Wednesday, Jan. 31, 2007 | 7:01 a.m.
Clark County Commissioner Yvonne Atkinson Gates bid in September to have her home construction company build a house for a prominent Las Vegas cardiologist. Three months later, while her bid was still pending, Atkinson Gates cast one of the four votes needed for the county to award a lucrative contract to the doctor's cardiology group.
Atkinson Gates did not disclose publicly the bid she had pending with Dr. Raj Chanderraj, nor did she recuse herself when the commission voted to approve the $5-million-a-year contract to Nevada Heart and Vascular Center. Atkinson Gates told the Sun that she was unaware at the time that Chanderraj was a partner with Nevada Heart and Vascular.
Now that she realizes he is a partner, Atkinson Gates said the situation has underscored for her how difficult it is to keep track of all the relationships people who come before the commission can have with elected officials and how the intertangling of those relationships can sometimes produce political headaches.
"This is one of the very reasons why it is time for me to go," she said, referring to her announcement earlier this month that she will step down from the commission in March.
The commissioner is well acquainted with Chanderraj. He has been a campaign contributor to Atkinson Gates and she has attended fundraisers at his home and been in his company at social events.
Chanderraj set up a meeting in early December at which he and a partner lobbied Atkinson Gates and one other commissioner, Myrna Williams, for the UMC contract.
Atkinson Gates says she does not recall that meeting. She also said she did not see Chanderraj in the audience on Dec. 20 when the County Commission approved the contract.
The contract is raising new questions at UMC, which already is under intense scrutiny. Former Chief Executive Lacy Thomas was fired Jan. 16 after an independent auditor revealed that the public hospital lost more than $34 million, not $18.8 million as Thomas had been telling commissioners. Thomas also is under criminal investigation for allegedly awarding no-work contracts to his Chicago friends.
The cardiology contract, which is not part of the criminal investigation, was awarded without a competitive process. The physician group that held the contract originally was given a chance to submit an offer. It did so, for a million dollars less, but Nevada Heart and Vascular prevailed.
Commissioner Chris Giunchigliani has asked to examine the new contract, saying it seemed to be rushed through at the final meeting before she and Susan Brager joined the commission.
Atkinson Gates announced Jan. 16 - the same day Thomas was fired - that she will resign from the commission to focus on her new custom home design and construction contracting firm.
The new company, Built By Yvonne, bid to build Chanderraj's house. Chanderraj and his wife spent $925,000 in 2005 for nearly three-quarters of an acre in an exclusive Summerlin neighborhood, The Ridges. At a gathering last summer, the doctor spoke to Atkinson Gates about his desire to build a custom home on the lot. She became one of three bidders.
Chanderraj told the Sun this week that he and his wife are debating whether to go forward with the project. "Hers was a reasonably attractive bid," Chanderraj said this week. "We're just not sure we even want to commit that much."
Atkinson Gates said she dealt with Chanderraj's wife when submitting the bid and emphasized that she has not signed any contracts with Chanderraj.
In September, the same month that Atkinson Gates bid to build the house, UMC boss Thomas asked Nevada Heart and Vascular to provide cardiology services at UMC, the managing partner in the group, Dr. William Resh, told the Sun.
Resh said administrators told him the hospital was having problems with its provider at the time, Heart Center of Nevada.
Doctors with Heart Center - who had been working for $1 million a year - told the Sun they never received any complaints from administrators or patients.
Resh said his group asked for $5 million a year and that the price was not negotiated. The final Heart Center proposal was for $4 million a year. Both included clauses that would result in a portion of patient payments being refunded to the hospital.
Resh said there is nothing untoward about his group's contract. He said he decided to lobby county commissioners after Heart Center enlisted attorney Richard Bryan, a former U.S. senator, to argue on its behalf.
Chanderraj had the political sway to quickly arrange personal meetings with commissioners to discuss the contract, Resh said.
"I couldn't call and get a meeting with them on relatively short notice, so there's no doubt they would have had to recognize his name in this whole thing," Resh said.
Resh said that when he and Chanderraj met with commissioners, Resh made the pitch. But Chanderraj's presence, Resh said, made it clear that he, too, was there on behalf of the group seeking the contract.
Chanderraj "was present at every meeting - with me, together, as partners," Resh said. "I can't speak for how somebody else might interpret that, but it seems pretty obvious to me."
Other commissioners had no doubt Chanderraj was involved.
Williams said it was obvious that Chanderraj and Resh were making a joint pitch. Similarly, former Commissioner Lynette Boggs McDonald, who met with the two doctors in the final days of her term, said she clearly understood that Chanderraj was part of the group that wanted the UMC contract.
Resh said he and Chanderraj were scheduled to meet with Williams and Atkinson Gates together in early December, but Atkinson Gates arrived as the 15-minute meeting was breaking up. Resh said he had about two minutes to make his pitch to Atkinson Gates. Even so, Resh said she seemed to understand the deal.
"I was comfortable leaving there that she at least knew what was going on," he said.
At the Dec. 20 County Commission meeting, Bryan, representing Heart Center, argued that the Nevada Heart and Vascular contract was not in the county's best interests, starting with its price of $1 million more a year.
Bryan also said that UMC had little flexibility under the Nevada Heart and Vascular Contract. The hospital could not cancel without cause for three years, and after that, only with a 365-day notice. Essentially, he argued, the hospital was locked into the contract for four years.
And the contract required UMC to cover the cost of additional cardiologists if patient volume increased 25 percent.
Hospital administrators replied by praising the new group's business model and reputation, which they predicted would draw business to the financially struggling hospital.
Bryan asked commissioners to wait two weeks until their next meeting to make their decision, which would have allowed the two incoming commissioners - Giunchigliani and Brager - to have a say. The commissioners declined.
Atkinson Gates cast one of four decisive votes to approve the deal. Four affirmative votes are needed, unless two commissioners receive written opinions from the district attorney's office saying they need to abstain because of a conflict of interest. Only Commission Chairman Rory Reid abstained, because he and Bryan work at the same law firm.
Criticism of the contract has continued since the vote.
Giunchigliani, who joined the commission Jan. 2, wants to take another look at the contract.
"It appears it was rushed through," Giunchigliani said. "There didn't seem to be any reason why the original contract was not continued. That's irresponsible or something else is going on."
The Sun asked a Henderson health care attorney, Maria Nutile, to review the contract. After doing so, she told the newspaper that she questioned why UMC officials waited until the last minute to negotiate a new contract instead of putting out a request for proposals, which would have allowed any interested cardiology groups to bid on the contract, helping to ensure that taxpayers funding the hospital receive the best price.
The new contract, she noted, took the $1-million-a-year program to $5 million.
"If you're a county hospital, shouldn't you know when your contracts are going to expire, so you don't get in this bind?" Nutile said. "It's just strange."
Atkinson Gates said she discovered only about a week ago that Chanderraj was a partner with Nevada Heart and Vascular. She said she defers to Resh and Chanderraj's recollections about their meeting to discuss the contract, but she insisted that she does not remember it.
"I don't ever remember meeting with (Chanderraj)," Atkinson Gates said.
Chanderraj said Monday that Atkinson Gates possibly believed he was only helping to arrange the meeting without realizing he worked for the group seeking the contract.
Several experts in ethics and law agree that if Atkinson Gates knew of Chanderraj's interest in the contract, she should have at least disclosed the potential conflict or abstained from voting.
"You have this financial deal cooking, so it's hard to say your evaluation of the competing possibilities is fair-minded," said Craig Walton, president of the Nevada Center for Public Ethics.
Late Tuesday, Atkinson Gates sent a message to the Sun saying she would ask for the contract to be reconsidered, now that she knows that Chanderraj is involved. The item is on the agenda for next Tuesday's meeting.
Sun reporters Mary Manning and Steve Kanigher contributed to this report.
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