“Step Up, Step Down,” Cygnus921

March 4, 2019; KGUN-9 (Tucson, AZ)

Hacienda HealthCare is now infamous as the facility where a severely incapacitated 29-year-old patient gave birth after being raped months before by a nurse. No one, despite the fact that her weight was 112 pounds, knew that she was pregnant. Since that revelation, the home has lost at least 10 members of the management team, including the CEO and two board members—among them Tom Pomeroy, who served as Hacienda’s board chairman for 38 years. Add to that the fact that Rick Romley, an attorney who was contracted as an internal investigator, has terminated his own contract, and you have a receivership situation if there ever was one.

Romley was pretty clear about where he thinks the problem resides:

My issues are with the board of directors and not with senior management. I felt feel that senior management was making tremendous progress towards addressing many issues, but it was the board of directors that were the problem. As I stated in my initial press conference, if I felt that the board of directors would not address the issues appropriately, and if I did not have full cooperation, then I would resign.

On February 19th, an article in the Arizona Republic revealed that board members “have a long record of self-dealing and nepotism.” Two of the board members specifically have business contracts with the organization, and at least three have family members who have obtained employment there, including one vice president and a manager.

Hacienda’s board chairman (now resigned), for example, brokered health insurance for roughly 800 Hacienda employees through his private company for decades, reaping lucrative commissions on the contracts.

On top of that, many of the board members do business with one another outside of the board. None of this leads to the kind of independence that might be needed in this board. It reminds us, in fact, of the board of Goodwill Omaha, which readers may recall had a similar set of interconnections.

Dr. Kevin Berger agrees that the board is the locus of the problem, saying, as he tendered his own resignation, that he believes the five remaining members of the board should also step down. When they reconstitute, he says, the board should be more diverse and include representation from patient families. As it happens, a petition is circulating among patient families to urge the board to resign, and even Arizona’s Governor Doug Ducey wants the board removed, saying he has no confidence in the leadership of the nonprofit.

Notably, Ducey cites two previous Republic investigations that documented years of staff complaints of sexual harassment by former longtime CEO Bill Timmons and allegations of financial fraud, leading the state to launch a criminal investigation over allegations it billed the state more than $4 million in bogus charges.

Pomeroy denied turning a blind eye to Timmons’s behavior. He said the board ordered Timmons to get counseling, attend training sessions and docked his pay. But financial records show the board continued awarding Timmons raises and bonuses. By 2015, Timmons was making $609,000 annually.

There is, as always, the usual commentary from experts about what parts of all this behavior was actually against the law. But, is that really the point? What a facility like this needs is a board that places the well-being of those who depend upon it first—as in a sacred trust. That focus should be undistracted by relationships that enrich board members or their families, and the best way to make that happen is to draw a firm line that prevents board members from doing business with the agency.

The fact that the board let longstanding problems related to sexual harassment persist without sending a loud and clear message can only be seen as laying a cultural foundation for abuse. In this case, the board should understand they have culpability and do everyone a big favor and resign.—Ruth McCambridge