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E-mails ‘point to corrupt enterprises’

The Bermuda Government's lawsuit against the Lahey Clinic points to e-mails between Ewart Brown and executives at the hospital as evidence of the alleged “corrupt enterprises” they took part in “at the expense of the Bermudian Government and people”.

The correspondence is quoted throughout the 54-page civil complaint, which claims that the hospital in Massachusetts paid bribes, disguised as “consulting fees”, to Dr Brown to ensure it got preferential treatment on the island, in breach of racketeering and money-laundering laws.

The fees were paid to Bermuda HealthCare Services, the Paget clinic opened by Dr Brown in 1993, and the complaint claims there “effectively was no distinction between Brown and BHCS”.

The e-mails between Lahey and Dr Brown were central to “their scheme to defraud”, according to the lawsuit, and constituted wire and mail fraud. Here, we publish e-mails quoted in the complaint and provide a timeline for some of the unproven accusations it contains.

The complaint alleges:

• January 13, 2007: Lahey donated $10,000 to the Premier's Gala fundraiser, soon after Dr Brown became leader of the Progressive Labour Party and Premier. Elizabeth Gray, then administrative director of Lahey's executive-international office, attended the gala, “for which there are no free invitations”.

• March 27, 2007: Ms Gray heard news that Johns Hopkins Hospital (JH) in Baltimore had been awarded a contract at King Edward VII Memorial Hospital. She e-mailed Dr Brown to say: “[u]nfortunately the news of the Hopkins relationship has spread and I am receiving feedback and inquiries as to why Lahey Clinic is not a participant. It is truly disappointing and not at all what we have discussed with you”.

Dr Brown responded the same day. “Beth: please relax!” he wrote. “No matter what you are hearing, Lahey will have the opportunity for involvement in the hospital. What you are hearing is that JH was hired to review the plan for the new hospital. That was in place before I got the job. Do not worry and tell others that I said to relax — unless they enjoy worrying (smile).”

• April 23, 2007: Lynn Malloy-Stofer, Lahey's then chief operating officer and senior vice-president of business development, e-mailed Dr Brown regarding a request for proposals that “went out from the hospital planning board and [stated] that Hopkins, among other interested parties, are attempting to get the contract to manage the hospital”. She asked that Dr Brown “[p]lease let [her] know how to advance Lahey's interests”.

Dr Brown responded that Lahey should “[l]et [K]urron compete and Lahey's interests will be protected”. The complaint alleges that he essentially informed her that Lahey would receive work from the hospital regardless of whether or not it won the bid. “In short, the bid was fixed from the start.”

• July 12, 2007: Dr Brown publicly announced a new partnership between KEMH and Lahey whereby Lahey physicians would travel to Bermuda from Massachusetts and see patients at the publicly funded hospital.

• July 19, 2007: Dr Brown e-mailed Ms Malloy-Stofer to thank her for her “sweet message” in which she had praised his work in Bermuda. He wrote: “[i]ts (sic) so important that Lahey stay front and centre in Bermuda ...”

• November 5, 2007: Ms Malloy-Stofer e-mailed Dr Brown in advance of the upcoming General Election to say: “I only wish that we could vote. Just learnt of your announcement for a December 18th election. Please know that you and [your wife] Wanda are in our thoughts and prayers and we wish you upcoming success. Whatever the outcome, you will always be ‘premier' in our minds.” She closed the e-mail by asking: “Is there anything that we might do to help? — just ask.”

• July 11, 2008: Ms Malloy-Stofer e-mailed Dr Brown at his official government e-mail address to tell him she had obtained approval to raise his “consulting fees” by 9 per cent, which she characterised as “a significant increase for Lahey Clinic”. She agreed to make the increase retroactive by seven months to January 2008, with an agreement for $504,000 or $42,000 per month.

Her e-mail noted she was happy “to see how [Brown's] leadership in Government has influenced the many changes” and that she hoped Dr Brown would accept the raise and that “we continue to move forward on our joint plans”.

• July 29, 2008: Dr Brown accepted her proposal in a reply e-mail and later met with her in September 2008, in Bermuda, to sign the contract.

• August 29, 2008: Work was progressing on the redevelopment of KEMH when Ms Malloy-Stofer e-mailed Dr Brown to say she “was rather surprised to read [of a BHB] announcement regarding [an advertised] cancer relationship between Dana Farber [Cancer Institute in Boston] and [KEMH]”.

She wrote: “[w]e have been proactively working with the hospital, its leadership and its physicians for years and have spent significant time responding to the needs of the hospital and the physicians on the island”. The complaint says she suggested the BHB make a similar announcement about Lahey.

Dr Brown responded, offering to speak with the BHB's chief of staff Donald Thomas and connect him with Lahey directly.

• September 18, 2008: Lahey's then president and chief executive officer David Barrett signed the agreement between BHCS and Lahey for consulting services. Ms Malloy-Stofer mailed a copy of the agreement to Dr Brown's wife in Bermuda. She noted that Lahey hoped “to work more closely with Bermuda, and in the spirit of the BHCS consulting role, [hoped] to look to [Mrs Brown] for insight and guidance and for bringing new opportunities to Lahey Clinic”.

The e-mail from Ms Malloy-Stofer to Mrs Brown noted that the accounts receivable for Lahey's reading of scans at BHCS and the Brown-Darrell Clinic in Smith's were overdue. She offered to retroactively apply a recently negotiated discount against the bill to bring down the total, “another means by which Lahey bribed Brown for his continued influence and assistance in gaining an advantage for Lahey in connection with its business interests in Bermuda”. The lawsuit claims: “Lahey therefore was willing to continue to pay consulting fees to Brown in exchange for the significant benefit he offered them in Bermuda, notwithstanding his delinquent remittance of MRI and CT scanning fees to Lahey.”

• January 2009: Ms Gray mailed Dr Brown to inform him that she would be on the island in mid-January with Lahey's telemedicine team and asked for meetings with Dr Brown and with the Minister of Health.

Lahey has said it will defend the lawsuit, citing “business practices and commitment to patients in Bermuda [which] are beyond reproach” and claiming the action is politically motivated.

Dr Brown, who was premier until 2010, is not a party to the action, which he has claimed contains “countless lies and ridiculous allegations”.

• 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.

Former premier Ewart Brown

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Published February 25, 2017 at 8:00 am (Updated February 25, 2017 at 4:18 pm)

E-mails ‘point to corrupt enterprises’

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