Erlanger hospital official, trustee share business link

Erlanger hospital official, trustee share business link

December 15th, 2011 by Ansley Haman in News

Erlanger Hospital is located on 3rd Street in Chattanooga.

Photo by Angela Lewis/Times Free Press.

Timeline

* April 2002 -- Douglas H. Fisher steps down as U.S. Rep. Zach Wamp's district director

* July 2002 -- Articles of incorporation for D.H. Fisher and Associates are filed with the Tennessee Secretary of State with three members listed: Fisher, Herbert Adcox and CPA Group, LLC, with attorney Michael J. McSunas identified as registered agent

* April 2003 -- D.H. Fisher and Associates' registered agent is changed from McSunas to James D. "Donnie" Hutcherson

* November 2003 -- Fisher returns to work for Wamp

* August 2006 -- Erlanger CEO Jim Brexler brings in Fisher as a government affairs contractor

* January 2007 -- Erlanger hires Fisher full time as director of government affairs

* February 2007 -- President George W. Bush visits Erlanger to tour Baroness campus and talk about health proposals

* December 2007 -- Fisher becomes Erlanger vice president

* 2008 -- Sometime in 2008, D.H. Fisher and Associates hires Kino Becton, who works between 2008 and 2010 on contracts from Tennessee American Water and Olin Chemical

* Aug. 7, 2008 -- Brexler announces he is engaged to Fisher's daughter, Kelly Manning, and Fisher is assigned to report to the hospital's general counsel rather than Brexler

* Aug. 23, 2008 -- Brexler marries Manning

* Aug. 29, 2008 -- Two Erlanger employees, a senior vice president for marketing and public affairs director, are terminated, and those duties are later assigned to Fisher

* November 2008 -- City appoints Hutcherson to Erlanger board of trustees to replace Bruce Adams

* November 2009 -- Hutcherson elected vice chairman of the Erlanger board of trustees

* November 2010 -- Hutcherson elected vice chairman of the board

* November 2011 -- Hutcherson elected vice chairman of the board

Doug Fisher of Erlanger

A top Erlanger executive's longtime business associate is the vice chairman of the hospital's board of trustees, which has been negotiating a possible severance package with outgoing CEO Jim Brexler, the executive's son-in-law.

Douglas H. Fisher, an Erlanger vice president, and James D. "Donnie" Hutcherson, a hospital authority trustee, have been involved in D.H. Fisher and Associates for almost a decade.

Though the business began as an embroidery franchise, it operated between 2008-10 as a public affairs consulting company with a full-time employee and at least two corporate contracts.

During that period, Fisher was on salary to run the public hospital's government affairs and public relations. The city appointed Hutcherson -- one of the founders of the CPA firm Henderson Hutcherson McCollough -- to the hospital's board of trustees.

When Brexler's $727,000 salary and benefits severance package came to a vote Monday, Hutcherson and three other trustees voted to approve it. The vote deadlocked 4-4 and then the eight trustees at the meeting cast a unanimous ballot in favor of accepting Brexler's resignation.

Both Fisher and Hutcherson have previously disclosed to the hospital their equity stake and shared interest in D.H. Fisher and Associates in annual conflicts-of-interest statements.

Hutcherson told other board members about the company, which other members said Hutcherson described to them as a failed venture from years before.

Hutcherson's only involvement was as the company's accountant, Fisher said.

"I think probably about two, three, four months ago it was dissolved," Fisher said. "It was a company I had active for many, many years."

The business is still registered with the state Secretary of State.

Hutcherson said his interest and involvement with the company ended on Jan. 1, but Tennessee Secretary of State records signed by Hutcherson in March show he's still the registered agent for D.H. Fisher and Associates.

The form states "Agent changed: No" and is signed by Hutcherson.

Hutcherson fully disclosed his interest in the business in 2009 and 2010 and told Erlanger Chief Compliance Officer Alana Sullivan that, as of earlier this year, he no longer was an owner, according to Sullivan.

When asked whether he knew D.H. Fisher and Associates had active public affairs contracts and a full-time employee when he joined the Erlanger board, Hutcherson said he was not.

"That's probably what it's involved in now, but when we got involved, it was an embroidery company," Hutcherson said.

AN EMBROIDERY BUSINESS

Hutcherson, Fisher and local auto dealer Herb Adcox first became business associates in 1989, Fisher said. Adcox and Fisher ran and held shares in a cable advertising company, CRI.

"Donnie was our accountant," Fisher said. "That was the genesis of my first relationship with Herb Adcox and Donnie."

Adcox and Fisher sold CRI in May 1998 for $600,000, according to federal records.

Fisher worked briefly for another company and later joined then-U.S. Rep. Zach Wamp, R-Tenn., as district director until April 2002.

"Right after that, we created D.H. Fisher and Associates to be able to try to find other things to do," Fisher said.

Adcox, Fisher and CPA Group, which was affiliated with Hutcherson, filed articles of incorporation for D.H. Fisher and Associates with the Tennessee secretary of state in July 2002, records show.

Hutcherson said CPA Group took a 13.3 percent ownership stake, but fronted only about $2,000 for the business.

Adcox said he served only as an investor in the member-managed company, which only listed him, Fisher and Hutcherson as members in its state fillings.

"It started out, they were merchandising their [embroidery] product through Wal-Mart," Adcox said. "I haven't been involved other than as an investor. I never received anything out of it."

Fisher said that's how the business began, but later the company, which Fisher said never produced any profits, went dormant.

"After I got it up and started ... somewhere along the way we sold it," Fisher said.

In 2003, Hutcherson became the registered agent for the business, state records show.

In November 2003, Fisher agreed to return to work for Wamp.

Hutcherson continued to file annual reports on behalf D.H. Fisher and Associates to the state.

Donnie Hutcherson is seen in this 2006 file photo.

Photo by Dan Henry/Times Free Press.

Erlanger's conflict of interest policy

Avoidance of Conflicts of Interest: Employees, officers, trustees, medical staff and agents maintain a duty of loyalty to Erlanger and, as a result, must avoid any activities which may involve (or may appear to involve) a conflict of interest or that may influence or appear to influence the employee, officer, trustee, medical staff member or agent's ability to render objective decisions in the course of his or her job responsibilities, or other services he or she furnishes to Erlanger.

PUBLIC AFFAIRS WORK BEGINS

In 2006, Fisher again left Wamp to help with Erlanger's government affairs efforts and, by early 2007, he'd been brought on full-time by the hospital.

Brexler promoted Fisher to vice president in December of 2007.

In 2008, Fisher's firm hired a full-time employee and secured two contracts, one with Tennessee American Water and another with Olin chemical for "public policy consulting work," Fisher said.

In August 2008, Brexler announced his engagement to Fisher's daughter and Fisher began to report to the hospital's chief legal officer rather than to Brexler.

The city appointed Hutcherson to the Erlanger board in November and, in 2009, he became the board's vice chairman. On Nov. 17, he was elected to his third term in that post.

In December 2008, Hutcherson's conflict-of-interest disclosure form for Erlanger listed D.H. Fisher and Associates "as a business that he had a small indirect ownership interest in with Doug Fisher," Sullivan said.

Fisher's conflict-of-interest report in July 2009 listed D.H. Fisher as a company in which he had an equity interest and Hutcherson as a board member with whom he shared a business interest, Sullivan said.

Fisher said he paid himself some remaining expenses, but handed over the Olin chemical contract to Brightbridge Inc., a nonprofit development group in which Fisher was the chairman of the board of directors.

Brightbridge's federal 2009-10 tax filings disclosed that D.H. Fisher and Associates paid $18,000 in consulting income to Brightbridge and $4,500 in rental income.

The same disclosure states Brightbridge paid a $3,000 consulting expense to D.H. Fisher and Associates.

Fisher continued to report the equity interest when he filed his conflict-of-interest report to Erlanger in 2010 and 2011.