BG - Felony? City, County Officials Collude to Ensure Hospital Bid Rigging

This is a storage area for FACTS that have been found during the two year fight with City Hall for Public Documents. These are being posted for reference and historical purposes only. We encourage any conversations about these documents n "Lakewood General Discussion." Here you will find the Highlight the lie, with the document proven the lie.

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Dan Alaimo
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BG - Felony? City, County Officials Collude to Ensure Hospital Bid Rigging

Postby Dan Alaimo » Sun Sep 25, 2016 8:14 pm

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By Brian Essi
(Moderator's note: Lakewood Attorney Brian Essi is meticulously researching the back-room deals that resulted in the closing of Lakewood Hospital. He has written extensively about it for the Lakewood Observer where this article first appeared. He concludes that this is an example of "bad government." Citizens will have their chance to vote on the ordinance which authorized the deal in a referendum on the November ballot. An "against" vote is to nullify the ordinance that passed last December. A "for" vote supports it.
To clarify: The byline at the top of this article defaults to the person who entered the copy. In this case, Brian Essi is the author of the article, while Dan Alaimo entered the story, provided some editing as well as the summary information at the top. - D.A.)


Highlights from the following article:
• In January 2015, Mayor Summers first said that Lakewood Hospital would not close. Days later, he announced the closure of the hospital, which he called “Good News.”
• When Summers was first asked about MetroHealth’s proposal concerning Lakewood Hospital, Summers lied about that, in an apparent cover-up of what we later discovered were two Metro proposals that he suppressed. He said no one else was interested in operating the hospital.
• Evidence in emails obtained by public records requests now suggests the involvement of County Executive Armond Budish and County Councilman Dale Miller in Summers’ efforts to keep Metro out of Lakewood.
• Elected leaders acted in secret to exclude MetroHealth, potentially jeopardizing Metro’s long term viability as the small competitor in the healthcare marketplace dominated by CCF and University Hospitals.
• On July 15, 2016, Law Director Butler denied over 100 public records requests, the majority of which had been outstanding since March 15, 2016.
• Allowing Metro into Lakewood would have provided greater healthcare opportunities and competition for Lakewood and Cuyahoga County citizens, including the under-served.
• The deadline on the Metro offer https://docs.google.com/viewer?url=http%3A%2F%2Fsavelakewoodhospital.org%2Fwp-content%2Fuploads%2Fmetrohealth-proposal.pdf passed without response from the City, and it was withdrawn. City officials have given various versions of this, the latest that Metro was only interested in Lakewood Hospital as a temporary overflow facility, which is not supported by the facts.


Key quotes:
Mayor Summers had "an excessive desire to manage the process and keep discussions to insider players," that “they had a distinct agenda” and that Summers "carefully controlled" the process. — County Councilman Dale Miller
CCF pressured County Executive Budish, and Budish pressured MetroHealth to back down. — A Member of Lakewood City Council (in a personal conversation)

On bid rigging:
• The U.S. Federal Trade Commission defines bid rigging as follows: “Whenever business contracts are awarded by means of soliciting competitive bids, coordination among bidders undermines the bidding process and can be illegal.” https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-competitors/bid-rigging
“In the United States, bid rigging is a felony criminal offense under Section 1 of the Sherman Act.” — Wikipedia https://en.wikipedia.org/wiki/Bid_rigging

Citizens generally expect a certain level of frankness and honesty from their elected representatives. Unfortunately, we are witnessing an era in which lies by elected officials are the first recourse in any public discussion.

In January 2015, Mayor Summers first said that Lakewood Hospital would not close. Days later, he announced the closure of the hospital, the loss of Lakewood’s largest employer and the loss of $7M in annual charitable services to the underserved. In his announcement, Summers made a false claim that there would be a “$120M investment” in Lakewood and claimed the closure was somehow “Good News.” That same month, when Summers was first asked about MetroHealth’s proposal concerning Lakewood Hospital, Summers lied about that, too, in an apparent cover-up of what we later discovered were two Metro proposals that he suppressed.

It took months of public records requests and separate discovery efforts in a taxpayer lawsuit to expose the truth--Summers’ alleged “Good News” was actually a $120M financial loss for the city and Summers had concealed a proposal that would have meant a $100M investment in Lakewood and would have saved 900 jobs--all without the need for financial losses or loss of charity services—Metro’s proposals were objectively better than the Cleveland Clinic (CCF) proposal that Summers actively misrepresented.

Evidence in emails obtained by public records requests now suggests the involvement of County Executive Armond Budish and County Councilman Dale Miller in Summers’ efforts to keep Metro out of Lakewood. Additionally, new evidence exposes the role of Huron Consulting, LLC as an advocate for the Summers and Cleveland Clinic Foundation (CCF) agenda. Prior to this new evidence, we were told that Huron was an independent consultant that could be relied upon to objectively assess what Summers did with CCF in the backroom.

Now that’s bad government.

Potentially Criminal Antitrust Violations
The public disclosure of one of Metro’s proposals back in May, 2015, resulted in Metro making public statements of continued interest in Lakewood. A May 18, 2015 email has recently surfaced where Summers wrote to Budish and Miller concerning Metro’s interest in Lakewood. Miller has stated that Summers had "an excessive desire to manage the process and keep discussions to insider players," that “they had a distinct agenda” and that Summers "carefully controlled" the process. Miller said he “helped facilitate a change" concerning Metro’s public interest in Lakewood. In other words, County leadership knew what Summers was up to in the backroom with CCF and then assisted in the “distinct agenda” to keep Metro out of Lakewood.

To make matters worse, one Lakewood City Councilmember recently claimed in a personal conversation that CCF pressured County Executive Budish, and Budish pressured Metro to back down.

So the evidence suggests that the leadership of one competitor (Budish and Miller on behalf of the county owned Metro Hospital) and the leadership of another competitor (Summers on behalf of the city-owned Lakewood Hospital) colluded with CCF to suppress the Metro interest which helped Summers steer the deal to a third competitor (CCF). This is what is referred to as “bid-rigging.” Antitrust laws contain criminal provisions designed to prevent bid-rigging among competitors in the marketplace. Metro Hospital, CCF Hospitals and Lakewood Hospital all competed in the same marketplace --the Summers’ Master Agreement with CCF eliminates Lakewood as a competitor and further precludes Metro from operating any healthcare facility at the former Lakewood Hospital site.

The Cover Up Continues
On July 15, 2016, Law Director Butler denied over 100 public records requests, the majority of which had been outstanding since March 15, 2016. Butler’s denial of the requests was made just days before the City of Lakewood was required to answer an Original Mandamus Action filed in the Cuyahoga County Court of Appeals to compel the city to produce public records related to a corruption probe.

One of the 100-plus public records requests that Butler denied, sought records of all of Butler’s communications with Huron Consulting, LLC. Huron is the consulting firm that issued a report that was used to close the hospital and allow CCF to dominate Lakewood’s valuable healthcare market indefinitely. Butler claims that all records of his interactions with Huron are “trial preparation records and joint defense communications” to be used only in the pending taxpayer litigation --Butler says he cannot share the records without the consent of defendants Summers, CCF and the Lakewood Hospital Association (LHA). But there is a problem with Butler’s claim-- the Huron engagement letter that Butler signed while the litigation was pending makes no mention of the litigation at all and it does not mention that Huron would serve as a litigation consultant or keep its interactions with Butler confidential.

So the cover up continues with the city relying on strained arguments and ever shifting stories. The latest concealment of the truth and public records concerns the now highly questionable role of a consultant leaders used to whitewash secret public decision-making. That secret decision-making by Summers and other public officials concerned the dissolution of Lakewood’s largest public asset, worth an estimated $150M-- the loss of which will affect the healthcare of Lakewoodites for generations to come.

Elected leaders acted in secret to exclude Metro, potentially jeopardizing Metro’s long term viability as the small competitor in the healthcare marketplace dominated by CCF and University Hospitals.

Allowing Metro into Lakewood would have provided greater healthcare opportunities and competition for Lakewood and Cuyahoga County citizens, including the under-served.

Our leaders continue to fail the “frankness and honesty” test.

That is really bad government.


“It is not the function of our Government to keep the citizen from falling into error; it is the function of the citizen to keep the Government from falling into error.”
―Robert H. Jackson, former U.S. Attorney General and Supreme Court justice

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