[UPDATED] State Ethics Commission, Broward Prosecutor Clear Hospital Commissioner

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Broward Health Commissioner Mike Fernandez is breathing a bit easier these days. He won't face criminal charges or disciplinary action in connection with a conflict of interest between his public role and his private-sector work.

A few weeks ago, the Florida Commission on Ethics ruled that Fernandez did not commit an ethical violation by accepting an appointment to the North Broward Hospital District board when that same district does business with Fernandez's employer, SonoSite, a manufacturer of ultrasound technology.

And last week the Broward State Attorney's Office, which opened a criminal investigation into Fernandez's conduct after reading this Juice post about SonoSite, decided not to file charges against the commissioner.

After the jump, we'll take a closer look at the Fernandez ethics case.
SonoSite has done business with the hospital district at least since 2001, based on records that the district provided to Juice. Fernandez was appointed to his commissioner's post by Gov. Charlie Crist, a fraternity brother of his at Florida State, in September 2007. At that time Fernandez was employed as a general manager with SonoSite, as he had been since 2003. With Fernandez aboard, the district resumed continued its business dealings with his employer, SonoSite.

Florida Statute forbids a public officer from doing business with a company where he is "an officer, partner, director, or proprietor or in which such officer... has a material interest."  If Fernandez doesn't qualify based on being a general manager for the company, then he would certainly appear to have a "material interest" in SonoSite. After all, SonoSite's selling ultrasounds to the hospital district helps the financial health Fernandez's employer, which in turn helps his job stability. What's more, he had stock options through the company.

To be fair, Fernandez disclosed his employment with SonoSite on his application to be a hospital commissioner; he even listed it on his Broward Health profile page. Within the district, it was said that Fernandez's job with SonoSite dealt only with Latin America, that he had no involvement with any local health-care districts.

But for obvious reasons, it's still ethically awkward. Are taxpayers who help to fund the district expected to simply take Fernandez -- and his company's -- word at face value?

No, because that would make it too easy for corruption to bloom, especially considering the hospital commissioner's job doesn't pay. There are plenty of qualified candidates who don't come with a potential conflicts like Fernandez. Indeed, his fellow Crist-appointee on the commission, Joseph Cobo, also came with conflicts of interest, due to Cobo's private work as a physician consultant. Former Gov. Jeb Bush rejected Cobo's application for that reason; but it didn't bother Crist. Now Cobo remains under criminal investigation.

Based on the closeout memo recently made public by the Broward State Attorney's Office, it appears that Fernandez was honest in saying that his job did not conflict with his role as commissioner. You can read that memo here.

It cites a sworn statement by a former SonoSite employee named Jeffrey Hattern who for four years was the territory manager covering South Florida, meaning that Broward Health was his client. Prosecutor David Schulson writes:
"Mr. Hattern testified that he did not know and had never had any contact w2ith Mr. Fernandez until he saw his picture in the lobby of the Broward General Medical Center after Mr. Fernandez was appointed to serve as a commissioner for Broward Health in September 2007. After Mr. hattern saw Mr. Fernandez's picture, he did reach out to Mr. Fernandez and they did then communicate on occasion via email or the telephone. However Mr. Hattern further testified that Mr. Fernandez had no involvement in the procurement of any medical equipment from SonoSite.
In addition, Broward Health's director of purchasing, Brian Bravo, told Schulson that Fernandez did not contact him or his staff about medical equipment purchases.

This led Schulson to the conclusion that the evidence didn't warrant the filing of an unlawful compensation charge.

Being a criminal prosecutor, Schulson must weigh the available evidence against the very steep burden he'd face in court -- proving guilt beyond a reasonable doubt. For a public integrity prosecutor in Broward County, there are far bigger fish to fry.

It's harder to understand the reasons that the Florida Commission on Ethics would take such a cavalier attitude about what seems a fairly clear-cut -- if minor -- conflict of interest.

Some of the credit may go to the district's interim general counsel, Sam Goren, who had Fernandez's permission to solicit an opinion from the state ethics body and who framed the question in a rather misleading letter, which you can read here.

In the letter, Goren concedes that Fernandez has stock options but in the same breath claims that the commissioner didn't have any ownership interests. Isn't a stock option an ownership interest?

Goren tries to establish that Fernandez didn't have a conflict based on a provision in the statute for contracts that existed prior to a public official's appointment -- except that in this case it wasn't an ongoing contract.

Here's a copy of the opinion that FCE gave.

UPDATE: A reader of this post remarked that by saying the district "resumed" its purchases of SonoSite equipment after Fernandez joined the board, it implied the one was related to the other. If so, that was not my intention. Rather, I merely sought to convey that the company and the district did business before Fernandez joined the board and continued to do so after he joined the board.

To address other comments under this post, let me add that I realize portions of Florida Statute are written vaguely enough that they may allow for Fernandez to keep his board position conflict-free. The point is that in a district that's been scandalized by insider dealing in the past, appointing a health-care supply salesmen to the board was of questionable wisdom. And for an ethics commission maligned as toothless and ineffectual, this was an opportunity to take a strict reading of statutes and warn the district -- and the governor's office -- about the dangers of conflicts of interest.


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