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Posted at 1:51 PM ET, 12/23/2010

Nickles pushes to extend United Medical Center CEO's contract

By Mike DeBonis

In one of his last acts before leaving D.C. government, Attorney General Peter Nickles is pushing to sign the CEO of United Medical Center to an extended contract -- a move that would complicate any efforts to sell the hospital in the coming months.

Nickles, with the backing of D.C. Council member David A. Catania (I-At Large), is set to recommend that the UMC board of directors ink Frank DeLisi to a year-long contract as chief executive of the now city-owned hospital. Neither Nickles nor Catania are members of the board, but both have exerted great influence over it.

Nickles said that an offer has not been finalized or formally presented to the board, but a draft agreement discussed at an executive board session last week would pay DeLisi $400,000 for a one-year term; a source familiar with the contract adds that DeLisi would have to be paid a sizable penalty, equal to a full year's salary, if he is removed before the end of the term.

The contract, Nickles said, "would simply be an affirmation of the great job he's done" -- pointing to the hospital's improved bottom line and new partnerships that stand to help the long-troubled hospital's standing immensely. Keeping DeLisi would also keep the hospital on course for a long-term stabilization under the D.C. government's control.

In other words, the contract could be a frustration to efforts backed by other key players -- including D.C. Chief Financial Officer Natwar M. Gandhi and Council member Jack Evans (D-Ward 2) -- to sell UMC more quickly and get what could well become a financial albatross off the city's books.

Since the city took control of the hospital in July, DeLisi has been working under the terms of his old contract with UMC's former operator, Specialty Hospitals of America -- one that paid him well in excess of $400,000, with additional bonus provisions.

He is, in essence, the D.C. government's highest-paid employee. But among the ranks of hospital administrators, such a salary is far from unheard of. "This guy is a steal," Nickles said. "Any CEO in this area is making in excess of a million, $2 million."

A Washingtonian magazine salary survey published last month confirms Nickles's contention: Kenneth A. Samet, president of MedStar Health, makes in excess of $2.6 million; Edwin K. Zechman Jr., president of Children's National Medical Center, makes just shy of $2 million; Robert L. Sloan, president of Sibley Memorial Hospital, makes $1.8 million, and Larry Warren, CEO of Howard University Hospital, makes $640,000.

Catania said that talks to ink DeLisi to a contract have been underway for "months and months." He also downplayed the timing of the deal's potential approval, noting that the board's composition -- that is, largely of Adrian Fenty appointees -- will remain intact even after Fenty leaves office.

"There will be no changing course. ... From my point of view, if Frank DeLisi leaves, our efforts unravel," Catania said. "This guy is at the center of the transformation."

How Mayor-elect Vincent Gray plans to approach UMC is the big mystery in all of this. He, like every politician in the city, has called for its preservation as the city's only hospital east of the Anacostia River. But there has been little indication of whether he favors the Catania/Nickles slow-walk approach or the Evans/Gandhi get-it-off-the-books approach.

At least one buyer, businessman George Chopivsky, is pushing for a relatively quick sale of UMC, and has hired top lobbyist David Carmen to persuade Gray and others that he would be a responsible steward for the hospital.

Gray has said little about the matter, and his transition team appears not to be treating it as a top priority.

Nickles said that he has had "little or no contact from anyone in the new administration" and that he's "very concerned at the lack of attention" it's gotten from Gray. Nickles added that City Administrator-designate Allen Lew toured the hospital recently.

"If there's any suggestion of neglect or selling it off to a person that's not going to maintain the bona fides of the hospital, I would be very concerned," Nickles said.

An interesting twist, Catania points out, is that Gray might not have the ability to immediately force a sale even if he wanted to. Of the 11 voting members of the UMC board, six are mayorally appointed, but five of those are Fenty appointees who will remain on even if they leave their posts in a Gray administration: Taxicab Commission Chairman Leon Swain Jr., Deputy Attorney General Eugene Adams, Office of Risk Management Director Andrew "Chip" Richardson, Real Estate Services Director Robin-Eve Jasper and Steve Baron, director of the Department of Mental Health. (Procurement chief David Gragan has resigned from the board to take a job in the federal government.) A council-designated member will join the board in January, with two others to follow.

Nickles is reportedly pushing for a vote on the contract as soon as early next week.

By Mike DeBonis  | December 23, 2010; 1:51 PM ET
Categories:  The District  
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Nickles should butt out of this and leave it to the Gray administration. It is Nickles who has made a mess of the whole UMC situation and now he wants to make sure no one can clean it up for at least a year!

It is time that Nickles just went home quietly. What happened to his first announcement that he would leave after Fenty lost on October 1st. We would have all been better off if he had done that.

I think Nickles did some good things as AG and he is clearly a good lawyer, but he has always shown himself to be a lousy politician and he often hurt Fenty with his decisions and statements that were pernicious and not thought out as to their long term ramifications.

I wish him well in retirement or in whatever capacity he decides to work. I just hope he will take his personal vendettas home with him.

Posted by: peterdc | December 24, 2010 4:26 PM | Report abuse

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