Healthcare District Files Appeal; Offers New Revelations At Sutter

EXCLUSIVE
The Eden Township Healthcare District filed a writ of mandate request Dec. 2 with the California Court of Appeals in San Francisco

EDEN CEO BISCHALANEY GAMED NEGOTIATIONS FOR SUTTER; WORKED IN CAHOOTS WITH FORMER DISTRICT COUNSEL
By Steven Tavares

Eden Medical Center CEO George Bischalaney, according to an appeal filed by the Eden Township Healthcare District, attempted to game both sides of now infamous 2008 Memorandum of Understanding between Sutter Health and the District’s attempt to save San Leadnro Hospital from closure.

District lawyers filed a writ of mandate Dec. 2 with the California State Court of Appeals, First District hoping to overturn the superior court ruling last month. “The respondent court abused its discretion and erred as a matter of law,” said the District’s lawyers in court papers.

Last month, Alameda County Superior Court Judge Marshall Whitley ruled against the District’s countersuit versus Sutter alleging Bischalaney and a former District boardmember Dr. Francisco Rico violated Government Code 1090. The law prohibits public officials from negotiating contracts when they possess a financial conflict-of-interests. In the ruling handed down in November, Whitley found neither defendant was proven to have received a “kick-back” of any kind and fell short of working for “two masters.”

Lawyers for the District argue Sutter plans to quickly convert the emergency room services at San Leandro Hospital upon receiving title to the property. “The adverse impact on the public would be immediate and severe,” the District cautioned.

The recent court filing reveals new testimony and shocking allegations never before made public. The 57-page documents paints a deceitful and cunning Bischalaney gaming the 2008 negotiations against the District. Bischaleney acted as CEO of Eden Medical Center while concurrently holding the same position for the District.

Bischaleney admitted in testimony that he was in a position to glean information from both sides of the negotiating teams and says its function was “to understand where the parties stood on issues that separated them.”

In Nov. 2006 after District served Sutter with a Notice of Default that preceded negotiations in 2008, Bischalaney notified the District of his “conflict,” but continued to participate as the lead negotiator for Eden Medical Center. Lawyers allege Bischalaney participated in District-only strategy sessions and dialogues, including closed-session board meetings.

  • April. 25, 2007, Bischalaney attended a closed session meeting on a proposed term sheet regarding Eden and San Leandro Hospital. He was present they say in a closed session hearing highlighting the District’s positions on issues later to be negotiated with Sutter.
  • Additionally, the court filing reveals more to the immense distrust some of the current Eden Township Board of Directors, including Chair Carole Rogers and Dr. Vin Sawhney had towards their former legal counsel led by Craig Cannizzo, who was fired late last December. District lawyers revel a disturbing alliance between Cannizzo and Bischalaney, who at times, appeared to be working in tandem with Sutter management against the District. Cannizzo is alleged to have given Bischalaney a copy of legal memorandum his firm had drafted for the proposed MOU with Sutter, which included legal analysis and opinions.
  • On Mar. 7, 2007, Bischalaney presented a PowerPoint presentation to Sutter management titled, “Eden Medical Center, Strategic Proposal for Partnership Renewal, Redevelopment and Growth.” The presentation, however, was created by the District and revealed their goals and objectives in negotiating with Sutter.

While the District’s lawyer are undoubtedly showing evidence of Bischalaney’s dual role at both entities, the District is conversely, attempting to prove his actions reveal he participated far more greatly than Sutter admits for the opposite side. The other defendant, Rico, is barely acknowledged in the Dec. 2 appeal. It does reveal the anesthesiologist derived all of his income from a doctor’s group, of which he is a partner, and accounts for 90 percent of its income from Sutter. It is also the sole provider of anesthesia at both Eden Medical Center and San Leandro Hospital. There is no timetable set for the decision on appeal. In the meantime, operations at both facilities will continue indefinitely.

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