A recent University of Maryland Medical System (USMS) audit ordered after reports of widespread self-dealing by about a third of the board members revealed again the alarming degree of blatant violation of conflict of interest standards and reputable governance by a non-profit board of directors.
Is it old, stale news first reported last March by the Baltimore Sun?
Why is there continual rehash of corrupt behavior not only by the board members but top medical system administrators who not only condoned but perhaps encouraged the granting of no-bid contracts to long-term board members?
For me, the review not only by UMMS but also the upcoming Maryland General Assembly’s report by the Office of Legislative Audits is anything but overkill. It’s entirely appropriate.
Eradication of crony self-dealing by board members and hospital executives requires bold, invasive surgery.
If the overused word “transparency” and public embarrassment are necessary to root out shady practices, so be it. UMMS receives significant state funding.
The audit declares that the delivery of care was unaffected by the high-level machinations. That might be true. But I suggest that the public perception of a sordid lack of integrity could lead some to wonder whether medical treatment might be compromised by unethical behavior at the top echelon.
The public is expected to ignore corporate misconduct and focus on medical treatment. And perhaps that is true too. What does it matter when a loved one is about to undergo life-saving surgery? Not at all.
Ethical corporate conduct, however, at the top level of hospital administration does have consequences. Revenue collected should go to medical treatment, not self-aggrandizement. Revenue should be spent wisely on necessary and competitive, not sole-source and frivolous contracts.
UMMS is highly regarded for its statewide medical care. Communities throughout the state are served well by its affiliated hospitals, including Shore Medical Center in Easton, as well as operations in Cambridge, Denton, Chestertown and Queenstown.
Some UMMS board members benefited personally and professionally through the receipt of large compensation for services provided by no-bid contracts. While the companies were reputable ones, the transactions were tainted by insider trading.
In the case of one board member, John Dillon, of Oxford, according to numerous news reports, he received payments for consulting services normally performed as part of any board member’s responsibilities, such as fundraising and strategic planning. I am not questioning Dillon’s commitment to Shore Regional Health as its former chair and his longtime record of community service, but I do find his disregard of accepted board members’ practices objectionable.
Many of us serve on non-profit boards. We are expected to contribute time and money without expecting anything in return. As it should be.
My obsession with ethics is simple: lack of integrity of a process engenders mistrust, which in turns besmirches the reputation of the organization, and those who serve it.
Eventually, the walls fall down; the foundation has been weakened by corrupt practices. Customers, suppliers, shareholders and stakeholders become disenchanted.
Ethical matters and transgressions readily lift me on my high horse. I am consumed by self-righteousness. For me, there is no gray, though there’s plenty in most cases.
A few years ago, I was responsible for conducting a competitive procurement for an investment advisor at a non-profit in Annapolis. It was a bit fraught. The board chair headed a wealth management firm in Timonium. Members of this organization were connected to investment advisory firms.
I strongly urged the chair to remain uninvolved. He did. We ensured that all bidders knew the process would be fair; no company affiliated with a member would receive any advantage. The process worked.
The human condition is frail at times. Greed can be tough to resist. What might seem appealing—and easily rationalized—may be rife with ethical minefields.
Columnist Howard Freedlander retired in 2011 as Deputy State Treasurer of the State of Maryland. Previously, he was the executive officer of the Maryland National Guard. He also served as community editor for Chesapeake Publishing, lastly at the Queen Anne’s Record-Observer. In retirement, Howard serves on the boards of several non-profits on the Eastern Shore, Annapolis and Philadelphia.
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Letters to Editor
Jane E. Hukill says
Thank you for all of us who have served and still serve on non-profit boards. We work hard to serve honestly and wisely.