New allegations in Palm Drive Hospital scandal

<p>Board members for Sebastopol’s Palm Drive Hospital are expected this week to discuss in public the alleged attempt by some elected officials to force out their chief executive officer, even as new allegations surface that were brought by the CEO and three of his top administrators.</p><p>James Russell, the chief executive placed Friday on paid administrative leave, sent a June 22 letter to the hospital human resources director alleging that unnamed officials had violated both the state public meeting law and medical regulations protecting the security of patients’ personal and financial information.</p><p>The letter, obtained from the hospital Monday, also alleges that “certain board members” acted “to cover up the security violations” of the hospital’s information technology manager, who happens to be the board president’s son.</p><p>The letter was signed by Russell, Chief Operating Officer Lori Austin, Chief Business Officer Cynthia Denton and Chief Nursing Officer Karin Reece.</p><p>Board President Dan Smith denied preferential treatment has been given to his son, information technology manager Bruce Espinosa. Asked about the letter, Smith said, “I can’t comment on any individual allegations because they are under investigation.”</p><p>Espinosa denied security violations and said Smith wasn’t involved in his hiring nearly two years ago, a time when Smith was a key Palm Drive benefactor but not a board member.</p><p>Espinosa said Austin had made similar charges against him a year ago. He maintained that the four administrators had a duty under state law to immediately report any security concerns, not to wait until it looked like the board might take action on June 23 against Russell.</p><p>The four, Espinosa said, used the letter “to attack me in an effort to attack Dan.”</p><p>Palm Drive Hospital, a publicly-owned, tax-supported facility, has been in turmoil for the past two weeks.</p><p>The controversy began when board members learned that administrators had signed two significant contracts without competitive bidding or board approval. The hospital’s attorney has said the contracts appear large enough to require the board to make a special finding in order to forego such bidding.</p><p>On Friday, following its third meeting behind closed doors, the board announced it put Russell on paid leave pending an investigation into “all allegations” brought forth in regard to hospital administrators and board members.</p><p>The vote reportedly was split. But the board didn’t announce the details, even though the state public meeting law specifically requires a legislative body to report not only the action but also “the vote or abstention on that action of every member present.”</p><p>Jim Beyers, the hospital’s attorney, said Monday he still was reviewing the public meetings law.</p><p>In Russell’s absence, Austin temporarily has become the hospital’s top administrator.</p><p>Asked about Espinosa’s comments, she said Monday “We feel the letter speaks for itself, and we’re looking forward to an investigation and a conclusion so that we can put these issues to rest.” The letter did not provide specific information about possible security breaches.</p><p>“We’re working very hard to keep good patient care during this time of turmoil,” Austin added. “It is a distraction but underneath the hospital is functioning very well.”</p><p>A new board meeting was announced Monday for Tuesday, but within minutes it was canceled. Smith said he hoped to scheduled the next meeting for Thursday.</p><p>Board member Frank Mayhew has asked for an item on the next meeting agenda that will provide “clarification for the public” regarding Russell’s allegation that a board member had told him two weeks ago “unequivocally that the board wanted my resignation.” </p><p>On Friday, in response to Mayhew’s question, board member Stephen Murphy said he was the official who had gone to Russell.</p><p>Mayhew said Monday he wants further explanation. “I want to know for sure and in public in order to show transparency,” he said.</p><p>Smith, meanwhile, wants the board in public to discuss the two contracts that were undertaken without competitive bidding or board approval. Mayhew is among those who have said neither process was legally required. </p><p>Invoices for one contract obtained Monday show information technology consultants billed the hospital $127,945 for their work between April 20 and June 16.</p><p>The bills sent by maxIT Healthcare of Westfield, Ind. included $99,615 for 778.5 hours of work by four consultants who came to the hospital this spring. The hospital also was billed $23,649 for airfare, lodging, meals, car rentals and taxis. Another $4,650 was for “remote support services,” typically billed at $130 an hour.</p><p>Regarding the contracts, Smith said, “Not a dime has been paid on them and, as far as I can tell today, they were entered into in violation of state law.”</p><p>“I don’t anticipate the hospital will be paying anything,” he said.</p>