After nearly two years of investigating non profit hospitals, Albany, Georgia surgeon Dr. John Bagnato and his accountant, Charles Rehberg, were convinced that they had uncovered systemic corruption in the non profit hospital system. While their investigation encompassed the non profit health care system as a whole, its nexis began at the local non profit hospital, Phoebe Putney. The two of them were certain that they found irrefutable evidence that Putney was making hundreds of millions each year, charging unnecessarily high fees to their poor patients, all while their executives enjoyed handsome compensation and the hospital paid no taxes because of its non profit status. In February of 2004, the two of them decided to get this message out. In that month, on multiple occasions, Charles Rehberg ANONYMOUSLY sent out faxes to local business leaders and politicians.
Word eventually got back to the powers that be at Phoebe Putney. The hospital reached out to the local District Attorney, Ken Hodges. Hodges began investigating the source of the faxes. In order to subpoena records from local phone companies like Bell South, Hodges claimed that a grand jury had convened. In this way, he intimidated these local phone companies into providing private information on Charles Rehberg. This was all totally untrue. Hodges never convened a grand jury because he wasn't investigating a criminal matter. He was, acting as an agent of the state, investigating a private civil matter on behalf of one party, Phoebe Putney, and he was in fact lying in order to get documents for the investigation.
While it took a matter of weeks for Hodges and his investigators to figure out the source of the faxes, nothing was done with the information yet. In the meantime, Rehberg and Bagnato reached out to class action attorney Dickie Scruggs. They convinced Scruggs to file a class action law suit on behalf of the indigent against the non profit hospital system. The lawsuit was in the final stages of being filed in September when Phoeb Putney filed a $60 million civil lawsuit against Charles Rehberg. Phoebe Putney called in the press and held a press conference to announce their claim which included such charges defamation of character and harrassment. The suit at this point was only against Rehberg at this point because it was he that actually sent the faxes.
At this point, Dr. Bagnato was the Chief of Surgery at Albany Surgical which operated out of Phoebe Putney. Because Rehberg had sent these faxes on both their behalf, Dr. Bagnato felt he should be on the suit. He also felt that if their chief surgeon was included on this suit, that would put the hospital back on its heels so to speak. As such, prior to the case reaching court, Dr. Bagnato filed to include himself on the defense. As such, he was added as a defendent. In Georgia, there is a tough anti SLAPP law (Strategic Legislation Against Public Persona). This is a law that protects those that face lawsuits merely as a way to stop an individual from continuing a public campaign against another entity, like a whistle blower. In March, Rehberg's attorneys filed this order. Phoebe Putney had ten days to respond. Their attorneys missed the deadline and as a result the case against Rehberg and Bagnato was dismissed.
At about this time, a criminal investigation of both Bagnato and Rehberg was started. Because the evidence that began this investigation was initially collected by Hodges in his investigation of the civil claim, he was forced to recuse himself. The Attorney General of the state, Thurgood Baker, stepped in and chose Kelly Burke a District Attorney from a near district.
In December of 2005, Dr. Bagnato received a phone call from a reporter at WALB, a local television station. The reporter informed Bagnato that he and Charles Rehberg were about to be charged with burglary, aggravated assault and breaking and entering. Dr. Bagnato was stunned. He asked who's home he was charged with breaking into. The home was of Jim Hotz, a member of the board of Phoebe Putney. The next day, upon the advice of his attorney, Dr. Bagnato turned himself into local police. He was booked, fingerprinted, and had his mugshot taken. Over the next few months, the case was dismissed and refiled because technicalities caused it to be thrown out. Finally, in May of 2006, the case went before a judge for an initial hearing. It was immediately thrown out because it lacked specificity. In layman's terms, the who, what, where, how and why were missing from the charges. In other words, the prosecutor, Kelly Burke, after nearly two years, four times filing charges, couldn't explain to the court when these two broke in, how they broke in, and what they did after they broke in.
As it turned out, these charges were totally bogus. All of it came from the words of Phoebe Putney investigators. There was no police report of this alleged incident and in fact the police never investigated the matter. The investigator for the District Attorney, James Paulk never spoke with Hotz. In fact, Hotz later testified that neither Bagnato or Rehberg had ever been in his home. As such, not only were these charges made up out of whole cloth but prosecutors couldn't even figure out how to make them sound believeable. (as such they lacked specificity) The whole thing was so absurd that Bagnato and his lawyers struggled not to break out in laughter during the proceedings as Burke presented what amounted to legal nonsense. While the court proceedings were amusing, it culminated a legal bill of six figures for Dr. Bagnato.
At about the time the criminal charges were being, Phoebe Putney began proceedings for medical peer review against Dr. Bagnato. Multiple nurses accused Dr. Bagnato of being tyrannical and difficult to work with and such the medical charge was that he was a "disruptive physician". In one case cited, Dr. Bagnato was late for case and when questioned about his tardiness Dr. Bagnato responded by saying, "what are you gonna do indict me?". (referring to the ongoing criminal case I just wrote about) Because nothing cited could be linked to any sub par patient care, the medical peer review eventually went nowhere and was dismissed as well. Though, again, Dr. Bagnato was forced to spend hundreds of hours to defend himself.
In July of 2007, Dr. Bagnato asked for and received a change in his status at Phoebe Putney. Instead of having hospital privileges he merely was a consulting physician. In the next year and a half, he would only work at the hospital an average of once every two months. Because of the changing landscape of insurance, Dr. Bagnato felt, in December of 2008, that he needed to get full privileges back at Phoebe Putney. (Phoebe Putney is by far the biggest hospital in Albany and it has the most diverse set of medical resources in the area) At this point, the administration again began a medical peer review proceedings against Dr. Bagnato for being a "disruptive physician". Because this review is still ongoing, Dr. Bagnato wouldn't comment any further on the matter.
Everything I just relayed has been reported in one capacity or another in the local and state media. In fact, it is now the subject of the documentary Do No Harm. As such, both Phoebe Putney and Ken Hodges have received a plethora of bad press. So, why did they pursue all of this? According to the watch dog group, Georgia Watch, the billing practices of Phoebe Putney have improved over the last couple years after this came out but they still have a long way to go. The hospital continues to make hundreds of millions yearly and, despite the bad press, it continues to operate in largely the same manner as before Bagnato and Rehberg went public. No one else at the hospital, however, has stepped forward from hospital staff to back up Dr. Bagnato.
When a whistle blower steps forward and goes public with corruption, the target of the corruption can and will survive if they limit the damage to one or a few whistle blowers. That's why whistle blowers are almost always the target of significant retaliation. The retaliation isn't for the benefit of the whistleblower but rather for the benefit of other potential whistle blowers. That's exactly what happened here. Dr. Bagnato faced civil, criminal and professional retaliation in the aftermath of his stepping forward to blow the whistle. The reason that I view whistle blowers so heroically isn't because they step forward and report corruption. That's simply the right thing to do. The reason it takes so much courage is that blowing the whistle means that you will face retaliation and that retaliation will be significant. The point is to break the whistle blower. By doing so, a message is sent to anyone else that dares do the same. On top of this, by breaking the whistle blower, that same whistle blower loses credibility. People lose their jobs, they get kicked out of school, and they even get prosecuted. That's what happens to whistle blowers.
Most shameful is this. Thurgood Baker is now running for Governor of Georgia. Ken Hodges is now running for Attorney General. Kelly Burke continues in the same position of District Attorney. Both have legitimate chances to win even though there is absolutely no doubt that all three are corrupt. There is no other way to view it. They pursued a case even though all three knew it was fabricated. Worse yet, they didn't even fabricate it well. Now, one may be the next governor of Georgia and the other maybe the next Attorney General. Potentially, the next Chief Executive and Chief Law Enforcement officer of the state of Georgia will both be, beyond a shadow of a doubt, corrupt. If that happens, it will be to the unacceptable shame and apathy of both the voters and media of Georgia.
For the full and inside story of the making of the documentary Do No Harm check out this link.
Please check out my new books, "Prosecutors Gone Wild: The Inside Story of the Trial of Chuck Panici, John Gliottoni, and Louise Marshall" and also, "The Definitive Dossier of PTSD in Whistleblowers"