Book of Jeb: At Hospital District, a Trial of Faith Between Ethics and Republican Friendships
Broward Health Commissioner Robert Bernstein has cast himself as a watchdog for waste at the county's public health-care district. But in the months since he led the charge to terminate the hospital district's two lead attorneys, questions remain about whether his motives were complicated by Republican special interests, such as a law firm that wields influence in the state capital.
The North Broward Hospital District has been rocked this summer by a series of ethics controversies. Earlier this year, an independent investigator told commissioners they needed to be more responsible in their roles as public trustees for such an enormous health-care entity. At the root of that problem, however, is the lack of ethical direction from the officer who is supposed to be a guide for commissioners, the general counsel. Since 2008, the district has had four different attorneys fill that role.
Blame for that instability belongs with the commissioners, who hire and fire the district's general counsel. It's apparent those decisions are heavily influenced by politics, both outside the district and within it.
Of course, that may seem only natural. After all, it takes a political animal to land an appointment to the hospital board in the first place. Bernstein, for instance, was a major Republican donor and activist when he was appointed to the board in 2005 by Gov. Jeb Bush.
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He and the former governor have a mutual friend, lawyer Jason Unger, whose wife, Karen Unger, had been Bush's campaign manager in 2002 and served on his staff. Jason Unger had represented George W. Bush and Dick Cheney during the 2000 fight for Florida ballots.
That same year, despite having an office in Tallahassee and world-altering legal work, Unger found time to represent Bernstein in a Broward County divorce.
The two men had met in 1996, when, according to an account Bernstein offered years later to Sun-Sentinel columnist Buddy Nevins, Unger responded to an ad that Bernstein placed for an attorney to handle his business affairs. Bernstein told the paper Unger got him involved in Republican politics and changed his life.
In June 2005, Unger was hired by Gray-Robinson, a firm with ten offices in Florida (including Fort Lauderdale) and strong ties to the state's Republican Party. Bernstein was appointed by Bush to the hospital board shortly thereafter.
This past June, Unger told me he "supported" Bernstein's appointment to the hospital board by Jeb Bush but denied that that support played a major factor. In an email yesterday, Bernstein said that former board chair Paul Sallarullo had encouraged him to apply for an appointment. "I don't remember if I used Jason Unger as a reference on my application or not," says Bernstein. "But it is certainly possible since Jason was a friend."
As noted in a post from yesterday, after arriving as commissioner, Bernstein took a leading role in removing William Scherer as the district's general counsel. That flux would prove lucrative for Gray-Robinson, which would see an uptick in legal business at the district in the years to follow. Jason Unger would be hired as a Broward Health lobbyist. And the general counsel vacancy would provide an opportunity for another Republican friend of Bernstein's.
He told me he first met attorney Laura Seidman in 2001 at a Lincoln Day dinner hosted by George Lemieux, then chairman of the Broward Republican Party, who later would become chief of staff under Charlie Crist and who's currently negotiating a gambling compact for the Seminoles.
Seidman and Bernstein encountered each other in other political functions too. As former Sun-Sentinel columnist Buddy Nevins noted in a February 2006 article, Seidman happened to have been a past president of the Republican Club in Parkland, where Bernstein lived. And the two rubbed elbows through their mutual involvement with the Broward Republican Executive Committee.
Nevins reported that in her February 15, 2006, interview with commissioners, Seidman said of health-care law: "I don't think it's a strength on my part." Considering she was applying for a job involving health-care law for one of the nation's ten largest public health-care districts, this would seem to be a problem. Still, she landed the job.
During the meeting at which Seidman was hired, Bernstein disclosed that she was a personal friend, but he added, "My guess was that most of the board members at that time knew Laura as a personal friend or acquaintance."
For her associate general counsel, Seidman selected Troy Kishbaugh -- an attorney from Gray-Robinson. (Kishbaugh did not respond to emails requesting comment for this article.)
From the perspective of taxpayers who have a financial stake in the district, the issue is not so much whether Seidman earned her job based on political connections. It's whether those connections were weighted more heavily than her legal qualifications. Theoretically, if Seidman lacked expertise in health-care law, she might be more likely to retain outside firms to perform the district's legal work, running up expenses for the district that a more qualified candidate could have curbed.
Public records provided by the district show that in Scherer's last year, 2005, Gray-Robinson billed the district for about $225,000 in legal work. The following year, in which Seidman and Kishbaugh took over, those bills increased to $293,000. Then in 2007 -- the only full calendar year that the two ruled the district's legal department -- Gray-Robinson billed the district $784,000. That number dipped to $618,000 in 2008, the year that Seidman resigned, leaving Kishbaugh as acting general counsel, till he was replaced by Goldstone in November. (Kishbaugh was hired back by Gray-Robinson and remains there today.)
Board chair Mike Fernandez and Commissioner Rebecca Stoll had raised questions about Seidman's professional competence, but her resignation in April 2008 may have had more to do with personal health concerns.
Seidman told me she was not free to discuss issues relating to her employment at the district. But judging by the memo that has surfaced in the recent ethics investigation, Seidman believed her treatment -- by Stoll, at least -- was driven by internal politics rather than performance.
As for Gray-Robinson, this would not be the first time it attracted questions about whether it capitalized on political connections for business advantage. In 2006, a state senator asked for an investigation of a public expressway board in Tampa Bay that contained a majority of Bush appointees and that chose to ignore the recommendation of its selection committee so it could pick Gray-Robinson as its outside counsel.
Following Seidman's resignation in April 2008, former Gray-Robinson attorney Kishbaugh had Bernstein's backing to be hired on a permanent basis, but by fall 2008, the majority of the seven-member board favored a national search. It contracted a search firm that named an attorney from Tennessee, Marc Goldstone, as the best candidate. Shortly after starting the job in December 2008, Goldstone convinced Joe Truhe, the general counsel for a hospital district in Southern California, to join him as associate general counsel.
Among the assignments for these two political outsiders was to scale back the public health-care giant's legal bills. Together, Goldstone and Truhe set out to perform more of the district's legal work in-house rather than assigning it to outside firms like Gray-Robinson.
"It was a key part of our efforts to greatly reduce the expenses of the district, by in-sourcing legal work to lawyers and rein in the out-of-control legal expenses to outside firms," explains Truhe, who specifically recalls Gray-Robinson handling work that he or Goldstone could take. By doing so, the two attorneys could save the district a few hundred dollars per hour that it was paying Gray-Robinson.
But sloppy record-keeping by their predecessors made that difficult. Says Truhe: "Marc discovered that we really didn't have good enough information left behind by Troy and Laura as to what firms had been given what projects, short- or long-term, and of what scope."
Around the same time the attorneys embarked on that task, Bernstein was pressing for an individual meeting with Kishbaugh -- an "exit interview," he called it, based on internal documents provided anonymously to Juice. Among those documents is a January 5 email from Bernstein that outlines their discussion -- beginning with any "issues" that "prevented you from completely, thoroughly, ethically, and/or professionally carrying out your responsibilities."
It was, to Goldstone anyway, a peculiar request. Internal documents show that he hesitated to give permission for the meeting as he sought the opinion of an outside lawyer, who ruled that the pow-wow was improper based on the district charter's directive that commissioners act as a collegial body, not individually. A meeting between Kishbaugh and Bernstein that dealt with district business, said the attorney, would be subject to the Sunshine Law and should be conducted in public.
Bernstein's interest in a one-on-one exchange with Kishbaugh to discuss ethical issues, among other subjects, seems prescient, considering the ethical bombshell that Kishbaugh would drop later in that same month of January 2009. Namely, his belief that Commissioner Joseph Cobo -- who had clashed in the past with Bernstein -- had violated ethics provisions of the district charter.
Ultimately, Kishbaugh described his misgivings about Cobo to Martin Goldberg, the former federal prosecutor who had been retained to investigate a previous allegation of ethical impropriety by Cobo. The new allegations by Kishbaugh against Cobo then became the basis for a new investigation by Goldberg, who in May produced a report that cited several instances of potential ethics violations by Cobo.
Before that case was intercepted by the Broward State Attorney's Office for criminal investigation, the board was to rely upon the advice of its general counsel -- then Marc Goldstone -- in crafting its response to Goldberg's findings. That is, whether to punish him and, if so, how severely.
Records made public from Goldberg's investigation make it clear that board chair Fernandez was furious about how much latitude Goldberg was taking in his inquiry, so much so that the chairman demanded Goldberg cut the investigation short. Since the general counsel is charged with monitoring Goldberg, it stands to reason that Fernandez's frustrations could have extended to Goldstone. (Fernandez and other sources at Broward Health are not free to comment publicly on these matters, due to the pending criminal case.)
The same anonymous source who told Juice of Goldstone's concerns about backlash from Bernstein over the cuts to Gray-Robinson says that Goldstone asked for the backing of Broward Health CEO Frank Nask and Fernandez, lest he be a victim of retaliation by Bernstein. But if in fact they protected him in the past, they certainly weren't willing to do so in mid-May when Bernstein first alerted Nask and Fernandez to his concerns about Goldstone's state licensure.
As to that issue, it's evident that Goldstone was initally mistaken as to the exact route he would take to become licensed to practice law in Florida. And he certainly could have been more open with the district about taking a different path than the one he'd mentioned during his interview. But it's also evident that, practically speaking, the one path toward licensure took about the same length of time as the other, and that both required that he refrain from activity that constituted the practice of law until he was admitted to the Florida Bar. But since his was mostly a management position, and since there were other lawyers on staff who were licensed in Florida and could legally file documents with the court, these were mere inconveniences -- the kind that Broward Health would have dealt with for any attorney that came from out of state.
At the very least, the matter is much more complex than it was treated at the emergency board meeting May 14. And the high-minded principles of full disclosure cited by board members at that meeting appear to be at odds with the action they took next, hiring attorney Sam Goren as interim general counsel.
In December, during an interview for Goldberg's investigation, Goren had allegedly disclosed conflicts of interest in dealings with the district. Which begs the question of why he didn't offer those disclosures before taking the job in mid-May. That ethical issue that seems every bit as serious as the one that inspired the emergency meeting to fire Goldstone. Commissioners may not have known on May 14 what Goren had told Goldberg, but they should definitely be aware of the issue now -- the story broke on Juice several weeks ago.
For a public health-care district battered by scandal in recent months, as well as in past years, it seems that every major move toward more ethical governance is later revealed as window dressing. So if commissioners suddenly realized after 18 years that Scherer was wasting valuable resources as general counsel, then Seidman and Kishbaugh were supposed to be trimming expenses -- except that then Goldstone and Truhe found that general counsel's office, too, was lax in managing its legal budget. In similar fashion, the ethics-based rationale for firing Goldstone and Truhe appears after closer inspection to have plenty of cracks.
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