"Investigations Swirl Over Medical School's Finances"

Two recent New York Times articles outline a growing scandal at the University of Medicine and Dentistry of New Jersey, "the nation's largest health-care university." They refer to a story that has been reported thoroughly by the local New Jersey press, although most relevant articles are no longer available on the web.
The first article, entitled "Investigations Swirl over Medical School's Finances," documented the state-supported university's many questionable practices, including:

• No-Bid Contracts, Often Resulting in No Documented Work - "It is not just that university officials handed out contracts to politically connected people without any competitive bidding. What is more astonishing is how pervasive the practice was, with more than $700 million in no-bid contracts awarded over five years, and that it appears that some of the contractors did no perceptible work in exchange for their payments." For example, a recent report still available from the Newark Star-Ledger noted that the school gave a $75,000 no-bid contract to Ronald White, a former top fund-raiser for former NJ Governor James E. McGeevey, but could provide no evidence he did any work for it: also, the school paid over $1 million over ten years to Chip Stapleton, a Republican consultant, to advise the university, but again the university cannot document that he did any work, either.
• Hiring Lobbyists to Influence the State Government, and Making Political Contributions - "It is not just that the university hired influential lobbyists and consultants, ostensibly to promote its interests in Trenton - itself a rare step for a public university - but that it hired so many of them. The school, which receives more than $300 million a year from the state, went a step further in strengthening its political ties, giving campaign contributions to many elected officials, a nearly unheard-of practice whose legality has been questioned by some legislators." For example, the Star-Ledger noted that the school gave a $10,000 campaign contribution to a "breast cancer group" linked to Newark Councilwoman Gayle Chaneyfield-Jenkins.
• Allowing Political Bosses to Make Decisions - "It is not just that university posts were handed to people with powerful political connections and potential conflicts of interest - though the extent of that practice was impressive. University officials and politicians alike say that political bosses actually dictated to the university who received what jobs, and who was shoved aside." For example, "Stephen N. Adubato Sr., a Newark power broker and president of the North Ward Educational and Cultural Center, has publicly taken credit for the ouster of Harvey Holzberg as university chairman. Stanley S. Bergen Jr., a former president of the university, and several other people tied to the institution and to state government, say that Mr. Adubato engineered the appointment of Mr. Petillo as chairman and then president - something that Mr. Adubato now vigorously denies. Last November, Mr. Petillo awarded a $95,000 no-bid contract to an organization run by Mr. Adubato."

This article also illustrates some pheonomena that are beginning to be familiar on Health Care Renewal:

• Health Care Organizations Seem to Operate with Little Oversight or Accountability - "But lawmakers, watchdog groups and political scientists say the causes boil down to two basic factors: a relative lack of scrutiny at the university, and the unique political structure and culture of New Jersey."
• The Anechoic Effect - "If people within government are not watching the doings of state agencies closely enough, the same may be true of those outside government." Furthermore, "But the newspapers in New York City and Philadelphia that are read by so many people in New Jersey have focused on the issue only occasionally, and the out-of-state television stations that dominate the state's airwaves have paid even less attention. And there may lie a reason the university long escaped scrutiny for practices that, in some cases, date back at least a decade."

If that weren't enough, another report by the NY Times noted that UMDNJ is now under investigation by the Inspector General for double-billing Medicaid, even though school officials were warned of the practice in 2001 by a law-firm that had been reviewing the university's billing practices, and in 2002 by the university's Chief Financial Officer (CFO) James Lawer, and by Adam Henick, a vice-president who was since dismissed by the university because he had "lost the confidence" of the top executives.
I should note that my first faculty position was at UMDNJ, at Cooper Hospital/ University Medical Center. I described how top executives swindled Cooper Hospital, a major teaching hospital in the UMDNJ system, of over $20 million in the 1990's (after I left - see the post here). I concluded my article in the RI state chapters ACP newsletter thus, "The case of Cooper’s corrupt executives can be viewed as the forerunner to the even more massive bankruptcy of AHERF. One can only speculate that learning the lessons of the Cooper
case could have mitigated the AHERF disaster. However, as noted in my last article, the lessons from AHERF are also not widely known. Yet, as George Santayana wrote, 'Those who cannot learn from history are doomed to repeat it.' " Replace AHERF with UMDNJ, and it works just as well.