Palm Drive exec placed on leave for hiring lawyer

<p>A key administrator at Sebastopol’s Palm Drive Hospital was placed on leave last week after she used public funds to hire an attorney for advice regarding the tumultuous dispute between some hospital board members and managers.</p><p>Lori Austin, Palm Drive’s second-in-command, was the top acting manager when the publicly-owned hospital on July 2 issued a $5,000 check to a law firm that had agreed to become a special counsel to Palm Drive’s senior administrators.</p><p>The hospital, which has received taxpayer support for nine years, has been shaken by turmoil this summer. Three weeks ago the board on a 3-2 vote placed Palm Drive CEO James Russell on paid leave, reportedly because of significant contracts that were undertaken without competitive bidding or board approval.</p><p>Earlier, Russell, Austin and two other managers in a June 22 letter alleged that certain board members violated the state public meetings law. They raised other concerns about security of patient records and confidential e-mails.</p><p>Austin, the hospital’s chief operating officer, was placed on paid leave July 6, but at the time officials gave no reason for her leave.</p><p>On Monday the hospital responded to a request by The Press Democrat for public records. Released was a copy of the contract between Austin and the San Francisco firm of Kessenick, Phillips & Gamma. The five-page contract said the firm would advise Austin on an “internal dispute” between “administration and certain members of the board of directors, for which you and your senior administration are in need of legal counsel, separate from and independent of district legal counsel.”</p><p>Attached was a copy of a check for $5,000 from the hospital’s general account.</p><p>The contract “was a reason” Austin was placed on leave, said James Beyers, the hospital district’s attorney.</p><p>Beyers said Austin as the interim top executive at times had the authority to retain legal advice, but “it’s not appropriate for her to be hiring an attorney to look into charges that she has made personally against the board of directors.” He cited the allegations made in the June 22 letter.</p><p>Austin’s private attorney, Daniel A. Street of Sacramento, on Monday defended his client’s action.</p><p>Austin didn’t hire the firm to look into issues raised in the June 22 letter, Street said, but to give “advice for the proper and effective operation of the hospital and administration in light of ongoing disputes.”</p><p>Street suggested Austin needed such advice because she believed “there may have been a conflict of interest with Jim Beyers because of his past and present relationship with Dan Smith,” the president of the hospital board.</p><p>Beyers, the district’s attorney for nine years, acknowledged in the past he had served as Smith’s personal attorney, but said he hasn’t done so for at least five years. He denied there was a conflict of interest and said at the hospital “people have made a lot of assumptions without really looking at what the facts are. That’s a big reason why there’s so much turmoil over there.”</p><p>In the interim Smith, a key Palm Drive benefactor, is temporarily filling in as the hospital’s top manager. Under the bylaws, he said, as board president he already serves as the hospital district chief administrative officer.</p><p>The board may meet Thursday in a closed session in regard to ongoing investigations linked to the conflict. Smith said the board has a regular public meeting scheduled for Monday</p>