Civic Accountability -- Honesty in Local Government III

[Mark Kindt]

What is so stunning about the public documents finally released to Mr. Essi under the Court orders, is that these public documents confirm all of the original reporting done by the team at The Lakewood Observer and its local citizen-journalists.

Unfortunately, the publisher and other Lakewood citizens were castigated and vilified in an organized campaign of harassment, some of it conducted from within the wall of City Hall by public employees or cronies of the city administration. The LO is still banned at City Hall. Basic journalism by local residents on the fate of the hospital was met with antagonism and animosity by the city administration and its allies.

This antagonism and animosity continues to be demonstrated almost daily as the city administration "deletes" commentary and questions from its residents on social media that it manages. The computerized records of the posts and their deletions may provide some imaginative and innovative attorney the opportunity to bring a case against the city for violations of the First Amendment of the U.S. Constitution.

[Lori Allen _]

Mr. Essi has covered this subject here on the Deck for the last two years or so. I suggest looking back on his posts.

I believe that we all know by now that the alleged criminals at City Hall have broken many laws.

[Mark Kindt]

My compliments to you Ms. Allen for correctly predicting that the Carnegie/Fitzgerald team would receive the city administration's recommendation to redevelop the former hospital property.

Yes, I have followed Mr. Essi' courageous civic-journalism both in print and on-line, and, I might add, your on-line civic-journalism, as well. Kudos to you both!

[Mark Kindt]

Now, to return to the Gorton/Haber emails posted above:

The city administration with the assistance of its paid PR consultant launched a "Big Lie" about the investment value of the proposals reflected in the original letter of intent among CCF, LHA, LHF and the City.

The Gorton/Haber emails do nothing more than remind all of the insiders what they already know -- that the $120 million dollar investment figure is "bogus" and that it is nothing more than a common public relations deception.

However, these emails also confirm my presentation originally posted on the Deck as "Civic Accountability -- Honesty in Local Government I".

The city administration took the risk of violating the federal securities laws by propounding and then "doubling-down" on this material financial misrepresentation knowing that it was false.

[Mark Kindt]

I carefully considered my use of the word "deception" in the above post. The $120,000,000 misrepresentation is both material and quantifiable. It's use was not just some cute PR gimmick.

Each of the participants in the Letter of Intent are (were) highly sophisticated parties and well-represented by legal counsel.

The parties to the Letter of Intent understood from the very beginning that no new investment was coming to Lakewood. They understood, in fact, just the opposite -- that a major liquidation of a hospital with a substantial balance sheet was occurring. Whatever Lakewood was going to get, would be coming from those liquidated assets.

Just the losses in charity care that would no longer be provided by Lakewood Hospital gut the $120M misrepresentation. The hospital provided approximately $7M annually to the community in charity care that has now ended. The lease had another decade to run. Just the loss in charity care alone due to the liquidation of the hospital could amount to as much as $70,000,000. The charity care loss figure is probably larger, since obviously Lakewood Hospital could have had an operational life beyond 2026.

The city administration and its Letter of Intent partners fully understood they were hiding a public health disaster behind a phoneyed-up PR number.

We witness a culture of dishonesty and a clear loss of moral compass.

[Mark Kindt]

My goal in writing this series is very simple.

Our municipal officials should comply with their own written policies.

Our municipal officials should comply with basic principles of ethics-in-government.

Those municipal officials who are professionals should comply with the ethical principals of their profession.

My bias in writing this is equally simple.

I believe that hospitals are good for communities. (Ask Avon). Why would anyone in their right mind trade a hospital for commercial development?

Most of my printed articles over the past decade-and-a-half are actually in support of economic development, but certainly not at the expense of invaluable community assets.

(In fact, if you search Google, you can find a number of position papers that I co-wrote on health care policy during my time at the FTC. I thought they were gone for ever, but they've resurfaced on the web.)

[Jim O'Bryan]

I believe that hospitals are good for communities. (Ask Avon). Why would anyone in their right mind trade a hospital for commercial development?

Most of my printed articles over the past decade-and-a-half are actually in support of economic development, but certainly not at the expense of invaluable community assets.

(In fact, if you search Google, you can find a number of position papers that I co-wrote on health care policy during my time at the FTC. I thought they were gone for ever, but they've resurfaced on the web.)

Mark


I fear you give them too much credit.

What we have here is a small handful of people, dedicated to bringing economic development to Lakewood at any cost. Even if it cost us our hospital, our largest employer, and even the future of the community. Their simple belief, was that commercial economic development would keep their taxes low. This is also the reason they are so NIMBY, with they will make any street south of Clifton into commercial, without any thought to the economic impact on the streets they are ruining. Woodward, Grace, etc.

But what we had was a group of people trading the community's cash cow (lakewood hospital), for some magic beans, and a small plot of land where to plant them. Hoping the ideas they became so attached to during the WestEnd debacle, were still true, which of course they are not. Retail retreating, office space rarely needed but by the largest companies.

As pointed out repeatedly by many, the fastest growing sector of business and industry is MEDICAL. And we sold ours for next to nothing, and from the average tax payer, one could say we paid them to take it.

Hence the cover-ups, the reluctance to prove anything they promised, falsification of documents, destruction of documents, and refusing to follow court orders that the documents belong to the people of Lakewood and have to be produced.

.

[Mark Kindt]

For the most part, Mr. O'Bryan, I simply do not know any of these people.

I am only looking at the documents that they have created, the lawsuits where they have been sued, and the processes that appear to have been misused by them.

My distinct impression is that they proceed in a rather reckless manner and have a poor understanding of the legal requirements that should govern their conduct.

This is their problem, not mine. During all of my years, in public service, neither I nor my colleagues in government functioned as they have.

They tarnish the general reputation of those who have committed their lives to public service.

I have a simple message. They can do better by simply using their own internal written standard as a guide-on. That's why the document was created.

The quote in my signature line says it all.

[Mark Kindt]

Leadership at LHA Knew and Then Admitted To City Leaders That The Investment Value Was Bogus

To return to the Gorton/Haber email:

In the press conference at City Hall (January 2015), the City announced plans to close Lakewood Hospital and build a Family Health Center. This plan was represented to the media and the public as a $120 million health care investment in the future of the City.

Why was a known misrepresentation systematically presented to the citizenry of Lakewood?

This figure (or similar figures) was subsequently used in printed announcements sent to residents with water bills. If this isn’t systematic, I don’t know what it? How many thousands were printed and sent? It was an organized and systematic effort to mislead the citizens.

These figures were never substantiated and likely could never be, given:

1.) the loss of future lease payments to the City,

2.) the loss of future hospital employee-related income tax revenue,

3.) the loss of charity care delivered to the community, and,

4.) the obvious loss in value of Lakewood Hospital in terms of assets, real estate, and as an actual going-concern.

This $120 million figure was widely reported in the media and now we know that the LHA leaders told the city administration that it was “bogus.”

[Mark Kindt]

And, of course, the statements to the City by the LHA insiders were obvious to anyone who could read and work a calculator.

The Lakewood Observer had this completely analyzed and charted almost immediately after the press conference and had already demonstrated the sheer "bogosity" of the investment number.

Attached to this post is the chart from the February 3, 2015 edition of the LO.

[Mark Kindt]

City Leaders Continued A Systematic Campaign to Mislead Lakewood Citizens.

In a September 2016 Op-Ed article (link below), a city official with full knowledge states that “At risk is more than $100 million of investment in health care currently underway.”

This is about 18 or 19 months after the number had already been exploded by insiders as bogus!

The author knew that there is no new health care investment underway.

If fact, the author knew that plans were underway to liquidate the major assets and real estate of Lakewood Hospital and distribute the vast bulk of the liquidated proceeds to private entities.

If fact, the author knew that the “bogus” investment value figure was being reported in the City of Lakewood’s official annual report for 2014.

The author knew that the $100 million investment was a wash and that the only funds that were being invested were the funds being liquidated under the Master Agreement.
As finance director, the author is a public official, who knew that the statement could not be accurate, given the author's actual knowledge of the offsets, losses, shortfalls and wind-down costs related to the so-called "investment" written of in the Op-Ed article.

Other city employees had been told in writing that the number was “bogus” and by that it was meant that it was not a meaningful or defensible number. It had no underlying integrity as a quantification.

Here is the link: http://www.cleveland.com/opinion/index. ... l_iss.html

[Mark Kindt]

You be the judge. Here is the relevant excerpt from page 16 from the City of Lakewood Annual Report for 2014.

[Mark Kindt]

So here we have a known and bogus public relations artifact tainting the City's official report.

[Mark Kindt]

The astute reader will also understand that in 2015, the city administration is mostly misrepresenting the investment value of the Letter of Intent.

In 2016, the city administration is mostly misrepresenting the investment value of the Master Agreement.

In any event, it was always a bogus figure and a serious misrepresentation (particularly in light of the actual federal securities laws).

[Mark Kindt]

But for the systematic dishonesty of our elected and appointed officials, ballot outcomes related the closure of the hospital might well have been different.

But for the systematic dishonesty of our elected and appointed officials, case outcomes related to the closure of the hospital might well have been different.