By LESTER CHANG
Seven members of the El Camino Hospital Foundation Governing Board have resigned, charging the hospital with using foundation money without their approval, a practice they suspect could continue.
Citing one example, Foundation Chairman James Rodriguez said the hospital approved $50,000 in February to buy equipment for a dialysis unit. The foundation money wasn't intended for day-to-day hospital operations, and the hospital should have bought the items with its own money, Rodriguez said in an interview with The Sun.
"It is more than just this one incident. There is a change in [the hospital's] management style, a different attitude toward the board," said Eleanor Watanabe, one of the resigning board members.
In the past, the foundation held fundraisers and controlled the money it raised, Watanabe said.
Hospital management now seems to want to use funds without consulting the board, she added.
The foundation funds are intended only to support the hospital indirectly, Rodriquez said. Rather than buying equipment, a more appropriate use would have been to train employees in how to use the dialysis unit, he added.
Hospital officials denied any wrongdoing and said the expenditure was appropriate because it strengthened medical services to the community.
Rodriguez, Watanabe, Muriel Johnson, Dr. Elliot Lepler, Carol Proffitt, Dr. William Reeves and Joyce Shefren resigned April 15. Roger Brunello and Charlie Knell remained on the board.
The resignations will hinder the hospital's fundraising efforts, Rodriguez said.
In the 10 years or so since it was created by the hospital district, the foundation has raised nearly $11 million in contributions from residents and Silicon Valley corporations.
The funds have been used for community programs that have provided medical services to the poor, the elderly and residents who can't afford health insurance.
But Dr. Paul Hoar, president of the hospital district's board, dismissed the group's complaint and said their fears were groundless.
"There has been no misuse of public funds in the past, and none is anticipated in the future," he said.
Rodriquez said the hospital might use other foundation funds in place of it own funds to operate the hospital.
The hospital had multimillion-dollar losses when it was run by Camino Health Care Corp. from 1992 to 1996. Camino reported losses of $17 million during fiscal year 1995 alone.
The board members of the Camino Health Care, the hospital district board and Camino Medical Group, a group of doctors who worked with Camino Health Care to try to implement medical services more efficiently, signed an agreement that returned the hospital's management to the hospital district in January.
"The new administration wants to make the hospital profitable again, and we applaud that," Rodriquez said. "But we have our concerns about the hospital foundation funds."
The members who resigned asked the district board to take steps to ensure the Foundation funds are "properly protected."
"Legally, it was OK," said Rodriguez of the hospital's decision to use the foundation money to buy equipment for the dialysis unit. "But philosophically, it conflicts with the representations to the donors."
Hoar said the hospital didn't "manipulate the budget" so that it could tap into the foundation funds.
The former board members also said it was not appropriate for the foundation to tell donors that funds would be used one way and then to have the hospital use them in another way.
"We will not participate nor ostensibly approve the potential misuse of foundation donations by the hospital administration without proper presentation of donors," the group wrote in a resignation letter to Dr. Hoar.
Victoria Emmons, president of the foundation board, said the complaint caught her off guard. "There is no intent to do what they think might be done," said Emmons, who isn't a member of the board but in charge of a staff that solicits funds.
Rodriquez said the district board allowed the foundation board to control the funds for the last 10 years. But that arrangement changed when the hospital district took over the reins of the hospital in January.
The members who resigned asked the remaining foundation board members to work with the district board to ensure proper distribution of the donated funds.
This article appeared in the Sunnyvale Sun, April 23, 1997.
©1997 Metro Publishing, Inc. All rights reserved.