Chicago hospital under investigation for ‘potential misuse of charitable assets’ | National News

Chicago hospital under investigation for ‘potential misuse of charitable assets’ | National News

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Loretto, a cash-strapped safety-net hospital, changed leadership in 2018, bringing on current President George Miller and installing Dr. Anosh Ahmed as chief financial officer and chief operating officer.

In recent months, it’s come under scrutiny over a series of scandals.

But questions about the hospital have extended past its vaccines.

Loretto’s board is responsible for overseeing contracts and financial billings to ensure top vendors aren’t overcharging or charging for services that weren’t provided. 

Lightford has been paid by an insurance firm owned by Loretto, which also paid for her to travel to the Caribbean for firm meetings, records show. Loretto paid for those trips, including stays at a luxury hotel, Lightford said. Lightford’s campaign fund also has accepted more than $38,000 in contributions from a key hospital management contractor, records show.

Lightford said in an interview she was not aware of the attorney general’s investigation.

“I don’t know anything about the attorney general’s probe,” she said.

 

After the stories disclosing Loretto’s contracts with Suhail, Loretto imposed stricter oversight of the hospital’s largest contracts, Lightford said.


“We made sure we put parameters in place,” she said. “Now we have to review every contract that’s over $750,000 as a result of this.”


Lightford said she received $4,800 annually from the hospital’s insurance firm and had little say in choosing the Caribbean hotel where she and other Loretto board members stayed. 


Loretto was forced to create its own offshore insurance firm several years ago when leading U.S. firms wouldn’t service the hospital, Lightford said. Cayman Islands laws require board members to travel to the island to attend board meetings, she said.


“There was nothing wrong with what I did,” she said. “I’ve just been busting my butt to try and keep the hospital open for 20 years. … It hasn’t been easy.’’


The BGA and Block Club also found the board chairman’s law firm billed the hospital for at least $3 million in legal fees over 11 years, although Loretto said his firm worked at a discount.


And the hospital’s compliance officer, who vets all staff and board conflict of interest statements, has private business ties to Loretto’s top attorney, who is tasked with defending the institution against legal claims and government investigations. 


Health care ethics experts said it’s not illegal for board trustees to do business with the hospital, but such personal financial entanglements could compromise the board’s independence.


The hospital is also facing questions about the contracts awarded to Suhail.


Soon after Ahmed joined Loretto in 2018, Suhail created three companies that received contracts with Loretto worth nearly $4 million in that first year, Block Club and the BGA first reported in April. One of the contracts was to overhaul the hospital’s billing system and another was to revamp the hospital’s psychiatric unit.


Suhail attorney Joseph Hylak-Reinholtz said Suhail has not been contacted by the attorney general or any government investigators about the contracts. Suhail’s companies have improved care at Loretto and saved the facility millions of dollars, he said.


Suhail and Ahmed severed their business ties in May following the Block Club and BGA reports, Hylak-Reinholtz said.


Ahmed could not immediately be reached for comment.


The 122-bed safety-net hospital serves mainly low-income people and patients of color, records show. It is run as a tax-exempt non-profit corporation, and its $81 million annual budget comes through the taxpayer-financed Medicaid program, as well as state grants and donations.


Inquiries like this one by the attorney general “are not particularly common,” said David Bea, a Chicago attorney who has represented hundreds of nonprofit clients over the past two decades. “I’ve seldom seen an organization under investigation. It’s pretty rare.” 


If the Charitable Trust Bureau does find serious problems, it can impose fines or even revoke a charity’s authority to operate in Illinois and its power to solicit contributions, Bea said. The attorney general’s office also can make a referral to the IRS if they believe a further audit is warranted.


“If there’s criminal activity, they can pursue the individuals,” Bea said.

 

 



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