By Fred Schulte, The Center for Public Integrity

HHS headquarters in Washington, D.C. Photo: Matt Bisanz/Wikimedia Commons

Thousands of doctors across the country are billing Medicare for routine medical care at rates far above their peers, potentially costing taxpayers tens of millions of dollars in overcharges, according to a new government report.

The audit released Wednesday by the U.S. Department of Health and Human Services Office of Inspector General stopped short of accusing the high-billing doctors of ripping off the government health plan for the elderly. But it stated that Medicare’s payment scales for doctors have been “vulnerable to fraud and abuse” in recent years. (more…)

By Buddy Nevins, BrowardBulldog.org 

Broward General Medical Center

A plan to change the name of Broward General Medical Center, the county’s oldest hospital, and the names of three other public hospitals has physicians and others protesting.

Broward General will become Broward Health Medical Center, a change that will roll out this summer as part of an advertising campaign.

The three other public hospitals in the Broward Health system will lose the words “medical center” in their titles.

Coral Springs Medical Center will be Broward Health Coral Springs. Imperial Point Medical Center becomes Broward Health Imperial Point. North Broward Medical Center switches to Broward Health North.

The changes were approved late last month by a 4-3 vote of the governing board of Broward Health, North Broward’s tax-supported public hospital system, whose legal name is the North Broward Hospital District. The district adopted the new name in 2007.

Not everyone is happy about it, especially at Broward General, which celebrates its 75^th birthday on January 2.

“Broward General is a historic place. Broward General was the first hospital in Broward and has a historic name. Just a few years ago we were advertising that ‘I am a Broward General baby’ and now we are doing away with the name,” said David Di Pietro, a hospital commissioner who voted against the change. “I have a real problem with this. So do many of the doctors.”

BRANDING TRUMPS HISTORY

Broward General was the county’s first public hospital, built in a remodeled apartment building with space for 45 patients. In 2010, it had 716 licensed beds, making it one of the nation’s top 20 largest public hospitals, according to Becker’s Hospital Review.

The name change is intended to downplay the perception of Broward General as a public hospital.

Commissioner Richard Paul-Hus said too many prospective patients stay away from Broward General because they believe it is a facility for the uninsured.

“The idea was to create a brand that doesn’t suggest a public hospital,” Paul-Hus said.

Sara Howley, Broward Health’s marketing vice president, agreed that was part of the reason for the change.

“People say, ‘That’s where you go when you don’t have insurance.’  We want them to understand we are so much more and by better marketing we can do that.”

Howley said streamlining the hospital names were necessary in an extremely competitive environment. She said it would enable the system to have more effective marketing campaigns unifying every hospital under the shorter, more memorable name Broward Health.

Howley pointed out that the University of Miami Health Systems, which has moved into Broward County, is now known as UHealth.  The county’s other public hospital system, the South Broward Hospital District, changed its business name to Memorial Healthcare Systems years ago.

“Our names today are very long,” Howley said.

There has been a 56 percent increase in the name recognition of the four North Broward public hospitals in the five years since the conversion to the Broward Health name.

“It went from almost zero,” Howley said.

She expects such recognition to increase with the renaming.

The renaming of the hospitals is the second phase of a five-year long business conversion of the North Broward Hospital District into Broward Health.  It was arrived at with the help of a strategic planning consultant and extensive research that included phone surveys and focus groups.

“The word ‘general’ did not test well,” Howley said. “People didn’t know what it meant in that context.  So all we are doing is changing the word ‘general’ to ‘health’.  One word is changing.”

One word is too much for some.

“Broward General is a recognized brand and much of our staff was born there.  Many of our physicians are against this change,” said one doctor who practices at the hospital and asked that his name not be used.

RESISTANCE SPREADS

Physicians at other hospitals also had problems with new titles.

Dr. Carrie E. Greenspan is an obstetrics and gynecology doctor and chief of staff at Coral Springs Medical Center representing 500 physicians. She said doctors at her hospital were against losing the words “medical center” in the name.

“The way the renaming is proposed makes it sound like the only real medical center of BH (Broward Health) is the current Broward General, and that the other facilities are some sort of undefined subsidiaries, with unclear purpose. We all agreed that taking away the name ‘medical center’ from the other facilities takes away the status conferred by that title,” she wrote the commission in January.

“We believe that moving forward with the proposed changes would be a very big mistake,” she wrote. “Members of the community, particularly if they are new to the area, will not understand what “Broward Health—Coral Springs” means.  It could be a clinic, a medical office building, a laboratory, a diagnostic facility.”

Clarence McKee, another commissioner opposed to the plan, lamented that the hospital system was not listening to physicians like Dr. Greenspan.

“The name “Medical Center” carries prestige and is important to our present and future physicians who bring us patients. This is one case where the views of our physicians should have been given more weight as they are key stakeholders–without them we would not exist,” McKee said.

Howley, who is married to a Broward Health physician, called the protests from physicians “turf protection….We’ve had resistance from doctors.  Doctors don’t tend to like change. Five years ago they didn’t like the name Broward Health and now they say it is great.”

The renaming will cost about $750,000 over four years. Some of the hospital signs were already wearing out and needed replacement anyway, Howley said.

Stationery, medical forms, lab coats and other items with the hospital names on them will be replaced when the existing stocks run out.  The cost of this is not included in the estimate because they would have been replaced anyway, she said.

Di Pietro said they change should have waited until after the 2012-2013 budget was set in the fall.

“I wonder if we should spent $750,000 now,” he said. “We should wait until budgeting is complete and see what vital services we need to preserve.”

Paul-Hus said now was the time to spend the money.

“We’re in a competitive situation,” Paul-Hus said. “If this was my business, I would do it.”

By Dan Christensen, BrowardBulldog.org

Joseph Cobo

The Florida ethics commission has found probable cause to believe that Fort Lauderdale consultant Joseph Cobo had business conflicts that “interfered with his public duties” as a North Broward Hospital District commissioner.

But over the objections of a Broward corruption prosecutor, the ethics commission decided to do nothing about it and close Cobo’s case.

Cobo, accused of exploiting his public position for private gain, owns and operates Florida Medical Management Consultants, which provides management and financial services to doctors. He stepped down from the district’s board when his term expired in September.

In a signed settlement agreement, Cobo acknowledged that probable cause exists that he twice violated Florida’s Code of Ethics for Public Officers and Employees. Nevertheless, the commission without comment last month adopted the recommendation of its attorney, Melody Hadley, that the case be dropped and no penalty assessed. Hadley did not explain the basis for her recommendation.

PROSECUTOR’S CONCERN DISCARDED

The ruling brushed aside concerns expressed by Broward Assistant State Attorney David Schulson. Schulson lodged the complaint against Cobo a year ago after declining to file criminal charges due to a lack of corroborating evidence that Cobo had used his power as a commissioner to try and punish a doctor who refused to retain Cobo’s consulting company.

“I do not agree that there should be no imposition of a fine,” Schulson wrote in a Nov. 21 letter. “Cobo admits in the proposed (settlement) that there is probable cause…and he should accept a reasonable fine for those violations.”

The district, which operates under the name Broward Health, is a special taxing district that runs several public hospitals, including Broward General and North Broward Medical Center. Cobo, a Republican activist, was appointed to the board in 2007 by then-Gov. Charlie Crist.

Cobo’s legal troubles began in early 2009 when the hospital district board hired the Lash and Goldberg law firm to investigate allegations of ethical misconduct regarding his involvement in business matters involving Broward Health. The firm’s findings of potential ethical and criminal violations by Cobo were forwarded to the governor’s office, where they initially languished.

Broward prosecutors began an investigation into whether Cobo had improperly used his public office to steer business to his company after reports of his actions were published in New Times Broward-Palm Beach. Last January, Schulson closed the probe after concluding Cobo’s actions were not criminal, but followed up quickly with a complaint to the ethics commission.

Specifically, Schulson asked for a review of issues involving two matters: Cobo’s role in a lease dispute at one of the district’s hospitals, Imperial Point Medical Center, and his involvement in the district’s recruitment of Dr. Dimitrios Lintzeris, a family practitioner in Pompano Beach.

COBO HAD CONFLICTS

The ethics commission ultimately determined that then-Commissioner Cobo had a conflict when he contacted Imperial Point’s chief executive, Calvin Glidewell, and questioned him about the terms of the lease while also representing clients involved in the dispute.  The commission also decided Cobo had a similar conflict when he contacted Glidewell to allegedly bad mouth Dr. Lintzeris after Litzeris decided not to sign a consulting agreement with Cobo’s firm even though Cobo previously had interceded on his behalf with a Broward Health official.

Three other related charges against Cobo were not sustained by the commission in findings made public Dec. 7.

Neither Cobo nor his Fort Lauderdale lawyer, Stuart R. Michelson, responded to requests for comment.

But in a pleading filed with the commission this fall, Michelson observed: “This entire process, with the investigation of the state attorney and now before this honorable commission, has been a nightmare…and he has suffered greatly as a result of it, both emotionally and financially.”

In September, Gov. Rick Scott chose Oakland Park lawyer and Broward Republican Party activist David Di Pietro to succeed Cobo on the board.

By Amber Statler-Matthews, BrowardBulldog.org

Northwest Medical Center

Harlan Ginsberg of Coral Springs was rushed to Margate’s Northwest Medical Center in 2006 after a kidney stone attack. During surgery to remove the stone, he says, a doctor mistakenly cut a tube that delivered urine to his bladder and removed a kidney that another doctor testified was healthy.

Relying on a voter-approved provision in Florida’s Constitution, Ginsberg’s medical malpractice attorney asked Northwest Medical to turn over its reports about other patients’ “adverse medical incidents” of the type Ginsberg claimed he suffered. The hospital initially refused. Later, it agreed to search its records – but only if Ginsberg coughed up $77,550 in advance.

Ginsberg refused to pay and didn’t get the records. In October, he lost his malpractice case in Broward Circuit Court against the 215-bed hospital and two of its doctors who treated him. Fort Lauderdale attorney Andrew Winston is considering whether to appeal.

“The hospital went to extraordinary lengths to prevent Mr. Ginsberg from obtaining the information he was entitled to under the Florida Constitution,” said Winston.

Seven years ago, Florida voters overwhelmingly approved a Constitutional amendment that gave patients who had been hospitalized the right to see reports dealing with botched medical procedures and poor care. While the amendment could be used to give patients vital information before a medical mistake is made, its practical and more much publicized purpose was to give aggrieved patients more power in court by opening up malpractice complaints and confidential internal reviews of doctors and hospitals.

The Patients’ Right to Know Act was hailed as a major victory for individuals seeking to know more about their hospitals and doctors. But it hasn’t always worked out that way.

Since the law’s inception, hospitals have thrown up roadblocks and legal challenges to block access to patient records. In response, patients across Florida are using the law to ask judges to pry open reports about medical errors.

‘UNDULY BURDENSOME’

In Ginsberg’s case, Northwest Medical’s attorneys produced to the court a 10-page affidavit from a hospital risk manager who called Ginsberg’s request “unduly burdensome.” A hospital lawyer said it would take the equivalent of at least 235 days just to research it. After months passed and the judge did not rule on the records request, Ginsberg’s lawyer withdrew it to expedite trial.

Northwest Medical is owned by the Hospital Corporation of America.

The Florida First Amendment Foundation is a private, non-partisan and non-profit organization that promotes the public’s constitutional right to oversee government through the state’s open government laws. Foundation President Barbara Petersen said the hospital’s hefty fee is “ridiculous – regardless of the affidavit – and amounts to an effective denial of access.”

“It is troubling that the hospitals would systematically deny records as required,” said state Rep. George Moraitis Jr., R-Fort Lauderdale.

While some hospitals comply with the law, others don’t, saying they have exclusive rights to the records or that their method of record-keeping does not fit their definition of documents required for release by the amendment. Broward Health, the county’s largest healthcare provider which operates Broward General Medical Center and other facilities, says it considers disclosure on a case by case basis.

Sean Domnick, a Palm Beach Gardens attorney, said some hospitals release a limited amount of information. But he said most avoid complying with the law.

“What we are finding now is hospitals aren’t investigating and reporting incidents like they’re supposed to. So there is no documentation,” said Domnick, who won a 2008 state Supreme Court ruling to obtain medical records on behalf of a patient.

PATIENT RIGHTS IN FLORIDA

The amendment, heavily backed by trial lawyers who anticipated an increase in medical malpractice lawsuits, was overwhelmingly approved by 81 percent of voters at a time when doctors and lawyers were in a pitched battle over malpractice lawsuits and patient rights.

Hospitals are legally required to investigate and keep records of adverse incidents, including patient complaints, as spelled out in the state’s General Records Schedule for Hospitals. Patients are supposed to be able to get access to those reports, but seven years later that’s not always the case.

Soon after the amendment was approved, hospitals began lining up to challenge the scope and wording of the patient records law.  Five months after the election, at the urging of hospitals, Florida legislators voted to limit the scope of the amendment. At the time the move was praised by Dr. Dennis Agliano, a Tampa surgeon who was president of the Florida Medical Association.

Today, the battleground is the courts.

“When presented with these cases, the courts are almost unanimously siding with the patient,” said Domnick.

Nova Southeastern University Law Professor Mike Flynn, who teaches classes on medical malpractice, said resistance by hospitals makes it seem as if they have something to hide.

“The amendment was designed to open up the records kept by the hospitals,’’ he said. “The idea is to permit patients access to the unsanitized version of what may have gone wrong in the treatment of a patient. The process requires relentless pursuit of the information.”

LEGAL CHALLENGE

In August, the Third District Court of Appeal in Miami sided with Dania and Ricardo Acevedo of Pembroke Pines, who alleged that a surgeon at Doctor’s Hospital in Miami negligently performed unnecessary surgery. The court ordered the hospital to hand over patient records to the Acevedos who continue to press their malpractice case against the hospital and others in court.

Hospitals cite a variety of reasons for not complying with the Constitutional amendment.

A routine argument is that Amendment 7 is too vague about which documentation must be turned over to patients. Hospitals also claim the records are exempt from disclosure because they are legally privileged.

The South Broward Hospital District, which operates the Memorial Healthcare System, usually rejects requests for adverse patient records because its records are not organized and maintained in a way that fits the definition of documents that must be released, according to Kerting Baldwin, director of media relations for the Memorial Healthcare System.

“Rather, most hospitals, including Memorial hospitals, maintain incident reports which are not producible as such under Amendment 7,’’ Baldwin said in a written statement.

Cleveland Clinic Weston is among hospitals that claim they have exclusive rights to adverse medical incident reports, and therefore they cannot be given to patients, according to an E-mailed statement from Arlene Allen-Mitchell, communications manager for the hospital.

Hospitals take such positions with near impunity. Florida’s Agency for Health Care Administration “does not have the ability to regulate or make a facility follow Florida’s Constitution,” said AHCA spokeswoman Shelisha Coleman. “That is up to the judicial system and is something that should be addressed in the courts.”

SOME HOSPITALS COMPLY WITH THE LAW

On the other hand, Tenet Healthcare Corp. — which operates the North Shore Medical Center/FMC Campus in Lauderdale Lakes — is among the minority of hospital organizations that said they comply with Amendment 7.

“Tenet Hospitals have and are prepared to make adverse medical incident records available for inspection and copying upon written request by patients and/or patient representatives in accordance with Florida law,‘’ said Shelly Weiss Friedberg, director of public relations for Tenet‘s Florida region, in a prepared statement.

State Sen. Ellyn Bogdanoff, R-Fort Lauderdale, said legal jousting by many hospitals has interfered with the implementation of a law that is “clearly what the public wanted.”

“Obviously (what the hospitals do) is creative from a legal standpoint, but it’s deceptive from a constitutional standpoint,” she said. “Amendments must be written very specifically. Otherwise they are useless.”

By William Gjebre, BrowardBulldog.org 

Broward County Jail

A former Broward County Jail inmate says he became impotent after he was forced to swallow a powerful anti-psychotic drug he wasn’t prescribed, then suffered a painful erection for five days before nurses and jailers finally responded to his pleas for help. 

A doctor eventually ordered Randon (Randy) P. Campbell rushed to the emergency room at Broward General Medical Center for treatment of priapism, a painful long-lasting erection. As a result of the medication errors and delay in treatment, Campbell was forced to undergo multiple surgeries and was later “diagnosed with permanent impotency,” court papers say. 

Court documents say that BSO correctional officers and a nurse laughed at Campbell after he sought help for the painful, unwanted and embarrassing condition that he attempted to hide by wearing his shirt untucked. The amused nurse allegedly told him to “work it off.” 

Campbell, 46, recently settled his 2008 lawsuit against Broward jail healthcare provider, Armor Correctional Health Services Inc. The terms are confidential, and the company’s lawyer declined comment. Now, Campbell is pressing on with a potentially big money civil action in circuit court against the Broward Sheriff’s Office. 

Sheriff Al Lamberti said the BSO will not settle. 

“Armor settled. We didn’t,” Lamberti said. “We don’t think we did anything wrong.” 

Attorneys for both sides – Daniel Harwin for Campbell and William Tucker Craig for BSO – declined comment. 

A judge refuses to dismiss 

Six weeks ago, in a parallel federal civil rights suit in Fort Lauderdale, Campbell’s case appeared to take a significant step forward when a judge denied BSO’s request to toss the case out of court. 

“The Court finds that it would be possible for a jury to conclude that Defendant acted with deliberate indifference in delaying plaintiff’s medical treatment,” U.S. District Judge William J. Zloch stated in his March 28 order. 

The federal case was set to be tried this week. But last week, for strategic reasons not explained in court papers, the two sides jointly agreed to dismiss that case. Instead, they will fight it out in state court. 

Court records outline the events surrounding the case. 

Campbell’s ordeal occurred while he was a pre-trial detainee in the county jail from August 1, 2005 through March 24, 2006. According to the BSO media relations office, Campbell was in jail for violating an injunction in a domestic violence case. 

A doctor had prescribed Campbell, then 40, to receive Clonidine (0.2 mg) daily for hypertension and Vistaril, as needed, for anxiety. Those were the only drugs he was prescribed to receive while in jail. 

On Dec. 1, 2005, however, Campbell’s nighttime medications included another drug, chlorpromazine, which is also known as Thorazine. Campbell immediately informed the nurse the medication was not intended for him. Nonetheless, he was ordered to take it by the nurse and a guard who are not identified in the complaint. 

Court records indicate the Thorazine was supposed to go to another inmate with the last name of Campbell. 

Shortly afterwards, Randon Campbell began feeling ill, describing dizziness and lightheadedness. 

The next day, Campbell awoke with an erection that lasted for five days. Priapism is both a known and common side effect of Thorazine, the lawsuit said. 

When the nurse handed out that morning’s medication, Campbell was again told to take the Thorazine. He gave the nurse a written note that had developed a sustained and painful erection, and, to explain his untucked shirt, informed guards. 

“The guards laughed and refused to alert the medical staff,” the lawsuit said. 

That evening, Campbell was again offered the Thorazine, but didn’t take it after finally convincing the nurse of the error. He wasn’t given it again. 

Still, Campbell’s painful erection continued. And despite his pain, and his repeated requests for help, no action was taken to provide him with appropriate care, the lawsuit said. Instead, nurses gave him Advil. 

Campbell “begged” for help 

Finally, on the afternoon of December 6, the pain had become unbearable. Campbell could no longer walk. He “begged” a guard to take him to the infirmary, the suit said. 

The guard agreed, and took him to Armor Correctional’s clinic where doctors quickly had Campbell transferred to Broward General. 

Emergency room doctors diagnosed priapism. Campbell underwent initial surgery and ultimately suffered from what the lawsuit calls “severe residual erectile dysfunction.” 

The state lawsuit against Armor alleged that its negligent care forced Campbell “to endure needless multiple and painful surgeries.” Specifically, it alleged that Armor administered “drugs that were not prescribed for him” and failed “to render timely medical attention and treatment for the side effects,” it said. 

Armor denied those accusations before the settlement. 

The presiding circuit judge in the state case is Mily Rodriguez-Powell. 

The federal lawsuit alleged BSO “deprived Campbell of his rights, privileges and /or immunities secured by the Constitution of the United State and Florida by denying him access to medical care.” 

BSO has denied any wrongdoing. 

Armor, based in Miami, has provided medical services to Broward County operated jails since 2004. Recently, Armor was a finalist to provide healthcare services to inmates at Miami-Dade County Corrections and Rehabilitation facilities, but lost out to Prison Health Services, a Tennessee-based company. The Miami-Dade contract, being negotiated now by the parties, could run as long as 11 years. 

Dan Christensen contributed to this report. William Gjebre can be reached at wgjebre@browardbulldog.org

By Thomas Francis, BrowardBulldog.org

Joseph Cobo

The Broward State Attorney’s Office will not file criminal charges against Joseph Cobo, a powerful hospital commissioner accused of exploiting his public position for private gain. But prosecutors who investigated those allegations found reason to alert the state’s ethics enforcement board.

In a memo dated January 13, Assistant State Attorney David Schulson cited a lack of “independent evidence” corroborating a report from a local physician who said that Cobo used his power as a Broward Health commissioner in seeking to punish that doctor for refusing to retain Cobo’s medical consulting firm. 

“The State Attorney did a thorough investigation of more than a year’s time and they found no significant criminal wrongdoing,” said Alberto Milian, Cobo’s attorney. “That’s good news.” 

But it’s not all good news for Cobo. 

After an investigation that spanned 19 months, prosecutors turned up enough evidence of potential misconduct to ask the Florida Commission on Ethics to review Cobo’s case. The ethics commission will determine whether Cobo committed violations of state law governing public officials. If it finds violations, ethics officials could issue civil fines and demand his removal from office. 

The prosecutor’s referral, sent to the ethics commission in mid-January, is bolstered by sworn testimony of Dr. Dimitrious Lintzeris, the physician who alleged that in 2008 Cobo pressured him to employ Cobo’s firm, Florida Medical Management Consultants. In addition, the file included sworn statements from the Broward Health officials. 

The original complaint came from the district’s former general counsel, Troy Kishbaugh, who in January 2009 made 13 separate allegations of what he believed to be ethical misconduct by Cobo. The district’s general counsel Marc Goldstone brought in former assistant U.S. Attorney Martin Goldberg to investigate the allegations. 

Of those allegations, the most troubling one involved Cobo’s conduct toward Lintzeris. Lintzeris contacted Cobo’s consulting firm in early 2008 to see if Cobo could help Lintzeris’ new family physician practice get financial assistance from the hospital district. According to statements by Lintzeris’ lawyer, the physician didn’t realize at the time that Cobo was also a Broward Health commissioner. 

But during their initial meeting, Cobo allegedly informed Lintzeris of his influential public position. Cobo then phoned Calvin Glidewell, chief executive officer at district hospital Imperial Point Medical Center, to set up a meeting. Following Glidewell’s meeting with Lintzeris, the CEO phoned Kishbaugh, who was then the district’s acting general counsel. Kishbaugh said that the district would not be able to give financial assistance to Lintzeris. 

According to the findings of independent investigator Goldberg, as well as the Broward State Attorney’s Office, Cobo then interceded on Lintzeris’ behalf, calling Kishbaugh. As a commissioner, Cobo would be voting that fall on whether to make Kishbaugh the district’s permanent general counsel. 

Following that conversation with Cobo, Kishbaugh reversed course and gave his approval for the district’s awarding Lintzeris an income guarantee agreement. 

According to the report, Cobo then circled back to Lintzeris to claim credit for the deal and to set up a private consulting agreement with Lintzeris. Based on advice from his attorney, Lintzeris decided against hiring Cobo as a consultant. 

“When Lintzeris rebuffed Cobo’s suggesting that Lintzeris now retain (Florida Medical Management Consultants), Cobo became angry with Lintzeris, raised his voice and said, ‘That’s not the way things are done’ and called Lintzeris ‘unprofessional,’” said the report by the investigator Goldberg — an account that was confirmed by the State Attorney’s investigation. 

Cobo then allegedly called Imperial Point CEO Glidewell, who had authority over Lintzeris’ new deal with the district. 

According to the State Attorney’s investigation: “Commissioner Cobo, who had always been very positive in his communications (to Glidewell) about Dr. Lintzeris, now told Mr. Glidewell that ‘he had gotten some information about Dr. Lintzeris that led him to believe that Dr. Lintzeris was not always upfront, that he was potentially disruptive and we should take a look at the income guarantee agreement.’” 

But the State Attorney pointed out that Cobo never specifically demanded that Glidewell nix the deal with Lintzeris. Nor did Cobo bring up that matter at a meeting of the district’s board. And ultimately, Glidewell followed through with the income guarantee agreement that Lintzeris sought. 

Better suited for civil action 

In the close-out memo, Broward prosecutors expressed a lack of confidence in bringing a case that rested, ultimately, on hearsay — the reports from those who were privy to conversations between Cobo, Lintzeris and district officials. That’s because in a criminal court, a conviction depends on a jury finding guilt “beyond reasonable doubt.” 

The standard is only a shade lower for the Florida Commission on Ethics, which only penalizes public officials if it finds “clear and convincing evidence” of violations of ethics law. During last year’s legislative session, the ethics commission lobbied to have that burden of proof lowered to “preponderance of the evidence,” which is the standard in civil courts. But the bill died in committee. It has been redrafted for this year’s session. 

The ethics commission is composed of a nine-member panel, five of whom are appointed by the governor. Since taking office last month Gov. Rick Scott has yet to appoint a member to the commission, meaning that the majority were appointed by Charlie Crist, just like Cobo was. 

Cobo’s attorney, Milian, declined to discuss the Lintzeris case. “I don’t think it’s appropriate for us to be discussing allegations in a piecemeal fashion,” he said. 

A round-about path 

The report on Cobo’s alleged ethical improprieties took a circuitous path to the Florida Commission on Ethics. In early 2009, then-chairman Mike Fernandez complained that investigator Goldberg was being overly aggressive. Fernandez ordered Goldberg to publish his findings before the investigator had finished interviewing sources and researching the allegations against Cobo. 

Still, Goldberg’s report found that five of the 13 allegations of misconduct against Cobo were “credible.” 

It was up to the board to recommend a response to what they learned from Goldberg’s report, and they would depend chiefly upon the advice of the district’s general counsel, which was then Goldstone. According to documents made public last year, Goldstone was prepared to recommend that the report on Cobo be sent to the ethics commission. 

But Goldstone and his associate general counsel, Joe Truhe, were fired less than two weeks before they could give that recommendation. 

Fernandez told the investigator, Goldberg, not to attend the May 27, 2009, meeting where the board was to act upon the report Goldberg made on Cobo. As a result, Goldberg was not there to defend himself during the public comment period, when a slew of powerful Cobo friends accused Goldberg’s report of being tainted by political motives. 

 The interim general counsel, Sam Goren, recommended the Cobo report be sent to the governor, rather than to the ethics commission or to the Broward State Attorney’s Office. 

Prosecutors, however, had been reading coverage of the Cobo investigation on Juice, a New Times Broward-Palm Beach blog that compelled them to open their own investigation. 

Ironically, it would have been better for Cobo if the ethics commission had received Goldberg’s report in May 2009. That 19-month delay means that the ethics commission will see that another investigator — the Broward State Attorney’s Office — agreed with Goldberg’s conclusion that Cobo may have violated ethics law. 

The ethics commission does not comment on pending complaints.

By Dan Christensen, BrowardBulldog.org

Dr. Zachariah P. Zachariah

In a stinging rebuke to the government, a federal judge Monday cleared Fort Lauderdale heart doctor and top Republican fundraiser Dr. Zachariah P. Zachariah of civil insider stock trading charges.

In her 60-page ruling, U.S. Magistrate Linnea R. Johnson said the U.S. Securities and Exchange Commission “failed entirely” to prove its assertion that Zachariah used inside information to collect nearly $1 million in illegal profits trading a pair of Florida stocks in 2005.

“The evidence simply is not sufficient to show that Dr. Zachariah, a prominent cardiologist who has given millions of dollars to charity, who has been appointed to and considered for prominent public service positions, and who has been a devoted father to his sons, would be willing to jeopardize his reputation and his career and put his family in harm’s way all for the opportunity to make what was an insignificant profit to him in light of his means at that time,” Johnson said.

“I’ve always had great faith in our justice system and I knew I’d be fully vindicated in the end,” said Zachariah, the director of the Fort Lauderdale Heart Institute at Holy Cross Hospital and a past chairman of the Florida Board of Medicine. “The government has put me through a long ordeal and I’m happy to be able to devote 100 percent of my attention to my medical practice and my public service.”

SEC Assistant Regional Director Glenn Gordon said it was too soon to say whether his office would appeal. “We got the decision late yesterday and we are reviewing it,” he said.  

Zachariah, a past member of the state university’s Board of Governors and a current trustee at Nova Southeastern University, has been a top Republican money man for more than two decades. He is close to the Bush family, and was an elite fundraiser for both Presidents Bush and former Gov. Jeb Bush.

According to court records and trial testimony, President George W. Bush planned to nominate Zachariah – or “Zee-Zee,” as the former president called him – as U.S. Surgeon General in 2006. The SEC investigation changed those plans.

The SEC accused Zachariah in 2008 of using nonpublic information to profit three years earlier trading the stock of generic drug maker IVAX and jail operator Correctional Services Corp., whose shares rose sharply during takeovers.

The non-jury trial ran 12 non-consecutive days over a seven week period that ended Oct. 8. It included testimony from a pair of corporate chieftains involved in those takeovers – Teva Pharmaceuticals Chairman Phil Frost and George Zoley, CEO of Boca Raton prison contractor, The Geo Group.

Throughout the trial, defense counsel Curtis Miner sought to portray Zachariah as “a model public citizen” who served selflessly on public boards and gave generously to charity.

“He has the trappings of wealth, a nice house, a boat. Does that make him a greedy person? No. It just means he’s successful,” Miner said. Zachariah was also represented by former federal judge and U.S. Attorney Tom Scott.

Zachariah, who lives in a home on the Intracoastal Waterway in Sea Ranch Lakes, took the witness stand to deny wrongdoing. In his testimony, however, he portrayed himself as a physician consumed with playing the stock market between patient visits – likening his strategy of placing “hundreds and hundreds” of trades a year to “gambling.”

Huge stock losses

He said he lost upwards of $20 million over the years.

“I made millions of dollars in the market, and I lost millions of dollars in the market,” he told SEC trial attorney Christopher Martin. “One time I took a portfolio from $40 million up to $60 million in two months. You’d think I was a mini-Warren Buffet. Now, you think I’m a fool.”

The government relied heavily on written records to document Zachariah’s trades, phone calls and inside corporate connections. But the few witnesses the SEC called to testify ended up helping Zachariah, according to the judge.

In her order, Johnson accused the SEC of employing flawed logic and low blows to try and make its case stick.

“The lengths to which the SEC went to attempt to attack the credibility of non-party witnesses, including its own witnesses, highlights the weakness of its claims,” Johnson wrote. “For example, the SEC referred to (Zachariah’s son) Reggie Zachariah as a ‘drinker’ in its closing argument and slides – a bizarre allegation that was entirely unsupported by the record evidence.”

The SEC argued that Reggie, who worked on the Correctional Services acquisition while employed in GEO’s merger department, was one of several possible sources of inside information that his father could have traded on when he bought about 80,000 Correctional Services shares for less than $3a share between May and July 13, 2005. Dr. Zachariah sold those shares for a large profit shortly after GEO announced on July 14 that it would pay $6 per share.

Alternatively, the SEC suggested Zachariah could have learned of the merger from his friendship with Zoley or his political work as a paid GEO consultant.

SEC’s ‘multiple choice theory’

Judge Johnson derided the SEC’s assertions as a “multiple choice theory.” Instead, she said she believed the “credible” testimony of Zachariah, his son and Zoley who denied discussing the merger in advance.

Likewise, the judge discounted the SEC’s allegations about Zachariah’s IVAX trades.

Zachariah was on IVAX’s board in July 2005 when he allegedly got a call from Frost informing him that IVAX had agreed to be acquired by Teva for $26 a share. The SEC said that phone records showed that within minutes Zachariah bought 35,000 IVAX shares for less than $21 a share.

IVAX’s directors were at the time forbidden by law from trading the company’s stock.

Johnson, however, ruled that the phone records were contradictory and unreliable. She also held that Zachariah’s violation of IVAX’s insider trading policy was not intentional. The company had sent the policy to Zachariah after he joined the board that spring, but he testified that he never received or reviewed it.

The judge’s findings were also a vindication of sorts for two other Holy Cross physicians charged along with Zachariah – his brother and fellow cardiologist Dr. Mammen Zachariah and endocrinologist Dr. Sheldon Nassberg.

The SEC had alleged that Zach Zachariah used the inside he information he’d obtained to tip both men. Mammen Zachariah, also a former chairman of the Florida Board of Medicine, and Nassberg paid large sums one year ago to settle their cases.

But the judge’s order suggests they should not have done so. Johnson wrote that she believed the testimony of both men who denied getting any inside information.

Melanie May

Robert Butterworth

By Dan Christensen, BrowardBulldog.org

The federal insider trading trial of top Republican fundraiser Dr. Zachariah P. Zachariah wrapped up Friday without hearing testimony from two big-name defense character witnesses. A judge’s verdict is expected in a few weeks.

Zachariah, the director of the Fort Lauderdale Heart Institute at Holy Cross Hospital, is accused by the U.S. Securities and Exchange Commission of using nonpublic information to make nearly $1 million in illegal profits in 2005 trading the stock of two Florida companies.

On the witness stand last month, Zachariah denied the SEC’s accusation that he used inside connections to make a killing in the stock of two Florida corporations whose shares rose during takeovers. (more…)

By Dan Christensen, BrowardBulldog.org

The Justice Department is investigating whistleblower allegations that the South Broward Hospital District conspired with Tampa’s Wellcare Health Plans to bilk Medicaid and Florida’s Healthy Kids program.

The district, the legal name of Hollywood’s Memorial Healthcare System, is specifically accused of helping Wellcare doctor its accounting books so it could avoid paying back excess profits owed to Florida and the federal government.

“We have never been named in the suit (as a defendant), nor have we received any subpoena,” said Memorial spokeswoman Kerting Baldwin. She declined to discuss the matter further. (more…)