The creation of a $39 million charitable health care foundation to support medical and health-care related services to those requiring assistance in Northern Virginia was announced last Friday, Jan. 21, during a press conference at Alexandria City Hall.
Attorney General Jerry Kilgore said, "The foundation will distribute funds that resulted from a lawsuit against individuals and corporate entities formerly associated with the former Jefferson Memorial Hospital."
The law suit, Commonwealth vs. Tauber, was initiated more than a decade ago challenging the use of funds by Jefferson Memorial "as not in line with its mission" as a non-profit institution. The hospital lost its non-profit status in the early 1970', according to Kilgore.
"Quality health care is one of the most basic needs of human existence. In assisting those individuals who are most in need of charitable health care, the foundation will not only benefit such persons individually but also the larger community," Kilgore said.
In the suit, the Commonwealth alleged that "various individuals and their corporate and partnership entities breached fiduciary duties and wrongfully appropriated the assets of Jefferson Memorial Hospital, Inc., a nonprofit, charitable corporation operated as a hospital in Alexandria, Virginia." The hospital has long since gone out of business. The property still exists, but it is not in use.
The suit was originally filed in Alexandria Circuit Court in April 1995. A trial on the issues was held in January 1997 that resulted in a verdict for the Commonwealth. That decision was appealed to the Virginia Supreme Court. That court also ultimately ruled in favor of the Commonwealth.
ON FEB. 21, 2001, Alexandria Circuit Court entered a decree in favor of the Commonwealth. On a subsequent appeal to the State Supreme Court, the high court again ruled in favor of the Commonwealth.
"Charitable assets are to be held for the benefit of the public and not for private gain. The foundation will ensure the assets diverted from the former hospital will be distributed in accordance with the charitable purposes to which they should have been devoted," Kilgore said.
In order to facilitate that end, Kilgore has recommended to the Alexandria Circuit Court the following individuals to serve on the foundation Board of Directors. The court must approve each individual.
* Marsha Allgeier, director, Arlington County Department of Human Services.
* Thomas C. Brown, Jr., partner, McGuire Woods, LLP, law firm, McLean, specializing in health care and corporate governance.
* Lisa M. Chimento, senior vice president and director, Health Management Practice, Lewin Group, Inc.
* William C. Cleveland, former vice mayor, Alexandria.
* Dr. Jane L. Delgado, president and CEO, National Alliance for Hispanic Health.
* Verdia L. Haywood, deputy county executive, Human Services, Fairfax County.
* Mark J. Kington, managing director, X-10 Capital, LLC, Alexandria.
* Dr. E. Anne Peterson, former health commissioner, Commonwealth of Virginia.
* Dr. April L. Young, senior vice president and managing director, Mid-Atlantic Region, Technology and Life Sciences Division, Comerica Bank.
"THE ALEXANDRIA Circuit Court has approved our plan and it is anticipated that the foundation will get $39 million. It will provide health care to the needy in the three jurisdictions of Alexandria, Arlington and Fairfax County," Kilgore said.
"All allocation of funds will be determined by the board and will be distributed locally. It will be up to the board to set a formula for distribution. All these individuals are well suited to the task at hand," he said, as they flanked him at the podium in the Vola Lawson Lobby.
"We have filed the necessary papers with the court to have them formally approve this. This is a good example of when government identifies a need it can meet," Kilgore said.
"This is one of the largest cases to come out of the Attorney General's office," said Richard S. Schweiker, Jr., senior assistant attorney general.
Asked if Inova Health System was involved in the case, Schweiker said, "Inova Health System was not a defendant. Their only involvement was that they were making payments to the group we sued. And, the court imposed an instructive trust on the settlement proceeds Inova was paying to the defendant."
Schweiker stated, "The judge ruled that the settlement payments were part of the hospital's (Jefferson) operating monies and should go to its previous charitable mission."
Legal action between IHS and Jefferson grew out of a hospital joint venture settlement, according to Schweiker. Payments applicable to that action are to be completed this year, Schweiker clarified.
THE FOUNDATION'S activities could include supporting projects to improve access to primary health care services where language and cultural differences might present obstacles to receiving quality care. Other foundation program will be supporting and improving provisions of health education, disease prevention, and wellness programs, according to Kilgore.
The foundation may also choose to fund one or more community health centers. Such centers provide family-oriented primary and preventive health care services for those living in medically underserved communities regardless of ability to pay, according to the foundation guidelines.
Kilgore specifically praised the efforts of former Alexandria City Manager Philip Sunderland and director, Alexandria Health Department, Charles Konigsberg, Jr., M.D., "for all their help in making this possible."