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Prosecutors Tighten Fletcher Allen Noose

Inside Track


Published December 8, 2004 at 5:00 p.m.

So what's going on with the federal and state criminal investigation of the hospital scandal that shook the Green Mountains in 2002?

It's going on three years since Fletcher Allen Health Care's Renaissance Project scandal broke wide open. Hundreds of millions of dollars in project costs were kept off the books and hidden from state and public view. Offshore financing scams were devised to subvert Vermont law. Skids were greased.

When the bubble finally burst in the summer of 2002, CEO Bill Boettcher was shown the door and handed a $750,000 golden parachute. Other administrators on Big Bad Bill's team were either dismissed or allowed to quit. One was recently indicted.

And the silk-stocking board of trustees, made up of local business bigwigs like Phil Drumheller of Lane Press and Richie Tarrant of IDX, was also replaced. The hospital cleaned house. Even changed law firms.

But major unanswered questions remain. Like, how did Bill Boettcher hide $200 million of costs, not only from the state but from his own board of trustees, too?

Two months ago, Boettcher's former right-hand man, CFO Thad Krupka, returned from Minnesota to cop a plea to three misdemeanor charges. Krupka will pay a hefty fine, but he won't get jail time. Thad also agreed to cooperate with investigators.

Since Krupka's October arraignment, though, it's been deadly silent on the criminal investigation front. Until this week.

Seven Days has learned that, behind the scenes, the criminal probe has been making steady progress.

According to sources connected to the probe, who spoke on condition of anonymity, criminal indictments of Boettcher and others allegedly involved in the Fletcher Allen Renaissance Scandal will come down in January.

We're told that other potential criminal targets include former hospital administrators, trustees and outside professional advisors and consultants.

Can you say "conspiracy?"

The investigation, sources say, is literally leaving no stone unturned. Even Renaissance Project architects and building contractors have been interrogated, sources say.

The criminal probe is being led by Paul Van de Graaf, chief of the criminal division at the U.S. Attorney's office in Burlington. Mr. Van de Graaf is a seasoned prosecutor with countless scalps on his belt. He's been in the Burlington office for 13 years. Paulie the Pistol is a graduate of Columbia Law School. His tenacity and attention to detail is legend among local defense lawyers. So is his passion for making bad guys pay for their crimes.

Mr. Van de Graaf reminds us of a Vermont version of New York's Eliot Spitzer -- not a guy you ever want to get a phone call from that begins with the phrase, "Hey, do you mind if I ask you a couple questions?"

Asked about pending indictments, Mr. Van de Graaf declined comment this week, other than to say, "We are continuing the investigation."

Boettcher's attorney, Jerome O'Neill, told Seven Days that his client remains "on his sailboat on the West Coast."

Merry Christmas, Bill.

It looks like it'll be your last "merry" Christmas for awhile.

Ho! Ho! Ho!

The New Boss -- The new CEO on Hospital Hill, Dr. Melinda Estes, made a center court appearance Sunday morning on Ch. 3's "You Can Quote Me."

Amazing! Bill Boettcher's name never came up!

However, inquisitors Marselis Parsons and Sera Congi politely raised issues of past dirty laundry.

Estes was waiting for it.

Marvelous Melinda declined to toot the Mary Fanny horn and claim the bad days are all behind us. She acknowledged "the depth of despair" that the Renaissance scandal had inflicted on the community.

"Trust takes a long time to rebuild," said Estes. "You can only rebuild it one person at a time."

Well said, eh?

The more we see of Melinda, the more she looks like the person to turn the joint around.

Melinda assured Marsillyiss and his better half that recovery "is well underway, but we're not completely recovered yet." She said, "It will be awhile before we emerge on the other side."

Yes, indeed.

Numbers Game? -- Recently Fletcher Allen announced it had more than achieved the goal of its "100 Nurses in 100 Days" recruitment campaign. In fact, the hospital announced it had "hired 113 registered nurses who accepted jobs at Fletcher Allen."


But Jen Henry, R.N., president of the nurses' union, says the numbers are a little misleading.

"It's not 113 nurses hired," Henry told Seven Days. "They should be honest about the facts."

Nurse Jen says the union's accounting shows about 55 "new" nurses hired. Others merely increased their hours, switched from per diem pay status to part-time, or were "rehires."

"That's great," says Henry. "At a time when hospitals have a hard time getting one new nurse, we have 55!"

But the Mary Fanny administration, charged the union boss, "isn't happy just telling us there are 55 new nurses. They have to twist it around into 113 new nurses."

In the hospital's defense, Public Affairs Director Maria McClellan pointed out that the "100 Nurses in 100 Days" press release "did not state all 113 were new hires." In fact, the Mary Fanny only claimed credit for 58 new hires. The remainder either upped their hours (44), switched from per diem "traveler" status (8), or were rehires (8).

Incidentally, 80 of the 113 nurses hired were Vermonters. The rest came from across the country.

"Right from the beginning we qualified what we meant when we said "100 Nurses in 100 Days," said McClellan. "We put the facts in every press release."

She's right.

So's Nurse Jen.

It's all about spin. The devil, as they say, is in the details.

P.S. The Mary Fanny's board of trustees meets next Tuesday. The nurses intend to speak up. There's also going to be a big management reorganization plan on the table. Sounds like news, eh?

Unfortunately, our local mainstream press, both print and electronic, hasn't covered hospital trustee meetings in ages. With "holiday season" stories to report from now till Christmas, it's doubtful they'll make it next week.

In fact, it was surprising to hear the lovely Sera Congi question Marvelous Melinda about Trustee Con Hogan's abrupt resignation from the board in August.

At the time WCAX, like the Freeps, ignored it.

Dubie Fast Track? -- Republican Lt. Gov. Brian Dubie was spotted making some interesting and impressive rounds in Washington, D.C., last Wednesday. Wild stories are flying about the Doobster nosing around for an ambassador posting, as well as waxing fantastic about a run for the U.S. Senate in 2006.

That would be for the seat that Independent U.S. Sen. Jim Jeffords says will not be vacant under any circumstances. Jim insists he's running, but it's remarkable that not a single political horse in Vermont is taking him seriously.

Despite Jeezum Jim's assurances, Vermont politicos are all making plans for the major shakeup a Jeffords retirement would set off.

Rep. Bernie Sanders would immediately run for the open senate seat. That is a known fact.

But would a Democrat get into a race that included Bernie the Superstar?

Would Republican Gov. Jim Douglas walk away from what many think could be a very long run in Montpelier to take a second shot at the only electoral prize he's ever sought and lost?

Doobie-Doo, who surprised even his loyal supporters with an impressive 56 percent reelection win last month, was accompanied to Foggy Bottom by political ally and friend Joe Sinagra of St. Albans.

Big Joe is executive officer of the Vermont Home Builders and Remodelers Association. He's been a GOP political activist since his days at Lyndon State. And he's a big Brian Dubie fan.

Unfortunately, Mr. Dubie did not return our calls requesting an interview this week. Cat must have got his tongue. But Mr. Sinagra told us that he personally got "within 15 feet of the West Wing" last Wednesday.

Joe said at one point he was "standing outside White House Chief of Staff Andrew Card's office." He said Dubie was meeting with "unidentified staff."

Brian "had a meeting on some Cuba stuff," Sinagra told Seven Days.

You'll recall that the Doobster set the all-time Vermont Lite-Gov record for world travel in his first term, visiting Taiwan, China, Cuba and Canada as an unofficial Vermont ambassador.

Obviously, it didn't hurt him election-wise. Can't blame Brian if he's thinking about bigger fish to fry, can we?

"If indeed it's job hunting," said Jon Copans, executive director of the Vermont Democratic Party, "it's a little unseemly for a guy not sworn in yet for second term to already be shopping for a new job."

Mr. Copans, however, failed to appreciate the fact that a Dubie job search would open up the Lite-Gov seat for a Democrat to win back.

New Leadership -- Saturday at the Statehouse was a day for the newly elected Democratic Party leadership. The 83 members of the House Democratic Caucus met to pick their new leadership team. Meanwhile, over at the Kellogg-Hubbard Library, the Democratic State Committee met to pick a new party chair.

Former State Rep. Peter Mallary of Fairlee has stepped up to replace Scudder Parker as the state chairman. Peter served three terms in the Vermont House during the mid-1990s.

"We've got these big majorities in the House and Senate," said Mallary. "We've got to handle ourselves in a smart way. The nation will be looking to Vermont for Democratic leadership."

Up the hill under the golden dome, the upbeat members of the new House majority gathered once again in historic Room 11 -- the big room. Four years ago, the civil-unions backlash moved them across the hall into the smaller Room 10.

The new House majority culture is poles apart from the Republican one it replaces. For one thing, can anyone imagine former GOP Speaker Walter Freed going around the room asking Republicans to stand up, introduce themselves and tell everybody "what makes them smile?"

That's exactly what the next speaker of the House, Gaye Symington of Jericho, did Saturday morning.

No one admitted publicly that marijuana makes them smile, but five Democrats, all male, made some sort of reference to "sex" being something that occasionally did.


Twenty years ago, everyone would have been writing about what a great day it was for women's liberation. Not only will Vermont have a female House Speaker in January, but the leader of the Democratic Caucus is a woman, too.

Rep. Carolyn Partridge of Rockingham has learned the Statehouse ropes while fighting a guerrilla war. Come January she'll be majority leader. Princess Carolyn is ready.

The coming session, folks, will be anything but dull. Plus, there'll be a lot more smiles than in recent years.


On the War Front -- The number-one question from readers of last week's column on the big Vermont National Guard call-up was about how the Vermont activation compares to other states. What's the breakdown on a per-capita state share?

Believe it or not, that information is not readily available. A couple congressional staffers spent all day Monday trying to find out. And at the end of the day they ended up at the same website we'd found on our own:

That takes you to a huge pdf file that lists every National Guard and military reserve unit activated for Iraq through November.

We didn't do the math on all 50 states, but a quick study indicates Vermont's military call-up appears about the second-largest in the nation on a per-capita basis.

Hawaii looks to be in first place, with one out of every 390 citizens activated.

Vermont is second with one out of 632 called up.

Texas is a different story. According to the numbers provided by the Department of Defense, it looks like only one out of every 2281 residents has been activated.

Vermont's per-capita call-up is about twice as big as New Hampshire's and more than six times bigger than that of Massachusetts, where one in 3847 citizen soldiers has been activated.

And remember, folks, the war is just getting started. Not only is there no light at the end of the tunnel, no one, it seems, can even find the tunnel.

Kiss Me, Kate? -- Apparently not anytime soon. Howard Dean's longtime closest aide unloaded on yours truly last week in the letters section.

We'd earlier noted Kate O'Connor's recent emergence from the shadows in a two-part, soft-touch interview on VPR. We emailed Kate requesting a similar interview. Her letter apparently will be her only response.

Kate accuses us of distorting the facts, but declines to identify precisely which facts we're distorting. In our column item, we quoted published comments made by former Howard Dean Campaign Manager Joe Trippi. We sought Kate's response, trying to get both sides.

Unfortunately, Ms. O'Connor completely avoided the facts.

Can't help but wonder how far Ho-Ho would have gone if Kate had not been there to "protect" him from those better equipped to get him elected.

Correction -- In last week's column, yours truly misspelled the name of the Dutch city of Maastricht. Peter Shumlin's Dutch mother brought it to our attention via email.

Dank u wel, Momma Shumlin.