Tri-City CEO Art Gonzalez gets a job in Minneapolis after $1 million payout from Tri-City Hospital

UPDATE: ART GONZALEZ WILL MAKE $490,000 IN HIS NEW JOB

See all posts about Tri-City Hospital

Tri-City ex-CEO lands job with Minneapolis health system
By Keith Darcé, Union-Tribune Staff Writer
June 10, 2009

...Gonzalez's annual base salary with the Oceanside medical center was $483,000. He will earn $490,000 a year in his new job, said Hennepin spokesman Tom Hayes.

Tri-City delivered large surpluses toward the end of Gonzalez's 10-year tenure there.

But critics blamed him for Tri-City's three failed bond initiatives, bonuses for executives that some considered excessive and a debt-refinancing program that became costly after the collapse of auction-rate securities markets last year. Tri-City faces an $8 million loss in the current fiscal year.


ORIGINAL POST:

Former CEO Art Gonzalez' severance deal with Tri-City Healthcare was finalized less than two months ago (see second story in this post). Today Hennepin County Medical Center announced that Gonzalez has been hired in Minnesota.

The forensic audit that was conducted while Art Gonzalez was on administrative leave has been kept secret, but I suspect that similar shenanigans take place at most hospitals, and the folks in Minnesota apparently agree with me.

All posts about our Tri-City Healthcare scandal. are here.


HCMC names new CEO
by Elizabeth Baier
Minnesota Public Radio
June 9, 2009

St. Paul, Minn. — The Hennepin County Medical Center has named a health care administrator from California, Arthur Gonzalez, its new chief executive officer.

Gonzalez will lead the Hennepin Healthcare System, which operates the Minneapolis trauma center and public hospital and clinic system...

Gonzalez has a doctor of public health degree from the University of Texas, and a master's degree in health care administration from Trinity University.

Most recently, he was president and CEO of Tri-City Healthcare District, a public health care system in Oceanside, Calif., where he spent 10 years...

Gonzalez has also served as the chief executive officer of Schumpert Health System in Shreveport, La., St. Joseph Hospital in Fort Worth, Texas; and Kino Community Hospital in Tucson, Ariz.

Gonzalez comes to HCMC at a time of budget uncertainty...Officials said cuts in state funding since 2008, and a drop in inpatient volume this year have resulted in a loss of approximately $10 million on operations.






Tri-City's severance deal tops $1 million
Former CEO agrees to drop legal action
By Lola Sherman
Union-Tribune Staff Writer
May 5, 2009

Online: To read the settlement agreement, go to uniontrib.com/more/gonzalez

NORTH COUNTY — The Tri-City Healthcare District board and former chief executive Arthur Gonzalez have agreed to a severance deal worth more than $1 million in cash and benefits....

Gonzalez was Tri-City's chief for almost a decade. He was placed on paid leave in December.

He could not be reached to comment yesterday. His attorney, Leslie Devaney, said Gonzalez was pleased with the deal...


The deal also indemnifies Gonzalez from any litigation that might name him during the period he was a district employee.

The agreement ends Gonzalez's turbulent tenure at Tri-City. When he was hired in December 1998, the district was in financial trouble...

In December, a newly-elected board majority put Gonzalez and eight other administrators on paid leave and launched a “forensic audit,” the results of which have not been released...

Tri-City's chief of medical staff, Dr. Richard Burruss... has warned that recent controversy harms the hospital's reputation.

“The medical staff feels strongly that the community deserves to know the final findings of the audit so the confidence of the community in the hospital can be restored,” he said.

Devaney yesterday would not discuss the seven other administrators she represents. A ninth district employee placed on leave has not been identified.

Tri-City Medical Center was in bad shape BEFORE it lost the bond election

Tri-City Hospital's old regime was depending on winning the bond issue last November, but voters didn't consider the hospital's leadership to be reliable, particularly when the board gave a $90,000 bonus to CEO Art Gonzalez, who was already making $483,000 per year.

Also, Dave Coles was set to be on bond oversight committee for Tri-City Hospital. Coles is the former Superintendent of Vista Unified School District (VUSD) who took credit for school bond Prop O, then made a mess of it. Money was unaccounted for, there were cost overruns, and money was spent on trailers that now have mold.


Other problems were:
(1) nearby hospitals are attracting Tri-City's former patients;
(2) the older part of the hospital needs retrofitting;
(3) Tri-City is one of two hospitals in the county with higher-than-average mortality rates.

But the San Diego Union Tribune is still trying to blame the new board for the sins of the old board. Here's a link to Keith Darce's shameless article (is he campaigning to become the new Don Sevrens?), which is well-described by one commenter:

"I live in Coronado. I've never been to Tri-City. I know that L.T. did some T.V. work for them. That's it. Don't know any of the parties.

"Here's my comment: this article isn't journalism.

"I'm a lawyer. I know "advocacy". And this is an advocacy piece. It's no different than an "opening statement" a lawyer makes at the beginning of a trial. You line up facts you like, quote your experts and mix the two in a way that leads your listener to form a certain conclusion or develop a certain opinion.

"I'm certain of one thing: if the board hired someone to write a piece from their perspective, using their facts, and quotes from their experts, and if the UT published it, we would all form a much different impression and opinion about this situation.

"To the UT: THE REASON I DON'T SUBSCRIBE TO SO CALLED "INDEPENDENT JOURNALISM" IS BECAUSE OF STUFF LIKE THIS WHICH IS UNFORTUNATELY ALL TO COMMON."

Here are my other posts about Tri-City Medical Center.

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Tri-City district wants suit postponed

$583,000 in doctor's debt at core of case

By Michael Burge
San Diego Union-Tribune
January 23, 2009

The Tri-City Healthcare District has asked a San Diego Superior Court judge to delay a decision on a lawsuit that the district filed against a surgeon it recruited who owes them money, but who claims he was recruited on false pretenses.

Tri-City sought out Dr. Thomas d'Amato in 2002, promising there were enough patients in the public hospital district, which covers most of Oceanside, Vista and Carlsbad, to support a third cardiothoracic surgeon.  However, two years after he signed the agreement and joined the practice of another surgeon, d'Amato took a leave of absence, saying there weren't enough patients and the recruitment violated federal law. ...D'Amato, a former Navy surgeon, has returned to his home state of Pennsylvania and is practicing on a contract basis.

... the district's new law firm filed a letter in Superior Court saying, “We no longer seek a default judgment against defendant.”  The letter from Burke, Williams & Sorensen says only that the district is “pursuing a resolution with the defendant.”

[Maura Larkins' comment: As well they should.]

HOSPITALS AND BRIBES

...One of the issues in the d'Amato lawsuit was the surgeon's contention that the relocation agreement violated a federal law that prohibits one doctor from benefiting directly from the recruitment of another physician.

The law was pivotal in 2002 when the the U.S. Attorney's Office in San Diego prosecuted Tenet Healthcare Corp. and Alvarado Hospital, contending the hospital and its chief executive signed relocation agreements with doctors that violated a federal anti-kickback statute. 

The law makes it illegal for a hospital to pay any bribe, kickback or compensation to established physicians through contracts with other doctors, with the aim of attracting patients to the hospital.  Two trials on the charges at Alvarado, which involved more than 100 such agreements, ended in hung juries. Tenet agreed in May 2006 to pay $21 million and sell the San Diego hospital to settle the outstanding criminal and civil charges.

According to the agreement between d'Amato and Tri-City, the district promised to lend d'Amato as much as $750,000 over 24 months to help him start a medical practice.  The agreement called for d'Amato to work for Dr. Theodore Folkerth, whom d'Amato paid $410,526 between 2002 and 2004, court documents show, plus $12,000 in monthly expenses.  In July 2005, d'Amato gave up his practice, leaving $583,333 of the Tri-City loan unpaid. In May 2007, the district sued him to get it. 

The court rejected d'Amato's legal argument on procedural grounds, ruling he couldn't represent his corporation and needed an attorney. D'Amato said he couldn't afford one.

...[The] board of directors placed eight top administrators, including Chief Executive Arthur Gonzalez, on paid leave Dec. 18...Board members Larry Schallock and Ron Mitchell were absent from the Dec. 18 meeting, and Dr. Madeline Rodriguez arrived late, after delivering a baby.

A brick to Leslie Devaney for demanding openness at Tri-City while she works to cover up events at Tri-City Hospital and CVESD

I'm concerned that attorney Leslie Devaney's demands for openness at Tri-City Healthcare are actually an attempt to STOP OR SABOTAGE THE FORENSIC AUDIT. Which does the public need more: an effective audit of financial shenanigans, or a long fight at a board meeting at which the final outcome was predetermined since the majority had all the votes they needed no matter who showed up? I think that the shortness of the meeting was merely an effort to protect the psyches of the board members, who apparently don't have much of a taste for being yelled at. I think they need to toughen up and summon up some courage. They're way too afraid of Leslie Devaney and Ray Artiano and the bigshots who hired them. The board needs to do some homework, to make sure it really understands the situation, and then stand up and go to bat for what it believes in. Too many board members across the spectrum of public entities simply do what their lawyers tell them to do.

This blog has awarded a big brick to attorney Leslie Devaney for hypocrisy and secrecy. Since 2001 Leslie Devaney's law firm Stutz Artiano Shinoff & Holtz has been paid $100,000s of tax dollars by Chula Vista Elementary School District to cover up crimes and other violations of law.

Yet Devaney has the temerity to denounce the new Tri-City Healthcare board majority for lack of openness. Why is she doing this? Apparently to stop the board's investigation into possible criminal activity by her clients Art Gonzalez and seven of his fellow administrators.

But it gets worse. At the same time that Devaney is denouncing board members for putting administrators on leave during a forensic audit, she and her partners at Stutz law firm are suing this blogger (Maura Larkins) for defamation, and REFUSING TO PRODUCE DOCUMENTS RELATED TO THE CRIMINAL ACTIONS AT CVESD.

How do I know these documents exist? Because I have over half the pages from the 87-page set of Bate-stamped documents--the ones that were cherry-picked by CVESD because they were less incriminating. The documents were collected by Daniel Shinoff at Chula Vista Elementary School District during the fall of 2001, and Bate-stamped with the number “1” (not “01” or “001”) through 87, inclusive.

In order to make it impossible for Stutz law firm to claim that they couldn't identify the documents, I sent them copies of many of the documents from the set. Still, Stutz says it can't find the documents, and blames a paralegal.

Here's where the story gets humorous: Stutz is suing me for saying that "Daniel Shinoff keeps documents locked up in his office."

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And here's a brick to the San Diego Union Tribune for hypocrisy and secrecy on behalf of Stutz law firm, for publishing tirades against CVESD for transferring the "Castle Park Five" while at the same time keeping secret the $100,000s of tax dollars the district had paid to defend many of those same teachers.

Tri-City Healthcare urged to "restore control over the administration and attorneys"

San Diego Union Tribune
Calling for award for chatty Kathleen
By Logan Jenkins
January 11, 2009

...Another bouquet – the Clearing the Air award – to Ron Cozad, the Carlsbad attorney representing Dr. John Young, a cardiothoracic surgeon whose bitter dispute with Tri-City administrators and fellow doctors appears to be high on the list of alleged “crimes” committed by the administration in exile.

Cozad's Dec. 11 letter to the board of directors has been cited as a possible road map for the board. But as is clear from Sterling's Dec. 4 voice mail, she already was harboring plans for dramatic changes that would lead to the resignation of loyalist board members.

Still, Cozad's letter, which he furnished to reporters, meshes well with the course the board majority would adopt in private session.

After describing a conspiracy of deception and retaliation against Young in the Dec. 11 letter, Cozad concludes: “Dr. Young respectfully urges this new Board to restore control over the administration and attorneys by exercising its absolute right to remove counsel and to fulfill its obligations to determine through an independent and unbiased forensic audit, whether your administrators complied with all relevant State and Federal laws . . . .”

What is going on with Leslie Devaney, her pal Jerry, and the insurance companies?

I can understand the thinking behind Leslie Devaney's January 5, 2009 effort to pack the Tri-City Hospital board's meeting room with opponents of the new board majority, and I can understand that such a crowd would be noisy and unruly. I must congratulate Leslie Devaney and Ray Artiano for putting on some good theater (although the threat of jail time for board members for Brown Act violations was a bit over the top).

Unfortunately, Leslie Devaney ended this week on a much lower note.

What was she thinking when she presented a couple of phone message recordings to District Attorney Bonnie Dumanis?

Tri-City board member Kathleen Sterling apparently left the messages on the phone answering machine of Jerry Salyer, her political supporter. Sterling said that a board seat might open up, and that she would be willing to help Salyer if he were interested. This wasn't a crime, it was democracy, as noted by former district attorney Paul Pfingst in a quote to the San Diego Union-Tribune.

But Ms. Devaney knows that. I'd advise her to stop directing threats of criminal prosecution to the Tri-City board.

It seems Ms. Devaney was hoping that Sterling's use of the word "personnel" in her phone message would prove that the board's actions on December 18, 2008, in which CEO Art Gonzalez and eight administrators were placed on administrative leave so that a forensic audit could be conducted, were not efforts to clear up financial questions, but efforts to discipline employees.

It does NOT appear that the board evaluated the performance of employees on December 18, but rather decided to protect the integrity of the audit by limiting access to files.

Clearly, Sterling was not trying to give Jerry a precise description of what was planned for the board meeting, which she certainly could have done if she'd wanted to. She was not speaking in legalese, she was speaking in the inexact language of everyday speech.

Devaney ranted on January 5 about how boards should be open and transparent, but at the same time she is suing me for defamation to stop all discussion of Stutz law firm on my website.

Devaney also seems to be using her insurance company connections to good effect in this case. Some people think that she and/or her partner Ray Artiano got Beta Healthcare Group to threaten to cancel the hospital's liability insurance. This threat is reminiscent of the threats to take away MiraCosta College's accreditation if reform trustees kept demanding accountability. In both instances, board trustees who wanted changes were opposed by Stutz law firm.

The relationships between public entities and insurance companies are a matter that needs to be investigated. This should be part of the forensic audit at Tri-City, and this possibility of finding kickbacks might help to explain why insurance company lawyers (such as Stutz law firm) are so worked up about this audit. The San Diego Union Tribune recently reported that federal authorities are investigating insurance kickbacks in relationship to San Diego public entities.

I don't know if it's significant, but Leslie Devaney's pal Jerry, the person who gave her the phone recording of Kathleen Sterling, apparently owns an insurance business.

Ms. Devaney might have overreached in her effort to saddle Kathleen Sterling with criminal guilt. People might not continue to focus their attention on Sterling, but rather look back at where the accusations are coming from. Why is someone who is a political supporter of Kathleen Sterling playing footsie with Leslie Devaney? What's really going on here?

SDUT's Don Sevrens says he will correct his erroneous editorial about Tri-City Hospital, but what about his CVESD coverup?

It's Leslie Devaney, not Dan Shinoff, this time, but San Diego Union Tribune editor Don Sevrens has once again gone out on a limb for his pals at Stutz law firm.

[Note: Don Sevrens does not make these decisions alone. He got full approval from editor Karin Winner for the cover-up of Stutz law firm's involvement in the Castle Park fiasco discussed below, and I'm sure Winner approved of all the protection the paper has given Stutz law firm over the years.]

Sevrens told a caller today that he will publish corrections to his December 7, 2008 editorial about Monday's Tri-City Healthcare board meeting. Apparently quite a few people called to complain about inaccuracies in his writing.

Here is my response regarding the inaccuracies.

Currently Sevrens is supporting Leslie Devaney, attorney for Tri-City CEO Art Gonzalez. She's the lawyer who helped Laurie Madigan fleece the City of Chula Vista.

But Sevrens and the SDUT seem more strongly connected to Devaney's partner, Dan Shinoff. The San Diego Union-Tribune has never told the full truth about one of Mr. Sevrens' favorite stories, the "Castle Park Five." Mr. Sevrens championed the teachers in story after story. Many letters of support were printed. But Mr. Sevrens never mentioned that the district was paying $100,000s to cover up illegal actions by teachers, with most of that money going to Daniel Shinoff. The SDUT supported the school board candidacy of Felicia Starr, a parent who was deeply involved with the teachers who had initiated illegal actions at the school. Of course, this may have been designed to split the anti-incumbent vote and ensure the election of board member Pamela Smith, who was authorizing the expenditure of taxpayer dollars on the cover-up.

The SDUT and Sevrens got help in the coverup from Linda Rosas Townson, publisher of the Chula Vista Star-News. Townson published the rants of a couple of former PTA presidents from Castle Park School, including Kim Simmons, who was later arrested for embezzling $20,000 from the PTA. The Star-News didn't bother to present the true story, though it had possessed documentation of wrongdoing at the school long before anyone decided to transfer the "Castle Park Five."

Both Sevrens and Star-News reporter Kelley Dupuis pretended that Castle Park teachers were perfectly ordinary teachers and that nothing out of the usual had been going on in the teachers lounge.

Leslie Devaney says Tri-City board should have given employees 24 hrs notice of meeting

See all Tri-City Hospital posts.
See all Leslie Devaney posts.

Stutz law firm attorney Leslie Devaney says the law requires that an employee be told a day ahead of time if his/her employment will be discussed at a board meeting.


Tri-City's new lawyer, Julie Biggs, said that employees must be given notice only if disciplinary action is being discussed. She said that the action was not disciplinary.

I think it's also important to note that the board wanted to do a forensic audit. The worry is that a whole lot of documents might have been removed from the hospital during the 24 hours after giving notice to Tri-City top dogs.

Sorry, Ms. Devaney. I don't think the board members you railed against are going to jail for failing to give notice ahead of a forensic audit.

North County Times
Lawyer for executives said they should have been given notice of Dec. 18 action
By PAUL SISSON
January 6, 2009

"If you don’t give 24 hours' notice, then it’s null and void and against the law," Devaney said at the meeting.

Julie Biggs, the board’s recently-appointed attorney, said Tuesday that she disagreed and has not advised the board to reinstate the executives or issue a public apology, as Devaney demanded Monday night.

Biggs said the decision to put administrators on leave came during a discussion of potential litigation in closed session. She said the board would only have to give prior notice and list allegations if it were taking a disciplinary action against the employees.

"No complaints or charges have been taken up," Biggs said. "This is not a disciplinary action."

Devaney said that she believes any action, not just a disciplinary one, against an employee requires the same advance notice.

News quiz: What do Tri-City Hospital, SDCOE-JPA and Otay Water District have in common? Answer: their law firms.

Photo: Public entity attorney Daniel Shinoff















"It must be a very fine line between what is criminal and what is, in my mind, very inappropriate and unprofessional."

1. Who said this?

(a) George Coulter, board member Tri-City Medical Center in Oceanside
(b) Judy Stratton, board member of MiraCosta Community College
(c) Donna Frye, San Diego City Councilwoman
(b) Gloria Carranza, board member of MiraCosta Community College

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Answers to this quiz are HERE.
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2. Who is being talked about?

(a) William "Woody" Merrill, attorney for Tri-City Healthcare Medical Center
(b) Art Gonzalez, CEO of Tri-City Healthcare Medical Center;
(c) Daniel Shinoff, attorney, San Diego County Office of Education--Joint Powers Authority;
(d) Randolph Ward, administrator, San Diego County Office of Education--Joint Powers Authority; SDCOE-JPA at first refused to turn over documents about the Victoria Richart settlement;
(e) The speaker was speaking in general terms about district attorney Bonnie Dumanis' investigation of events at MiraCosta Community College.


"Some of these things don't seem ethical and not even legal...He's either got to change his ways or get on his way...We're not getting the transparency that's needed.”

3. Who said it?

(a) George Coulter, board member Tri-City Medical Center in Oceanside
(b) Joe Biden, campaigning to be vice-president
(c) Judy Stratton, board member of MiraCosta Community College
(d) Rick Walker, student trustee at GCCCD


4. Who is being talked about?

(a) President George W. Bush
(b) Art Gonzalez, CEO of Tri-City Healthcare Medical Center
(c) William "Woody" Merrill, attorney for Tri-City Healthcare Medical Center
(d) Omero Suarez, Chancellor of GCCCD
(e) Bonifacio "Bonny" Garcia, attorney for public entities, famously worked for Burke Williams & Sorenson


5. What law firm is now representing Tri-City Healthcare Medical Center?

(a) Best, Best & Krieger
(b) Fagen, Friedman & Fulfrost
(c) Stutz, Artiano Shinoff & Holtz
(d) Burke, Williams & Sorenson
(e) It doesn't matter which of the above it is; they're pretty much the same.


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Answers to this quiz are HERE.
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Tri-City Health Care District Hospital places CEO on administrative leave and fires school attorney Woody Merrill

To see all posts on Tri-City Healthcare, click HERE.

UPDATE DECEMBER 25, 2008: In my opinion, Burke Williams & Sorenson law firm is no better than former Tri-City lawyer Woody Merrill. Reform is needed, but none
of these lawyers is interested in reform. Maybe the public should sell the hospital (cheap) to employees. (See Logan Jenkins' article.)


Tri-City Medical Center CEO Art Gonzalez has been placed on administrative leave. At a closed-session meeting yesterday Tri-City Health Care District Hospital (Oceanside) placed CEO Art Gonzalez and administrators who worked closely with him on administrative leave.

At the December 18, 2008 board meeting, Michael J. Williams of C.M. de Crinis & Co. in Sherman Oaks was hired to do a forensic audit of hospital books.

At the same meeting the board fired legal counsel William W. "Woody" Merrill, who is also one of the preferred attorneys doing work for San Diego County Office of Education. Merrill works for Best, Best and Krieger, a firm that has many contracts with public agencies in San Diego. Mr. Merrill's wife, Michelle Fort-Merrill, works for SDCOE-JPA, and is currently being sued by Rodger Hartnett, a former SDCOE-JPA employee.

Merrill was replaced by Julie Biggs, a Riverside attorney who works for Burke, Williams & Sorenson.

The San Diego Union-Tribune notes that legal counsel from Musick, Peeler & Garrett was also fired.

The North County Times writes:

...[Kathleen] Sterling and [George]Coulter did say they thought it was time for new legal counsel.

"I think it's important that we give control back to the people and the organization," Sterling said. "The board has by all appearances abdicated their authority to the CEO and it was time to re-evaluate our relationship with Best, Best & Krieger (and) Woody Merrill."

"I feel that these attorneys weren't doing what was right for the board or the public," Coulter said.



A year and a half ago Tri-City trustee Kathleen Sterling objected to financial irregularities at the hospital.

The board has tried for a long time to muzzle Ms. Sterling, and at one time hired a private security firm to follow her. North County Times published various articles about Sterling:
April 27, 2007
Oct. 31, 2005

Sterling was recently reelected.


Channel 6 covered protests in 2004 when Gonzalez and others were given $2 million in bonuses.

On June 1, 2007 Paul Sisson of the North County Times noted that Gonzalez was making $436,000 a year in base salary, and that the governing board had approved two raises:

On a 5-2 vote, with hospital directors Kathleen Sterling and RoseMarie Reno opposed, the board increased Gonzalez's base salary from $436,000 to $457,000. The raise is retroactive to Oct. 3. A second 5-2 vote along the same lines will increase the chief executive's base salary to $483,000 on Oct. 3 this year. Gonzalez's contract with Tri-City requires that his salary be reviewed annually and adjusted to keep his pay in the 65th percentile of hospital chiefs at similar-sized medical institutions nationwide...

Gonzalez earns a base annual salary of $483,000. The board voted recently to pay him a $90,000 bonus for 2008.

Other articles about Tri-City and Woody Merrill:

Opposition statement to Tri-City bond challenged; September 7, 2006

Tri-City sues doctor for breach of contract; July 9, 2007