Rep. Daniel J. Flood (D-Pa.) rammed a special $14.5 million appropriation for Philadelphia's Hahnemann Hospital through the House three years ago over the pointed objections of the Department of Health, Education and Welfare.
Flood also passed over the applications of seven other Pennsylvania hospitals for federal funds in pressing for the Hahnemann grant at the final markup session of his House appropriations subcommittee on a $15.9 billion appropriation bill.
HEW officials had protested in a memo to the subcommittee's ranking Republican, Robert H. Michel (III.), that Hahnemann already had an application pending with them for $13.2 million but it failed to meet their criteria for hospital construction grants.
The delicate fianancing for the 21-story Hahnemann project, now under way in Philadelphia, has since come under federal grand jury investigation. lt has also sparked allegations that Flood and Rep. Joshua Eilberg (D-Pa.), whose law firm was hired by Hahnemann Hospital in the spring of 1975, may have profited from the undertaking.
Although the $14.5 million grant was only about 20 per cent of the projected total cost, officials at Hahnemann - al(See HOSPITAL, A6, Col. 1)(HOSPITAL, From A1)ready frustrated at an earlier financing attempt without money from Washington - regarded the federal funds as crucial, the "sine que non" for the additional money that was needed.
ln addition, according to an undated report by the hospital in government files, Hahnemann had "created an acute strain on (its)ability to meet current expenses when due "by dippling into operational revenues for architects' iees and other early expenses.
Michel said he "raised hell" when Flood finessed HEW's objections by turning the Hahnemann bid into an antipoverty project to be carried out by the Community Services Administration. Flood, however, just "pushed it through" his subcommittee on a voice vote, Michel said.
From there on, it had clear sailing. No one questioned it in the Senate Appropriations hearings before the Labor-HEW subcommittee headed by Sen. Warren G. Magnuson (D-wash.). A staff memo to one of Magnuson's colleagues about the item offered one theory for the acquiescence.
"l would assume Magnuson will accommodate Flood since Flood often accommodates Magnuson," the memo stated.
Magnuson yesterday took issue with that assessment and hinted that he simply trying to accommodate the presumed wishes of Sen. Richard S. Schweiker(R-Pa.), a member of Magnuson's subcommittee. but in any case, what Michel assailed as "The System" of congressional logrolling on appropriations prevailed. The Hahnemann grant became law in June 1975.
Eilberg's firm, hired by the hospital in late April, then went to work on the additional financing that was needed, primarily a $39.5 million bond issue from the Hospitals Authority of Philadelphia, "a body politic and corporate" that the City Council there was created in 1974.
Correspondence in the files of the Community Services Administration, obtained under the Freedom of lnformation Act, suggests the application may have been less than an arms-length transaction.
According to letters to CSA from the Eilberg law firm as late as Nov. 19, 1975, the firm's chief lawyer serving Hahnemann, Lawrence Corson, was communicating with CSA officials about the hospital project as a member of the firm of "Eilberg, Corson, Getson & Abramson."
The letterhead also listed a Philadelphia lawyer named Romanus J. Buckley as "Of Counsel" to the Eilberg firm.
By Nov. 25, 1975, just six days later , the names of Eilberg and Buckley had disappeared from the letterhead. Coincidentally, the first letter from the new firm of "Corson, Getson & Abramson" in CSA files here was an application for multimillion-dollar bond issue.
lt was addressed to the "Hospitals Authority of Philadelphia . . . Attention: Romanus J. Buckley, Esquire, Executive Director."
Corson could not be reached for comment. Buckley, who had been appointed executive director of the Hospitals Authority in June 1974, said in a telephone interview that it was all a misunderstanding since he had "severed all relationships" with the firm-where he had been a "tenant" months before November 1975.
The Eilberg firm was still "handling some cases for me" but "they gave me no assignments, l gave them assignments," the 69-year-old Buckley said.
ln any case, Buckley recalled, when Corson went to see him in the fall of 1975 about a bond issue for Hahnemann, "l said, 'Hey Larry' . . . l said, 'Look, make sure my name's off the door and off the letterhead.'" He said he assumed both steps had been taken earlier but "l never went back to the office" to find out.
"l've since talked to them and they apologized," Buckley said. "They said a girl still had the (old) stationery in her desk . . . l just wish to hell they hadn't used my name."
The Hospitals Authority approved the Hahnemann project on Dec. 12, 1975, "as an appropriate one for the authority's assistance" and authorized the steps that resulted in the sale of a $39.5 million bond issue to complete financing for the new hospital construction.
All this, however, would have been impossible without the appropriations rider Flood sponsored despite HEW's warning that the project, on its merits, would "not be able to complete successfully against many higher priority projects" then pending. The HEW memo to Michel called the grant to CSA "a clear avoidance of (the) competition" that Hahnemann should have had to meet in vying for federal funds.