HATCH'S FOUL MOUTH
Both sides promised fireworks, and both sides delivered on that promise.
In a rare appearance on the witness stand, Attorney General Mike Hatch testified Thursday that his hand-picked board of directors for Medica was seriously "off track" by early 2003, had ignored its mandate to fix the ailing HMO, failed to find a chief executive and seemed more interested in taking care of itself.
Hatch is attempting to remove eight members of Medica's board, claiming they are still under his jurisdiction as special administrators of the company. He appointed the board members in 2001 when Allina Hospitals and Clinics was divesting itself from Medica after an embarrassing disclosure of financial irregularities as a result of a Hatch investigation.
Testifying in Hennepin County District Court in a lawsuit over control of the 1.3-million-member organization, Hatch said he found board Chairman John Buck "arrogant" and said he was surprised when he learned the board's base salary was $50,000 a year, more than the amount paid to directors of Blue Cross and Blue Shield of Minnesota, the state's largest insurer.
"I was flabbergasted. I had a sick feeling about all of this," Hatch said after describing a lunch meeting with Buck at the Lexington in St. Paul that year. "I had a bad feeling this thing was going way off track."
But in her opening statement to Judge Lloyd Zimmerman, Medica attorney Marianne Short said this case is about corporate independence and Hatch's desire to control Medica long after it has been righted by a very capable board of directors.
"This is a story about a leader who has a vision about the health care industry," Short said. "In 2001, he asked a blue-ribbon panel -- he said he didn't want a puppet board -- and when he got his wish, he changed his mind."
Hatch's appointees subsequently were elected to the board by members of Medica. They contend now that they are no longer responsible to Hatch.
The trial that opened Thursday is the latest attempt by Hatch to retain control of the board. Hatch was the first witness and was on the stand for about four hours.
He testified that he was "flabbergasted" when Buck told him at the January lunch that he was thinking of running Medica as a part-time chief executive, that the board had elected itself as directors and there was a multimillion incentive plan for management in the works.
"He was very arrogant," Hatch testified. "He said they were paying themselves $50,000 roughly, which was a surprise to me. The fact that there wasn't a CEO was very bothersome."
Under cross-examination by Short, Hatch acknowledged that he left an irate message on Buck's answering machine a few hours after the lunch meeting.
Hatch said he didn't recall exactly what he said. Short read a transcript of the message which said, "This bonus will undo all that we've accomplished. We would be [expletive] front-page news. It would be a [expletive] scandal. The only thing we can do is lower premiums. I don't want another [expletive] scandal on my hands."
The exchanges between Hatch and Short were often testy. When Short suggested to Hatch there was no language in a September 2001 memorandum of understanding between Hatch and his appointees over their ability to continue on the board, Hatch said, "That was crystal clear. To say they can't hijack an organization without putting in there that they can't hijack it is a stretch."
Animosity surfaced near the end of Hatch's testimony when Short recounted a conversation Hatch had with one of her partners at the law firm of Dorsey & Whitney. Short asked Hatch if he described her with two expletives to her partner and threatened to take state business away from the firm.
Hatch denied using the phrase or making the threat. He said he was only upset that his pretrial deposition could not be conducted at the Capitol where he could be close to his office at a time when state government was shutting down in June.
The nonjury trial continues today and is likely to extend to the middle of next week. Source: Star Tribune, July 29, 2005
In a rare appearance on the witness stand, Attorney General Mike Hatch testified Thursday that his hand-picked board of directors for Medica was seriously "off track" by early 2003, had ignored its mandate to fix the ailing HMO, failed to find a chief executive and seemed more interested in taking care of itself.
Hatch is attempting to remove eight members of Medica's board, claiming they are still under his jurisdiction as special administrators of the company. He appointed the board members in 2001 when Allina Hospitals and Clinics was divesting itself from Medica after an embarrassing disclosure of financial irregularities as a result of a Hatch investigation.
Testifying in Hennepin County District Court in a lawsuit over control of the 1.3-million-member organization, Hatch said he found board Chairman John Buck "arrogant" and said he was surprised when he learned the board's base salary was $50,000 a year, more than the amount paid to directors of Blue Cross and Blue Shield of Minnesota, the state's largest insurer.
"I was flabbergasted. I had a sick feeling about all of this," Hatch said after describing a lunch meeting with Buck at the Lexington in St. Paul that year. "I had a bad feeling this thing was going way off track."
But in her opening statement to Judge Lloyd Zimmerman, Medica attorney Marianne Short said this case is about corporate independence and Hatch's desire to control Medica long after it has been righted by a very capable board of directors.
"This is a story about a leader who has a vision about the health care industry," Short said. "In 2001, he asked a blue-ribbon panel -- he said he didn't want a puppet board -- and when he got his wish, he changed his mind."
Hatch's appointees subsequently were elected to the board by members of Medica. They contend now that they are no longer responsible to Hatch.
The trial that opened Thursday is the latest attempt by Hatch to retain control of the board. Hatch was the first witness and was on the stand for about four hours.
He testified that he was "flabbergasted" when Buck told him at the January lunch that he was thinking of running Medica as a part-time chief executive, that the board had elected itself as directors and there was a multimillion incentive plan for management in the works.
"He was very arrogant," Hatch testified. "He said they were paying themselves $50,000 roughly, which was a surprise to me. The fact that there wasn't a CEO was very bothersome."
Under cross-examination by Short, Hatch acknowledged that he left an irate message on Buck's answering machine a few hours after the lunch meeting.
Hatch said he didn't recall exactly what he said. Short read a transcript of the message which said, "This bonus will undo all that we've accomplished. We would be [expletive] front-page news. It would be a [expletive] scandal. The only thing we can do is lower premiums. I don't want another [expletive] scandal on my hands."
The exchanges between Hatch and Short were often testy. When Short suggested to Hatch there was no language in a September 2001 memorandum of understanding between Hatch and his appointees over their ability to continue on the board, Hatch said, "That was crystal clear. To say they can't hijack an organization without putting in there that they can't hijack it is a stretch."
Animosity surfaced near the end of Hatch's testimony when Short recounted a conversation Hatch had with one of her partners at the law firm of Dorsey & Whitney. Short asked Hatch if he described her with two expletives to her partner and threatened to take state business away from the firm.
Hatch denied using the phrase or making the threat. He said he was only upset that his pretrial deposition could not be conducted at the Capitol where he could be close to his office at a time when state government was shutting down in June.
The nonjury trial continues today and is likely to extend to the middle of next week. Source: Star Tribune, July 29, 2005
0 Comments:
Post a Comment
<< Home