LANCASTER — The Antelope Valley Healthcare District Governing Board appears to be considering firing the fourth chief executive officer in five years, as it debated behind closed doors, regarding Michael Wall’s employment status.
The Board met in a special closed session for about two hours Monday night, emerging without having made a decision and continuing the matter to another special meeting at 6:30 a.m. today.
Although the five-member district Board’s discussions were not made public, comments from the public made prior to the closed session alleged embezzlement, bullying and retaliatory tactics.
Also mentioned were staff reductions made earlier this year, which impacted some 300 employees, while the CEO received a pay raise a year into his four-year contract.
On Tuesday afternoon, Wall issued a statement to hospital staff refuting allegations made during the public comment period, prior to the Board entering into closed session, calling such statements “outright falsehoods and partial truths.”
“Perhaps more disappointing is, these remarks were clearly the result of orchestrated leaks in violation of California law, the Brown Act and our hospital’s compliance policies,” Wall said, adding the most disturbing comments regarded alleged embezzlement. “Board members know this is not true. There is simply no evidence of embezzlement.”
To refute the allegations, he said he proposed a $200,000 donation to the Dr. Colette Nichols Foundation, a nonprofit foundation he created with the hospital and named for Nichols, the hospital chief financial and chief operating officer.
The Foundation was modeled on the existing Antelope Valley Hospital Foundation with the purpose “to empower young women age 6 to 17 to reach their highest potential and build their esteem in a community where young women face extremely high pregnancy rates and challenges with major health indicators” including sexually transmitted diseases, he said.
Wall presented the Foundation, already created with incorporation papers and bylaws, to the Board on June 27, with a $200,000 donation of hospital funds intended to serve as seed money. Wall is authorized to spend up to $200,000 without prior Board approval.
However, comments from three directors two days later, made him realize they had additional questions about the Foundation and he stopped development of the Foundation and the donation without any check being issued or cashed, and prior to any actual or threatened investigation, he said.
“I have proof of this and will furnish it to anyone who wishes to see it,” Wall said in a statement. “I understand the Board knows of this truth, but for some reason decided not to correct the record Monday night in response to various false statements made about embezzlement. The Foundation has been dissolved and does not exist any longer.”
At some point after June 29, the Board began an investigation into the Foundation’s creation. Agendas for special closed session meetings on Oct. 3 and Oct. 10 list “conference with special counsel appointed by the AVH District Board to conduct an investigation, discussion of anticipated exposure to litigation and report on investigation” as items for discussion and possible action.
Wall’s statement also addressed concerns regarding the hospital’s sponsorship of 16 local young women to attend the 2018 Women of Excellence luncheon, held in Beverly Hills, by the Ladylike Foundation, a nonprofit organization whose purpose is “to educate, empower and inspire young women living in underprivileged communities.”
He said the goal of sponsoring these young women to attend the event was similar to the intention of the Foundation, to “engage young A.V. girls in esteem-building events for the improvement of health.”
Sponsoring the young womens’ attendance amounted to “about $8,000 or $9,000,” he said, and included hotel rooms for one night, food and, because self-esteem and image was an important focus of the event, professional make-up for the young women attending the luncheon.
Wall said he would “be happy to discuss it with the Board and reimburse it, personally.”
As for the recent layoffs, he said he regrets they occurred, “but they were necessary because we had to right-size financially for the long-term viability and financial stability of our hospital, which is an important community resource.”
Wall was hired under a four-year agreement in January 2017, following a Board turnover in the November 2016 election that led to the ouster of Alecto Healthcare Services management company, after 13 months. Four directors remain from the Board that hired him. Dr. Mukund Shah resigned in December and the Board appointed Dr. Phil Tuso in February to fill the remaining nine months of his term.
In December, the Board approved a 5% pay raise for Wall, increasing his annual salary from $770,000 plus benefits to $808,000, with the potential for incentive bonuses of up to 20% of his base salary.
His original contract says he will be paid 12 months’ base salary if he is fired without cause during the first 12 months of the four-year deal. If he is fired in the second year, Wall would be paid the balance up to the 24th month. He would not receive a severance payment in years three or four.
The hospital paid Alecto more than $6 million to end its management contract.
Prior to the arrival of Alecto, the hospital was led by CEO Dennis Knox, whose 20-month tenure came to an end in July 2015, following a 3-2 vote of the Governing Board that was alternately called a “resignation” and “termination.” He left with a $475,000 severance package.
Knox, in turn, replaced Ed Mirzabegian, who served about six years in the CEO post, before resigning in 2013.
The discussion regarding Wall comes as the healthcare district is seeking voters’ approval of a $350 million bond in the election, just three weeks away.
The Board unanimously agreed to place Measure H on the Nov. 6 ballot, in hopes of raising funds to, at minimum, retrofit Antelope Valley Hospital to meet state earthquake standards, but hopefully to provide the basis for an entirely new facility to replace the 65-year-old hospital.
If passed, the bond would mean an annual property tax of $25 per $100,000 in assessed value for property owners in the district, over the 30-year life of the bond. It requires approval from 66.6% of the votes cast to pass.