Prince George's County Executive Parris N. Glendening has written to the chairman of the nonprofit corporation that oversees the county's three long-troubled public hospitals asking his response to allegations of mismanagement that include nepotism, financial agreements with businesses in which board members have interests, and improper awarding of contracts.
Citing a "possible breach of the public trust," Glendening asked Chairman Francis J. Aluisi to look into alleged "irregularities . . . in the management of that organization."
The letter, mailed last Friday, preceded the corporation board's vote Monday night to fire board vice chairman Sylvester (Fred) Frederick after Frederick had raised questions similar to Glendening's at board meetings.
"I was asking some very tough questions and demanding answers and checking them out to make sure they were accurate," Frederick said.
Wayne Curry, board counsel and general secretary, yesterday defended the board, saying that in the year and a half it has been in existence, it has upgraded the administration of Prince George's General Hospital, Laurel-Beltsville Hospital and Bowie Health Center.
"Our board believes firmly in the mandate delivered to us by the county that our hospital system must exist as a multifacility system with equal access to good health care for everybody . . . . " he said. "We are not going to sit idly by while politicians play into the hands of a few dissidents attempting to thwart this longstanding objective."
Curry figures in one of Frederick's concerns. In a January letter, Frederick asked the county bar ethics committee about the propriety of $204,000 in legal fees awarded by the corporation board to the firm of Shipley and Curry, a firm partly owned by Curry. Frederick said that while Curry abstains on voting for approval of his fees, he speaks and votes on matters "which ultimately result in legal proceedings directly affecting the fees billed . . . . "
Curry said yesterday his firm charges the corporation less than its usual rate and that 11 firms were considered.
"I just happen to be good, and I don't intend to defend myself for my effectiveness and talent," Curry said.
Another concern Frederick raised centered on $230,000 in expenses paid to the 22 volunteer board members during the past 18 months. Rick Wade, a spokesman for the Maryland Hospital Association, said the expenses paid to board members -- $250 for each board meeting and $100 for each committee meeting -- are unusually high for board members running nonprofit hospitals.
Board members defended their attendance fee policy, saying it encouraged active participation and for some members represented "income replacement."
The corporation, known as Community Hospital and Health Care Systems Inc., was created July 1, 1983 to replace the old, unpaid county hospital commission. The County Council created the corporation in an effort to make the administration of the three hospitals more efficient and fiscally solvent. While financial problems remain, state health officials say the overall picture has improved.
The County Council rejected a proposal by then-County Executive Lawrence J. Hogan to turn over management of the facilities to a private for-profit corporation.
Hogan had strongly opposed the nonprofit arrangement, contending that it entrusted a multimillion-dollar operation to inexperienced people. The initial board was appointed by the executive and council, but the group is free to reappoint or oust members at will.
The hospital corporation has not had a full-time executive director since the resignation more than a year ago of Kenneth V. Duncan. Yesterday, Glendening issued a statement calling for the appointment of a "professional hospital administrator to provide the credibility and the expertise needed for the efficient and economical operation of the hospitals."
Such an appointment, he said, would remove board members from "day-to-day decision-making in hospital affairs."
Among concerns raised by Frederick were arrangements between the corporation and companies Frederick said were associated with Robert Brady, head of the hospital board's executive committee.
Brady's brother Richard, for example, was paid $7,700 to produce a photographic exhibit and slide show about Prince George's General's trauma unit, according to Mike Canning, a hospital spokesman. Canning said he hired Richard Brady because of his ability as a photographer and his rates, which were lower than others.
The motion to oust Frederick was made Jan. 28 by Thomas Dugan, who complained that Frederick had gone outside the corporation with his ethics complaint.
Dugan is a vice president of a brokerage firm that received a fee for investing hospital employe pension funds. Dugan resigned from the board's pension committee, though not from the board, last fall, after saying that his company wanted to be considered for hospital work.
In a corporation executive committee meeting in October, according to minutes of the meeting, Chairman Aluisi acknowledged that "many of the board members possibly have some conflict with their activities on the board." But Aluisi said at the same meeting that if a member had a conflict of interest, abstaining from voting would remove any impropriety.
On the issue of nepotism, board members said all contracts were competitively let and persons were hired on the basis of merit. They acknowledged that the corporation has contracts or agreements with some firms in which directors have an interest, but they denied any impropriety.
For instance, Roy Dabney, an assistant vice president at the First American Bank of Maryland and a corporation director, said the board elected to put $745,000 in certificates of deposit in his bank because it agreed to lend the corporation money at a reduced rate of interest.
In addition, Frederick argues that the corporation has reduced an operating deficit of more than $1 million to $11,000 by using accounting tricks.
Robert Brady dismissed that criticism yesterday, saying the $11,000 deficit figure resulted from "appropriate accounting treatment" of complex financial matters.
Said Brady, who has been involved in many of the hospitals' daily decisions, "The board decided to let me navigate the ship out of the harbor."