(Host) The Fletcher Allen Health Care debacle could cost a lot more than $300 million, commentator Timothy McQuiston says it could cost some very prominent Vermonters their reputations.
(McQuiston) The persistent question surrounding Fletcher Allen’s problems is not how much it’s going to cost in the end, or who was involved or who did what… but why? Why would anyone stick their neck out so incredibly far only to allegedly circumvent the regulatory process?
If Fletcher Allen is indeed Vermont’s Enron, it still begs the question of motivation. Look at it this way: the recently indicted former CFO of WorldCom is out on bail of, get this, $10 million. And he’s only 40 years old. If you can come up with that kind of money to make bail, your motivation for having cooked the books is pretty easy to figure. Greed.
The problem involving the Fletcher Allen’s hijinks is that there is not a clear motive. Certainly President Bill Boettcher, his staff and the board of trustees wanted to get the Renaissance Project done. Sure, the four-level, underground, 1,000-car parking garage was probably not going to pass regulatory muster. But why take the risk of setting up an apparently bogus offshore corporation to hide your tracks? You’re taking the risk for what? Fame? No. Fortune? No. The whole scheme seems way out of proportion to what was gained, which is this: 600 parking spaces.
Already, Fletcher Allen has paid a $320,000 fine. But that appears to be the best case scenario if you factor in possible punitive action. Both the state attorney general and the US Attorney in Burlington are investigating.
Beyond what may or may not happen to Bill Boettcher, there are the reputations of the entire board of trustees, state regulators and the entire hospital to consider. The people who are most at risk of having their reputations sullied by this whole mess are the trustees. The Fletcher Allen board of trustees is volunteer, unpaid and prestigious. Some of the elite of Burlington’s business society sit on that board. But the two most notable players right now are Chairman Philip Drumheller and Louise McCarren. McCarren is heading up a special committee to investigate what happened.
McCarren is the president of Verizon Vermont. A former public servant, she was the commissioner of the Department of Public Service and chair of the Public Service Board. Her reputation is one of being smart, tough, direct, fair. Other trustees, like Drumheller, president of Lane Press, and Richard Tarrant, CEO of IDX Systems, own their own shops. Their reputations are on the line too, but not to the extent of McCarren’s. At the end of the day, she’s an employee, just like the rest of us, and her substantial reputation is all she has. I expect she will get to the bottom of this mess. And maybe she’ll even be able to answer the ultimate question: Why?
This is Timothy McQuiston.
Timothy McQuiston is editor of Vermont Business Magazine.