When whistleblower Joe Vincoli sent emails to his state representative, he never expected them to be forwarded to officials with Carolinas HealthCare System. After all, Vincoli was responsible for bringing federal investigators to the massive hospital system’s door.
Vincoli’s emails dealt, in part, with the federal investigation into CHS. N.C. Rep. Donny Lambeth, R-Forsyth, forwarded those emails to officials with CHS and MedCost, a for-profit health benefits company that the Charlotte-based hospital system co-owns.
It so happens that MedCost’s other owner – N.C. Baptist Hospital in Winston Salem – is Lambeth’s former employer. Lambeth served as the hospital’s president from 2007 to 2011, before he was elected to the state legislature in 2012.
Vincoli says it appears Lambeth was trying to help former colleagues more than a constituent.
“He betrayed my trust,” Vincoli said. “You expect (elected officials) to have a sense of propriety and a respect for confidentiality.”
Vincoli fired off a complaint last week to the North Carolina Ethics Commission, alleging that Lambeth violated a state law requiring public servants to make a “diligent effort” to identify and avoid conflicts of interest. The commission investigates allegations of ethical impropriety by public officials.
The episode raises questions about who owns emails sent to public officials – and how often messages sent in confidence wind up getting channeled to special interests.
Lambeth, who co-chairs the House health committee, told the Observer that he couldn’t recall why he forwarded Vincoli’s emails to officials at CHS and MedCost.
“I don’t know what the intent was,” Lambeth said. “I don’t think it was a harmful intent, none whatsoever.”
Lambeth said he’s not aware of any ethical rules that would have prohibited him from forwarding the emails. He said he routinely sends the emails he receives to agencies “to make them aware of certain situations.”
“All our emails are public information,” Lambeth said. “I certainly didn’t intend to betray (Vincoli’s) trust. He’s been a good friend for many, many years.”
Battling the hospitals
To make sense of Vincoli’s current complaints, it helps to understand his penchant for keeping an eye on health care dollars.
The 58-year-old Forsyth County resident once worked as director of managed care at N.C. Baptist Hospital, where it was his job to negotiate with insurers. There, he says, he told hospital officials they were being overpaid by the public health insurance plan for state employees. He says a hospital lawyer told him to “let sleeping dogs lie.”
But in 2009, two years after he was fired by the hospital, Vincoli reported the problem to the state. That prompted an inquiry by the State Auditor’s office, which found that the health plan had paid the hospital about $1.3 million more than its contract had intended.
N.C. Baptist sued Vincoli in early 2011, contending he had provided state officials with “disparaging and/or confidential information.” The hospital later dropped the suit.
In 2009, Baptist’s employees sued the hospital. They alleged that the hospital’s choice of MedCost – the health plan it co-owned and required its employees to use – was not serving the best interests of employees.
The hospital ultimately agreed to pay nearly $5.4 million to settle the suit. The federal Labor Department later ruled that Baptist had not demonstrated that it was adequately protecting employees.
In 2010, Vincoli called the federal Labor Department to file a similar complaint about Carolinas HealthCare System, MedCost’s other co-owner. The department soon began investigating.
The federal Employee Retirement Income Security Act, known as ERISA, prohibits most employers from using companies they own to provide health benefits for employees – unless they can show the Labor Department that they’re putting employees’ interests first. Vincoli questioned whether Carolinas HealthCare’s ownership and use of MedCost violated the law.
CHS officials have contended they’re not governed by the federal law because of a provision that excludes governmental employers. CHS, one of the nation’s largest public hospital systems, is a governmental entity known as a “hospital authority.”
The Labor Department’s investigation remains open.
Vincoli’s actions in those cases were central to the the emails that Lambeth forwarded. (CHS provided those emails in response to a public records request filed by Vincoli.)
Vincoli knew Lambeth from his time at Baptist Hospital and lived in his legislative district. He said he regularly copied Lambeth on emails because he trusted him to help correct problems he was finding.
In July 2013, he copied Lambeth on two emails that concerned his efforts to report the overpayment to N.C. Baptist. Using his legislative email account, Lambeth forwarded those emails to MedCost Vice President Joel Groce. He included a note:
“Here is this weeks (sic) email from JV. Pass along to your attorney until I get him set up.”
In January 2014, Vincoli copied Lambeth on another string of emails that concerned the federal investigation into CHS.
In those emails, Vincoli asserted that Carolinas HealthCare is not under state control and speculated about what might happen if the federal Labor Department determines it is not a governmental entity. Vincoli also offered to meet with Mecklenburg County Commissioner Bill James, who has contended the public has too little say over CHS.
Lambeth again forwarded the emails from his legislative account, this time to Carolinas HealthCare President Joseph Piemont. “You and Mike may be aware if (sic) the recent efforts by Joe If not I wanted you to be aware,” Lambeth wrote.
(The “Mike” mentioned in that email referred to Michael Tarwater, Carolinas HealthCare’s CEO, Lambeth said.)
Piemont forwarded Vincoli’s email to a lawyer for the system, and to Greg Gombar, the system’s chief financial officer. Gombar responded with a single word: “Crackpot.”
While saying he couldn’t recall his specific reasons for forwarding the emails, Lambeth said:
“I’ve had relationships with folks at Carolinas HealthCare, folks at Baptist and folks at many agencies for many years.”
Lambeth has received thousands of dollars in campaign contributions from employees at N.C. Baptist and other hospitals. But public records don’t show any contributions to his campaign from officials at Carolinas HealthCare System.
CHS officials did not respond to most of the Observer’s questions about the emails, and would not say whether they are considering legal action against Vincoli.
But a spokesperson said, “it’s not unusual for our legal team to look into negative and potentially defamatory comments” made about the system.
MedCost officials declined to comment.
Jane Pinsky, director of the N.C. Coalition for Lobbying and Government Reform, said she does not think Lambeth’s actions violated state law. Almost all emails to and from state lawmakers are public record, she said, and it would be hard to prove that Lambeth expected to benefit financially from sharing that information.
Still, Pinsky said, she finds Lambeth’s actions “ethically incorrect.”
“I think he should have said, ‘If we’re going to continue this discussion, I’m going to share these emails with the other side,’ ” she said.