- The Washington Times - Friday, October 24, 2003

Three top executives for the bankrupt firm that owns Greater Southeast Community Hospital must relinquish credit card statements, bank records and other personal financial documents as part of a court-ordered investigation requested by creditors.

Doctors Community Healthcare Corp. President Paul Tuft, Chief Financial Officer Steven Dietlin and Vice President Erich Mounce were ordered to disclose all sources of income, including loans, salary advances, bonuses and property transfers dating back to 1998.

The ruling earlier this week by U.S. Bankruptcy Judge S. Martin Teel coincides with a reorganization plan by the executives, who were seeking keep ownership of Greater Southeast and three other hospitals, including Hadley Memorial Hospital in the District.

Doctors Community purchased Greater Southeast in December 2000 and city officials began pouring tens of millions of dollars into its bank accounts as part of plan to privatize health care for low-income residents.

Despite D.C. government financing, Greater Southeast spiraled into its third bankruptcy in five years, repeatedly failed inspections and experienced frequent emergency room staffing shortages.

The hospital lost its license in August 2003 and has been operating under a provisional license ever since.

The D.C. Health Department is expected to announce Nov. 1 its decision on whether conditions at the hospital warrant its closure.

Creditors asked the court to investigate the executives’ finances so a determination could be made whether claims could be filed against their estates.

“The management is seeking release from potential liability and we need to understand the effects of such a release. We need to understand what actions may lie against them and the amount of their resources,” Sam Alberts, an attorney for the creditors, said in an interview yesterday.

Mr. Alberts said the request for documents reaches as far back as 1998 because “you can reach back for properties that may have been transferred and it gives a historical framework about when assets were received.”

Court papers reveal that Tuft-Redman, owned by Mr. Tuft, received $4.3 million from Doctors Community for travel-related expenses the year before Greater Southeast declared bankruptcy.

During that same period, Greater Southeast struggled to staff its emergency room, failed inspections and operated at a nearly 10 percent deficit, according to records obtained by The Washington Times.

Despite the mounting problems, Doctors Community executives received millions of dollars in salary advances.

Mr. Tuft received his regular salary of $2 million in 2001 and $3 million in salary advances from December 2001 to November 2002, according to a company financial-disclosure statement obtained through court filings.

He also bought a $2 million property in Paradise Valley, Ariz., and used $575,000 in cash to make a down payment on the house in February 2001.

Several family members worked as executives in Mr. Tuft’s company, including his brother and father-in-law, who each earned salaries of more than $230,000 in 2001.

Mr. Dietlin’s salary was $628,572 in 2001. Doctors Community also gave him a $23,000 auto allowance, $175,00 in bonuses and $1 million in salary advances. In August 2002, Mr. Dietlin purchased a $1.65 million home in Paradise Valley.

Mr. Mounce had a $450,825 salary in 2001, received a $100,000 bonus, $7,800 auto allowance, and $65,593 in loans.

The executives’ salaries were scaled back to $750,000 per year for Mr. Tuft, $337,236 for Mr. Dietlin, and $321,120 for Mr. Mounce after Doctors Community filed for bankruptcy in November 2002.

Between Jan. 1, 2001, and Dec. 31, 2002, Doctors Community paid D.C. lobbyist and political fund-raiser Kerry Pearson more than $600,000 for meetings with city politicians on contracting and policy issues.

Doctors Community officials could not be reached for comment yesterday afternoon.

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