All the Governor's Men

Imperato, who received the details of the Kanell contract without the names of the doctors mentioned, says a case might be made that the terms don't constitute fair market value and are therefore unlawful. He added that a prosecutor could also argue that the contract is so flawed that there is nothing "bona fide" about the relationship between the district and the practice.

At the heart of any case would be the pro forma. Scherer insists through his public relations firm that he never had any involvement with the Kanell deal from the beginning. He claims to have recused himself because, as a patient of Caldwell's, he had a conflict of interest. Other officials say Scherer, because of his conflict of interest with Blosser, tries to stay away from all deals involving the lobbyist.

But the facts show that Scherer was, in fact, deeply involved in the Kanell hire.

When the Legal Review Committee passed the Kanell contract in April, Scherer was there to explain it. Just days later, the district board passed the deal without any discussion or debate.

Then, in September, Reilly complained about the contract at a board meeting. "I think the biggest financial fallout that the district fails to consider is the impact of alienating physicians such as myself, who are disgusted with the inveiglement of the public health care system," Reilly told the board before criticizing the pro forma.

From his seat on the dais, Scherer addressed Reilly. "We are doing due diligence, and the information you are giving us is helpful," Scherer said. "We are listening. If you have something that shows that we are operating on incorrect assumptions, I'll look into it."

Look into it he apparently did. According to district CFO Mark Knight, it was Scherer who determined that the original pro forma was, in fact, improper. A new pro forma was drawn up last November -- and nearly $700,000 disappeared from Kanell's projected practice revenues.

The original pro forma indicated that the district would lose $23,000 during the first year of the contract. The second pro forma lists an astounding $900,000 loss to the district -- and taxpayers -- on the deal. Call it voodoo orthonomics.

Though district spokeswoman Sara Howley asserts that the old pro forma is "null and void," the new one never went back before the board or any committees, leaving commissioners clueless about a $900,000 bath. The new pro forma also still includes possibly illegal extra rehab and ancillary revenues.

Most suspicious is Scherer's insistence that he had nothing to do with the Kanell contract. The general counsel contends that Bill Eck, a lawyer with the firm of Greenberg Traurig, handled the entire contract for the district. But Eck says he wasn't hired until late 2003 to look into it -- after it had already passed the board. He also asserts the high salaries are based on the "marketing power" of the Marlins and the Dolphins. That explanation, however, isn't reflected in any significant way on either of the pro formas. "In our view, there is no legal problem with that," Eck says. "It's not paying the doctors for MRI procedures. It's a marketing issue."

Even NBHD Commissioner Paul Sallarulo, who was present during the April Legal Review Committee meeting, contradicts Scherer's claim that he was uninvolved: "The general counsel [Scherer] worked a lot on that contract."

Reilly believes there's a reason Scherer is attempting to shield himself from the Kanell agreement. "The pro forma is an indictment -- it shows how the district uses referrals to work up these contracts," Reilly says. "And Scherer is deadly afraid of that."

The doctor says he refuses to take patients to NBHD hospitals, which he claims amounts to a loss of $3 million in revenues for the district. Another prominent orthopedic surgeon, who asked not to be identified, concurred with Reilly and added that the district's unfair contracts had cost the public hospital system tens of millions of dollars in revenues.

"The commissioners are all basically stooges for the Blossers and the Scherers," the surgeon said. "Blosser gets a success fee to deliver the contract. Guys like me and a half dozen guys around town are pissed off about [unfair district contracts], so I go out of my away to direct knee scopes away from the district."

Like the Kanell contract, the Lwin deal has cost Broward General millions in business, contends Dr. Kevin Shrock, one of only a few orthopedic surgeons active at the hospital who are not connected to the ER contract.