It was a long day on the stand for Allison Spencer, a Schneider Regional Medical Center paralegal who spent all Wednesday fielding questions about a variety of hospital documents, including employment contracts, stipend agreements and voucher payments, for the three former executives currently on trial for conspiracy and corruption.
Rodney Miller Sr., Amos Carty Jr. and Peter Najawicz have been charged with helping one another defraud the hospital of millions of dollars by, among other things, awarding each other lavish pay and benefits packages without the approval of SRMC’s governing board.
Prosecuting attorneys have contended that while the official government salaries for the group ranged from $150,000 to $80,000, the trio was able to pull in much more and used their top positions to siphon large sums of money from the hospital’s accounts to their own personal accounts.
Spencer has spent the last two days testifying to the officials’ employment contracts and was grilled Tuesday on documents that she, while working as Carty’s assistant, either prepared or knew about. Tuesday’s testimony centered, in particular, on the inconsistencies between two 2005 employment contracts for Miller, where the base salary in one is higher than what was listed in the other.
Another sticking point for the prosecution was that the dates on the contracts didn’t match up. Spencer testified Tuesday that one of the contracts was dated May 14, 2005 — the day after Miller’s previous three-year contract with the hospital was set to expire — while the other was drafted and sent for review in September 2005. The second contract, according to the documents, listed Miller’s base salary as $265,000, while the first listed it as $150,000.
Getting a crack at the witness Wednesday, Miller defense attorney Alan Teague zeroed in on the dates, asking Spencer if the first contract could have been a "placeholder," while a second contract was being drafted. Teague said the hospital’s board, tasked among other things with hiring and firing the SRMC’s chief executive officer, would not have wanted Miller’s 2002 contract to lapse while another one was in the works.
Spencer agreed, saying it was plausible that the first contract — which listed the same base salary as Miller’s 2002 contract — could have been a "placeholder."
Meanwhile, Teague also peppered Spencer about the difference in dates listed in two June 2005 offer letters from the board to Miller, one listing a base salary of $260,000 and the other a salary of $265,000. During cross-examination, Spencer said the second letter was not signed by Miller, while the first one — which is also signed by former hospital board chairwoman June A. Adams — was.
The first letter also contained a listing of benefits, including a housing allowance for Miller that was less than what was offered in the second letter, Teague pointed out.
Adams is also a co-defendant in the trial, and has been charged with aiding and abetting the three former officials in their alleged scheme, along with three counts of perjury.
Through questions directed to Spencer, Teague also noted that correspondence from Minnesota-based Clark Consulting, an independent firm hired by the hospital board in 2005 to conduct an analysis of Miller’s compensation package, was addressed to the board’s compensation committee, indicating that at least four of its members (Adams, Sam Topp, Natalie Thomas and Francis Jackson) knew about the second contract and what was included in it.
Spencer also acknowledged that a series of payment vouchers referenced by the prosecution earlier Monday were also signed by either Beverly Chongasing, who was, at one point, the board’s chair, or Adams. The vouchers would additionally have to be reviewed by the hospital’s accounts payable division — which would check to see if the requisite "backup documents" were in place — before a check is cut.
Extensive testimony was given about an Oct. 1, 2004 voucher of $45,500 — a sum that Teague implied was advanced to Miller and used as a down payment on Miller’s Mahogany Run condominium. While housing allowance is generally used to pay rent and other related expenses, Teague also implied that the money was advanced from Miller’s retirement benefits, and was considered a loan that had to be paid back.
It was pointed out Tuesday, however, that a clause waiving the repayment of all advances to Miller was included in one contract — the one that Miller signed — but not in the other.
Defense attorneys have all continued to argue that the practice of hospital employees making above the salaries listed in their Notices of Personnel Action — government documents that show, among other things, what an employee’s position is and what they are paid — was not limited to Miller, Carty and Najawicz.
Referencing a number of what was called "additional stipend and compensation agreements," Teague said other Schneider employees—five whom he cited in particular—were all making between $20,000 and $23,000 more than their NOPA salaries. Each stipend/compensation agreement appeared to be for various benefits, such as employees’ housing allowance.
The trial picks up again at 9 a.m. Thursday.
