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Ethics, Shmethics: Lomeo Goes From CEO to CEO to CEO
by Buck Quigley
On April 25, Jody Lomeo became the new CEO of Kaleida Health—a financially troubled 501(c)(3) not-for-profit whose records are off-limits to the press and public. He was simultaneously named CEO of Great Lakes Health, a private entity whose nebulous raison d’etre was to become the governing body of the new entity created after a merger of Kaleida Health and Erie County Medical Center—which never occurred—and is unlikely to ever occur in the foreseeable future. Such a merger would require legislative action that has never even been pursued. The entity never bothered to register as a 501(c)(3), the type of not-for-profit it claims to be. It has never filed a tax return, as such charities are required to do.
At the same time, Lomeo became the former CEO of Erie County Medical Center (ECMC)—a reasonably transparent Public Benefit Corporation whose records are available to anyone under the Freedom of Information Law.
For three months before the April 25 announcement, Lomeo had been serving as CEO of ECMC and temporary CEO of Kaleida Health, after the firing of former Kaleida CEO James Kaskie in late January.
Thus, the one individual whose job, until six days ago, was to intimately know every strength and weakness of Erie County’s public hospital now holds the reins of the private hospital that competes with it. He also heads the entity whose role now seems to be to decide which hospital, ECMC or Kaleida, will take on which services to provide to the public. Which are more profitable and so on. At the press conference announcing Kaskie’s dismissal, a Great Lakes Health spokesperson termed it “collaborative competition.”
In February, a lawyer from the New York State Joint Commission of Public Ethics (JCOPE) told Artvoice that Lomeo—as a public employee making $700,000 per year as CEO of ECMC—would need to have his appointment to the position of Kaleida CEO approved by JCOPE. He pointed to part 932 of the New York Codes, Rules and Regulations, which states, in part: “No covered individual shall engage in any outside activity which interferes or is conflict with the proper and effective discharge of such individual’s official duties or responsibilities.”
At the time we asked the question, Lomeo was still the head of ECMC. A request to learn his new salary as permanent CEO of Kaleida remains unanswered. His predecessor earned between $1.3 and $2.3 million in any given year leading that cash-strapped not-for-profit.
JCOPE’s post-employment restrictions for public employees state that “[f]ormer State Officers or Employees may not, within a period of two years after leaving State service, appear or practice before their former agency regardless of compensation or receive compensation for any services rendered in relation to any case, proceeding, application or other matter before their former agency.”
As CEO of Great Lakes Health, the “parent organization” presiding over ECMC, Lomeo would have a tricky time complying with such a restriction, one would think.
Twenty-seven years ago, the New York State Ethics commission spoke to the topic this way:
The enactment of this new “revolving door” provision is part of a sweeping reform in New York’s conflict of interest and financial disclosure laws that is intended “to restore public trust and confidence in government.” (Governor’s Memorandum, On Approving Chapters 813 and 814 of the Laws of 1987.) The new subdivision 8 of §73 can be said to reflect the same intent expressed by Congress when it enacted the federal restrictions on post-employment activities—that “[f]ormer officers should not be permitted to exercise undue influence over former colleagues, still in office, in matters pending before the agencies [and] they should not be permitted to utilize information on specific cases gained during government service for their own benefit and that of private clients. Both are forms of unfair advantage.
We put this ethical question to ECMC and Kaleida, and received this response from ECMC:
Jody Lomeo has been a former employee of ECMCC since April 25, 2014, but the issue Artvoice raised was contemplated and analyzed before his status changed.
As the New York State Joint Commission on Public Ethics, and its predecessors, have repeatedly and consistently noted, the Public Officers Law does not prohibit all contact between a former employee and the state agency. Rather, it reaches only efforts to influence a decision of the former agency or to gain information from the agency that is not generally available to the public.
It is anticipated that, as Great Lakes Health CEO, Jody Lomeo may be invited by the Board of Directors of ECMCC to share information he has that would be helpful to the Board and ECMCC. The Public Officers Law does not prohibit that type of communication.
In addition, the Public Officers Law specifically exempts situations where the former employee may be performing a governmental function for a nominally private entity like Great Lakes Health. In this instance, Great Lakes Health has already been found by two separate court decisions to be an entity that was formed by New York State and “considered a public body” performing a governmental function. Thus, and in addition to the above, contact between Jody Lomeo and ECMCC is exempt from application of the rule altogether.
JCOPE continues to look into this matter, so time will tell if ECMC’s explanation is correct or not. Meanwhile, Great Lakes Health has announced that the next regular meeting of the Board of Directors is scheduled for Wednesday, May 7, at Buffalo General Medical Center, 100 High Street, in the Robert Glenning Conference Room, “D” Building—2nd floor, at 7:30am.
The footnote to this public meeting announcement reads (in all capital letters):
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PLEASE NOTE THAT PURSUANT TO A COURT ORDER CURRENTLY IN EFFECT, DISCUSSION OF MATTERS CONCERNING KALEIDA HEALTH WILL BE HELD IN CLOSED SESSION; AND PURSUANT TO PUBLIC AUTHORITIES LAW SEC. 3628 (12), DISCUSSION OF STRATEGIC PLANNING, BUSINESS DEVELOPMENTS, CONTRACTS AND SIMILAR ITEMS WILL BE HELD IN EXECUTIVE SESSION.
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