Wyckoff Heights Medical Center in Brooklyn, NY has experienced interesting interpretations/actions of Duty of Loyalty and Duty of Care from the board.
One member of the hospital’s board obtained for the pharmacy that he owned the exclusive right to market prescription drugs to hospital patients. Mr. Goffner had three conflicts, more than any board member. He had the exclusive contract to dispense drugs. And Mr. Goffner was the landlord of a building being rented by the hospital. In the recent shakeup at the hospital that led to the ouster of Mr. Garg as chief executive, Mr. Goffner is now chairman of the board. Another board member lent $2.4 million to the ailing Wyckoff at 12 percent interest, with the hospital required to put up several of its buildings as security. Yet another trustee, Andrew Boisselle, president of Cebco check cashing, provided on-site check cashing for Wyckoff employees.
When the chief executive lost his license after an accident, hospital security guards chauffeured him and his wife around the clock in a Cadillac Escalade or a Lincoln Town Car. Mr. Garg said in the interview that he suspected that the drivers of the Town Car and the Escalade were eavesdropping on his conversations. So he had the hospital purchase a used stretch limousine for about $33,000. The hospital recently sold the stretch limousine for $18,000; it had cost $33,000 eight months ago. It sold the Lincoln Town Car for $9,000 and hopes to get $18,000 for the Escalade.
The hospital all but defaulted on its $109 million in state-secured bonds, forcing the taxpayers to cover $10 million due to bondholders before the state agreed in May to defer the hospital’s overdue payments.
Mr. Garg became CEO in 2008. “The optics definitely don’t look right,” Mr. Garg conceded in an interview. “There’s no intention to waste money. Sometimes it just happens.” His attitude, he said, was that “if you can save a couple of million here and there, and manage to spend $500 on dinner, it doesn’t really matter.” Wyckoff paid for numerous meals at expensive restaurants for Mr. Garg, as well as his trips to Sutton Stogies for drinks and cigars.