healthy4u: news media

How the Anechoic Effect May Be Generated - The Chairman of a Hospital Board Buys a Newspaper

We have often noted that stories about problems with the leadership and governance of health care tend to be <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>. That is, they tend to get less notice and generate less discussion than their content would seem to warrant. We have postulated that this has to do with fear of offending the rich and powerful who now lead and govern health care organizations, and the benefits, which may be produced by conflicts of interest, of maintaining good relationships with the rich powerful. Did a Newspaper Delay a Story Unfavorable to its Prospective Buyer? A story that has been emerging in bits and pieces over the last two months shows the sort of complex machinations that may generate the anechoic effect. In February, 2012, a New York Times <a href="http://www.nytimes.com/2012/02/16/business/media/in-philadelphia-papers-editorial-independence-at-issue.html">story</a> raised questions about how a bid to purchase a big city newspaper by a group of well-connected and wealthy buyers would affect news coverage.  The big city newspaper was the Philadelphia Inquirer.  The group bidding to buy it was: <blockquote>made up of the area’s most powerful Democrats. Edward G. Rendell, the former Philadelphia mayor and Pennsylvania governor leads the group, which includes George E. Norcross III, a Democratic powerbroker in South New Jersey;... </blockquote> The Times suggested that the Inquirer's coverage was being influenced by the proposed buyers before they had completed the sale: <blockquote>Last week, Gregory J. Osberg, chief executive and publisher of the Philadelphia Media Network, which publishes The Inquirer, The Daily News and Philly.com, summoned the news organization’s three most senior editors to his office. Over three hours, he told them he would be overseeing all articles related to the newspapers’ impending sale. If any articles ran without his approval, the editors would be fired, according to several editors and reporters briefed on the meeting who did not want to be identified criticizing the company’s leadership. In a telephone interview Wednesday morning, Mr. Osberg said the meeting did not happen. But Larry Platt, editor of The Daily News and one of the editors in attendance, said that it did. Late Wednesday, Mr. Osberg acknowledged that the meeting had taken place but denied interfering in the editorial decisions, saying he only wished to be notified of further coverage. Mr. Platt declined to comment on specifics, but said, 'We fought for what we believed in,' referring to editorial independence, 'and we didn’t get all that we wanted.' </blockquote> A Story About Who Benefits from How a Hospital is Lead This is directly relevant to the anechoic effect in health care. Per the Times, <blockquote>An investigation about conflicts of interest among board members of the Cooper University Hospital in nearby Camden, N.J., remains unpublished after months. Mr. Norcross serves as the hospital’s chairman. In an e-mail Mr. Norcross, who has called The Inquirer and The Daily News in the last week to discuss other coverage, said the reporter’s research 'contained significant factual errors and incomplete data about the hospital and health care industry.' </blockquote> The allegedly suppressed <a href="http://www.philly.com/philly/news/new_jersey/20120325_Powerful_Medicine.html">story</a> finally came out in late March. In its published form it implied that Mr Norcross had an outsized influence on hospital operations, the hospital had business relationships with people who donated to political causes and organizations favored by Norcross, the hospital seemed to disproportionately benefit from government money and actions, and the hospital's board was afflicted by numerous conflicts of interest. Norcross' Influence on Hospital Management Per the Inquirer, <blockquote>With Cooper suffering from record deficits, Norcross, then a top executive at Commerce Bank, helped bring the hospital back from the brink in 1999 when he arranged for the bank to lend it $8 million. Since then, Norcross has put his imprint all over Cooper, from its lavish marketing, to its competitive fight to lure doctors, to its recent $450 million construction boom, to the political figures who work at Cooper and serve on its board. Just as he was one of the first pols to spend heavily on television ads for lowly county races, Norcross was among the first to sell a hospital on TV, deploying Kelly Ripa as Cooper's pitchwoman. As it happens, she's the daughter of Joseph Ripa, the Democratic Camden County Clerk. The milestones have been coming faster. The medical school, a must-have for any hospital with big ambitions, is finally gearing up. This year, work began on a $100 million cancer center.</blockquote> The concern is that Mr Norcross was influencing operations in ways that happened to benefit his interests. Note that this contrasts with a number of cases we have discussed in which health care organizations' boards often seen too deferential to the organizations' hired leaders. Hospital's Relationships with Political Donors The Inquirer reported these instances, <blockquote>With its heavy capital spending and big operating budget, Cooper has become an economic powerhouse. It throws off millions in fees and contracts. Consider Cooper's heavy borrowing to pay for all that expansion. In the last decade, Cooper's bond sales have generated $5.1 million in fees to a variety of law firms, title companies, and financial advisers. On top of that, the hospital has handed out big-ticket contracts for other legal work, such as malpractice defense, its public disclosures show. Many of those who received work via Cooper are major political donors, giving across the state to both parties. But they have been especially generous in Camden County, Norcross' home base. During the last decade, firms involved with Cooper have given more than $1.5 million to Camden County Democrats. As an example, lawyers at Cozen O'Connor, a Philadelphia firm that worked on four Cooper bond issues, have given Camden Democrats $115,060 since 2002. That represented more than 70 percent of its local political contributions in New Jersey. A Cozen spokeswoman said all donations reflected candidates' merits. In interviews, Norcross conceded he had input into who was selected to work on hospital bond issues, managed by state and local authorities. 'Have I made recommendations of quality firms?' he said. 'Absolutely.' But he insists that firms are selected solely on ability and that political donations were irrelevant. "These people have been making major, sizable donations to the Democratic Party in this region long before any bond issue," he said. Lawyers offer varying explanations for their giving. Attorney Steven Weinstein, formerly with the Philadelphia firm of Blank Rome, has given steadily to South Jersey Democrats over the years, public records show. His giving hit a peak, in 2004 when he gave $30,000 to the Camden County Democratic Committee. The following year, Blank Rome was named one of four law firms to work on a $135 million Cooper bond issue, representing the investment firm Goldman Sachs. In the six years since, Weinstein's donations to Camden County Democrats came only to $2,850. Weinstein said his donations had no connection to Blank Rome. But David Lebor, another former Blank Rome partner who joined Weinstein in making Camden County donations in 2004, said the firm would sometimes request that lawyers make specific contributions. Lebor said he didn't know the firm's motives for making requests. 'I don't ask those questions,' he said.</blockquote> The implication is that Mr Norcross was using his control over the hospital to fulfill his political agenda. Favorable Relationships with Government The Inquirer documented instances which seemed to show that the hospital seemed to be treated disproportionately well by government, for example, <blockquote>Late last year, the Delaware River Port Authority, its once-vast development kitty finally running dry, approved its last round of project spending. Among the lucky few recipients: Cooper University Hospital. It got $6 million for the cancer center. No other hospital in New Jersey or Pennsylvania has ever received DRPA assistance, the authority says. The DRPA money was one of many ways in which Cooper has benefited from government action during the Norcross era. This year, Cooper received $52 million in state funding, more than any hospital in South Jersey - and in the top five for all 72 New Jersey hospitals. And U.S. Rep. Rob Andrews (D., Camden) has set aside $640,000 in federal earmarks for Cooper over the last decade, the most of any hospital in his district. Another Camden hospital, Our Lady of Lourdes, received nothing.</blockquote> The Board's Conflicts of Interest The Inquirer article noted, <blockquote>[Cooper Health System CEO John P] Sheridan's old law firm, Riker Danzig Scherer Hyland & Perretti L.L.P., has been a paid lobbyist for Cooper for at least a decade. More recently, the hospital put another firm on its roster. It didn't look far to make the hire. In 2010, Cooper added Republican lobbyist Jeff Michaels to the team. In another lobbying venture, he is the partner of [George] Norcross' brother Philip. The hospital has paid the firm solely operated by Michaels $180,000 over the last two years.</blockquote> Beyond that, <blockquote>As Cooper has spent its millions, hospital insiders have frequently been on the receiving end. From 2008 to 2010 Cooper paid more than $40 million to companies tied to the hospital's board of trustees, according to public-disclosure documents the hospital filed with the IRS. The payments included: $1.6 million to Norcross' Marlton insurance brokerage, Conner Strong and Buckelew. $1.8 million to the Parker McKay law firm, where Philip Norcross is the firm's chief executive. $4.6 million to the former Commerce Bank and its successor, TD Bank. Norcross and a former Cooper board member were top executives at Commerce. $277,000 to Riker Danzig, where Sheridan was once a law partner. But of the millions in payments, the largest share - $33 million - went to a joint venture between international construction giant Turner Construction and HSC Construction and Builders in Exton. Former board member Edward Viner's son, Jim, serves as president of HSC. Most of the money was passed through to subcontractors and the joint venture was paid $2.8 million in fees, Cooper said. In 2008 and 2009, the last years for which regional data were available, Cooper initially reported more of what the IRS calls 'Interested Persons' transactions than any hospital in the Philadelphia area.</blockquote> This again suggests that the hospital may be run such that board members' financial interests are put ahead of other concerns. Summary <a href="http://www.boardsource.org/Knowledge.asp?ID=3.364">According to BoardSource</a>, the duties of boards of trustees of non-profit organizations include: <blockquote>- Duty of Care The duty of care describes the level of competence that is expected of a board member, and is commonly expressed as the duty of "care that an ordinarily prudent person would exercise in a like position and under similar circumstances." This means that a board member owes the duty to exercise reasonable care when he or she makes a decision as a steward of the organization. -Duty of Loyalty The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization. -Duty of Obedience The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission. </blockquote> The delayed Inquirer story suggests that instead, those who are supposed to steward large health care organizations may be putting their own interests, political or financial, ahead of the mission, potentially violating their duties of loyalty and obedience. This story corroborates questions we have been raising about who now are the stewards of health care organizations, and to what ends. However, this particular story appears to have been delayed, and perhaps diluted, because of the power wielded by the sorts of people who now are supposed to be stewards of health care organizations. This shows how powerful insiders not only are distorting health care to fit their own agendas, but that they may be smothering the discussion of this vitally important issue. We will not be able to truly reform health care until we can freely discuss what has gone wrong with it.

How the Anechoic Effect May Be Generated - The Chairman of a Hospital Board Buys a Newspaper

We have often noted that stories about problems with the leadership and governance of health care tend to be anechoic. That is, they tend to get less notice and generate less discussion than their con…

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18 Apr 2012

BLOGSCAN - Why Problems at Local Marquee Hospitals May be Anechoic

We have often discussed how the shortcomings of leadership of big health care organizations may be anechoic.  (See <a href="http://hcrenewal.blogspot.com/2011/01/who-undermined-these-wonderful.html">this post</a> for a recent example.)  Now, on the HealthBeat blog, Maggie Mahar <a href="http://www.healthbeatblog.com/2011/01/when-a-local-newspaper-investigates-local-hospitals-.html">discussed</a> how journalists often fail to look closely at the actions of large, well-known local hospitals.  She noted some possible causes: - "Hospitals, after all, are major advertisers." - "the marquee hospital’s patrons tend to be powerful local figures." - " most readers really don’t want to hear that their local academic medical center is having problems...." She also summarized just how unhealthy relationships among the news media and marquee hospitals can become, but also provided some examples of incisive investigative reporting.  As they say, read the whole thing.

BLOGSCAN - Why Problems at Local Marquee Hospitals May be Anechoic

We have often discussed how the shortcomings of leadership of big health care organizations may be anechoic. (See this post for a recent example.) Now, on the HealthBeat blog, Maggie Mahar discussed…

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18 Jan 2011

Who Undermined "These Wonderful Philanthropic Organizations?" - Evil External Swindlers or Their Own Leadership

The rise and fall of yet another esteemed health care institution provides another cautionary tale about health care dysfunction.  The Tragic Fall of the Picower Foundation Two years ago, a highly-regarded charitable foundation had to close its doors, apparently one of the biggest victims of the Bernard Madoff Ponzi scheme.  Here is the Boston Globe <a href="http://www.boston.com/business/articles/2008/12/20/major_foundation_falls_to_madoff_fraud/">version</a> of the story: <blockquote>The unfolding scandal surrounding the alleged Ponzi scheme run by Bernard L. Madoff yesterday claimed as a victim one of the largest foundations in the country, which has funded groundbreaking brain research at the Massachusetts Institute of Technology and diabetes research at Harvard Medical School. The Picower Foundation of Palm Beach sent an e-mail to 'colleagues and friends' late yesterday saying that it was a victim of Madoff's alleged scheme and that it would soon shut down. With assets of more than a half-billion dollars, it is believed to be the largest charity to have been forced to close by the unfolding scandal. 'It is with great sadness that I write to inform you that the Picower Foundation has ceased all grant-making, effective immediately, and will close its doors in the coming months,' wrote Barbara Picower, the foundation's president, who added that its money was managed by Madoff.</blockquote> Similarly, the New York Times <a href="http://www.nytimes.com/2008/12/20/business/20foundation.html">reported</a> without question: <blockquote>One of the nation’s leading philanthropies, the Picower Foundation, announced on Friday that it was shutting down. </blockquote> Also, <blockquote>Listed previously at $1 billion, the foundation’s assets were managed by Bernard L. Madoff, Mrs. Picower said in a statement, and his 'act of fraud has had a devastating impact on tens of thousands of lives as well as numerous philanthropic foundations and nonprofit organizations.' </blockquote> A Blow to Medical Research and Academic Medicine This appeared to be a major blow to philanthropy, and to medical research and academic medicine.  Per the Boston Globe: <blockquote>[No charities that had suffered from the Madoff scheme] were near the size of the Picower Foundation. In its 2007 tax return, it said the market value of its investment portfolio was $955 million. The Foundation Center, a nonprofit that tracks philanthropy, ranks the Picower philanthropy as the 71st largest in the United States by assets. It finances medical research at many leading institutions, human rights and child advocacy programs, and arts and cultural operations.</blockquote>In particular, <blockquote>A portrait of the Picowers hangs in the Picower Institute for Learning and Memory at MIT. They gave the center $50 million in 2002, which was, at the time, the largest grant from a single foundation the university had ever received. The foundation gave MIT another $4 million in May to launch a fund for faculty to conduct high-risk neuroscience research activities. 'I am deeply saddened by the terrible news,' Susumu Tonegawa, the Nobel laureate for medicine who founded the center in 1994, said in an e-mail. It is unclear from the foundation's statement whether it lost all its money or just enough to force it to cease operations. The Picower Foundation also gives MIT $200,000 a year to fund scholarships for graduate students, in the name of Norman Leventhal, the famed Boston developer and philanthropist. Leventhal was a director of Picower Foundation until this year. The Picower Foundation also awarded $1.5 million for diabetes and metabolism research to Dr. Jeffrey Flier, dean of Harvard Medical School. </blockquote>In addition, <blockquote>[Dean Flier's] research funded by the foundation 'is over,' he said, unless he finds another funder. Added his colleague, Dr. Barbara B. Kahn, chief of the division of endocrinology, diabetes, and metabolism at Beth Israel Deaconess Medical Center, 'I think it's tragic for the Picower Foundation and for the public that a single individual could undermine these wonderful philanthropic organizations that support excellent causes such as biomedical research.'</blockquote>So that was the story in 2008. By then, we all knew that the scope of Bernard Madoff's fraud was audacious, and that all sorts of people were victimized, but it seemed a particularly low blow that he could "undermine these wonderful philanthropic organizations that support excellent causes such as biomedical research."  The narrative was one in which a prestigious, well-intentioned charity was laid low by an evil act perpetrated by a wily criminal. Should Madoff be Blamed? Or not. Today the Wall Street Journal <a href="http://online.wsj.com/article/SB10001424052748703583404576079960159263644.html">reported</a> the latest update on this story, on that seems quite dissonant with the version above: <blockquote>A federal judge signed off Thursday on a settlement in which the widow of a longtime investor with convicted Ponzi scheme operator Bernard Madoff will return $7.2 billion to the victims of Mr. Madoff's fraud. The settlement by Barbara Picower, the widow of Jeffry Picower, brings to nearly $10 billion the amount that Irving Picard, the court-appointed trustee for Mr. Madoff's firm, has recovered for people cheated in the scheme.</blockquote> Recall that Barbara Picower was the President of the Picower Foundation. Anechoic Stories About the Conflicted Leadership of the Picower Foundation In fact, the glowing description of that foundation in the Boston Globe did not square with stories that ought to have raised serious questions about this apparent bastion of health care philanthropy, but instead were quite anechoic. In 2001, the St Petersburg Times had <a href="http://www.sptimes.com/News/070801/news_pf/Worldandnation/Complex_web_benefits_.shtml">published</a> an expose of the Picower Foundation which suggested that its Jeffrey Picower used it in a complex scheme involving self-dealing for the purposes of personal enrichment.  The story is a bit complicated, but I provide details below to underscore its verisimilitude. A Foundation that Appeared Virtuous On one hand, it acknowledged how the foundation was set up to appear virtuous. One of the largest recipients of its apparent charity was the Picower Institute. <blockquote>Picower's wife, Barbara, was active in determining the charities that received Picower Foundation grants. In 1999, the foundation gave $250,000 to the National Abortion and Reproductive Rights Action League, $700,000 to public television station WNET-Ch. 13 in New York, $120,000 to the Children's Aid Society and $107,000 to the Boys and Girls Clubs of Palm Beach County. By far, though, its largest grant was to the Picower Institute. The foundation's $5.5-million donation was 41 percent of the $13.3-million in grants it made in 1999. </blockquote>The Institute's leader was a famous medical academic: <blockquote>Dr. Anthony Cerami was at the peak of his career in 1991 when he dined with Picower to celebrate his new job as president of the Picower Institute for Medical Research. A dean at New York's Rockefeller University, Cerami had just been elected to the elite National Academy of Sciences, about the highest honor for a scientist short of a Nobel Prize. 'Dr. Cerami is what we call a giant in the scientific community, and he's also very well liked personally,' said Michael Kent, a biotechnology investor. </blockquote>A Focus on  Drug Development But it appeared that the main purpose of the Institute was actually to develop drugs, through a vehicle called Cytokine Networks: <blockquote>Cytokine Networks held the rights to certain discoveries of the Picower Institute. In an arrangement common for non-profit medical research charities, it was set up in 1993 to commercialize science discovered at the Picower Institute. 'To bring science more quickly to the bedside -- that was their avowed mission,' Massey said of the institute. Cytokine Network's largest shareholders were the New York-based Picower Foundation and the Picower Institute, which had each invested $2.5-million in the venture and held a combined ownership stake of 62.5 percent. [Jeffrey Picower] owned no shares of the company.</blockquote> Cytokine Networks held the rights to a drug labelled CNI-1493: <blockquote>CNI-1493 has shown great promise in reversing Crohn's disease, a devastating inflammation of the intestine that is treated, though not always effectively, by injections. A small molecule can be taken in pill form and is cheaper to manufacture. </blockquote> However, Jeffrey Picower, the husband of Barbara Picower, seemed to indirectly control Cytokine Networks: <blockquote>he ran the board meetings, which were held at the New York offices of the JMP Group, Picower's investment holding company, said [Dr Glenn] Rice, the former Cytokine Networks executive. 'He was involved with every major decision,' Rice said. 'He'd get into minutia -- the capitalization of the company, screening potential new investors, personally reviewing the clinical trials. Virtually everything a chairman of the board would do, he did.' </blockquote>Picower Foundation Sells Cytokine Networks to Picower (the Person) And here comes the trick. Observe closely: <blockquote>In 1999, [Cytokine Networks] ... merged with another private pharmaceutical company, PharmaSciences Inc., in which Picower was the majority shareholder. </blockquote>So <blockquote>When the merger was completed in 1999, Picower's non-profit organizations' equity stakes were diminished from a combined 62.5 percent of the old company to 24.5 percent of the new company. Picower owned nearly 47 percent -- making him the largest shareholder in the company that had obtained the rights to CNI-1493. An evaluation by Merrill Lynch put the merged company's fair-market value at $15 to $25 a share, making Picower's stake worth an estimated $40- to $67-million. </blockquote> This is a pretty good trick: <blockquote>Rice contends that by wearing all the hats in the merger, Picower had a conflict of interest. In any business negotiation, each side tries to get the best deal. Yet in this merger, the interests of Picower's non-profit organizations were pitted directly against Picower's personal interests. On one side were shareholders of Cytokine Networks, mainly the Picower institute and foundation. On the other side were the shareholders of PharmaSciences, primarily Picower. Picower called the shots at the institute and foundation. So, Rice said, the question is this: On whose behalf was Picower working? His own? Or his non-profit organizations? 'The valuation here would be crucial,' said George Cowperthwaite Jr., a certified public accountant who specializes in preparing private foundation returns and has no connection to Picower. By that, Cowperthwaite means the relative values assigned to each company for purposes of the merger. The shareholders of Cytokine Networks would be expected to push for the highest value possible assigned to their company. A higher value would give them more ownership in the new, merged company. Yet Rice, who also was a shareholder in Cytokine Networks, questioned whether Picower had any incentive to push for a higher valuation of Cytokine Networks because it would mean that he would end up owning less of the merged company. Indeed, a 1997 valuation by Lehman Brothers concluded that Cytokine Networks shareholders should own 47 percent of the combined company. They ended up with 36 percent. </blockquote> In 2009, ProPublica published <a href="http://www.propublica.org/article/madoff-client-jeffry-picower-netted-5-billion">a report </a>on the Picower Foundation which summarized this transaction thus: <blockquote>Picower used both his foundations and a private corporation called PharmaSciences, of which he was the majority shareholder, to gain control of a potentially lucrative medical discovery. In 1999, Picower merged PharmaSciences with a for-profit spinoff of his institute called Cytokine Networks, essentially negotiating with himself. The merged company called Cytokine PharmaSciences had the rights to develop a new drug that could help minimize such illnesses as arthritis and multiple sclerosis. The newspaper raised the question of whether Picower had shortchanged his nonprofit in the deal.</blockquote>So it appeared the Jeffrey Picower used the Picower Foundation, which was lead by his wife, and the Picower Institute, which was ostensibly an independent not-for-profit organization funded by the the Foundation, to set up a deal which could have markedly enriched Jeffrey Picower. Picower's Previous Anechoic Financial Peccadilloes In fact, it appeared that Jeffrey Picower had a long history of questionable business deals.  In 2002, Forbes ran a <a href="http://www.forbes.com/forbes/2002/1014/068.html">profile</a> of Jeffrey Picower that asserted: <blockquote>has been battle-hardened from years of legal disputes over his dealings. In the 1980s he sold to clients of his old accounting firm Laventhol & Horwath shaky tax shelters involving computer leases. When the Internal Revenue Service realized the computers were virtually worthless, it challenged the deductions. That spelled trouble for longtime client Peter Davidson of Brooklyn, N.Y.'s Davidson Pipe, who had put at least $30 million in Picower's leases after an introduction by Laventhol accountant William W. Schneck, who happens to be a former boss of Picower. Davidson sued Laventhol and Picower for $90 million. He claimed that Picower had bribed Schneck to betray him. Picower denied that, and his lawyer says he testified that the $50,000 he'd given Schneck was a loan. After hearing the opening arguments, he and Laventhol paid Davidson to drop the case on condition that Davidson keep his mouth shut about the settlement. Davidson later settled with the IRS. Picower also had a run-in with the Securities & Exchange Commission. In 1983 the SEC rebuked him for being months late disclosing that he had exceeded a 5% position in Fidata, a financial services firm that he later merged into what is now Alaris, a medical device maker. Shades of the Cytokine Pharma merger: Picower was on both sides of the table. Two years ago Picower had to put up $21 million from another one of his pet companies--Physician Computer Network in Morris Plains, N.J.--to appease other shareholders who'd lost everything when it went bankrupt after it came out that his executives had cooked the books. It is hard to imagine how a smart guy like Picower could have been oblivious to all of that while chairing the board and controlling 45% of the stock, but he was never charged with a thing. There have been other trips to the courthouse. Fourteen years ago he refused to pay the final bill for renovations on his New York offices. When the interior design firm sued to collect, he sued them for $17 million, taking the stand at trial in an effort to convince the jury that sloppy work had left him in squalor. The judge made a surprise visit to the office with the jury in tow. The place turned out to be sumptuous, and the judge decided not to let it go to the jury at all, rendered a directed verdict and ordered Picower to fork over $178,000, including legal fees. </blockquote>So by 2002, there were plenty of reasons to worry about the integrity of any organization lead by Picower.  Yet when the Picower Foundation went bankrupt in 2008, the public narrative was of a noble pillar or health care philanthropy done in by an evil confidence man. One year later, the story was very different Picower as a Beneficiary of Madoff So maybe it should have been no surprise when ProPublica chronicled how the Picower Foundation seemed to have made huge profits from the Madoff Ponzi scheme that had victimized so many others. <blockquote>It now appears that the biggest winner in Madoff's scheme may not have been Madoff at all, but a secretive businessman named Jeffry Picower. Between December 1995 and December 2008, Picower and his family withdrew from their various Madoff accounts $5.1 billion more than they invested with the self-confessed swindler, according to a lawsuit filed by the trustee who is trying to recover money for those Madoff defrauded.</blockquote>Jeffrey Picower died in October, 2010.  As noted above, just today, the settlement that would return $7.2 billion from Picower's operations to the Madoff  trustee. Summary The big question is why people can be so easily fooled?  Why were a Chief of Endocrinology, the Dean of one of the country's most prestigious medical schools, and a Nobel Prize winner not the least bit skeptical of a foundation whose leadership was accused of conflicts of interest and self-dealing, and had been involved in a series of questionable business deals over the previous 20 years?  All this was public by six years before the collapse of the foundation.  Why was the media so eager to spin a narrative that labelled the apparent perpetrators as victims?  A simple Google search on "Picower" would have suggested other explanations. Certain health care institutions seem to held in such high esteem that almost no one thinks to question what goes on behind their walls.  This makes it possible for unscrupulous leaders to subvert the missions of such institutions for personal gain.  It even makes it possible for scam artists to create institutions that appear as if they ought to be held in high esteem as vehicles for chicanery. We have now seen so much <a href="http://hcrenewal.blogspot.com/search/label/ill-informed%20management">ill-informed</a>, <a href="http://hcrenewal.blogspot.com/search/label/Mismanagement">incompetent</a>, <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">mission-hostile</a>, <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicted</a>, and <a href="http://hcrenewal.blogspot.com/search/label/crime">criminal</a> leadership of health care organizations that no one should accept the word of someone just because he or she is in the leadership of an institution with a fancy name. Just because a health care organization has an impressive name, or even an impressive history does not mean that its current leaders should be immune to questions, inquiry, skepticism, or even investigation.  In fact, in this day and age, the leaders of large health care organizations with historically good names should be scrutinized especially carefully.  If not, expect so see more collapses of "wonderful" organizations.

Who Undermined "These Wonderful Philanthropic Organizations?" - Evil External Swindlers or Their Own Leadership

The rise and fall of yet another esteemed health care institution provides another cautionary tale about health care dysfunction. The Tragic Fall of the Picower FoundationTwo years ago, a highly-rega…

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13 Jan 2011

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