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BY DEBRA GRUSZECKI
Times Staff Writer | Friday, September 19, 2003 | (No comments posted.)
MUNSTER -- An anonymous open letter to local financial magnate Donald Powers alleging financial and ethical improprieties as a board member of the Community Foundation of Northwest Indiana has prompted an internal investigation.
The Community Foundation is the parent company of the Community Hospital of Munster. Powers is a real estate developer and businessman who also has served on Community Hospital's board of directors the past 20 years. He currently is chairman, president and chief executive officer of the Community Foundation of Northwest Indiana Inc.
Powers referred the letter to Nancy Lund, a lawyer and director of corporate compliance for the Community Healthcare System, said David Wickland. He is an attorney and president of the Munster Medical Research Foundation, the hospital's corporate name.
The letter, which was purported to be written by board members, was circulated within the medical community.
It called for a change in leadership in the interest of "patients, our employees and physicians" who "expect and deserve an ethical board."
The Times, which received a copy of the letter, will not disclose the specific allegations, because they were raised anonymously and could not be verified.
The letter also said, "We, as members of the board are no better than those of Enron, unless we stand up for what is right and ethical.''
It contains a portion of the preamble of the Declaration of Independence, and it arrived in an official foundation envelope.
Lund, who handled corporate compliance issues in Michigan before coming to Northwest Indiana, will conduct an investigation into allegations of wrongdoing and try to determine who wrote the letter.
"The committee will receive, I hope in short order, the results of her investigation,'' Wickland said.
"Based on what she tells us, its findings will be referred to the board." Wickland also is chairman of the hospital's corporate compliance committee for investigation and review.
Wickland called the allegations serious, and he questioned their validity, as well as the anonymous approach taken.
"I can tell you unequivocally, each board member has been addressed with regard to this letter, and each indicated that in no way were they involved in it," Wickland said.
"In no way did they have knowledge of it, and in no way do they support what is in it. For the letter to say it comes from board members is patently false."
Fifteen years ago, two Munster doctors raised questions about Powers' financial gains concerning his involvement with The Community Hospital and its entities. After a six-year federal probe that focused on Powers and the late George Watson, another prominent businessman, then-U.S. Attorney Jon DeGuilio found no wrongdoing.
The investigation by the Internal Revenue Service and the Lake County Assessor's office looked at questionable financial transactions among the hospital, related nonprofit foundations and private companies in which Powers and Watson were involved.
In 1988, the year the probe began, Powers told The Times money was transferred from the Community Foundation Inc., a nonprofit holding company of the hospital, to their private ventures. Powers noted, though, the money was returned as soon as a foundation accountant questioned the transfer.
In 1990, a federal grand jury reportedly pored over thousands of documents and records looking for potential tax violations.
When cleared, Powers told The Times, "It's the outcome I always knew would be there." He also said he harbored no grudge against his accusers, nor would he be deterred from keeping a strong voice in management of the hospital.
This new round of accusations dovetails with Powers' recent acceptance of a Lifetime Contribution Award from the Northwest Indiana Quality of Life Council.
One of 19 recipients, Powers was recognized Wednesday for contributions to the community as a member of Purdue University's Board of Trustees, helping to develop the Calumet university campus, as well as his development and leadership roles with The Community Hospital, the Center for Visual and Performing Arts and the new memorial park honoring veterans of war in the last century.
Wickland said the current letter struck him as more of the same, referring to the prior investigation.
Debra Gruszecki can be reached at dgruszecki@nwitimes.com or (219) 933-4158
Donald Powers, a recipient of a Lifetime Achievement Award for community service Wednesday, is a real estate developer and businessman, who has served as the following:
* A member of Purdue University's Board of Trustees, and developer of the Calumet campus of Purdue in Hammond.
* A president of the board of The Community Hospital since 1983, who helped build the Munster hospital - donating land and cash to improve the site where The Community Hospital was built. He also played a sizeable role in developing the Center for Visual and Performing Arts in Munster, Fitness Pointe and the new veterans park on Calumet Avenue. Powers passed the president gavel of Community Hospital's board of directors over to David Wickland in July. He continued to serve as chairman, president and chief executive officer of Community Foundation of Northwest Indiana Inc., the parent company of the Community Hospital of Munster which acquired St. Catherine Hospital in East Chicago and St. Mary Medical Center in Hobart. Together, the three hospitals form Community Healthcare System. In guiding development of the Community Hospital, Powers helped secure the reinvestment of more than $270 million into the hospital since its opening in 1973 as a 94-bed medical-surgical facility to a 364-bed full-bed full-service medical center.
* A founder of Community Hospital Cancer Research Foundation Inc., a not-for-profit organization dedicated to improving the quality of cancer care in the community.
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