In The News: Union says banker has conflict on Salinas Valley Memorial Hospital board

NewsApril 5, 2011

The Monterey County Herald:

Herald Staff Writer

Posted: 04/05/2011 05:22:31 AM PDT

In the midst of contract negotiations, a Salinas Valley Memorial Hospital employees union is calling attention to a prominent local bank and its president, who serves as a hospital board member.

Led by the National Union of Healthcare Workers, hospital employees are planning to protest outside the Salinas headquarters of Rabobank today in an effort to highlight what they call the “questionable financial relationship” between the hospital, the bank and its president, Harry Wardwell.

Wardwell, who has served on the public hospital’s board for more than a decade, and his supporters dismiss the protest as the product of “tough negotiations” with a union that doesn’t want to sacrifice with other employee groups for the future of the hospital.

In memos to employees and community members last week and this week, board president Jim Gattis and CEO Sam Downing blasted the union’s dissemination of “misleading and factually incorrect” information about the hospital’s administration and leadership.

Union officials charge that Wardwell, who serves as the board’s treasurer, has a conflict of interest because the hospital keeps millions of dollars in his bank and has Rabobank-affiliated ATMs on site.

They also argue that hospital board members are unfairly requesting employee pay cuts and implementing layoffs while they dole out excessive salary and benefits packages to executives and approve multi-million-dollar consultant contracts as the hospital earns record profits.

They say it’s time for hospital officials to institute district elections, which they say could help break up the pro-management cadre’s grip on the board.

Marilyn Benson, a pro-union licensed vocational nurse who has worked at Salinas Valley since 1974, said she plans on attending the protest even though she’s on medical leave. Benson said she wants the public to be more aware of what’s happening at “their hospital,” including what she called Wardwell’s split allegiances.

“If the hospital is doing business with your bank, how can you be impartial? Are you for the bank or for the hospital?” Benson said, calling for district elections. “I’d like to see more diversity (on the board).”

The union’s John Borsos said Wardwell was responsible for boosting Downing’s compensation to the point where he is one of the highest-paid public employees in the state. A report in the Los Angeles Times citing a state controller database said Downing’s $791,000 annual salary is the third highest in that category. All four of the top salaries listed in the report are paid health care executives.

Borsos said Downing’s salary figure doesn’t include his copious retirement benefits, including a $2.1 million payout last year.

Borsos said the hospital reported profits of nearly $10million so far this fiscal year and paid consultant Wellspring $6 million during the past two years for advice on how to cut costs.

Read the full article at The Monterey County Herald.