- The Washington Times - Thursday, January 19, 2006

Creditors of Greater Southeast Community Hospital’s parent company have accused its executives of using funds from the District’s health care program for the poor for “compensation and gift loans,” and providing free chartered flights for D.C. officials.

A liquidating trust for creditors of Arizona-based Doctors Community Healthcare Corp. (DCHC), which runs Greater Southeast, made the accusation in a wide-ranging complaint filed last month in U.S. Bankruptcy Court in the District.

“Greater Southeast Corp. received millions of dollars from the District of Columbia under the Healthcare Alliance contract,” trust attorneys said in a Dec. 29 filing. “This money was funneled up to DCHC via a centralized cash management system and used … in the form of additional compensation and gift loans.”

Trust attorneys also said, “It is unclear to assess how much money may have trickled back down to Greater Southeast Corp. and the other hospitals who provided indigent services.”

However, the trust said at least $10 million in claims have been filed against Greater Southeast by the District and Washington Hospital Center under the Healthcare Alliance contract.

The trust also is questioning the nearly $5 million that DCHC executives spent on chartered flights, especially free trips for D.C. officials, as the company sank into bankruptcy.

DCHC chief Paul Tuft said he had not seen the trust’s amended complaint.

An attorney for DCHC executives declined to comment but has disputed in previous filings the trust’s accusations that corporate funds were squandered.

The trust has said DCHC executives misspent funds before the company’s bankruptcy and has filed hundreds of claims against other entities to recoup money for creditors.

The funds include millions of dollars the D.C. government paid to Greater Southeast for managing the city’s health care program for the poor.

Among the questioned expenses: $4.7 million paid to a company founded by DCHC executives in July 2001 for time-share interests in two jets and other travel costs from November 2001 to November 2002.

According to the trust, “frequent users” of the chartered jets included “politicians and lobbyists to and from Washington, D.C.”

The trust has cited free trips for Francis Smith, former executive director of the D.C. control board; Elaine Crider, a member of the city’s health services reform commission; and Colene Daniel, a former high-ranking D.C. health department official who recently began working for DCHC.

The flights for Mr. Smith and Miss Daniel occurred shortly before or after their work for the D.C. government, trust attorneys said.

Miss Crider said she was provided a return flight from Scottsdale, Ariz., to Washington after she attended a business meeting that did not involve D.C. government business.

She also said she has never worked as a D.C. government employee, adding that her position on the health services commission was that of an unpaid adviser.

Mr. Smith and Miss Daniel could not be reached for comment.

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