Palm Drive investigator cites illegal board meeting
Published: Tuesday, July 21, 2009 at 9:36 a.m.
Last Modified: Tuesday, July 21, 2009 at 9:36 a.m.
An investigative report gives a seldom-seen and at-times unflattering look at the interactions of staff and elected officials at Sebastopol’s Palm Drive Hospital.
The report, made by an attorney hired by the district, details how two board members agreed privately that one of them should go to the chief executive and give him the chance to resign.
The hospital’s second-in-command suspected that the information technology manager had been reading her company e-mails, a charge vehemently denied at Monday’s hospital board meeting.
And last month three board members violated the state meeting law when they couldn’t agree on which one of them should leave a meeting with the CEO on the hospital’s uncertain financial condition.
The report concludes that “a serious breakdown in trust” exists between Palm Drive administration and some board members, as well as “sharp divisions” among the five board members.
The report was released Monday, the day the board voted 3-2 to terminate CEO James Russell’s contract and to give him a severance package that will include $131,000 in salary.
Lori Austin, the hospital’s chief operating officer and second in command, will be allowed to return from a paid leave once an interim chief executive is hired, possibly within the next week.
Rumors of Russell’s possible termination last month shook the publicly supported hospital, even as officials are trying to sell bonds, pay off creditors and emerge from bankruptcy protection.
The investigative report, prepared by attorney Gregory McClune, was prompted by formal allegations made by Russell, Austin and two other administrators in a June 22 letter, as well as by remarks Russell made the next day at a board meeting.
The board members and an audience of more than 75 people spent about an hour Monday listening to and commenting on his report.
Giving highlights from a 22-page report, McClune concluded that a series of written allegations, while in some cases based on reasonable assumptions, were not supported by the available facts. Specifically, he found that the board members didn’t break the state public meetings law when board member Stephen Murphy went privately to Russell to seek his resignation.
Similarly, he found no violations as alleged of federal health care privacy regulations, nor was there evidence of a “cover-up” by board members in regard to alleged security violations by information technology manager Bruce Espinosa.
Espinosa was raised as a foster child by Smith, and he said Monday that he still considers Smith his father. After the report, Espinosa denied the allegations and sharply criticized the administrators who had made them.
McClune went into considerable detail as to whether three of the elected officials had agreed to have board member Stephen Murphy go to Russell on June 16 and seek his resignation.
The attorney reported that board President Dan Smith recalled telling Murphy in a June 15 conversation that “someone needs to go to Jim Russell and give him an opportunity to resign.”
And board member Linda Johnson recalled that on June 14 Murphy told her that he was thinking of talking with Russell. But, McClune wrote, “she is quite clear that there was no agreement between the two of them that Murphy should request Russell’s resignation.”
The other two board members, Frank Mayhew and Nancy Dobbs, denied ever talking with any other members before June 16 about seeking Russell’s resignation. The Brown Act, the state meeting law, prohibits a majority of elected body outside of a properly noticed meeting from developing a consensus on any action to be taken.
McClune said he did uncover a Brown Act violation, one not included in the allegations. He said that violation occurred on June 10 when members Smith, Murphy and Mayhew found themselves together in Russell’s office as they sought to learn more about the hospital’s uncertain financial status. Smith reportedly noted that it would be a violation for all three to remain in the office, but each man refused to be the one to leave.
“In similar situations in the future, the ‘meeting’ should end immediately by the group disassembling forthwith,” McClune wrote, “or at least one member must leave to reduce the number below a majority.”
However, he suggested the violation was minor and would not lead to criminal or civil action.
McClune concluded that many, if not all, the allegations would not have been made “had the two groups, that is, the administration and the board, enjoyed the type of healthy and open dialogue expected of an elected board and its appointed officers.”
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