After a brief hiatus, testimony in the trial against former hospital executives Rodney Miller Sr., Amos Carty Jr. and Peter Najawicz is expected to resume Tuesday with prosecutors about ready to close out their case, and the defense gearing up to present theirs.
In her opening statement to the jury weeks ago, government attorney Denise George-Counts said Miller was at the helm of the three-man conspiracy at the hospital, in which he allegedly racked up close to $3.8 million in salary and associated perks by the end of his five-year tenure. Working alongside, the government contends, were Carty and Najawicz, who — in their respective positions as chief operating officer and chief financial officer — allegedly approved and made the payments, while also pulling in thousands more than their government-mandated salaries.
At the heart of the government’s case have been two 2005 employment agreements for Miller — one that reflected the $150,000 salary listed on his NOPA (Notices of Personal Action, which reflect what an employees’ position is and how much they are paid) and another that contained hundreds of thousands more in extra benefits that prosecutors have argued Carty added on without anyone on the hospital board knowing.
Included in the benefits was the establishment of a Rabbi Trust, or retirement account for highly paid executives, along with multiple insurance policies and a clause that waived repayment on a $45,500 advance made to Miller from his annual housing allowance.
Supporting the arguments have been testimony from a range of hospital board members, including the three members of the compensation committee convened by the board in 2005 to review Miller’s contract and determine what he should be paid. While the board members have said that the general consensus among them was to raise Miller’s salary, spurring negotiations on the second 2005 contract, none remembered including many of the benefits in the language.
Three board members — Francis Jackson, Natalie Thomas and Beverly Chongasing — recently testified that no vote was ever taken on the contract, while Jackson and former hospital board member Sam Topp said that the board had agreed to set a "definite" limit on Miller’s total compensation, which was revealed last week to total more than $400,000.
Topp and former hospital board chairwoman June Adams, however, also testified that the board did approve the contract, but could not recall when or who was present.
The inconsistency has played into the hands of the defense, which has pointed out that little about Miller’s contract negotiations — even the appointment of the compensation committee members — had been recorded in the hospital board’s minutes.
Defense attorneys have also not denied that the trio was paid above their NOPA pay grade, which they have argued was a "common practice and culture" at the hospital, with several other employees also earning benefits and bonuses that were not listed in the official documents. Among the employees, current hospital Chief Operating Officer Angela Rennalls-Atkinson testified on the stand that a raise in her salary from $80,000 to $120,000 was never reflected in her NOPA.
Miller defense attorney Alan Teague has also elicited testimony about the board considering the establishment of a Rabbi Trust, and even agreeing to partially fund it once they received more information on the account. Board members have said they did not question the legitimacy of two $625,000 payments made to Miller at the end of his tenure, which they were told by Carty that Miller was owed.
The "general consensus" was that nothing had been set up for Miller’s retirement, and that he should be paid anything outstanding, board members said.
Testifying on the clause about waiving the repayment of any advances made to Miller, Adams said she did not realize that she signed off on two vouchers — including the $45,500 advance — in October of 2004. At that time, Miller’s employment agreement said that he was entitled to quarterly housing allotments, according to documents entered into evidence during the trial.
Adams’ recent testimony on the stand was cut short before she was cross-examined after it appeared that she was ill. She has yet to return to the witness stand.
Another issue for the prosecution has been large payments made to the three former executives from a Scotia Bank account that they have argued was used as a "private slush fund," and which Adams recently testified was set up for emergencies at the hospital — such as paying for medication or equipment.
A tape recording played by Najawicz defense attorney Robert King about payments being made to Miller from the account was recently testified to by Jackson, who said that he, at a meeting in 2008, ended up confronting Carty about the payments, which were based on a contract he said the board had never approved.
On the stand, Jackson said his first inclination had been to fire Carty, who he said admitted to making a "million dollar mistake" by approving the payments to Miller. Ultimately, the board decided to keep Carty on to respond to a joint federal and local audit into possible financial mismanagement at the hospital.
King has sought to single out Najawicz from the bunch, saying that he made the payments under direction from Miller and Carty without having copies of Miller’s contracts to verify the amount. The argument was verified last week by Hannibal Ware, who headed the audit on the federal side and read aloud a clause from the final report to that effect.
The trial wrapped up early last week with another tape recording, this time testified to by Miller’s former executive assistant Karen Rennie, who taped the board’s meetings and transcribed the minutes. Among other things, Najawicz mentions to board members in the recording about the hospital’s collections and being unable to recoup all its billings to insurance companies.
The meeting is followed by an exchange between Miller and Najawicz, which Rennie said, under cross-examination from King, showed that Miller was concerned about the perception the board and the media — who was generally present during open sessions of the board — would have about the hospital’s performance.
The trial is scheduled to resume early Tuesday morning.
