Kucinich Files New Charges With FTC

[Jim O'Bryan]

Ex-Congressman Kucinich has filed another round of grievances with the Federal Trade Commission over some glaring mistakes made in the City of Lakewood's move to sell off the publicly owned hospital. In a letter sent to the FTC the 13 of this month...

May 13, 2016

The Federal Trade Commission
600 Pennsylvania Avenue
Washington, DC 20580
Room 404

Dear Commissioners and Staff,

Earlier this year I submitted a complaint to the FTC concerning alleged violations of federal anti-trust law by the Cleveland Clinic Foundation (“Cleveland Clinic.”)

In subsequent conversations, FTC staff made clear that despite the volume of evidence presented, the case involving Cleveland Clinic’s acquisition and subsequent closing of Lakewood Hospital in Lakewood, Ohio did not, at that time, rise to the level of an FTC review.

As the former member of Congress who represented Lakewood, and as a former chair of a congressional investigative subcommittee which had jurisdiction over such matters, I remain seized of the necessity of a review and present additional material in support of my continuing appeal:

At my request, several attorneys reviewed the Early Termination Notice database searching all terms involving Cleveland Clinic and Lakewood Hospital, and could not identify a required notice, although the transaction has already been consummated.

As far as can be determined, there was no Hart-Scott-Rodino (H-S-R) filing made for the transaction and the hospital is now shuttered for in-patient care.

The Cleveland Clinic clearly met the ‘size of entity’ test. The transaction between the Clinic and the Lakewood Hospital Association closed a viable hospital that had almost $124M in gross revenues in 2014.

A Lakewood Hospital Association consultant, Subsidium, placed a going-concern value of Lakewood Hospital at approximately $70M. In addition, the Lakewood Hospital Association held an investment pool of approximately $50M, making the asset value approximately $120 million, which clearly meets the size of transaction threshold.

Even viewing the transaction as the wind-down of a collaboration, such as a joint-venture, it still should have been reviewed under the H-S-R Act, because of the value of the assets involved in the deal.

If H-S-R filings, though required, are simply not made, regulators lack sufficient information to prompt a Herfindahl-Hirschman Index (“HHI”) review to determine market concentration.

I previously expressed this precise concern to the FTC staff. The FTC is unwittingly inviting transactions to be structured to avoid an H-S-R filing. This is not just a case of health care mergers flying under the radar. The FTC has turned off its radar, at great peril to the public interest it is charged with protecting.

Despite the FTC being provided with documentary evidence that a potential future competitor in the relevant market was denied an opportunity to bid, to the benefit of the acquirer, Cleveland Clinic, it did nothing. Even though the transactional documents contain express anticompetitive covenants related to the relevant market, the FTC did nothing.

Τhere is reason to believe, based upon documentary evidence, that the transaction which led to the closing of Lakewood Hospital was steered to Cleveland Clinic by virtue of that party’s active participation in the development of the offering process; and that during the offering process Clinic employees, or trustees had access to review offers of its competitors. The FTC has been notified of this and the other aforementioned facts and, apparently, has done nothing.

Therefore, I provide additional documentary evidence (attached) in the form of an affidavit from a shunned bidder who was ignored by Lakewood city officials, while they steered the sale to the Cleveland Clinic, in secret, while attempting to conceal the absence of a bidding process. It is my understanding that the bidder excluded from consideration remains interested in operating Lakewood as an inpatient hospital.

The facts presented herein and in my previous declaration make it clear that the people of Lakewood, Ohio and the greater Cleveland area are being deprived of urgently needed access to full health care facilities as a result of cut-throat competition.

The Cleveland Clinic, with the assent of naïve or complicit local officials, has corruptly set about eliminating a community hospital and endeavoring to destroy its vestiges so as to create facts on the ground which are irreversible.

I once again call upon the FTC to restore public confidence in the regulatory process and to immediately take such steps to reign in Cleveland Clinic’s anti-competitive conduct in the greater Cleveland market. Hart-Scott-Rodino filings must be ordered. Appropriate fines must be levied for circumvention of that law and an HHI investigation, which the Clinic thus far has successfully sought to avoid, must occur.

The HHI must be recalibrated and market dynamics reassessed in greater Cleveland. If after a serious review of the transactions which resulted in the closing of Lakewood Hospital the FTC determines a condition exists which is incompatible with anti-trust laws, the Cleveland Clinic-Lakewood deal must be deemed illegal, reversed, and the community hospital fully restored status quo ante.

Thank you, once again, for your consideration.

Sincerely,



Dennis J. Kucinich
Member of Congress
1997-2013

[Lori Allen _]

Thank you Dennis! I wish I felt confident that this might work. However, it appears that with Marcy Kaptur and Sherrod Brown being chummy with Lord Lakewood, I believe they will be told by Lord to pull the plug on the FTC investigation again. How Can one Lord have so many friends in low, low, places? I am praying for you Dennis. Give them hell!

[Michael Deneen]

Thank you Dennis!

[Peter Grossetti]

"Therefore, I provide additional documentary evidence (attached) in the form of an affidavit from a shunned bidder who was ignored by Lakewood city officials, while they steered the sale to the Cleveland Clinic, in secret, while attempting to conceal the absence of a bidding process. It is my understanding that the bidder excluded from consideration remains interested in operating Lakewood as an inpatient hospital."


Can anyone tell us who the shunned bidder was?

Thanks.

[Jim O'Bryan]

"Therefore, I provide additional documentary evidence (attached) in the form of an affidavit from a shunned bidder who was ignored by Lakewood city officials, while they steered the sale to the Cleveland Clinic, in secret, while attempting to conceal the absence of a bidding process. It is my understanding that the bidder excluded from consideration remains interested in operating Lakewood as an inpatient hospital."


Can anyone tell us who the shunned bidder was?

Thanks.

Peter

My bad, this is the accompanying documents.

http://media.lakewoodobserver.com/media ... 497028.pdf

It is pretty staggering how hard Mayor Summers worked to turn back better deals, if they did not include his "friends" getting to keep Lakewood's money.

Read it for yourself.

What Ex-Congressman Kucinich is talking with FTC over, is in the rush to do this deal before Lakewoodites knew it was happening, many mistakes were made. The city has fought all record requests, which is the only reason we are still hearing about it today. Now the records are finally coming in and lawyers just see it as a FUBAR.

Mayor Summers will go down as the worst Mayor, the one that broke the city, and potentially even worse.

As they scramble to privatize as many departments as possible, so they can keep stuff from the city, residents should start to ask themselves, why?

.

[cmager]

Mayor Summers will go down as the worst Mayor, the one that broke the city, and potentially even worse. As they scramble to privatize as many departments as possible, so they can keep stuff from the city, residents should start to ask themselves, why?

I suggest you examine Build Lakewood and politicians' ties to the Koch Bros. and to ALEC and related entities. Seriously.

[Peter Grossetti]

I suggest you examine Build Lakewood and politicians' ties to the Koch Bros. and to ALEC and related entities. Seriously.

ALEC ... for the uninitiated:

https://en.wikipedia.org/wiki/American_ ... ge_Council

http://www.alecexposed.org/wiki/ALEC_Exposed

http://www.motherjones.com/mojo/2012/11 ... il-economy

[Lori Allen _]

I want to thank Dennis for helping us. He has always been compassionate and cares about people. Where are Kaptur and Brown? Oh, that's right, friends of Lord Lakewood! Does anyone else wonder how Kaptur, Brown, and for that matter, also Antonio, benefit from backing Lord and the closure of OUR hospital? Just curious.

[Brian Essi]

"Therefore, I provide additional documentary evidence (attached) in the form of an affidavit from a shunned bidder who was ignored by Lakewood city officials, while they steered the sale to the Cleveland Clinic, in secret, while attempting to conceal the absence of a bidding process. It is my understanding that the bidder excluded from consideration remains interested in operating Lakewood as an inpatient hospital."


Can anyone tell us who the shunned bidder was?

Thanks.

Peter,

An affidavit of Frank Sossi--a partner and Surgical Development Partners was filed in the taxpayer lawsuit. So I would guess that the "shunned bidding" was SDP.

Here it is from March 3, 2016.

2016.03.14.Sosse Affidavit w Exhibits.pdf

(1.97 MiB) Downloaded 79 times

[Bridget Conant]

image.jpeg (46.57 KiB) Viewed 1933 times

But NO ONE is interested in running Lakewood Hospital!

This makes what, THREE entities that TRIED?