable alternatives” are established, the Council’s April 8 meeting draft minutes expressed concern that people needing long-term care may be shoved out of county.
When LHH cut its beds to only 780, and restricted admissions in January 2008 to only rehabilitation, AIDS, and hospice units, admissions plummeted from 625 in calendar year 2004 to only 242 admissions in 2008 (a 61.3% net reduction, or 383 fewer admissions), according to LHH’s January 2009 Board of Supervisors quarterly report publicly available.
Third, although I knew data compiled by the Lewin Group presented to the LTCCC on April 8 claimed San Francisco’s population in 2030 would be less than it currently is, I didn’t know then the Lewin Group was wrong. California’s Department of Finance released new data on April 30 documenting San Francisco’s population increased 1.2% between 2008 and 2009 to 845,559 — though it had projected in 2007 we wouldn’t reach 844,000 residents until 2020. We’ve reached this threshold 11 years early; now we’re projected to have 855,000 residents, including 179,375 people over the age of 65, by 2030. (Notably, U.S. Health and Human Services Secretary Kathleen Sebelius told ABC News’ George Stephanopoulos on June 14 the Lewin Group’s “public health plan” single-payer data are being questioned.)
Fourth, I later learned the Alzheimer’s Association projects a “silver tsunami” by the year 2030 of 26,868 San Franciscans over the age of 55 having Alzheimer’s, six percent of whom — or 1,612 people — will at some point need nursing home level of care. Given San Francisco’s minimum 4,207 SNF-bed deficit, where will we care for Alzheimer’s patients needing nursing home care?
This is crucial, since the Alzheimer’s Association also reports that it currently costs Californians $86,692 annually to provide for a Medicare-certified and licensed home health aide for just 44 hours of care per week for home care, but only $64,068 annually for a semi-private room in a 24-hour-per-day, 168-hour-per-week skilled nursing facility, a difference of $22,624 more annually for just 44 hours of home care, compared to almost four times as many hours of care in a nursing facility.
Fifth, I didn’t know in late April that a prominent observer would question in May whether pot-bellied pigs and gardens planned for the new LHH might be great, but not if there aren’t enough beds for patients displaced due to LHH’s reduced size. San Francisco’s League of Women Voters (LWV) monthly newsletter started a new “Bond Watch” column to track general obligation bond performance. The column is written by LWV’s treasurer, Kristin Chu, who is both a member of SF’s Citizen’s General Obligation Bond Oversight Committee and the Sunshine Ordinance Task Force. In her May column (at www.lwvsf.org/pages/bonds.html) Chu wrote about the LHH bonds: “Pigs and gardens are great but shouldn’t we have a bed for each patient from the demolished building?,” referring to LHH’s loss of one-third of its beds and pot-bellied pigs planned for its farm.
Sixth, Mayor Newsom’s Deputy Chief of Staff for Health and Human Services, Catherine Dodd, stated during the Mayor’s LTCCC’s May 14 meeting that since SEIU Local 1021 members rejected a contract deal the previous day, there was nothing preventing Mayor Newsom from cutting more beds at LHH. Her comment was censored from that LTCCC meeting’s minutes.
Although Dodd didn’t specify the number of beds being considered for closure, the Mayor linked SEIU’s contract rejection to LHH’s size was unmistakable. She didn’t even mention any impact on patients, or that LHH has already lost 420 beds. Prior to SEIU’s second contract vote on June 3, anecdotal reports surfaced that a senior LHH nurse also told some LHH units its 780-bed capacity may be cut by another 200 beds.
Finally, I hadn’t completed an analysis of SFs current SNF capacity. My research found that rather than having a 4,207 SNF-bed deficit by 2020, San Francisco potentially faces a 5,341 SNF-bed shortage by 2030, assuming no further closure of “freestanding” and “hospital-based” SNF beds, and excluding plans to further cut LHH’s beds.
Before any further strategic planning decisions are made, capacity available at short-term care, vs. rehabilitation facilities, vs. long-term care SNF facilities must be updated, and tracked regularly with greater specificity.
Otherwise, the only alternative is to use lipstick-on-a-pig to gloss over failures to plan comprehensively for elderly San Franciscans needing affordable long-term care in a skilled nursing facility.
Monette-Shaw, is an accountability watchdog. Reports cited
in this column are at www.stopLHHdownsize.com.
Mourning Laguna Honda Hospital’s Changes
When my article, “War on
Laguna Honda Seniors Heats Up,” appeared in the Observer’s March issue describing changes occurring
at Laguna Honda Hospital (LHH), little did anyone suspect the hospital’s
Executive Administrator, John Kanaley, would die unexpectedly on March
19 from a heart attack. His sudden demise deeply affected hospital staff.
I’m as shocked and saddened as everyone.
LHH hosted a touching, standing-room-only memorial
service to honor his four years of service at LHH. Its newsletter, The
Grapevine, and speakers at his memorial service, trumpeted Kanaley’s
“agent of change” role, touting his “leadership.”
While it’s true Laguna Honda passed its state
licensing surveys the past two years in a row on the first visit avoiding
a re-inspection, and while it’s true the number of deficiencies found
by state inspectors has dropped dramatically, in mid-February Kanaley
notified LHH’s medical staff that based on its May 2008 state inspection
LHH just received the lowest possible rating on the Five-Star Quality
Report issued by the federal Center for Medicare and Medicaid Services
(CMS), receiving an overall rating of just one star.
Although by increasing resources Kanaley was able
to reduce LHH’s 56 deficiencies received between November 2005 and October
2006 to just 18 deficiencies received between November 2006 and October
2007, the state issued LHH 20 deficiencies between November 2007 and
January 2009, a slight increase over the previous inspection. There
are nine deficiency categories, including “mistreatment,” “quality of
care,” “resident rights,” and “environmental,” among others.
CMS’s rating system focuses on three measures:
State health inspections, staffing levels, and quality measures. One
star, the lowest-possible rating, represents “much below average;” five
stars, the highest, represents “much above average.”
A search of CMS’s Nursing Home Compare web site
returns a comparison of 125 nursing homes within a 50-mile radius of
LHH (the system returns only 125, even if there are more facilities).
Of the 125, there were only 21 including LHH, to its credit, which received
the five-star rating for staffing levels, even though LHH’s nurse-to-patient
staffing ratio remains below California’s average. Common sense indicates
higher staffing levels leads to improved quality measures and favorable
health inspections; indeed, low staffing levels typically involve providing
substandard care. But 22 of the 125, including LHH, received the lowest
one-star rating for the Health Inspections category, and 39 of the 125,
including LHH, received one-star ratings for Quality Measures.
Of the 21 facilities that received the five-star
rating for staffing, surprisingly 13 received a one-star rating for
Quality. Only four of the 21 received a one-star rating for Health Inspections,
illustrating a correlation between staffing and inspection performance.
Of the 21 that received five stars for Staffing, Laguna Honda was the
only facility that received a one-star rating in both Quality and Health
Inspections, sinking LHH’s overall rating to just one star. This couldn’t
have pleased Kanaley.
Three days before his untimely death, Kanaley
answered questions posed by a community member who had inquired about
issues raised in my March article. Kanaley attempted to minimize LHH’s
change to a “social health” model of care as dealing more with quality-of-life
issues — like “providing a more home-like environment, involving patients
in activities involving pets, gardens, and children for a more meaningful
social life” — rather than the medical model of care focusing on illness
and disease treatment.
Kanaley didn’t acknowledge the social health model
of care is a nationwide effort to move people out of nursing homes into
lower levels of care in “assisted living” and “supportive housing,”
driven in part to reduce expenses from the exploding Baby Boomer population
expected to overwhelm Medicare and Medicaid. Instead, Kanaley informed
the community member he “wished I knew what motives Patrick [me] to
be a conspiracy theorist.”
I assure you I don’t believe there’s any conspiracy
to implement changes at LHH, other than perhaps a conspiracy of silence
designed to keep the community uninformed about changes actually taking
place. A concerted effort is being made by City employees, with or without
conspiratorial motives, to keep news about these changes out of the
Another person wrongfully accuses me of presenting
“assumptions” as fact, and not making clear to readers the difference
between facts and assumptions. I completely disagree: My March article
reported facts gleaned from ten public-record documents; I included
minimal observations or commentary, not assumptions.
Laguna Honda’s Communications Director, Marc Slavin,
was so irritated by my March article, he reportedly took a copy to the
Mayor’s Long-Term Care Coordinating Council’s March 12 meeting, where
according to a reliable, impartial source, Slavin engaged in an ad hominem
personal attack against me. This is the second time Slavin has attacked
me personally when I wasn’t present to defend myself, and he’s done
so elsewhere. The first time, during a West of Twin Peaks Central Council
meeting, another community leader was so offended by his personal attacks
she wrote Kanaley indicating how inappropriate Slavin’s behavior had
been. This hasn’t stopped him; Slavin is viewed by several members of
LHH’s staff as another sly “change agent,” and Mayor Newsom’s minister
of misinformation and propaganda.
Of the many changes at LHH, Kanaley didn’t address
the loss of 420 skilled nursing beds eliminated from LHH’s replacement
facility under construction. San Francisco has seen the closure of 312
skilled nursing beds since 1992, and another 618 are planned for closure,
bringing to 930 the number of skilled nursing beds that will be lost
just before the “silver tsunami” of San Franciscans expected to develop
Alzheimer’s will arrive, many of whom will need nursing home level of
medical care. Hospital CEO’s in the Hospital Council of Northern and
Central California are so concerned about the loss of post-acute hospital
discharge locations, they are currently conducting a study to measure
the unmet availability of lower levels of care in nursing homes and
The minutes of the Health Commission’s March 3
meeting reports the City is being sued by Bay Area Legal Aid over whether
San Francisco is failing its Health and Safety Code Section 17000 obligations
to provide care to the [medically] indigent. Director of Public Health
Mitch Katz reported that City officials have agreed to limit publicity
about the lawsuit, because opposing counsel hope to reach yet another
“settlement agreement.” Details of the case haven’t been made public,
so it’s unknown whether failing to provide care to Medi-Cal recipients
at LHH is part of the lawsuit.
In addition to mourning Mr. Kanaley’s premature
passing, San Franciscans should be mourning the loss of nearly 1,000
skilled nursing beds so desperately needed, the loss of medical care
to the City’s medically-indigent frail elderly and disabled citizens,
and the loss of publicity concerning the public’s right-to-know about
lawsuits against the City.
Monette-Shaw, an accountability watchdog, operates
www.stopLHHdownsize.com and a member of the First Amendment Coalition,
protecting and defending the public’s right to know.
Newsom's Laguna Honda Boondoggle
By Patrick Monette Shaw
Cost overruns continue to skyrocket on the Laguna Honda Hospital replacement project ostensibly being jointly managed by Department of Public Works and Department of Public Health staff, even while the project’s scope has plummeted dramatically.
As a disciple to his guru, Mayor Gavin Newsom is artfully utilizing Willie Brown’s playbook.
In 2003, former Mayor Willie Brown snatched $25 million from tobacco settlement revenues (TSR) earmarked to rebuild Laguna Honda Hospital (LHH) in order to balance his final City budget, although the tobacco settlement fund wasn’t established to balance City budgets. The eleven then-sitting Board of Supervisors — including Gavin Newsom — passed a special ordinance granting Willie permission to raid the TSR account.
Mayor Newsom just de-appropriated another $18.3 million of TSR’s from the LHH Replacement Project fund: $15.2 million to help balance his fiscal year 2008–2009 budget, plus $3.2 million for funding new community housing subsidies mandated by the Chambers settlement. Newsom has done this without a special ordinance, by simply including the de-appropriation in next year’s Annual Appropriation Ordinance budget.
The guru and his disciple have siphoned $43.3 million from the TSR account.
Belatedly, Planning for Elders in the Central City (PECC) just requested a full, clear accounting of LHH’s new $110 million capital budget increase, how the cost overruns occurred, and who is responsible. Following San Francisco’s Capital Planning Committee June 9 meeting, PECC also requested an examination of $47 million in Certificates of Participation (COP) — a form of public financing bypassing voter approval — for the LHH Replacement Project.
Unlike bond financing, COP’s aren’t considered, and aren’t shown as, City debt; they’re considered repayments of future revenue streams tied to City assets, in this case guarantees against the General Fund as simple payments on leased assets. Public scrutiny of COP spending isn’t required. COP’s can only be applied to debt service payments for capital costs related to the LHH replacement project, including construction and equipment acquisition.
To qualify for leased assets, Newsom and Supervisor Sean Elsbernd suddenly introduced on June 5 a new Ordinance the creates a Property Lease, a separate Project Lease, and a Trust agreement with a Trustee for the LHH Replacement Project, without explaining the lease terms or why leases are suddenly necessary.
It’s not $47 million, but $185 million in COP’s being proposed to complete LHH Replacement Project financing — in addition to the $420 million already appropriated. Of the $185 million, $30 million is believed to be earmarked to service the debt on already existing bond indebtedness; $110 million for construction; and $45 million for furniture, fixtures, and equipment that former City Attorney Louise Renee had reportedly previously negotiated to be funded from the General Fund to repay Guru Brown’s raid of $25 million from the TSR account.
There’s no explanation about why $47 million is now needed to replace the $25 million, or why $47 million is now needed for furniture, fixtures and equipment for a facility reduced from 1,200 beds to only 780 beds.
In its March 2008 status report to the Citizens General Obligation Bond Oversight Committee (CGOBOC), LHH’s Replacement Project team indicated the Controller had identified $120 million in COP’s that could be issued using the City’s General Fund as credit, to be repaid using federal revenue. [Note: the repayments are actually made by the State, not the Fed’s.]
Suddenly, without explanation, the amount of COP’s to be issued has surged to $185 million. The $185 million in COP’s will cost an additional $123.7 million in interest, totaling a $306.4 million increase to LHH’s replacement project.
The true cost overruns of the LHH Replacement Project have been hidden from the public long before September 2007, following repeated cancellations of the Laguna Honda Hospital Joint Conference Committee, a subcommittee of San Francisco’s Health Commission; Health Commission meetings; and CGOBOC meetings. Few LHH-sponsored Town Hall meetings have been held.
The LHH Replacement Project team’s September 2007 status report to the CGOBOC stated the “forecast at completion” of the then-approved 780-bed project was $541,168,339, an increase at the time of $58.3 million.
Six months later, its updated report in March 2008 says the same 780-bed project forecast-at-completion cost is now estimated at $593,946,602, another increase of $52.8 million. The two increases total $111 million above previous estimates.
The March 2008 status report doesn’t describe the many reductions in the scope of the project, including elimination of various programming, and the de-funding of a decade-long-promise to provide $15 million towards assisted living housing on Laguna Honda’s campus.
The replacement project’s Budget Revision 14 released on March 26 increases consulting services by $14 million, to a total of $96 million. It simultaneously reduces actual construction costs by $16.3 million, and eliminates entirely the $15 million assisted living commitment, for a total of $31 million in project scope reductions. The reductions had to be made, in part, to finance the consulting services, and a new $20 million increase to renovate the front section of the current hospital’s administration building. A full accounting of all project cuts hasn’t been described publicly.
Although LHH’s rebuild is now smaller by 420 beds, the LHH Replacement Project team claims the 780-bed project will only cost $594 million. But the Mayor’s Office of Public Finance has forecasted the total budget to be $641 million, $240 million — or 60 percent — over the initial budget, apparently anticipating additional cost overruns. The Project Team’s March 2008 status report also forecasts $642 million in total sources of funding. No explanation has been made public as to why the current project budget of $594 million is expected to soar another $48 million, to the new forecasted $642 million amount.
In 2007, a City audit of the Department of Public Works pointed to a lack of oversight of projects that leads to project delays and questionable project costs. DPW’s oversight of the greatly delayed LHH replacement project has been pathetic.
Voters should demand a Grand Jury investigation of Newsom’s Laguna Honda rebuild boondoggle to determine who is responsible for the project’s cost overruns and scope reductions.