Friday, May 11, 2007 | 7:25 a.m.
Top Clark County officials say two University Medical Center administrators should have returned expensive gifts they received from an advertising agency that holds a hospital contract worth millions of dollars.
The gifts include digital video cameras and iPod Nanos, items far more costly than the traditional fruit baskets or boxed chocolates that companies often send clients during the holiday season.
The ad agency, Brown & Partners, gave the gifts to two UMC administrators who held sway in deciding how the hospital's marketing money was spent: Cheryl Persinger, UMC's director of marketing and public relations, and former Chief Executive Lacy Thomas. Thomas is under criminal investigation in an unrelated case for allegedly giving hospital contracts illegally to friends and associates in Chicago.
Persinger, who still works at UMC, said she and Thomas knew they could not accept the gifts, which could be seen as an attempt to influence decision-making at the public hospital.
Although Persinger said her first impulse was to return the gifts, she said Thomas suggested that they instead give them to UMC's development and fundraising department. Presumably, the gifts could have been used as fundraising prizes.
But there is no documentation proving the gifts were given to the development department. In fact, after Thomas was forced out in January, hospital officials found one of the cameras in a storage closet in his office.
Persinger, noting that the box was unopened, suggested Thomas perhaps was merely storing the camera - given to him in 2004 - for the development department. The iPods were given during the holiday season last year.
Even if nothing untoward was going on, the gifts should not have been accepted , County Manager Virginia Valentine said.
"Because of the value of these gifts, they should have been sent back," Valentine said. "I don't know that it influenced decision-making, but it has that appearance.
"I would say it's generally in the best interest of the employee to return the gift. Whose career and reputation is worth an iPod?"
Brown & Partners could have donated the items directly to UMC's charity organization, she said.
Thomas' successor, interim Chief Executive Kathy Silver, agrees with Valentine.
"If it is an individual gift like a recorder or iPod, it should be returned," she said.
Silver said her assistant at the hospital - formerly Thomas' assistant - remembered delivering the items to the hospital's development and fundraising department.
Although county ethics policy says gifts cannot be personally accepted - except for meals less than $50 and tickets to community events, which can be accepted if disclosed to a department head or assistant county manager - it allows for some gifts to be donated to charity.
UMC officials cannot say for sure whether the gifts to Thomas and Persinger ever made it to the hospital's independent fundraising organization.
"The disappointing thing about this is we don't have enough institutional memory to make sure that what we thought was going to happen with those gifts happened," Silver said.
As for the camera found in Thomas' office, she said: "Now that we found that it is here, we will return it."
Brown & Partners President Chuck Johnston defended the gifts.
"We give out holiday gifts to all our clients," he said. "Whatever UMC got, all our other clients got." The cameras and iPods cost about $150 each, he said.
The revelations about electronics being given to UMC administrators is likely to heighten scrutiny on the hospital's advertising expenditures.
The hospital in 2002 awarded Brown & Partners a three-year advertising contract worth as much as $1.9 million annually, with the option for two one-year extensions.
The cameras were given to Thomas and Persinger during the 2004 holiday season, about seven months before Clark County commissioners, who oversee UMC, granted the first one-year extension at Thomas' recommendation. In September 2005, UMC also hired Brown for $6,000 a month for public relations work.
The second contract extension, granted in June, was for as much as $3.4 million and incorporated the monthly public relations payment. Brown gave the iPods to Thomas and Persinger during the Christmas season.
Hospital officials note that the contract amounts are not necessarily what UMC actually paid Brown. But the actual spending has grown dramatically, rising from $321,833 in fiscal 2003 to nearly $1.8 million in fiscal 2006.
Silver is taking steps to rein in that spending.
First, she made good on her commitment this year to have UMC contracts awarded through a competitive process, something that did not always happen in the past. The hospital solicited proposals for the advertising work this year and is now deciding among three respondents, including Brown.
Silver also has canceled more than $355,200 in ads and plans an advertising and marketing budget of about $1.2 million in the coming fiscal year, one-third less than last year.
She also plans to change Thomas' strategy of promoting UMC with generalities about its institutional offerings. It is difficult to quantify the results of such a broad strategy, Silver said. Instead, she plans to focus on specific services that UMC offers, then measure whether more patients are using those services.
"We were a little broad-based in our approach," she said. "I think it needs to be more targeted."
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