Civic Accountability -- Honesty in Local Government III

[Mark Kindt]

There are good reasons that the legal profession is held by the public in such disregard. The testimony of the council-member quoted above from the court transcript is a perfect example.

Mr. O'Leary, a lawyer, is disingenuously informing the court that because no agreement existed, council had nothing to deliberate upon, and, therefore, council could not be in violation of the Ohio open meetings statute.

This is the meaningless legalistic quibble that hid the actual substance of what had occurred. It represents, at a minimum, a lack of candor to or bad faith with the court.

From my perspective, this council-member ran the risk of perjury and, perhaps even worse, the lawyers for the city understood this.

As we will see, a definitive agreement (the Master Agreement) was substantially complete by December 7th (2015) and that the city law director knew this when the council-member offered his testimony to the court.

Let's look at a city document that describes what this council-member and the other council members were doing on December 6th.

Gosh! They were having a non-public meeting to deliberate and agree on how they would roll-out the "non-existent" definitive agreement. Note the list of attachments to this email!

[Mark Kindt]

Please review the attached transcript page and the highlighted statement found at page 69 of the transcript.

I quote it here in full as the council member testified to the court:

“As our attorneys had followed our direction to negotiate with the Cleveland Clinic to reach a master agreement, they had been at work on that task, on that Sunday [December 6, 2015], they were at a point where they had finalized a master, I’m sorry, a high level concept sheet.” Bracketed text added for clarity.

In this testimony, the council member changes the word "master" (presumably indicating the master agreement) to his characterization of a finalized "high level concept sheet."

Has the witness continued to mislead the court that no agreement existed prior to December 7th? Probably, given that the Master Agreement related to four parties (one not actually in legal existence yet), is 84 pages long and had been in development for almost 11 months.

Other documents produced to Mr. Essi, establish that drafts of the Master Agreement were circulating between the parties as early as February 2015.

As an experienced transactional attorney myself, I do not believe that this council members testimony to the court is creditable given the size of the transaction and the public documents that have finally, but only partially, been disclosed.

[Mark Kindt]

In this series of posts, I am reviewing evidence of what I believe to be a culture of dishonesty in our city administration.

Is denying the existence of a public document a common practice for the City?

Clearly so. The City routinely denies in writing the existence of public documents until forced to divulge the (actually existing) documents under court order.

If you take the time to review examples of the City's written document request denials to Mr. Essi, you will see that denying the existence of documents that actually do exist is apparently standard operating procedure for the City's law department. Mr. Essi has faced numerous example of this practice over the past year and a half (as the City systematically violated the Ohio sunshine laws.)

So, falsely denying the existence of the Master Agreement would likely be consistent with the City's own demonstrated practices.

The dishonesty that I have described is strategic and, therefore, intentional. These document denials have been made by professionals who have compromised their professional integrity to achieve misplaced objectives.

The instances that I have documented here are obvious violations of the City's own written standards related to the duties of its public employees.

[Jim O'Bryan]

In this series of posts, I am reviewing evidence of what I believe to be a culture of dishonesty in our city administration.

Mark

The two staggering documents that should make all open their eyes are.

1) That with everyone on LHA, Council, and City Hall explaining we DO NOT own the building, property and equipment, had been assured the City of Lakewood DID OWN, The hospital, the equipment and the land.

2) Where the City and LHA members were told and warn that the $120 million in development dollars they quoted was fraudulent to use.

I wonder how the elections and thought process could have changed had they not been able to say those falsehoods?

.

[Mark Kindt]

What we have witnessed in terms of systematic dishonesty, false statements, false financial representations, deceptive omissions and various other general BS from the City has been truly staggering in its proportions.

I can only characterize it as "Nixonian".

Document-by-document, we can compare falsehoods with truth. It is quite fascinating. The Observation Deck is an excellent vehicle for document disclosure and review.

Frankly, I am surprised by the sheer scope and breadth of what has been going on.

Elected and appointed public officials are risking their careers...for what?

Across my public career, I have seen elected officials indicted for less.

In 38 years of legal practice, I have never seen a false affidavit so nakedly false and provably so as that filed by the City with the Ohio Court of Appeals. It boggles the mind.

[Mark Kindt]

Let me quote from my next document:

"the assets, both real and financial, of Lakewood Hospital are owned by the City of Lakewood"

Who tell us this? The Mayor of the City of Lakewood.

Who confirms this? The Chairman of the Board of the Lakewood Hospital Association.

Who is the sole member of the Lakewood Hospital Association? The Cleveland Clinic Foundation.

Through-out 2015 and 2016, the messaging from the city administration was that it didn't really own the hospital and that the agreements were complicated and vague.

How vague is the statement "the assets, both real and financial, of Lakewood Hospital are owned by the City of Lakewood"?

It is abundantly clear that the City understands that it owns Lakewood Hospital.

You be the judge.

[Bridget Conant]

Owned by the City of Lakewood.

That is US, the residents and taxpayers.

Where did our money go?

[Mark Kindt]

The major beneficiaries of the liquidation of Lakewood Hospital are, in no particular order:

1. The Cleveland Clinic Foundation who received the vast bulk of the hospital assets as so-called "wind-down" costs;

2. A "New Foundation" that will be paid $32M over a number of years and upon which CCF will have designated board seats;

3. The Cleveland Clinic Foundation who benefits from encumbering the former hospital site with a non-competition clause that prevents its redevelopment for health care;

4. The Cleveland Clinic Foundation who has forced a potential future competing hospital from the marketplace;

5. The former mayor of Lakewood and former LHA board member who benefits from securing the hospital site redevelopment award;

6. The City of Lakewood that received some nominal compensation, but in amounts seriously insufficient to compensate for the long-term loss of its hospital assets, lease revenue from those assets and hospital-related income tax revenues.

As we look at more documents secured through the diligent efforts of Mr. Essi, we will learn that since at least as early as 2013 (if not earlier), the City of Lakewood has been acting antithetical to its own governmental self-interest and the basic interests of its citizens and taxpayers.

[Mark Kindt]

Again, let me quote from the above City of Lakewood document:

"the assets, both real and financial, of Lakewood Hospital are owned by the City of Lakewood"

Since, the date of this letter, we can make a well-documented argument that the vast bulk of those "assets, both real and financial" have been transferred to private parties for nominal dollar values.

I can say this with confidence, since the Mayor is telling the media that the hospital property will go to the developer for either free or $1.

(Keep your eyes peeled for other taxpayer subsidies in the redevelopment project. Trust me, they will be coming.)

At the risk of sounding like a Republican, I will state that this has all been an extraordinary taxpayer rip-off.

[Mark Kindt]

The culture of dishonesty flows right from the top of the city administration:

In the last document that I posted (dated March 5, 2013), the Mayor states to its potential consultant (Subsidium) that "The assets, both real and financial, of Lakewood Hospital are owned by the City of Lakewood."

This statement has been confirmed by LHA in the same letter (by the signature of its Chairman).

In this email (dated December 6, 2014) to all members of city council and a local newspaper publisher, the Mayor is misrepresenting the status of his decision-making and that made by the committee he chaired at LHA (the so-called "Step-Two Committee").

By the date of this email, the CCF proposal to close the hospital and open a family health center is the sole proposal on the table. The letter of intent is under development. PR folks are already at work. The closure of the hospital is the chosen decision path.

As you read these documents, I think you will be convinced of what I am describing as a culture of dishonesty.

[Mark Kindt]

On or before September 24, 2014, Subsidium has informed the Mayor that its analysis concluded that the CCF offer "did not support a finding of a material advantage to the community". This analysis is attached. The Mayor proceeded down the path of the weakest offer and never reached the counter-offer metrics recommended by Subsidium (as far as we can tell.)

I have also attached the September 17, 2014 slide deck of the contemporaneously-made offer from Metro Health Systems. This is the offer to continue Lakewood Hospital as a going concern and invest $100,000,000 over 10 years.

Take a moment to compare the two documents. The Mayor proceeded down the obviously "wrong-headed" decision path; a decision path antithetical to the governmental self-interest of the City and its taxpayers.

In the December email posted above, he is being entirely disingenuous with city council and the media about the state of the proposal process.

It is my opinion, and I emphasize opinion, that a clear signal was sent either to the County or to Metro to "butt-out" and that the proposal was improperly steered to the Cleveland Clinic Foundation. In fact, we will review documents that show that this was done over the objections of one of the Step-Two Committee members.

[Mark Kindt]

Wrong Process Naturally Leads to a Poor Result

Commentary:

For the moment, we will stick a pin in the question of how the city wound-up with the proposal that did not provide "material advantage to the community".

Suffice it to say, that from the time Metro Health System submitted its proposal in May until the City selected CCF in the Fall to close the hospital, Metro always had a multi-dimensional proposal that was markedly superior to what CCF was proposing. It is clear to me that the City of Lakewood proceeded in a private, likely improper, process that was entirely antithetical to its own governmental self-interests.

I write with the benefit of hindsight. I have had time to review documents, study legal issues, and monitor the various cases against the City. The City had both a literal duty and a duty of competence to comply with its own processes to independently and publicly bid the hospital assets for sale or lease. It did not do so. Public bidding obligations exist to prevent the kind of backroom dealings that result in improper contract awards.

Why would the Mayor ever think that he could lead the negotiations related to Lakewood Hospital from inside of the Lakewood Hospital Association (who's only actual member was the Cleveland Clinic Foundation)?

There were obvious problems with this from the start. It was the wrong process, because:

1. It ignored (or evaded) public bidding obligations. Strike One!

2. It was conducted under a likely misdemeanor conflict-of-interest violation during the entire time-frame of the negotiations (see Ohio Ethics Commission letters). Strike Two!

3. It ignored (or evaded) obvious federal antitrust legal risks that arise when competitors meet to discuss competitive issues. Strike Three!

Should we be surprised that the wrong process led to a marginal outcome? Probably not. We will continue to explore how this marginal outcome occurred and was then wrapped in a campaign of strategic dishonesty.

The City had years to get this right. Some would speculate that its real goal was to actually get it wrong.

[Mark Kindt]

Before we move on to the topic of the "Big Lie", let's continue our review of the Mayor's December 6th (2014) email to city council and the local publisher.

Quoting from that email:

"The Trustees are working hard to make a major investment in healthcare for the future of Lakewood". This is a naked falsehood.

Having rejected the one proposal that would maintain Lakewood Hospital Association and a continuing hospital in Lakewood, the trustees were actually proposing the wind-down of the Lakewood Hospital Association, the closure of the hospital, and the liquidation of all assets.

Again quoting from that email:

"Currently, they are looking at a wide variety of options. Nothing has been decided at this point." Again, a naked falsehood.

The trustees were looking at the sole option from CCF to close the hospital and let CCF build a medical office building. They were not "looking at a wide variety of options". It was all baked.

Some questions:

1. Why is the Mayor making misrepresentations to the publisher of the local newspaper?

2. Is the Mayor also making misrepresentations to one or more members of city council?

3. If the Mayor is making misrepresentations to any city council member, who's interests is he actually serving?

One final comment: The City was finally forced to produced some documents under court order(s). Now that the hospital is closed and some buildings have been demolished, the public (after 450 days of stonewalling) can review some of the documents related to this debacle. These violations of the Ohio Sunshine Laws were part of a continuing effort to impede review of the deal. Many documents are still being withheld.

[Brian Essi]

1. Why is the Mayor making misrepresentations to the publisher of the local newspaper?

2. Is the Mayor also making misrepresentations to one or more members of city council?

3. If the Mayor is making misrepresentations to any city council member, who's interests is he actually serving?

Mr. Kindt,

Excellent analysis!

I will take a wild stab at answering your questions:

1. Why is the Mayor making misrepresentations to the publisher of the local newspaper?

Because he knows that he has done something wrong and is in the process of consummating something that is wrong.

2. Is the Mayor also making misrepresentations to one or more members of city council?


Yes!--He copies them and he has actual intent to deceive them---Bullock and Madigan are complicit in this BIG LIE too since as LHA trustees they have actual knowledge that the Mayor is lying to JOB and their colleagues on Council---I have the proof--delivered August 16, 2017---shuffled in the stack of 20,000 plus pages of rubble. We can presume that Marx is also in on the BIG LIE since she was told of the CCF FHC/close the hospital plan 13 months earlier. The Mayor's calendar shows he met with Nowlin--Madigan's good friend---during this time frame too, so it is likely he had similar knowledge and sat silently, i.e. was complicit as well.


3. If the Mayor is making misrepresentations to any city council member, who's interests is he actually serving?


Since you have proven beyond any doubt that no governmental benefit was achieved by proceeding with the Mayor's plan AND that private bad actors have benefited, the only conclusion to draw is that Summers, Bullock, Madigan and Marx received improper benefits as well.

Most people don't lie, conceal and commit fraud unless they have done something wrong.

[Mark Kindt]

Lakewood Hospital Association Insiders Admit Investment Figures Are "Bogus"

Let's role the calendar a few weeks forward from the Mayor's misleading email of December 6th (2014) to explore what I will refer to as the "Big Lie".

In a January of 2015 press conference, the Mayor announced that there was a “plan” that had $120 million dollars in investment value for our community. That number was repeated by elected and appointed city officials. It was published in our water bill inserts. Was it true or false?

Let’s let the insiders answer the question for us. Was it true or was it BOGUS? (This is one of my favorite documents).