Police probe puts some UMC contracts at risk

Friday, Jan. 26, 2007 | 8:44 a.m.

Clark County commissioners are expected to be asked to consider canceling several University Medical Center contracts targeted by a police investigation.

The public hospital's acting chief executive, Kathy Silver, said Thursday that she plans to ask commissioners, who oversee UMC, to take another look at some of the contracts that police are investigating.

"I think we've done an assessment of the contracts and drawn what we believe to be the right conclusions," she said.

Although Silver would not say what action she will ask the County Commission to take, other county officials said commissioners will be asked to cancel several contracts.

"For the agenda items I looked at, they are going to be asked to cancel them," said Holly Gordon, a deputy district attorney who has been assisting in the review.

Silver and County Chief Financial Officer George Stevens have been reviewing the contracts mentioned in a police affidavit, but county and hospital staff are still deciding which contracts will be recommended for cancellation.

The police affidavit, which accompanied a search warrant served on UMC last week, raises allegations that seven companies received contracts based on their leaders' personal relationships with ousted hospital Chief Executive Officer Lacy Thomas rather than merit. The contracts - most with companies based in Chicago, where Thomas previously served as director of Cook County's John H. Stroger Hospital - generally involved little or no work, the affidavit charges.

It is unclear whether the hospital or the county will reexamine other UMC contracts beyond those mentioned in the affidavit. But Commissioner Bruce Woodbury said Thursday he would welcome a review of other controversial contracts handed out under Thomas.

"I think any of these big contracts within the last year really should be reviewed and reevaluated to see if they were in the best interest of the hospital," Woodbury said. "I am not sure we can rely on the recommendations we got on these projects."

Commissioners approved most of the contracts that police are now investigating.

County Auditor Jerry Carroll later raised questions about one of the contracts given to ACS Consultants, which was doing business as Superior Consultants. Bob Mills, senior vice president of Superior, was a friend of Thomas and flew him to the Virgin Islands in 2005 to view the company's operations there, the affidavit said.

In another contract that commissioners approved between UMC and Chicago-based Frasier Systems, the cover page in the commission's agenda packet said payments would not exceed $483,600. Two pages into the contract, however, it said that the total costs amount to $892,944. No one noticed the discrepancy when the commissioners approved the contract Feb. 21.

Thomas' contract was terminated last week after an independent financial auditor revealed that, in the fiscal year that ended June 30, the hospital lost more than $34 million - significantly more than the $18.8 million Thomas and his chief financial officer had led commissioners to believe.

On the same day that commissioners heard from the independent auditor, Metro Police raided UMC, hauling away from executive offices documents and computers they think might support the allegations in the affidavit.

County Manager Virginia Valentine terminated Thomas' contract later that day.

Police also have subpoenaed Thomas' bank records, an indication that investigators want to know whether any of the public funds received by Thomas' Chicago friends were kicked back to the UMC boss.