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$10M is sought from D.C. by firm with ties to Gray campaign adviser

By Tim Craig, Mike DeBonis and Nikita Stewart
Tuesday, March 8, 2011; 9:28 PM

A now-defunct radiology firm with ties to Mayor Vincent C. Gray campaign consultant Howard L. Brooks is seeking $10 million from the city for services it claims to have provided to the taxpayer-supported United Medical Center.

Whether Brooks had a role in drafting the letter is unclear, but it seeks payments dating from more than three years ago. City and hospital officials said they have refused payment, saying that they believe Southeast Imaging PLLC had overcharged the facility.

Brooks allegedly made payments to mayoral candidate Sulaimon Brown during last year's campaign, Brown claimed in a recent interview with The Washington Post. Brooks, who has denied making any payments, did not return messages seeking comment.

Brooks was paid $44,000 by the Gray campaign through last fall. He is a close associate of campaign chairwoman Lorraine A. Green. Brown alleges that she oversaw the payments and that the campaign promised him a city job in return for his attacks on then-Mayor Adrian M. Fenty if Gray won.

Gray and Green have denied the allegations, and The Post has not been able to independently verify any payments.

The letter, sent to Gray on Feb. 23, was drafted by an attorney for Southeast Imaging and renewed efforts to collect money the company says it owed for services provided from 2005 to 2007.

"It has never been our client's desire to file a law suit against the District of Columbia," wrote attorney Jill L. Phillips, "however, they have been irreparably harmed and therefore now have no choice but to bring action against all parties involved if the matter is not resolved."

Phillips declined to comment on the letter, obtained by The Post under the Freedom of Information Act.

Gray learned of the letter Tuesday, a spokesman said. The mayor's general counsel, Brian K. Flowers, confirmed receipt of the letter but said it was referred to the hospital. "We take the position that we are not liable for debts incurred before the foreclosure," Flowers said.

According to a report filed in 2005 with the Department of Consumer and Regulatory Affairs, Brooks is a member or manager of Southeast Imaging. A 2007 report, the last one filed by the corporation, did not list Brooks as a member but listed Charles E. Hunter as a principal in the company. Hunter, a licensed radiologist, said he and Brooks were business partners.

Hunter, however, said he had no knowledge of the letter and doesn't "know anything about $10 million."

"I did talk to Jill Phillips prior to the first of the year, and I know they were waiting for the new mayor to be inaugurated so that they could submit something to him," Hunter said. "But I was not aware of the dates or the amount or anything like that."

According to hospital and city sources, Brooks had turned to Gray when he was D.C. Council chairman to secure payment from the hospital for unpaid invoices.

Council member David A. Catania (I-At large), chairman of the Health Committee, said he was approached by Gray's council chief of staff in late 2007 or early 2008 asking about Brooks's concerns that his company hadn't been paid.

Catania said he told Dawn Slonneger, who no longer works for Gray, that the company's claims were under dispute because the hospital believed it was being overbilled.

In an interview, Slonneger confirmed she asked Catania about the situation but declined to comment further.

Since The Post reported on Brown's allegations, Gray has been pressed to explain what role Brooks played in his campaign. Brown said Green and Brooks gave him cash payments in the "thousands" of dollars last summer.

Gray has said Brooks helped raise funds and organize taxi drivers to take voters to the polls. Gray has also indicated that their sons attended college together.

Also, in recent years, Brooks has driven his baby-blue 1966 Cadillac convertible as part of Gray's entourage in summer parades. After Gray defeated Fenty, Brooks's son was appointed to a $110,000-a-year job as a special assistant in the Office of the Deputy Mayor for Planning and Economic Development.

Brooks's neighbor Leroy A. Ellis also worked for Gray's campaign during the general election. He was paid $23,500 in consulting fees, $22,090 for providing campaign materials and $15,186 for catering, according to campaign finance reports.

Ellis, who referred questions to Gray's transition team, was recently hired as a $125,000-a-year special assistant to the D.C. Department of Employment Services.

Beside his campaign role, Brooks has had ongoing professional dealings with the District government as it struggled to keep the only hospital east of the Anacostia open.

Last year, the District seized control of the hospital after city officials alleged that its previous owner, Specialty Hospitals of America, had defaulted on its lease agreement.

Since taking office in January, Gray has been pushing to sell the hospital, concerned that it is becoming a financial burden for taxpayers.

George Chopivsky, a District businessman interested in purchasing the hospital, said Brooks recently approached him to discuss his bid. "He just wanted to understand what my interests are," Chopivsky said. "I am assuming he wanted to see if his interests dovetailed with my interests."

Until 2007, Southeast Imaging had a contract to offer radiological services at the hospital, which had been previously known as Greater Southeast Community Hospital.

But following a dispute with Speciality, which until last year owned the hospital, the contract was terminated when officials became concerned Southeast Imaging was overbilling.

In December 2009, Phillips wrote to Frank G. DeLisi III, the chief executive of United Medical Center, and then-Chairman Gray "demanding . . . payments immediately" totaling $10 million.

Hospital officials, Catania and former Attorney General Peter J. Nickles protested and accused the company of trying to gouge the hospital, which has struggled to avoid bankruptcy.

"They were unlike almost every other major company that we asked to cooperate with the hospital to save the hospital," Nickles said. "They needed to take a discount so we could get through stormy times. Not only did they not consider that, they tried to put our back against the wall."

Frank J. Wilich Jr., Specialty's chairman, said Gray's office tried to mediate the dispute between Brooks and the hospital in early 2008, but settlement talks were not successful.

Hospital records show that Southeast Imaging has a $922,215 outstanding invoice for services performed from December 2005 to November 2007. George Lowe, a local consultant who had advised Specialty, noted the bill includes $360,000 in late fees - which he said amounts to $5,000 a day.

"Southeast Imaging wanted aggressively high prices, and being the stewards of city money, at that point, [Specialty] practiced prudent buyer principles and replaced them," Wilich said.

In late 2007, Greater Southeast re-bid its radiology contract, which Southeast Imaging had held for $162,000 a month, Lowe said. But before a replacement could be selected, officials say, Southeast Imaging and its staff abruptly left the hospital on New Year's Eve 2007.

Lowe said Specialty offered the company, which lost its incorporation in 2009 when it failed to file its biannual report, a $162,000 settlement after the company's relationship with the hospital was severed. The offer was rejected, he said.

Frederick D. Cooke Jr., a District attorney who represented Brooks at the time, said Southeast Imaging was "one of a number of vendors trying to get paid" after the hospital nearly went bankrupt in 2007.

"They were overdue a big pot of money, and looking at the records, I believe them," Cooke said. But he added Gray was not involved in the negotiations. Cooke added he doesn't "know what the current thinking is" regarding the $10 million claim.

The 2009 letter from Phillips to DeLisi said the company owed "all past due payments, interest" as well as compensation for "financial harm suffered" by the company when it separated from the hospital.

Hunter, however, said he was skeptical that he and his former business partner were owed $10 million.

"We worked for a period of time without getting paid, but it wasn't $10 million," Hunter said. "I don't know know anything about $10 million."

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