Rep. Mary Moore, D-Birmingham, claims health care construction contracts in Birmingham are given to companies that have long-standing relationships with local hospitals.

Moore points to the deal with BE&K, who is serving as construction manager along with Hoar Construction LLC for Children’s $571 million expansion project. BE&K CEO Mike Goodrich’s wife, Gillian, is on Children’s board.

Besides Children’s Hospital, Baptist Health System also has board members with ties to firms receiving millions of dollars of business, but at a smaller percentage. Baptist has business relationships with three of its trustees, according to Internal Revenue Service filings.

Birmingham’s nonprofit hospitals insist they have mechanisms in place to avoid conflicts of interest. However, Moore said having company executives on hospital boards positions their firms for multimillion-dollar contracts and denies minority participation.

Bill Morton, CEO of Robins & Morton, is on the board of Baptist Health System. His company is responsible for $70 million worth of renovation and construction at Shelby Baptist Medical Center.

Baptist also paid Maynard Cooper & Gale PC $2.5 million for legal services, according to 2007 federal filings. Maynard Cooper’s N. Lee Cooper is a Baptist Foundation board member. His firm’s business relationship with Baptist pre-dated his tenure on the foundation’s board, which began three years ago.

Cooper said the foundation’s board is separate from the system’s and there is no cross-interaction.

“We don’t participate in the operations of the hospital,” Cooper said. “There is zero conflict of interest.”

BE&K’s Goodrich deferred questions to Children’s and Bill Morton did not return requests for comment.

Baptist and Children’s acknowledge the business relationships in federal filings, but said those relationships do not give board members priority for hospital business.

Children’s spokesman Garland Stansell said the nonprofit hospital is fortunate to have volunteer board members who represent the business community. He said the contract for the new facility was awarded to Hoar and BE&K after soliciting competitive bids.

“These two companies together have years of experience and specific, exceptional health care construction expertise,” Stansell said in a written statement. “The selection of Hoar/BE&K was made by a sub-committee of the Children’s board of trustees on which no individual associated in any way with either company was represented. Children’s board of trustees members sign conflicts of interests statements and recuse themselves from any action in which there could possibly be a conflict.”

Other Children’s board members whose companies had business relationships with the hospital during 2007, according to IRS filings, are Thomas Carruthers of Bradley Arant Rose & White LLP, former AmSouth Senior Executive Vice President Charles Mayer and Buffalo Rock CEO James Lee.

Baptist’s conflict of interest policy conforms to IRS guidelines, spokesman Ross Mitchell said in a written statement. Mitchell said board members are surveyed annually to assure strict adherence to the policy, which was adopted in 1990.

All construction contracts are available through a bid process, Mitchell said.

“All contracts, payor, physician, construction, legal, etc., fall under internal BHS policies and procedures which include consideration of alignment with BHS values and mission, financial and operational review and appropriate documentation of the review process,” Mitchell’s statement said.

Moore has met with Baptist and Children’s officials to ensure minority-owned businesses have opportunities to participate in ongoing or proposed construction projects. She said the same group of firms seem to receive all the contracts for these mega-projects. Baptist has proposed a $75 million project for Princeton Baptist Medical Center, which Moore says should include opportunities for minority-owned firms.

The potential for conflict of interest with board members having business relationships with the hospitals concerns Moore.

“They have this elite group of contractors, attorneys and financial advisors that are the only ones involved in projects and don’t include black vendors or companies,” she said.

Patricia Kettenring, director of business and arts at Rutgers University Business School, said board-business relationships often give the wrong impression.

“It is highly advisable to not have a representative with a business interest on your board,” she said. “Even if there is no clear conflict, there certainly is the perception of conflict.”

by Jimmy DeButts Staff

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