Recently ousted Gov. Juan F. Luis Hospital Chief Executive Officer Ken Okolo and the current chief financial officer received bonuses of $25,000 and $15,000 without approval by the hospital’s governing board, hospital officials told senators Tuesday. The Senate Committee on Health, Hospitals and Human Services called the hearing to get information on the apparent vacuum in leadership at JFL in the wake of Okolo’s termination of Chief Medical Officer Mavis Matthew, Chief Nursing Officer Justa Encarnacion and subsequent ouster of Okolo. (See Related Links below)
Okolo took the CEO post in November 2015 with the resignation of Dr. Kendall Griffith. He was previously JFL’s chief operating officer. In March of 2016, Okolo terminated Matthew and Encarnacion, and the director of human resources resigned. Legal Counsel Richard Evangelista took over the COO and human resources responsibilities.
On May 10, the board terminated Okolo’s contract as chief executive officer, making him chief operating officer – decreasing his salary from $350,000 to $200,000 annually. (See related links below) May 17, the board fired Okolo and made Evangelista acting CEO in addition to his other responsibilities.
With the hospital struggling financially and having recently escaped a close call with decertification by the Centers for Medicare and Medicaid Services, senators on the committee pressed hospital management and JFL board members on whether the management upheaval was putting either patients or CMS certification at risk.
JFL Board Chairman Troy deChabert-Schuster insisted that care continued as usual, for the time being, and that the people Okolo had terminated had been replaced on an interim basis. Dr. Angel Lake is interim chief medical officer and Jacintha Stephen is interim chief nursing officer, he said.
Sen. Sammuel Sanes asked about reports of bonuses to top JFL officials even as the hospital was facing serious financial difficulties.
Sen. Kurt Vialet asked who received the bonuses.
Chief Financial Officer Tim Lessing said Okolo received a $25,000 bonus and he, the CFO, received $15,000.
Sen. Jean Forde asked who approves management bonuses.
DeChabert-Schuster said the bonuses were not approved by the board. The one for Lessing was approved by Okolo, he said.
The bonus to Okolo "was when he was still chief operating officer. That was given to him by Dr. Kendall Griffith in October, before he stepped down," deChabert-Schuster said.
"I asked him (Griffith) about it. … He said he had forgotten it had to be approved by the board," deChabert-Schuster said.
The bonus for Lessing was just released in the last few days, he said. It was outlined in Lessing’s contract that the CEO would be able to approve it, which did not sit well with him, so he asked the board’s legal counsel, attorney Bruce Cole, to look it over for legal sufficiency and was told the contract was legally sufficient, so he and another officer signed the check for the bonus, deChabert-Schuster said.
Asked if he felt that was appropriate, deChabert-Schuster said that he did not like it and that he would propose to the board there be a moratorium on any executive management bonuses.
Vialet read from Lessing’s original contract, which makes him eligible for a $15,000 bonus "upon board approval," and asks who approved the bonus.
DeChabert-Schuster said there is an addendum to the contract, deleting the word "board" and inserting "CEO."
Vialet asked how the addendum was approved without the input of the JFL governing board.
"It was approved by Mr. Okolo," deChabert-Schuster said.
"How do you eliminate the board without telling the board or the board approving them?" Vialet asked. There was no clear answer given.
"How can the board be involved in the contract but not in the addendum?" Vialet asked.
"I don’t know how it is possible but it was done," deChabert-Schuster said. He said again that he contacted the board attorney out of concern and was advised it was legally sufficient.
Lessing told Vialet the addendum "would have been generated through Human Resources and signed by Dr. Okolo and myself."
"So you requested the decision be taken away from the board?" Vialet asked.
"To be honest, I was not aware of this. … I just became aware of this myself and brought it to the attention of the board," Lessing said.
"So it just popped out of the air?" Vialet said, exasperated.
Senators asked their legal counsel for an opinion on the legality of the contract addendum and bonuses. The legal counsel, who was not named on the record, cited a section of V.I. Code saying hospital CEOs can appoint and remove the medical director and CFO "with the advice and consent of the district governing board."
She suggested Okolo lacked legal authority to change the CFO contract, rendering the bonus approval improper.
"The CEO cannot contract away the board’s authority to approve the hiring of the CFO so I would argue the contract is null and void because it violates" that section of law, she said. The cited section of law does not mention the board approving contracts for the COO, so it is not clear the $25,000 bonus Griffith gave Okolo would be similarly affected.
Senators pressed the volunteer board members to come up with a plan to bring stability to the hospital and report back to the Senate in the next few weeks.
No votes were taken during the information-gathering oversight hearing.
Present were committee members Forde, Francis, Vialet, Sens. Novelle Francis, Justin Harrigan, Almando "Rocky" Liburd and Nereida “Nellie” Rivera-O’Reilly. Sanes, Sens. Kenneth Gittens, Myron Jackson and Positive Nelson were also present but not members of the committee.