Defying Ethics Code, Broward Health Commissioner's Firm Does Big Business With Hospital District

The ultrasound manufacturing company where Mike Fernandez works as a general manager has been selling products to Broward Health during the same period that Fernandez has occupied a powerful position as a commissioner of that hospital district. Documents obtained by Juice suggest that Fernandez has been violating state ethics law -- the very same allegation that is the basis for a pending criminal corruption investigation against his commission colleague, Joseph Cobo.

Both were appointed to the commission by Gov. Charlie Crist, who was a member of the same Florida State fraternity as Fernandez. A rival on the board, Commissioner Robert Bernstein, is asking that the board file a complaint about Fernandez's conduct with the Florida Commission on Ethics. In an interview this morning, Bernstein called Fernandez's behavior "insulting." And he blamed Broward Health CEO Frank Nask for failing to inform other commissioners about Fernandez's conflicts of interest.

For weeks, Bernstein has been looking forward to the January 27 board meeting, when he hoped to have Nask fired. Now he has more ammunition. After the jump, a closer look at Fernandez's seeming ethical conflicts.

Fernandez manages Latin America sales for SonoSite, a manufacturer of ultrasounds that is based near Seattle.

Documents show that SonoSite has sold Broward Health $170,000 worth of equipment since Fernandez joined the board in September 2007. Florida Statutes dictate that a public officer not have a financial interest in a company that does business with that public entity -- and if he does, then at a minimum he must disclose that potential conflict of interest. Fernandez has been open about his employment with SonoSite, but he has made no official disclosure during his time on the board that that would pose an ethics problem.

As you can see here, on page 23 of the district's procurement code, the district is required to put out a public bid for all purchases in excess of $50,000. Internal records obtained by Juice show that on January 24, 2008, Broward Health purchased a SonoSite Micromaxx ultrasound for $49,999, avoiding a public bid by a single dollar. [See update below.]

Page 22 of the procurement code states that "departments may not break up requests (for purchase orders) with the intent to avoid required approvals."

UPDATE: Broward Health spokesperson Sara Howley says that SonoSite contracts with the district as a "group purchasing organization," meaning that it qualifies for an exemption from the bid process, whether it was over $50,000 or not.

Fernandez, who was not immediately available for comment, anticipated Bernstein's move. Email correspondence to Broward Health Acting General Counsel Sam Goren shows that Fernandez requested his own item on the agenda relating to his role at SonoSite. Last night, Fernandez wrote to Goren:

I believe it has come up that my employment with SonoSite Inc., may be an ethics violation. I have always been up front about my employment with SonoSite and have always worked for the International Division of SonoSite the entire time I have been a Commissioner at Broward Health. In this position, I have no responsibility for any business in the US or specifically Broward County.

However, in an attempt to make sure we are doing the right thing, I believe we should get a ruling by the Ethics Commission regarding my specific situation to make sure we are all behaving correctly. Can you place this as an agenda item as I would like to have the board instruct you to look into this as soon as possible.

For his part, Bernstein objects to Fernandez's personal pronoun usage -- the "we," says Bernstein, should be "I."

It's the second time that Fernandez has had a major, ethics-related rupture with Bernstein. The first one came after it was revealed that Fernandez acted unilaterally to shut down the internal investigation of Commissioner Cobo, when the board's motion stipulated that such actions can take place only by board action. CEO Nask bore witness to that event but failed to inform Bernstein and other board members. That was part of Bernstein's case to terminate Nask.

"The fact that both issues are related to Commissioner Fernandez just tells me that Frank [Nask] and Mike [Fernandez] have been collaborating in keeping information from the rest of the board," says Bernstein.

Fernandez isn't the only commissioner to have a day job that poses a potential conflict. Bernstein himself was running outpatient clinics when he was appointed to the board in 2005, but he says he was circumspect about avoiding business relationships with Broward Health. He assumes the same of his fellow commissioners -- until now, that is.

If Fernandez's company can do business with Broward Health, Bernstein asks, then "Why can't [Commissioner] Dan Gordon sell insurance to the district? I was in the health-care business -- why couldn't I do business with the district?"

Bernstein's been out of the outpatient clinic business for more than two years. He jokes that with the recent ethical faux pas he's discovered at Broward Health, that commissioner-ship has become his full-time job. "As a fellow commissioner, it's insulting," he says, of Fernandez's failure to disclose his company's business dealings with the district. "It calls into question the ethics of the entire board."

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