During hours spent wading through the minutiae of the government’s payroll processes, both defense and prosecuting attorneys battled it out in V.I. Superior Court to prove exactly how much Rodney Miller Sr., Amos Carty Jr. and Peter Najawicz were earning during their time at Schneider Regional Medical Center — and how they were paid.
Prosecutors have alleged that the three embattled former hospital execs conspired with one another to defraud the hospital of millions of dollars — allegedly by using hospital funds to award themselves hefty pay raises and other associated perks outside their government salaries and without approval from the hospital’s governing board.
A fourth official, former hospital board chairwoman June A. Adams, is also accused of aiding and abetting the trio, and lying about letters she allegedly sent authorizing Miller’s lavish increases.
In her opening arguments last week, government attorney Denise George-Counts alleged that Miller racked up close to $3.8 million by the end of his five years at the hospital, while Carty and Najawicz — accused of approving and making the payments — were also pulling in thousands more than the $80,000 salaries listed in their government payroll documents.
George-Counts found support Monday in the testimony of former Finance Commissioner Claudette Watson-Anderson, who went through a series of W-2 tax forms while on the stand that listed Miller’s salary at $150,000 and Carty and Najawicz’s at $80,000 each.
Watson-Anderson said Finance is responsible for cutting all government employee payroll checks being paid with public funds. While most of the checks are backed with money from the General Fund — the repository for all the government’s tax revenue, among other things — there are employees being paid by Finance from other "special fund" accounts, such as the Health Revolving Fund, which is supported with money generated by the hospital, she said.
Documents referenced on the stand Monday by Watson-Anderson and later legislative post auditor Jose George, showed that Carty was being paid from the Health Revolving Fund, while Miller and Najawicz were being paid through the General Fund. Meanwhile, the tax forms referenced by Watson-Anderson showed Miller’s salary from 2003 to 2006 as $150,000, while Carty and Najawicz were making $80,000.
George testified the same salary amounts for the three former officials were included in annual reports up to fiscal year 2008 submitted by the hospital to the Legislature’s Post Audit Division.
While defense attorneys have contended that many hospital employees — including the three former officials — were making above the salaries documented in their Notices of Personnel Action (or NOPAs), Watson-Anderson testified under cross-examination that any bonuses, stipends and other compensation offered to them should be factored into the amounts listed on the tax forms she previously discussed.
"I am certain they should be," she said in response to a question from Najawicz defense attorney Robert King about what is included in the total amount listed on the tax forms. Watson-Anderson added that any independent contract work with the government would be documented in 1099 forms, but there were none of those on file at Finance for any of the three former officials.
In his opening arguments last week, however, King and Miller defense attorney Alan Teague contended that many in the hospital — from the providers to the execs — have been making above their NOPA salaries for years, while King took it a step further and said the practice is not listed as a crime under V.I. law and is used to recruit and retain talent at the hospital.
King’s point was underscored Monday by testimony from Carmelo Rivera, a member of the St. Croix hospital’s governing board, along with the territorial board that oversees both hospitals’ operations. Referencing payroll documents for former Gov. Juan F. Luis Hospital head Gregory Calliste, Rivera verified that the board had offered Calliste an executive compensation package in excess of his documented $135,000 salary.
An attached employment agreement listed Calliste’s salary as $165,000, and included perks such as housing and car allowances, educational expense payments, a severance package and a stipulation for an increase after two years. During opening arguments, King had said similar perks were included in Najawicz’s contract.
Meanwhile, on Monday King produced a letter written by Rivera in 2008 to the V.I. attorney general.
"And in this letter, you express concern over doctors in the hospital being paid above their NOPA salary, and say they should not be punished for it, isn’t that correct?" King asked.
"Yes, sir," Rivera said.
Rivera also testified that the approximately $300,000 salaries paid to the new heads of both V.I. hospitals were decided on by the board, but are in the lower range of salaries offered in comparable hospitals on the mainland.
"The territorial and district boards concurred that we have to search for the talent the hospitals need because they certainly are in trouble," Rivera said, adding that, upon the advice of independent recruiters and through independent research, the board was able to set the salaries. In all cases, however, any packages offered to a hospital head must be approved by the board, he added.
Rivera also said that the hospital’s chief executive officer is able to negotiate the compensation packages of other managerial employees, but that there is nothing in the local statute that sets a limit on how much can be offered — just that it has to be within the hospital’s "budgetary constraints."
The trial is scheduled to resume 9 a.m. Tuesday in V.I. Superior Court.
