Hospital hiring under scrutiny

August 19, 2007
Three Memorial Health System trustees have moved from the boardroom to the city-owned hospital’s payroll, prompting the City Council to consider imposing a one-year hiatus between board service and job hunting.
The ordinance would bar council appointees from seeking jobs with agencies they oversee for a year after they leave their unpaid posts. The proposal comes after three board members applied for and landed high-level Memorial jobs during or just after their board service — two of them within the past year. A fourth, Stephen Goldstone, a businessman who served as the board’s finance committee chairman in 2006, resigned last month to apply for the hospital’s chief financial officer job. Councilman Randy Purvis wants to close the revolving door, or at least slow it down. “When a person is placed on a board or commission to execute oversight over the particular entity or exercise their independent judgment, they should be doing just that,” said Purvis. “It creates a conflict of interest if someone on a commission is looking for employment with the organization they’re supposed to be supervising.” The 15-member Memorial Health System Board of Trustees oversees a budget of $619 million and supervises Executive Director Dick Eitel. Purvis said that board member June Chan’s 1999 hire “raised an eyebrow,” but that council members shied from adopting a law in response to one case. “But when it started happening regularly, like once a year, then something needs to be done,” Purvis said. “It’s a trend that I want to stop.” Chan, formerly with Denver Children’s Hospital, resigned from the board after she was hired as director of maternal and child services at a salary of $79,000. She has since been promoted to administrative director of Memorial Hospital for Children. Memorial did not provide her current pay. Doug Landolfi, a small-business owner, was appointed to the board in October 2005 and resigned after he was hired in June or July 2006 as the hospital’s chief operations officer at $275,000 a year. Another person was appointed to replace Landolfi on the hospital board, but Memorial could not provide Landolfi’s resignation letter. Nor did the hospital release a reason for his leaving the job earlier this year. The hospital has since hired Gus Lee as its chief operations officer. Eitel said that he felt no discomfort in hiring Landolfi, one of his bosses at the time, and that Landolfi’s board service played a role. “My goal is to hire the most qualified candidate for the health system, and I felt I had the full support of the board in hiring the candidate,” he said. A national search yielded a dozen finalists, but Eitel said Landolfi, who had been a health care industry consultant but never a chief operations officer, stood out. “The advantage is that I knew him,” Eitel said. “Doug was the candidate who best met our values and could contribute the most as COO. He was the most qualified candidate. It was just the fact that he was familiar with the health system through his service on the board.” Cari Davis, director of TESSA, a domestic violence service agency, until resigning in December, was appointed to the hospital board in 2000. On March 28, Davis told the board she was taking a leave of absence “as she pursues career opportunities within the health care sector,” the meeting minutes said. “She will come back as a board member if her career choice allows her the option.” In her May 9 resignation letter, Davis said she had recently become an independent contractor for Memorial Health System Foundation, a nonprofit agency that raises money for the hospital, and that “it is appropriate that I resign from the Memorial Health System Board of Trustees, in order to prevent the possibility of a conflict of interest.” Two weeks later, on May 23, Memorial posted a director of communications and marketing job opening on its Web site, the only place the job was advertised. Davis was hired July 2 from a field of six local finalists and started work July 12. Her salary is $97,073 a year, nearly twice the $52,500 she made at TESSA in 2005, the most recent public record available. She refused to disclose her 2006 pay, and the 2006 IRS report has not yet been filed. Davis was also a member of the Memorial foundation board. She resigned April 27, five days before she became the foundation’s contract grant writer, according to information provided by the hospital. She was paid $5,125 until she quit that job July 11 — one day before she started the Memorial Health System job. Davis’ new boss, Vice President of Communications and Marketing Rita Burns, served on TESSA’s board when Davis ran the organization. Davis said in an interview that she didn’t know about the hospital marketing job when she resigned from the hospital board, and that she learned of it from the hospital’s Web site. Asked how she made the transition from being Eitel’s boss as a trustee to being his subordinant, Davis said, “It has not been difficult, and I think the reason why is the two roles are extraordinarily different, and I am enjoying being in a role where I can focus on supporting Memorial’s mission all day long.” Eitel said that he had no say in hiring Davis but that Burns “made a great choice.” Burns said the fact Davis hasn’t held a communications or marketing job didn’t bother her. “In her previous role at TESSA, she conducted media interviews on a regular basis and did functions for communications and marketing the agency,” she said. At TESSA, Davis oversaw 55 employees and a $2 million budget. At Memorial, she provides internal communications for 4,600 employees and serves as a media contact. Stephen Goldstone stated in his July 16 resignation letter that he intended to apply for the chief financial officer job, one of Memorial’s top posts. Memorial did not provide the status of that hiring process. Councilwoman Margaret Radford backs Purvis’ oneyear waiting period idea, saying council-appointed panels are “extensions of this body.” As such, she said, they should be subject to the same oneyear waiting period as council members are required to observe. But Vice Mayor Larry Small said he isn’t sure. “We should recognize we’re dealing with volunteers,” he said. “Can we realistically place restrictions and still be in compliance with state and federal employment law?” Because appointees are volunteers, he said, he’s “uncomfortable” with a mandate. “We’re elected officials,” he said. “We’re held accountable to the public.” But Purvis said, “How can one be objective and supervise someone if they’re going to ask for a job later?” CONTACT THE WRITER: 636-0238 or FROM THE BOARDROOM TO THE PAYROLL Former Memorial Health System trustees who sought jobs at the hospital - JUNE CHAN resigned from the board after she was hired in 1999 as director of maternal/child services. She is now administrative director of Memorial Hospital for Children. - DOUG LANDOLFI resigned from the board after he was hired in June or July 2006 as the hospital’s chief operations officer. He has left the job. - CARI DAVIS resigned May 9 after becoming an independent contractor for Memorial Health System Foundation, a nonprofit fundraising arm. In July, she was hired as the hospital’s director of communications and marketing. -STEPHEN GOLDSTONE, who was the board’s finance committee chairman in 2006, resigned last month to apply for the chief financial officer job.
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