The leader of a private, nonprofit group is asking a 2nd Judicial District judge to impanel a grand jury to determine if any criminal actions were involved in the closure of Crittenden Regional Hospital in West Memphis last month.
Hubert W. Bass, the president of the private Crittenden County Justice Commission and a Crittenden County Quorum Court member, said Monday that two civil lawsuits filed against the hospital mention criminal allegations of fraud and misappropriation of funds, but there is no criminal investigation ongoing.
"This isn't a witch hunt," Bass said. "We just want to know the facts. We will go where the facts take us. If there is criminal wrongdoing, we'll get some closure. If not, we can put our trust back into the community."
Bass has asked 2nd Judicial District Circuit Judge Victor Hill to impanel a special grand jury to look at "numerous inconsistencies and misinformation in reports made by hospital officials to many former employees."
Crittenden Regional Hospital closed on Sept. 7 after Chief Executive Office Gene Cashman said the facility could not pay more than $30 million in debt.
John Tishler, a Nashville, Tenn., attorney representing the hospital, did not return telephone calls Monday.
Several employees have joined in two civil lawsuits against the hospital, claiming that hospital administrators withheld money from employees' paychecks for insurance but failed to pay premiums for 2014. The hospital employed about 400 workers.
County voters passed a 1 percent sales tax in July that would have raised about $6 million a year to help the cash-strapped facility, but Cashman said in a letter notifying employees of the closure that it was not enough.
Crittenden County officials placed an injunction on the collection of the tax, which had been set to begin this month, said County Judge Woody Wheeless.
The hospital first closed after a June 6 fire burned an unoccupied intensive-care room on the second floor. Water from the hospital's sprinkler system damaged floors, ceilings and walls.
Workers repaired some of the damage, and the hospital re-opened July 18. But on Aug. 25, Cashman announced the hospital would close permanently.
"This has touched the lives of everyone in the county," said Bass, who formed the private commission in 2012. "That's why we're calling for the criminal investigation."
Prosecuting Attorney Scott Ellington said Monday that he had not been contacted by Bass or by Hill.
"I am aware of the civil lawsuits ongoing in Crittenden County and have communicated with interested parties in one of the lawsuits," he said. "I have spoken with an investigator with the U.S. Department of Labor and know there is an ongoing investigation into this matter."
Bass said he hopes to hear by the end of the week whether Hill will impanel a grand jury.
He said he has also spoken with U.S. Department of Justice officials and the U.S. attorney's office.
"We want closure to this," he said. "Accountability breeds trust. Something bad happened there. We do know that. That's why we are calling for the criminal investigation."
Wheeless said he planned to meet with potential hospital buyers late Monday, but he would not say who they were.
"From the county's standpoint, we're looking to get a hospital back in Crittenden County.
"This left a bad taste in the mouths of everyone," he said. "It will be hard to have trust in anyone else. We have to work to change that perception."
He said potential buyers may not be saddled with the full $33 million debt, pending completion of the hospital's bankruptcy.
He said a buyer could take over the hospital by paying the remaining hospital revenue bonds that were pledged. There is still $4.9 million owed on the bonds, but a recent sale of the hospital's home health equipment brought in $3.1 million, and a portion of that will be used to retire some of the bonds, he said.
"Potentially, someone could take this over for $2 million," Wheeless said.
The county judge said hospital administrators renewed a $200,000 insurance policy that absolves them from personal litigation on the same day the hospital filed bankruptcy.
"They took care of themselves, but not their employees," Wheeless said. "I'm disappointed they did that.
"People made decisions [and] need to be held accountable for those decisions."
Bass said the litigation could hinder potential buyers of the hospital because of the uncertainties of the debt.
"How will we recruit new business with no local hospital?" he said.
"This is devastating. And it's wrong."
State Desk on 10/07/2014