Weinberg questions no-bid contract as SCI investigates school finances
Star Ledger
April 15, 2005
JOSH MARGOLIN AND SUSAN K. LIVIO
A powerful state legislator yesterday called for the University
of Medicine and Dentistry of New Jersey to postpone inaugurating
its new president amid fresh disclosures about the way the
school's finances have been managed.
Assemblywoman Loretta Weinberg (D-Bergen), chairwoman of the
Assembly Health Committee, said UMDNJ must shelve plans to
hold a weeklong inaugural celebration for incoming President
John Petillo because of mounting questions about no-bid contracts,
spending practices and financial oversight at the state-owned
health care university.
"It is really out of control," Weinberg said of
UMDNJ's finances. "We should see what -- if any -- role
he's played in any of this. I don't have the power to stop
any of this, but I'm making a very strong suggestion to the
board."
The university said it will not delay Petillo's inauguration,
slated April 26. Interim UMDNJ Chairwoman Sonia Delgado said,
"He's been doing the job and he's been doing the job
well." Petillo has been serving as interim president
for 10 months. He declined comment.
Weinberg's remarks followed a legislative hearing in which
Trenton lawmakers demanded an explanation for a $282,000 grant
the state made to UMDNJ last year to study local health agencies.
In response to angry questioning, Health Department officials
acknowledged their department already had conducted a similar
study using state staff only months earlier.
To do some of the study's research, the university hired,
without competitive bidding, a newly formed firm, LVB Partnership,
run by two full-time employees of the Bergen County Health
Department.
Those employees, Donna Szot and Len Fiorenza, were hired for
$40,000 in February 2004 after the university and the Health
Department signed off on the arrangement. Szot and Fiorenza
have long- standing ties to Mark Guarino, an assistant director
in the Health Department office in charge of the study. Guarino
used to be Szot's and Fiorenza's supervisor in the Bergen
health agency.
"This thing reeks to me," said Assemblyman Joseph
Cryan (D- Union) during a hearing of the Assembly Budget Committee.
"I think it's been redundant and cost- inefficient at
best."
Assistant Health Commissioner James Blumenstock said the study
done last year was superior to the "outdated" review
from 2003 and defended the decision to retain LVB.
"We were well aware of this group as practicing public
health officials, and we felt they would add to the process.
My staff felt this entity had great value," he said.
UMDNJ spokeswoman Susan Preston said the terms of the no-
bid contract awarded for the health agencies' study were "stipulated"
by the Health Department and referred all questions to department
officials.
Blumenstock responded to that, saying, "We may have put
the issue on the table, but it was agreed to by both"
his staff and the university.
Guarino, Szot and Fiorenza did not return calls seeking comment.
As for Weinberg's request to postpone Petillo's inauguration,
Preston said: "The inauguration is going on as planned."
Weinberg, who said she had heard about the study and the firm
last year, yesterday sent a letter to the head of the Budget
Committee asking for "an investigation into this company,
its possible ties with state employees and this no bid- contract
award."
Meanwhile yesterday, four state officials confirmed that the
State Commission of Investigation has opened its own probe
into UMDNJ finances, prompted by a request from acting Gov.
Richard Codey.
Codey contacted the SCI after The Star-Ledger reported last
month that UMDNJ awarded a $75,000 no-bid contract to Philadelphia
lawyer Ronald White, a top fund-raiser to former Gov. James
E. McGreevey, to represent the university during the McGreevey
transition period in late 2001 and early 2002. White died
a few months ago. Codey ordered the university to investigate
the contract and report back, only to be told that officials
at UMDNJ could not explain why White was hired or what, if
anything, he had done.
Though Codey declined to comment specifically on the SCI probe
yesterday, he said the White contract showed the university's
finances "merit inquiry."
SCI Chairman W. Cary Edwards declined to comment on the investigation,
citing confidentiality rules. A bipartisan arm of the Legislature,
the SCI has subpoena power and has the authority to recommend
changes in government operations and refer matters to the
Attorney General's Office for criminal prosecution.
Delgado, the UMDNJ chairwoman, said she was not aware of the
SCI probe until she learned about it from a reporter.
On Wednesday, Delgado said recent questions regarding UMDNJ's
finances led her and the board to retain former state Supreme
Court Justice James Coleman to review hundreds of lucrative
no-bid contracts awarded in recent years to determine whether
there has been a breakdown in financial control at the Newark-
based university, which costs $1.6 billion a year to operate
and received $199 million in state funding this year.
After disclosing that Coleman had been hired, Delgado also
revealed she had ordered a moratorium on all charitable donations
made by UMDNJ. The moratorium was a response to Star-Ledger
inquiries about a $10,000 "charitable" gift to a
group run by Newark City Councilwoman Gayle Chaneyfield- Jenkins.
The organization, it turns out, is not a registered charity.
That revelation capped a series of news accounts highlighting
spending and no-bid contracts at the sprawling health care
university, which includes three medical schools and a dental
school, as well as hospitals and programs to train other health
professionals.
