Civic Accountability -- Honesty in Local Government III

[Mark Kindt]

Mr. Essi: Your amplification is always helpful! I've been looking at many of your previously published articles. You nailed all of the worst abuses early on! You've covered an immense amount of territory. Again, kudos to the team at the Lakewood Observer for all of their hard work.

[Dan Alaimo]

I find this letter a little baffling. July 2014 was about when they were starting to carve the final deal into stone.
Maybe someone can explain it. Was it just a CYA effort?

[Mark Kindt]

As far as I can tell, LHA spent two years across 2013, 2014 and 2015 working with its consultant Subsidium.

There were never more than two proposals in play; one to keep the hospital (Metro) and one to close the hospital (CCF).

(Surgical Development Partners was excluded from participation, likely because its late proposal to operate the hospital was inconsistent with the Letter of Intent to close the hospital.)

I cannot answer your question, until I review more documents. I have some opinions on this, but I do not want to post them until I have documented confirmation.

There seems to have been a de facto "rejection" of the Metro proposal as a result of LHA delay and the passage of time.

Metro withdrew in early October 2014. LHA found itself stuck with the offer from CCF that its own consultant advised was without material advantage to the community.

A robust public process led by a nationally-recognized investment bank with expertise in health care would have been the correct way to handle CCF's desire to exit the management of Lakewood Hospital.

Recognize that my hindsight is always 20/20.

[Brian Essi]

I find this letter a little baffling. July 2014 was about when they were starting to carve the final deal into stone.
Maybe someone can explain it. Was it just a CYA effort?

Mr. Alaimo,

Mr. Kindt has given you his cogent answer, qualified upon what is currently know and a yet to be thoroughly reviewed mountain of public records.

I have just breezed through the July 2014 records as part of my review of the 27,000 pages of records produced this summer---I say "breezed" thorugh since I am under a Court imposed deadline that does not afford me the time to complete my analysis.

Nevertheless, when I put Summers' July 3, 2014 letter and his testimony in the taxpayer lawsuit together with the documents around that time, the evidence suggests that Summers likely made false statements under oath---essentially he claimed that he went to Dr. Donnelly's office (the #2 man at CCF) with letter in hand to confront him (in the middle of Step 2 negotiations he led) and that meeting ended with Donnelly convincing Summers that the claims in the letter lacked factual and legal merit. There is also no evidence in the record that Summers ever sought legal advice at that time (and he confirmed that to me on April 8, 2015) combined with Summers' claim (and documentary evidence) that many facts and much analysis had been gathered as of July 2014.

So, having spent thousands of hours on this matter, having interviewed a number LHA trustees and having reviewed tens of thousands of pages etc., I can render you my professional opinion with the requisite degree of certainty that:

1. The LHA Board was fake.
2. Trustees Tom Gable, Bill Gorton, Madigan, Summers, Bullock et al were all fakes.
3. The Subsidium process led by Summers was fake.
4. The Select Committee process was fake.
5. Step 2 was fake.

Summers and Bullock are fake "leaders."

I have no idea whether the July 2014 letter was CYA, but it was part of a completely fake process led by a fake.

FAKE
adjective
1.
not genuine; counterfeit.

Noun
1.
a thing that is not genuine; a forgery or sham.

[Dan Alaimo]

Thanks Brian and Mark for your response.

You know what would be useful? An actual timeline because sometimes events and claims are conflated between 2014 and 2015 - and occasionally it's intentional. Also it would demonstrate how far back this goes, and who was involved in 2010, and how he pops up again now.

[Mark Kindt]

My focus in this series III is to identify distinct instances where misrepresentations can be cleanly documented to highlight the city administration's disregard for its own basic written policies.

Yes, a chronology would be helpful, but would entail a serious commitment of time and resources that I simply do not have.

[Mark Kindt]

The mayor understood that the value of Lakewood Hospital was between $150,000,000 and $200,000,000

So here we see the LHA secret Step-Two Committee ignoring the offer from Metro to keep the hospital operating under the proposal jointly solicited by their retained consultant (Subsidium) and, instead, to proceed on the proposal that no other parties were ever permitted to bid on.

You be the judge. Here is the document.

[Mark Kindt]

Here is the entire document:

[Stan Austin]

Deliberate Sabotage

[Mark Kindt]

The documents finally released from the City under Court order seem to fully vindicate the reporting in the Lakewood Observer, the positions taken by the Save Lakewood Hospital group, the complaints filed with state and federal officials, and the lawsuits that were filed against the City.

From the City's own documents, we can see that the city administration understood:

1. that it owned the hospital;

2. that the hospital was worth between $150M to $200M;

3. that the current lessee (CCF) was removing valuable programs from the hospital;

4. that a major metropolitan health care system had offered to continue hospital operations;

5. that the city's own consultant told it that the offer under consideration with CCF had no material advantage;

6. that it was engaging in a non-public and conflict-ridden process; and,

7. that it was ignoring public bidding requirements on the largest set of assets that it owned.

We could go on-and-on listing these kinds of points. But I do not want to repeat what other citizen-journalists have already published; nor what citizen-activists have already advised their representatives.

In a few short months, we each will see the wrecking-ball take down the hospital building. We each owe it to ourselves as citizens to understand what happened, how it happened and why it happened.

Even more importantly, we need to understand why we were constantly and systematically lied to about events that occurred behind closed door and decisions made by private individuals in the shuttering of an invaluable, century-old community asset.

Ask yourself these question: Why was the LHA Step-Two Committee running (or ruining) the city? That committee was the center of major government decision-making. Why were the normal functions of government displaced or evaded? With what result? Aside from the mayor, who on that secret committee was ever on the local ballot?

What does LHA, LHF or CCF have to do with setting local inter-community tax policy? But the private Letter of Intent is full of these kinds of governmental decisions (search "Avon"). Something went wildly wrong here. Like Mr. Essi has said before, we are not making this stuff up.

[Brian Essi]

Deliberate Sabotage

Messrs. Austin and Kindt,

Please note the three documents below from separate releases by the City (and CCF under court Order in the Taxpayer Lawsuit) .

The first document was released in 2015 via the City Website and the Summers/Subsidium dog and pony forums in 2015--It suggests, that after Summers spent a years studying the problem and spent $750K Subsidium's fees doing so, they somehow did not know (in 2015) that the Clinic was liable under the 1996 Agreements for $158M-$214M of projected losses (caused by the Clinic's own conduct).

The second second was released in August 2017 (after a Court Order) and clearly shows that Summers and Subsidium not only believed the Clinic was liable for the same projected losses ($150M-$200M), but they built their negotiating strategy upon that liability.

The third document is an internal CCF document revealed in the Court filing shows that CCF knew it was legally liable under the 1996 Agreements to cover capital improvements and operating losses through 2026 and that that liability was estimated at 279.5M. This one document completely undermines Kevin Butler’s erroneous and fraudulent legal “opinion” claiming that CCF was not contractually liable for the losses.

Doesn't the evidence suggest that Summers, Subsidium, and CCF's Tom Gable and Brian Donnelly (who all spoke at the coordinated forum where the first document was presented all engaged in more than deliberate sabotage---didn't they proactively mislead the public in 2015 by suggesting there was ambiguity about the Clinic losses that they knew was false?

See also posting.php?mode=quote&f=7&p=170945

Slide below is from city Website since 2015:

scan0321.jpg (341.23 KiB) Viewed 5323 times

Page below was produced August 16, 2017 under Court Order

scan0322.jpg (415.65 KiB) Viewed 5323 times

[Mark Kindt]

There may be some readers who dispute the analysis presented in this Series III.

I would enjoy reading any counter-analysis or alternative interpretations, but to be convincing such readers will now have to provide actual documents to present a credible argument.

[Brian Essi]

The mayor understood that the value of Lakewood Hospital was between $150,000,000 and $200,000,000

1. Carefully examine the internal CCF document above-- it refers to $278.5M in "Operating Loss and Capital Needs."

2. Please recall that the City actors always relied on the need for $91M in capital improvements needed to bring what they claimed was plant and equipment in ill repair.

3. If the $91M figure to a middle ground number from Summers/Subsidiums projected losses of $150M to $214M, i.e. $182M, we arrive at a figure of $273M (91+182=273) And Sha Zam those numbers closely track the Clinic's $278.5M figure.



So, when we look at the situation in 2015, the hospital had no debt and over $80M in cash---borrowing $80 or 9M to make the alleged needed improvements would not even have triggered the Clinic to make cash infusions into the hospital under the 1:1 cash to debt debt ratio obligations of the Clinic.

I just don't see how Summers and the Clinic can run from these numbers---nor can Bullock, Nowlin, Marx et al run from them--Garsh, SHa ZAm, Gall Lee

[Stan Austin]

Can you imagine buying a car with Mike Summers? The sticker is the least I will pay and I'll pay for the floor mats

[Mark Kindt]

These documents and Mr. Essi's analysis raise an interesting issue:

It seems that they (Subsidium, the City, LHA) ignore the value of the hospital as a going-concern and are approaching the values as liquidation values, not just of the lease, but of all of the assets.

This only makes sense if the city administration and the LHA trustees know that there has been a multi-year effort to decant the programs from the hospital, as another recent post by Mr. Essi discusses going back to 2010.

What a disaster!