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ST. LOUIS, MO & SAN FRANCISCO, CA Consumer groups criticized Missouri Attorney General Jay Nixon for "failing to uphold the law and protect the public" when he gave the green light to the sale of nonprofit St. Louis University Hospital to for-profit Tenet Healthcare Corporation for $309.2 million. Nixon announced late Monday that he would not seek to stop the proposed deal. Consumer groups had urged Nixon to take action because there is an ongoing dispute over the charitable use of the money from the hospital's sale, and Tenet and the hospital have refused to make the final sale agreement public.
Local groups planned to protest at the university at 10 A.M. on Wednesday, February 25.
"The Attorney General is shirking his responsibility to protect the public interest," said Julio Mateo, Jr., staff attorney for Consumers Union's West Coast Regional Office.
Nixon said in his announcement that, "St. Louis University is dedicating all of the proceeds from this sale to the furtherance of its nonprofit mission medical education just as the law requires." He also said that, "we have asserted as much oversight to this process as is allowed by law."
Consumer groups countered both these claims, challenging the use of the charitable proceeds and urging the Attorney General to force the parties to make the purchase agreement public.
Under Missouri law, the Attorney General is "the public guardian of charitable assets," according to Joel Ferber, an attorney with Legal Services of Eastern Missouri. Ferber pointed to trust documents, obtained by the Attorney General, that "clearly indicated St. Louis University Hospital began as a hospital for the indigent and those of modest means." SLU Hospital must therefore continue to apply those assets, including any sale proceeds from the sale to Tenet, to that primary purpose, Ferber said.
"By this decision, the Attorney General has failed in that duty," said Ferber. "He has the authority to file suit to prevent charitable assets from being diverted to other purposes."
"This decision is out of step with other attorneys general in the nation," Mateo said. The National Association of Attorneys General last year passed a resolution that declared, "the proposed use of the proceeds from the agreement or transaction should be consistent with the charitable purpose for which the assets are held."
Amy Smoucha, of Reform Organization of Welfare (ROWEL), said, "As the state's highest law enforcement officer, he is not representing the people and following law."
Tenet and SLU said on February 14 that they did not plan to make the final purchase agreement public. A spokesman for the Attorney General said he could not subpoena the purchase agreement or force the parties to make it public. Mateo challenged this claim, saying that the Attorney General had the "authority and obligation to go to court to get those documents, especially when there is a dispute about the proposed use of the charitable assets. If there's an ambiguity, let the court decide."
"Without the release of the purchase document, there is no way to assess whether the representations made by Tenet and SLU about the agreement are true," said Craig Robbins of Association of Community Organizations for Reform Now (ACORN).
ACORN and others plan to picket at St. Louis University over the "backroom deal," Robbins said. The public will gather on Wednesday, February 25, at 10:00 a.m. in front of Dubourg Hall on Grand Avenue, just south of Lindell.
"We will investigate what legal action may be brought to require the Attorney General to perform his duty," Mateo said.
