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February 25, 2005

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Publication Date: Friday, February 25, 2005

Voice to sue for hospital contract Voice to sue for hospital contract (February 25, 2005)

Issue is the secret salary of El Camino's CEO

By Julie O'Shea

:After months of refusing to release the employment contract of El Camino Hospital CEO Lee Domanico, the Voice is suing the publicly-run healthcare district to force the document's release.

In response to a Public Records Act request filed by the Voice on Dec. 10, hospital board chair Mark O'Connor said Domanico's contract is protected from disclosure by the U.S. Constitution and a special tax exemption by the Internal Revenue Service. O'Connor called the newspaper's request "inappropriate."

The hospital reiterated its position again on Tuesday, stating in an e-mail from its spokesperson: "The law does not require complete disclosure of all the records of a nonprofit organization and or a public hospital district. Such laws regarding public disclosure are complex; however El Camino Hospital believes it is in full compliance with the law on these issues."

However, other area hospitals, including the Santa Clara Valley Medical Center and Sequoia Hospital, readily disclosed information about their top executives' salaries and contracts upon request.

Peter Scheer, the executive director of the California First Amendment Coalition, said state law makes it clear.

"All employment contracts of government employees are public records in California. The employees who have contracts hate that and the government agencies who sign those contracts hate that, but that's just too bad," Scheer said.

"Directly or indirectly, those employees are being paid by tax dollars, so it's entirely fair for the taxpayers to get to see the employment contract," he added.

The Voice had originally asked to see a copy of Domanico's employment contract in October after receiving several phone calls from El Camino doctors who said they had repeatedly asked for the CEO's contract and been denied.

Hospital spokesperson Judy Twitchell said then she didn't know if Domanico's contract was considered a public record.

But Jim Ewert, attorney for the California Newspaper Publishers Association, said, "There isn't anything in that contract that is considered private. ... They have to produce that contract immediately."

The hospital can't claim Domanico's contract is protected under the U.S. Constitution, Ewert said, because the Fourth Amendment only applies to government agencies seeking employment contracts.

Judy Alexander, an attorney who is representing the Voice in the case, said, "I think there is a good chance a judge will look past the smoke and mirrors and say 'No, you can't do that.'" Alexander said the lawsuit will be filed this week in Santa Clara County Superior Court.

The El Camino Hospital Board of Directors is comprised of five publicly-elected individuals. The board hired Domanico in October 2000 to run the 395-bed hospital. Officials reported during a public meeting that the CEO had agreed to a $350,000-a-year contract, which trustees had drawn up. Domanico reports directly to the board as its sole employee.

State law mandates that "every employment contract between a state or local agency and any public official or public employee is a public record." The El Camino Hospital District, which governs the hospital, is considered a local agency. However, the hospital itself is a nonprofit, which is why, district officials said, Domanico doesn't have to disclose his contract agreement. Domanico did not respond to a request for comment.

Mitchell Olejko, the attorney for the district, refused to be interviewed but said in an e-mail that the state law doesn't apply here because the "El Camino Hospital District does not have an employment contract with any person."

The district's board of directors are the same individuals who sit on the hospital board. It is unclear who Domanico has a contract agreement with. He is considered a hospital employee, according to El Camino's Twitchell. But Twitchell would not confirm if the hospital board is the holder of Domanico's contract.

"The hospital here is clearly trying to hide behind a distinction that doesn't really exist," said Scheer of the First Amendment Coalition. "The CEO has an employment contract, and that is an employment contract with the hospital or the district -- take your pick. They are one and the same."

The board's bylaws state that it is the board's responsibility to hire the hospital's CEO. Directors also conduct the CEO's annual performance review and determine any salary increases. According to the bylaws, the CEO can act as a "duly authorized representative" of the board.

Olejko said the IRS does not require the hospital to file financial-disclosure statements like most nonprofits do because it is subject to an independent financial audit, which ran in full in the Dec. 24 issue of the Voice.

In comparison, Santa Clara County officials released the salary figures of Valley Medical Center director Susan Murphy immediately upon request. Murphy, who oversees the 524-bed facility, makes $203,028 a year. And her boss, Bob Sillen, who manages the county's health and hospital system, makes $229,324 annually.

The CEO of the Sequoia Healthcare District in Redwood City, Stephani Scott, who was hired last year, faxed the Voice her employment contract with the Sequoia board of directors, also immediately upon request. She makes $83,000 annually.

Sequoia Hospital director Glenna Vaskelis, whose salary is considered private because she is a contracted employee and doesn't directly report to the Sequoia district's public governing board, also shared her annual employment package. Vaskelis, who oversees the 421-bed hospital, receives $246,718, a $7,200 car allowance and vacation and health benefits.

E-mail Julie O'Shea at [email protected]

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