Hospital Deal Gets Financing From D.C.

A copy of that letter, obtained yesterday by The Washington Post through a Freedom of Information Act request, shows that Gandhi asked Nickles to require that Specialty submit an audited financial statement.

But Specialty did not submit such a report, and Gandhi was left with vague financial documents that failed to allay his concerns, according to government sources who spoke on condition of anonymity because the financial statements were confidential.

Gandhi said: "We sent a confidential letter to Nickles about what we saw at that point and where this whole thing was going. We alerted them to the issues [later] raised in the fiscal impact statement. They should not have been surprised. This is months of deliberation. For them to say, 'Gandhi came in with this letter at 8:45 this morning,' that's rubbish."

Gray and Catania said they had not seen the letter. In an unusual move for a legislative meeting, Gray called Nickles and Frank Willich Jr., chief development officer for Specialty, to address Gandhi's points.

Willich said he agreed with Catania's assessment. Nickles said many of the issues cited by Gandhi were discussed during negotiations and, he thought, satisfactorily resolved.

But he told the council, "I can't sit here today and tell you that this is a risk-free transaction."

Staff writer David Nakamura contributed to this report.