More Rick Scott: Bad Deals and Conflicts of Interest
Posted on April 29th, 2009 by Jason Rosenbaum in Profits Before People
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Now, there's a lot that we already know about Scott, like his $1.7 billion fraud investigation, and how he's using the golden parachute he got for leading his company, Columbia/HCA, to defraud the government (a reported $10 million in severance and $300 million in stock options) to fight against health care reform with his new outfit, Conservatives for Patient's Rights.
But what happened after Scott was forced out of Columbia/HCA? Turns out, there were more shady deals.
Two months before Scott was forced out, in May of 1997, he announced Columbia/HCA's intent to buy a controlling interest in a company called America's Health Network (AHN), a cable company which produced original, health-related television. When Scott was kicked to the curb (with a $310 million golden parachute) in July amid fraud investigations, the deal fell apart, causing AHN to lay off 80% of its workforce and other investors to sell of their stakes, most likely at firesale prices.
The next year, Scott, along with another disgraced Columbia/HCA executive forced out with him, bought 75% of AHN, again, likely at firesale prices.
Now, after Scott bought his controlling interest, what original investors AHN had left filed suit against Columbia/HCA for scuttling the prior deal which led to the devaluation of AHN. According to The Tennessean:
On Friday investors in a limited partnership with the former America's Health Network an Orlando, Fla.-based cable property now known as The Health Network filed suit against HCA in Davidson County Chancery Court. The suit claims that HCA aborted a promised deal to invest in the then fledgling network on the same day in 1997 that Scott, at the time HCA's embattled chairman and chief executive officer, was shown the door. The lawsuit seeks unspecified financial compensation for losses investors say they have suffered as a result of the deal's demise.
Now, why did these investors wait a year to file suit against Columbia/HCA? And why didn't AHN sue Columbia/HCA itself, as opposed to just a group of investors? Turns out, Scott used his controlling interest in AHN to scuttle the suit against his former employers. The best part is, Scott claimed conflict of interest prevented him from suing:
In its complaint, the suing investors say Scott has failed to pursue litigation because of a 'conflict of interest' stemming from his ties to AHN and role in HCA's original decision to buy a controlling stake in AHN.
Clearly, if Scott had any morals, he would have recused himself from discussions about these suits and left the decision of whether AHN would sue Columbia/HCA to those who didn't have ties to both sides of the complaint.
But no.
Scott refused to allow the suit to go forwards on the incredibly preposterous claim that his conflict of interest prevented it. Since, Scott has used similar logic, most recently accusing President Obama of "cooking the books" with his new health care plan without noting that he made Columbia/HCA so "successful" by cooking the books, though he couldn't weasel his way out of the fraud investigation.
No morals, shady deals, circular logic, every-man-for-himself mentality. This is the life story of Richard Scott. And this is what he's selling to the American people when it comes to health care. He wants to deny us the choice of a public health insurance option. He wants to leave us at the mercy of the insurance industry. And he uses fear mongering, clever editing, and outright lies to try and bully us into submission.
Luckily, he's a borderline criminal, otherwise I'd be worried someone might actually be listening to him.