Civil Cover Letter 2
Lawsuit slams Brown and Lahey
Ewart Brown and the Lahey Clinic conspired on a “wildly successful” and “unlawful” enterprise that profited both “at the expense of the Bermudian government and people”, according to a lawsuit filed in the United States.
The 54-page civil complaint, brought against Lahey by the Government of Bermuda and seeking unspecified damages, alleges that the former Premier and the Massachusetts-based teaching hospital “together … concocted a scheme built upon bribery and greed and carried [it] out with complete disregard for Brown’s position of public trust or for the physiological and psychological impact on patients”.
Last night, Chris Murphy, Lahey’s executive director of marketing and media relations, responded to the complaints, telling The Royal Gazette the clinic was concerned that the lawsuit was likely motivated by internal island politics, not business practices.
“This lawsuit may be a politically motivated attempt by the current government of Bermuda to discredit their political opposition before an election, using Lahey Hospital & Medical Centre as a pawn in an intense partisan political battle,” he said. “Our focus is on providing high-quality care to our patients, not politics.”
The suit, which names Dr Brown as a “non-party co-conspirator”, claims: “Over the course of nearly two decades, Lahey conspired with Brown to design and perpetuate an unlawful enterprise fuelled by Lahey’s payment of bribes to Brown disguised as ‘consulting fees’, in return for which Brown facilitated and ensured that Lahey: received preferential treatment when bidding on healthcare contracts issued by the Bermudian government; obtained privileged access to Bermudian patients that it could service at its facilities in Massachusetts and in Bermuda; and made millions of dollars reading and interpreting medically unnecessary MRI and CT scans performed at Brown’s clinics.”
It goes on: “[The] defendants’ unlawful activity and practices have resulted in Bermuda’s payment of millions of dollars for medically unnecessary services and for contracts and other services tainted by bribes.”
The key unproven accusations in the court filing are that:
• Dr Brown used his position as a government minister to promote Lahey’s interests in Bermuda and the hospital paid him “bribes disguised as consulting fees” to do so.
• The arrangement led to Lahey gaining contracts with King Edward VII Memorial Hospital and to it becoming the “service provider of choice for Bermudians, both on the island and in the United States”.
• Dr Brown’s clinics in Paget and Smith’s conducted “excessive, medically unnecessary and frankly dangerous scans” in order to increase payments received from health insurers.
• He paid Lahey a portion of the reimbursement for reading each scan, making the hospital millions of dollars. Lahey “stayed silent” about the “extreme level of unnecessary and possibly dangerous scans” because it was “blinded by its desire to keep its ‘consulting’ relationship with Dr Brown intact”.
• Dr Brown and his “surrogates” successfully pressured government officials to increase the remuneration paid for such tests.
• He “offered and paid kickbacks” to local physicians, disguised as commissions, to refer patients for scans to his clinics.
• The level of testing conducted at Dr Brown’s clinics led to Bermudians becoming “among the most scanned patients in the world”.
The complaint, filed in federal court in Massachusetts, accuses Lahey and Dr Brown of “illegal acts”, which resulted in “mounting returns” for both.
It says Dr Brown, who was first elected as a Progressive Labour Party MP in 1993 and was Premier from 2006 to 2010, “is and has been one of the most politically powerful individuals in Bermuda for more than two decades”.
While an elected official, according to the suit, he owed “fiduciary duties” to Bermuda, including to ensure that he acted in the best interests of government and that he did not, without approval, profit from his position.
The complaint says he never declared his financial involvement with Lahey in the parliamentary register of interests, leaving fellow lawmakers in the dark about the alleged conflict of interest.
His alleged involvement in the schemes enabled him to buy a $3 million home in Martha’s Vineyard, Massachusetts, and other properties in New York and Turks and Caicos, according to the complaint.
Lahey, according to the claim, engaged in a “pattern of racketeering activity” that caused injury to the Bermuda Government.
The hospital’s alleged aim was to exploit Dr Brown’s roles as “government minister, Premier and physician entrepreneur in order to unfairly and unlawfully defraud the Bermudian government of millions of dollars and deprive its people of the right to honest services”.
The complaint is being brought under various US laws, including the Racketeer Influenced and Corrupt Organisations Act, the Foreign Corrupt Practices Act and the Money Laundering Control Act.
Dr Brown told The Royal Gazette yesterday afternoon that he had read the complaint and would be in a position to comment later in the day. Lahey said on Tuesday that it would “review these allegations and vigorously defend ourselves through every step of the legal process”.
Attorney-General Trevor Moniz said in a statement he had issued the proceedings after “many months of investigations by the Attorney-General’s Chambers into certain arrangements between Lahey and former Premier Dr Ewart Brown, involving undisclosed payments made by Lahey to Dr Brown over a period of many years.
“In return for such payments, we assert that Lahey received preferential treatment from the Government in relation to its work in Bermuda and for Bermudians. Over a lengthy period of time, MRI and CT scans have been carried out by Dr Brown’s clinics and interpreted by Lahey staff, which appears to have been medically unnecessary.
“As a result of these investigations, the Government believes it has substantial claims against Lahey and has issued the proceedings accordingly.”
Lahey is an overseas partner of the publicly funded Bermuda Hospitals Board, as well as a preferred provider for patients on the FutureCare and HIP government insurance plans.
This newspaper asked BHB to comment on the allegations in the lawsuit and give details about any current agreements or contracts BHB has with Lahey. A spokeswoman said: “BHB cannot comment and we refer all questions relating to the legal case to the Attorney-General.”
The Ministry of Health and Seniors refused to comment when contacted yesterday.
Annabel Fountain, president of the Bermuda Medical Doctors Association, which represents physicians, said the association would not be able to comment on the claims in the lawsuit about local doctors. It wasn’t possible to reach anyone from Bermuda Medical Council, which decides on professional misconduct cases.
The Government’s complaint against Lahey was filed just three days after police officers raided Dr Brown’s private clinics: Bermuda Healthcare Services in Paget and the Brown-Darrell clinic in Smith’s (see separate story).
Mr Murphy added: “LHMC has worked closely with both major political parties in Bermuda over the years to increase access to high-quality care for the people of Bermuda. We are committed to defending this lawsuit and to ensuring this political conflict does not prevent our patients from getting the care they need and deserve.
“Our business practices and commitment to patients in Bermuda are beyond reproach. Over the years, our Bermuda business contracts and consulting agreements have been thoroughly reviewed by internal and external parties — all of whom have found our practices to be fully compliant with all applicable laws and regulations.
“LHMC has a 25-year track record of providing the highest-quality care to our patients in Bermuda, and offers this care at what we believe is a lower cost than other academic medical centres. In fact, LHMC was the first healthcare system to bring specialists to Bermuda to care for patients in their communities, where it is more convenient and easier to access.”
Dr Brown said in a statement on Monday: “As I have said often, they [the police] have found no political corruption, because there was no political corruption.”
After the medical director of his Paget clinic was arrested last year, Dr Brown told reporters regarding the ordering of tests: “I want to make it absolutely clear that these suspicions are completely unfounded.
“No patients and no insurance companies that pay for the scans have ever made one single complaint concerning these very necessary diagnostic procedures.”
• For the full complaint brought by the Bermuda Government against Lahey, including the cover sheets, click on the PDF links under “Related Media”
• On occasion The Royal Gazette may decide to not allow comments on a story that we deem might inflame sensitivities. As we are legally liable for any slanderous or defamatory comments made on our website, this move is for our protection as well as that of our readers.
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