Hospital's ex-chief gets jail
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AP Photo / Alden Pellett Former Fletcher Allen CEO William Boettcher is accompanied by family members as he enters U.S. Federal Court to begin a sentencing hearing in Burlington on Monday. AP PHOTO / ALDEN PELLETT |
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By JOHN ZICCONI Vermont Press Bureau - Published: April 26, 2005
BURLINGTON — A federal judge Monday sentenced former Fletcher Allen Health Care president and chief executive officer William Boettcher to two years in a minimum security prison for defrauding a state regulatory agency.
The sentence was the maximum allowed under a plea agreement Boettcher struck with federal and state prosecutors for his role in hiding the true cost of the hospital's $367 million Renaissance Project.
The 57-year-old broke down in tears several times during the daylong hearing while asking U.S. District Court Judge William Sessions for leniency, but he showed no emotion when the two-year sentence was read.
He was quickly whisked out of the courtroom by his legal team and did not answer questions.
Boettcher told the judge that deceiving state regulators should be viewed as a civil and not a criminal offense, and asked that he be sentenced to supervised release and community service.
"What we did was unethical," Boettcher said. "But I did not think it was criminal."
Boettcher said he believed lying to regulators was the only way the hospital would gain timely approval for a new birthing center, emergency room, ambulatory-care center, surgical suites, and modern facilities for both obstetrics and pediatrics, all of which Fletcher Allen badly needed and are now being built at the hospital.
"What I did — what we did — was wrong," Boettcher said. "What went wrong here is that we had too much passion and we let desire overcome common sense. We had a dream … but I should have seen that we were putting the organization in harm's way. I should not have done that. I understand I crossed the line."
The former hospital executive now has 10 days to file an appeal or he must report June 7 to a federal prison in Nevada, the closest penitentiary to his California home. Jerome O'Neill, Boettcher's attorney, declined to answer questions and would not say whether his client would appeal.
Judge Sessions, speaking from the bench, noted Boettcher did not profit personally from the scandal that cost virtually all of Fletcher Allen's top executives and board members their jobs. But he said the crime was costly to Vermont because the medical center holds a prominent position in the community and Boettcher severely violated the public trust, he said.
"Your offense goes to the heart of this society because it challenged the very institution that exists here," the judge said. "The fact is, there is a Vermont way of doing things. We are respectful, honest and expect our public officials to act in the best interest of the state.
"Every time a public official acts in a deceitful and abusive way, a little bit of this life is shredded away."
Prosecutors asked the judge to sentence Boettcher to five years in prison because he violated terms of his plea deal by not divulging all of his financial assets to his parole officer. Sessions, however, questioned whether the $105,000 investment account that was excluded belonged solely to Boettcher's wife, and without solid proof it was a joint account, declined a sentence longer than two years.
Despite losing on the sentence length issue, prosecutors, who worked more than two years to build the case against Boettcher, said they were "delighted" with the outcome.
"We think this is the right result," said David Kirby, Vermont's U.S. attorney. "The court made it very clear this was an appropriate investigation and agreed the plea agreement was fair."
Boettcher, when he ran Fletcher Allen from 1998 to 2002, told state regulators who control hospital spending that the medical center's 600,000-square-foot development plan would cost $173 million when the true cost was more than twice that. The actual price tag was not discovered until well after construction began.
Prosecutors said regulators told them they never would have approved the project had they known its true cost, but were forced to allow its completion because construction was well under way.
The additional costs will unnecessarily increase local health care costs for years to come, prosecutors said.
Current Fletcher Allen president and CEO Melinda Estes, in written testimony, told the court the fallout from Boettcher's actions were profound and costly. The hospital is still struggling to regain the community's trust, while more than $15 million has been lost through the need to hire lawyers, the downgrading of the hospital's credit rating and a sudden falloff of charitable donations, she said.
"The monetary impact of these investigations has been staggering," Estes wrote. The money would have been "much better spent caring for our patients."
The Renaissance Project's exorbitant cost also maxed out the hospital's borrowing capacity, Estes said, making other needed improvements like modernizing patient rooms impossible to achieve.
Three other former hospital officials — David Demers, David Cox and Thad Krupka — have also been charged with crimes in connection with the scandal, but their hearings have been delayed until after Boettcher was sentenced.
Demers and Krupka pleaded guilty to fraud charges. Cox, the hospital's chief financial officer under Boetcher, pleaded innocent and plans to go to trial.
As part of a plea deal, Demers agreed to testify against Boettcher.
The former Fletcher Allen senior vice president of planning and business development described his former boss as a "bully" who purposefully withheld the construction project's true financial totals from the hospital's board of trustees and believed state regulators were "idiots" who could not be trusted.
"He is a mean person who controlled and managed those around him by fear and intimidation," Demers said at the hearing. "He did not view regulators as competent and did not view (them) as our friends … We shared only information that we needed to share, and that did not include full disclosure of our resource allocation plan."
Boettcher acknowledged his disdain for Vermont's regulatory process. He said Vermont's so-called Certificate of Need process increases the cost of health care, unnecessarily delays vital projects and that regulators did not understand Fletcher Allen's needs.
Contact John Zicconi at john.zicconi@rutlandherald.com.
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